Ark Restaurants (NASDAQ:ARKR) Q4 2021 Earnings Call

0:00 Greetings and welcome to ARC Restaurants' fourth quarter and year-end results conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chris Love, Secretary for ARC Restaurants. Thank you. You may begin. Thank you, operator. Good morning and thank you for joining us on our conference call for the fourth quarter and fiscal year ended October 2nd, 2021. My name is Christopher Love and I am the secretary of our restaurant. With me on the call today is Michael Weinstein, our chairman and CEO, and Anthony Sirica, our chief financial officer. For those of you who have not obtained a copy of our press release, it was issued over the news wires yesterday and it's available on our website.

0:55 To review the full text of that press release, along with the associated financial tables, please go to our homepage at www.arcrestaurants.com. Before we begin, however, I'd like to read the safe harbor statement. I need to remind everyone that part of our discussion this morning will include forward-looking statements and that these statements are not guarantees of future performance, and therefore, undue reliance should not be placed on them. We refer everyone to our filings with the Securities and Exchange Commission for a more detailed discussion of the risks that may have a direct bearing on our operating results, performance, and financial condition. I'll now turn the call over to Michael. Hi, everybody. Thank you for joining us today and happy holidays to you all. The quarter was a very satisfying quarter.

1:42 There are just a few comments I'd like to make regarding it by venue. Las Vegas was particularly strong. It compared very well to 2019. We were up. One of the two problems that we are having across the board is disruption in pricing, meaning inflation at the wholesale level, and our inability to secure full staffing at all our restaurants. What is interesting, even though cost of goods are going up, we've been able to... Reengineer some of our menus and what we offer.

2:28 So the price increases passed on to customers, with the exception of where we're serving shellfish, has not been that severe. In Las Vegas, we always thought we were somewhat underpriced. We work primarily in New York, New York. Hotel and Casino, which is a mid-priced casino hotel, and we were not as aggressive because of that marketing demographic that we thought we were hitting. We were able to raise prices very easily there, so part of the increase compared to 2019 is not only headcounts, but it's also price increases.

3:17 With regard to our payroll there, Payroll is up per head, but because we're always about 50 people short out of 600 that we employ there, our payrolls have remained steady to down in terms of whole dollars when compared to 2019. So the advantage we have there is our payroll is more productive and efficient at a lower cost, although we would like to have more people, but for just better service, but that has probably offset whatever increased wholesale costs have been to us. So Las Vegas has worked out very well throughout the quarter.

4:04 The same could be said about Florida. The productivity in Florida as a function of payroll has been exceptional. The costs have been up a little bit there, especially again in shellfish. I cite two examples consistently. At Rustic, where one out of every four people seem to order king crabs, that product has more than doubled in the last six months. I think we were, about six, seven months ago, we were paying $23 a pound. We served a two-pound cluster of That price went as high as $53 a pound. The product has not been available.

4:51 We're now carrying about $2.3 million in inventory in various shellfish, mostly king crabs, but also Dungeness crab and snow crabs. That's a crab house. People come for that product. We want to be able to serve them what they want, but our food costs at Rustic In relation to the quarter, I'm just trying to give you a feel. Our product cost as a percentage of sales has gone from 43% to 57%. We're still profitable at Rustic. Our demographic cannot pay more than what we're charging. We've raised King Crab Lakes from $75 to $95 to $115 to $125.

5:41 over the last seven months as the price increased. Right now, a customer at Rustic is paying $125 for something that costs us $109 to put on the plate. So we're more concerned with the revenues and keeping our customers than we are with the profitability of a particular product. But at Rustic, one out of four people order that product. Again, we're profitable, but those profits have been eroded on considerably. The rest of Florida is doing extremely well. I also cite what's happened to Conch Products, which we use at Shucker's in north of Palm Beach.

6:32 That product, 40 pounds, six weeks ago used to cost us $40. A week and a half ago, it was $125 for the case, so threefold increase. It's now back down to, excuse me, it used to cost $300. It became $1,250, and it's now down to $750. What we're seeing in shellfish, all crabs, we think the price has peaked. It's starting to come down a little bit. That'll be helpful in future quarters. But this relatively strong December quarter we had was carried by extraordinary results in Las Vegas, the non-crab restaurants in Florida, a very good performance in Sequoia and Washington, D.C., and again in New York we're still hampered by office buildings that are only 30% occupied, fewer events in terms of revenue streams and a lack of tourism.

