Dine Brands Global Inc (DIN) 2013 Q4 法說會逐字稿

Good day ladies and gentlemen and welcome to the fourth-quarter 2013 DineEquity Incorporated earnings conference call. My name is Regina and I'll be your conference operator for today.

At this time all participants are in listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions).

Today's event is being recorded for replay purposes. I would now like to turn the conference over to your host for today Mr. Ken Diptee, Executive Director of Investor Relations. Please go ahead Mr. Diptee.

Thank you. Good morning and welcome to DineEquity's fourth-quarter and fiscal 2013 conference call. Today I am joined by Julia Stewart, Chairman and CEO; Tom Emrey, CFO; and Gregg Kalvin, Corporate Controller.

Before I turn the call over to Julia and Tom let me remind you of our Safe Harbor regarding forward-looking information. Today management may discuss information that is forward-looking and involves known and unknown risks, uncertainties and other factors which may cause the actual results to be substantially different than those expressed or implied. We caution you to evaluate such forward-looking information in the context of these factors which are detailed in today's press release as well as in our most recent 10-K filing.

The forward-looking statements are made as of today and assumes no obligation to update or supplement these statements. We may also refer to certain non-GAAP financial measures which are described in our press release and are also available on DineEquity's website.

With that I will now turn the call over to Julia Stewart. Julia?

Thanks Ken. I'd like to welcome all of you listening in this morning and thank you for participating on DineEquity's fourth-quarter and full-year earnings call.

Today I will briefly review some highlights and provide an update on our continued efforts to strengthen our business model and create additional shareholder value. I will then turn the call over to Tom for a financial overview and discussion of our 2014 guidance before opening the call for questions.

As you saw on our press release this morning we delivered impressive results for the fourth quarter and for fiscal 2013 as a whole which marked our first full year of operation as a 99% franchise company since becoming DineEquity. We continue to generate substantial free cash flow and returned approximately $87 million or 73% to our shareholders through quarterly cash dividends and share repurchases in 2013.

At this time we plan to maintain our current capital allocation strategy which provides for a very attractive dividend yield and affirms our commitment to create value for our shareholders. And while we expect dividends and share repurchases to be the primary components of our strategy, share repurchases will be done opportunistically.

We will remain thoughtful as we enter the marketplace. We will also reduce debt when it is in the best interests of the Company to do so.

We review our capital allocation strategy on an ongoing basis but believe that the current plan will help position us to successfully refinance our debt which is a high priority. We continue to evaluate our options very thoroughly but believe that now is not the right time to refinance.

During the course of 2013, we also made significant progress in many key areas. In addition to managing our capital structure we prudently controlled our G&A and capital spending. I will have more on that later.

We expanded our footprint into nontraditional locations, broadened our international presence and restored positive same-restaurant sales at IHOP. I am confident that we can build on these successes.

Now I'd like to switch gears and briefly discuss some of the fourth-quarter highlights at the brand level starting with IHOP. IHOP continued to outperform the family dining segment in the fourth quarter based on industry sales data despite a still uneven economic environment and intense competition in the breakfast category.

The brand fourth-quarter domestic system wide same-restaurant sales increased 4.5% which is the third consecutive quarter of positive same-restaurant sales. I am very pleased to say that it's also the highest quarterly increase since the first quarter of 2006.

The sales performance is a testament to the hard work and dedication of the IHOP team and especially our franchisees. Congratulations to everyone on the progress we have made.

The increase in same-restaurant sales reflected a higher average guest check primarily due to a favorable shift in product mix. The increase was partially offset by a slight decline in traffic.

Obviously there is still more that we can do to drive consistent and sustainable positive sales and traffic. This remains a very high priority.

And to address this we are laser focused on strengthening our advertising and media effectiveness and continuing to leverage our innovative efforts in social media, transforming the core menu through category renovation and ongoing supplication, improving the value proposition by offering excellent quality and made-to-order menu items, maximizing the potential of the next remodel package and accelerating testing of key initiatives to more effectively compete and broaden IHOP's breakfast appeal. We continue to make progress in social media. IHOP began 2013 with a strong presence on three social networks, Facebook, twitter and YouTube.

Throughout the year IHOP's social community grew to a total of eight social platforms and our Pancake Revolution has reached over 3 million members. We believe that successful execution of these initiatives will contribute to driving consistent and sustainable positive same-restaurant sales and traffic. On operations we again achieved all-time highs in key measures of our guest loyalty which includes overall satisfaction, likely to return and likely to recommend.

