Carrols Restaurant Group, Inc.
Q4 2017 Earnings Call Transcript

Published: 28 Feb 2018

[Operator:]

Welcome to the Carrols Restaurant Group Fourth Quarter 2017 Earnings Conference Call. [Operator Instructions] I would like to remind everyone that the conference call is being recorded today, Wednesday, February 28, 2018, at 8

[Paul Flanders:]

Thank you. Good morning. By now you should have access to our earnings announcement released earlier this morning, which is available in our Web site at www.carrols.com, under the Investor Relations section. Before we begin our remarks, I'd like to remind everyone that our discussion will include forward-looking statements, which may consist of comments regarding our strategies, intentions, guidance or plans. These statements are not guarantees of future performance and therefore, undue reliance should not be placed on them. We also refer you to our filings with the SEC for more details, especially the risks that could impact our business and results. During today's call, we will discuss certain non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles. A reconciliation to comparable GAAP measures is available with our earnings release. Today when we refer to acquired restaurants, we'll be discussing those restaurants acquired from 2015 through 2017, while our legacy restaurants include all of the company's other restaurants, including those acquired before 2015. With that said, I'll now turn the call over to the President and CEO of Carrols Restaurant Group, Dan Accordino.

[Dan Accordino:]

Thanks, Paul, and good morning, everyone. We were pleased to have crossed a couple of major company milestones in 2017. First, total restaurant sales crossed the $1 billion mark with sales totaling almost $1.1 billion for the year. Secondly, the number of Burger King restaurants that we operate now exceeds 800 units. We ended the year with 807 restaurants having acquired 64 restaurants and opening 11 new units in 2017. Our team is rather proud of these accomplishments and the significant growth that we've achieved over the past few years. Turning to our financial results, we performed somewhat better than our most recent guidance and exceeded our estimates on top line, comparable restaurant sales growth, and adjusted EBITDA. Total restaurant sales increased 15.4% to $1.09 billion in 2017 with a solid 5.2% increase in comparable restaurant sales for the year. And while full-year results were under pressure from elevated commodity costs and persistent wage inflation, we were able to increase adjusted EBITDA from $89.5 million in 2016 to $91.4 million. With that, I will turn to our more recent quarterly results. Comparable restaurant sales for the fourth quarter rose an impressive 8.9% on top of a 3.2% gain in the prior year quarter, reflecting sales strength and traffic gains across all day parts and most all DMAs. With respect to fourth quarter promotions, notable value drivers included the 2 for $6 WHOPPER promotion, Spicy Chicken Nuggets for $1.49, 2 Cheeseburgers with small fries and a drink for $3.49 and Flamin' Hot Mac n' Cheetos. Premium offers included the Farmhouse King, our KING Sandwich line extension featuring two quarter-pound flame-grilled beef patties, bacon cheese, crispy onions and signature sauce topped with a fried egg. During the quarter we also featured the new bacon KING Junior, the crispy Buffalo chicken melt, and a chicken Cordon Bleu sandwich. Our continued focus on the breakfast day part included the 2 for $4 mix-and-match breakfast sandwich offering which is now available with either our CROISSAN'WICH or fresh baked biscuit. Lastly we promoted three large pancakes for $0.89 and our sausage biscuits for $0.79. All in all, the broad array of these promotional offerings demonstrated the effectiveness of Burger King's marketing strategy in balancing premium, value and limited time products to drive check in and customer accounts as reflected by our sales results. Starting in January, we expanded our 2 for $6 WHOPPER offering into a mix-and-match format to include the Crispy Chicken Sandwich. The result has been very positive and is supporting continued sales momentum in the first quarter. Turning to profitability. We generated higher restaurant level and adjusted EBITDA compared to the prior year fourth quarter, while improving operating margins. Although our restaurant level and adjusted EBITDA margins were impacted by the higher level of promotional activity and higher ground beef costs in 2017, we were able to favorably leverage our strong fourth quarter sales performance across most other operating costs including restaurant wages. With respect to acquisitions, we purchased four restaurants in Maine during the fourth quarter, which brought our total acquisition activity in 2017 to 64 restaurants, the integration of these new locations is progressing well. In 2017, we remodeled a total of 34 locations and at year end had more than 75% of our total restaurant portfolio updated to the 20/20 store design. As I mentioned earlier, we also opened 11 new restaurants, the most new Burger King's that we've opened in several years. In summary, we capped off the year with a solid fourth quarter including a strong sales performance and improved profitability compared to the prior year. With solid momentum going into 2018, we are generally reiterating the initial 2018 guidance that we provided last November, while modestly raising the bottom end of the range for our adjusted EBITDA guidance. And with that, I will now turn the call over to Paul for our financial review.

