Dine Brands Global - Earnings Call - Q2 2016
August 3, 2016
Transcript
Speaker 0
Welcome to the Second Quarter twenty sixteen Dine Equity, Inc. Earnings Conference Call. My name is Sylvia, and I will be your operator for today's call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session.
Please note that this conference is being recorded. I will now turn the call over to Ken Dipty. Ken, you may begin.
Speaker 1
Good morning, and welcome to DynaEquity's second quarter twenty sixteen conference call. I'm joined by Julius Steuer, Chairman and CEO Tom Emery, CFO and Greg Calvin, Corporate Controller. Before I turn the call over to Julia and Tom, please remember our Safe Harbor regarding forward looking information. During the call, management may discuss information that is forward looking and involves known and unknown risks, uncertainties and other factors, which may cause the actual results to be substantially different than those expressed or implied. We caution you to devalue such forward looking information in the context of these factors for detail in today's press release and 10 Q filing.
The forward looking statements are as of today and assumes no obligation to update or supplement these statements. You may also refer to certain non GAAP financial measures, which are described in our press release and also available on Giant Equity's Investor Relations website. I'll now turn the call over to Julia.
Speaker 2
Thanks, Ken, good morning, everyone. Thank you for being on the call today. Here are the headlines for the second quarter. We delivered year over year growth in second quarter adjusted EPS despite soft comparable sales at Applebee's and IHOP. We also generated free cash flow of $56,000,000 in the first half of the year.
IHOP's second quarter comp sales increased by 0.2% while lapping over the brand's highest quarterly sales increase in over a decade. At Applebee's, we saw a decline of 4.2% in comp sales for the quarter, and I'll elaborate on this shortly. As a result of the sales performance at Applebee's and IHOP during the first half of the year and our outlook for the back half, we are revising our 2016 comp sales guidance downward for each brand. We will expect comp sales improvement in the second half, but given the year to date results, we think it's prudent to reset the ranges. Tom will elaborate on these revisions in his remarks.
Applebee's has been number one in casual dining for nine consecutive quarters as measured by total system sales. Our brand remains strong and we continue to drive brand differentiation for the long term while testing and implementing short term traffic driving initiatives. In May, we announced the nationwide launch of certified USDA choice hand cut steaks on a wood fired grill using real American oak. Over 40% of our menu items are now being cooked on the WoodFire grill from steaks and chicken, salmon, pork chops and vegetables, all now have that smoky flavor guests love. We're well aware of changing consumer needs and demands, so we're testing several revitalization initiatives to address them.
To give you a sense, they include items such as value messaging, revitalizing the bar, car side to go and delivery options, the remodel and new prototype programs, leveraging social and digital media to interact with guests in real time and simplifying the menu, which includes the deletion of 22 menu items this year alone to make room for new menu innovation. In addition, with an average check of under $14 Applebee's is still near the low end of the scale for casual dining and provides guests with great value, which we define as more than just a price point. And we've become more relevant to the younger generation, almost doubling the percentage of millennials in our restaurants in the last four years. As I've said before, changing perceptions of Applebee's and revitalizing the brand will not happen overnight. However, we are already beginning to see a change.
And there's more good news. We conducted proprietary research after the launch of HandCut WoodFired platform and discovered that 95% of guests that purchased an entree prepared on the WoodFired Grille said they would repurchase it again due to the overall taste and quality of the item. This is the start of changing the Applebee's story, which takes time. However, this quality improvement was met head on by consumers looking for value. Based on what we've learned, our best hypothesis is that the platform's performance was impacted by not communicating its value proposition.
We are currently working very closely with many of our franchisees to test and validate various value messages to help win short term traffic. In addition to testing several different value messages with TV, we are also launching local promotional activity across the country to assist with short term traffic needs. And more good news, while all of this additional traffic generating work is underway, we have made real progress with improved service at Applebee's. Overall satisfaction scores have increased 500 basis points since the launch of HandCut WoodFire and 64% of our restaurants are now ranked A or B operationally. To recap, we're changing the story at Applebee's and revitalizing the brand.
This will not happen overnight. A major step in our journey was the introduction of the new WoodFire cooking platform, which as I said earlier, impacts over 40% of our menu and it doesn't end there. We are testing and validating several revitalization initiatives, while laser focused on enhancing our service to the guests, a key component of price value. And we're testing several value related messages to give guests reasons to visit our restaurants and come back more frequently in the short term. We are number one in casual dining and we serve over 1,250,000 people a day.
