Good morning and welcome to Dave & Buster's First Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. . Please note this event is being recorded. I would now like to turn the conference over to Michael Quartieri, CFO. Please go ahead.

Thank you, operator. And thank you all for joining us today. Joining me on today's call are Kevin Sheehan, Interim Chief Executive Officer, and Margo Manning, Chief Operating Officer. After our prepared comments, we will be happy to take your questions. This call is being recorded on behalf of Dave & Buster's Entertainment Incorporated and is copyrighted. Before we begin our discussion on the company's results, I'd like to call your attention to the fact that, in our remarks, our responses to questions, certain items may be discussed which are not entirely based on historical facts. Any of these items should be considered forward-looking statements relating to future events within the meaning of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Information on the various risk factors and uncertainties have been published in our filings with the SEC which are available on our website. In addition, our remarks today will include references to financial measures that are not defined under Generally Accepted Accounting Principles. Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings announcement released this morning, which is also available on our website. Now, I'll turn the call over to Kevin.

Thanks, Mike. Good morning, everyone. We're very pleased to report yet another quarter of outstanding financial results. We set records for revenue, net income and adjusted EBITDA in the first quarter, reflecting both progress toward returning to a normalized operating environment and our success in driving top line growth. I'm so proud of our teams as they have enthusiastically welcomed back guests to our stores. We're excited about the trajectory of the business and. in particular, the next few months as we begin our summer of games rollout and other traffic-driving initiatives that we are confident will drive even more visitation to our stores. As demonstrated by our first quarter results, our teams continue to execute on our initiatives to drive organic growth, improve profitability, and produce significant cash flow for the business. We have significant upside potential. And with our continued focus on innovation, growth and value creation, we can deliver on that potential. You can tell I'm very excited about the future of this company. We're optimistic about the state of the business and look forward to sharing our ongoing progress in coming quarters. At this time, Mike is going to cover the first quarter results. After that, our COO, Margo Manning, will update you on the operations. Then I will return with some final comments. Mike?

Thanks, Kevin. Our record first quarter results demonstrated our ability to drive revenue, profitability, and strong cash flow despite continued headwinds in the economy. We continue to benefit from a higher mix of amusements and a leaner operating model. While we are still experiencing pressures from wage and commodity inflation, our margins continue to improve as we have offset inflationary costs with a more efficient labor model. cost savings and efficiencies and thoughtful pricing actions. In the first quarter. comp store sales increased 10.9% compared to the same period in 2019. Our walk-in sales continued to post strong comps, up 14.7%, while our special events business continued to lag down 34.6% compared with 2019. However, this showed sequential improvement from the fourth quarter and we believe this part of our business is recovering. When looking at our overall comp store sales by month, in the quarter, February was flat due to the Omicron variant, March was up 12.5% as a substantial portion of the COVID restrictions were lifted in advance of the spring break season, and April was up 21.5% which was helped by the return of our eat and play combo promotion. Our uplift in comp store sales has continued during the first five weeks of Q2 as overall comps are up 12.2%. Regarding sales mix, amusements and other had a positive 23.8% comp and was 66% of our overall mix compared with 59% of our mix in 2019. This was mainly due to minimal discounting and a continued shift to higher denomination power cards. F&B had a negative 8.1% comp compared with 2019, a substantial portion of which was due to the softness in the special events business, which we believe is starting to rebound. Adjusted EBITDA for the quarter was a record of $143.2 million or 45.8%…

Thank you, Mike. And good morning, everyone. We continue with our commitment to simplify store operations, improving our guest experience and enhancing our food, beverage and entertainment offerings to drive sales and profitability. In Q1, we brought back one of our most successful promotions. Our eat and play combo ran as a limited time offer for the length of April to capitalize on pent up demand from our more value-oriented guests. We saw sequential comp store sales improvement in both food and beverage throughout Q1 with the comp food items count turning positive during the eat and play combo campaign window. In late May, we completed the brand-wide rollout of reservation capabilities to make it even easier for our guests to dine with us. Guests can now reserve a table in our dining rooms directly through the D&B website or via OpenTable. Our stabilized staffing levels have put us in a better position to serve our guests. We are already seeing the benefits of our now fully implemented service model that allows our guests to choose their service experience. The data pulled from our guest satisfaction tool showed our overall guest satisfaction and Net Promoter Scores hit a new high watermark in May. Our new beverage menu launched in January was designed to expand both reach and appeal. We're proud to share this new beverage program was recently recognized at the annual VIBE Conference as the best overall program for multi-unit operators. In Q1, we started our efforts to revitalize our late-night segments through a combination of marketing and programming efforts. Our late-night happy hour initiative includes reduced size of popular acts as $5 Late Night bites and an enhanced late night vibe with live streaming DJ sets and exclusive visuals taking over our screens and our in-store airways. Q1…