[Paul Flanders:]

Thanks, Dan. Restaurant sales in the fourth quarter increased 17.9% to $284 million with restaurants acquired since the beginning of 2015 contributing $59.6 million in sales. Comparable restaurant sales increased 8.9% reflecting a 5.1% increase in average check and a 3.8% increase in customer traffic. The increase in average check included 3.4% of menu pricing, while sales mix shifts including the impact of Burger King's premium promotions also contributed to the increase in check. Of note, the 8.9% in comparable restaurant sales was on top of the 3.2% increase in the prior year quarter, so sales momentum accelerated in the quarter to a very healthy 2-year comp trend of 12.1%. Adjusted EBITDA increased 26.5% to $25.8 million in the fourth quarter from $20.4 million in the prior year period, while adjusted EBITDA margin increased 62 basis points to 9.1% of restaurant sales. Restaurant level EBITDA increased 20% to $40.4 million in the quarter and $33.6 million in the fourth quarter of 2016. Restaurant level EBITDA margin was 14.2% of restaurant sales, and 25 basis points higher than the prior year period. As Dan said, we favorably leveraged our strong fourth quarter sales performance against most all operating costs. Cost of sales was the notable exception, increasing 105 basis points as a percentage of sales compared to the prior year period. This reflected the higher year-over-year level of promotional activity along with higher ground beef prices which averaged $2.01 per pound in the fourth quarter of 2017. And while ground beef prices decreased about 9% sequentially from the third quarter, they were 8.6% higher than the fourth quarter of 2016, our lowest quarter in the previous year. Restaurant labor expense decreased 23 basis points to 31.5% of restaurant sales compared to the prior year quarter as we were able to leverage restaurant management cost due to the strong increase in sales. Our restaurant hourly wage rate inflation, however, was approximately 6% for the quarter. With respect to other cost as a percentage of restaurant sales, we favorably leveraged other restaurant operating expense of 85 basis points, advertising expense by 27 basis points and general and administrative expenses by 46 basis points. Net income was $3.9 million for the fourth quarter of 2017 or $0.09 per diluted share compared to net income of $29.5 million or $0.65 per diluted share in the prior year period. This decrease was primarily due to the 2016 reversal of a $30.4 million valuation allowance or $0.68 per diluted share previously established against our net deferred income tax assets. Adjusted net income was $3.8 million or $0.08 per diluted share compared to $2 million or $0.04 per diluted share in the prior year period. A reconciliation of net income under GAAP to adjusted net income which is a non-GAAP measure is provided in the supplemental tables included with today's press release. Adjusted net income excludes impairment and other lease charges, acquisition costs, and certain other gains and losses net of taxes. In 2017 it also excludes an income tax benefit of about $800,000 recorded in the fourth quarter of 2017 related to a revaluation of net deferred taxes due to the lowering of the federal income tax rate to 21% under the tax law changes enacted in late 2017. In 2016, excludes the reversal of the valuation allowance for deferred taxes discussed above. Total capital expenditures excluding acquisitions were $28.9 million in the fourth quarter of 2017 and $73.5 million for the full-year. At the end of the fourth quarter, our cash balances were $29.4 million, total outstanding debt was $281.9 million and there were no outstanding borrowings under our $73 million revolving credit facility. And with that, let me provide the following guidance for 2018. We are generally reiterating much of what we provided back in November with the exception of our adjusted EBITDA range, which we’ve increased on the bottom end. As a reminder, our guidance does not include any impact from potential acquisitions and we may complete as the year progresses. We expect total restaurant sales of $1.14 billion to $1.1 7 billion. Previously $1.12 billion to $1.15 billion including an estimated 3% to 5% growth in comparable restaurant sales. Given our better-than-expected performance in the fourth quarter, we believe that our comparable restaurant sales could skew somewhat to the lower or middle part of this range. Commodity costs are expected to increase 2% to 3% including a 3% to 5% increase in beef cost. General and administrative expenses are expected to be $58 million to $60 million, excluding stock compensation expense and total acquisition related costs. Adjusted EBITDA is now expected to be $93 million to $100 million compared to the previous range of $90 million to $100 million. Our effective income tax rate is estimated to be between 0% and 5%. Capital expenditures before discretionary growth related expenditures are expected to be $45 million to $50 million. In addition to expenditures for the construction of 10 to 15 new restaurants and remaining cost from our 2017 new unit construction late in the year, are expected to be $15 million to $25 million. We expect to complete sale-leasebacks in restaurant properties generating $10 million to $15 million of estimated proceeds. Such sale-leasebacks primarily include restaurants already opened including certain new units that we opened in 2017. And lastly, we expect close 20 to 25 restaurants in 2018. This concludes our prepared remarks. So, operator, with that lets go ahead and open the line for questions.

