Monro Inc (MNRO) 2016 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Monro Muffler Brake's Earnings Conference Call for the first quarter of fiscal 2016. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions)

As a reminder, ladies and gentlemen, this conference call is being recorded and may not be reproduced in whole or in part without permission from the Company.

I would now like to introduce Ms. Effie Veres of FTI Consulting. Please go ahead.

Thank you. Hello, everyone, and thank you for joining us on this morning's call. I would just like to remind you that on this morning's call, management may reiterate forward-looking statements made in today's release in accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. I would like to call your attention to the risks and uncertainties related to these statements, which are more fully described in the press release and the Company's filings with the Securities and Exchange Commission.

These risks and uncertainties include but are not necessarily limited to uncertainties affecting retail generally such as consumer confidence and demand for auto repair, risks relating to leverage and debt service including sensitivity to fluctuations in interest rates, dependence on and competition within the primary markets in which the Company stores are located, and the need for and cost associated with store renovations and other capital expenditures.

The Company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The inclusion of any statement in this call does not constitute an admission by Monro or any other person that the events or circumstances described in such statements are material.

Joining us for this morning's call from management are John Van Heel, President and Chief Executive Officer; Cathy D'Amico, Chief Financial Officer; and Rob Gross, Executive Chairman.

With these formalities out of the way, I'd like to turn the call over to John Van Heel. John, you may begin.

Thanks, Effie. Good morning and thank you for joining us on today's call. We're pleased that you're with us to discuss our first quarter fiscal 2016 performance. I'll start today with a review of our results, key initiatives and outlook for fiscal 2016. I'll then turn the call over to Cathy D'Amico, our Chief Financial Officer, who will provide additional details on our financial results.

Despite a choppy environment in the first quarter, our team's consistent execution of our proven strategy and initiatives allowed us to deliver net income growth of 11%. While first quarter comparable store sales of negative 0.4% were below our guidance of flat, our continued focus on margin improvement and effective cost control combined with the outperformance of our recent acquisition enabled us to achieve record earnings per share of $0.57, the midpoint of our guidance range. These results demonstrate that our business model is working.

However, as I said, in May, while we have expanded our operating margin and increased earnings and the bottom line remains more important than the top line, we are working to combine these improvements with higher comparable store sales to consistently achieve the level of sales and earnings growth that I expect of our Company.

On that call I describe the set of initiatives to help drive traffic and sales. These initiatives are being led in large part by our new Senior VP of Consumer Branding and Digital Marketing. We are shifting our marketing spend to more efficient digital advertising thereby driving more customers into our stores and to our website as a similar overall marketing spend. These customers will find more robust website capabilities, including improvements to our online appointment, tire search and customer review process.

In addition to these website enhancements, we are increasing the collection of customer e-mails which allow us to more effectively and efficiently communicate with our customers and drive higher conversion.

Also, for our local commercial customers, we've recently launched a new online tire ordering system which provides them with better visibility into tire pricing and inventory while increasing convenience, delivery speed and tire sales.

In addition to our digital initiatives we continue to focus on the building block of our traffic oil changes. On top of Monro's everyday low price we also offer promotions such as free service checks and wiper blades. These are low cost to Monro but high value to the customer, allowing us to drive increased visits to our stores where we can build trust with those customers and capture sales of needed maintenance, tires and repairs.

While most of these initiatives are still early in their implementation, I believe that this heightened focus is already having a positive impact on our traffic and sales which will increase as we move forward this year. As I said in May, I am tired of being cautiously optimistic about the consumer.

Now let's turn to the quarter's results. During the quarter, service categories such as alignment and brakes were up 8% and flat respectively on top of high single digit percent increases in the prior year. Tire sales were flat with 3% higher average retail pricing offset by a decline in tire units.

After a slow start to the first quarter, overall traffic and sales improved in May and June and led to slightly positive comparable store sales in both months. Our results in July improved with positive traffic, tire units and oil changes driving comparable store sales up approximately 2% month to date. Additionally, comparable store tire sales from May, June and July are positive, representing the first consecutive month increases in this category since fiscal 2014.

While I'm encouraged by the comp store sales trend, I'm not satisfied with the 2% increase. We are highly focused on generating positive profitable sales above that level. Importantly, the effective management of our retail tire pricing combined with our ability to leverage our increasing scale and flexible supply chain allowed us to continue to increase our tire margin.

