Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Kura Sushi USA, Inc. Fiscal First Quarter 2022 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode and the lines will be opened for your questions following the presentation. Please note that this call is being recorded. On the call today, we have Hajime Jimmy Uba, President and Chief Executive Officer; Steven Benrubi, Chief Financial Officer; and Benjamin Porten, VP of Investor Relations and Business Development. And now, I will turn the call over to Mr. Porten.

Thank you, Operator. Good afternoon, everyone, and thank you all for joining. By now, everyone should have access to our fiscal first quarter 2022 earnings release. It can be found at www.kurasushi.com in the Investor Relations section. A copy of the earnings release has also been included in an 8-K we submitted to the SEC. Before we begin our formal remarks, I need to remind everyone that part of our discussion today will include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance, and therefore, you should not put undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. We refer all of you to our SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. Also during today’s call, we will discuss certain non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation nor as a substitute for results prepared in accordance with GAAP and the reconciliations to comparable GAAP measures are available in our earnings release. With that out of the way, I would like to turn the call over to Jimmy.

Thank you, Ben, and thank you, everyone, for joining us today. I’m very pleased that we announced a strong start we’ve had to fiscal 2022 and that we are on track to achieve the goals that we shared in our annual guidance. The sales momentum we discussed in the previous earnings calls has continued into the new fiscal year, resulting in Q1 comparable sales growth of 19.9% as compared to the pre-pandemic fiscal first quarter 2020. As a reminder, our fiscal 2020 first quarter referred to the September through November of calendar 2019. We believe these comps are a demonstration of the resilience of our business model in the face of ongoing COVID concerns due to the Delta variant and I couldn’t be more proud of how far the company has come in adapting to the changes created by COVID. We continue to make excellent progress in returning to pre-pandemic unit performance with Q1 restaurant-level operating profit margin of 19.5%, as compared to 17.3% in Q1 fiscal 2020. Q1 is typically our weakest quarter from a seasonality perspective and to be so close to our historical peak annual restaurant-level operating profit margin of 20% is a great sign for our recovery. Regional sales trends observed in the previous quarter remained in play, as Texas continues to be our strongest market with regional comps of 27.8%, as compared to California regional comps of 12.4%. Looking at the monthly cadence of sales, we benefited from an additional weekend in October as compared to the same period in fiscal 2020, which was offset by one less weekend in November, as compared to the same period in fiscal 2020. These differences in calendar timing resulted in a minor compensation in November, as compared to the preceding two months. After adjusting for this calendar shift, however, we demonstrated consistent trends throughout the fiscal 2020 quarter. Off-premises revenue was $1.3 million on a sales mix of 4.5%, compared to Q4 off-premises revenue of $1.4 million on a mix of over 5%. Now I would like to provide an update on the pricing event we mentioned in our last earnings call. We increased the pricing by high single digits at the beginning of September, and in many markets there was pushback despite this being the largest single operational move we’ve ever taken. I’m pleased to report that the response continued to be just as favorable, and I would like to discuss how this has impacted our most recent quarter, as well as our business going forward. Looking at our comps breakdown is particularly instructive in terms of understanding the impact of our pricing. Most of the growth seen in Q1, a two-year stack, the comps of 19.9% was driven by price increases over this two-year period. As guests are able to control their ticket size due to our small plates menu, we believe greater consumption is an effective measure of price elasticity. It is encouraging that over this same period, the average number of plates consumed by guests increased. The increase in per guest consumption in spite of pricing gives us the belief that our guests have yet to reach the thresholds of price sensitivity for our offerings and that our guests understand and appreciate the premium value that we provide. The increased plate consumption was partially offset by a dining room profit differentiation of approximately 11% versus two years ago, which we believe is partially due to our off-premises sales. We actually believe this is a positive signal, as we think this profit differentiation is being driven by longer table turn times due to more time-consuming, but important COVID safety measures, as opposed to any change in demand, as demonstrated by how long our wait times remain. Secondly, the Q1 comps of 19.9% and restaurant-level operating profit margin of 19.5% were achieved despite a double-digit dining room profit headwind, underscoring the potential for improvement on historical AUVs as we reach profitability as we exit the pandemic and the profits normalize. Turning to development, we opened our first new restaurant of the fiscal year in October at Stonestown Galleria in San Francisco. After the quarter, we entered the new market of Arizona, with one unit in Phoenix and one unit in Chandler, both of which opened in late December. It is still early days, but we are encouraged by the performance of these new restaurants. Our full-year development plans remain on track with two more units under construction and fully executed leases for the remainder of the pipeline. Now, I'd like to touch on three topics that are the current focus of the restaurant industry: supply chain, staffing, and the impact of COVID variants. This is a variety of our commodity basket. We continue to be relatively insulated from recent supply chain pressures, but while we have seen impacts across company commodities such as freight cost, we have not gone over the variance on any single primary protein that protected us from the cost of productivity that others are experiencing. This main strategy, in conjunction with the pricing we took in September has allowed us to maintain ongoing control over our cost spend, as Steve will discuss later. Our investment in recruitment and retention continues to pay dividends, resulting in stronger restaurant teams, which enabled our strong Q1 sales. Looking to the current quarter, the Omicron variant has caused some operational complications for us due to occasional sector-wide quarantining out of an abundance of caution. In late December, we saw some of our restaurants reduce their sitting capacities or operating hours due to reduced workforces, which unfortunately coincided with a more lucrative holiday season. But we believe this is a temporary setback. These pressures are a result of increased prevalence of the Omicron variant and our prioritization of the safety of our employees and guests. We expect normalization following this period. In December, we also saw a comp headwind due to a pricing event in December 2019, representing several points of comp headwind for Q2. Consequently, we saw December comp growth of just over 14% when compared to December of calendar 2019. Now I’d like to provide an update on our recent initiatives. The table-side payment system is fully rolled out, and we have seen that the guest restriction is exceeding initial expectations. The pilot for touch panel drink ordering continues to expand across our system, with full rollout expected in this or the next quarter. I am also very excited to announce a new initiative with Starbucks. As of today, we have high-level restaurants assisting our wait staff with deliveries. Even beyond this level of efficiency, it’s been a pleasure to watch our guest experience come to life in our restaurants. Pending the results of the pilot, we expect full rollout by the end of the fiscal year. Our rewards program continued to grow with 73,000 new members joining in Q1 for a total of 313,000 members, representing growth of over 30%. Rewards program enrollment and engagement remains a top priority as our members have a significantly higher ticket average and dining frequency than non-members. While we all look forward to the end of the pandemic, I am extremely proud of our recent performance and the amazing work that our team has done to deliver these results. I would like to extend my thanks to everyone in our restaurant teams and corporate support center for making this possible. With that, let me turn the call over to Steve to briefly discuss our financial results and liquidity. Steve?

