Franchise Group, Inc. (FRG) CEO Brian Kahn on Q2 2022 Results - Earnings Call Transcript

Franchise Group, Inc. (NASDAQ:FRG) Q2 2022 Earnings Conference Call August 4, 2022 4:30 PM ET

Company Participants

Andrew Kaminsky - EVP & Chief Administrative Officer

Brian Kahn - President, Chief Executive Officer

Eric Seeton - Chief Financial Officer

Conference Call Participants

Larry Solow - CJS Securities

Ian Zaffino - Oppenheimer

Operator

Ladies and gentlemen, thank you for standing by. And welcome to Franchise Group’s Fiscal 2022 Second Quarter Conference Call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question-and-answer session.

I would now like to hand the conference over to your host, Andrew Kaminski, Executive Vice President and Chief Administrative Officer of Franchise Group. Thank you.

Andrew Kaminsky

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

Before getting started, I'd like to mention that certain matters discussed on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other provisions of the federal securities laws. These forward-looking statements are based on management's current expectations and are not guarantees of future performance. Actual results could differ materially from those expressed in or implied by the forward-looking statements.

The forward-looking statements are made as of the date of this call and except as required by law, Franchise Group assumes no obligation to update or revise them. Investors are cautioned not to place undue reliance on these forward-looking statements. For a more detailed discussion of these and other risks and uncertainties that could cause Franchise Group's actual results to differ materially from those indicated in the forward-looking statements, please see our Form 10-K for the fiscal year ended December 25, 2021 and other filings we make with the SEC. The financial measures discussed today include non-GAAP measures that we believe investors focus on in comparing results between periods and among peer companies.

Please see our earnings release in the News and Events section of our website at franchisegrp.com for a reconciliation of non-GAAP financial measures to GAAP measures. Non-GAAP financial information should not be considered in isolation from, as a substitute for or superior to GAAP financial information, but we include it because management believes it provides meaningful supplemental information regarding our operating results when assessing our business and is useful to investors for informational comparative purposes. The non-GAAP financial measures the company uses have limitations and may differ from those used by other companies.

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

Brian Kahn

Thanks, Andrew, and good afternoon to our listeners, and thank you for joining us. Before we discuss FRG business, I’d just like to give a quick shout out to Charlie Loudermilk who passed away yesterday at the age of 95. Charlie happens to be the founder of Aaron Rents and he also happens to been an all around good guy among other things. And he was larger than life and his legacy does live on in many aspects of what we do at FRG and how we do it.

So moving on to FRG business, I'll provide a general update before turning the call over to Eric to provide financial details. I’ll then be happy to answer your questions. The Franchise Group second quarter financial performance was within our expectations but for the full year 2022, we're lowering our financial outlook for revenue to approximately $4.3 billion from $4.45 billion; adjusted EBITDA to approximately $390 million from $450 million; and non-GAAP earnings per share to approximately $4.00 a share from $5.00 a share. Inflationary pressures leading to lower profitability in our home furnishings businesses while profit growth in pet, health and wellness and education services are providing the diversification in scale that allowed FRG to declare another quarterly dividend at a $2.50 per share annual rate.

Specifically, product and freight costs within our home furnishing businesses are reducing margins. And food and energy inflation is taking a larger share of our lower income customer’s wallet, which is reducing transaction volumes. This combination is meaningful. Although American Freight is emphatically expected to be a material contributor to FRG’s long term growth, the impact of inflation this year is likely to result in approximately $100 million less EBITDA than what the current store base would be expected to generate in the steady state.

American Freight is expected to generate approximately $200 million less revenue than planned, that revenue loss comes with roughly 30% EBITDA flow through and additionally the nearly $ 1 billion of revenue that American Freight will generate will come at a cost of over 500 basis points of excess freight. The math totals over $100 million of EBITDA impact at American Freight this year alone.

We were frequently asked how FRG will perform in a suboptimal economic environment, shareholders, lenders, vendors and franchisees all want to understand the downside just as we want to understand the downside when we perform diligence on potential acquisition candidates or vendors. I think this environment will provide an excellent opportunity to enhance our credibility with all of our stakeholders by demonstrating that FRG is built to bend but not to break. FRG’s cumulative profitability and cash flow are more reliable in the whole than in part, and that ultimately should make FRG more valuable as a whole than in parts.

