Fiesta Restaurant Group Inc (FRGI) 2015 Q1 法說會逐字稿

Greetings and welcome to the Fiesta Restaurant Group first quarter 2015 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. (Operator instructions)

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host today, Ms. Lynn Schweinfurth, Senior Vice President and Chief Financial Officer.

Thank you. Good afternoon, and thank you for joining our call. Our first quarter 2015 earnings release was issued after the market closed today. If you have not already seen it, it can be found on our website, www.FRGI.com under the Investor Relations section.

Before we begin, I must remind everyone that our call today may include statements that are not based on historical information. These forward-looking statements include without limitation, statements regarding our future financial position and results of operations, business strategy, budget, projected costs and plans, and objectives of management for future operations.

Actual outcomes and results my differ materially from what is expressed or forecasted in such forward-looking statements. And we can give no assurance that such forward-looking statements will prove to be correct.

Important factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements can be found in our SEC filings. Please note that during today's conference call, we will discuss certain non-GAAP financial measures, which we believe can be useful in evaluating our performance.

Any discussion of such information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP, and a reconciliation to comparable GAAP measures is available in our earnings release.

Now I'd like to turn the call over to Tim Taft, President and Chief Executive Officer.

Thank you, Lynn. And good afternoon, everyone. We had another great quarter delivering sales, profitability, restaurant openings, and improved operating metrics. We're also on track to deliver the annual operating targets that we set out to achieve at the onset of the year.

We grew first-quarter revenues by 12.7% as we benefited from a combination of 23 net Company-owned restaurant openings as we continued to successfully and strategically advance in development of Pollo Tropical restaurants in new markets as well as in existing markets, and through purposeful cannibalization and legacy markets.

By adding restaurants in these legacy markets, we can relieve some stress from operations resulting not only in a better quality experience for both our team members and guests, but the attainment of our financial return goals as well.

In addition, we also experienced comparable sales increase at both of our brands. We achieved these strong top line results despite severe winter weather that led to restaurant closure in Atlanta, Nashville, Jacksonville, and Texas during the quarter.

Pollo Tropical comparable restaurant sales rose 6.4% during the first quarter, and 12.7% on a two-year basis, extending its track record of positive gains to 22 consecutive quarters.

While Taco Cabana comparable restaurant sales rose 3.8% during the first quarter and 4.6% on a two-year basis, achieving positive sales gains for the fifth consecutive quarter and 18 of the past 19 quarters.

During the quarter, Pollo successfully promoted the Tropical Lite menu, which added to the menu system-wide in late 2014 a menu category that we believe is an important consumer offering not only in the short term because it reinforces our healthy positioning. But especially when the rest of the industry implements nutritional content menu labeling by the end of the year, consumers will be further drawn to our offerings.

Taco Cabana continues to demonstrate the positive financial impact of improved operations execution, remodels, [value-added] promotion, and competitive spirit versus their sister brand. It is remarkable that a brand as tenured as Taco Cabana can still generate steady improvements in sales and guest satisfaction scores, a testament to how far Taco Cabana has evolved.

The brand is becoming even more competitive in the marketplace, setting itself for successful growth in the core Texas markets, and perhaps beyond.

As you know, we have been proactive in looking for a secondary growth vehicle to develop outside of the Texas market with our Cabana Grill test, while at the same time dedicating ourselves to reinventing, reintroducing, and reestablishing the original concept, Taco Cabana.

The top line momentum both brands experienced in the first quarter was augmented by effective controls within our four-wall operations and meaningful investments in human capital resulting in diluted EPS growth of 18.2%.

Second-quarter-to-date through this past Sunday, Pollo generated comparable sales growth just shy of 5%. And Taco generated comparable sales growth of approximately 7%.

Taco's second-quarter results thus far have benefited not only from continued momentum seen in the first quarter, but additionally from favorable weather comparisons. We continue to believe we're on the right track to meet our 2015 operating targets.

With that, let me update you on the progress we've made to date on key drivers.

Because we continue to believe that the key to success starts with our people, during the first week of April, we held the General Manager Leadership Conference in Dallas where we brought together GMs from both brands for the very first time.

Support teams were also present, and we focused on building leadership, strategic alignment, and relationships across the organization. We also recognized the team for their tremendous efforts that are driving our business results.