Now let's turn to Applebee's. Applebee's domestic system wide same-restaurant sales decreased 0.7% for the fourth quarter. The decrease in same-restaurant sales reflected a decline in traffic partially offset by an increase in average guest check.

Also as others have noted, the severe weather experience in parts of the country during the fourth quarter clearly had an adverse impact on same-restaurant sales. The weather has been extraordinary over the last few months and our 2014 guidance for sales at both brands reflects the impact to the start of the year. And while we are pleased that the brand continued to outperform the overall category, for both the fourth-quarter and the full-year 2013 based on industry sales data, there is more to be done to drive consistent and sustainable positive same-restaurant sales and traffic.

I mentioned last quarter that to remain the leader in the casual dining we are continually exploring ways to evolve the guest experience and to keep the brand relevant. To that end we are currently focused on pushing the envelope with the menu and the bar. Additionally we remain committed to our ongoing efforts to deliver value.

On the menu, we are continually refreshing and updating our offerings. In addition to updating guest favorites, we are working to broaden our appeal in a number of areas such as health and wellness.

With healthy kids' meals and children's nutrition remaining a top culinary trend, Applebee's launched a completely redesigned kids' menu. We are doing more to better target our guests and address their needs and tastes.

We are committed to reinvigorating our bar business. We must continue to evolve the bar experience capturing trends that resonate with our guests.

We are working hard to develop ways to communicate and create more personal interactions with the guests. We will do this while remaining faithful to our neighborhood roots.

Delivering value to our guests remains paramount. Since the introduction of our industry's first 2 for $20 offering at Applebee's we have been working to deliver value at every opportunity. To be clear we define value as more than just price. It is the overall experience.

And it is why we're using consumer-facing technology to increase the speed of surface and enhance how guests enjoy our restaurants. It is maximizing every touch point.

We know that sustainable progress will have to come from different areas such as the introduction of tablets to evolve the way we communicate with our guests. We recently announced that Applebee's is in the process of installing tablets at every restaurant nationwide placing more control of the dining experience in the hands of guests.

Having a strong franchisees base is another important piece of our success. Our franchisee is a vital link to our guests and the source of further development. So we must ensure that we have a solid base of experienced restaurant operators that will be with us in the future.

In 2013 we strengthened our Applebee's franchisee base through franchisee to franchisee sales and transfers as well as the closure of a few underperforming locations. We believe that focusing on these four key areas -- enhancing the menu, reinvigorating our bar business, delivering value and developing strong franchisees will unlock the growth that we have seen from Applebee's in the past.

And as you saw on a separate announcement this morning, Mike Archer will be departing as president of Applebee's. I'd like to thank Mike for his contributions these past five years.

We also announced that Steve Layt will be the new president of Applebee's effective immediately. Steve has a rich background in many phases of our industry and I look forward to working closely with him to drive sustainable, positive sales and traffic growth.

International is another key area where we have made organizational channels to enable growth. It is important to note that casual dining and family dining still remain underdeveloped categories in many parts of the world.

With our two category leading brands, DineEquity is uniquely positioned to exploit this opportunity. I believe there are very few franchise oars that can offer two number one US brands to aspiring franchisees which is a relevant point of differentiation.

In 2013 we made great strides towards growing our international presence. We had a strong year for international development at IHOP exceeding the prior year by 50%. We introduced IHOP to Saudi Arabia, Kuwait and the Philippines.

And at Applebee's we entered into two new countries, Egypt and the Dominican Republic. We have consolidated our international operations into one group giving it scale and the ability to track new developing franchisees while serving as one face to our international franchisees. I'll provide more color on this as the year progresses.

We continue to execute on our long-term strategy to maximize the business by innovating and evolving our strong brands, facilitating franchisee development and controlling G&A. We will continue to create lasting improvements and efficiency by evolving how our teams work together to deliver the highest value to the organization.

To close, we are taking stock of the Applebee's brand with the goal of widening our lead in the category. We've demonstrated in the past that we can change and adapt and in fact you are seeing it at IHOP right now. I am confident you will see it at Applebee's over time.

With that I will turn the call over to Tom Emrey, our CFO, to discuss the financial results. Tom?

Thank you Julia. Good morning everyone. I will provide a brief overview of the highlights for the fourth quarter and full year of 2013.

