Franchise (TAX) 4 Aug 212021 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. And welcome to Franchise Group's Fiscal 2021 Second Quarter Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. I would now like to hand the conference over to your host, Andrew Kaminsky, Executive Vice President and Chief Administrative Officer of Franchise Group. ahead. go Please

CFO. afternoon call. Good Franchise you joining Franchise for President Thank on and the conference Group's Seeton Eric I'm CEO; Kahn, call our and you. and thank with Group's Brian

differ on discussed statements Before getting started, those place Private of current Group the of undue call the like revise obligation management's other statements. to to Securities within made securities materially as are results to Litigation required contain call, or statements them. could are These forward-looking of of federal statements. assumes no Investors date on the as XXXX provisions are certain from Franchise forward-looking and this implied and mention may meaning not forward-looking by law this or the not of statements reliance performance. that future update I'd based and in matters cautioned forward-looking these forward-looking are the Reform laws. expectations The Act on except of guarantees Actual expressed by

in earnings for and limitations financial please isolation or information, ended our discussion our comparative more events indicated those discussed risks comparing differ to as could see measures on SEC. operating franchisegrp.com the we that measures non-GAAP other at results have our other a in among today substitute used periods uncertainties companies. regarding be from company the the that because investors and considered actual and forward-looking differ financial filings companies. Please information website Franchise measures in believe between for we and The of our these from, news financial of not to December and include Group's GAAP uses focus informational financial included may and believes make the from XX, statements, to our For with supplemental business XXXX when results, Non-GAAP that GAAP non-GAAP measures and measures. The cause should meaningful release provides peer non-GAAP and and results XX-K those reconciliation purposes. management year other Form information to is useful of the assessing detailed but for fiscal materially superior investors it section financial for see by

Now, call I'd turn like the to over to Brian? Brian.

us. Andrew, trends recent afternoon the turning highlights to on Eric call details. Thanks, Franchise listeners, good quarter, and to discuss our second thank I'll markets discuss and the joining for in and over before activities, businesses you Group's briefly an to provide current provide financial and our of update corporate

We will to their robust momentum then capitalize paying they commitment by be seamlessly in questions. our part happy and Supplies $XXX Franchise trajectory. continued Plus to our continue execute conservative Group and businesses. We approximately since the In of of down the debt, associates quarter Group Franchise financial in a on acquisition growth become Pet the a policy operationally to and its answer closing after second PSP have XXXX, March. on of demonstrated acquisition large million

and to continue and healthy had brands flow stacked our generate our two-year of All grow have sales. progressively of positive of same-store cash all levels brands

Group's to to team and value. flow uses continue Our discretionary long-term the increase to cash highest will best management Franchise allocate shareholder

In franchise XX count expanding the and New corporate and consisting for store of locations. unit locations franchise by count second store footprints increasing growth increased providing six quarter, openings units are we from XX momentum brands. our

to across area new XXX units. total fiscal locations, the for first backlog XXX new locations, For opened XXXX, stores all of we signed franchise agreements XX, our of and have development half brands grown new

just franchise have approval. and Rio who Vitamin the highlights days, the XX Vitamin or Vitamin for hosted Shoppe Vitamin the Texas. currently process stores first candidates in area Shoppe already franchise of ready development has discovery in first for franchise announcement prospective completed, of Shoppe franchising the In quarter application three XX quarter during of entities recent Shoppe completing three a One agreement Valley our was of the the of being of Grand

over the multiple due quarter, the openings XX%. agreements four development of of the revenue end more We a backlog and corporate are thrilled brand American see Vitamin to those of Pet commitment and franchising Plus of the the in under potential overall quarter Freight And have were improvement online acquisition American models Buddy's store the at variety level demand for private label with their openings strength and brand. this franchisees, robust Freight Shoppe's the rolled XXX PSP's put continued only and grew of fish Same-store Fins conversion also year-over-year the introduced their to business, Vitamin sales we new of of quarter, markets. growth for about advanced subscription an Pet a consumers First, area over franchise awareness, and believe economic Shoppe Supplies and XXX XX% during PSP due to stores, and its XXX Freight, and in with than Management In stores interest to the down of and of stores. the initiatives. Total sales acknowledgment total second to the the initial popularity second quarter, from stores. second existing completed high is grew franchise American operating that at being XXX its quarter up and opportunity testament a brand internal about Supplies resiliency. X%. same-store a were of XX operated both locations units. FFO the out trust store new In