In fact, we currently have six Pollo restaurants that generate over $4 million in sales, and 36 Pollo Tropical restaurants that generate between $3 million and $4 million in sales. At Taco, we have five restaurants that generated over $3 million in sales, and 52 restaurants that generate between $2 million and $3 million in sales.

Overall, it was an exceptional event, and I could not be more proud of our operations team for their passion and commitment.

As I indicated last quarter, we now have more managers in training than ever before to support our aggressive restaurant growth. We've added one training restaurant to each Texas market -- Dallas, Houston, and San Antonio. And are in the process of doubling the number of training restaurants in Texas in the short term.

This will provide us the ability to train future GMs within their own markets and not require them to travel to another city or state to complete their training. In addition, after the completion of the training program, future GMs and AGMs -- assistant general managers -- will be working in open restaurants for several weeks to gain additional experience before they begin managing their own restaurants, and will be closely mentored by their district manager. This will ensure that we operate at the highest level possible, and thereby provide a great guest experience from day one.

Next I'd like to provide an update on our remodeling and re-imaging efforts. We remodeled eight Taco Cabana restaurants during the first quarter, and will complete our remodeling initiative at Taco by the end of the second quarter with 12 remaining restaurants.

We believe that the brand's sales trajectory is directly related to our restaurants refresh effort, complemented by enhanced operations, marketing, and media initiatives now in place.

With Taco's remodeling initiatives winding down, we are turning our full attention to re-imaging our Pollo Tropical system to reflect our Big Blue prototype signature elements. As we've already discussed, this prototype represents a seismic shift in more effectively communicating the promise of a uniquely Caribbean experience, which has been confirmed by our guests' reaction to new restaurants that have opened with this prototype thus far.

To that end, we will start re-imaging older restaurants in Orlando in June, with a goal of substantially completing the entire market by the end of the year. We are also planning to re-image one of our busiest and most high profile restaurants in South Florida this year to gauge the acceptance of Big Blue in our legacy markets. We plan to continue our re-imaging efforts in 2016.

We also continue to focus on building catering, to-go, drive-thru sales in the coming years across both brands, leveraging the successful introduction of online and mobile app ordering capabilities at Pollo, we will be introducing online and mobile app ordering at Taco Cabana this summer.

We are also in the midst of building a stronger operational foundation related to how customers order, receive and consume our products to fulfill or exceed their expectations, delivering a strong price-value proposition with great execution and food quality.

Doing off-premise correctly requires a fully integrated approach encompassing our menu offerings, labor scheduling and kitchen layout to make best use of technology and processes that integrate ordering and food production across distribution channels. We firmly believe that our integrated strategy will help us meet all of these demands over time.

Lastly, our robust development plans for 2015 consist of 28 to 32 planned Company-owned restaurant openings, the majority of which will be Pollo Tropical restaurants. We are adding more restaurants this year than ever before. And as the operations team has accelerated its pace of openings, so too has the development team in securing sites and opportunity for 2016 and beyond.

As part of our Go West strategy for Pollo Tropical, 10 to 12 of these new restaurant openings will be in Texas, including two that are already open during the first quarter. We also opened up two restaurants in Atlanta, and two restaurants in Florida in the first quarter.

We will open two restaurants in Nashville this summer, enabling us to substantially reach media efficiency in this market by the third quarter. We will open a total of four restaurants in Atlanta and approximately 10 restaurants in Florida this year.

As of today, we have 17 restaurants under construction and expect to have all of 2015 restaurant opening under construction by summer.

As we've said on previous calls, we continue to focus our Pollo Tropical development strategy within three different categories: legacy South Florida markets where we have the highest average unit volumes; low- to mid-penetrated markets which include Jacksonville, Fort Myers, Naples, Tampa, and Orlando; and lastly, emerging markets in Texas, Atlanta, and Nashville.

New restaurant performance is on track as we try and build out our markets as quickly as possible to get to a number of restaurants that can efficiently and effectively advertise via broadcast media.

In summary, we're pleased with our successful start in 2015. Our teams have demonstrated strength and tenacity while positioning ourselves for sustained growth, and to borrow a phrase, creating an enterprise that's built to last.

With that, let me turn the call back over to Lynn.

Thank you, Tim. Overall a very good quarter. Let me begin with a summary of our financial results for the period, after which I will review our outlook for the full year.

We grew total revenue by 12.7% to $163.9 million in the first quarter, as we benefited from new Company-owned restaurant openings over the past year, and solid comparable restaurant sales growth at both brands.