We ended 2013 on a strong note reporting fourth-quarter adjusted earnings per diluted share of $0.98, an 18% increase over prior year adjusted earnings per diluted share of $0.83. This includes approximately $1.7 million dollars in closure, transfer and extension fees received primarily in conjunction with the sale between two existing Applebee's franchisees.

In 2013 we received a combined total of $7.8 million in Applebee's termination transfer and extension fees. And I'd like to emphasize that we expect the value of any such transaction or the related fees to be minimal in 2014.

For 2013 we reported adjusted earnings per diluted share of $4.24 compared to $4.28 per diluted share in 2012. The decline was mainly due to expected lower segment profit as a result of the re-franchising of 154 Applebee's company-operated restaurants in 2012. This was partially offset by a lower cash interest in G&A expenses.

Turning to G&A for the full year G&A expenses were $143.6 million in line with our guidance for 2013 and down from $163.2 million in fiscal 2012 primarily due to lower compensation costs and a nonrecurring charge of $9.1 million recorded in 2012 related to the settlement of litigation. As disclosed in our 2014 guidance, we expect G&A to be in the range of $144 million to $147 million.

We generated strong free cash flow of $120 million for the full year 2013 compared to approximately $30 million in 2012. Now it's important to understand that free cash flow is defined here and is used in our 2014 guidance is net of mandatory debt service payments. The increase in free cash flow over 2012 was primarily due to higher cash flow from operating activities as a result of much lower income tax payments due to the lower gains on asset disposition, a decline in G&A expenses and lower interest costs in 2013 versus the prior year.

As mentioned earlier, we returned a significant amount of cash to our shareholders in 2013. And to provide some additional details we repurchased approximately 412,000 shares or $29.7 million of our common stock and paid out $57.4 million in cash dividends.

Regarding the refinancing of our debt, we continue to actively assess the interest rate environment and capital markets to ensure that we make the best decision. Meanwhile the make whole in our bonds continues to decline by approximately $5.5 million per month. This means that it will decline from roughly $81 million at the end of February 2014 to a plateau of about $36 million at October 30, 2014.

It is important to note that our interest expense guidance for 2014 does not include any savings from a refinancing. And our reasoning for that is that the timing, savings and even the future structure of our debt are all TBD at this point.

Turning briefly to the balance sheet. Our cash balance as of December 31, 2013, was $106 million and this includes approximately $53 million in cash held for gift card programs and IHOP advertising funds. For the full year 2013, there was a favorable swing in networking capital due to the timing of rent payments as a result of varying fiscal year end and other favorable changes in working capital.

So to wrap things up we have made a great deal of progress in 2013 and we have capped off a solid year demonstrating our ability to create shareholder value. We will continue to execute on our strategy to drive strong brands and position the Company for long-term success.

And with that I will turn the call back to Julia for closing comments. Thank you.

Thanks Tom. In summary we had a great year.

We generated $120 million in free cash flow. We announced a capital allocation strategy that returns a substantial portion of free cash flow to our shareholders and we have made great strides expanding the reach of our brands both domestically and abroad.

I am excited about our strategy to further enhance shareholder value. Our core objectives are to position the Company for long-term success, ensure strong and stable brands and to maintain financial discipline.

Now, Tom and I would be pleased to answer your questions. Operator?

(Operator Instructions). Bryan Elliott, Raymond James.

Hey, good morning. Just a quick question on the guidance and then a big picture.

On the guidance Tom, just checking on the working capital assumption in the FCF guidance for 2014. I assume it is flattish?

Yes, pretty much flat.

Okay. And then the interest guidance, it would appear that it doesn't assume any sort of debt paydown?

That is correct.

That's correct, okay. And there is no reason to assume there --

No, other than the nominal amount of the mandatory payment.

The minimum. Okay.

And Bryan as Tom said in his comments, the reason for that is we simply just don't know the timing, the debt -- we don't know anything at this point. And so it would be I think it would be premature to put that guidance in. Obviously if in fact we were to do a refinancing we would alert the investment community immediately.

Sure, sure. And then actually the big picture question I guess for you Julia.

So you talked at the end of your prepared remarks something about the continued success overseas, internationally. Could you sort of step back with us and sort of maybe draw some scenarios or what do you think each brand might look like five years down the road assuming that things continue to progress at a decent rate with the in the emerging markets and global economic growth?