In the first quarter, our growth profit dollars collected per tire were higher than any quarter in fiscal 2015. This is very impactful, given that every $1 increase in gross profit per tire is worth $0.05 of EPS, while every 1% increase in tire units is worth $2.5 of EPS.

Gross margins for the quarter increased by 80 basis points to 42.2%, a result of both lower material costs as a percentage of sales and strong payroll management. This improvement in gross margin is particularly impressive, given we were lapping the substantial increase in gross margins we delivered in the first quarter of last year and the fact that this year's quarter sales mix shift shifted slightly to the lower margin tire category.

Total operating expenses as a percent of sales de-levered by 10 basis points year over year as a result of the layering of operational expenses from newly-acquired stores, largely offset by focused cost control.

Despite the choppy environment, we achieved another quarter of strong profit growth with first quarter operating income of 14% year over year and operating margin expansion of 70 basis points to 14.2%. For the quarter, net income was $18.8 million, an increase of 11% versus last year or $0.57 in earnings per share net of $0.01 of due diligence costs.

Now, I'd like to discuss our growth strategy. In fiscal 2015, we acquired 81 locations representing approximately $85 million or 10% growth in annualized sales. As a result, we ended this fiscal year with greater economies of scale that are benefitting us today as well as positioning the Company to deliver strong earnings growth over the next several years.

Continuing this solid acquisition growth, we are pleased to announce that we closed on an acquisition of four stores in Massachusetts earlier this month and have also signed a definitive agreement to acquire 27 stores in central New York and Pennsylvania, which is expected to be completed by mid-August.

The 27 store chain will be re-branded as Mr. Tire stores allowing the Company to fill in existing markets where we currently operate Monro Brake & Tire locations. This acquisition significantly increases Monro's market share in these markets and is a great demonstration of the advantages of Monro's two-brand strategy. The four Massachusetts stores will be operated as Monro Brake & Tire location further extending our brand in this important market.

These transactions have approximately $31 million in annualized sales with a sales mix of 60% service and 40% tires. Although these acquisitions are expected to be slightly dilutive to earnings per share in the second quarter, we expect them to be breakeven in fiscal 2016. As we expect cost synergies to be realized in an accelerated rate due primarily to our ability to leverage existing distribution in these markets.

In April, we completed the previously announced acquisition of the Car-X brand, a chain of 146 franchise locations operating in 10 states, three of which are new states for Monro.

In fiscal 2016, we continue to expect that Car-X will be slightly accretive to earnings per share, adding approximately $2 million in EBITDA. Including the Car-X acquisition, the transactions completed and announced to date in fiscal 2016 represent approximately $35 million in annualized sales growth.

Acquisitions increase Monro's total sales and store count and as a result raise our purchasing power with vendors. They also allow us to further leverage distribution, advertising, field management, and corporate overhead costs, all of which will help drive future operating margin expansion.

The current operating environment continues to create favorable acquisition opportunities and we continue to expand our operating margin advantage and produce more profit than competitors. In the short term, choppy sales trends and higher costs continued to weigh on smaller dealers, but importantly, the long-term opportunity is that owners of independent tire dealers are at or near retirement age without an internal succession option.

Even when excluding the three fiscal 2016 acquisitions, we continue to have more than 10 NDAs signed, which is the highest number we've ever had at any one time. Therefore, we would be surprised if acquisitions in fiscal 2016 did not exceed our goal of 10% annualized sales growth as outlined in our five-year plan.

Now to the details of our outlook. For fiscal 2016, taking into account anticipated sales contribution from 2015 acquisitions, we are raising our sales guidance to a range of $950 million to $970 million versus our previous guidance of $935 million to $955 million. This range assumes comparable store sales of positive 1% to 3% unchanged from our initial guidance. As a reminder, we closed 34 BJ's stores in fiscal 2015, which reduces our sales base versus last year but will have a minimal impact on earnings.

Turning to our expectations for cost of goods sold, as we discussed last quarter, we continue to believe that Monro's overall tire cost including related warehousing and logistics will be down slightly in fiscal 2016 with more of the benefit realized in the back half of the year. We expect lower raw material costs, increasing competition among manufacturers, and our ability to ship sourcing to suppliers outside of China to more than offset any impact from the recently implemented tariffs on tires imported from China.