We are pleased with the record results we delivered in the first quarter. We’re seeing guests returning to our stores, our special events business is recovering, and I'm confident that in another few months we will be in a much better place as the core business returns and we increase our efforts on corporate events and a logical extension. We've been able to offset inflationary pressures from labor and supply chain with more efficient labor model enabled by technology, lean process improvements, proactive menu price adjustments, and more effective marketing investments. As a result, we've improved margins even though we've experienced some headwinds in our business. We're extremely excited to add Main Event to the Dave & Buster's’ team. Their strong management team and strategic fit with our company provide for even more growth opportunities for both brands, which will benefit all stakeholders. We expect to close the transaction in a couple of weeks, and we will schedule an investor update shortly thereafter. At that time, we will detail the compelling merits of the transaction, our integration efforts and all of the value creation initiatives already being teed up. As I've said before, we have an exceptional business model, strong assets and a talented team. We are optimizing the performance at our existing stores and are achieving best-in-class average unit volume, store level margins and solid returns on our new stores. We're broadening our entertainment offering to include more immersive sports viewing experience, including improvements to the watch environment, and we're looking forward to the addition of fantasy sports and the sports betting option in markets as permitted. We're optimistic about the summer games which rollout and will be supported by a significant marketing campaign. We're progressing with our refresh/remodel program to give our existing stores a fresh look. And…

. Our first question is from Jake Bartlett of Truist Securities.

First, Kevin, I'm hoping you can you can build on your last comments there, just in your experience at the helm of the company. You're looking at the company from a different perspective than your position on the board. How has that perspective changed as you dug in to the nitty gritty and what do you think the greatest opportunities are going forward?

I think as those of you that remember the very first call that I was on, I looked at this as a great opportunity. Steve and Brian were great CEOs. But sometimes when you get a new person coming in with a fresh perspective, it can change everything. And I had always talked to you guys about taking a clean sheet of paper and trying to determine the art of the possible, not only on running the business, but on each and every opportunity. And you heard me go on early on about, hey, what do we do with each day of the week, what do we do with the hours of the day, how do we spike the demand across the board? And these are enormous opportunities. And we've taken advantage of quite a few, I would say. And if you look at it, we're probably in the latter part of the second quarter of the football game where we're going to get an opportunity with Chris coming in to take a halftime huddle and re-spirit everybody and refocus and drive on all the initiatives that are still there. But if you think about – we've got initiatives that we haven't announced yet on Monday, we've got late nights that Margo talked about which is a huge opportunity to get back to where we were, but not only that, to make it a more interesting place to come. We've got opportunities on what we're calling a date night. We think there's a big opportunity there. Is there any more comfortable place to come on a date with someone and if you get bored be able to kind of go play games and recover and then come back after you play a little bit and be more comfortable in your…

My follow-up question is on what you're seeing from the consumer. There's obviously some commentary out there that the lower income consumer is pulling back on some spending – I would think discretionary spending in terms of your brand. What have you seen from that lower income consumer? And then, building on that, in terms of April and the value inserted with the eat and play, was that something that you're going to try to kind of increase or could turn that lever on a bit more as we go throughout the quarter? So, it's really what you're seeing from that lower income consumer at your concept and then how you think you're going to respond to it?

Yeah, it's funny you say that because we're not seeing it at all at this point. And my comments about even looking at yesterday's revenue report, it's just very, very consistent and orderly across the organization. And so, what I also said earlier about, as we roll out these new programs, if there is any change in consumer spending, which we're not seeing at this point, these new initiatives will go to offset that. And I expect that we're going to ride through this and then have the extra energy as we come through it. So, that's the way I look at it. And I also think, even little things like the events business that we talked about, we still have another 4 percentage points that would improve top line as that comes back. And we don't see any reason why that's not going to return to its normalized level as we get through into the fall and the late fall. And then, the energy that we've got around – and this is something that Margo and Mike and I have been working on with the team is we have this great proposition that would be super for corporate accounts to come and have their events in our stores. And it's a heck of a lot better than going to a smug hotel where you're paying up the nose to have their event room and you buy a bottle of water, it's eight bucks kind of thing, to coming in and having a joyful event and coming to Dave & Buster's and having the meeting and having food and then having everybody share in having a lot of fun out in our case. So, we think there's a huge opportunity there too. So, that's just one area. But we have an enormous number of opportunities that we are now – you go from the point of where you're afraid to be successful to the point in which you start to see that you can be successful. And it's like the tipping point. And all of a sudden, the inertia of this team, you can see it's very different. And the equity program for the general managers, they're all seeing their opportunities. So they drive in. They don't come to work and just operate the business. I'm not saying they did that in the past, but they come in with the extra step in their motion that is going to drive that incremental benefit as we move forward. And I’ll leave it to you guys. Anything else?

