Lynn M. Liddle - Executive Vice President of Communications, Legislative Affairs & Investor Relations Michael T. Lawton - Chief Financial Officer, Principal Accounting Officer and Executive Vice President of Finance J. Patrick Doyle - Chief Executive Officer, President and Director.

Jeffrey Andrew Bernstein - Barclays Capital, Research Division Mark E. Smith - Feltl and Company, Inc., Research Division Andrew Michael Charles - BofA Merrill Lynch, Research Division Alvin C. Concepcion - Citigroup Inc, Research Division Alton K. Stump - Longbow Research LLC Brian J. Bittner - Oppenheimer & Co. Inc., Research Division John S.

Glass - Morgan Stanley, Research Division John W. Ivankoe - JP Morgan Chase & Co, Research Division Peter Saleh - Telsey Advisory Group LLC.

Good morning. My name is Bonita, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q1 Financial Results Earnings Call. [Operator Instructions] Thank you. Ms. Liddle, you may begin your conference..

Thanks, Bonita. And thanks, everybody, for joining us this morning. We should be an hour or less. We will give an opportunity for some prepared remarks, as well as Q&A. I would also ask that members of the press who are on the call realize this is for investors and stay in a listen-only mode.

And then I'll turn all of your attention to our Safe Harbor statement in the event that any forward-looking statements are made during the call today. We're going to kick it off today with Mike Lawton, our Chief Financial Officer, who has some prepared remarks..

Our improved operating results benefited us by $0.09, foreign currency negatively impacted us by about $0.02; lower diluted share count primarily due to our share repurchases benefited us by $0.01; and lower interest expense benefited us by $0.01. Turning to our use of cash.

During the first quarter, we repurchased and retired approximately 221,000 shares for $15.1 million, at an average price of $68 a share. So far in the second quarter, we've repurchased 154,000 shares. We also returned over $11 million to our shareholders in the form of a quarterly dividend.

We did make a required $5.9 million principal amortization payment in the first quarter. Due to the terms of our debt, we will also be making a $5.9 million required principal amortization payment in the second quarter of 2014.

Although we had expected that we'd be able to stop making required payments in the second quarter, due to meeting the 4.5x ratio specified in our agreements, we didn't meet this threshold.

Debt to EBITDA, which you can see in the financials, and is the closest approximation that a financial statement user can see to the actual ratio we need in order to cease making required payments, but the actual calculation is impacted by cash movements within our securitization structure that did not impact -- and they don’t impact operations or financials, but they did impact our ability to meet the ratio.

Going forward, we will continue to evaluate the opportunity to cease making required payments once the specific securitization terms are met. In closing, we're very pleased with the results in the quarter.

We will continue to focus on improving our operating performance, growing our global store base and utilizing our free cash flow to drive shareholder value. Thank you for your time. And now I'll turn it over to Patrick..

Thanks, Mike. As you heard, this quarter's headline is that we once again delivered strong consistent results, and we're particularly pleased with the store growth in our international division, which was especially robust. Overall, it was a great start to the year. We had a busy first quarter.

Domestically, we had strong sales results, good order growth over last year and a great promotion for our Handmade Pan Pizza. Our advertising featured our very talented store team members, and I'm delighted that this campaign seems to have resonated well with our customers.

We also wrapped up our analysis of franchisee profitability in 2013, and we're pleased to see that profits continued to increase. Franchisees reported that store level EBITDA was up to about $82,000 last year from $75,000 in 2012.

We continue to focus on this important metric because increasing per store profitability results in a healthier franchisee base, and with a higher return on investment in stores, it ultimately helps drive store growth. It also puts our system in a better place for store reimaging.

We've been ramping up the process of getting stores updated across the system, with our corporate stores leading the way. We're well underway to having our team USA stores reimaged in the next 2 to 3 years. Another area of intense focus for us right now is corporate store performance.

Company same-store sales performance has lagged franchise stores in a meaningful way for the past 2 quarters. While it will take a little time to get these stores where we want them, we want you to know that we're working to turn these results around.

During the quarter, there was a fair amount of discussion about the particularly cold and snowy weather in much of the country and its possible impact on our business. Typically, weather does not have an impact on our quarterly sales because it tends to be very regional and also short in duration. However, this winter was atypical.

