FAT Brands Inc. (FAT), the global franchising company, has released its financial results for the first quarter of 2024, showcasing a significant increase in total revenue and system-wide sales. The revenue surged by 43.8% to $152 million, mainly attributed to the acquisition of the Smokey Bones restaurant chain. System-wide sales experienced a 4.8% uptick, reaching $581.8 million. Despite these gains, FAT Brands faced a net loss of $38.3 million for the quarter. The company is executing a multifaceted strategy involving organic growth, strategic acquisitions, and enhanced production capabilities at its Georgia manufacturing facility to drive future expansion.
Key Takeaways
- Total revenue for FAT Brands rose 43.8% to $152 million in Q1 2024.
- System-wide sales increased by 4.8% to $581.8 million.
- The acquisition of Smokey Bones and new restaurant openings significantly contributed to revenue growth.
- FAT Brands plans to open 125 to 150 new units this year, with over 1,100 additional units in the pipeline.
- The company intends to convert more than half of Smokey Bones' 61 locations into Twin Peaks restaurants and is preparing for a Twin Peaks IPO.
- Development deals have been signed for Fazoli's, Marble Slab Creamery, and Round Table Pizza brands in Canada.
- The Georgia-based manufacturing facility reported $9.5 million in sales and $3.7 million in adjusted EBITDA.
- Costs and expenses increased by 45.6%, resulting in a net loss of $38.3 million for the quarter.
Company Outlook
- FAT Brands is focused on expanding its footprint with 125 to 150 new units planned for the year.
- The company is exploring new acquisitions that align with its strategic pillars.
- Plans to take Twin Peaks public are underway, with the aim to use proceeds to reduce debt.
Bearish Highlights
- The company reported a net loss of $38.3 million in the first quarter.
- Costs and expenses saw a 45.6% increase.
- Weather conditions slowed new store openings in the first quarter.
Bullish Highlights
- Snack brands, including cookies and ice cream, are showing a positive trend.
- Casual dining chains like Ponderosa and Bonanza experienced a 5-6% increase in sales.
- The Georgia-based manufacturing facility is expected to expand product offerings and partner with third parties to increase utilization.
Misses
- Despite overall growth, there was a decline in same-store sales.
- The first quarter saw fewer new store openings due to adverse weather conditions.
Q&A Highlights
- Andy Wiederhorn discussed the upcoming Twin Peaks IPO and the integration of Smokey Bones into the brand.
- He confirmed that two-thirds to three-quarters of Smokey Bones locations will be franchised based on geography.
- Wiederhorn expressed confidence in meeting the target of 44 new store openings in the second quarter despite initial delays.
FAT Brands has outlined a robust strategy for growth that includes expanding its brand portfolio, increasing its manufacturing output, and enhancing its global presence. The company's commitment to strategic acquisitions and organic growth, alongside its focus on the upcoming Twin Peaks IPO, signals a forward-looking approach to its business operations. Despite facing a net loss and challenges such as weather-related store opening delays, FAT Brands appears optimistic about its future prospects and its ability to create value for its stakeholders.
InvestingPro Insights
FAT Brands Inc. (FAT) has demonstrated resilience amid its reported net loss for Q1 2024, with strategic acquisitions and a robust pipeline signaling potential for future growth. Here are some insights based on real-time data from InvestingPro that may offer additional perspective on the company's financial health and outlook:
InvestingPro Data:
- The company's market capitalization stands at $121.95 million USD, reflecting its current valuation in the market.
- Revenue growth for the last twelve months as of Q4 2023 was 17.98%, indicating a solid increase in the company's revenue streams.
- FAT Brands boasts a substantial dividend yield of 7.7%, which is particularly attractive to income-focused investors and aligns with the company's history of raising its dividend for 3 consecutive years.
InvestingPro Tips:
- Analysts anticipate sales growth in the current year, which could be a positive signal for investors looking at the company's revenue prospects.
- Despite the challenges, FAT Brands has a strong return over the last five years, suggesting a long-term potential for investors who are considering the company's track record.