The primary difference between the business climate today and the one we shared after the first quarter is that freight costs and home furnishing product costs have peaked. We're now ordering new inventory at lower product costs, and lower incoming freight costs. Some cost reductions are more material than others but generally we're headed in the right direction. Markets are ultimately a self correcting mechanism and we believe that supply and demand imbalance for products and human capital are both correcting in our favor, and we expect this trend to continue. Despite these changing trends in our favor, since the velocity of transactions are much lower than normal, it will likely take the rest of this year to sell the older higher cost inventory through our system.

We're also keeping an eye on energy prices as the surge in gas prices deter the marginal customer from getting in the car to make an incremental trip to the store. We've seen this phenomena manifests itself with fewer transactions and larger transaction sizes as customers attempt to limit their need to buy fuel. We expect typical market forces ultimately to reduce gas prices back to within a normal range and provide relief for our customers. If we're wrong and fuel prices continue to increase, it would be worse for our customers and our same-store profitability.

As a management team, we spend significant time diligencing acquisitions to further diversify and scale FRG. But we recognize the tremendous opportunity to drive material incremental cash flow and earnings per share and continuing to block and tackle as we drive franchise unit growth and execution within our current brands. More importantly, unit growth within our current brands is completely within our control and does not require any M&A or capital market cooperation.

Franchising activity continues to accelerate across FRG. For the first six months of 2022, with all the 88 new territories and opened 54 new locations. We're starting to see cost of construction materials and labor improving and believe our franchisees will have an easier time opening stores over the next couple of years, compared to the last couple of years. I'll be happy to answer any questions after Eric provides the financial details.

But before I hand it over, I just want to publicly thank all of our financial partners for their support over the last several months. FRG is very lucky to have the support of a great group of lenders and real estate partners. Very easy to get lender support when the risk free rate is zero and when the economy is humming. But I've always learned the most about people in stressful times. When the credit market shut down completely last quarter, Oak Street Real Estate stepped up and closed on the sale of Badcock leases anyway and earlier this week, close again on the Badcock headquarter sale.

We also appreciate that our revolver lenders chose to give us a larger share of their balance sheets despite suboptimal market conditions and recently upsized our revolver. And our term loan lenders are the nimblest, most creative and smartest partners we could ask for and we appreciate their efforts on our behalf. Everybody plays his role really well and everybody works well together and the group we've assembled is uniquely positioned to help us take advantage of opportunities that are going to come our way in the current environment. Their patience will pay off and I appreciate their support of FRG and their trust in our management team.

Eric, I'll turn it to you to provide the financial details and then we can wrap up with Q&A. Thank you.

Eric Seeton

Thank you, Brian. Before I address the results of operations, I would like to remind you that we will be making many references to pro forma items throughout this call. Our press releases and filings may refer to historical financial results for the acquired businesses prior to their acquisition by Franchise Group. These items have been adjusted to align with our fiscal calendar and accounting policies to the extent reasonable. Comparison to pro forma results will allow us to discuss and evaluate performance of the acquired companies when a comparable period is not available due to the timing of the acquisition.

Moving to the second quarter results, I will start with a quick recap of our home furnishings businesses. In the second quarter system-wide Buddy’s had a negative same-store sales comp of 4.8% with franchisee comps declining by 4.7% and corporate stores declining 5.4%. Buddy’s opened seven new franchise stores and awarded three new locations bringing backlog to 98 locations. Badcock comps down 11.4% for the second quarter.

During the quarter we closed on the sale of Badcock’s retail and distribution centers for $94 million and $150 million respectively, and used the net proceeds to pay off the balance of the Badcock acquisition financing. Earlier this week, we closed on the previously announced sale of Badcock headquarters for $23.5 million. The net proceeds will be used to reduce outstanding debt.

American Freight comps down 13.7% for the quarter. We sold 10 new franchises in the second quarter bringing total franchise backlog to 26 locations. Sylvan continued to perform well in the second quarter and delivered comps of 3.7% as it heads into the slower summer month. Sylvan opened one new location and sold seven new franchises in the quarter bringing its backlog to 20 units.