7:51 Our customer base at Bryan Park and Roberts especially requires a robust Office Occupancy, Event Business, and Tourism Business. And that has not been there. So these results are quite remarkable given the handicaps I just outlined for you. We're very, very pleased. New York, this last week and a half, you could sort of see the results of Omicron. We're having a very good December quarter, but I can tell you that the last week or so, in terms of events occurring in New York, they're under-occupied.

8:45 People paid us for 350 people for an event and 175 show up. So I don't quite know... What the Future Will Hold for the March quarter, but the December quarter has been very strong. Meadowlands. What I can say is that 50% of all sports betting in the state of New Jersey is done at the Meadowlands. 40% of it is online. 40% of the online betting is captured by the Meadowlands websites. 50% on-premise betting is captured by the Meadowlands.

9:34 We did well over a half a billion dollars in betting there, sports betting. The hold has been better than we had thought. Originally we thought it would be FanDuel told us, who's our partner, it would be about 5%. It's a little bit over 6%. After everything is said and done, it's projected to the calendar year December, the Meadowlands would have a positive EBITDA of $15 million. That means two things to us. Number one, we're going to get our first distributions because we own about 7 point something percent fully diluted. The distributions will be the equivalent of what we would pay in taxes.

10:22 So it's not going to be a million dollars. It'll be a couple hundred thousand dollars this year. But it'll be the first distributions we've received. The second thing that's important about this thing being cash flow positive is there's not going to be any capital calls. So we're in good shape on the Meadowlands in terms of The current business, whether or not it becomes a casino, we have thoughts. It's anybody's guess as to when that might occur, if it does occur, but it's certainly not going to occur until downstate casinos in New York City get licenses, and that's presently scheduled for late 2023.

11:10 If that is advanced forward, we may get some action by the New Jersey Legislature to progress forward the consideration of a casino license in the northern part of the state, particularly the Meadowlands. I hope that gives you a little bit of flavor of what's going on. I'm happy to take questions right now. Thank you. Ladies and gentlemen, at this time we will be conducting a question and answer session. If you'd like to ask a question, you may press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

12:00 Our first question comes from the line of Roger Lipton with Lipton Financial Services. Please proceed with your question. Good morning, Michael. Hi, Roger. What can you tell us about the Las Vegas lease negotiations? They're going very well. We're a little bit behind schedule in terms of when we thought we'd get leases in hand, documents. As far as we're concerned here, all the economic issues have been agreed upon. So we think we're just fairly far down the road in terms of keeping the present operations going for an extended period of time.

13:01 But we haven't received documentation yet. I would be pretty confident that's coming, but we just haven't received anything yet. So we've had nothing to review as to whether or not our thoughts about the economic issues and other issues are confirmed by a document. And you mentioned, of course, the Omicron effect here in New York. Have you felt anything at all yet in Las Vegas or Florida or Alabama? As far as the Omicron, you know, the latest... So it's not only us. I mean, you know, we're sort of pay attention to our own business and we don't, you know, make phone calls around how other people are dealing with the problems.

13:55 But this whole period from March of, you know, 2020 going forward, we've had constant cases in these restaurants. everywhere. Some of them we've had to close down for periods of 10 days until we could get a crew together that was not showing any signs of positive tests. So it's been difficult. Right now we have some cases in Florida. We have some cases in New York. There's always cases in Las Vegas. We have 600 employees. We're working in a facility that has 2,500 employees. it's just difficult I don't know and we have recent cases and the problem is we don't know whether those tests like everybody else are showing signs of Omicron or Delta but so far we've been able to isolate people we're really on top of it So, you know, I would say in 95% of the cases, people feel sick at home and they don't come in and they get tested. You know, they're trying to protect their fellow employees, customers, and keep the restaurants open.

15:22 So that's what's going on. But this Omicron thing in New York City is awful right now. And, you know... The revenues in December will be strong because the events that we had in Bryant Park and Robert went on at full price because, again, somebody schedules for 350 people. They paid us the 350 people. They expect 350 people when they have the event. and, you know, they're lucky to have 50% of those people show up.