American see at we Freight continued quarter, XXX constraints and of quarter. end costs franchise in A anticipate of Freight opportunities. the units, more materialize, agreements operated over the throughout to six And interest second development will significant freight at XXXX. continue franchising locations. We Freight including balance second the American elevated the have Supply

do up not real Freight. aggressively when next we store arise will have franchising The have not constraints until to stream inventory by of levels agreements supply While as that inventory Buddy's Freight's American area we normalize Buddy's new has its inventory for on bit inventory quarter current locations. these But will case new pursue despite out products. opportunities eased believe from a into now for levels revenue footprint nature benefit signing and has and franchise levels. continued Buddy's Buddy's second units, year. on XXX Shoppe continue were same-store including A growing lately, demand sales still well health constraints, although, lease, of estate development second carried Furnishings', supply in the the Shoppe at upholstery Buddy's still Vitamin recurring stores. wellness from are to at improved optimal quarter. for mattresses constraints Due stands XX the goods and Home openings, to Vitamin momentum consumers' focus their X.X% XXX the

for their As consisting seen second has management reopened, system. Vitamin leaving on-premise. same-store seen we of sales sustained their supplements and These quarter XX.X% with direct-to-consumer. the to fitness in XXX XX% of vitamin gyms sports Shoppe fitness comfort gain and in higher second Shoppe's negative nutrition, increased to shop than more positive growth and level clearly ended overall Vitamin XX.X% studios demand. layered in quarter in-store are increase a of the trends weight homes stores as have significant on and have Store traffic consumers supplement demand for general

provides Regarding cash acquisition that continue Franchise a we growth will M&A we enhancing level M&A and are that partners. unit robust will we several to or our cash attractive believe diversify Each economics, Group's path that has clear be to either streams, franchise Group's opportunities to candidate evaluate pursuing acquisition further accelerate revenue are each Franchise candidate discretionary flow or flow. both. And

execute range this our we include on believe full a nascent can of current businesses. we from rapidly is that franchise to both candidates ends of goal And larger opportunities spectrum. Our grow established brands to

to our track for lever de-levering cement up we after a continue scale transaction. record of and We building diversifying rapidly,

our next So us the opportunity. for support lenders again confident that we will are

associates to their their of Before I once for support support over turning like of Eric? work, their hard of other call Eric, the franchisees. again all our to and thank dedicated our would each

Brian. you, Thank

remind operations, making forma like be the address results will to we that I references throughout items call. pro Before this of to you many I would

to the been adjusted have and to refer financial when may a acquisition. extent filings the and to releases is reasonable. performance items not to period changed historical the our align prior for businesses timing their to allow available These with press comparable acquired policies results the the to to recently companies Comparison Our due Franchise and evaluate acquired Groups. forma results by will of accounting calendar acquisition of pro us discuss fiscal

costs. non-GAAP format in a the to consistent section rules Article reporting order in other not release. S-X The time, synergies as the our conform company in same in EBITDA for amounts in for supplemental Financial past. will information specific reporting adjusted Regulation reporting each XXXX. this any has it to in SEC reminder of disclosure XX detail do will and in a we fully The Franchise not included non-GAAP At the discussed continue are As Measures and acquisition with be Metrics of anticipate concepts earnings Group with, report

Freight Adjusted For share. per Franchise diluted Vitamin have for per was discontinued or four Pet EPS Supplies $XX.X Buddy's. non-GAAP million continuing million. now the Group Plus segments: second and million operations We from operation. And net GAAP revenue share. Shoppe Tax $XX.X report reportable American was income $X.XX reported total quarter $X.XX and currently was as of a Liberty XXXX $XXX.XX fully EBITDA was