Thank you, Jimmy. For the fiscal first quarter, total sales were $29.8 million, as compared to $9.4 million in the prior year period. We believe measurement of comp sales growth is most relevant versus the pre-COVID period of fiscal first quarter 2020. On that basis, comp sales grew by 19.9%, with regional comps of 12.4% for California and 27.8% for Texas. Turning to costs, food and beverage costs as a percentage of sales were 30%, compared to 32.4% in the prior year quarter, due to pricing taken at the start of the quarter and largely normalized performance as sales volume improved. Labor and related costs as a percentage of sales decreased to 32.5% from 46.3% in the prior year quarter, due to higher sales leverage. Occupancy and related expenses as a percentage of sales improved to 7.4% from 18% in the prior year quarter, also primarily due to higher sales leverage. Other costs as a percentage of sales decreased to 12.1%, compared to 22.1% in the prior year quarter, due to higher sales leverage as well. General and administrative expenses were $5.4 million, compared to $3.5 million in the prior year quarter. This increase was primarily due to compensation-related expenses, as we made investments in our team to support our accelerated growth plans. As a percentage of sales, general and administrative expenses were 18%, compared to 37.4% in the prior year quarter. Operating loss was $1.3 million, compared to an operating loss of $6.3 million in the first quarter of fiscal 2021. Income tax expense was $12,000, compared to an income tax expense of $29,000 in the prior year quarter. Note that we expect to continue to incur nominal income tax expense quarterly, irrespective of our pretax income or loss, as a result of the full valuation allowance against our deferred income tax assets and incurrence of minor income taxes payable at state levels. Net loss was $1.3 million or $0.13 per diluted share, compared to a net loss of $6.4 million or $0.76 per diluted share in the first quarter of 2021. Restaurant-level operating profit as a percentage of sales was 19.5%, compared to restaurant-level operating loss as a percentage of sales of 9.9% in the prior year quarter. Adjusted EBITDA was $800,000, compared to a negative $4.1 million in the first quarter of fiscal 2021. Turning to our cash and liquidity, at the end of the fiscal first quarter, we had $44.4 million in cash and cash equivalents and no debt. Finally, I would like to reaffirm our previously shared full-year guidance for fiscal year 2022. We expect total sales between $130 million and $140 million. We expect general and administrative expenses as a percentage of sales of approximately 17%. And we expect the opening of eight to ten new units, with net capital expenditures per unit of $2.1 million. It bears mentioning that these expectations assume that we experience no further operating restrictions or material downturns resulting from the ongoing COVID-19 pandemic. Our expectations are based on the results that we have seen in recent quarters, and while we believe the expectations are appropriate, given our current operating environment, the company and the restaurant industry generally remain highly vulnerable to COVID-related volatility.