We will not be deterred. Our franchisees are supportive and want to be part of the revitalization. Now let's switch gears to IHOP. Despite achieving its thirteenth consecutive quarter of positive comp sales, IHOP sales performance wasn't what we had hoped for either. However, it's worth noting that in the second quarter, we lapped over the brand's strongest results in over ten years, a six point two percent increase.
Additionally, we believe that consumer sentiment shifted during the quarter and caused guests to be more conservative and value driven. On sustaining and building on IHOP's momentum, we're reinforcing our breakfast heritage and leadership position through everything that we do. We're testing additional platforms, but there's more work to be done. We're streamlining our menu to make it easier to execute in the back of the house, while continuing to build a pipeline of innovative and unique menu items. Evolving our breakfast drinks to other dayparts with IHOP's unique ability to provide a personalized offering to consumers will be a key aspect of these exciting changes.
We're driving a significant and exciting remodel program, as we've said before, and we're on track to have approximately three fifty restaurants completed in 2016. The cost of the remodel ranges from approximately $100,000 to $175,000 depending on the extent of the remodel. We're placing a greater emphasis on our food, which is made fresh to order with the use of fresh ingredients and certainly differentiates us from fast food restaurants. As I said earlier, there are parallels with Applebee's. IHOP also needs a compelling long term value message, so we are communicating an even more pointed value message going forward.
One proven fact of how we'll accomplish this is by bringing back Kids Eat Free this month. This will be the centerpiece on our new value strategy, which we expect to drive traffic. How we communicate these initiatives in the coming months and years is just about as important as what we're communicating. We have a continued focus on the use of technology, including social and digital media to engage with our consumers. To this end, one on one daily engagement is central to our social media strategy and we're capitalizing on real time content opportunities to keep the brand relevant.
We're also challenging ourselves to raise the bar and continually strive to take our advertising to the next level. To achieve this, our new ad agency of record will assist with developing a new creative message. The new direction we've taken will be reflected in the campaign that kicks off at the September to support the introduction of new innovative seasonal items. Now turning briefly to development, which is also a key part of our strategy. As you read earlier in our guidance, we're going to guide, excuse me, on the lower end and suggest that we may overall open five less restaurants.
Our analysis suggests there is ample headroom to continue developing Applebee's and IHOP restaurants in The U. S. And internationally. We are working with our franchisees both existing and new to expand our footprint in rural, suburban, urban and non traditional locations. Additionally, we're currently assessing our longer term international development projections and we'll provide an update on our progress next quarter.
And with that, I'll turn the call over to Tom to discuss briefly the quarterly results. Tom?
Speaker 3
Thanks, Julia. Good morning, everyone. I'll provide a brief recap of the second quarter's financial results starting with the income statement. Adjusted EPS in the second quarter was $1.59 compared to $1.53 in the same quarter of 2015. The increase was mainly due to fewer weighted average shares outstanding, lower income taxes, higher gross profit and a decline in cash interest.
These items were partially offset by higher G and A. Regarding gross profit for the second quarter, the slight year over year increase was mainly driven by development by franchisees over the last twelve months and favorability in IHOP royalties and dry mix. These were partially offset by lower Applebee's royalties and a decline in financing interest income. Turning to G and A. On an adjusted basis to exclude non recurring consolidation charges, second quarter G and A was approximately $36,000,000 compared to roughly $35,000,000 in the same quarter of last year.
The increase was primarily due to higher personnel related costs. When including roughly $500,000 of consolidation costs, G and A was $36,500,000 Please note that G and A for the second quarter also reflects lower incentive compensation accruals due to the comp sales performance of both brands in the first half of the year. And as a reminder, there is some seasonality to our G and A in the back half of the year related to our annual franchise conferences, which are both scheduled for the third quarter this year compared to the fourth quarter in 2015. For the full year, we reaffirm our G and A guidance range of between $154,000,000 and $158,000,000 And please note that this includes a total of approximately $4,000,000 of nonrecurring costs related to our restaurant support center consolidation, and I'd like to highlight that these costs do not have an impact on adjusted EPS. We continue to closely manage our G and A.
Now I'd like to provide a brief update on the restaurant support center consolidation. The process is nearly complete and is going as planned. Year to date, we've taken approximately $5,000,000 in charges. Of this, roughly $2,600,000 hit G and A, primarily for relocation and recruiting related to the consolidation. We also incurred a charge of approximately $2,500,000 in lease termination costs related to the facility in Kansas City, which were included in closure and impairment costs.