Our best estimate is that weather drove between a 1% and 1.5% positive impact on sales in the quarter. Moving to new product news. In the U.S., we recently launched our first new food product since the Handmade Pan Pizza in the fall of 2012. It's called Specialty Chicken. It's boneless chicken with a pizza twist.

We know that chicken is a popular side item for us and that boneless chicken sales have growing 11% in the last 3 years for the whole quick service industry. This product gives us the opportunity to showcase chicken and do it in a way that's unique to Domino's.

It's also a product that's good for store profitability, which is important to our system and brings some new product news to our brand. On the international front, we have some great milestones in key markets. In India, we opened our 700th store, a huge achievement for the fastest growing market in our system.

By focusing on both quality and service, they've been pioneers and are dominating the fast-food market in India. Despite the fact the economy is going through a rough patch, store yield economics are still strong enough to sustain robust store growth and they are expanding into new cities. We're very proud of their accomplishments.

We're also pleased with the progress being made in Japan, where we recently opened our 300th store. Since being acquired by Australian master franchisee, this market has continued its strong performance with excellent sales in store growth. We continue to be very optimistic about the changes and growth opportunities in that market.

I recently visited Australia, and I am impressed with what our master franchisee is doing in that market. They not only continue to build profitable stores in a fairly mature market, but they also have really stepped up their game in service and product quality.

Plus, they have excellent marketing, which is helping to keep the brand dominant in their market. While highlighting some markets, I'd like to point out our recent agreement we signed in South Africa with a new master franchisee. TASTE Holdings is based in Johannesburg.

They're a publicly traded company that operates nearly 150 pizza restaurants under the scooters pizza and St Elmo's pizza brands. We expect the vast majority of these will be converting to Domino's Pizza units in late 2014 and through 2015.

This gives us an excellent entry into the southern region of Africa, which is a continent with attractive future growth opportunities for our brand. It's young. It's increasingly very digital, with good mobile phone penetration and emerging consumer class, growing urbanization and a modernizing retail sector.

In terms of population and consumer purchasing power, sub-Saharan Africa is roughly the same size as India. Stay tuned for more from this region of the world. While our international business is certainly a major driver of growth, technology also continues to advance our brands as we lead the industry with technological innovation.

This week we launched an iPad app that features amazing images to take advantage of the iPad's high-definition Retina Display. The team used gaming and animation software to power the incredible 3D graphics of our new pizza builder. It's a great app and I'd encourage you to try it out.

We also recently announced that our Android app will accept payment with Google wallet, which is a free mobile payment system that allows customers to store debit cards, credit cards, loyalty cards and gift cards electronically on their mobile phone.

It's just the kind of flexibility and convenience we feel is important for us to offer to our consumers. And apparently, Google thought it was pretty cool that we signed up, since they called it out specifically on their earnings call.

Another consumer convenience we've discussed before is profiles, which is the ability for consumers to store their pizza orders and credit card information.

We added about 2 million more profiles in the first quarter, so we're now up to 9 million profiles, and about half of our mobile app sales were made using established profiles in the first quarter. Overall, digital now comprises 45% of our sales, with some recent weeks at 50% of sales.

We are really delighted with what digital ordering is doing for our business in the U.S. and around the world. Finally, I'd just add that we're off to a great start this year. We grew stores at a nice clip, had robust domestic and international sales and despite some headwinds from FX and food costs, delivered strong EPS growth once again.

That enabled us to pay an increased dividend and buy back a significant number of shares, more continued evidence of our commitment to shareholder returns. I'm very proud of our team and our results. Our franchisees are running great businesses all around the world and they're doing so under a name brand with increasing recognition and strength.

With that, I'll be happy to take any questions..

[Operator Instructions] And your first question is from the line of Jeffrey Bernstein with Barclays..

A couple of questions on international. Obviously, a very, very impressive start to the year, at least from a -- well from comp annual perspective. Just wondering, you mentioned something about the royalty rates, just wondering the frequency of, I guess the opportunity you have to update the royalty rates, both in international and domestically.

Maybe you can give some sort of range in terms of the high versus low of those percentages. It would seem like over time with a very strong performance, there would be the opportunity to increase those rates. And then I had a follow-up..

The opportunity on the international side is very rare. We have very long-term contracts with our master franchisees. And ultimately, those contracts and their confidence that they're going to be able to build the Domino's business and generate a great return for themselves or their shareholders, if they're public, that's what attracts capital.