16:09 So, you know, in terms of profitability and maintaining the revenue we thought we had projected, we're getting that. But there's no question that there's a deterioration in the number of customers walking into these restaurants right now everywhere. Everywhere, including Florida and Alabama and Vegas. Well, no, not Florida, not Alabama, not Las Vegas, not yet. Not yet. But in Washington, D.C., it's quiet without a question. In New York, without a question. I mean, our biggest problem right now in New York and Washington, D.C., although I haven't checked with Washington lately... We had very robust reservations for New Year's Eve and the number of cancellations coming across is significant.

16:59 Really significant. For purposes of our financials, in the Northeast, this is a slow time. Anyway, we're going into our slow season. Omicron starts expanding throughout the tri-state area. We're slow to begin with in January and February, so it's not a bad time for this to happen. We're all watching the same news, and maybe this thing will burn itself out quickly. Great job under the circumstances, and Happy New Year. Thank you, Roger. You as well. Our next question comes from the line of Jason Walters, a private investor.

17:46 Please begin with your question. Hi, Michael. Question about the company's current cash position and your thoughts on capital allocation going forward. Thank you. Yeah, so Anthony can answer that in more detail. So, Anthony, why don't you talk about the balance? I'll talk about capital allocation. Sure. Currently, we have approximately $24 million of cash before float. Float's generally $3 to $4 million. Our debt level is, the bank is $25.8 million currently. It was $27 a year in. We made principal payments September 1st. Our PPP loans, as the press released, $10.4 million of the $15 million have been forgiven.

18:37 We expect another $3 million to be forgiven with the net balance of unforgiven loans of approximately $1.7 million. Those will be paid over the course of 10 months. The reason we were not able to get all that money forgiven was because we couldn't spend the money within the 24-week covered period because the restaurants in New York, and it primarily relates to the New York restaurants, weren't open last summer. They didn't open until the end of June. We got the money in early May. I did see there is something, and I don't know if we'll apply to public companies, But I believe Jerry Nadler introduced a bill to extend that covered period so more of these loan amounts could be forgiven for that exact reason.

19:27 I don't know if that's geared just towards small businesses or not, but, you know, we'll stay on top of that. So the balance sheet is very strong and, you know, as far as capital allocation. I just want to make a comment that right now we also have a receivable from the government of about $3 million from the IRS. So when you include that, cash and the receivable exceeds our long-term debt right now by a few bucks. Capital allocations. We're going to have, if these Vegas leases are executed, we're going to have to spend some money in Vegas over the next 12 to 18 months.

20:21 My guess is that's going to be $5 to $7 million, maybe a little bit more, but that's sort of what I think the amount is. We would have spent that money anyway. It's not necessarily a requirement through leases. We would have spent that money anyway if our current leases were of a longer term. The reason we wouldn't spend the money or didn't spend the money was we wouldn't have spent it if we knew we were going to be out of there. But there's just some spiffing up we have to do and new kitchen equipment we have to buy and just a whole bunch of postponed maintenance issues.

21:15 So beyond that, at the other restaurants, probably keeping roofs on is another million and a half dollars to two million dollars. So my guess is that We have commitments of somewhere between $7 and $9 million over the next 12 to 18 months in terms of keeping the facilities fresh. We are not seeing anything in terms of potential acquisitions that we like right now.

22:03 We had focused a little bit on Florida because we have a very good broker down there who's more of an investment banker and understands what we're looking for. But business has been so strong in the Florida market and other markets that we really don't see anything we want to own at the prices they're being offered. I'm sure that's going to change a little bit now. The idea of building, unless it's an extremely expensive, with a lot of pen and improvement money, is something that we're just not interested in doing at this point. So that sort of gives you a flavor. There are two exceptions to this.

22:53 And we discussed at the beginning of... of exploring these two situations. One is the Museum of Art and Design in New York where we have Robert. Right now we have Robert's on the ninth floor. We have a seventh floor where we have an exclusive, it's sort of like an event space. It's only 1,400 square feet. We use it, the museum uses it, we make money with it. But it's an awkward space. The museum has a new executive director, and where we've been rebuffed in the past with the suggestion that we trade the seventh floor for the tenth floor, 3,300 feet of usable area for a larger event space and a lounge to complement the restaurant, That has always been rebuffed, but the new director has encouraged us to go ahead and present them with what they consider an opportunity for both the museum and ourselves.