We initially estimated that we would incur approximately $8,000,000 in pretax consolidation costs solely related to the facility in Kansas City. Our original assumption was based on the entire facility being subleased. We now estimate that we'll incur a total of approximately $5,000,000 as a result of terminating our lease on two floors of the Kansas City Building. Our team members will be moved to one floor that we will retain. On our tax rate, the tax provision in the 2016 was lower due to our adjustment of state deferred taxes as a result of the restaurant support center consolidation.
Now a few comments on the cash flow statement. Cash flows from operating activities were $54,000,000 for the first six months of twenty sixteen compared to $48,000,000 for the same period last year. The increase in cash from ops was primarily due to favorable net changes in working capital due to having paid less interest on our long term debt and an increase in advertising funds and marketing accrual. As a reminder, the initial interest payment on our securitized debt in the 2015 represented five months of accrued interest through March 2015. All subsequent quarterly payments, including the payments made in the first and second quarters of this year, represented three months of accrued interest, respectively.
The increase in cash from ops and the favorability in CapEx were partially offset by slightly lower net receipts from notes and equipment contracts receivable, resulting in free cash flow of approximately $56,000,000 for the 2016 compared to nearly $50,000,000 for the first six months of last year. In the second quarter, we returned a total of $32,000,000 to shareholders, which included $17,000,000 in cash dividends and $15,000,000 to repurchase roughly 181,000 shares of our common stock. Turning to our performance guidance for fiscal twenty sixteen, I'd like to highlight a few revisions, but please see our press release for details on the complete guidance. We now expect Applebee's comps to range between negative 3% and negative 4.5%. The previous range was between negative 2% and positive 2%.
We currently expect IHOP comps to range between positive 0.5% and positive 2%. The previous range was between positive 1% and positive 4%. We are also making incremental investments over the next next few months for testing additional marketing programs at Applebee's as part of our plan to generate traffic. We expect this to result in a decrease of approximately $2,500,000 in Q3 Franchise segment profit. Combined with the revised comp sales guidance, we now expect franchise segment profit to range between approximately $342,000,000 and $352,000,000 for the fiscal year.
The original franchise segment profit guidance was between $345,000,000 and $360,000,000 We will continue to review our performance guidance on an ongoing basis. And with that, I'll now turn the call back over to Julia for her closing remarks. Thanks.
Speaker 2
And thanks, Tom. To recap, we delivered growth in adjusted EPS despite comp sales being below our expectations. We also continue to generate strong free cash flow. A significant part of our story is that we have two iconic brands. IHOP is a leader in the industry's only growing daypart, and we're in the early stages of revitalizing Applebee's, one of the world's largest casual dining chains.
Getting both brands firmly back on track is our top priority. We're taking steps to drive positive and sustainable sales and traffic with a renewed focus on value at each brand. We also continue on thoughtfully exploring a strategic acquisition. Finally, the consolidation of our headquarters is nearly complete, and we're seeing the benefit of real synergies across the organization, which has facilitated more effective collaboration. The consolidation resulted in approximately 100 new hires and has brought our two strong brands under one roof.
In closing, we're confident in our plans and the strategic steps we're taking to drive the business forward. And now, Tom and I would be pleased to answer your questions. Operator?
Speaker 0
Thank you. We will now begin the question and answer session. And the first question comes from David Carlson from KeyBanc.
Speaker 4
Hi. I just had a really quick question. Is the thought process being that on the free cash flow that after paying dividend that you still plan to spend the excess to repurchase shares? And then a follow-up to that being given the same restaurant sales decline and the revised guidance, has it at all caused you to revisit your capital plan?
Speaker 3
No, it hasn't. It hasn't made any significant real significant adjustments to our free cash flow when you look at it in totality. And so we've been doing what we've been doing for the last while, and we're not probably going to be making any changes to that.
Speaker 0
Our following question comes from Brian Vaccaro from Raymond James.
Speaker 5
Good morning and thanks for taking my questions. Julia, I wanted to just start out with the WoodFire Grill platform at Applebee's and appreciate some of the details around the initial guest response. But can you remind us sort of what's been done so far to build awareness around the platform and what the plan over the next several quarters would be to continue to drive awareness there?