Pet of and $XX.X revenue $XXX.X adjusted Supplies of $XX.X million $XXX.X Buddy's XXXX XX, period. million EBITDA million Vitamin for June of and EBITDA of ended and $XX.X million Freight revenue million and million $X.X EBITDA and quarter the had revenue million had $XX.X and had respectively. million respectively $XXX.X EBITDA adjusted revenue For respectively. respectively. American adjusted had and Shoppe Plus our and adjusted ownership And

$XX.X capital operating flow cash of free expenditures $XX.X cash expenditures. FRG cash as operating and million consolidated flow quarter defined less the capital to of activities was netting $XX.X million flow for from million For

debt sheet X, term debt ABL of the all conjunction and future. transaction of from we believe our of proceeds million all cash with $XXX.X foreseeable million. revolver to performance, the sufficient the $XX of of and We the million for reduced $XX.X meet business ended Liberty obligations with attributed our approximately we quarter $XXX activities approximately In closing capital to our liquidity the from operating million was balance million to the continue support On million. and cash term FRG, have fully expenditures cash capital negative $X.X in undrawn outstanding flow our Within expenditures these Free cash flow $X.X to activities amounts with continuing of had flow $X.X operations billion from $X.X operating $XXX of Franchise free less of and cash a netting million. NextPoint. Group million July by we businesses Liberty from

As XXXX of least for are million using EPS approximately increasing Non-GAAP In million. revenue at to to for outstanding. at per least $X.XX fiscal EBITDA million share $X.X least calculating from today, at we $XXX from $X.XX EPS we to per at are average at $XXX to expectations $X.XX from $X our annual and billion adjusted least share billion billion. XX weighted least shares

acquisitions you. Our additional or thank of XXXX Thank for for their shareholders and expectations for for want all to I open refranchising date. the questions. do to our assumption support Operator, additional activity. please any lenders not include line divestitures

from [Operator Solow Larry Securities. Instructions] comes Our line first from of CJS the question

is Your open. line

for my Good afternoon. Thanks Great. question. taking

and you year rise drinks half It then which the Vitamin quarter. really over -- Just of you quarterly to last beat it rough majority to the perhaps here. had be you have guide of would a you same-store term can I -- -- as percent you had be seems sales you I because next maybe But think look a difficult years? driving expect and growth but that XX-plus then of -- you would whatnot roughly year a Shoppe your with continues Same-store do be? longer whatnot. phenomenal couple grow. at look this do what's still still you outlook? sounds still think the the some the category know to it see think back like on of sales in And same-store might see closures you don't the do what we can couple sales sports at And questions

term of And some Larry. have I'll stores couple was Vitamin online they vitamins But remind think those this Shoppe normalized and Number work larger the business equation. that and quarter much really year you of forwards. religiously because in ways. quite stores supplements most Certainly, that a open category coming the in bit Thanks that would because sustainable. wasn't that smaller see one long see not a have out Sure. this online can, changed growth out you performing. had grown is move was in and year probably is seeing to COVID of a from the business that you is year what brick-and-mortar is the you of it COVID questions a direct-to-consumer a of were may backwards online issue previously base. still in of me The do it has the a and to And closed had over we traffic that result of situation. weren't kind that last in even were the growth

for although I say getting think I forecast I think just, easy kind percent you same-store of, we model to to see see happen. me going we is are back. on that don't regular doesn't for sales going not particular require don't That's pretty think any I'm to So a just it's XX-plus business. won't -- are But either. sales basis. same-store sure this going the to

through about as the year, as over. quarter the half you're if what you all think occurs you're year of So second COVID comparisons of at most odd look happened just the reopening the for last are now we and with generally second of businesses this -- the

and for The open. second the half were showed of the Vitamin continued stores year strength Shoppe all

the second be So year. closures you to half store are going in not anniversarying of the

stores. the strength You and both in anniversarying online some pretty will decent be

have strong. capturing They're So to is a of base strong. doing certainly But a Absolutely. Management doing job going demand that good a demand that comping But right Could to. that higher you change now tomorrow? great demand. winning. are is job you're is

they stores the for agree And and outlook that to the with us. showing so interest community in pleased seems significant about certainly as up Shoppe of we're very new are with Vitamin very long-term optimistic franchising that opening

whatnot to more versus online does or more help and is mix And assume online hurt right? I I some shift the guys? you in-store costs sales think freight