24:06 So we're working on a project in the early design phases of it. The museum hasn't approved it yet. They want to see something with how the space is going to be used and with the essential elements, kitchen, storage, office and bar be placed. That's a project that we're very much interested in because pre-COVID we had a lot of unfulfilled demands and the tenth floor of the Museum of Art and Design overlooks Central Park. I think it's a substantial, substantial opportunity increased for us at that facility. The other thing we're looking at is JB's on the Beach.

24:58 It's doing $12 million and a lot of demand. And we're looking to build a deck over the top of the restaurant for a bar lounge, an outdoor bar lounge. And we've gone to the City Council. What we're proposing to the council, they have passed positively, meaning they've said what we're looking to build is buildable as of right. They'll have some input once we get further along in the business line.

25:45 Each one of these two projects would cost us probably $2 to $3 million, but we would be expanding facilities where we know the demand exists, and we're excited about both of them. There's a small third project at Blue Moon Fish Company, which is on the intercoastal and is called Fort Lauderdale by the Sea. We now have a deck that goes into the waterway that sits about 50 people. We have almost all the approvals necessary to expand that deck another 12 feet into the waterway.

26:36 That would give us another 60 or 70 seats. So we're waiting for city council approval on that, but we have approval from the Army Corps of Engineers. There were four different entities that we needed approval from. So it's not like we're idle. We're trying, you know, the best thing we could do is expand the facilities where we know we have demand and where we have institutions, you know, essentially with great locations where we can add seats and hopefully significant revenue. So all those projects are probably things we can complete in the next 18 to 24 months, and we're working on them.

27:28 So I hope that gives you an answer. Yes, thank you. You're very welcome. Our next question comes from the line of Paul Johnson, a private investor. Please receive your question. Yes, good morning. You guys have done an amazing job since the pandemic, and I appreciate also the candor about the difficult situations out there. So just wanted to understand, obviously, you guys don't want to be doing this forever. We've spoken in the past about sort of strategic alternatives, and it's difficult given the sort of very diverse situation restaurant map that you have. It seems like it's becoming more of a Florida story these days, but maybe New York will come back.

28:18 Vegas is doing better. I guess the question is, is there anything to be done in terms of monetizing the Meadowlands asset, or is it more, is your thinking that it's premature until things develop there in terms of a casino? And in a larger sense, does it make sense to sort of So let me deal with the last part first. We're not shopping the company at all. Obviously, I guess this is more personal as opposed to objective research. We think we're undervalued.

29:14 We don't like being undervalued, but I'm a 30% shareholder here, maybe more with my family. We think there's a lot of good work that we can do over the next few years in terms of creating A larger EBITDA, although that's been stalled for a while because of COVID and the machinations that we were going through pre-COVID in terms of trying to find or identify a better path forward. I think we identified that path as we started to buy the land under these restaurants.

30:03 I'm going to repeat something I've said in other phone calls and be a little long-winded here. I apologize. But if you want to monetize assets, you know, we bought, for instance, the Rustic at $7.5 million when it was earning $1.5 million. And we bought not only the operation, but the land underneath it. The land underneath it, I think, was priced at roughly $4 million. Just pre-COVID, we were making $3.5 million. You know, a sale leads back on that depending upon how much we wanted it. are assigned to rent, but if you're assigned a million dollars to rent, you know, with interest rates where they were or continue to be, although I suspect that'll change, without a corporate guarantee, we thought we could get, you know, something on the order of $12 million on a sale leaseback and be paying a million dollars in rent and still making $2.5 million.

31:00 So we have that situation... in all four of the locations that we own the land, the two in Alabama and Shuckers and Rustic, where we think there's $30 million, $40 million on the table depending upon how much rent we would pay of the EBITDA we're generating, the operating profits we generate from those restaurants. So there is... Value that's not showing up on the balance sheet, number one. Number two, in terms of the Meadowlands, what I think happens if the Meadowlands gets a casino license.

31:47 First of all, we have a right of first refusal on all the restaurants in the Meadowlands. The deal on how much it would cost to build out is a little murky because the documents that were executed at the time said it would be similar to the deals we have in Las Vegas. Well, in Las Vegas we had a great deal of tenant improvement money and the rents were very, very cheap. So I think there'll be a negotiation on that if that goes forward with the restaurants. We also own 7% of New Metal Lands LLC, which is the entity that would be running the casino in conjunction with Hard Rock, who is a 20% owner and made their investment based upon the fact that they would be the operator.