This concludes our prepared remarks. We are now happy to answer any questions you have. Operator, please open the line for questions. As a reminder, during the Q&A session, I may answer in Japanese before my response is translated into English. Please bear with us.

Thank you. Our first question comes from James Rutherford with Stephens, Inc. Please go ahead with your question.

All right. Thank you, and congrats on the results here. Could you help quantify the extent of capacity limitations that you’re seeing today, just so we can calibrate where we are today on that? And then if you have any estimate, I know it’s hard, but any estimate on how much of a headwind that may have been to the comp you reported for December?

Thank you, James, for your first question. Please allow me to answer in Japanese, Ben is going to translate.

In terms of the current situation, it remains highly fluid. But what we can say is that it has had a meaningful impact on our sales, particularly as it began in the latter half of December leading into now with the holidays. It’s been on a rolling basis because of Omicron.

Thank you, James, for your first question. Please allow me to answer in Japanese, and Ben will translate. In terms of the current situation, it remains highly fluid. However, we can say that it has had a meaningful impact on our sales, particularly since it started in the latter half of December and has continued into the holiday season. This has been an ongoing issue due to Omicron.

That being said, our operations department, or operating team, or recruiting team are working at full capacity, and as a result, the majority of our restaurants are able to operate without issue. So that’s something that we’re very proud of and grateful for the work that they’re doing. Also, I just want to mention that these operating limitations are a result of quarantine shifts as opposed to anything like a government mandate.

Oh! Thanks for that clarification, and that’s helpful. Kind of leads into the second question I had, which is regarding the traffic discussion. You mentioned demand is very robust and I’ve seen that myself; I have been in your restaurants. But you said table turns have crept up, limiting some of the traffic recovery. So my question is, what can you do to increase those table turns and call back some of that traffic, maybe through technology, or can you push people to shoulder periods? Just do you have any ideas about what you can do to bring those table turns down? Thank you.

Sure.

In terms of reducing table turn times, the immediate focus would be those three initiatives that we’ve been discussing historically, that would be our table-side payment, our touch panel drink orders, and now our robot servers, which are working very well, at least, as we’ve seen in the pilot so far. What we want to emphasize here is that the table turn times are not a permanent impact on our operational throughput; it’s really a result of the additional cleaning procedures that we take in between parties, and that efficiency will be naturally regained as we exit the pandemic. Besides efficiency, some traffic pressures have been ongoing in metropolitan areas where our restaurants are highly dependent on foot traffic. But we do believe that we can make up those traffic losses through increased marketing efforts. The robot servers, besides being an efficiency measure, are really a meaningful addition to the Kura experience and they’re highly Instagrammable. It’s been a great draw for our guests.

Very helpful. Thank you.

Thanks, James.

Thanks, James.

Thank you, James.

Our next question comes from the line of Andrew Strelzik with BMO Capital Markets. Please proceed with your question.

Good afternoon and congratulations on a great quarter. I wanted to clarify the sales guidance you provided. You mentioned it was assuming no further implications from COVID, but what exactly does that entail? If you were to consider the levels prior to COVID, would that align with the range you mentioned, or are you anticipating a return to previous conditions? I'm trying to understand how your comments relate to the recent trends.