We believe the tariff only widens our competitive cost advantage in the market as smaller dealers lack the scale and sourcing capabilities to mitigate these higher costs like Monro. Based on these assumptions, we continue to expect fiscal 2016 diluted earnings per share to be in the range of $2 to $2.20 versus $1.88 in fiscal 2015, an increase of 6% to 17% year over year on top of a 40% increase in the prior two years. This guidance includes a $0.12 to $0.17 contribution from 2015 and 2016 acquisitions and is based on 33.1 million weighted average diluted shares outstanding.

As a reminder, given the lower material costs we anticipate this fiscal year, we will need a comparable store sales increase of 1% to overcome inflation versus the 2% to 2.5% increase we have required in prior years. With that said, remember that every 1% in comparable store sales above that inflation hurdle generates an incremental $0.07 of EPS. The midpoint of our fiscal 2016 earnings guidance represents operating margin expansion of 70 basis points for the fiscal year on top of the 80 basis point improvement we realized in fiscal 2015.

Turning to the second quarter, July comparable store sales month-to-date are up approximately 2% and traffic, oil changes, and tire units are also positive versus the same period last year. Based on these factors, we expect second quarter comparable store sales to increase 1% to 3% versus the prior year. We anticipate total sales for the second quarter to be in the range of $233 million to $237 million, which reflects the comparable store sales range, the sales contribution from our fiscal 2015 and 2016 acquisitions, and the closure of the BJ's locations last year. We anticipate second quarter diluted earnings per share to be in the range of $0.54 to $0.59 versus $0.50 last year. This guidance assumes slightly higher due diligence costs related to potential transactions and includes $0.02 of expense related to annual director stock option grants.

Long-term trends remain favorable for our industry with nearly 250 million vehicles on the road, a record average age of those vehicles of 11.8 years old, a slowly declining population of service base, and consumers choosing do-it-for-me service more frequently. Importantly, for the first time vehicles 13 years old and older accounted for 28% of our traffic. These vehicles produced average tickets similar to our overall average demonstrating that customers continue to invest in and maintain them, even if they advance in age.

Our key competitive advantages are still in place, including our low-cost operations, superior customer service and convenience along with our store density and two-brand store strategy. Our five-year plan remains unchanged and continues to call for, on average, 15% annual top line growth, including 10% growth through acquisitions, 3% comps and a 2% increase from Greenfield stores. Our acquisitions are generally diluted to earnings in the first six months as we overcome due diligence and deal related costs, while working through initial inventory and the operational transition of these stores.

With cost savings and recovery in sales, results are generally breakeven to slightly accretive in year one and $0.09 to $0.12 accretive in year two and another $0.09 to $0.12 accretive in year three. Over a five-year period that should improve operating margins by approximately 300 basis points and deliver an average of 20% bottom line growth.

As our results have shown, our disciplined acquisition strategy is further strengthening our position in the marketplace. We expect it to continue to provide meaningful value to our shareholders for many years to come.

Before I hand the call over to Cathy, I want to reiterate some of the positive trends that we believe will favorably impact our bottom line in fiscal 2016.

These include the positive impact to traffic and sales from our current digital and other sales initiatives, a favorable tire pricing environment with tire inflation of 2% to 3%, which represents 1% increase in overall comparable store sales on flat unit volume, tire cost of goods that are slightly down versus fiscal 2015, at current prices our year-over-year benefit from the decline in oil costs, net of reduced waste oil credits of approximately $1 million, significant sales and earnings contributions from our fiscal 2014, 2015 and recent 2016 acquisitions, and additional acquisitions at attractive valuations.

We are committed to combining our proven business model and execution with improved sales performance to achieve the level of sales and profit growth that we expect from our Company. With that, I would like to thank each of our employees who continue to work hard to provide superior service to our loyal customers. Monro's strong brand and financial success is the direct result of this consistent execution which is an integral part of our Company's compelling customer value proposition.

Now, I'd like to turn the call over to Cathy for a more detailed review of our financial results. Cathy?

Thanks, John. Good morning, everyone. Sales for the quarter increased 8.7% and $19 million. New stores, which we define as stores opened or acquired after March 29, 2014, added $25.2 million, including sales of $23.1 million from the fiscal 2015 acquisitions. Comparable store sales decreased 0.4% and there was a decrease in sales from closed stores of approximately $6.1 million, largely related to the BJ's store closures in fiscal 2015.