And that's what's generated the strongest growth really in international of any of the major players in the restaurant industry. So those opportunities are very rare. Our average, as we've said before, is around 3%.

Our master franchisees themselves have some ability to change their rates to sub-franchisees, and if that happens, then we've got some ability to do something. But overall, you're not going to see material changes in those rates..

And the U.S., how does that compare to -- the U.S., obviously, you don't have those big master franchisees but what's the range and the average now?.

I mean, our contracts are at 5.5% with some incentives out there. We may be just slightly below that. I think, we're between 5.4% and 5.5% average. And it's been that way for a very long time. So I would not expect anything there..

Got you. And just in terms of the sales mix, obviously, now pushing a little bit more into, well, I guess, the chicken is the most recent push. Just wondering whether you can give any directional color in terms of, however you slice it, whether it's value versus premium on your domestic sales mix, or pizza versus protein versus size.

Just wondering the trends over time, and it sounds like you're pretty happy with the profitability of the chicken, I'm just wondering if you could rank the profitability of each of kind of the big core components of your menu?.

Well, pizza is great business. And that's the core driver of comp growth. It is certainly where the vast majority of profitability comes from in our system. Chicken is a great part of our business. It's the second-largest part of our business. But it is materially smaller than our pizza business. But it's a good sized business.

And right now, given the way commodities have been moving, the fact that we've got a chicken-focused promotion out there right now, is a good thing and nicely timed. But ultimately, you're talking about value or premium. Our pricing has been quite consistent now over the course of 4 or 5 years, and that's really a reflection of where consumers are.

And the value that consumers demand. And as long as that's what they're looking for and we're continuing to drive growth in our franchisees' profitability, which as I mentioned previously, we did again quite nicely in 2013, we're going to be pretty consistent in our approach to pricing..

Lastly, Mike, if I could just ask you, you mentioned you're looking at which quarter you can stop making that $5.9 million payment once the rate gets to a low enough level from leverage. You didn't mention anything about a potential boost to the leverage again.

I wasn't sure whether, where rates are today, it's just not as compelling, and therefore you're more focused on getting the leverage down to that certain level so you can stop making those payments..

Right now, we continue to watch where rates are but it's not, as you say, it's not that compelling. And we would -- we expected that we would stop making the payment probably, still a high probability that, that would stop next quarter. And we'll just continue to watch. We're quite content with where we are, which is at the 4.5x level..

Your next question is from the line of Mark Smith with Feltl and Company..

Just wanted to follow up on commodity inflation and competitive environment.

What's your opportunity to take price today?.

Well, as I mentioned in my part, we did take -- the ticket is up a little bit and that's not really from taking price as much as being very careful and sharp on the coupons that you do offer. As I know you're aware, most of the transactions that take place have got some kind of a deal associated with them.

So I don't think -- I think there's more opportunity to be careful about your couponing than there is to take menu price up at this point in time. And now, while you may see a little bit of adjustment, I wouldn't expect anything major. As long as our current expectation's commodity prices will come back down. It's taken longer than we expected.

We got exactly what we expected out of chicken, which is meaningful, and that's lower. It's really a pork and cheese situation right now and making the presumption that they hopefully will still come back down fairly in either the second or, at worst, third quarter. I don't think you'll see a lot of pricing adjustment..

Does this give you an opportunity, as we've seen the trend of mom-and-pops kind of going away and some of the smaller regional guys, does this give you an opportunity over the next year or 2 to add more domestically, as you can withstand some of these pressures better than smaller peers can?.

Yes. It's absolutely -- we think our size and scale and ability to buy effectively and pass those savings through to our stores is clearly a strong competitive advantage and so yes, I think it does put us in a stronger position from a share standpoint..

And your next question is from the line of Joe Buckley with Bank of America, Merrill Lynch..

It's Andrew for Joe. You called out the underperformance of company stores compared to franchisees over the last several quarters.

Considering the refranchising activity during the quarter, does it make sense to further refranchise as it's evidenced your franchisees are great operators?.

Our franchisees are great operators. And I would tell you there have been times when our corporate stores have outperformed the franchise side and the other way around. And right now, we're in a moment where the last 2 quarters, we've had some pretty material underperformance. There are some execution issues that we've got to get fixed.