Sure, Andrew. It takes into account what we observed in December, which included increasing challenges from Omicron as the month went on. I want to emphasize that this is a situation we are monitoring closely on a daily basis with our operations team and HR. If a positive case arises in a restaurant among team members, it could lead to the need to quarantine others who have been in contact with that person, and our team is working diligently every day to manage these scenarios. We view this level of activity as temporary, though it's hard to define what "temporary" means exactly. In the near term, we're adjusting our operations almost daily in response to these circumstances. Looking at the entire year and the revenue guidance we provided, we expect that over time, the challenges posed by Omicron will lessen and not be as significant from day to day as they have been recently. However, we are currently factoring in some difficulties that come with the situation we've been experiencing over the past few weeks.

Got it. Okay. That’s pretty clear. And then, second question, I mean, I guess you were asked last quarter and weren’t prepared to commit, and obviously, it wasn’t included in the formal guidance. But especially with the commentary you gave around the restaurant-level margins this quarter and what is typically a seasonally weaker period. Is there any way or color that you can give on where you think within that sales range or restaurant margins might land, or maybe some color there being impacted on the upside so much from an inflationary perspective, but just anything to help us think about the margin trajectory here for the year?

I’ll begin by noting the volatility we've discussed. Generally, in our most recent year before COVID, around 23% of our sales occurred in the first quarter, which increased to 24% later, resulting in 47% of sales in the first half and 53% in the second half of the year. Items like food tend to be nearly entirely variable. Labor costs are somewhat fixed and somewhat variable, depending on how one views it. Regarding expenses like occupancy, those costs become more manageable as sales grow. It's important to keep in mind the current quarter's COVID challenges that weren't as pronounced earlier in Q1, which can assist in forecasting for the business. We are pleased with our margin at 19.5%, just 50 basis points short of our historical peak annual margin, especially considering Q1 is usually a slower sales season. The pricing adjustments we've implemented, along with positive customer feedback regarding our value, suggest strong potential for future margin growth.

I understand. It makes sense. I wanted to ask one more question about entering the Arizona market in this environment, which seems to be less affected by COVID compared to others. I'm curious about your willingness to explore markets that may be more impacted, or if you would prioritize differently. Are the markets you're considering currently facing pressure? I’d like to hear your thoughts on unit openings at the market level and your preferences there.

Well, that’s been on foreign language.

In terms of our leases, we typically sign 20-year leases, and the impact we’re seeing from the pandemic would be temporary. So we’re not making any fundamental changes to our development strategy in response to the pandemic. Largely speaking, we will continue to pursue the strategy that we’ve pursued since going public of doing a 50-50 split between entering new markets and filling existing markets. And since you brought it up, Arizona, while being a new market, has minimal impact or limited impact from Omicron and is performing extremely well.

Got it. Very encouraging to hear. Thank you very much.

Thank you, Andrew.

Thank you, Andrew.

Thanks.

Our next question comes from the line of Sharon Zackfia with William Blair. Please proceed with your question.

Hi. Good afternoon. I guess when you think about the trends here in the second quarter, can you talk about where you’ve seen more of an impact if it’s been California or Texas relative to the kind of November trend? And then I understand the reduced hours and the seating capacity dynamics associated with the labor quarantining, but are you sensing or have you had any evidence of consumer reluctance to come into the restaurants?

Sure, Sharon.

In terms of what we’re seeing quarter-to-date, we’re not really seeing too much of a geography-specific impact. It really does boil down to each restaurant and the number of employees quarantining, so it really does vary case-by-case as opposed to geography-by-geography.

Okay. The Omicron situation remains highly fluid, and so we can only speak to what we’ve seen so far. But so far, we’ve been very encouraged by a lack of consumer hesitation or change in consumer behavior. I think this is clearly demonstrated by how our wait times really haven’t changed since entering the Omicron era. In terms of the sales pressures that we’re seeing, it’s really more a result of the quarantining that we’re doing out of the abundance of caution, whether that results in fewer operating hours or diminished seating capacity. That’s where the sales pressures are coming from. It’s really not from a demand-related aspect.

Great. That’s very helpful. And then I’m also curious if you’ve seen off-premises take up, and I know, seasonally, typically off-premises would take up in the winter. But if you kind of level set it seasonally, if you’ve seen that increase in December and so far into January? And then a second question on that, I know there were some potential dynamics associated with new units that you were going to incorporate to kind of make the off-premises business more frictionless. Can you give us any update on that as it relates to new unit development?