[Operator:]

Thank you. [Operator Instructions] And our first question comes from Will Slabaugh with Stephens Inc.

[Will Slabaugh:]

Yes. Thanks, guys. Congrats on the quarter. I wanted to ask you on the comp acceleration, first. I think you were up 460 basis points you’re showing on a 2-year basis, which is a pretty eye-popping number. Is there anything geographically benefiting you or weather-related going on here, is this just a product of better execution in the restaurants?

[Paul Flanders:]

We were pretty consistently up all quarter. I will say that we were -- our comps were positive across every single one of the DMAs that we operate in, which is I don't recall that happening too many times in the past. I'd say, if on a regional basis, we were probably the strongest in the Northeast markets for some reason. I don't think -- maybe the weather was a little bit better in December. I don’t know that we had a meaningful impact, but we were double-digit comps in many of the Upstate, New York markets for example.

[Will Slabaugh:]

Got it. And just to make sure I heard you right, you said you’re pretty consistent throughout the quarter and I was curious also if you’d had any comments on January and February, that would be helpful as well.

[Dan Accordino:]

I would say we -- I mean, actually we accelerated through the quarter a little bit. I mean our strongest month actually turned out to be December. In terms of the first quarter, I would say we -- I would describe our performance so far was through January, obviously, in the first first three weeks of our fiscal February, and I guess I would describe our comps as solidly in the single-digit range.

[Will Slabaugh:]

Got it. Okay. Last thing was thoughts on beef for 2018, you mentioned you’d moved down sequentially in 4Q and curious kind of what you are seeing out there now? Any thoughts as we move throughout the year?

[Dan Accordino:]

As we said we expect our beef cost to be up 3% to 5% for the full-year. We averaged about, I think, about $2.09 to $2.10 for the first full-year. We are actually below there at this point. We're just a little bit over $2, so I think on a year-over-year basis -- at least from where we are today, I think our guidance implies that beef could go up 8% to 10% from here, but 3% to 5% over the last -- over last year.

[Will Slabaugh:]

Got it. Thanks, guys.

[Operator:]

And our next question comes from Greg Badishkanian with Citi.

[Fred Wightman:]

Hey, guys. This is actually Fred Wightman on for Greg. If we look at that check number which was up over 5%, I think last quarter you said pricing should be just over 2.5% for the fourth quarter. Can you just talk about sort of that implied mix benefit that you're seeing and how sustainable you think it is?

[Paul Flanders:]

Yes, as I just said, check was up about 5%. 3.4% of that was pricing, so obviously mix also here pretty good contribution in the quarter, which we have seen right along throughout the year, which is I think more probably is a reflection of the mix of the promotions. Well, we have promotions going on both the value and the premium size, the premium promotions have been very effective in driving the average check. For example, we had the 2 for $6 WHOPPER promotion particularly in the second half of 2017, and it’s a $6 promotion which is generating an average check north of $11. So those promotions are very effective obviously in that sense. Because we had a 3.4% menu pricing in the quarter, I think about 3% of that rolls over into the first quarter and we're a little bit under 2% of that for the full-year, and we’ll likely take some additional price increases as we get further into the year.

[Fred Wightman:]

Okay, great. And you mentioned that you're expecting the promotional levels, I think which was in the release to remain elevated into next -- or into this year. Can you just sort of talk about what you're seeing broadly in the competitive landscape to that?

[Dan Accordino:]

Yes, this is Dan. Yes, with the competitive -- you know what the competitive landscape is, generally it's -- I mean Wendy's is doing their 4 for $4 and McDonald's is doing the $1, $2, and $3, so we think the competitive landscape will continue to -- in 2017 -- 2018 be very much the same as it was in 2017.

[Operator:]

And our next question comes from Bryan Hunt with Wells Fargo.

[Bryan Hunt:]

Thank you. Paul, I was wondering if I could push a little bit more, you said solidly in the single-digit and same-store sales kind of quarter to date. Would that put -- if I -- what I interpret that to be high-single digit or low-single digit?

