Greetings, and welcome to the ARKO Corp. Second Quarter 2022 Financial Results Conference Call. At this time, all participants are in listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ross Parman, Vice President of Investor Relations and Government Affairs. Please go ahead. Thank you. Good morning and welcome to ARKO's second quarter 2022 earnings conference call and webcast. On today's call are Arie Kotler, Chairman, President, and Chief Executive Officer, and Don Bassell, Chief Financial Officer. Our earnings press release, quarterly report as filed with the SEC, and our earnings presentation are available on ARKO's website at arkocorp.com. Before we begin, please note that all second quarter 2022 financial information is unaudited. During the course of this call, management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of words such as will, may, expect, plan, intend, could, estimate, project, and similar references to future periods. These statements speak only as of today and are based on management's current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to our press release, our quarterly report on Form 10-Q for the quarter ended June 30, 2022, and our other filings with the SEC, including our annual report on Form 10-K, for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Please note that on today's call, management will refer to non-GAAP financial measures, including same-store measures, EBITDA, and adjusted EBITDA. While the company believes these non-GAAP financial measures provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for our financial information presented in accordance with GAAP. Please refer to our earnings press release for reconciliations of our non-GAAP measures to the most directly comparable GAAP measures. I would also like to note that we're conducting our call today from our respective remote locations. As such, there may be brief delays, crosstalk, or other minor technical issues during this call. We thank you in advance for your patience and understanding. Now, I would like to turn the call over to Arie. Thank you, Ross. Good morning, everyone, and thank you for joining us. ARKO's strong results for the second quarter showcase the resiliency and strength of our business model and our ability to execute our long-term growth strategy. ARKO's generated $31.8 million in net income, an increase of over 24% versus the prior year's second quarter. Adjusted EBITDA was an all-time second quarter high for the company at $79 million, marking comparable quarter year-over-year EBITDA growth for six straight quarters. As these strong results show, we accomplished a lot during our first half of the year. Our performance and financial strength facilitated continued investment in our stores and hiring and retention programs, as well as the repurchase of common stock, which we continue to view as a great use of capital, and a declaration of our third quarterly dividend. I'm extremely happy with the performance of all areas of our business. This quarter, we navigated historic volatility and inflation by remaining focused on executing our strategy in stores and in fuel. In our stores, we maintained total market share and grew total store dollar sales. Merchandise margin increased 170 basis points to 30.4% compared to 28.7% in the second quarter of 2021. Second quarter same-store merchandise sales, excluding cigarettes, was 5.7% on a two-year stack basis. The marketing team has done a good job managing for inflation in key categories. In particular, this quarter, we saw growth in frozen food, center-of-the-store items, beer, and other tobacco products. In terms of execution of our strategy, here is the short case study. Building out frozen food offering was strategic focus for us in prior quarters. The team moved quickly to implement this program and has executed it very well. It has rapidly gained ground, and selling frozen food increased 81.5% compared to the prior year quarter. We also had a very strong quarter in fuel. Whether prices are high or low, our strategy is consistent. We seek to manage margin and volume to optimize profitability while remaining competitive. We executed our strategy through volatile price movement this quarter and achieved great results. Total fuel gross profits was $130.8 million, a 15.1% increase compared to $113.7 million in the second quarter of 2021. As our in-store results show, we believe that we can maintain cents per gallon growth while maintaining merchandise margin dollar growth. While we deliver excellent results with higher fuel prices, we believe that the fuel strategy also enables strong results as prices decline as they have done recently. I've been visiting stores throughout the summer, driving through Michigan, Virginia, the Carolinas, and many other states. I think it's important to get out and listen to customers and associates. I see how the communities around our stores are doing, as well as our competition. I see how we are executing at the store and territory level. In our stores, customers continue to buy items that fulfill their basic needs. We believe that we are driving some of this demand with compelling fas REWARDS promotion, offering great discounts on fuel and in-store purchases. We have a very compelling offering and continue to implement key initiatives that are resonating with our customers. One of the factors that make this company successful is our ability to identify and deliver the right combination of initiatives. The company's scale and resources allow us to pursue multiple opportunities at once. This is an advantage that we believe enable us to deliver great results for our stockholders. For example, we completed five-store remodel this quarter. We also moved quickly to implement