So it is a great question and I think it came up on the last call on third quarter. And as I shared then we are in the process of assessing the international side of the business.

We brought in a new president for that division. We will be in a much better place to share that information with you towards the end of this year, talking about sort of the short-term and the longer-term opportunities.

So I am probably a couple of quarters away from answering that question. As you know guidance for 2014 has 80 to 100 restaurants in the development. The large majority will still be in the US.

So it is a ways off. But I promise to answer that question in about two quarters when we have done a full assessment.

Fair enough. Thank you.

Will Slabaugh, Stephens.

Thanks guys. Julia I wonder if you could give us a little bit more of your thoughts around what has been happening at Applebee's, where you think that the brand stands right now and sort of the underlying reason for the change there at the top.

So the whole thing with Applebee's is this is a great brand with a great history. I've probably said 1 million times we never would have made the acquisition if we didn't believe in the brand and its future.

And certainly I happen to be a little biased but I think we have some of the finest franchisees at Applebee's in all of the restaurant industry. So I would tell you that we have at Applebee's some of the same issues that many in casual dining have.

We need to distinguish and differentiate ourselves in a meaningful way so that we are not just like everyone else. And I don't think that is just done through the menu and the bar, I think that is a service platform, I think it is the way consumers use us. It is every aspect of the business that we are working on to differentiate.

The good news is I have every confidence that Steve Layt and myself, the Dine team, the franchisees will make that possible.

Got you. And then just if I could just ask one more on Applebee's. The guidance looks like it could indicate a little bit of a step down from what we have seen.

So I'm just curious if you are assuming or what you're assuming rather from a traffic and check growth standpoint for next year. And if possibly you are just giving your new president a little bit of lee way as he works into the position and maybe some new tactics there.

As I said in my prepared remarks, part of our guidance on the 2014 at Applebee's had a lot to do with the weather that hit very, very hard. And you know we don't talk about weather here, I don't think I have ever talked about weather.

But as I said in my prepared remarks it was extraordinary. If you look at the sales impact in the first part of the quarter it did have an impact.

As you know we have a lot of Applebee's east of the Mississippi. And so I think we guided accordingly for the year with that in consideration.

That makes sense. And just one more quick one if I could about tablets. I wonder if you could just talk a little bit more about what that opportunity means to you at Applebee's and what that timeline may look like throughout the year?

So we think it will take us the rest of the year and maybe a little bit into 2015. You're talking over 100,000 tablets at Applebee's. There is nobody in the United States who has ever done this.

So this is a major piece of work to put them at the bar and on every table. The whole idea behind putting a pay-at-the-table really addresses the touch point that the consumer has really hates to wait for the check and/or it gives the guest more control. But it also enables us to add onto the check because it literally is asking people throughout the meal would you like another drink, would you like an appetizer?

So it has a tremendous upside we think for sales. But it really lets the guest control the experience.

And frankly one of the other issues and obviously you have seen the media lately, people don't want the credit card to leave their presence. And this enables them to keep their credit card at all times.

And with fraud and all the issues that people have had in the retail sector with credit cards this is an enabler. So think of the tablets as a way to help the guest enhance the guest experience. Doesn't take away from service, doesn't take away from our fabulous food servers that focus on see-you-tomorrow but it does enable an even better guest experience.

Got you, thank you very much.

Chris O'Cull, KeyBanc.

Thanks. Julia I was pretty impressed with the number of new products and value options at an Applebee's location I recently visited. They were testing some new products I think. And should we expect more new products or value categories promoted at Applebee's this year than last year?

I think you will see six menus again this year at Applebee's. So that is what we did in 2013.

So the actual menus will remain the same but I think it is fair to say we have beefed up our, no pun intended, we have certainly increased and enhanced the level of new products, line extensions and continuing to look for value propositions. So I think you will see that throughout the year.

Whether we will market and advertise all that remains to be seen. But certainly you will see some of that on the menu.

We are testing a great many ideas and options. So I think you happen to be in the market that does a lot of testing. But you will see that throughout the year.

Did we see any new categories, menu categories, last year? Not just line extensions but flatbreads are becoming more popular in the industry. I don't think we saw any last year, is there a possibility that we could see a whole new category, a menu category, this year?

Yes, I think there is definitely testing going on both for line extensions and for categories and frankly as well additional healthy items and most importantly even the way we prepare them. So we are testing everything from back of the house to front of the house on both aspects of the food.