[Paul Flanders:]

You want me to answer -- it sounds like you want me just to give you the number, Bryan?

[Bryan Hunt:]

Okay, fine. That would be helpful as well.

[Paul Flanders:]

Solidly in the mid-single-digit range.

[Bryan Hunt:]

Okay. That helps. Thank you very much.

[Paul Flanders:]

If I didn’t make that clear?

[Bryan Hunt:]

No, that’s good. If I look at same-store sales, you said they accelerated throughout the quarter. Can you may be talk about the day part, may be driver and/or the promotional driver that caused the acceleration in your mind. I mean, whether it were consumers taking a bigger amount of these premium promotions in Q4 relative to Q3 because you all posted some of the strongest comps out of anybody that's reported so far in Q4?

[Dan Accordino:]

The 2 for $6 -- this is Dan, Bryan. The 2 for $6 promotion clearly was a major accelerator in terms of the comps in the fourth quarter. As soon as that promotion was launched, we saw a pretty robust increase in both the lunch snack and dinner day parts. Quarter Fantastic. And -- you talked about the promotional environment going forward, McDonald's promotion with the $1, $2, $3 menu is new. I think jack-in-the-box has followed the suit and as you said Wendy's is kind of reemphasizing what they're doing. Have you all -- as these promotions have been renewed or reemphasized, seen a difference in same-store sales pace relative to any one of these particular promotions, who do you think is kind of doing the best of taking share besides you all.

[Dan Accordino:]

No, I think that the Burger King marketing calendar actually has been very effective and actually been a bit ahead of what the competitors have been doing. So as you could tell by our fourth quarter sales, I wouldn't suggest that any of these competitive promotions have much impact on our restaurants.

[Bryan Hunt:]

And Dan you enumerated a long list of products. Are there any fears that -- what you're juggling is becoming too cumbersome for employees to manage in the back of the store or do you think there is a good balance between core and LTOs?

[Dan Accordino:]

Actually Burger King is on a very good job in using the same SKU with various toppings. So, consequently, we have not seen a lot of -- as a matter of fact, we haven't seen any new SKUs in the kitchen in the fourth quarter. So it's really just been modifications to existing Chicken Sandwiches and toppings. The 2 for $6 is the same WHOPPER obviously and the Crispy Chicken was -- its not a new SKU. So I don't think that the complexity has -- at all been enhanced or increased by virtue of the marketing calendar.

[Bryan Hunt:]

And last two questions. Where does the app launch for mobile ordering stand for Burger King? Is this something that we will see early this year?

[Dan Accordino:]

That question is better answered by Burger King, but we do not expect to see any mobile launch in the Carrols Restaurants early this year, no.

[Bryan Hunt:]

Okay. And the last question is, your bonds become callable this year 104, your performance is done very solid. Are there any capital structure plans in the near-term or is this more of a 2019 strategy?

[Paul Flanders:]

We don't have plans presently. It's something that we are just starting to look at. I mean the call is in May, obviously there's not necessarily any rush to get to the market. I mean, we have no immediate needs for capital. As I said, we get $28 million in cash. Some of that’s obviously less -- left from last year's [indiscernible] offering. We got plenty of revolver, so it would be more -- I think -- and these restructuring, the capital structure would be simply opportunistic relative to interest rate opportunities. And we're just starting to look at that.

[Bryan Hunt:]

Good luck. Thank you for your time.

[Dan Accordino:]

Thanks, Bryan.

[Operator:]

And we will take our next question from Brian Vaccaro with Raymond James.

[Brian Vaccaro:]

Thanks and good morning. Just a couple of questions on the comps, if I could. And circling back on the quarter to date, Paul, I think your comparisons get more difficult as you move through the first quarter. Can you remind us of the monthly cadence in the first quarter of '17?

[Paul Flanders:]

I don’t know that we necessarily disclose monthly comps, historically with last year but, I mean, I think if you just generally -- if you think back to, we got a pretty slow start in January of last year with the nature of the promotion. That was not really successful in January, which we changed out pretty quickly. So I think that’s sort of -- a commentary on how we started January. February got stronger. I think there was a [indiscernible] time where Burger King launched the 2 Cheeseburger deal. So we obviously saw improvements as we worked our way through the quarter.

[Brian Vaccaro:]

Okay. Is it right -- my recollection that Jan and Feb were both negative and then March was positive?

[Paul Flanders:]

That's a fair -- stemming the whole quarter was slightly negative. I mean, I wouldn't really say that one month was significantly different from another although, yes, January and February were slightly negative, then March was positive. But that’s -- it's a -- I wouldn’t say they vary that much.