For investors seeking more detailed analysis and additional InvestingPro Tips, they can explore the full range of insights available at: https://www.investing.com/pro/FAT. There are 11 more tips listed in InvestingPro that can provide a deeper understanding of FAT Brands' financial and operational metrics. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Full transcript - FAT Brands (FAT) Q1 2024:
Operator: Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the FAT Brands First Quarter 2024 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode. Please note that this conference is being recorded today, May 1, 2024. On the call from FAT Brands are the Chairman of the Board, Andy Wiederhorn; and Co-Chief Executive Officer and Chief Financial Officer, Ken Kuick. This afternoon, the company made its first quarter 2024 financial results publicly available. Please refer to the earnings release and earnings supplement, both of which are available in the Investors section of the company's website at www.fatbrands.com. Each contain additional details about the first quarter. But before we begin, I must remind everyone that part of the discussion today will be including forward-looking statements. These forward-looking statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. Actual results may differ materially from those indicated by these forward-looking statements due to a number of risks and uncertainties. The company does not undertake to update these forward-looking statements at a later date. For a more detailed discussion of the risks that could impact future operating results and financial condition, please see today's earnings release and recent SEC filings. During today's call, the company will also discuss non-GAAP financial measures, which it believes can be useful in evaluating its performance. The presentation of this additional information should not be considered in isolation nor as a substitute for results prepared in accordance with GAAP. Reconciliations to comparable GAAP measures are available in today's earnings release. I would now like to turn the call over to Andy Wiederhorn, Chairman of the Board. Please go ahead.
Andy Wiederhorn: Thank you, operator. I'd like to begin this afternoon by thanking all of our team members, franchisees and their dedicated employees across our portfolio of brands. Their unwavering commitment and strong execution have been the driving forces behind FAT Brands continued strong performance and growth. Our trajectory over the last three years has been truly remarkable. We have expanded our footprint tenfold, by strategically building a diverse portfolio that now includes 18 iconic concepts spanning over 2,300 locations worldwide, across more than 40 countries and 49 U.S. states or U.S. territories. The results we'll discuss today underscore, the vast potential of our multi-brand strategy and ability to drive long-term sustainable growth, by leveraging our scale, shared services model and deep franchising experience. During the first quarter, we grew total revenue 43.8% to $152 million, compared to $105.7 million in the prior year quarter. The increase was driven, by the acquisition of Smokey Bones in September of 2023. System-wide sales in the first quarter, grew $581.8 million, a 4.8% increase, when compared to the prior year quarter. Turning to profitability. First quarter EBITDA was $9.4 million, compared to $7.7 million in the first quarter of 2023, a quarterly increase of $1.7 million, and adjusted EBITDA was $18.2 million, compared to $19.2 million in last year's first quarter. We remain focused on forwarding our three strategic pillars: one, organic growth; two, growth by acquisition; and three, increasing cookie dough and dry mix production at our Georgia-based manufacturing facility. Let me now provide updates on each of these pillars. First, organic growth. Our development momentum continued in the first quarter with the opening of 16 new units across our brands. We should open another 44 this quarter, keeping us on track to achieve our growth targets for 2024. In total, we project to open between 125 and 150 new units this year, a potential 20% increase from 2023. To further fuel this growth, just two weeks ago, we hosted our Biannual FAT Brands Franchise Summit in Las Vegas with our franchisees, suppliers and key stakeholders. We hosted over 1,660 corporate team members, franchisees and partners and celebrated our extraordinary growth and shared what's next for our business. At the event, we honed in on the Summit theme, all systems go, which encapsulates our commitment to moving forward together, navigating industry challenges and maximizing the synergies within our brand family. The energy level and the enthusiasm were contagious, and we again thank all who participated. At the FAT Brands 2024 Summit, we also offered incentives for franchisees to buy additional units, and signed or plan to finish signing development deals representing over 100 new restaurants. Our pipeline in total remains in excess of 1,100 additional units to be opened in the coming years. We estimate this robust future unit growth, will ultimately translate to approximately $50 million to $60 million of incremental adjusted EBITDA, which will enable us to naturally delever our balance sheet as we scale the business over time. And while the summit