Speaker 2
Sure. So in the middle of second quarter, we began the advertising that talked about the fact that we had this WoodFire platform and also that we were hand cutting our new USDA Choice certified stake, so on the American Oak, which is that was the major thrust. So for the balance of the year, you'll see more of it about both the value messaging, but it also relates to other products that go on the platform. So the only thing we talked about in the initial launch was about steaks. But over 40% of the menu at this point is affected by the WoodFire platform.
So the balance of the year, you'll see that. So for instance, right now, we're in the middle of salad, which has many of them are on the protein that's on the salad is on the WoodFire platform and also making dressing in house. So it continues those quality cues, but a lot of it related to WoodFire. We think the reason I mentioned the testing is we think there's an opportunity to bring in a stronger value message. So that was the marketing, if you will.
And then there was PR and there was additional in store remessaging that we did as well with the launch.
Speaker 5
Okay. All right. That's helpful. And secondly, I wanted to ask about your perspective sort of on the broader industry weakness and maybe from two angles. First, sort of the ongoing debate regarding the health of independents and their relative performance versus the chains.
Could you share your perspective from what you're seeing on the ground or hearing from franchisees in that regard?
Speaker 2
Yes. It's very interesting. I think you've heard me say for some time that the consumer is lumpy and bumpy, and I would continue to say that. I think in general terms, there hasn't been a huge shift in market share. What you saw a couple of quarters ago in terms of independents versus chains is very similar.
Mean, we are so big to make a change in that category mix shift would take a lot. So in general, you're seeing very much the same in terms of market share and and so forth that we saw, I would say, even three quarters ago. So not huge changes and shift. I think if you're going to see that, it would reflect probably over several quarters.
Speaker 5
All right. And then you mentioned your mix of millennials in terms of the consumer mix is up significantly over the past four years. Could you share where that percentage stands these days?
Speaker 2
Sure. Millennials are now over 40% of the mix at Applebee's. That's significantly higher than many of our close in chain competitors. I don't have the way to get at the independence, but that's through the work that we've been doing both in revitalizing the brand. And clearly, there's no question the social and digital strategy has made a significant inroad as well.
And the bar, that is one of the advantages we have at Applebee's. The bar does attract the millennial, and we have programs to enhance that. I think you heard in my prepared remarks about the revitalization of the bar.
Speaker 5
Great. Thank you.
Speaker 0
And our following question comes from John Ivankoe from JPMorgan.
Speaker 6
Hi. I wanted to go two different places. First, just the overall attitude and willingness of not only the Applebee's franchise system to reinvest, but are you sensitive, Julia? You have some experience in this industry. Are you worried about potential closures or nonrenewals of the franchise system, especially as growth for the brand was so robust twenty years ago?
Speaker 2
Well, I'll start by saying that we only have 32 franchisees in the Applebee's system who own almost 2,000 restaurants. So this is a very well heeled, sophisticated, thoughtful group of franchisees who have, over the years, invested millions and millions of dollars in this business. Just like our IHOP franchisees bleed blue, our Applebee's franchisees bleed Applebee's. They care deeply about it. It's their primary business, And they want to see it as successful as we do, if not more so.
So they are highly committed. And as I said, they've been willing to test all along with us and continue to do so because they too believe that consumers' expectations and demands are changing. When you have 40% or more of your consumer base as millennials, your expectations are different than a baby boomers, if you will. I'm grossly simplifying, but you get the gist. So the needs have shifted.
And the franchisees, I think, are because they are so savvy are willing to move with us. If that means a closure here and there as it has over time, then we figure it out and we work with our franchisees. But I think you're also seeing more and more franchisees willing to realize if the shift of the train area moves, they move with that new train area. So it's not just about closures, it's about moving to new areas of growth and development, and they're very focused on that. So they've been terrific partners in that whole arena.
Speaker 6
And you made this comment in your prepared remarks about potential growth of Applebee's in The U. S. I mean as you have conversations with these 32 franchisees and they have a sense of their pipeline, what may be closing, what may be moving, what might be opening, can the system sustain the number of units that it has today? I mean, what's kind of your view over the next couple of years in terms of The U. S.
Applebee's store count?
Speaker 2
Yes. As you know, we announced, gosh, it's probably been two years ago that we thought Applebee's could do a couple 100 more restaurants, and that was over the old modeling work that we've done. But Jim has been with us for a year and has done even new sophisticated modeling, and that number is still very relevant. So that work is in progress. The mapping that he does individually by DMA and each franchisee has a very thoughtful review of where they are, where they could grow and what the map suggests as either trade areas develop or grow or move.