[Brian Vaccaro:]

Okay. That’s great. And also, in terms of this is the second quarter in a row of pretty outsized performance versus the Burger King system overall in the U.S as to what you attribute that outperformance?

[Dan Accordino:]

The only -- this is Dan. The only thing that I can ascribe it to would be the geographic differences. I don't know what the specific comps were in each of the various divisions, but I can only assume that because our comps were more favorably benefited in the Northeast, that the Northeast was probably stronger than the other divisions for Burger King.

[Brian Vaccaro:]

Okay. And shifting gears, if I could real quick, on the fourth quarter store margins, it was particularly impressed by the acquired unit margins that were up over 150 bps. Paul, can you touch on the drivers of that improvement? Is that mostly the mix of units, maybe reflecting Cincinnati and the Maryland acquisitions, or is that also reflecting some pretty meaningful operational improvement that you're realizing?

[Paul Flanders:]

I think it's a little bit of both. I mean, we’ve obviously -- the acquisition in [indiscernible] or Maryland, certainly those units have had somewhat of a impact on the overall acquired margins, just simply given their unit -- average unit volumes that are so much higher. So that have some impact. But I would say that on a more general basis [indiscernible] because of the improvements we’ve been making in the acquired stores.

[Dan Accordino:]

Yes, this is Dan. Yes, the margins in Maryland certainly were higher, but that was somewhat offset by the fact that the age of these in Cincinnati [indiscernible]. So consequently the Cincinnati margins just by virtue of sales weren't quite as robust. But the improvements that we have made in the Cincinnati in both markets, but primarily in Cincinnati, we’ve had a little bit longer have enhanced those margins considerably.

[Brian Vaccaro:]

Okay. That's helpful. And then last one for me, a question on the G&A guidance. It seems like it does reflect high single-digit percentage growth in '18. Before the impact of acquisitions, I assume if you look at it on a dollar basis, up about $4 million bucks at the midpoint year-on-year that’s the same dollar increase that you saw in '17 versus '16. Can you just walk us through what's driving that increase sort of on an organic basis sort of that 7% to 8% increase? Anything you’re bringing in there?

[Paul Flanders:]

Well, I think -- I don’t know if there's anything specifically -- I mean, remember, we’ve acquired stores, 64 stores in 2017, so you have the full-year impact of the incremental field overhead that’s been added for district managers and probably some at the regional level, that's clearly had some impact. The other thing and I'm not sure everyone understands, but our training costs for manager training is classifies in our G&A expense. So when we pull the restaurant managers out of the restaurants for purposes of training, those salaries get classified in the G&A number. And that’s [indiscernible] training costs have gone up toward the growth, and I guess I’d say the other area that we were particularly focused on internally is reducing turnover because that's -- it had a similar effect on training cost. And I think maybe the only other thing maybe to call out is instead of compensations assumed to be little bit higher, assuming we hit our plans, which we obviously did not do in 2017.

[Brian Vaccaro:]

All right. Great. I will pass along. Thank you.

[Operator:]

[Operator Instructions] We will take our next question from Jeremy Hamblin with Dougherty & Company.

[Jeremy Hamblin:]

Good morning, guys. I'll add my congratulations on the strong results. I wanted to start with a follow-up there on the stock compensation and just get a sense for last year I think it finished at about $3.5 million on that front. I think this G&A number excludes that, although on a reported basis, you do included it in how it reports on the income statement. Can you give me a sense, Paul, should we be factor in let's say like $4.5 million or $5 million on the stock comp side of the equation?

[Paul Flanders:]

Yes, I'd say $4 million to $5 million is probably the range. I mean, one thing just that you’re aware of, we have some modifications of the comp structure in the last year or so, and some of that included putting some of our bonus at risk for a longer period of time, so we shifted -- actually added a component relative to paying some of the bonus in the form of stock, which in turn then is now -- is payable over a period of time depending on performance. So that have some impact on that line as well.

[Jeremy Hamblin:]

Okay. So on an adjusted basis for including the stock on a reported basis to be like $62 million to $65 million is the range, right? Excluding any acquisitions?

[Paul Flanders:]

Correct.

[Jeremy Hamblin:]

Okay. And then as a follow-up on that point acquisitions, we didn't talk at all about kind of the acquisition pipeline. There's been lots of -- kind of changes out there, we continue to see the franchisee based getting a little bit older. Any commentary on whether or not you have active deals in the pipeline. It has -- you’re digesting some nice transactions from earlier, in 2017, but any commentary on where things stand? How many deals you're looking at, anything sizable in nature?