Yeah, I'm just going to add – this is Margo – that with the stabilized staffing efforts, one of the things that we've been able to really get back into in a pretty meaningful way is our local school marketing initiatives where our GMs are going into their individual communities and looking specifically for more opportunities that they can drive into the stores. So, I think that with the ability to pull some of the levers for off-peak to drive in more value oriented guests, I think we're going to be well positioned to go through the summer.

The next question is from Nicole Miller of Piper Sandler.

Could you talk a little bit about the continued sequential improvement in the special events? I was wondering about the why and the how. Curious if the why at all would be tied to the box office. There seems to be some decent movies. And I know I just hear anecdotally, around my own self, a lot of people heading to the theater in that direction and you could be a good place to go before or after. Nonetheless, how is it improving? Meaning, like who's coming in, the exact same guest? Or is it a different profile, doing something different at a different time?

I'll jump in and then I'll let you join. One of the things that we have done over the past couple of months is we invest into our special events structure with a very specific objective. And what we've done is bring in stronger sales individuals that go out and are actively soliciting business. And Kevin alluded to going after corporate business. So, that's one of the things that we have a sales team very focused on, re-engaging with past corporate business and uncovering new corporate visits. And we're starting to see some great traction with our outbound efforts. And so, we're encouraged because we feel like we're sort of at the tip of the iceberg on what we're seeing there. But in terms of the business coming, we're seeing social business coming back and we're most encouraged about the corporate business. Kevin, do you have anything you want to…?

I think on your point around the summer season with movies, we are located in the same center of the number of movie theaters. So we do get that extra draw of people coming out of the movie theater, it's 9 o'clock, it's a little early, what do you guys want to do? They are able to come into Dave & Buster's and enjoy a couple of games a cocktail, a late dinner, or a few appetizers at that point. So there is a good pickup of business there. But it's just like any other event. We've also done some things where we've kind of become the point of gathering before other events, whether that's a concert event or things to that effect. So, we are seeing a little bit of pickup in that piece, which is really just about it's summertime and people are getting back out and moving.

Mike, just one thing on that, you're starting a conversation with a big events business to see if we can transform that into a mutual benefit between the two companies. And the other comment that Margo made on the corporate thing. And I'd say the important distinction now on corporate is – and I remember this from when I was CEO of Norwegian Cruise Lines. There are the order takers and there are the people that go out and fight for new business. And they're very different people. So, we’re delineating the type of person on the corporate accounts that are in receipt of getting orders for events and the ones that are going out and finding new events. And I think that's going to make a big difference for us as we move forward.

Just a final follow-up question more on the numbers. I appreciate the detail around comp and certainly understand the message is continued improvement. Just from a modeling perspective, can we get comps for 1Q 2022 versus 1Q 2021. So, if you could share – and if it's out there, I just missed it and I apologize, but the food and bev comp again, 2022 versus 2021 and the same for amusement?

Yes, 71%.

71%. That was on food and bev or total.

Total.

.

No, I know they're big numbers. . That's how the models kind of tick and tie. 71%, total. Okay. All right.

The next question is from Andrew Barish of Jefferies.

Just one for me. Also, modeling-wise, just level-setting on – if you could give us the average weekly sales , what that's running much if any kind of seasonal drop off versus the 1Q because, historically, average weekly sales do go down slightly in the 2Q but, obviously, it feels like things are pretty strong right now and a lot of programs still rolling out.

Just to give you a little bit of perspective, so in Q2, usually, it’s around about – let's just say for the first five weeks, we were $186,000 has been the average so far. And as we look further into the quarter, we expect that to pick up slightly because you are starting to now get into its full time summer season, kids have graduated, so you do get that just normal, I'm on vacation or the staycation, kids are done with school. So you do get a little bit of that pick up on an average basis throughout the course of the rest of the summer.