And that work is going to be in progress well, really, the end of this year and the beginning of next year to really hone in on that sophisticated level of development and where we might be able to go. What will be interesting in that work and I've really never talked about this before, much similarly to the work we're doing at IHOP is whether there are fill in opportunities in existing markets where you use a smaller footprint or you look at different ways to outlay that marketplace. That's the work that Jim and his team actually have been working on, will be finalizing, and then literally sitting down with each individual franchisees. These are all of these franchisees are sophisticated developers, but they want that additional mapping work, which we are in the process of finalizing. So that will be an opportunity for them to really stretch their wings and look at the growth potentials by DMA.
Some have more potential than others.
Speaker 6
So can you give us color to the extent that it's appropriate about kind of the state of those 32 franchisees? Should we expect to see more consolidation? Maybe there could be some fragmentation. Maybe there are some generational issues amongst what I think some of these are family owned businesses that may be transitioning. How do you anticipate that franchise community changing?
Can that be to a benefit to you in the next few years?
Speaker 2
I think you'll always and I've been saying this for years on both businesses there's always buyers and sellers. That's no different this year than it's been any other year. You'll always see a couple of transactions from an existing franchisee to a new franchisee, whether they're in the system today or not. Our recruiting efforts this year, just like any other year, have produced a handful of interested parties who'd like to become franchisees. So I think that buying and selling if you look over the last, gosh, I'll say five years, in any given year, you've had a handful of franchisees sell and a handful of either new franchisees or existing franchisees buy.
I don't see that as any different this year.
Speaker 6
Okay. Thank you. I'm going to change directions for a second. It looks like your net debt to adjusted EBITDA is around 4.25%, I think. Is that what you guys calculate?
Speaker 3
More or less. But it's a little higher than that, mid-4s.
Speaker 6
Okay, mid-4s. What is the appropriate target leverage ratio for the company at this point? And just remind us what kind of either refinancing opportunity or I guess probably better said at this point tack on ability that you have to the current facility that if you wanted to put more leverage half a turn or a turn or whatever could you and would you, I guess, is the question.
Speaker 2
So let me start off with saying we've said for several quarters when asked that question that we are very comfortable with where our leverage ratio is today. We feel very good about it. But I'll let Tom answer in terms of the refi specifics.
Speaker 3
No, I think that's fair. We can't really refinance the securitization for a while anyway, and it runs out the total period of it is seven years, it runs through 2021. And so there's no urgency to do that. We feel pretty good about where we are. As it stands now, don't propose to make any significant changes to it.
There is some room to borrow more under the securitization potentially, but, you know, we'll have to evaluate that if needs arise.
Speaker 2
And then just to refresh your memory, we do have the, revolver, which is, a 100,000,000. We have that revolver as well. And I wouldn't draw it against the revolver like 5,000,000 Yes, about 5,000,000 Yes, credit, it's really tied up in the letters but we always have the revolver as well. Sorry, didn't mean to interrupt.
Speaker 6
Please. And in addition to that revolver, you're carrying 118,000,000 of cash. I mean, how much of that is can be returned to shareholders? I mean, how much of that do you want to perpetually hold back versus could be used for other purposes?
Speaker 3
Well, fair bit of that money is advertising and gift card related and all that. What you should look at is the metrics that we talk about when we talk about our annual free cash flow and the amount we return to shareholders. And that's been pretty consistent over the last couple of years and that's sort of the way to kind of look at it.
Speaker 6
Okay. Thanks.
Speaker 0
Our following question comes from Michael Gallo from CL King.
Speaker 7
Hi. Good morning. One First question and one on Wood Fired Grill, Julia, I know you noted very strong purchase intent and customers seem to really like the product. I was wondering whether with some of the changes, whether perhaps some of the core price points might be too high for where the customer is today. I know you're addressing it a little bit here on air with the $8.99 salads.
But can you speak to whether some of these changes and improvements might have priced it a little above your core customer? And then also I have a follow-up question. Thanks.
Speaker 2
Yeah. So, great question. Really good question. I think there's two things to remember. In the casual dining space, you have a lot of light user base.
And so we recognize, and we've said this repeatedly, that it takes time for people to try the item to come in and actually do it. We have a huge as in all of casual dining, there's a huge light user base, so it does take time. So I don't want to underestimate the importance of people make it clear when they're ready to go in, they'll try it and they can't wait, that type of thing. So we know that. The other thing I mentioned is it's less about the price that actually franchisees are charging for it.