itself was a meaningful financial investment for us, we expect to see a significant payback due to the large number of new development deals, or actual franchise agreements signed as a result of this event, which in turn will lead to incremental royalty revenue, each year going forward once these new stores open. As we've said before, a key area of strategic focus for us this year is driving accelerated growth within our Polished Casual segment, which consists of our Twin Peaks and Smokey Bones brands. Beginning with Twin Peaks, this sports lodge concept continues to produce industry-leading average unit volumes of around $6 million, with some of our highest volume locations in Florida, generating AUVs between $9 million and $14 million. During Q1, we opened three new lodges in Guadalajara, Mexico, Boardman, Ohio and Doral, Florida with two more lodges in Naples, Florida and Rock Hill, South Carolina planned for Q2. We anticipate opening 15 to 18 new Twin Peaks in all of 2024, closing the year with approximately 125 lodges. This will represent approximately a 51% growth in unit count in just three years since our acquisition of Twin Peaks. Twin Peaks growth pipeline is healthy, with over 125 new franchise deals signed, paid and committed to be built over the next five years. The planned unit expansion is expected to grow Twin Peaks system-wide sales, to approximately $1 billion and increase the mix of franchise locations to between 75% and 80% of total unit count. The excitement we are seeing from new and existing franchisees to open additional Twin Peaks locations reinforces the concept's strong consumer appeal, and compelling unit economics. In Q4 of last year, we expanded our Polished Casual segment, with the acquisition of Smokey Bones. A full-service restaurant chain that delivers great barbecue, award-winning ribs and perfectly seared steaks. We expect Smokey Bones to increase FAT Brands annual adjusted EBITDA by approximately $10 million net of any conversions to Twin Peak restaurants. We plan to use the existing Smokey Bones portfolio of restaurants, to help fuel the expansion of our Twin Peaks brand. Out of the 61 existing Smokey Bones locations, we have identified more than half of the units to be converted into Twin Peak locations. This strategy allows us to rapidly scale Twin Peaks footprint, leveraging existing restaurants rather than having to build new restaurants from the ground up, which can take more than two years. Several of these conversions are slated to take place in 2024, with the majority occurring throughout 2025 and 2026. Recently, we started our first conversion in Lakeland, Florida. Additionally, we are working closely with the Smokey Bones leadership team on a plan to reignite brand growth, through our proven franchise model. Our goal is to rebuild Smokey Bones' footprint to the approximately 120 units that it had its peak. We continue to work on our previously announced plans to take Twin Peaks public. While the timing and the size of the transaction is subject to market conditions and other factors, we are working diligently to expedite a successful transaction. Twin Peaks continues to produce industry-leading economics and has a deep pipeline of profitable growth, making this a strong move, for both the brand and FAT Brands as a whole. We view an IPO, or any alternative transactions as opportunities to monetize the business, for the benefit of FAT shareholders. Our priority is to use the proceeds from any transaction, to deleverage the balance sheet. We are also planning to refinance our Twin Peaks securitization debt prior to the IPO. Looking to our other segments. Earlier this month, we signed our first international development deal for our Fazoli's brand with Briwin Restaurants to bring 25 locations to Canada over the next 10 years, and the first units are expected to open in 2025 in the province of Alberta. We have a strong network of international franchisees that span across nearly all our restaurant concepts. This experience operator, Briwin Restaurants comes from within our Fatburger franchise system and is committed to launching and developing additional FAT brands concepts in Canada. We are confident that expanding Canada is a natural first step for Fazoli's and becoming a leading global chain. Fazoli's currently operates in 26 states and over 200 locations. We've signed a development agreement for 40 new Marble Sub Creamery franchise locations throughout Canada in partnership with our longtime partner, Canadian Ice Cream Company Inc. The Marble Sub Creamery locations are set to open over the next 10 years, with the first of the new locations slated to open by the end of 2024. This will bolster the brand's presence to 140 locations in the country, and underscores our commitment to long-term fruitful franchisee relationships. Round Table Pizza also signed a new development deal with franchisee AF Ventures LLC to bring a total of 10 Round Table Pizza franchise restaurants to Oklahoma, and additional six franchise locations to Arkansas over the next six years, both are new states for the brand. Finally, Fatburger made its long-awaited debut in Orlando, with lines wrapping around the restaurant opening day. This follows our well-received entrance into the state last year, with a new location in Tampa. Both locations are part of a 