Is that total or comp AWS, Mike?

That's total there.

Secondly, can you give us a sense of how the pricing increases have been received by the guests, particularly on the game? Because that was something that was relatively new to the strategy. Was there any shifting around of gameplay that you saw because of pricing or anything you can share with us?

No, there really wasn't much of a change. I think the biggest impact was back in October when we increased the entry point at the kiosk level, which at the same time really wasn't necessarily a price increase because the consumers still got the same number of equal value of points in relation to the dollars that they were spending, but they would just play the card and finish the card, so you would get that incremental revenue. When we change some of the pricing at the game level, it just means that the card is being utilized faster. The uptick there then is the opportunity, are they recharging? And there's been a little bit of increase with the recharges, but not of a significant nature.

And if you're asking about was there a shift between redemption and non-redemption games, I'm not sure if that's your question, we didn't see anything significant there in terms of shifting in categories of gameplay.

That's exactly what I was thinking about, Margo. And just finally, can you give us a sense on the smaller prototype? I think that Sioux Falls was your latest. Just kind of what you're learning from there and how .

Andy, you're breaking up a little bit. So, I'm not sure if I heard all of it. But you're asking about the mini format and how it's performing. They're performing really well. And I'll just give you, from an operational perspective, they're a dream to manage, just flow really well from the guests. It’s really very easy for us to serve the guests because of the design layout. And we're very happy with it, and you'll see more of them.

The next question is from Chris O'Cull of Stifel.

This is Patrick on for Chris. First, Michael, I wanted to follow up on that last question. But hoping you can help us understand just from a little bit wider perspective, the composition of the comp performance in the quarter and the breakdown between traffic and check just to get a better understanding of sort of what foot traffic is looking like relative to pre-COVID levels at this point.

From a traffic perspective, it is lower than what we've seen pre-COVID. But it's steadily improving. If you remember, right, the company, basically like almost every employer, closed every store and has been rebuilding that business ever since. So, we're finally at the point today where we've got our full staffing model in place. We're up to full operating hours. Margo touched a little bit on late night happy hour, which is a great piece of business for us. And so, from that perspective, when we measure traffic and the fact that the number of items sold, it is lower than what we've seen pre-COVID, but the price of the check is more than offsetting that.

Obviously, the labor line looks stellar this quarter, which is great. And I know that's partly driven or maybe wholly driven by the improved labor model that you guys have implemented. But I'm also curious if there's a portion of that just indicative of the fact that sales may have picked up even faster than you were expecting. And so, I'm curious if there's an underlying need to potentially as labor hours going forward, and just how we should think about that line as we as we think about how the rest of the year should look.

Yeah, we are definitely benefiting from the mix shift into amusement. So, if you think about amusement and its profit margin, very little labor is in there. It's the machine techs and a few folks walking around making sure everyone's having a good time and attending to the games on the floor as opposed to the food and beverage where you've got servers, bartenders, food runners, the whole kitchen staff. So, the labor model is dramatically different between those two pieces of business. And given the shift to 66% versus 59%, we are definitely benefiting from that. But at the same time, we did take that opportunity to introduce the tablets, ex dine and other labor efficiency initiatives on the F&B side which has helped us be able to continue to serve those customers with a more efficient labor model. So, we are benefiting from that as well.

The next question is from Jeff Farmer of Gordon Haskett.

On the late March earnings call, you had said that you were at roughly 95% of pre-COVID levels on the operating hour front. And a question you just answered, you said that you were closer to full operating hours. So, I'm just curious what full – how you define full and when did that happen for you guys, when did you get to that “full level of operating hours.”

This is Margo. In terms of getting back to the full operating hours, we did it in a phased fashion. As the stores were getting back into the staffing levels that we needed, we would push the hours back. So, it's not like there's one date when every store was back to the full operating hours. We did it in a phased fashion through the quarter. But I'm going to say, by mid to early May, we had all the stores back to pre-COVID hours. And I'm doing that from memory, so I'd give and take a couple of weeks.

Just remember, the traffic lags that, right? You're going to make sure everybody knows we're open those extended hours. And that's the initiatives that we're taking on right now to make sure that this is a place to be for late night as an example, but other time parts as well.