Pollo generated comparable restaurant sales growth of 6.4%, which consisted of a 5.5% increase in average check, and 0.9% growth in comparable guest traffic. Average check was driven by menu price increases that positively impacted restaurant sales by 5.4%.

Sales cannibalization in Florida related to new restaurant development was a little over 1%, consistent with our expectations.

Taco generated comparable restaurant sales growth of 3.8%, which consisted of a 3.1% increase in average check and 0.7% growth in comparable guest traffic. Average check was driven by menu price increases that positively impact restaurant sales by 1.9%, and a positive change in the sales mix due to the implementation of new menu boards in February.

If you recall, we saw a positive mix shift beginning in January of last year when we refined our menu board layout at Taco to de-emphasize combo meals, resulting in more plates being sold. Plates do not come with drinks or chips and queso, and we are seeing guests add these items to their orders, resulting in a higher check average and enhanced profitability.

In February of this year, we rolled out a new menu board which eliminated combos entirely. Guests can still order a combo meal, but it is no longer displayed on the menu. This recent menu change produced incremental sales mix and profitability over the prior year.

Restaurant-level EBITDA as a percentage of restaurant sales improved 100 basis points to 23.3% due to favorable cost of sales, labor, rent, and advertising expenses that were partially offset by higher pre-opening and depreciation and amortization expenses. In dollar terms, restaurant-level EBITDA rose 17.7% to $38 million.

Consolidated adjusted EBITDA increased 20.2% to $25 million and improved 90 basis points as a percentage of revenue to 15.2%.

Cost of sales was approximately the same as the prior year, primarily due to the benefit of price increases, a shift in sales mix to more profitable menu items due to Taco's new menu board, and effective supply chain initiatives. These benefits offset commodity cost increases.

Restaurant wages and related costs improved as a percentage of restaurant sales by 30 basis points, as sales growth at both brands more than offset labor costs at new elevated Pollo restaurants.

Pre-opening costs increased by $0.3 million to $1 million in the first quarter of 2015 due to six Company-owned restaurant openings in the first quarter, versus four in the year-ago period. And the timing of expenses for future restaurant openings, which are typically incurred four to six months prior to opening.

G&A expenses increased $0.5 million sequentially from the fourth quarter, and $1.6 million compared to last year to $13.8 million. This was primarily due to ongoing human capital investments as we have more managers in training than ever before to support our Pollo expansion, FICA taxes being higher in the first half of the year, and investments made in our infrastructure to support our growth strategies.

Depreciation and amortization increased $1.5 million to $6.8 million in the first quarter of 2015 due to new Company-owned restaurant openings over the past year.

Interest expense decreased by $0.2 million to $0.4 million in the first quarter compared to the prior-year period primarily due to lower borrowing rate. Our weighted average effective interest rate at the end of the quarter was 1.7%.

We incurred an impairment charge of $0.1 million in the first quarter related to Taco locations that will be closed during 2015. We also recognized other income of $0.4 million associated with a deferred gain on a prior sale lease back transaction that was recognized upon termination of a lease due to an imminent domain proceeding.

Our annual effective income tax rate for 2015 of 38.3% is consistent with the prior-year period and assumes that the Work Opportunity Tax Credit is not reenacted in 2015.

Net income increased to $10.5 million in the first quarter of 2015, or $0.39 earnings per share as compared to net income of $8.7 million in the prior-year period, or $0.33 earnings per share.

Turning to brand margins, consolidated restaurant-level EBITDA margins expanded in the first quarter by 100 basis points. This expansion was the result of margin expansion at Taco of 170 basis points, partially offset by margin contraction at Pollo of 40 basis points.

Taco continues to do an excellent job controlling costs and flowing dollars to the bottom line. Pollo margins were negatively effected by chicken costs and labor and rent expenses at new restaurants in line with our expectations.

At quarter end, we had a cash balance of $3.5 million. After reserving $6.3 million for letters of credit, we had $73.7 million of borrowing capacity under our senior credit facility, and we are in compliance with all related covenants.

At this time, I would like to review our financial targets for 2015, which is a 53-week fiscal year. Please note that this extra week is already factored into our operating target. For 2015, we continue to expect mid single-digit comp sales growth at Pollo, and low single-digit comp sales growth at Taco.

Comp Sales expectation for Pollo includes approximately 1% in sales cannibalization as we continue building our presence in existing markets. These projections are unchanged from previous guidelines.