14-store development agreement in Orlando and Western Florida. We also continue our expansion with the use of our co-branding strategy. During Q1, we announced the grand opening of our first West Coast Johnny Rockets and Hurricane Wings co-branded restaurant. Following the resounding success of our first Johnny Rockets and Hurricane Wings co-branded restaurant in Washington, D.C. last year. Similarly to Fatburger and Buffalo's Express, Johnny Rockets and Hurricane Wings have a great synergy together as they are both family-oriented restaurant brands with loyal followings. Additionally, in April, we announced a new development yield to open 40 new franchised Fatburger locations in Northern California inside 40 existing Round Table Pizza locations over the next 10 years with the first location set to open in 2024. Since opening our first co-branded Fatburger and Round Table Pizza in the Dallas area last year, we have seen significant interest in this pairing from our franchisee base. The strategy is not unsimilar to the success we've had experienced with our over 100 co-branded locations of Fatburger and Buffalo's Express and separately, at or more than 100 Marble Slab Creamery and Great American Cookies co-branded locations worldwide. Also, I'd like to mention our continued success in the growth of nontraditional units across our brands in locations like airports, cruise lines, amusement parks, universities, casinos, et cetera. For example, we are now operating Johnny Rockets on approximately 15 Royal Caribbean (NYSE:RCL) cruise liners. Both Fatburger and Johnny Rockets in multiple Six Flags (NYSE:SIX) theme parks, as well as partnering with several prime operators in a number of airports and universities. Moving on to our strategic pillar number two, grow through acquisitions, we are assessing several new potential acquisitions at this time. Currently, we are looking at opportunities that add significant strategic value similar to how we bought Smokey Bones, to fuel growth at Twin Peaks and how we bought Nestle Toll House Cafe to boost our manufacturing facilities utilization. When evaluating acquisition targets, we must ensure the brand is both scalable and synergistic, with our existing platform and when possible, leverage our existing manufacturing capacity, which brings us to our third strategic priority, our Georgia-based manufacturing facility. Our manufacturing plant produces Pretzel mix and cookie dough for brands within our portfolio. During Q1, our manufacturing facility generated $9.5 million in sales, a 3.4% increase over the prior year. Additionally, it contributed $3.7 million to adjusted EBITDA. Currently, our factory business is operating at about 45% of its capacity, up from 33% almost three years ago when we purchased the asset. Not included in that percentage is the 3.5 acres of excess real estate, the factory sits on, which can be expanded on to. Also, we can further double the factory output capability if we have demand by making a modest $1.5 million capital expenditure. As a result, we see significant whitespace opportunity, within our factory business. To increase utilization, we have leveraged our portfolio of brands by enhancing our dessert offerings, selling cookies and other products made at the facility within these restaurants. Additionally, we are actively involved in several RFPs for various third-parties to use our facilities to produce their cookie on dry mix type products and utilize our excess capacity. Lastly, I would like to provide an update on the growth, and the work of the FAT Brands Foundation. As mentioned earlier, we hosted our FAT Brand Summit two weeks ago. The foundation was a key element at the Summit, hosting our first ever giving back event with 3 Square, Southern Nevada's only food bank and the area's largest hunger relief organization. Attendees helped pack nearly 6,000 meals per family. Further, the foundation was happy to deliver a $10,000 grant to supply 30,000 meals to the food insecure in the area. The Foundation Board also hosted several on-site fundraising efforts, including a raffle and silent auction, raising over $75,000 to support non-profits in FAT Brands communities. To recognize this tremendous achievement, FAT Brands is donating an additional $50,000 to further the critical work of the foundation. This will bring the 2024 available foundation funds for grants to more than $300,000. It's worth noting that, FAT Brands Inc. underwrites all SG&A for the foundation, so that all money raised 100% of it is spent on gifts, to deserving organizations. In summary, I have the utmost confidence in our exceptional leadership team, and the robust pipeline of growth opportunities that lie ahead, which will naturally delever our balance sheet. Our long-term strategy is to create value through the organic expansion of our existing brands, acquire additional brands that strategically complement our portfolio realized value from strategic divestments, when appropriate to manage outstanding debt and ultimately increase long-term value for our stakeholders. We look forward to providing updates on our progress, during future calls. We sincerely appreciate your participation today and your ongoing interest in FAT Brands. And with that, I would now like to hand it over to Ken, to discuss our financial highlights from the first quarter.