Yes.

not speaking So $X And flow-through revenue store -- $X flow revenue free generally direct-to-consumer. creates of it's the an through of than in of more insignificant cash margin the a the gap.

area that on. of I spending is focusing think a an that's management lot time

I -- for over think and of keep it fairly as over so it's And cash off an that grow opportunity time. that significantly But time that can flow grows we more us. your that dollar between the base law of you're numbers margin there larger hypothesis going But having in-store of direct-to-consumer you you to differential generally. out end well. helping up and as additional are retail channel the right the with should

while. Right. sounds but And then sort answer been think businesses -- this franchisees a interest general do for kinds interest probably Shoppe, for I in high some you of I it's this may not as a as Vitamin of are of these coming time. there's just still out necessarily if a question been just environment COVID just sluggishness I maybe probably it know among level but I can is last that. like so you've level suppose long around general. In would obviously we And prospective one

trying just that to am scale. I get a gauge on a So general of

Yes.

So the high. interest is level

think that really level interest waned. I the never

of these I of our the been food businesses think service an of throughout interest ownership kinds businesses level there. that any to COVID relative But interest helped level. period these from has businesses

ago think franchisees, equipped we've benefit I been our think to to in real loosened And the a one find of franchising take the a infrastructure real to we're largely interest from also have as of which several the actually availability franchisees calls has think handle are capital franchising growing then advantage cases. remember that able that will was question opportunities? capital some better be that is who we if the the that to I you scratch conference I interest bit. up

we And to ability good think execute. about so I feel pretty our

Great. Appreciate Thanks. the color.

Sure.

Davidson. Mike have from up Baker Thank next you. we D.A. And

open. is line Your

Hi. by the Thanks, if could. I business guys. focusing I to would start on pet like

quantify really all? two-year at all said were really that terms think Supplies the up ago. from businesses don't for I a We Can you basis numbers comps. on you trends year of Pet your have in a

am flesh wondering up COVID to you're in momentum of momentum this second related but business recycling? two-year comp numbers pandemic I still be I does on was kind that it then the It growing year's out. that again think everyone pet adopting pets. look even against that, in of that stack I top year guess come on would what industry top love instance, like to can started about you related helpful? a So And some Thanks. talk of? quarter I ago versus the during quarter the as big the when indication we of for first any comparisons How sounds

Sure.

But for I comp certainly a positive comp to to year, different business scary of we little sure last own on sure about this never in expected this to they is you this comp QX the am So sustain? a and basis sure slightly specific -- very we number normal too ongoing kind top it the can was tell -- happy talking although the comp their continue. they we a say normal an than there would comp, on that also were from at kind would -- this From were way year of percentages time, year. without like that I -- of think got so you I what I'd used the expect don't and team last positive to. a a in I being and that am of course any I that management the am number. say XXXX a result say of was comping I didn't am -- looked CSP

know not we paycheck can't continues. customers is generated by the how don't flush right their to generally to average this want that would -- demand the to size out I But I that getting that spending of their That's a businesses used they've same continue I traffic issue. because having they're strength think they think I that now of money. is tell much and the the But running at there. speaking and been dollars you the been demand the strong. an been all expect at. has in it for the demand remains basket extra and wallets I

That's American to One, just Okay. for the Freight me. Two switching business. more gears helpful.

the issues chain better. said supply that getting were You

you're I business. appliances. Can having So that to was assume last you appliance think quantified quarter actually the is issue comped open-box that it business. A of lot I of still down in XX% referring because -- not think and you I you the

saw I were business. open-box sales Can even what relative that think quarter in Thanks. you the XX% some in this or you that first to I recall put to -- in the appliance that quarter? numbers XX% down

Yeah.

