管理層發言
Good afternoon. Ladies and gentlemen. Thank you for standing by. Welcome to the Kura Sushi USA Incorporated Fiscal Third Quarter 2026 Earnings Conference Call. At this time, participants have been placed in a listen-only mode. And the lines will be open for your questions following the presentation. Please note that this call is being recorded. On the line today, we have Hajime Uba, President and Chief Executive Officer, and Benjamin Porten, SVP, Investor Relations and System Development. And now I would like to turn the call over to Mr. Porten.
Thank you, operator. Good afternoon, everyone, and thank you all for joining. By now, everyone should have access to our fiscal third quarter 2026 earnings release. It can be found at www.kurosushi.com in the Investor Relations section. A copy of the earnings release is also being included in the 8-K submitted to the SEC. Before we begin our formal remarks, I need to remind everyone that part of our discussions today will include forward-looking statements as defined under the Private Securities Litigation Reform Act. These forward-looking statements are not guarantees of future performance and therefore should not be relied upon. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. We refer all of you to our SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. Also during today's call, we will discuss certain non-GAAP financial measures which we believe can be used when evaluating our performance. The presentation of this additional information should not be considered in isolation nor is it a substitute for results prepared in accordance with GAAP, and reconciliations to comparable GAAP measures are available in our earnings release. With that out of the way, I'd like to turn the call over to Jimmy.
Thanks, Ben, and thank you to everyone who is joining us on our call today. During our fiscal third quarter, we were able to make significant progress toward our goals of sustainable margin improvement and returning to our historical 20% restaurant-level operating profit margins. Despite tariff relief having not yet fully taken effect and despite our cost of goods sold as a percentage of sales being 200 basis points higher than last year's due to tariffs, operational efficiencies allowed us to more than offset this impact and improve our restaurant-level operating profit margin by 90 basis points over the prior year to 19.1%. We were also able to improve adjusted EBITDA margins by 40 basis points to 7.7% and grew our adjusted EBITDA dollars by more than 20% over the prior year. Our ability to improve profitability in a challenging environment speaks to what we do best: responding rapidly to control what we can control. Total sales for the fiscal third quarter were $85.9 million, representing comparable sales of negative 0.4%, driven by negative 5.1% traffic, offset by positive 4.7% in price and mix. Effective pricing for the quarter was 4.5%. During our last earnings call, we mentioned that mix being close to flat at negative 0.2% was the best flow-through in pricing that we had ever seen. Mix actually saw further improvement in the third quarter with average check growth exceeding effective pricing. Pricing rolled off 1% as of June 1, which we offset with 1% pricing on July 1, making our effective pricing for the fiscal fourth quarter 4.2%. Cost of goods sold as a percentage of sales was 30.2% compared to 28.3% in the prior year quarter due to the impact of tariffs. While COGS remain meaningfully higher than historical levels, we are pleased with the progress of our vendor negotiations and cost management efforts, which resulted in a sequential improvement of 20 basis points over Q2. Our full-year COGS expectations as a percentage of sales remain approximately 30%. Labor as a percentage of sales improved by 250 basis points to 30.6% due to operational initiatives. At the beginning of the fiscal year, we had shared an expectation to leverage labor cost by 100 basis points over fiscal 2025 full-year labor cost of 32.9%. I am very pleased to share that as of the end of our third quarter, we have been able to drive down our year-to-date labor cost as a percentage of sales to 31.2%. It now looks like we are going to land in the neighborhood of 200 basis points of improvement on our labor expense. Turning to new restaurant development, we opened seven new restaurants in the third quarter: Orange, Union City, Temecula, and San Diego in California; Goodyear, Arizona; Wellington, Florida; and Denton, Texas. Subsequent to quarter end, we opened the restaurant in Tulsa, Oklahoma; Sunset Valley, Texas; and Charlotte, North Carolina, bringing us to 15 new unit openings to date. While we continue to expect to open 16 new restaurants for this fiscal year, we have unfortunately faced significant unexpected delays in a number of restaurant openings in both Q3 and Q4, and the loss of approximately six revenue months has impacted our revenue expectation for the year, which we will discuss shortly. These delays occurred following the April earnings call across different geographies and for different reasons, and for many