Ken Kuick: Thanks, Andy. Total revenue during the first quarter increased 43.8% to $152 million, driven by the acquisition of Smokey Bones in the fourth quarter of 2023 and revenues from new restaurant openings. Costs and expenses increased $48 million, or 45.6% in the first quarter. Included in costs and expenses, general and administrative expense increased $1.6 million, or 5.6% to $30 million in the first quarter from $28.4 million in the prior year period, primarily due to the acquisition of Smokey Bones in the fourth quarter of 2023. Cost of restaurant and factory revenues, increased to $99.1 million in the first quarter of 2024, compared to $59.1 million in the prior year quarter, primarily due to the acquisition of Smokey Bones again during the fourth quarter of 2023. Depreciation and amortization expense increased $3.1 million to $10.2 million in the first quarter from $7.1 million in the year ago quarter, primarily due to the acquisition of Smokey Bones again during the fourth quarter of 2023 and depreciation of new company-owned restaurant property and equipment. Advertising expense varies in relation to advertising revenues and increased to $12.6 million in the first quarter of this year from $10.5 million in the year ago period. Total other expense net for the first quarter of 2024 and 2023, was $33.4 million and $30 million, respectively, which is inclusive of interest expense of $34 million and $30.1 million, respectively. Net loss for the quarter was $38.3 million, or $2.37 per diluted share, compared to a net loss of $32.1 million, or $2.05 per diluted share in the prior year quarter. On an as adjusted basis, our net loss was $32.9 million, or $2.05 per diluted share, compared to a net loss of $23.5 million, or $1.53 per diluted share in the prior year quarter. And lastly, EBITDA for the quarter was $9.4 million, compared to $7.7 million in the first quarter of 2023. And adjusted EBITDA for the quarter was $18.2 million, compared to $19.2 million in the year ago quarter. And with that, Nick, please open the lines for questions.
Operator: Thank you. [Operator Instructions] The first question comes from Alton Stump with Loop Capital.
Alton Stump: Great. Thanks for taking my question. I guess, first, I wanted to ask - I do apologize if I happened to miss this Andy during your presentation. But utilization at your cookie factory, obviously, is a big opportunity. Could you update us on kind of where the utilization is now, say, versus time last year and kind of where it could head over the course of the year?
Andy Wiederhorn: Yes. It's roughly 45% today, Alton. And that's before we pull any of the levers to give us even more capacity. So it's 45% as built today, but of course, it can double in capacity by a small investment in equipment, and that's without even using the excess land. We - have rolled out cookies and dessert items at a number of our brands. We have a few brands left to go that are more in the casual dining, and Polished Casual segment. So, we expect to get some more traction there that will soak up some more capacity. And then we are testing some third-party manufacturing relationships right now, which we expect if they go well, could really soak up that capacity by the end of the year. So, we're very excited about the progress we've made. Last year, 12 months ago, capacity was somewhere in the lower 40s or utilization sort of somewhere in the lower 40s, but now it's moved up a few ticks.
Alton Stump: Okay. Great. Thanks for that color. And then, I just want to ask about Twin Peaks obviously, is an excellent brand, growing very rapidly. Of course, you mentioned the opportunity to use Smokey Bones conversions. As you kind of look at the 2025 knowing of course that you haven't given any guidance yet for next year, but just how quickly do you think that the pace of builds could pick up given the fact that you obviously now have the Smokey Bones opportunity to convert?
Andy Wiederhorn: Well, we have this 15 to 18 store target for 2024. The issue really is that the 2024 locations were already identified in 2023, by franchisees and by the company for corporate stores. So it's not really the conversions, many of them. There'll be a few that happened this year. It's really '25 and '26. But in those years, both franchisees and corporate locations, will accelerate that opening. So it should be somewhere in the 20 to 25 units per year, not 15 to 18 units.
Alton Stump: Great. And then just as a follow-up to that, I was going to ask, as you mentioned that if you are building ground up, it could often take a couple of years to build a Twin Peaks, ballpark, how long does it take to convert? I assume obviously not as long as that, but just given the fact that I just pointed out, you only bought this business just over six months ago. And so, I guess, what would be the timing if you were to decide now to convert allocation on average, until it could actually be opened as a Twin Peaks?
Andy Wiederhorn: Yes. So we have the first one underway now in Lakeland, Florida. It's 120, 150 days for the first one, but we think going forward, knock on wood, will be 120 days to convert them. So very quick compared to all the other things that you do. Now to be fair, when you identify a site, maybe it takes nine months from start to finish, because of permitting and all those things that have to go on. But once you break the construction hammer and you close the restaurant and start the conversion, it's somewhere around 120 days, very quick.
Alton Stump: Great. Thanks so much for the color. I'll hop back in the queue.
Andy Wiederhorn: You bet. Thank you.
Operator: The next question comes from Joe Gomes with NOBLE Capital. Please go ahead.
Joseph Gomes: Good afternoon. Thanks for taking my questions.
Andy Wiederhorn: Hi, Joe.
Joseph Gomes: So just on the same-store sales drop, I mean, I've seen the headlines, some of the other restaurants seeing the same thing. I don't know if you guys break this out or if it's possible to kind of get a feel. But how much of that same-store sales decline, is due to traffic and are maybe price reductions at some of the franchisees?