You know it is tough to elaborate too much Chris because it is highly competitive. But think of us as testing an awful lot and we will be able to share that after the fact as we go.

Okay, I am traveling so I may have missed this, but it didn't look like -- I was a little surprised your Company did not raise dividends it initiated roughly a year ago. What is the Board's thinking regarding the dividend?

In my prepared remarks I talked about the fact that our current notion was to keep the capital allocation strategy as it was in play in preparation for the possibility to refi. And so I think that was sort of our way of saying that we're going to keep things steady as she goes at this point and we will be back to the investment community when we have a better sense on the refi. But remind you that we have either the second, I think we have a second highest yield in the restaurant category industry.

Okay, great. I apologize, I missed that.

And then Tom, what was the composition expense in 2013 I think you said it was down, was it at a targeted level payout bill in 2013 compared I mean versus your budget? And then what are some of the gives and takes for the G&A expense guidance for 2014 that you are targeting?

Well basically the main driver year over year is the stock-based comp. It went up and then we also have a budgeted merit increase as we typically do. But there is nothing really dramatic going on as we go from 2013 to 2014.

Okay. It looked like some of the low end of the guidance suggested it could be lower year over year though in 2014 than 2013. What would drive that?

The year-end actual for 2013 was $143 million and change. And the low end of the guidance is $144 million. So it could be flat.

Okay, sorry about that.

It could be flat. Part of the changeover is the fact that we invested in international which we had made, which we had talked about on the call that we had recently invested in, hiring a head of international.

Great, thanks guys.

Michael Kelter, Goldman Sachs.

Good morning it is Ivan sitting in for Michael. I was hoping to kind of loop back to the question around table top technologies or tablets within the store. Can you help us understand why you chose tablets over tabletop technologies, what some of the benefits from that might be?

And then you had also mentioned how that could potentially help ticket and speed of service. But how do you see it as a driver, as a catalyst for same-store sales particularly as you try to remediate some of the traffic issues you have seen?

So, maybe I misspoke but if you have seen it and I have shown on television it is a tablet that sits on the table. So I guess it is both. It is a tablet but it is also a pay-at-the-table device.

So it physically sits on the table and you can swipe your credit card through it. So perhaps is the best of both worlds.

That technology we have been testing for over two years. And the franchisees entered into an agreement late last year with the vendor.

The notion of what does it do for sales, it does a couple of things. Because it automatically asks you if you want to reorder a drink, if you want to order an appetizer or remind you about desert, it does a lot of up selling automatically within its sort of the way it works through.

Its algorithm includes automatically up selling to every single guest that comes in. And so the odds of me saying to you that every food server in America automatically up sells a drink, an appetizer and a dessert would be naive.

So the reality is that technology enables 100% of the time that you get up sold. And it allows the food server to focus more on value-added items other than just taking orders -- spending time with the guest, getting to know the guest, getting to know the guest's name.

This notion of see you tomorrow and all of the work we've put into the experience at Applebee's gets enhanced by this technology. But from a sheer dollars and cents sign, it is all about the suggestive selling and literally the guest gets to control their experience.

You want to leave and not wait for your check, you don't have to. You literally want to get out, you're in a hurry and you didn't tell the food server that, here's an opportunity to do so.

So it has real opportunity for enhancing the guest experience. But it is also has real financial benefits because it is literally 100% guaranteed suggestive selling at every aspect of the 40-, 50-minute experience.

Okay, thank you very much.

Peter Saleh, Telsey Advisory Group.

Great, thanks. Good morning. I just wanted to ask about, just going back to the tablets, the functionality on the tablet from day one will it allow you to order from the entire menu or will you be limited in how should we be thinking about I guess functionality as we go through 2014? At what point will you be able to order from the entire menu and/or your drinks, appetizers and the main entrees?

Right, so right now today obviously it is a great question. The functionality will evolve.

Today it can do a second drink, appetizers and dessert. By the end of the year as we evolve the functionality it will be able to do a lot more and integrate with everything from mobile app to the like.

But right now it's functionality is the second drink, the appetizer, the desert and the check. But it will do a whole bunch of interaction by the end of the year 2015 interacting with everything from social media to mobile app, you name it. It is an evolving technology.

And can you just talk a little bit about the cost behind this? How much cost you're putting up versus your partner? What cost is this to your CapEx or your G&A budget?