We like where we are with our store accounts on the corporate side today. We use it as, not only a way to generate good returns for our shareholders and, at the profitability levels we have today, we do that. But we use it to test new things and that's important for us.

But I'll tell you, critically, and I think fundamental to why we run stores, is it's where we develop talent to lead our franchise system both domestically and around the world. So based on that, I would tell you I think we're pretty comfortable in the range that we're in.

We've always said from time to time, you're going to see some opportunistic transactions, both buying and selling, and you're going to see us building stores, importantly.

So if there is a -- there's not necessarily a magic number, but I would tell you the range we're in today with the level of talent we're able to generate through there, to meet our needs and the returns we're generating out of the stores, we feel pretty good about where we are..

Okay. And just one more.

Can you just talk a little bit more about the remodeling program versus how many you did this quarter, and any insights you're learning such as the mix of carryout growing and if guest counts at remodeled stores are outpacing the system?.

Yes. It's -- you know what, it's still fairly early on that. And I would tell you, as we just announced out to our system now, what 3, 4 months ago, those efforts are just ramping up now. I think you're going to start seeing a lot of reimages starting kind of second half of this year.

So we've got a couple hundred out there today that have been done over the course of the last year to 18 months. That number hasn't really materially changed in the first quarter. I think second half and then the years out from that is when you're going to see most of that activity..

Your next question is from the line of Alvin Concepcion with Citi..

Just a couple of questions related to the pan pizza.

It seems it's brought on some incremental new customers and the product seemed to have long-term staying power, and now that you've had it over a year and a half, what have you seen in regards to loyalty from those customers you've taken on? And when they do return, do those customers always tend to come back for the pan, or do they have a propensity to try other items you're promoting?.

They buy both pan and hand tossed and, when we launched this pan, we knew that there were pan occasions that were going to competition, frankly, from our customers. So people who were buying our hand tossed pizzas wanted a change of pace, and they were going elsewhere, because we didn't have a good offering.

And so this has really mostly been about picking up more occasions from our existing customers who were taking their pan pizza business elsewhere. But what that has meant is higher loyalty from those customers as they're giving us both of those occasions. And so we continue to be very pleased with how it's performing. It's a terrific product.

And as you saw again in the first quarter, it had some real staying power for us with our customer base..

Great. Thanks for that color, and finally you mentioned 45% of your sales are now digital.

Can you talk about what that's done for store profitability, or even productivity as that mix has increased over the past year?.

It absolutely helps. And it helps on essentially every measure. The ticket is higher. Order accuracy is higher for the customers, since they're taking their own orders, so customer satisfaction is higher, and the profitability of the order is a little bit better as well. And it's also more efficient to market to those people who have already signed up.

And we continue to make advances. So with the profiles set up, the ability for those customers to reorder quickly if they set up profiles is terrific. So continues to be a very positive thing for our business. And certainly, an area where you're going to continue to see focus.

But as we've said, just in the last month or 2 now, you've seen a number of other things, Google wallet, the iPad app. We're continuing to drive innovation at a very high pace in this area, and it's something that is going to continue to be part of our core strategy..

Your next question is from the line of Alton Stump with Longbow Research..

I guess just a follow-up on the pricing question earlier.

Obviously, I think that was in reference more to company-owned stores but, on the franchise front in the U.S., are you getting any feedback from them on average if they plan to take any pricing, given particularly cheese cost moving up so hard here over the last couple of months?.

Look, we all watch it. And it is certainly an area that's -- we will all talk about. None of us like to see record high on cheese and obviously, pork moved as well. I actually commend our franchisees. I think they've been remarkably disciplined about recognizing that this is relatively short term and about just taking some of that in the first quarter.

That said, our franchisees still did very well in the first quarter, and we think their profits were actually up a little bit versus the first quarter of the previous year, but not a lot, but a little. And the volume clearly that we saw in the first quarter carried the day.

And they understand that sales growth and keeping our customer base happy and loyal, is ultimately what's going to drive long-term profitability and growth in the business.

So overall, I think they have been remarkably disciplined about looking at this for what it is, which has been a relatively short term movement that persisted a little longer than, frankly, we had hoped it was going to. But we're already seeing some easing on cheese, it's back down some over the course of the last couple of weeks.

Hopefully, that will continue. But overall, they've been quite disciplined..