unrelated reasons to coincide with one another is highly unusual. Our marketing team has been hard at work building our IP pipeline for fiscal 2027, which is shaping up to be one of our strongest ever. Following our current collaboration with Honkai: Star Rail, we have a collaboration with Atlus' Persona. Atlus officially announced the release of the much-awaited Persona 6, marking the end of a decade-long wait for fans since Persona 5. In September and October, we are partnering with The Apothecary Diaries coinciding with the release of the anime's latest season. I am extremely excited to announce that November marks our third collaboration with Nintendo. Our IP campaign for November and December is Yoshi to celebrate the recently released Yoshi game for the Nintendo Switch 2. In other marketing news, we remain on track for our fiscal 2027 launch of our app upgrade to our rewards program. We are also in the process of introducing optionality to our Bikkura Pon system by giving guests a choice between the capsule prize and a free dessert voucher that can be redeemed on their next visit. We believe this addition will improve guest satisfaction, encourage repeat visits, and reduce our prize production costs. Development is currently underway and we hope to have an update for you at our November earnings call. Now I will discuss our financials and liquidity. For the third quarter, total sales were $85.9 million as compared to $74.0 million in the prior year period. Comparable restaurant sales growth compared to the prior year period was negative 0.4%, composed of negative 5.1% from traffic and 4.7% from price and mix. Comparable sales growth in our West Coast market was negative 1.2% and negative 2.1% in our Southwest market. Effective pricing for the quarter was 4.5%. As a reminder, beginning in the first quarter of fiscal 2027, we will no longer provide regional breakdowns for comparable sales. Regional comps are largely determined by the timing of infills, and we do not believe they are indicative of overall company trends. Turning to cost: food and beverage cost as a percentage of sales was 30.2% compared to 28.3% in the prior year quarter due to tariffs on imported ingredients. Labor and related costs as a percentage of sales were 30.6% as compared to 33.1% in the prior year quarter, due to operational efficiencies and pricing partially offset by low single-digit wage inflation. Occupancy and related expenses as a percentage of sales were 7.8% compared to the prior year quarter's 7.5%. Depreciation and amortization expenses as a percentage of sales were 4.9% as compared to the prior year quarter's 4.7%. Other costs as a percentage of sales were 14.6% as compared to the prior year quarter's 14.7%. And other administrative expenses as a percentage of sales were 11.9% as compared to 11.8% in the prior year quarter. Operating loss was $39 thousand compared to operating loss of $162 thousand in the prior year quarter. Income tax expense was $49 thousand as compared to $55 thousand in the prior year quarter. Net income was $123 thousand or $0.03 per share, compared to net income of $565 thousand or $0.05 per share in the prior year quarter. Restaurant-level operating profit as a percentage of sales was 19.1% compared to 18.2% in the prior year quarter. Adjusted EBITDA was $6.6 million as compared to $5.4 million in the prior year quarter. At the end of the fiscal third quarter, we had $66.1 million in cash equivalents and investments and no debt. Lastly, I would like to update and reiterate the following guidance for fiscal year 2026. We now expect total sales to be between $330.5 million and $331.5 million. We continue to expect to open 16 new units, maintaining an annual unit growth rate above 20%. We expect average net capital expenditure per unit to continue to approximate $2.5 million. We continue to expect G&A expenses as a percentage of sales to be approximately 12% excluding litigation expense. And we now expect full-year restaurant-level operating profit margins to be approximately 18.5%. Before we open the call to Q&A, I want to conclude my prepared remarks by acknowledging our team whose execution during the quarter was excellent despite a challenging top line. This is best showcased in our improved guidance on restaurant-level margin and restaurant-level margin dollars, which are both higher than our previous expectations for the year. We remain confident in our team's ability to deliver this kind of execution going forward, and I thank our team members for their continued effort. This concludes our prepared remarks, and I am happy to answer any questions you have. Operator, please open the line for questions. As a reminder, during the Q&A session, I may answer in Japanese before my response is translated into English. Thank you.
分析師問答
We will now be conducting a question-and-answer session. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 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 number keys. One moment while we poll for questions. Our first question is from Jeremy Hamblin with Craig-Hallum. Please proceed with your question.