Pet Supplies Plus generated system wide same store sales comps for the second quarter of 5.8%, franchisee comps grew 7.1% in the quarter, Badcock & More stores grew 4.2% for the quarter. PSP continues to accelerate its growth and brand building with eight new store openings and the sales 20 new franchisee area development agreements in the second quarter, bringing total backlog at PSP is at 230 locations. The acquisition of Wag N' Wash has been going well and it’s almost integrated into the PSP system. There has been strong interest in the concept and we believe we will be in a position to capitalize on this demand later this quarter when we expect the Wag N' Wash FTD to be approved.

Vitamin Shoppe comps were up 2.1% in the second quarter due to continued increases in store traffic and increased customer interest in sports and nutrition products. Direct-to-consumer accounted for approximately 24.8% of the business in the quarter. Franchising continues to build momentum with eight stores sold in the second quarter, bringing backlog to 20 stores. On a consolidated basis for the second quarter of 2022, total reported revenue for Franchise Group was $1.1 billion, net income from continuing operations was $41 million or $0.94 per fully diluted share. Adjusted EBITDA was $103.4 million and non-GAAP EPS was $1.19 per share.

FRG’s overall financial results included the financial results of all acquisitions from the date of acquisition. In the second quarter, and for the first six months of fiscal 2022, all six business segments were fully included in our results and are detailed in our press release and filings. We are still in the process of transitioning consumer finance at Badcock from in-house to third party partners and have excluded the non-core results of the finance business from adjusted EBITDA and non-GAAP EPS.

While we count pro forma in the income statement for consumer lending, the balance sheet continues to reflect securitization debt and accounts receivable despite most of the receivables having been sold to third parties. Once we discontinue originating customer loans we believe that securitized receivables will be accounted for as a sale and the related assets and liabilities will no longer be reported on our balance sheet.

We ended the quarter with approximately $1.1 billion in outstanding term debt and cash of approximately $95 million. During the quarter, we increased the size of our ABL revolver to $250 million and had approximately $130 million of availabilities remaining. All of our debt is [over] based and with the recent increase in interest rate, our cash interest expense increased accordingly and is expected to cost an incremental $10 million dollars annually.

In conjunction with our balance sheet and business performance, we believe we have sufficient liquidity to continue to meet all of our obligations and support all of our businesses for the foreseeable future.

Operator, please open the line for questions. Thank you.

Question-and-Answer Session

Operator

Thank you. At this time, we will conduct a question-and-answer session. [Operator Instruction] Our first question comes from the line of Larry Solow from CJS Securities.

Larry Solow

Great, good afternoon. Thanks, guys. Thanks for taking the questions. First question just on high level on guidance. I know you don't guide specifically to the businesses but and clearly the biggest driver here is the furniture business. Is it really specifically American Freight? Is that, I means, is that like the lion’s share of this deduction or is there anything else coming out at all in your general outlook that's significant?

Brian Kahn

Yeah. Well, I'd say that the balance - American Freight has had the greatest impact from inflation. I think a relative guidance, overall. The rest is really just noise. There's minor pluses and minuses in the other businesses, but it's really amounts to noise outside of American Freight.

Larry Solow

And even Badcocks’s is - I’m just trying to get my hands a little bit better on that, because I know you've taken out the EBITDA contributions from the lending piece of it. But this 25 - and I think you've done like $50 million year-to-date EBITDA or something close to that. But I thought that the run rate number was more like $60 million, because you had a little excess last year from government stimulus that you saw and then obviously taking out the lending business. So I'm just trying to get my hands a little bit better on because the Badcock numbers were actually a little bit, the first two quarters were actually kind of better than - a little bit of an offset to American Freight, which was obviously worse. So any thoughts there on what sort of an annualized EBITDA number could look like or should look like? Is there anything artificial or one-time in this quarter?

Brian Kahn

Yeah, now, it's a good point. That's why I said that the rest of the businesses combined, to be noise. Badcock on an overall EBITDA performance in the first half of the year, outperformed by a little bit versus what we would have expected but Badcock is a home furnishings business as well, as it says in its name.

Larry Solow

Yeah.

Brian Kahn

And it's seeing a lot of same inflationary pressures, not quite to the same extent at American Freight. American Freight, their unit cost and their average selling prices are significantly below that of what Badcock and Badcock is pretty deep value, as well. So American Freight is seeing more of it. We obviously set our projections for the year giving Badcock a cushion as well. So it's important that you understand that all of the home furnishing businesses are seeing the same inflationary pressure. But as far as the impact relative to our financial projections for FRG as a whole that bridge really comes from American Freight.