Moving on to a separate topic, loyalty, you shared some color there, specifically on your loyalty membership ranks, including the active ranks. But what I was looking for was, in terms of – I guess what percent of your sales to these loyalty customers represent as you're renewing changes there? Do loyalty members have a greater visit frequency? Anything of that nature that you can provide would be helpful to help us really gauge how impactful this loyalty program has been on your business.

I don't have that information with me. I will tell you, as we're building that program, it's a smaller percentage of the sales right now, but we're excited about the opportunity to leverage it going forward. So, you'll see more from us in the upcoming months as we have our marketing department maximize that opportunity.

Yeah. Just to give perspective, when I walked in the door, it was just recently being launched. We cleaned up the back end of it, we kind of juiced it and got it back out there. So, the fact that we've got 3.65 million users and probably this thing has been rolling out for about less than six months, it's pretty remarkable for the company that we are and the type of clientele that we have. So, it is in the very early stages, very early innings. And there'll be a lot more to come as our marketing team gets to use this asset, which, as Kevin alluded, when we start talking about organic growth, this is just one more arrow for us to have in our back pocket to utilize, to drive organic growth. And in times of – if the economy does slow, this is another opportunity for us to be able to pull to bring more customers in to offset that.

Just one more. So, it's been roughly 18 months since the company first reported, I think it goes back to the September of 2020 earnings call – don't hold me to that – but you guys were in discussions with a potential sports betting partner. Can you just help us understand the hurdles to moving forward with partnership or anything else we should be thinking about as it relates to a partnership with a sports betting firm?

As you know, the landscape for sports betting has changed quite a bit with some of the names that you know that are in the space and how the reactions in the market has been to some of their results. Having said that, we've broken down this whole sports betting and fantasy sports and it’s also states with lottery that runs the sports betting aspect. So, we're on the path of now having it – and we're not going to rush it. But I think we're very, very close. And we've got an announcement coming with three or four different agreements that, together, I think drive a really fantastic opportunity for this company. We're spending in process millions of dollars just making sure we've got all of the audio correct in all of the sports sections of the stores. And that'll be all done before preseason. So, we'll have the right sound systems, we'll have the right environment, and then we will have this opportunity that should hopefully drive quite a bit of traffic. And as I said early on, once you get these people in for sports betting, they're going to stay longer. And that's the real economics, is another opportunity on the traffic side, they'll stay longer, they'll have another drink or two, they'll have an appetizer. And so, the spending behavior will be exactly what we're hoping for. And so, I would say stay tuned. And you will see this in short order. So, just looking at the landscape a little bit, we've got Main Event probably a few weeks away, we've got sports betting coming. So, we've got a lot of very positive announcements for this company coming down the path.

The next question is from Andrew Strelzik of BMO.

My first one, I just wanted to follow up on the on the loyalty profiles question that was just asked, and maybe from the angle of those that are not active, it seems like it's a big percentage. So, I'm curious, is there anything that you guys are actively doing to bring those people back? And maybe it's a function – you said, it's only been six months. Maybe it's a function of the frequency. But is there anything specifically that you're doing to motivate those folks who are obviously prior customers to return?

Look, the great thing about the app is it allows you to have one-on-one communication. And that's what our marketing team is now gearing up for. They have the opportunity now, they have the tool, we're starting to gain the data. As Margo said, 1.9 million of that 3.6 million are active users. So they're on the app within the last six months. And so now, we've got a group of people to now specifically target to get them back into a Dave & Buster's.

Maybe another demographic question. I know early on in the recovery, it was mostly the kind of play together young adults, I think is the kind of the term that the companies used historically, versus kind of the families with children. And then maybe it evened out at some point. So, I'm just looking for an update on that. I'm trying to think through what that could mean longer term for the amusement mix. And now, obviously, with the announcement with Main Event and, obviously, skewing towards the younger customers, are you seeing that lag in your stores or just broader thoughts, which cohorts are driving the recovery?

I’ll start and then Margo and Mike can take it over. But that's the whole basis for the transaction. We found this diamond in the rough actually that enables us as we move past the closing date to differentiate the customer base a little bit, whereas Main Event will have more of the families, little kids and we'll have more of the families, teens, and young adults and adults. So, as we move forward, we'll be able to get a little clearer on that definition, which should drive each of those populations of guests in a powerful way to each brand.