aspects of our remodel program across our footprint by investing in high margin categories and food service, which include converting delis to Sbarro locations in our stores, and an extensive bean-to-cup coffee program that follows on the heels of our successful rollout of freezers and grab-and-go open air coolers. I recently visited store 30 in Richmond, where there was a line out the door for Sbarro pizza. This Sbarro program is clearly a hit with customers. We opened 4 Sbarros this quarter and have a total of 8 open for business, with 5 more under construction right now. I believe we are on pace to achieve our goal of opening 50 Sbarros by the end of the year. Over the last few quarters, we installed bean-to-cup coffee machines in a total of 548 stores, exceeding our goal of 525 store installations. This quarter, we increased iced coffee unit sales by almost 22%, and we believe that we're very competitively priced for cost-conscious consumers. My store visits confirmed that our bean-to-cup coffee machine, along with our new beans, make consistently high quality cup of coffee. I'm a serious coffee drinker, and I believe we knocked it out of the park with the quality of bean and the freshness that these machines offer. I also want to speak about some other investments we are making. We are moving forward on 3 new Dunkin' and plan to remodel 2 additional Dunkin' stores. 1 Subway was remodeled in Q2, for 6 Subway remodeled this year. We remain on track to commence engineering on our new to industry store in Atlanta, Texas. We're extremely pleased with the continued growth and consumer response to our fas REWARDS loyalty program. We now have approximately 1.1 million enrolled loyalty customers, who use the program, earning and redeeming points out of whom about 650,000 with whom we can directly communicate and provide special offers. We're excited to roll out our enhanced loyalty app currently under development, which will enhance communication with these million-plus customers and enable us to serve them customized deals as well as order and delivery functionality and many other features. Another factor that has fueled our growth and been consistently accretive to our bottom line is our highly successful acquisition strategy. We've executed 21 acquisitions in less than 10 years, including the acquisition of Quarles Petroleum fleet fueling business, which closed in late July. Using estimated forward-looking non-GAAP measures, we expect that the acquisition of assets from Quarles Petroleum will add approximately $17.5 million of adjusted EBITDA on an annualized basis. The acquired Quarles assets fit seamlessly into our footprint with cardlock sites in prime areas and key territories. Importantly, we believe this acquisition presents opportunities for organic growth and expansion. I want to warmly welcome the approximately 100 Quarles employees who have joined our Family of Community Brands in connection with the acquisition. They're seasoned operators who have been stewards of the Quarles name for over 80 years of continuous operation. In terms of acquisition, cost pressure have created opportunities and advantage for a large operator like ARKO. It's important to remember that the convenience store industry tends to be very resilient and has historically grown during recession. Right now, there is a robust deal pipeline in the market. We believe that the company is well-positioned to use current market conditions to our advantage given our strong financial position. ARKO total liquidity as of June thirtieth was approximately $727 million, composed of cash and cash equivalents and short-term investments of approximately $282 million and approximately $445 million available under line of credit. In addition, we have the extended $1.15 billion real property commitment to all three real estate capitals at our disposal. We are also investing in areas that we believe will have positive impacts on our stores in the longer term. We are working on adding EV charging capabilities and just installed level 3 fast chargers at Village Pantry in Marysville, Ohio. These fast chargers deployed by ChargePoint support all types of EVs. We previously announced that chargers will be installed at 2 stores in Colorado. We are in the early stages of our EV charging strategy. We are identifying grants and subsidies and exploring partnerships at the corporate level. Our ambition is to make EV drivers loyal customers as adoption increase in our store footprint. We also recently released our ESG policy, and I encourage you to visit our website to read it. We have made significant progress on this policy and look forward to sharing baseline reporting with our stakeholders later this year. I want to thank all associates for their excellent work. Every year I visit a lot of stores, and I'm always struck by how they are willing to go the extra mile. One recent accomplishment was all in effort. Throughout this quarter, we partnered with JDC, a leading global humanitarian organization, to help alleviate the refugee crisis in Ukraine and neighboring countries. Our associates helped collect donations at the point of sale. We also partnered with our supplier community with a dollar for dollar match by a generous JDC donor. We collectively raised over $640,000. We are grateful for the support of our associates, customers, and supplier community. We have yet again delivered excellent financial results, and I truly believe ARKO is well-positioned for continued success. I will turn the call over to Don. Thank you, Arie, and good morning, everyone. We had strong results this quarter. Increased merchandise contribution and fuel contribution at same stores, combined with an increase in fuel contribution in our wholesale segment