As a reminder, based on our 2015 contracts in place, chicken costs will further increase in the second quarter compared to the first quarter, and then increase again in the third quarter.

We believe higher cost of sales as a percentage of restaurant sales at Pollo will be partially offset by lower cost of sales as a percentage of restaurant sales at Taco. That being said, and consistent with prior communications, we continue to look for opportunities to mitigate cost increases.

G&A expense expectations continue to be between $53 million and $55 million. Due to human capital and infrastructure investments to support our growth strategy, we believe we will come in at the higher end of this annual range. We continue to expect annual G&A expense as a percentage of revenues to improve over 2014.

As Tim mentioned, we continue to project opening 28 to 32 new Company-owned restaurants in 2015. We are also anticipating closing up to six restaurants in 2015, of which two of the closures had been expected to occur in 2014, but were delayed.

Of the six closures, five are expected to be Taco restaurants and are primarily associated with highway expansions, or lease expirations in trade areas that have become less vibrant. Three of the five Taco closures took place in the first quarter.

And finally, we are maintaining our capital expenditure projections as previously communicated.

To conclude, a very good start to 2015. And we look forward to continued progress as a result of our key business drivers.

With that, operator, please open the line for questions.

Thank you. We will now be conducting a question and answer session. (Operator instructions)

Alex Slagle, Jefferies.

Hey, thanks. (Inaudible) question on the same store sales trends. If you could give some color on how they went through the quarter, and also how weather specifically impacted both brands.

Well, as the -- I think as the final results, the same store sales for Taco were really, really good. We had an issue with Pollo as well as Taco in some of the cold weather markets. Same store sales at Pollo were effected. You know, any time you build outside of sunny Florida, you're going to run into some problems.

But for people that follow our story closely, Alex, you'll remember that in first quarter of 2013, when there was a tax -- taxes went up and IRS checks came in late, there was a little pinch of liquidity that people had. And as a result of that, our same store sales kind of softened a little bit while people were adjusting.

If you take a look at three of our best performing markets, Dade, Broward, and Palm Beach, over 750,000 people signed up for the affordable healthcare. If those three counties were an individual state, they would have ranked third in the Union in terms of number of people signing up.

So like what happened in first quarter two years ago, the same thing is happening. There's a little bit of pinch while people are adjusting to paying for things -- bills that they didn't have a year ago.

But all in all, as we said, we started off the year with both brands really, really strongly. And Taco continues that expansion now.

Great. Thanks. And then on the remodels, Pollo in Orlando, if you have any initial reaction, anecdotal evidence of what people are saying?

Well, we haven't -- we're still in the permitting phase right now, Alex.

[Oh], okay.

But we'll be sure to let you know as soon as that happens.

Great, thanks.

Will Slabaugh, Stephens.

Yes, thank you. Wanted to ask a little bit more about the mobile ordering. Can you talk a little bit more about what that's going to entail and if that's going to incorporate mobile pay as well?

Yes, Will, actually we already accept Apple Pay in our restaurants today. And in terms of mobile ordering, we've rolled out almost -- well, we've rolled out mobile ordering to almost 100 restaurants at Pollo. And we'll complete that by the end of June.

And then as we mentioned in our pre-opening comments, Taco will take on a mobile platform sometime in the short term.

Got it. Okay. And then just a little bit more about kind of what you're seeing in some of your markets. Obviously, Taco's very strong to start the quarter-to-date off at 7%.

Is there anything different you're seeing in sort of the North Texas, South Texas [weather]? I know you mentioned the weather was beneficial year-over-year, so I didn't know if there was anything else to call out there.

You know, we had some favorable weather as we mentioned a year ago, like we mentioned for fourth quarter. That was a percentage of what the difference was. But all in all, Taco continues to perform very, very well throughout the State of Texas.

Great, and last little follow up on weather, if I could. Do you have the number of closed or effected days for the quarter, by chance?

Yes, we do. But that is only one snapshot of the picture. I think the other consideration is we were open for many hours where we saw a much reduced traffic as a result of the weather.

Got it. Thank you.

Imran Ali, Wells Fargo.

Good afternoon. Thanks for taking my questions. The absolute number of Pollo unit openings has increased in each of the last three years and you've guided to a fourth such year in 2015. Where do you see the concept's unit development rate peaking either in terms of absolute units or year-over-year growth rate?