Larry Solow

Right. But it seems like -

Brian Kahn

The magnitude for what you're thinking about for Badcock though is directionally correct.

Larry Solow

Right. And just correct me if I'm wrong, because it seems like American Freight, it’s cheaper furniture that's much more sensitive to price both on the fact that your freight expenses are now significantly relative to the overall price of the goods but more importantly, your customers who normally you're attracting are now being basically priced out. It's not a normal type of recession, usually prices are lower, not higher. So that consumers get hurt more?

Brian Kahn

Totally correct for a lot of reasons, look, American Freight, if you look at their freight costs that are loaded onto the product costs compared to pre-COVID, the last couple of years don't really give you much in terms of really good information, but their freight costs are up almost 200% from where they were.

Larry Solow

Right.

Brian Kahn

Badcock is up more order of magnitude 50%.

Larry Solow

That’s a big difference there.

Brian Kahn

So, yes, there is a very large difference and you're also correct that at American Freight, the - what you would typically see is in a recession, you would see the lower income customer, everybody, the jobless rate going up, unemployment is increasing. So you have a trade down, the higher income customer now becomes your customer and the lower income customer who you may lose is replaced, that's not really what's happening now. We're not seeing unemployment go up. What we're seeing is the low income customer having their wallet squeezed. And then we're compounding their problem as we've been increasing our prices as we've been getting price increases from our vendors. We're very - we're not doing that again for the back half of the year, which is part of the reason for our guidance. As we continue to increase prices to that low income consumer, we're just having more and more customers say, no, I'll wait. So you could increase the pricing, you're going to end up taking more from the customers who continue to buy from you because you'll just lose more customers. And we've got 370 stores going to 1300 stores. It is an opportunity for us to get back into being that value of home furnishings business that has spread by word of mouth.

I think you know that the American Freight stores are not a performer [mainly] because they don't have to be. The best form of advertising for American Freight is word of mouth because you get a great deal and then you hear about it from a buddy, and then you go to the American Freight store. Well, if all of a sudden, American Freight isn't offering those great deals, that could end up having a bigger impact. So we're just not going to increase prices, we're going to eat the cost increases that we have embedded in the inventory now. We see costs coming down and in some cases, very significantly. We have one of our larger and better vendors, decreasing prices, product costs 30% to 40% in major categories. So we'll shift our purchasing as much as we can to those vendors that are reducing their prices as dramatically as that and see where we go.

On the other hand, the higher income customer, he or she is not losing their job. So they don't need to trade down. And we see this quite a bit in the applications. Again, we use a third party virtual rent-to-own provider and we see in the applications that a score of 600 or more and FICO scores are actually the applications are up. So it shows you that that customer is fine. The scores below 600, we're seeing applications, just applications forget what actually gets completed, applications are down on average over 20%. And the lower the FICO score, the bigger the decrease in applications. So you're absolutely seeing it and it's very clear to us and we're not going to do anything to make it worse for that customer because that customer - we want that customer to be a customer for life.

Larry Solow

Right now I appreciate all that color. Can you just briefly, switching gears on just Vitamin Shoppe, Pet Supplies, I think you mentioned like 2%, 6%, or maybe a little bit less on the same-store growth. Are those numbers, they're aided by price, I imagine, right? You get some decent price at both of those companies. So just trying to figure out what that sort of volume growth or what that are at Vitamin?

Brian Kahn

It's not as dramatic. The inflation is not nearly as dramatic in either health and wellness or pet supplies as it is in home furnishings. Units, year-to-date, both at Vitamin Shoppe and PSP - traffic down at PSP, units are down at Vitamin Shoppe, but pricing is up. But you're talking single digits on both sides that end up leading to positive same-store sales. PSPs got higher sales, but lower pricing.

Larry Solow

And PSP - I mean because usually you get same-store, historically pet supplies has kind of - pet industry has grown but we have heard that there is some less like people buying the dog food and the food but some less of like the bones and more discretionary stuff. Have you guys seen that also?

Brian Kahn

Absolutely, absolutely.

Larry Solow

Okay, right, Okay, great. Just lastly, just a quick comment. I saw that - nice to see - encouraging to see that you've added good up to 20% in Vitamin Shoppe and I think 26% backlog for franchise because I know both those businesses were basically starting at zero, just like last year, right? Or close to zero, so good to see that start to pick up, that's it, thanks.