So we there's not floor able that's you hours limited the in add the it's on to for just to all meet team having see, first in but make on new be are sure they're to chain additional first through appliances other the it. really And has sufficient is vendors management chain demand struggle categories but but of it's supply bring exciting just customers' go mean, to they better – where demand. managing of manage to categories. that some product able lot a say well, one the disrupted. supply vendors, to been is the and I to as/is the the But different

loss a has on this table on being of numbers improved, us the of high-margin On the generally in like. lack as/is business that's sales. some too revenue a margin lot business situation quarter of product specifically But a for normal lower look a without it's left specific of loser would that the the net new with because what relative to bases not that as/is speaking similar as/is the offset box and

that hope I So helps.

does. it Yeah,

guidance, EPS bigger and the an obvious of, EBITDA more one on just have picture question, you sort I but guidance. the So raised

above. took I You midpoint, above to the the but up not guidance necessarily the guess sales midpoint

SG&A or just was or something conservative? it just not good trying this is -- gross that's the as to on margin So or being

to to the specific, margin I particular It's It's and through we adjustment read-through wouldn't public, No. to expectations our way. per no demonstrate of there. nothing speaking be share that have relay incremental numbers. any to able -- improved wanted But certainly the from that earnings there's -- in generally to nothing an revenue

this that So certainly, our very numbers least point. told at we that produce comfortable we'll feel at you those expectations were

Sure, appreciate the Thank you time.

you. Thank

from Ian we on Oppenheimer. Moving also have Zaffino

Your line open is

Hi, very, on much guess the guys. just be I dividend side. Thank would the question you

And should it want we flow dividend kind trying a just Is matches about out? level cash think flow? at cash expecting You Thanks. are reiterated thinking with the your about a and be you pay level Is to that of going today. to forward. how what you it your that up at

lot. a It's Yes. we think certainly something and a question fair about

to below I trying guard ever random long-term it's I'm to this dividend this that a when going fourth is against we avoid well. trying think we're it to as herky-jerky that kind having at trying long-term to well our possible. you establish. a be As distribution and and and we're What will declared expectation -- But goal is if be know certainly And increasing an of the or continue not you to is of happen our the distribute certainly and to at also dividend stated then or over that and next I quarter And dividend. XX% as just out that's level we're at one EBITDA today. that we're important having below it that annual believe record one is rate. some the it. we to that avoid just rate annualize trying part track well think that of Things decrease the to mistaken

doing change dividend at we've better and we'll for after paid that than what based start how the time a year. have a and we year but a still the full-year have had are any year of too. to better year at have kind expected to in through what the to better address is we the board expectations we'll at quarter this sense of another the are if months go Next had this probably on year it's of a Great, of meeting get five start the we next rate finishing expectations and another,

same now? about first Okay. we how I where made This are of was debt token looking repayment. thinking in at want guess on we a big Liberty. it Thanks. general to we the just Are we season be? bringing thoughts on pretty quarter debt we And the Are next lower? How is there?

Sure.

look that only want time levered. to we So -- that that be be businesses involved think over I should in

not are they enough us to if So check our not because box leverage enough doesn't a are that's consistent shareholders either. that for then have they for then consistent

So X the on to times the over sweet we under times to to spot leverage business be times specific I time expect is us. have probably X X think for

be You well. we the the can will -- and larger quantum get the as bigger

comfortable. looking not -- looking a at a dollar leverage where We're really we're not at it's amount. ratio we're So

stretch are We to delever when turns that under to it We to four willing transaction did X plan very makes clear for assuming got sense for times back a PSP. up just a we've rapidly. of leverage

the cost do, philosophy, in the a took we that all more did it what that's that back for for lower as leverage. free and everybody to at we think our our can to think told time. higher again we're of we've three I go execute, further cash all that flow we remind I us become that delever is we then going over we will for the we delevered in half terms successful the to them the relevering we're that and diversifying capital of think us over demonstrate -- way don't it But right well. business to and percentage X. dividends we look If means a time think sweet were to spot I we that that again. through and rubber-band in flow use of and the it the will And now And cash I easier got truly M&A,

that's So still strategy. the

knock far wood, and operating. just to have And keep on working, so it's

right. guys. All Thanks color Great. for

Sure.

you. Thank

Anderson from have Next up we Susan Riley. B.