There were 90 selling days in both the current and prior-year first quarters. At June 27, 2015, the Company had 999 company-operated stores and 146 franchise locations as compared with 966 stores and 1 franchise location at June 28, 2014. During the quarter ended June 2015, the Company added four company-operated stores and closed four.

Gross profit for the quarter ended June 2015 was $99.7 million or 42.2% of sales as compared with $90 million or 41.4% of sales for the prior-year quarter. The increase in gross profit for the quarter ended June 27, 2015 as a percentage of sales is due to several factors, including a decrease in total material costs primarily related to a decrease in oil costs.

Additionally, labor cost decreased as a percentage of sales as compared to the prior year due to a focus on cost control. Productivity as measured by sales per man hour also improved as compared to the prior-year quarter. Distribution and occupancy costs were relatively flat as a percentage of sales as compared to the prior-year quarter. Operating expenses for the quarter ended June 2015 increased $5.5 million and were $66.1 million or 28% of sales as compared with $60.6 million or 27.9% of sales for the quarter ended June 2014. Approximately $5.4 million of the $5.5 million of the increase in operating expenses was directly attributable to increased expenses such as manager pay, advertising and supplies related to a full quarter of expenses for the fiscal 2015 acquired stores and franchisee support cost related to the Car-X acquisition in 2016.

Operating income for the quarter ended June 2015 of $33.6 million increased by 14.3% as compared to operating income of approximately $29.4 million for the prior year quarter and increased as a percentage of sales from 13.5% to 14.3%. Net interest expense for the quarter ended June 2015 at 1.4% of sales increased $1.3 million as compared to the same period last year which was at 1% of sales.

Weighted average debt outstanding for the first quarter of fiscal 2016 increased by approximately $81 million as compared to the first quarter of last year. It was an increase in capital lease debt recorded in connection with the fiscal 2015 acquisitions as well as an increase in debt outstanding under our revolving credit facility to fund the purchase of the 2013 and 2016 acquisition. The weighted average interest rate also increased by approximately 50 basis points from the prior year, largely due to adding capital leases.

The effective tax rate was 38% of pre-tax income for the quarter ended June 2015 and 38.1% for the quarter ended June 2014. Net income for the current quarter of $18.8 million increased 11% over net income for the quarter ended June 2014. Earnings per share on a diluted basis of $0.57 increased 9.6% as compared to last year's $0.52 a share.

Moving on to the balance sheet, our balance sheet continues to be strong. Our current ratio of 1.1 to 1 is comparable to fiscal 2015.

With regard to cash flow, during this quarter we generated approximately $32 million of cash flow from operating activities and reduced our debt under our revolver by approximately $4 million. We also paid approximately $4 million on capital lease debt.

At the end of the fiscal quarter debt consisted of $118 million of outstanding revolver debt and $140 million of capital leases as financing obligations. As a result of the fiscal 2016 paid outs to date, our debt to capital ratio, including capital leases, decreased to 34% at June, 2015 from 36% at March, 2015. Without capital and financing leases, our debt to capital ratio was 19% at the end of June, 2015 and 21% at the end of March, 2015.

Under our revolving credit facility we have $250 million that's committed through December, 2017. Additionally, we have a $75 million accordion feature included in the revolving credit agreement. We are currently filing at LIBOR plus 125 basis points and have approximately $112 million of availability, not accounting in the accordion today. We are fully compliant with all of our debt covenants and have plenty of room to do future deals under these covenants without any problem. All of this, as well as the flexibility built into our debt agreement continued to make it easy for us to get acquisitions done quickly.

During the first quarter, we spent approximately $9 million on CapEx and $15 million on acquisitions. Depreciation and amortization totaled approximately $10 million and we received $4 million from the exercise of stock options. We paid about $5 million in dividends. Inventory turns at June, 2015 were flat as compared to year-end.

That concludes my formal remarks. With that, I'll turn [the floor] over to the operator for questions. Operator?

Thank you. (Operator Instructions) Rick Nelson, Stephens.

2 to 3% pricing that you are expecting in the tire category but you saw 3% this quarter, why do you think that number isn't higher given that Chinese tire tariff and if you could comment on what's happening with the domestic tire manufacturers?