Brian Kahn

Yeah, you got it. Thank you.

Operator

Thank you, and one moment. Our next question comes from the line of Michael Baker.

Michael Baker

Okay, thanks. Can you hear me guys?

Brian Kahn

Yeah.

Michael Baker

Great. All right, so first, I'll start off. I guess I'd be remiss if I didn't ask you about Kohl's. You have put out some press releases regarding that, so I think its fair game. In some ways, it fit your criteria of what you might buy just because of the cash flow generation and the fact that you could sort of buy it without any incremental equity. On the other hand, Franchise Group, it doesn't feel like Kohl's is a franchise model. I guess, can you explain the thought process? You know what you were thinking to even be involved in that. And then what - if you want to, and so why it didn't work out? It seems like a good fit, ultimately what happened?

Brian Kahn

Yeah, good, good questions. And yeah, I’ll make a couple comments, I think can help you. You're right. First of all, we don't view Kohl’s as a franchisable business and we struggled, the first couple of times we were approached with the concept. It didn't really make sense for us because it didn't fit Franchise Group as a franchisable business. But ultimately the - it was the structure of what was proposed to us that just the transaction structure that was too good to ignore. If we have the opportunity to have to engage in a transaction that brings that much potential cash flow to Franchise Group without actually having any net cash investment risk out of FRG, that kind of transaction, we have to at least explore.

Ultimately, and I know we did put out a couple of releases, one outlining what we might do, and then also saying that we weren't going forward. But ultimately, the goalposts moved a little bit from where we started as far as not having any net cash investment risk out of FRG. But it didn't move by so much that it made sense to just walk away from offhand. I think we, if we had proceeded, it would have been a structure where we would have had, at a minimum, all of our risk, all of our cash risk, paid off very quickly, months, not years.

And then, ultimately, the goal would be to use that free cash flow to accelerate the growth and diversification of Franchise Group with franchisable businesses. Yeah, obviously, the transaction did not go forward. I think we are likely to see a lot of benefit from going through the process, but not a transaction that we ultimately culminated.

Michael Baker

So I guess, I guess a follow up to that would be, what now, plenty of dry powder. That was going to be a big one, you were willing to do it, it didn't go forward. So now you presumably have a lot of dry powder. So how is the acquisition pipeline now? Is it better because businesses are struggling? Is it worse because maybe it's hard to get financing? And how should we think about the next steps for Franchise Group?

Brian Kahn

Yeah, well, all of the above is correct. I think that the environment, there's plenty of opportunity, plenty of fish in the sea, plenty of opportunities for us to explore, some bigger, some smaller. Look, our lenders, and I mentioned them in the script. Our lenders were fantastic in that transaction. And I have to say, as I sit here today, I think our lenders are probably more disappointed than we were even that the transaction didn't end up going forward. I mean, they were there for us, and they're very anxious to help us with whatever comes next. And we're going to take them up on that. I think we're certainly back within our comfort zone as far as leverage even under levered. If the right opportunity comes up, I think that we will be prepared to take advantage of it for sure.

You're absolutely correct those capital markets were quite chaotic. The cost of capital is extremely high generally, to the extent that our cost of capital is going to be high, that's the threshold for what we're going to need to get in return for accepting that cost of capital the threshold goes up as well. But, yeah, look, I think that this environment that we're in has and will continue to create more opportunities. And, as we've discussed many times on these calls before, there's an opportunity cost to doing that next transaction, because it's - if you're going to lever up, we need to de-lever before we can really engage in anything else meaningfully after that. So I think we're going to be very mindful about what that next larger transaction is. And while we're at it, we can certainly look at tuck-ins and other verticals to add on a smaller basis.

Michael Baker

Makes sense, thanks for that. If I could, sorry, one more, just switching gears. On American Freight, one thought is that this was a little bit perhaps a recession - I don't won’t call it recession proof, but a recession resistant model, I guess it's turning out not to be the case but if you could just talk about the long term expectations, if you will, for American Freight, why this is still a good business. And part of that if you could talk about the idea that inflation now coming down, when does that start to flow through the P&L? Presumably from your guidance, not this year, it sounds like for the process maybe next year but if you could just delve into that a little bit?