Andy Wiederhorn: Well, I think the way to think about it, I mean, there is some difference between our QSR segment, our fast casual segment, our casual dining and polished all of those segments have different numbers. We don't report or break them out that way. But just as - just to give you a little color, like our snack brands like cookies and ice cream, pretzels and things like that. They're trending in a pretty good direction here, and they're just not off by much at all anymore if you do not. But you look at our casual dining, where you can look at Ponderosa and Bonanza and the steakhouse chain, and they're up over somewhere between 5% and 6% right now year-to-date, and that's a value trade, right? That's customers finding value that are pressured by dollars to spend. We started the year like everyone else in a really tough January, sales were off significantly, because of the weather everywhere. And they've been coming back period-after-period. So here we are four periods in and the negative numbers are much less so than they were to start with, if you add everything up. And so, we're encouraged that things are improving, but it is a little bit different where you are in the value spectrum of price.
Joseph Gomes: Okay. Thanks for that. And on the Twin Peaks, I know you talked about kind of market conditions, but we have seen some other restaurant IPOs. Is there something that you kind of you're waiting for, or that is unique to Twin Peaks that it's not a go yet for an IPO?
Andy Wiederhorn: So, we are working very hard, very diligently on this IPO. We hope to be on file very soon, and we will announce that we confidentially filed when we do file. So everyone won't be in the dark don't know that at least we filed. It will be a confidential filing, but everyone will know. We have to, because we're putting Smokey Bones together with Twin Peaks in terms of one organizational entities so that when the stores are converted, it's easy inside the same entity. We had to get a new audit of Smokey Bones for all of 2023, and we didn't own Smokey Bones for all of 2023. So it's taken a little bit of time. That's actually expected to be completed by the end of this week. And so, we're hopeful that we'll be on file here very shortly.
Joseph Gomes: Okay. And then on the Smokey Bones that you're talking about converting here, do you expect them to maintain them as company stores? Or do you think they would be refranchised?
Andy Wiederhorn: Yes. That's a good question. So somewhere between two-thirds and three quarters of them will be franchised. The balance will be company-owned. It's really - it depends on the geography. So if it's already in a franchisee territory, we expect one of the existing franchisees, to take on that conversion. And if it's in a market - it's a corporate market like Texas, or part of Florida or the Mid-Atlantic or something like that. Then we would operate it as a corporate store. And if it's in a market, where we don't have a franchisee yet, we'll either get a franchisee to reach into that market, or we'll do it as a corporate store. So either way, we've identified the stores that can be converted. And things that restrict, which stores can be converted or not. There may be landlord restrictions on the percentage of alcohol that can be sold. It could be some other lease provision that restricts other things, about the business. So, we already have a Twin Peaks nearby, so it makes no sense to have the second one. So and Smokey Bones is our second highest AUV concept with more than a $3 million AUV. And we really want to grow that brand. It's a great brand. It's great food. It used to be 120 units, and our franchise sales team is in the thick of it to, get that brand ready for franchising, whether we refranchise existing company-owned stores that we retain, or whether we just sell new stores, all of that is in the works.
Joseph Gomes: Okay. One more, if I may. So the number of new store openings in the first quarter were a little bit lighter than I would have expected. You did mention you think you're going to get 44, or so open in the second quarter. How confident are you that's a pretty big jump from the 16 that were in the first quarter? Or was there something particular to the first quarter that kind of slowed down the opening growth?
Andy Wiederhorn: No question. It's heavily back-ended here for Q2. But what you see in Q1, I mean, you had just ridiculous weather in January in so many markets. So that slowed down people on their opening schedules, and training and just everything you could - delivery of equipment, everything you can think of happened. So here we are with a number of additional stores that have already opened in Q2. I don't think we've released that number, but we've already made substantial progress towards additional units through the month of April. And so, we feel pretty good that we'll get to that 44 unit number by the end of June.
Joseph Gomes: Great. Thanks, Andy. I'll get back in queue.
Andy Wiederhorn: Thank you.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Andy Wiederhorn for any closing remarks.
Andy Wiederhorn: Maybe operator, just to make sure that no one else has any other questions, before we end the call.
Operator: Okay. [Operator Instructions] All right. Back to you Andy. I'm sorry.
Andy Wiederhorn: Very good. I'd like to thank everyone for joining the call today, and this concludes our Q1 recap. Thank you. Have a good day.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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