Sure. That 3% is what we've seen in our business versus last year you know that the tariffs were just finalized and are going into effect. So I just think you have other operators out there trying to drive sales and that's kind of -- but for right now holding the market where it is on the pricing side.

And with regard to the domestic manufacturers, we are seeing opportunities to work costs down as we move forward through the year this year. So that's the part of the guidance that we've given in terms of our overall tire costs being slightly down this year versus last.

Yes. I think hopefully, Rick, it gets better than that but I like plus 3% better than minus 4% which we got last year.

[Around the NDAs] you mentioned more than 10. [Can you just tie] those up in terms of number of stores in the markets?

Sure. They are all within our markets. And that set of NDAs that we've consistently talked about are those 5 to 40 store chains and they are -- and all of the ones that we're working with right now are within our markets. It's all very consistent in those 5 to 40 store chains with regard to that number.

Great. And if I could circle back to tires, at the unit performance, how you think that's keeping pace in terms of market share within the industry?

I think we're keeping pace. Based on our pricing discipline if we're giving anything up it's very small, but as I said we are absolutely making more money than our competitors given all the financials that we see with the NDAs. So I don't see ourselves losing share and again I'm encouraged certainly by the fact that July being positive, in units as well in price, is certainly a good start for the rest of the year.

Great. Thanks for the color and good luck.

Thank you.

Thank you.

James Albertine, Stifel.

Wanted to ask, you mentioned the NDAs are all within your existing markets, but can you maybe shed some light on how many of the NDAs are in some of the newer markets like the Florida or southeastern part of the US, and maybe highlight a little bit of the distribution drag you're still experiencing, as you have that gap sort of between Atlanta and Indianapolis?

So the first part of your question, there are a fair number that are in the newer markets. I'm not going to be specific about that, but it's a good chunk of the opportunity that we have which again for us is very encouraging given the density and opportunity in those markets and the fact that it will help balance our geography some. So I'm very encouraged by the opportunities in those new markets.

I'm sorry, the second part of your question?

Well, just understanding, it sounds like if that is the case then the distribution cost through the drag from having the gap between the mid-Atlantic region and it sounds like you're still feeding off of the DCs in sort of your legacy markets, not the south, you don't have a new DC as far as I understand right?

No, we don't. And as I said in the past, I view us making the investment in a new DC when we hit triple-digit stores down in that area of the country. And so, when we talk about the synergies that we get obviously, we're not getting all of the distribution synergies right now in those markets that is incorporated within our guidance that we've given on the acquisitions this year. And I think you can see the importance of that in the fact that for the stores that we're buying, the 31 stores that we just announced with this -- on this release, that those will be breakeven this year after basically six months of operations because -- which is ahead of what we usually experience, because they are so close here within our markets.

So when we hit the triple-digit number of stores down in the Atlanta, Georgia, Florida markets, I think you'll see us putting in a DC to get the additional accretiveness there.

Yes, Jamie what's the drag you're talking about, remember operating margin is up 70 bps, so [it's not hurting us] too bad right now.

Well, I was just going to say it's all the more impressive that your comp leverage point is as low as it is with that drag. So it was more of an optimistic spin if anything on the question. If I may, just ask an housekeeping item, gentlemen and Cathy, April, May and June monthly comp if you can provide it and then maybe an update on some of your opportunities. It sounds like clicks are improving and you've got some good traction in your digital front to the extent that you're -- you can sort of opine on where you are there on the digital effort that would be great. Thanks.

So the comps by months were down 1.8% in April and up 20 basis points in May and up 20 basis points in June. And with regard to the sales initiatives and the digital initiatives, we are still early in the push there. What I am most encouraged by is the fact that, as I said, just this heightened focus on our overcoming consumer and anything else in the external marketplace is that additional focus, I think, is helping us right now. And I'm very encouraged by the early results we've seen out of the website enhancement, the appointments and we'll comment on that as those become more fully implemented later in the year.

Very good. Thanks again and best of luck in the back half.

Thank you.

Thanks, Jamie.

Bret Jordan, Jefferies.

On the supply chain question, what number of stores are you not currently distributing to? Of the 1,000, I guess, how many are you having to out-buy? And do you have a feeling sort of what the store level productivity of a distance store versus a self distributed store is?