Thanks for taking the questions. I thought I might start with the comp trends. Obviously, a little bit disappointing with where traffic fell down 5% in the quarter. Wanted to see if you could provide us an update on how current quarter trends are looking, how June shaped up. And with the guidance range that you provided on revenues for FY 2026, what is the implied same-store sales range that you would expect to hit those revenue figures given what you expect for unit openings for the remainder of the year?
Sure. Thank you, Jeremy, for your first question. Please allow me to speak in Japanese. Benjamin is going to translate.
Hi, Jeremy. This is Benjamin. We were certainly disappointed that traffic came in negative as well, but we believe that this is largely due to elevated gas prices, along the lines of what we discussed in the prior earnings call. As gas prices have eased, we are beginning to see a little bit of benefit as we have entered Q4, but those benefits are partially offset by how popular the World Cup is. The guidance that we are providing for revenue contemplates the Q3 and Q4 macro background as well as the construction delays. As it relates to comps, we continue to be confident in our ability to deliver slightly positive comps for the full year. This year has been choppy, but we are very much looking forward to fiscal 2027. As we have discussed in the past, the real estate pipeline is extremely promising. It is the first time that we have had a majority new market ratio in many years, and so that will be a cannibalization tailwind and thus a comp tailwind for us. The fiscal 2027 IP pipeline is phenomenal; I could not be happier with it, and so that should be a meaningful tailwind as well. We also have the rewards program coming on as we enter the new year. As it relates to fiscal 2027, we remain very bullish about where we can land for comps.
Gotcha. Okay. I think it implies something more like down 3%, 4% maybe in Q4. But I did have a follow-up question. The company had a fairly consistent history of comp performance, consistently positive with some volatility, but there has clearly been a bit more volatility over the past two years. I wanted to understand what you think might be driving that. And then in terms of thinking about as the company is closing in on 100 locations over the coming couple of quarters, how should we be thinking about the long-term growth algorithm for Kura as a concept? Is this something where you think of long-term comps in the range of low-single-digit positive with some variability? Color on what internally you expect and whether the IP collaborations have had a bigger impact than typical on results, and thoughts given the higher gas prices.
Sure. In terms of the things that are under our control as it relates to comp, we see real estate pipeline management as the dominant factor. Regarding the IP pipeline, last year we had a five-month stretch without IPs, and that had a visible comp impact. We have since remedied that and have done seven this year, and we are actually continuing to grow the number that we are doing every year because we know there is maximal excitement at the beginning of every campaign. So fiscal 2027, beyond having higher-quality IPs, will also have a total of eight IPs. We are also supplementing this by putting more energy into our food-based promotions. Our Kura Reserve items have been very successful with our guests, and so we are increasing frequency from nine a year to twelve a year. These will also be supplemented by a different type of food-based promotion that allows us to be more reactive should there be macro pressure so we can lean more into value if necessary. As it relates to the last two years' comps, I would also add that this has not happened in a vacuum. We are in a world now with elevated gas prices; last year we had the FAST Act come online, and we have a pretty big California presence. So there are factors beyond our control, but we feel extremely good about the factors that are in our control.
Great. Alright. Well, thanks for taking my questions, and best wishes.
Thanks, Jeremy. Thank you.
Our next question is from Andrew Charles with TD Cowen. Please proceed with your question.
This is Zachary Ogden on for Andrew. Just a follow-up to Jeremy's first question. I know you called out the delayed openings being partly responsible for the lower revenue guidance, but can you just talk about where that down 40 basis points same-store sales for the quarter fell relative to your expectations? And then how your expectations for Q4 have changed over the last 90 days?
Hey, Zachary. In terms of the negative 0.4% comps, this was within our range of possibilities and so it was not a surprise to us given overall macro pressure and elevated gas prices, especially in California. In terms of our thoughts on comps over the last 90 days, they have not really changed; we continue to believe that we can deliver positive comps for the full year. If we are talking about surprises, the restaurant delays are certainly the biggest surprise for us. This was not something we had anticipated at all at the time of the last call.
Got it. Okay. Thank you. And then the second question is on mix. Can you unpack what made that flip positive in the quarter? Last call it sounded like you were not expecting that to remain flat, so what drove mix to actually be positive and better than you were expecting?