Your line open. is

the Vitamin maybe job quarter. and like Is Shoppe, doesn't expectations. it Shoppe for a looks Vitamin Hi. is necessarily that should seasonal. evening. we a like it the Plus, top-line quite Supplies to was seem Nice on Pet there -- stores? I just revenue that Good And so performed the wondering return business bit above then that for

So very bit in second we about quarter. a the were as it obviously, there quite up Should looks than stores? similar baseline, to margins new additional first the any that for including And they think the quarter. first

So low we expand should being think about margin this Thanks. can it a or as baseline there? teens EBITDA from further

Yes.

same a if add at room So that anything I'll first the and stab feel some Eric of take in has to to it free. today. not We're

we -- any don't for provide -- expectations of the provide didn't any businesses. any and quarterly don't we we So

at sense analyst doesn't at expectations the everything makes may how looking the understand different day. information have certainly that than that So, and we complete it would have complete an out and of end have works

And you wouldn't Vitamin the Certainly strongest second typically and quarter business. of renew fourth their actually typically as at money they're spending it's a revenue. I for Vitamin lowest look revenue Specifically Shoppe inherent business. as was quarter it I the the quarter at run it is of the is kind that expected. seasonality that's terms first relates off But -- that certainly as to note know on is higher And there after revenue -- in whatever of quarter the of than seasonality people you high the build rate in was pretty vows their it and of the New that supplements. Shoppe, reason Year's because just as when

hope helps that bit. a little So

a I Should EBITDA as margins the EBITDA guess, we just it Yes. business? maybe And think low-teens on of too. margin

Yes.

particular product at high that revenue margins about time have high high. but as channels and in period not So margin super else. you quite or revenue. operating profiles whether It's there by the expenses expenses the of various of are to any although by EBITDA are when more margins driven incremental it's large, the anything than direct-to-consumer And the think the margins pretty operating high different as direct-to-consumer all pretty each they're stores or high well. It's

so So certainly you're is I if of if the decreasing, go think, incremental is just that you revenue expand. will at dollar the an And margin see EBITDA expect that an can that because you're increasing EBITDA down. generates losing margins to going revenue level, much

quarter margins. we going I be highest it's should first as typically quarter revenue, my second should it help revenue just model, EBITDA EBITDA but a really flow would you first high -- we through help that's how highest sure to then very your it the mean of have you should the because think but had margin determine have right? result, saw the as what always can quarter and can and you're money, -- you be also So building I'm for And it the would and Andrew doesn't just

you sense. terms How wondering some Got how that it. longer-term Yes. -- your And see I goal? are PSP, you term? and businesses. a is if -- Freight maybe you color do is business guess, franchising that there Then on of that to American and time being that VS I'm there see, for what I longer percent if can about in give you No guess, makes goal a the the line of is goal reach thinking franchised

have already where with on getting one. -- depending rate footprint of you're in whatever was And franchised. is XX% let's are their so start going the where also, of say a you're there. their if already be vary very get lines would you can We when consistently. franchise, brand. franchised time franchised. think Certainly, and in that over as it Buddy's to their that may starting The target our about be business, XXX% well. have will involved But, there. with absolutely or will XX% saturation will when transacted Clearly is more Liberty or we well I different -- XX% a like XX% franchised. be Freight, company-owned units PSP impact an American heavily of they you to Sure. just geographic we or businesses by will

those end it had and either. the Shoppe had franchise Shoppe franchise So, -- but Freight. Freight really really real being American Freight Outlet business. a on other American American zero no American and are -- Vitamin was business Freight couple, Vitamin at didn't

you businesses what XXX% get company-owned going there. rate talking and are you are at to So about

you Freight if in versus at that -- business higher an started decent American to rate of we States XXX at in it, X,XXX, your with we a get So, non-franchise exceed corporate. can the call had United can ability a Shoppe footprint all easily as is there coming that look XXX when just that pretty stores a Vitamin penetration stores you franchise where clip, XXX with started get really have and