Sure.

Our costs experienced a loss of share…

I am sorry. Go ahead, Steve.

I wanted to briefly discuss off-premises sales. We will provide more details about Q2 when we review the overall results. In Q1, we observed a slight percentage decline as expected, since we had full dining room capacity for all three months, while in Q1, California was only at 2.5 out of 3. Off-premises remains an area where we know there are customers who enjoy this option. We will share more specifics about the quarter as we progress.

In response to your second question, the units designed for a more seamless off-premises experience, such as curbside parking or pickup windows, are still in our pipeline with no updates to report at this time.

Yeah. That’s great. Thank you.

Thank you, Sharon.

Thanks.

Our next question comes from Jeremy Hamblin with Craig-Hallum. Please proceed with your question.

Thanks and I’ll add my congratulations on the strong momentum in the business. I wanted to just come back here to the comp breakdown, in particular in December, in terms of that split that you saw in Q1, Texas up almost 28%, California up over 12%. How have those splits been in the December period?

In December, Texas continues to outperform California on a comparable basis, with a slight pullback that was a bit more than California's change when comparing Q1 to December. Additionally, December faced some challenges due to Omicron affecting our staffing, and from a calendar perspective, it was less favorable compared to two years ago. This year, we lost a weekend to both Christmas Eve and New Year’s Eve, while two years ago we had a mid-week holiday period. It's important to consider these factors. Moreover, during our prepared remarks, I mentioned that we lapped a pricing increase from December 2019, which was a mid-single-digit rise. This means the pricing difference is less when comparing December to Q1. Nevertheless, Texas continues to show very strong positive performance, outpacing California in December.

Okay. Got it. And then I just wanted to come back because I did miss the, in terms of the 19.9% in Q1 versus 2019, what was the breakdown specifics of transaction growth or transaction change, I should say, versus average check.

Sure. The significant difference can be mainly attributed to the pricing changes that occurred over the last two years. The comparison showed a 19.9% increase, with approximately 18% of that being due to pricing changes, which included at least three pricing adjustments during that timeframe. We slightly outperformed the pricing increase. As mentioned, the average number of plates consumed per customer increased between the two periods. This suggests that our customers are not feeling constrained by price-value considerations. The pricing adjustments did not lead to a decrease in the average plate count; in fact, due to the value we provide, our marketing efforts, and the success of our rewards program, we are currently selling more plates per customer than two years ago. However, this growth was somewhat balanced by a traffic decrease of about 11% in comparable stores over the two years. This decline can be mainly attributed to COVID-related factors that have impacted our restaurant operations, such as the need for sanitization between table settings and the limitations on items that can remain on tables between new customer arrivals. Does this help clarify the numbers?

That's very useful. I'd like to talk about unit growth and the timing. You recently opened two units after the quarter ended, and you mentioned having two more under construction with leases signed for three additional locations. Can you provide more details about the expected completion timing for the units under construction and the plans for the latter half of the year?

Sure.

We have two units under construction that are progressing well. One is in San Antonio, Texas, and the other is our upcoming location in Watertown, Massachusetts. We are close to starting two additional units, as our typical construction time ranges from four to five months, which gives you an idea of our expected timeline. However, please note that unexpected delays can occur due to permitting or inspections from municipal governments, but that's what we currently anticipate.

Understood. For my final question, I’d like to discuss your unit volumes, which are up 20% compared to two years ago. When examining the operating costs, particularly the utilities, repairs and maintenance, as well as credit card fees, I noticed this line has increased by approximately 40 basis points compared to Q1 two years ago. Could you clarify which components contributed to this increase? Specifically, is it primarily due to utilities and maintenance, or do you have insights on how much credit card fees have risen as a percentage of sales during that period? Any additional details you could provide about the 40 basis point increase would be appreciated.

Yeah. I don’t know that I could speak to the precise change or build it for you necessarily, but components that go in there, like credit card fees, they really are straight variable costs. They run as a percentage of sales, and some of the small tools expenditures for the little bit of off-premises business that we do. There are some additional costs that run through the P&L in the other costs area that would perhaps be a minor deleveraging factor on the sales numbers since we have a meaningful percentage of business happening there. Things like insurance costs with growth in the business as well. They tend to go up along with the exposure metrics, and those exposure metrics are often sales from the insurance company view. So some of those costs may not be as leverageable over a multiyear period as others like in the occupancy, the pure rent category for instance.