Sure, Zachary. It was a pleasant surprise at the beginning of the year when we began to see mix turn favorable, especially after it had been a headwind for multiple years. That improvement has continued through the present day and actually further accelerated in June, which has led us to believe that this is not just coincidence or luck. Our interpretation is that this is a result of our pricing strategy. The 3.5% pricing we implemented in November meaningfully underpriced relative to our competitors, so guests who have been going to other sushi restaurants have become accustomed to paying a much higher price than a year ago. When they come into our restaurants and see how much cheaper we are than they expect, they end up spending more. We are seeing growth not just in per-person plates but also mix attachment and drinks. Generally in the restaurant industry, when there are macro pressures on the consumer the expectation is that people reduce frequency, and we are seeing that in traffic given higher gas prices and competing attention from the World Cup. But seeing mix grow gives us enormous confidence: when guests do come in, they are spending more than ever before. They are responding well to our efforts, whether it be the Coke float promotions we ran in June, our new giveaways, hand roll campaigns, or other promotions. Our promotional calendar has been packed, and the sustained mix improvement over more than six months gives us confidence that the competitive advantage between us and the rest of the sushi industry is meaningful. We have been able to take minimal pricing because of aggressive cost controls, and our hope is that as the macro environment normalizes and the World Cup is no longer a factor, traffic will return while our price and mix remains elevated. Our pricing expectations for fiscal 2027 are actually to be below where we came in for fiscal 2026, and we hope to keep compounding this advantage.
Got it. Thanks, guys.
Thanks, Zachary.
Our next question is from Todd Brooks with Benchmark StoneX.
Hey, thanks for taking my questions. Wanted to dimension the permitting delays in getting the new units open that you experienced and that kind of caught you by surprise. I think you framed it up as maybe six months of lost unit operating time at $4 million AUVs. Can we ballpark the revenue guide down a couple million attributable to the delays and the balance just same-store sales performance?
Just put them all.
Yeah, that is a fair analysis.
Okay. Great. Thanks. And then looking forward, you talked about how pleasantly surprised you have been by the mix performance the last couple of quarters. Coming into this quarter, you had looked for mix to revert but that did not happen. Based on what you are learning here and as you are thinking about Q4, are you still assuming that you can hold the gains on mix? Or are you expecting, in the guidance horizon going forward for the balance of the fiscal year, mix to switch back to slightly negative?
Given that mix has actually improved as we have entered the quarter, we remain optimistic. For the remainder of the quarter, we do not see a reason for trends to change, though anything is possible. That is reflected in the range of our restaurant-level margin guidance as well as our expectation for slightly positive comps for the full year. We believe the macro situation will ultimately be transitory, but we believe the mix flow-through we are seeing now could be a sustainable advantage and a positive tailwind for us in the coming years.
Great. And then one final: you quickly went through the review of the upcoming IP collab schedule. I know Honkai just recently launched. Can we just review the calendar for the back of this fiscal year? And then can you qualify the impact of Yoshi as a platform with Nintendo and how you've been earning the ability to do higher-tier promotions with Nintendo?
Yep. After Honkai: Star Rail, we have Persona, which is a role-playing game. In September and October, we have The Apothecary Diaries, a popular light novel series that has become a popular anime. In November and December, we have Yoshi. On magnitude, Yoshi is comparable to Kirby; it is hard to pick between them, but you can be very excited for the November call because we are extremely excited to share what we have for the back half of the year in terms of the IP pipeline.
Okay. Perfect. Thank you both.
Thanks, Todd. Thank you.
Our next question is from Matthew Curtis with D.A. Davidson. Please proceed with your question.
Hi. Good afternoon. I was wondering if we could get back to the third quarter for a minute. Could you describe the sales impact that IP collabs had in the third quarter relative to the second quarter? And more importantly, how are same-store sales trends affected as you begin to lap the resumption of IP collabs, which I believe happened at the end of April?
Sure, Matthew.
For any IP, our base-case expectation is a low single-digit comp contribution. When we have marquee items like Kirby or Yoshi, the expectation is a mid single-digit contribution. We are excited to continue to introduce more mid single-digit contributing IPs. As it relates to Q3, we believe the IPs contributed low single digits to comps. Part of the offset for the traffic pressure through the quarter was the success of our food collaborations; the Kura Reserve was very meaningful not only for getting people to come in but to spend more than they have before. That has been a big part of the mix growth, and we are excited for the incremental benefit next year by having an extra three of these.