Well, Imran, what we've said consistently from the very beginning is that you can count on the enterprise that's FRGI growing at an 8% to 10% clip. And so we'll stick with that right now. But as we've mentioned in the pre comments, that our desire is to grow as quickly as we can do it correctly.

And the first step of that is making sure that we've got the right general managers and assistant general managers trained and on the ground. So as we're building infrastructure in Texas, we'll be able to make sure that we do a good job of opening up those restaurants.

You will be -- speaking of infrastructure -- there will be a press release coming out next Monday that Bob Moore, who was formerly a Senior Vice President of Operations for Whataburger -- I worked with for 11 years -- at one time was a Vice President of Ops Services for Sonic, will be joining our Company, and will be running the Pollo West. So his sole responsibility will be making sure we have the right people on the ground, great operations, and training for faster growth if possible.

Got it. And just following up on a prior question about the mobile app at Pollo. Can you share any additional color on what you're seeing so far? Specifically, any details on average check or frequency relative to customers not using the app so far?

Yes, I think certainly we're seeing a much higher average check. So we're encouraged by that. And so we'll continue to really build that part of our business more organically initially as we put more people and processes in place.

Got it. Okay, great. Thanks very much.

(Operator instructions)

Joshua Long, Piper Jaffray.

Thank you for taking my question. Tim, I wanted to circle back to the manager conference and the opportunities you mentioned around just getting synergies between the two brands, whether it was in training or just kind of sharing ideas. I'm sure there's still a lot to come there.

But I was curious if you might be able to elaborate on that a little bit. And just kind of maybe flesh out the opportunity as you all see it and discussed it at that conference before -- your two brands, especially in Texas and some of these new emerging markets.

Yes, Josh. Great question. I think one of the reasons that we wanted to bring both brands together -- and typically, each year we have an individual brand conference. We wanted to bring them both together in our new expansion market in Texas to show the general managers the bigness that this Company is achieving, and the opportunity for, if you're an assistant manager, or if you're a general manager, that if you want to have a career within FRGI, you're not limited to Pollo or you're not limited to Taco. So the opportunity for people to grow and build within the Company is there.

We've also shared with them the responsibility to bring on new folks. So we want to get to the point where we have a 100% grow from within, promote from within. And bringing all the general managers together really opened up, I think, a lot of eyes to the hope that is this brand in terms of where it's going and the growth opportunities for advancement.

That's helpful. And then as we think longer term, does it make sense that there could be an opportunity to have some cross-pollination between Taco managers or Taco human capital and Pollo human capital? Or is the idea that you would still build up both of those independently to kind of source talent for those brands independently?

I think the way that we look at it right now is that given that our brands, Taco and Pollo, have some of the highest average unit volumes in the system, that's a tribute to the high quality general managers and system managers that we have.

Our vision is that we'll be able to cross-pollinate, that we'll be able to use -- if somebody wants to move to Texas, or if they want to move across the street, that the opportunity for advancement within FRGI is there.

That's very helpful. Have a lot of the systems been put in place now as we just kind of thing of the inning that we're in now around this human capital development and investment that you talked about?

I'm guessing a lot of that's in G&A for the year already, or your expectations. But kind of, where are we in that rollout of tools or services, or however you may think about and discuss it internally?

About the fourth inning right now. In terms of dollars, what was in the budget -- Bob Moore was already in the budget. So I think if your question was, should we expect incremental G&A between now and the end of the year because of this human capital expansion, the answer is no.

Yes, that was certainly part of it. But then just also curious, I mean, I would imagine it takes several years to really get all this platform built. So just really curious on kind of your fourth inning commentary. So that was helpful.

And then one last one for me, as we thinking about the pricing you took in the fourth quarter, there was some discussion around how that would be handled. It appears that it's been received very well. I'm curious on how that may have or may not change your expectations on -- or outlook for chicken price over the remainder of the year given the potential for continued pressure maybe on labor, and maybe in particular on chicken.

Yes. I think, Josh, we put in place our pricing late in the year for Pollo. And we'll see that pricing throughout the year and lap it in the fourth quarter. We haven't made any decisions in terms of taking any incremental price for 2015 above and beyond what we already have.

Okay, thank you.

Thanks, Josh.

(Operator instructions)

Nick Setyan, Wedbush Securities.

All right, thanks for taking my question. Lynn, what's pricing going to be in Q2?