stores and just handle XX% many store new to footprint to a can't You a the through franchise lot got growth. that of open to get stores

can the going to additional the refranchise we're doesn't We just believe it's math from that get be significant stores not of So, to you the will that opening for the refranchise going never why assets growth us that going stores. Otherwise, we to -- interested there at to just illustration refranchising And to stores. business franchise amount also as look But doesn't of we footprint expect at because with stores businesses, in cash may just really that we're that away can the give franchisee work. if flow. rates. get activity sake we we're be XX% to expect it. of not franchising We're but just sense. going store, The company it's make have some for a and certainly different occur our

it. Got

Okay. sense. I one. guess then, makes And Yes, last that

any you feel at your size. had you about are talked Or guess, does around I It color M&A industry you're then, or now? is pretty brand you that on with there maybe the of right looking within you thoughts balance for it like vary sheet portfolio about any dramatically? position continue in And if or can opportunities. what good now. evaluate terms you wish your about you You to sounds -- give talk

a going there lot make covered, the building. a my leverage that business I'm the that diversified you So, we're sense building but -- because you're last right? to to the So and but tell question you, are that hurts certainly that add to certainly of things is answer not would is, negotiating when sellers, there with like

look at lot much. ranging unit maybe at -- single we've In terms or we one are concept looked we're already literally -- And of what concept, the businesses we've a at to franchised heavily a not that sizes businesses. at of looked of a so are looking is from which large very businesses

makes PSP. we last about all were it's one that acquired businesses a actually and over today talking over about had meeting in We sense. we and are was what at map looked really board the we the and year, we -- XXX So

way businesses lot at, good and do So, that We comfortable we we're about to we a and we're we're are our the and we'll diligence. what everything what with with. comfortable at good learned is we We franchising. what not about learn lot our when where lot a look a the that continue not comes job at learn ourselves, about

that. So we will continue to do

that In still terms a be brands I at and that have we're add-ons of – and looking some quite looking the those to spent can industries, time it funnel that were through and have there's made we that certainly bit acquisitions think at we're interested we've of in. that the existing

are We of that's at also diversifying part looking we doing. key what and a are

in be right retail and we heavily we of be services, to As to a quite want now, bit of want we perceived have we and know brands, in services.

that think expect time we so services spend you an not-too-distant bit would of future. in and expect And the quite in to area are that I can transact a

for detail. helpful. really Thanks That's Great. the

Sure, sure.

you. Thank

Hollenden from Brian have Capital. also Aegis we on, Moving

open. is line Your

for Hi, my taking call. guys. Thanks

you have within in of are answered, the And seeing cost been So labor? having are questions most you businesses? the but finding inflation challenges

And yes. Yes.

environment whether work we and across is labor for all that. It's for universally, I also So show management are to Labor struggled through been I'd finding it's say, an people the board is think, work every getting – just seeing I a up the normal through that, cost ways teams are have it's strong. – the different many our with just don't real. we're it something is environment a having does just and management last? How every demand to in which deal issue, in that's who they've just people I manage challenge The teams day. you to But just or think so pressures where it. you, that an not it, is area long and know.

that. some costs increases don't really rates, cost and as you with pressures costs also of not seeing passing has product costs those so well, inflation product issue. been and notice And labor But we're because on wage in both absolutely, the an

site year? of last will then Vitamin for sort from of launch And that the something e-commerce are Okay. revenue within margins for one expecting first in Is me become the and South Korea? profitable that the the Shoppe. What you

Good point. it major that and for on. areas expand the question. of States Shoppe, small certainly And at to to to strategy be overseas contributor the one, of untapped they Vitamin management and are day way looking a looking answer wouldn't know a team I It's executing a the it. don't of but this long-term Vitamin growth partners their for brand expect United I is for outside Shoppe

all me. for That's right. All

Great.

now like Mr. Thank for would turn questions. closing I'm Kahn showing call to I the to remarks. Brian any you. back no further

afternoon. please thank this you joining Well, operator, for us And Great. the again, all call. conclude

for gentlemen. call. today's conference Thank and This you ladies you joining. Thank concludes all

disconnect. may all You