Thanks. And then a different topic: I think last quarter you mentioned a 1% comp lift from the reservation system. Did that persist in the third quarter?
Yes.
Okay, great. Thank you.
Thank you. Thanks, Matthew.
Thank you. Our next question is from Sharon Zackfia with William Blair. Please proceed with your question.
Hey. Thanks for taking the question. As you've seen the slowdown in traffic, is there any difference in what you are seeing with new customer acquisition versus existing customer frequency?
We are seeing a difference between nonmembers and members. The defining feature for Q3 was a reduction in frequency, and that reduction is tied to the macro environment with higher gas prices and competing attention from the World Cup. These factors we believe are transitory, and we are confident we can maintain the momentum of our mix and come out stronger.
Thanks for that. And then on the restaurant delays, are there steps you are taking to help ensure that we do not see incremental issues in 2027? Are you adding more buffer to the pipeline as you think about that?
Of the four stores, three of the delays were caused by fire inspections. Typically, when we have delays because of a fire inspection, the corrections are something we can do in two weeks, but the asks this time were much more involved and took on average six weeks with extra time waiting for a reinspection to be scheduled. That was frustrating. We adjust our practices with every hiccup, but it is always different: different counties have different rules and different inspectors, which makes it hard to head off. We do bake a certain degree of delays into our expectations, but for so many to follow one another at the same time and to be much longer than typical was unexpected. We are happy to say we just opened our Charlotte, North Carolina location today, our 94th restaurant. As part of that inspection process there was a request for a third-party inspection for conveyor belts, which had never happened with our preceding restaurants. These kinds of surprises can pop up, but now that it has happened, we will come into future openings with that third-party inspection readiness and head off that issue.
Okay. Thank you.
(No audio content beyond acknowledgement.)
Our next question is Mark Smith with Lake Street Capital Markets. Please proceed with your question.
You mentioned some cannibalization easing here; I'm curious whether you saw any real impact in the quarter as well as your outlook for restaurants opened over the last several months from cannibalization.
In the past, our estimate for comp headwinds from cannibalization was between 300 to 400 basis points. We have been able to bring that down to about 50 basis points. We would expect this headwind to continue into the first half of fiscal 2027 given the timing of some openings, especially the first infills and next set of key performers. But as we benefit from a 55% new market mix, we expect cannibalization to steadily lessen over fiscal 2027 and 2028.
And on opening delays, has that added any incremental costs? You maintained guidance for new restaurant build-out costs, but are you seeing incremental costs from delays or inflation pressure leading to higher opening costs?
When we have an opening delay due to an inspection, the primary incremental costs are training costs or rehiring costs because you cannot ask staff to wait for a month without work. That being said, in spite of those incremental costs, we were able to raise our restaurant-level operating profit margin guidance to 18.5%. We are proud of how efficient our restaurant-level teams have been. As we get closer to the end of the year and have more visibility into fiscal 2027, we think we will get closer to that 20% historical goal faster than expected, and we'll update you in November.
Last one: on menu price increases, it sounds like you are seeing positive results from offering value. Can you speak to elasticity on the price increases and consumer response?
The mix growth speaks volumes. Our plan is to keep value intact and wait for traffic to return, benefiting on both ends. We are performing analysis to empirically view how much pricing competitors have taken. Anecdotally, against our roughly 4% pricing, competitors are typically closer to much higher levels — there is a gulf that has widened post-tariff. While Q4 top line will have pressure, we believe that keeping pricing minimal and driving margin improvement will allow us to benefit when traffic returns.
Excellent. Thank you, guys.
Thanks, Mark.
Our next question is from John-Paul Wollam with ROTH MKM. Please proceed with your question.
Hi. Appreciate you taking my questions. I wanted to follow up on the idea of new customers or customers trading down from other restaurants and whether that is increasing as a percent of mix relative to repeat customers. I'm trying to get a sense of whether you are seeing real market share gains that may be temporary or more structural, and whether lower-income traffic returning could produce a big boost later.
The biggest point in favor of new customer trading is that average check growth is growing faster among nonmembers than reward members, which has never been the case before. Our interpretation is that reflects higher-spending guests coming to us. We commission a consumer study twice a year, and that will be one of the top questions in our next analysis. We look forward to updating you on how much more we can capture.