Well, right now we're carrying roughly 2.5% for Taco and over 5% for Pollo.

Okay. And so for Q2 -- basically for all of Q2, it's kind of about 5%? Or a little bit over 5%?

Yes.

And then Q3 and Q4 that kind of falls off if we don't take anymore pricing?

Well, I mean, if we're not taking anymore pricing it starts to fall off in fourth quarter for Pollo.

Okay. Can we maybe talk about the advertising and if there was any kind of a shift as the quarter progressed and into Q2? And maybe if there's anything coming up that we may actually see a little bit of an acceleration as the quarter progresses because of the transaction trend?

Are there going to be any catalysts for it? I think what we're seeing, as Lynn indicated, the -- our momentum with Taco remains. It's very, very strong. I think what you're seeing probably on a smaller note, Nick, that in our advertising we have a new planning and buying service that we had versus a year ago.

And in round numbers, let's say that the buy efficiency for Dallas/Fort Worth is 18% more efficient than a year ago, we're taking that incremental 18% and spending it on a baseline of radio for Pollo. And we're keeping the [weight] levels the same for Taco. And we're seeing that that's beneficial -- the buy-in is beneficial to both brands.

I think as the year goes on and we get more and more restaurants developed in the various DMAs in Texas, then clearly we're going to have more and more money to spend on those markets. And once again, that's why those three markets have our undivided attention to get big as fast as possible.

Got it. And then just kind of any update on the Cabana Grill concept? I know we have the second one open now for a few months. Any commentary on that, any color would be helpful.

Yes. I think the test for Cabana Grill is exactly that, a test. We are adding breakfast in the coming weeks to the Jacksonville market. So that's another daypart, so we'll have breakfast, lunch, and dinner there.

I think that one of the most exciting things that has come out of the test is that while looking at the market, and looking at the brand Cabana Grill completely differently, looking at ways to lower our cost of entry into the market for -- or into the marketplace for future restaurant. And in doing so, we're finding ways to build Taco Cabanas more effectively, more efficiently.

And at the same time, we're looking at new innovations for product and product development. So with that, we're helping strengthen the Taco Cabana brand at the same time. So we'll see what happens when we add breakfast. At the end of the day, it's a nice little brand. The question is, where is the money going to come from for development? Is it going to come out of Pollo? Does it come away from Taco? Where is it going to be? But it's still in the early stages.

Got it. And just one last question, the Calypso Beef, I know you guys were planning on rolling it out system-wide. But I think it turned into more of a limited time offer, or more of a test than a limited time offer. Can you maybe comment on that, and if there are still plans to roll that out system-wide?

I think ultimately the goal is to get it out system-wide. Right now it's -- in a lot of markets, we haven't felt the need to do that and that an LTO is the best possible place for it. It is a higher cost item. And it is so delicious that I think everybody in the restaurant enjoys eating it too -- team members. (Laughter)

So I think right now we're looking at LTO and systematically, or I guess strategically we'll look for different areas to plug it in.

Got it. Thanks very much.

Thanks, Nick.

Brian Vaccaro, Raymond James.

At Taco Cabana, can you comment on the daypart trends? Is it still being led by breakfast? And maybe a quick update on what you're seeing in the overnight business specifically?

Sure. I think our biggest daypart areas of growth -- breakfast is certainly the highest growth area. And then late afternoon is the other.

Overnight isn't as robust. But we're also continuing to figure out which stores we want to remain open overnight. And we do an ongoing analysis around profitability to make that determination. But overnight isn't a huge piece of our business.

And then lunch and dinner are certainly about equally growing at a good trend.

Yes, I think, Brian, it's fair to say that everybody else is getting into the same overnight business. It's the toughest daypart. It's the lowest check average. There's a lot of things that go one after 2:00AM, between 2:00AM and 6:00AM. So that's not really one that we're really focused on.

But we really are seeing some increase in sales in some of the other dayparts. And one of them is when restaurants in the past might be closing, we're looking at perhaps keeping them open a little bit longer.

Okay. That's helpful. And then, Lynn, just one more quick one. On the extra week, can you help us quantify the impact of that in 2015?

Yes, we haven't quantified the 53rd week.

All right, thank you.

Thanks, Brian.

Thank you. Ladies and gentlemen, there are no further questions at this time. This now concludes our teleconference for today. You may now disconnect your lines at this time. Thank you for your participation and have a wonderful day.