32:47 Honestly, what I think happens if there is a casino license issued, I think it takes about five minutes for Hard Rock to come to us and say, you know, How much do you want for your position? So I think it is premature on the Meadowlands. I don't know who we would sell it to, honestly. You know, I don't think anybody wants to be a minority shareholder. And that, although there is, you know, it's a, I think the bet on whether it becomes a casino or not, and it's improving, I don't know how to price that. The other reason we have difficulty, honestly, if we were inclined to shop the company, is how to put a value on that 7% and the exclusive right of first refusal on all the restaurants in the Middlelands.

33:47 If somebody wanted to come to us with a stupid price, I guess we have to listen because we have a board of directors. that would listen to try to benefit our shareholders, but we haven't heard a stupid press yet. Go ahead. No, I was going to say that totally makes sense, and it's better to be patient with the Meadowlands. So given that, going back to the general management of the company, are you grooming people to eventually take over your job? Is there young management coming in? So the answer is I think we have some very capable people here who could continue.

34:38 Anthony is sitting in the room with me. Anthony is more than a CFO. He has skills well beyond that. And there are a couple of people I think who could be with Anthony would continue what we're presently doing. Out of my own ego, I've always thought, and we've interviewed people over the years, and as a matter of fact, we hired one and then fired him a few years back. What we do is different than most public restaurant companies Brian Park You know, I always used to stick out my chest when people said, how does it work?

35:55 I said, well, at 5 or 6 on a spring day, you know, there are 1,100 seats of which about maybe 100 are occupied. At 5 after 6, all 1,100 are occupied, and they all want to be out of there by 7.15, and we get them out of there by 7.15 because there are another 1,100 waiting. So we do big very, very well at a quality and price point, which I think, is as good as anybody else in this industry. And we do it without a brand. So would I like to have had a brand? I made a left turn when maybe I should have made a right turn many years ago when I started doing restaurants within two or three blocks of each other on the Upper West Side.

36:41 And that sort of became what we did. But The difficulty of bringing somebody in here who doesn't understand not only the culture of the company, which you may or may not agree with, but how to smell a deal. How to look at something where you're saying, hey, it's 100 seats. We ain't interested. Show us something 700,800,900 seats. We're really happy to see that deal. and we could pull it off. So that person, if they exist outside and honestly we haven't advertised for that person but we've met people along the way, that person really exists in our company.

37:34 There are a few of them and I think we'll just be fine but I'm not looking to retire yet. So that's where we are. That's actually great news, and we appreciate your long-term thinking and management, and so totally understand, but it's good to know that you have a game plan in place as well. Thank you. Our next question comes from the line of Jeffrey Kaminsky with JK Consulting. Please proceed with your question. Hi, Michael. Congratulations on a great quarter in a very challenging environment. A couple of the questions that I had were actually addressed prior, but just a follow-up in regards to the government PPP loan program.

38:25 Some of the monies, as I understand it, are forgiven as a grant, and some are due for repayment. Has that number not been set yet, and does the performance of the properties and ARC have a role in determining what is forgiven versus what you need to pay back? No, the number is set. So we had 15.1 million of PPP loans that we had obtained. That money had to be spent within 24 weeks of the incoming wire. For the most part, properties outside of New York, we were able to spend the money in the 24 weeks and the loans have been forgiven.

39:10 There's six or seven smaller loans that are now at the SBA waiting for forgiveness. The SBA seems really backed up and I think it has to do with the second draw loans are now all applying for forgiveness as well. So of the 15.1 million, based on the applications that I have submitted and we've already received back, 1.7 million was not forgiven or will not be forgiven because for instance, Bryant Park. Bryant Park reopened, what, the end of June of last summer and it was outdoor only and then it was 25% indoors after Labor Day and the money had to be spent by October 15th.

40:00 And the money that you obtained from the program was based on your payroll for 2019, two and a half times your monthly payroll. Well, we weren't anywhere near that monthly payroll in the summer of 20 through October, starting at the end of June. So we could not, and you're limited to 60%. Your spend has to be 60% on payroll. So you basically, how much payroll money did I spend divided by 0.6, I'm capped on my forgiveness for an operation like that. And that happened at Robert as well and a couple other places. And that's why we have the $1.7 million. It has nothing to do with The profitability of the operation or any defect or anything in the applications we submitted, they didn't really think ahead with that 24-week covered period when it came to markets like New York where we stayed closed for extended periods.