[Dan Accordino:]

Yes, Jeremy. This is Dan. We’ve digested the 2017 acquisitions pretty well. So that's not inhibiting our ability to do deals with all. And, yes, we are actively pursuing several deals, some of which are not particularly large. And one of which could be in the 20 to 30 store range, and those deals are currently being negotiated.

[Jeremy Hamblin:]

And any change in the -- with the acceleration of comps, any change in evaluation, obviously there's valuation that's higher on higher EBITDA, but from your perspective, continuing to stay disciplined in that 4x EBITDA on what you're willing to pay?

[Dan Accordino:]

Yes, we remain disciplined.

[Jeremy Hamblin:]

Okay. And then, Paul, I wanted to come back to the same-store sales guidance, 3% to 5%, which clearly on the heels of 5% plus growth last year, that would represent I think again some of the best QSR comps going out there even just getting to the 3%. Could you just build back for me the composition in thinking through that? I think you mentioned that menu pricing as it stands in Q1 is up about 3%. How should I be thinking about the build back on that 3% to 5% comp? Are you looking at kind of like 2.5% on menu price for the year, positive contribution from mix or how we get into the 3%?

[Paul Flanders:]

Yes, what I said is we’ve dealt [ph] 3% effective pricing carrying into the first quarter. Some of those price increases will drop off during the course the year, but for the full-year based on our existing pricing, we’ve added just a little under 2% for the full-year. That’s already been -- price is already been taken. Our view is that and we will obviously reexamine this as we move forward, but our plans would be to try to get that up to 3% for the year. So, the objective will be to have 3% pricing as we know we’ve seen favorable mix from the promotions, which as we indicated we expect to continue at this level. So I would expect we have some additional increases in the average check from the those, from sales mix. I think we're just -- yes, I mean, you asked the trends, I mean, it's been very strong. We obviously wanted -- don’t want to be overly aggressive as we think forward as to what 2018 could look like, given the comparisons frankly.

[Jeremy Hamblin:]

Okay. And then I have to just ask, again, because the comps are just so strong for the brand and even better for you guys. What in terms of figuring out what the customers [technical difficulty] responding to, there's a real value side to two WHOPPERS for $6 bucks, it's also a fairly significant discount, I think, roughly 30%, 35% discount off of traditional price. But you really had success I think with these premium sandwiches, the KING series. Is this just simply now -- I think that the double quarter pound KING is off to a very strong start as well. Is this really kind of value messaging in disguise, but you’re driving higher checks because the cost of the sandwiches is high and that's really what your consumers is asking for and they’re coming into the restaurants for is it check disguised with kind of real value messaging?

[Dan Accordino:]

I think that’s a very good way to think about it, Jeremy. That is exactly the way the consumer is behaving. As Paul said earlier, the 2 for $6 promotion is yielding an average check north of $11. So, yes, that that's exactly how this is being used by the consumer, and I think it's very clever on behalf of Burger King.

[Jeremy Hamblin:]

Yes, I agree. Paul, can you just to put that in context what was the average check for the year, for 2017?

[Paul Flanders:]

Give me a second here.

[Jeremy Hamblin:]

I think you had $6.85 for 2016.

[Paul Flanders:]

Its higher. I know that. I don’t have the full-year here. I can give you the fourth quarter, it might be a good benchmark to tell you where we’re.

[Jeremy Hamblin:]

Okay. Sure.

[Paul Flanders:]

Fourth quarter we are at $7.29.

[Jeremy Hamblin:]

Okay.

[Paul Flanders:]

And I would say, just I look back over the course of the year, I mean, we sort of were $7 to -- anywhere from $7 to $7.30 basically. So what I would say one of the average is probably in the $7.10, $7.15 range.

[Jeremy Hamblin:]

Great. Thanks for taking my questions, guys. Congratulations and …

[Paul Flanders:]

Thanks, Jeremy.

[Jeremy Hamblin:]

… best wishes this year.

[Paul Flanders:]

Okay.

[Operator:]

And it appears there are no further questions at this time. I'd like to turn the conference back over to management for any additional or closing remarks.

[Paul Flanders:]

Thank you. We don't really have anything to add at this point. We appreciate your time today and look forward to speaking to you after the first quarter. Thank you.

[Operator:]

And that does conclude today’s conference. Thank you for your participation. You may now disconnect.