It was the fact that we didn't put a price point on television. So our hypothesis is some people may have thought, Gosh, this is going to be expensive. So we have a way to counter that with the work that we're doing for the balance of the year. But I think those two things combined are an important factor to remember.
Speaker 7
Okay. Thank you. And then just a follow-up on IHOP. It's really outperformed for a long period of time, you've done a great job with the brand. I was wondering this quarter whether you really saw anything shifting either competitively or otherwise or was it just more a function of Paradise Pancakes perhaps not being as strong a promotion as SummerStax was last year?
Thanks.
Speaker 2
Yes, great question. And we continue to do well. And the brand is, as you might well imagine, iconic in so many ways. I think as I said in my prepared remarks, we recognize there's probably an opportunity as we think about messaging the brand of the consumers to be a little stronger in terms of reminding people what we do differently and better than everyone else. That's the notion of the new ad agency.
That's the notion of being a lot more focused on I wouldn't say aggressive, that's probably not a fair word but being a lot more targeted in our approach about the things we do that virtually no one else can do and talking about them in a more meaningful way. I think I've sort of tongue in cheek talked about the fact that we've been serving breakfast all day for fifty seven years, and we've been, you know, cook scratching by we've been cook spread we've been scratch cooking. Thanks. We've been scratch cooking for, you know, forever and the like. So there's probably a little bit more of a of a targeted approach we can do to the messaging that that we think we need to get after.
The brand is certainly solid and iconic and brings back memories for anybody and everybody. But I think there's an opportunity in the messaging. That's really the focus that I was trying to get across in my prepared remarks.
Speaker 7
Just as a follow-up to that, mean, am I hearing you right that you don't really see much changing in the dynamic around competitive or geographic or otherwise? It's just from a standpoint of IHOP controlling what it can control. Is that fair?
Speaker 2
I think that's fair, but I would also say, and I think I mentioned this a couple of quarters ago, there is no question you have significantly more people in the breakfast space today than you did five years ago. That's why it becomes so important how you message what we do differently than everybody else. We just have to be more laser like in that communication.
Speaker 7
Okay, thank you.
Speaker 2
Uh-huh.
Speaker 0
And the following question comes from Alton Stump from Longbow Research.
Speaker 8
Hey guys, it's actually Brittney Whitman on for Alton this morning.
Speaker 2
Hi Brittney. Hi.
Speaker 8
Hi, how's it going?
Speaker 0
Good.
Speaker 8
On the Wood Fired cooking platform, I wanted to ask about the guest traffic that that's driving. Is it mostly just new customers, or is it more regular customers coming in more often, or what's that dynamic?
Speaker 2
I think the dynamic is that you have existing guests who know and love us coming in a lot more frequently. The opportunity is to get that infrequent and light user to come in. That's everything I talked about today about really focusing on the value piece of it and driving it driving it home to that light or infrequent user that may be either shopping or just needs to be reminded of what we've got that's new and different.
Speaker 8
Right. And is there anything in the platform that maybe you could talk about to sort of keep that going or?
Speaker 2
Well, there's lots of things, and I mentioned it early on that over 40% of the menu now being impacted by Wood Fired Grill, we have a real opportunity to talk about some of those other items. It's not just about steak. I challenge you to go have that pork chop and tell me that's not the best pork chop in America or the salmon or the grilled vegetables. I mean, they're really fabulous products and thus this notion of now what we've got on air talking about salad. But we have a real opportunity not just to talk about the platform, but and the innovation doesn't stop there.
All the things I mentioned to you early on about all the new initiatives that really are focused on the revitalization, it's not just that Woodfire platform, but it's a great beginning and there's a lot more to talk about related to that and this value messaging. Because I always have to remind people, we play at the low end of casual dining and there's a real opportunity there to take advantage and optimize that.
Speaker 8
Okay, great. Thanks, Julia.
Speaker 2
Uh-huh. We
Speaker 0
have no further questions at this time. I'd like to hand the call back over to Julia Sewer for closing remarks.
Speaker 2
Well, thank you all again for joining us on the call today. We are scheduled to report results for the third quarter on November 1. So if you have any questions in the interim, as always, feel free to contact Ken or Tom or myself, thanks again.
Speaker 0
You, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.