Great. Helpful color. Best wishes for continued success, guys.

Thank you, Jeremy.

Thanks, Jeremy.

Thank you.

Our next question comes from the line of George Kelly with ROTH Capital. Please proceed with your question.

Hi, everybody. Thanks for taking my questions. So just a couple for me. First, I was hoping you could start with the tech initiatives that you talked about; did you say that the table-side payment is now fully rolled out across all your restaurants? And if I heard that correctly, how impactful is it? How much of an impact do you think that will have on turns and timing at the table?

Sure.

In terms of the rollout, yes, the rollout is complete, and is now in all of our restaurants. In terms of the impact, we’ve already seen a reduction to the workload that our servers are responsible for and we’ve seen that translate into greater customer service satisfaction. In terms of table turn times, the pilot has been going on for too short a period for us to quantify it, but we look forward to providing an update in the future.

The rollout is complete and is now in all of our restaurants. We have already observed a reduction in the workload for our servers, which has led to greater customer service satisfaction. The pilot has been ongoing for too short a time for us to measure the impact on table turn times, but we look forward to providing an update in the future.

To provide some additional color, historically, in terms of our customers’ payment methods, about 80% has come through credit cards. Looking at our table-side payment, the usage rates across all transactions are about 30% to 35%. So just under half of that 80% we mentioned earlier, so you can imagine just how much of an impact it’s having in terms of reducing workloads for our servers.

Okay. That’s helpful. Thank you. And then next question for me is a different topic. In the past, you’ve run promotions and prizes that are really impactful and drive a lot of traffic. And in the last two years since pre-COVID, I mean, you’ve grown so much in units and just absolute levels of traffic. And so I was curious, as you look forward, I’m sure that those promotions and special prizes take a lot of planning. And just as you kind of map out the next year or so, are there a lot more kind of special partnerships and promotions that are becoming available to you just because of your increased scale?

Absolutely, that's the case. We were really excited about this when we went public in 2019. Before that, we mainly worked with smaller brands, our own characters, or Japanese brands. Since then, we've gained access to much larger internationally recognized brands. Currently, we are partnering with a notable brand and have an upcoming collaboration with Pac-Man as well. We just finalized a partnership with Sonic. The quality of our partnerships is improving every year, and I'm incredibly proud of the efforts made by our PR and marketing team. Regarding future updates, we prefer to keep things low-key; part of this is because licensors don't allow us to disclose too much in advance. However, we are very excited about our upcoming projects.

Okay. Cool. And then last question for me. I appreciate the info you gave us on leasing, on construction and development pipeline. But if we could go and I don’t know how much you’re going to want to say here, but could you go one layer higher, LOIs or things that, I don’t know what other kinds of numbers you could give just on the number of things that are maybe in the pipeline for more of a next year event? And what I’m trying to understand better is how much if this year was more of a normal environment with timelines. I know that construction is taking longer than normal. But you’ve made a lot of corporate investments in getting that development team in place. I’m just curious what kind of a normalized year could look like beyond this fiscal year in new store openings?

Sure.

In terms of LOIs, we’d like to just continue with the information that we’ve already shared publicly, which is the leases for the remainder of the year are fully executed. But as you can imagine, we’re very diligent with maintaining a strong pipeline of LOIs, given our investment growth plans.

In terms of current construction periods, we’re seeing the same thing that the rest of the industry is seeing, and there are some supply chain delays regarding construction materials, and permitting and inspection can take a little bit longer than typical. But that 10-unit annual guidance that we gave and reaffirmed today supports that expectation, and we remain confident that we can hit those eight to ten units. In terms of a more normalized environment, there are really three factors that determine our growth rate. First would be our ability to identify high-quality sites, the second would be the quality and size of our management pipeline, and the third would be our liquidity. We think we’re in a great place and we think we’re positioned to grow faster. If the right circumstances are there, we would be very excited to announce that in the future.

Got you. Thank you.

Thanks, George.

Thank you.

Thanks, George.

Ladies and gentlemen, we have reached the end of the question-and-answer session. This concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation and have a wonderful day.