41:01 Yeah, we also had the situation at Robert where the museum was closed and we were on the ninth floor. Museums didn't open until October. We got our money in May or April. and we never were able to spend any of it. So all of that money is going back to the SBA. It's a loan. The other thing I want to point out is that we only got the first tranche of PPP money. Private companies got two shots of PPP money but public companies were restricted because of the abuse of some public companies. In the second tranche they They eliminated the ability of public companies to give a second round. So we didn't get the advantage of that.

41:48 We did get some employee retention money at a couple of the restaurants, but that was not significant in relation to the $15 million. Okay. And just to follow up to capital, Michael, you had mentioned that – The opportunity at the moment, certainly in Florida and some of the southern states, to acquire another property, given the robust level of business, just isn't there yet. But if that property should come along, be it Florida, Alabama, or somewhere else, do you feel that you're in the position right now from a capital point of view that you'd be able to pull the trigger? Well, first of all, we're net positive in terms of cash in the bank and receivables from the IRS.

42:34 Vis-a-vis long-term debt. Our working capital ratio is stupid in terms of how restaurants usually run. We're in great shape with every ratio. Our banks have signaled to us that if we need more money, they're certainly happy to consider it. I think that's not a difficult task. But we have enough cash on hand to make a couple of good acquisitions given the type of properties we usually look at. I'm not worried. Capital is not a concern, Jeff. It's the operation that we would look for.

43:22 One of the interesting things, and this is probably more luck than intelligence or research, and Rustic, Shuckers, the two Alabama properties, JB's on the Beach, Blue Moon Fish Company. We're talking six acquisitions where management has stayed and performed so well for us. We've had no desertions of key people, quite the opposite. They tell me, and I believe them, they're happier in our hands than they are in their prior owners' hands. And the reason for that is, you know, individual owners of those properties, they weren't part of a corporate structure, were pulling all the cash flow out. for their lifestyle, and these managers were getting calls all the time from purveyors, when you're going to pay me, when you're going to pay me.

44:28 They couldn't make significant repairs. They didn't make repairs. There were problems. There were refrigerators that were 18 years old that they were keeping together with scotch tape, and we go in there and we make facilities brand new, essentially, in terms of equipment and repairs, and they never get a call from a purveyor. Because we pay every bill within 10 to 14 days. So, you know, that's always been the case here when we were in the financial position to do it. We don't want our purveyors to screw around with our products. And, you know, we've always have been very quick payers because we want our purveyors to know that we're a big part of their positive cash flow.

45:19 and if they screw around with us and they lose us, you know, they're losing the primary client. You know, during 9-11, I always tell this story and I apologize for repeating it. During 9-11 in New York, three or four weeks after that, we had purveyors who would deliver us product in the morning and pick up a check in our office in the afternoon because they were all bleeding. Their customers couldn't provide them with, you know, the cash flow from their deliveries. And they were all bleeding. They were all scared. And we were there, you know, essentially paying for things the day we received them. We were lending money for our living guy. We kept him in business.

46:05 We lent him money. We went through a very similar process with COVID. And we were doing the same thing with COVID. So, yeah, so... So, you know, we're in great financial shape, just great financial shape. I've seen the questions, and again, congratulations on a solid quarter, and happy and healthy holidays and New Year to everybody. Yes, you as well, Jeffrey. Thank you. There are no further questions in the queue. I'd like to hand the call back to management for closing remarks. All right, so thank you. Happy holidays, everybody. We'll see what happens. What Omicron does to our business in the March quarter, I think you'll be very pleased with the December quarter.

46:54 I know you'll be pleased with the December quarter. But the March quarter could get kind of crazy again, but we're here. We're not in the office frequently. Today we happen to be for the call. But if anyone... has any questions. My cell phone number is 646-322-9197. So 646-322-9197. I'm usually pretty responsive and can answer a call in the same day I get it. Again, happy holidays. Thank you. Ladies and gentlemen, this does include today's teleconference.

47:41 Thank you for your participation. Thank you.