Brian Kahn

Sure, yeah. And you're correct. We do believe American Freight is recession resistant. And I think that the problem is, this is not an actual recession. In a recession, where you're going to see unemployment rates go up and that impacts lower income, middle income and higher income customers, this is really just an impact of inflation. This is - I'm not sure what the right term would be. But this is like really standard deviation type inflation that we're seeing. And unfortunately, it's not a recession. I think in a good old fashioned recession, you'll see American Freight perform very well. And someday there will be another good old fashioned recession.

The American Freight in my mind is, still it's the best unit economics of all the brands that we have, right now. There's a ton of demand from franchisees, we're limited by finding real estate and being able to get stores open. And as I think, it's the only brand that we have, where we are as eager as we can be to even open company-owned stores. And part of our plan is open company owned stores every year whether we end up ultimately refranchising those or not, but whether it's two years, three years, five years, 10 years from now, American Freight is ultimately likely to be the most valuable business that we own contributing the most free cash flow of any business that we own today, that is of course. And it really is a fantastic business. It's just been hit with quite a storm that makes it very deep value products, not so deep value in the customer’s eyes, and our main customer can't afford the product.

So we're seeing - that if I told you we would be seeing units in furniture and mattress down over 50% compared to pre-COVID levels, not COVID peak, pre-COVID levels and the business would still be generating the EBITDA that it's generating. I don't think I would have believed that myself but it is. That's just how good of a business it is. It is withstanding, as I said, at least three standard deviations of chaotic performance right now.

Michael Baker

Understood. Thanks for the color.

Brian Kahn

Sure.

Operator

Thank you. And one moment for our next question. Our next question comes from Ian Zaffino at OPCO.

Ian Zaffino

Thank you. It's Ian Zaffino from Oppenheimer. A couple of questions here. I guess the first one - I guess you explained the comp or the same-store sales slowdown in Pet Supply. It seems like the traffic was down, also discretionary was weaker. But can you tell me why that traffic was down, what you were seeing there? And then also Vitamin Shoppe, I guess, also decelerated. What was that attributable to on a same-store basis? Thanks.

Brian Kahn

Yes. Thanks. Thanks, Ian. And I think that it's really across the board. Although the - I know, we spent a lot of time talking about the home furnishings business because the inflation there has been such a - had such a dramatic impact. But across the board, you know what, you're still seeing the average consumer for all of our businesses, seeing food and energy inflation and the cost to fill up the tank is greater and they're trying to limit the number of trips to any store, that would include Vitamin Shoppe, that would include Pet Supplies Plus. I think that's why even though we're seeing the traffic down at PSP, we're seeing still higher average ticket prices and that's what's leading to the positive revenue comps. Vitamin Shoppe, same thing, people are making fewer trips to the store, their units are down, tickets up, but the units per transaction are actually down as well. So I just think that it's across the board.

Look, Sylvan, even as we get into this summer, customers are taking vacations that they didn't take last summer. And so utilization is down, so comp up clearly but utilization is still lower. So I think it's really across the board. Buddy’s, its same dynamic, we have fewer customers per store that are paying more on a monthly basis than they're used to paying. And so the business still generates plenty of cash, the business is doing well but there's a lot going on underneath the scenes we’re under the covers with the actual customer activity.

Ian Zaffino

Okay, perfect. And then also, stock is well off, it’s high. We'll finally see some more downside coming up, any consideration of a meaningful buyback here? Or anything like that as far as return to capital, take advantage of where the share price is at this point? Thanks.

Brian Kahn

Yeah, so we authorized, at our two Board meetings ago, we authorized a $500 million buyback over the next few years. We did not intend to do a 10b5-1. We want to be strategic about when and how much we acquire. Certainly, it is something that we - just say we've not had an open window, still don't have an open window. We didn't have an open window because of the Kohl’s transaction and then we got into the quiet period. So we haven't had an open window yet to speak of but, look, we will - we now have the ability to weigh, buying more of our existing businesses against buying other businesses that's not a tool that we've had in the toolbox before. We have it now, we're very excited about that and I don't think anybody knows our businesses better than we do, which is a good thing. So I think we'll be opportunistic as we can be.

Ian Zaffino

Okay, thank you very much.

Brian Kahn

Sure.

Operator

Thank you. I would now like to turn it back to Brian for closing remarks.

Brian Kahn

Great. Well, thank you very much for joining us today. And operator, please end the call.

Operator

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.