Well, I was actually ask you, like, our job isn't to be cheese cost experts, but we have seen quite a bit of relief over the last 3, 4 weeks here.

Any outlook if it could head down further from here?.

Our expectation is that it is going to continue to ease. We don't think it's going to happen quickly, but over the next few months or couple of quarters, our expectation and certainly the market's expectation, as you look at forward curves, is that it's going to continue to come down. We'll see.

There have been a couple of components that have driven it. One was weather and there were some areas where production per cow was down because of the extreme weather. Obviously, as we're warming up now, that's going to get somewhat better and production should get better. Input costs are very good. Corn costs, feed cost, are very good.

But the other part of it has been the export market. And dairy exports in general have been up. And that's driven the demand side overall on this. And so we'll see. Our expectation is that it's going to continue to ease, but it's going to take some time for that. We're going to be watching it closely.

But over the next couple of quarters, we're hopeful that we're going to see it down somewhat more..

I have just one quick follow-up and then I'll hop back in the queue.

As you kind of think about this chicken launch, obviously it's very early, just the last couple of weeks here, but any color, even as ruling this out in the test market or in the group studies, how this is compared to some of recent launches, which has obviously been very successful, whether it's the pan pizza or prior to that.

Any color on that front that you can give us?.

Yes. I mean, that's all in the second quarter. So I really can't get into that..

Your next question is from the line of Brian Bittner with Oppenheimer..

First on the U.S. comps, you brought up winter weather helping you 100 to 150 basis points. First question is, how did you come up with that estimate? And then the second question on these U.S. comps is, even after that acceleration, the 2-year trend actually accelerated almost 300 basis points.

So after you answer the weather question, if you can just go into some other dynamics that drove the acceleration in the first quarter, anything you can point out from, obviously, technology continues to help, but from a technological market share/menu mix perspective would be helpful..

Okay, I'll take the weather question. What we did was, we ran everything through our media mix model and we looked at what we expected by market versus what we got. So I could tell you we have a pretty sophisticated model but, at the same time, you have to take it all with a bit of a guess as to what the right numbers are.

But we've always tried to give you the best picture we can as to what we think is happening.

So after running it through the model, we looked at -- and that includes looking at markets where there isn't any impact from snow, areas where you got more snow than what we had the year before, areas with less snow that are impacted, and we come out with something in this range of 1% to 1.5%..

The only thing I would add to that, Brian, is we also then just as kind of, "All right, does this all make sense?" We looked at our carryout and delivery mix. And our delivery mix was a little stronger than we would have expected otherwise, which was clearly a function of the weather as well.

So we think it was kind of in that 1 to 1.5 point range, and obviously the blend between our carryout and delivery business insulates us somewhat. To your other question about kind of what's driving the comps. I think there have been a few things.

I think we've done a good job buying our media and our media has been up a little bit over the course of the last few years, just from a straightened, not only efficiency standpoint, but effectiveness. And some of that's just a function of the growth of the system.

And the more we're driving comps, the more dollars that we've got to put back in to driving the brand. Clearly, an important part of this though is digital. And I think digital continues to be a strong part of our business.

We see the effect it has on customer retention and frequency, and that has clearly been a big driver of our results and continues to be a big driver of our results. And overall the execution from our system and our franchisees has been strong.

And we're seeing great results from them as we look at our kind of internal measures of the service levels that they're giving and their execution. I'm proud of our franchisees and our whole system and how they're performing, and that builds overall momentum within the system as well..

Okay.

And have you told us what percent of the corporate stores are reimaged as of now?.

Yes. I think it's -- we haven't, but I think it's in the range of about 1/4 of them right now. I think it's around 100, maybe just slightly over 100 of them today are reimaged..

Okay. Because I thought it was more, because I'm trying to better understand the comp underperformance at the corporate level and you talked about kind of execution being done.

I was just wondering if there's anything, any correlation between execution and store reimage or anything like that, but it seems that 25% it must be -- it's just not really having an impact yet anyway?.

It's just -- it's straight-up execution..

Okay. And then the last question, the $4 million to $8 million of G&A, year-over-year.

Mike, did you say that includes the gain on the sale?.

Yes. The primary reason that we reduced the increase is just reflective. We got the kind of unusual gain in there..

Your next question is from the line of John Glass with Morgan Stanley..

You talked about the majority of pizza sales are still on a deal and that sort of reminded me of that persistence in the industry.