And I was going to say, as you're moving into the summer months, you'll see some seasonality come in. So, you'll see an influx of families as we typically do. You see that during the spring break months. But our guest face in our stores looks a lot like it did pre-COVID. We're seeing families that are coming in stores that skew families, we're seeing adults come in the stores that skew adults. And then, for most of our stores, it's a blend. And so, we are, to Kevin’s point, excited about the opportunity to be more prescriptive and more surgical in how we market to the adults and leveraging the Main Event ability for us to capitalize on family. So, we're excited about that. But, right now, you're seeing the guest face in its fullness return to Dave & Buster's.

The next question is from Brian Vaccaro of Raymond James.

I just wanted to circle back on the quarter-to-date average weekly sales. Sorry, I think my phone broke up earlier in the Q&A. Did you say that average weekly sales was $186,000? And then, Mike, could you also remind us what the normal historical seasonality looks like for the last eight weeks? June and July compared to May?

Look, so for 2019 numbers, the first five weeks of the quarter were $186,000. And then, as you transition into the last eight weeks, those numbers increased to about $220,000. So it's roughly about 118%. Or I should say, an 18% increase up.

Current quarter-to-date average weekly sales are up 10% or 12% versus the $186,000, can you tell us what the quarter-to-date in the current five weeks is?

Well, we've communicated what the comps are, is up 12.2%.

On the margin front, I wanted to ask about labor. Margo, I was wondering if you could provide some more specifics maybe on the labor efficiencies that you've realized during COVID and maybe just how the new service model compares to pre-COVID, whether it be average number of salaried managers per store, server hours and average station sizes or any other metrics you think might be worth highlighting.

In terms of the management parts in stores, we were slightly reduced in our management part pre-COVID. And from an hourly perspective, I don't have a concrete, let's say – staffing levels, they're about 90% of what we were pre-COVID. And I do want to keep in mind that we do have some pockets of markets that aren't completely staffed yet. So, I'm talking about it holistically. So I just want to be mindful about – we’re excited about the new service model. It was a phased rollout also through Q1. Every store was officially live on at the end of May. The early results, I indicated, or the results that we pulled as stores have come on, have been really promising as it relates to the guest experience. So you'll hear more about us as we get fully seated in it in the upcoming months.

I guess elaborating on that a bit on in terms of the guest experience, do you have any stats on average table turns or getting food out of the window and also just maybe the percentage of guests or sales on SMB that is occurring over the mobile digital ordering system?

In terms of the mobile digital ordering, I don't have that information right now. We have the ability to track that. It's a fairly manual process and we're working to automate that. I don't have the change in that. I will tell you, in tests, when we moved to the new service model, we saw that goes down to mid-teens in terms of the number of guests that were selecting the ex-dine option. So, you had more guests gravitate towards the full experience, although I don't have the current reporting on that. So, I'm giving you information from when it was in test.

Just one last one for me. I wanted to ask about the other operating cost line. Can you help us bridge what drove the increase in spend there? I think it was into the 120s, low to mid $120 million range compared to a quarterly spend that's been below $110 million the last several quarters? And then, could you also just speak specifically to the marketing spend in the quarter and how you expect that to progress through the year?

I’ll kind of speak on the marketing aspect of it. So, remember, we did the eat and play combo advertisement within the month of April. So, there was a nationwide campaign that went along with that. That was roughly, I'm going to say, about $5 million in total of marketing spend. And so, that was one of our largest campaigns. Then you get to a more normalized level of marketing throughout the rest of the year.

And I'm not sure about the second part of your question. Can you clarify what you're asking for? It's an increase because we have more stores. I'm not sure what you're asking about. Can you rephrase that for me?

You could even look at it on a cost per operating week basis, if you'd like. But it did seem like a pretty noticeable step up sequentially in other operating costs, and part of it – appreciate the $5 million, Mike, on the marketing side, but just curious if there were any other costs that came back, whether it be repair and maintenance or anything that stood out. I just was thinking about the normalization and the cost structure of the business as we exit Omicron.

The only other aspect that comes to mind that would have enough of an impact on an individual linings basis to cover on a call would be outside services. So, if you think about that, your cleaning crews, things to that effect. And so, when you're in a tight labor market where you're trying to hire people back, it was more important for us from an operation standpoint to hire people for the frontline to serve customers, and then outsource some of that cleaning and back office type stuff. Security would be another one of those aspects. So that would have been probably the biggest contributor to that. Which by the way is also an opportunity as we get to more normal staffing levels and as we've progressed forward in this environment, for us to be able to then go look at bringing back in-sourcing that as an opportunity to improve margins at that point.

Which we've actually already started to do.

This concludes our question and answer session and today's conference. Thank you for attending today's presentation. You may now disconnect.