Look, the stores that are down in Florida and Georgia, number -- in the low 60s, 62 or 63. So those are the stores that we're primarily talking about. Now, don't forget we do have a certain amount of products shipped directly from manufacturers directly to the stores and we are getting some parts down there right now, we're just taking some different shipping approaches which are raising our costs there and we would expect that to be what we would say later on in setting up the DC down there.

Okay.

Go ahead.

No, you go ahead.

I was just going to say that when we talk about the synergies that we get, we get [100 to 150] basis points on distribution, so we're not getting that right now and there's probably a couple of hundred basis points of the just straight cost savings that we're not getting right now as well with regard to those 60 floors.

Okay, thanks. And then on Massachusetts acquisition what chain did you buy?

It's called Windsor Tire.

Okay. Not direct tire?

No.

All right. And then one last question, did you take a price increase in April in anything because April and September are still your increase months?

Yes, we took a service price increase actually before April of about 1.5% and we recently tweaked some tire pricing as well up slightly.

Okay. And my final question, alignment comp was up so high. What was happening there? I mean, usually that correlates to tire sales but it seemed to outperform?

Yes, I think when you look at that comp that was up [8] on top of being up, I believe, [9] last year. So certainly it was a tough winter. That has an impact and we're doing a better job I think on that in the stores. And as you contrast that maybe with the brake category, I think you come back to the consumer and I still see the consumers deferring some of those larger purchases during the quarter certainly earlier in the quarter like breaks or tires and we see that potentially improving into July and I'm hopeful that the consumer as a piece of this is getting better and we'll finally get some more of those needed repairs done, which will certainly be even better for our accounts going forward.

Michael Montani, Evercore ISI.

I wanted to ask about what traffic and ticket were for the quarter.

Sure. Traffic for the quarter was down [1] and ticket was up [50] basis points.

I was just going to say in terms of the tire unit side of the equation, I think you said there was a 3% price increase, but was that 3% ticket or was there also an offset from trade down?

No, the mix of tires was relatively flat in the quarter. It's between what we talked about as direct import and in branded, so it was overall just the ticket.

Okay. And then just to follow-up on margins, if I could, the full-year guidance, as you mentioned implied 70 bps of operating margin and expansion, but then there is initiatives that seems to be building, especially if you think about the tire side with the cost save. So can you just help me to understand really what the key offsets are to that that might prevent greater margin expansion into the back half of the year?

Well, that 70 basis points on top of the 80 basis point improvement from last year. And I think it's -- you might look at it as some conservatism from our side where we're -- again, I'm pleased that we're starting to show some progress on the sales front, but I'm not -- that's not where we need to be. So I'm trying to make sure that we put out numbers that we believe we can hit and are conservative. So we'll certainly update that as we put more time behind us with positive comps and positive margins.

Great. And just lastly, when you guys think about your consumer, what we've seen year-to-date, 3.5% increase in miles driven, probably 1.5% increase in miles driven per vehicle pending [SAR and scrappage], I mean those are the best numbers we've seen in years. So what kind of pent-up demand are you seeing and any kind of qualitative comments you could make, et cetera, as we head into July?

Sure. In terms of miles driven, I think we've consistently held the view that miles driven are not necessarily in any short period the key driver, I'm still -- the consumer is the other piece of it and I would just go back to my thoughts on alignment as the category versus brakes and perhaps tires, is that I think consumers are still spending only when they absolutely have to, and holding back some.

We still see pent-up demand and I just don't think that miles driven you're going to tie that in so closely. For us, obviously, the broader trend in terms of cars getting older has always been much more important to our business and we see that helping the business. The other piece of it to me is the consumer and when they just decrease that deferral cycle and that's what I expect to help our comps when that occurs.

Thank you and good luck.

Thank you.

And there are no additional questions at this time. I'll turn the call back to John for any addition and closing remarks.

Thank you all for your time this morning. I'm looking forward to reporting on the positive impacts of our focus on sales and traffic and contribution from the acquisition opportunities that we are acting on. Our business model should produce another year of double-digit EPS growth on top of the 40% increase over the past two years. We appreciate your continued support and the efforts of our employees that work hard to take care of our customers every day. Thanks again and have a great day.

That does conclude today's conference. Thank you for your participation.