How much less of a deal have you been able to sell pizzas on when you do it on mobile or through the Internet? Is there a material difference? And I guess, related to that, how close are you to be able to do one-on-one marketing, so that you're not offering me a deal if I wasn't going to take one anyway, so you improve your profitability that way?.

It's interesting. Customers online tend to use coupons a little bit less. They -- even though they're there and in front of them, they use them a little bit less, and it's part of why ticket is somewhat higher. They also just add more food items for the digital orders. But that's a fairly small effect on that.

So I think overall, we kind of look at 3 buckets of orders. We look at orders that are going out at menu price. We look at those that are on kind of the national offer, and those that use local coupons. And you can kind of manage pricing within each of those 3 areas. And overall, there is some effect with the digital.

That's clearly been a little bit positive for the ticket over time. And that's kind of how we think about it, I guess, is kind of looking at each of those 3 areas, what's going to drive volume and then managing the profitability within it..

And just following up on that, so if you decided not to show coupons to customers as they logged in, you think that's a dangerous precedent that they're going to end up thinking you end up being more expensive than your competition?.

No, coupons have to be there. If the coupons are available to any customers, we're going to have them there for them online. And they got to know that they've got access to great value digitally when they're ordering..

And then just last piece of that is when do you start to, or have you already begun to, send people individual offers either because they haven't ordered as often in the past or you want to up-sell them something specific.

How have you done that so far and are there plans to increase that?.

Yes, what we've done -- some things in terms of targeting groups, but there is lots more to come. As we get more sophisticated about managing kind of our database and people within it, there's still lots of opportunities on that front for us going forward..

And your next question is from the line of John Ivankoe with JPMorgan..

As you've seen a significant uptick in the number of people with profiles, how have you seen that customer change, if at all, from having a profile, to not having a profile in terms of things like order incidence, average ticket, and maybe in reference to the previous question, your ability to communicate to that profile-holding customer directly? In other words, how good is this for Domino's Pizza?.

Yes. It's a positive on all fronts. It's -- once they've given us that information and particularly, if they put credit card in, their ability to get through the process quickly and their ability to access favorite orders quickly, all of that is a positive for the customer, so it's a positive for us, and we can see it in behavior..

Excuse me, and by behavior you mean that customer is ordering more often and maybe ordering a little bit more? I mean, so that could -- just as there's been a increase in digital ordering, do you kind of view profiles as another leg, as a future sales driver?.

Yes, we do..

And this question is from the line of Peter Saleh with Telsey Advisory Group..

I just wanted to ask about the marketing spend in the second quarter, and maybe a little bit into the third quarter, and how you're planning that with the World Cup this year, if you're planning to spend more dollars this year on advertising?.

You're not going to see big shifts kind of because of that. And remember the way kind of our funding works on our advertising is it's a percentage of sales from our stores. So as overall system sales increase, that means the absolute volume of those dollars is growing. But in terms of material shifts between quarters, you're not going to see any..

Great. And then can you just comment a little bit on the -- there's been a lot of talk, a lot of headlines on fast casual pizza space really starting to pick up steam here in terms of units, and the growth and, while still small, I think when you look out the next couple of years, I think it might be a little bit more significant.

So can you just comment on how you guys are planning to combat the growth in fast casual pizza?.

We think that all of the things we're talking about do that effectively.

So getting our stores looking better, reimaging our stores, building some new stores, putting them in better locations combined with better food than we've ever offered, combined with a digital platform that we think is really second to none, having some seating in these reimaged stores, making it more welcoming for those who like to sit down as they wait or to eat as well.

Really opening up the kitchens so people can see the quality of the food. All of those things make us a better brands for consumers in general and make us more competitive within whatever the competitive set is going to be out the next few years.

And I guess, the only thing that I would repeat is that we continue to see the largest players in the category taking share from the independents. And so to the extent to which you're seeing some of these newer players growing a little bit, they are clearly not taking share from us today.

And potentially, taking even more share from some of the other locals and independents as we also are taking share from those players..

And there are no further questions.

Are there closing remarks?.

So we appreciate all of you taking the time to be on the call and for the questions, and we look forward to being back together with you on July 22 to discuss our second quarter earnings. Thank you, everybody..

And this concludes today's conference call. Thank you for your participation. You may now disconnect..