So there are no costs in any of the line items for the corporation. We don't have any costs other than the slight cost it would be for our 23 company-operated restaurants.

But the way to think about the cost is our franchisees have the interaction. As I said earlier they sign the contract with the vendor and there is minimal to zero cost. Because in the functionality of the tablet is games and so forth that people can play for a nominal amount.

Great, thank you very much.

Amod Gautum, JPMorgan.

Hi, thank you. I am on for John Ivankoe.

Julia I wanted to punch it in first on the commentary you made around the Applebee's comp guidance which as I understand sounds like it's primarily driven by the first quarter's weather. I think this is still one of the lower guides to comps for 2014 across the major players in the industry.

So is it basically fair to assume that maybe the first quarter would be below the guidance and then you kind of normalized back to that in the subsequent quarters? Could you give us more context around why a negative 2% comp might occur for the year just given what happened in the first quarter.

So we don't guide quarter to quarter. We guide for the year.

And we obviously look at all the factors inherent in the business. I think all of us believe it is a realistic assessment of the guidance.

And I think it is fair to say the economic environment is still lumpy and bumpy. We thought the guidance was realistic in terms of where we were today and what we were looking at for the year.

Certainly if for whatever reason it changes dramatically as we have done in the past we would certainly reguide. But I think right now we think that is a realistic assessment.

Okay, fair enough. And then thanks for quantifying the numbers around the make whole payment, that was very helpful. Could you just help us understand what drives your thinking around whether that event would just be a refinancing as opposed to potentially taking leverage higher?

That is a decision we would have to make at the time. I couldn't really even speculate about that now because it depends on what type of instruments are available to us and what the credit markets are like at the time.

So it is a little premature to say that. But is a good question and it's one that we'll be answering as we move forward.

Okay. And if I could just slip one more in. The color that you gave on the franchisee segment profit guidance, I think a back-of-the-envelope calculation with gross unit growth and the comps kind of seems to imply that it would be you could potentially get above that range. Is there any commentary you could give us around maybe unit closures in 2014 or franchise expenses and margins as offsets?

So let me try to take it to a top level and then let Tom try to -- so at the top the guidance on Applebee's was 40 to 50 restaurants being developed. And right now the plan is on both brands to have a handful of closures.

We don't have anything major planned for this year. Franchisee to franchisee sales as we said in the prepared remarks, nothing of influence or substantive nature on the franchisee to franchisee sales of transfers.

You know in our business sometimes it is hard to tell but right now today we have nothing major planned or guided in. That is the top level.

I did not know if you wanted to add that. No? Okay.

Okay, thanks very much.

Michael Gallo, CL King.

Hi, good morning. Julia question I have is just on broad base, kind of high level on the Applebee's brand. You've obviously done a lot over the last three or four years with the revamps and the menu and improvement in the products, all the remodels which I think over 75% of the stores.

Yet you still haven't really been able to get that guest traffic piece going. So I was wondering if you look from a high level what areas you think Applebee's still has room to improve or is still falling short and how you plan to address those in 2014 and beyond? Thanks.

So it is a fair comment that we have had several years of comp growth and done a great job on that and this past year is the first year we saw some decline in that. Traffic has the getting it in a positive trajectory as has been all of casual dining has not been as easy and as forthright, and I think it is fair to say it is the work I mentioned earlier when someone else asked the question.

It is really focused on differentiating both the brand and the experience. So that is everything from the service platform to the food, some of the work we are talking about with the technology but really looking at everything from the menu to the technology.

Obviously that is the next steps that we are taking and the experience at the bar, everything that we are doing is focused on differentiating the brand. And I think what we are doing is trying to take advantage of where we are starting to see the traffic increases and exploiting those opportunities throughout the year in 2014 if that makes sense to you.

It does. And then perhaps I missed it, did you give a closings number expectation of either other brands? Or can we assume smaller numbers or --

No, I said a handful. What I said in my Q&A was a handful.

Right now what is planned is a handful of both brands. There's nothing material.

Right, okay. Thank you.

Ladies and gentleman this concludes the question-and-answer portion of today's event. I would like to turn back over to Julia Stewart, Chairman and CEO.

Thanks operator and thank you for participating this morning. Our next reporting date is scheduled for May 1, 2014.

If you have any questions in the mean time as always feel free to call Ken, Tom or myself. Thank you so much.

Thank you so much for your participation today. This does conclude the presentation and you may now disconnect. Have a great day.