Okay. And then strategically, as you approach 100 units and think about the next 100 units, how would you categorize where your centralized operations and HQ infrastructure are to support that growth? Anything needed in the next 6 to 12 months?
For fiscal 2027, we already have the pipeline locked and loaded, and we know it is higher than 20% growth. Regarding G&A and the support center, we believe we have the infrastructure intact and will need proportionate growth to manage more volume. Nothing out of the ordinary is needed, and we expect to continue to leverage G&A. Historically, constraining factors have been availability of high-quality sites, availability of capital, and our management pipeline. We feel very good about our training department and personnel bench. We opened seven restaurants in Q3, but our cash burn was only $3 million, so we are pleased with balance sheet management. The remainder is availability of high-quality sites, and we want to be flexible so we do not commit to sites we would not otherwise choose.
Thanks, guys. Best of luck.
Thanks, JP.
Our next question is from Jon Tower with Citi. Please proceed with your question.
Thanks for taking the questions. You spoke to labor leverage and expecting to be down about 200 basis points in fiscal 2026. Can you speak to exactly what you are doing at store level to get that leverage, particularly in the context of modest same-store sales growth on the year?
A lot of the labor gains this year come down to work done in fiscal 2025. The reservation system was installed systemwide by Q4 of last year, which resulted in headcount reduction in front of house. We have also improved scheduling substantially. Those two factors have been driving the improvement in fiscal 2026. We will be lapping the benefit of the reservation system implementation in Q4, but we have the robotic dishwasher to look forward to for fiscal 2027, which should add additional leverage. Leveraging 200 basis points on modest comps is something we believe is achievable given our initiatives.
Thanks. In terms of other OpEx next year, with the higher IP cadence and increasing Kura Reserve frequency from nine to twelve and other investments, how are you thinking about marketing spend next year versus this year?
This is something Jim and I have been working on. The Bikkura Pon change may be a bigger lever than initially appreciated. In our last consumer study, guests found getting to the fifteenth plate and the prize compelling, but found the prizes themselves less compelling. We were dispersing prizes to guests regardless of whether they wanted them, so by giving guests the option to choose between the capsule prize or a food coupon, we reduce wasted prizes. The cost of the dessert is offset by the incremental visit when guests redeem it. Once fully in place, we would expect up to a 50-basis-point benefit, which would more than offset incremental investments for the more frequent IP campaigns and food LTOs. We are aggressively negotiating vendor contracts for other cost items, bringing preventive maintenance in-house, and we expect meaningful savings. With that and the Bikkura Pon savings, we feel good about other cost expectations for fiscal 2027. This connects back to our comment that you may be pleasantly surprised by how quickly we get back to that 20% restaurant-level operating profit margin.
Thank you for taking the questions. Appreciate it.
Thanks, Jon.
Our next question is from Jim Sanderson with Northcoast Research.
Hi, thanks for the question. I wanted to go back to the margin discussion. I think you are guiding toward 18.5% on a non-GAAP basis. Compared to last year, is the biggest factor in fourth quarter going to be continued improvement in labor that you expect to continue into fiscal 2027?
Yes, a lot of the margin benefit is coming from labor. We will be lapping the introduction in Q4 so the benefit will be partial, but the bulk will come from the initiatives discussed earlier and tight scheduling. The other cost improvements we expect for fiscal 2027 are already starting to show benefit in Q4. We are also receiving some tariff refunds for other cost items where we are the importer of record, which is a one-time tailwind that plays into the 2026 expectation. That said, our efforts are designed to be structural and are now baked into the business, and we expect the gains to accelerate as we enter fiscal 2027. The robotic dishwashers also offer further upside as they are rolled out.
Okay. And the one-time tariff refund will be in the fourth quarter, pending?
Yes.
I wanted to also go back to traffic, the negative 5.1%. Can you break that down by month so we can get a sense of trends within the quarter?
There really was not enough difference between months to call out a meaningful trend; traffic was relatively stable month to month. The only thing I would add is that June mix saw a strong improvement, which was a pleasant surprise.
But relatively stable traffic trend throughout the quarter by month. Got it. I will pass it on.
Thanks, Jim.
This now concludes our question-and-answer session. Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. Please disconnect your lines and have a wonderful day.