for the best second quarter in company history. The 2021 acquisitions of ExpressStop and Handy Mart also contributed to these results. We're excited about the Quarles acquisition, which closed in late July. We are working with the highly experienced Quarles team on integrating their operations now. Quarles will become a fourth segment, a fourth reporting segment for the company. This will keep our financial performance easily accessible for all investors and analysts. With the acquisition, the company is now engaging in fuel hedging positions. This is to manage risks associated with an immaterial number of fuel transactions that have price risk until the actual fuel is delivered to the cardlock, where several customers buy based on a formula tied to the current rack prices on the date of sale. This hedging applies to only approximately 2 million gallons per month associated with fleet fueling operations. Getting into the results, merchandise margin dollars for the second quarter of 2022 increased by $90 million versus the prior year, while margin percent increased 170 basis points to 30.4% from 28.7%. Arie noted this, but I would like to reiterate this point. We recorded extra results in an elevated fuel price environment. We believe our resilient strategy enables the company to also achieve strong results as fuel prices decline, as we've demonstrated in prior quarters. Whether prices are high or low, we strive to manage margin and volume to optimize overall fuel margin dollars. Retail fuel profitability, excluding intercompany charges for the second quarter of 2022, grew 15% this quarter to $13.7 million versus Q2 2021. The company increased retail fuel margin to $0.413 per gallon versus $0.343 per gallon versus the prior year quarter, an increase of 20.4%. For the second quarter of 2022, wholesale fuel profitability, excluding intercompany charges, increased approximately $3.5 million compared to the prior year period. Fuel contribution from fuel supply locations increased by $1.9 million, excluding intercompany charges, compared to the prior year period due to greater prompt pay discounts related to higher fuel costs and greater rebates. Fuel margin cents per gallon for these locations increased to 7.2 cents per gallon versus 5.6 cents per gallon in the second quarter of 2021, or an increase of 28.6%. This quarter, the company continued to realize strong margin dollar contribution from consignment locations. Fuel contribution from consignment locations grew $1.6 million compared to the prior year quarter. Fuel margin also increased 6.9 cents per gallon or 27.2% to 32.3 cents per gallon compared to the second quarter of 2021, primarily due to greater prompt pay discounts related to higher fuel costs, greater fuel rebates, and improved rack-to-retail margins. Volume sold through consignment locations were 16% of the total gallons for wholesale. However, it accounted for approximately 47% of total fuel margin dollar contribution for wholesale. Moving on, second quarter store operating expenses increased $23.4 million or 15.1% versus prior year due to an increase in expenses at same stores, including higher personnel costs, credit card fees, and as a result of our 2021 acquisitions. In terms of hiring, we are seeing our applicant pool improving. While we continue to see a smaller than historical store applicant pool, we are keeping up with the turnover inherent to our industry, while taking additional steps to retain staff and fill vacancies through special incentives and recruiting marketing. Moving on to more results, net interest and other financial expenses decreased by $4.7 million versus the prior year quarter to $7.3 million for the quarter. During the current quarter, we recorded $7.3 million in favorable fair value adjustments, primarily associated with our public warrants. Adjusted EBITDA was $79 million, an increase of $3.3 million or 4.4% compared to $25.6 million in Q2 2021. As of June 30, 2022, we maintained our strong liquidity position, including cash and cash equivalents and short-term investments of approximately $282 million. Our outstanding debt, excluding capital leases, was approximately $714 million, resulting in net debt of $432 million. For the quarter, net cash provided by operating activities was $42.1 million versus $47.7 million for the second quarter of 2021. Capital expenditures were $24.5 million for the quarter, compared to $15.1 million in the prior year quarter. Higher CapEx was driven by upgrades to fuel dispensers and investments in our stores, including remodeling delis to facilitate our Sbarro expansion and installing bean-to-cup coffee equipment. Yesterday in our earnings release, we noted that in the third quarter, the company initiated an internal restructuring that will include change in tax status of certain subsidiaries, which will streamline business operations to provide long-term synergies and other cost savings. We expect this to largely be completed by the end of the third quarter. Given the restructuring, we expect to record in the third quarter a one-time non-cash tax expense of approximately $8.5 million. Our board of directors declared a quarterly dividend of $0.02 per share of common stock to be paid on September 12, 2022, with a record date of August 29, 2022. In the second quarter, the company repurchased 3.1 million shares of common stock at an average price of $8.65 for a total of $27 million paid. We believe this is an opportunistic use of capital. There are approximately $11 million remaining under our previously announced $50 million stock repurchase program. As of August 5, there were approximately 120.1 million shares of common stock outstanding. The company continues to scale with 1,308 retail sites and 1,620 wholesale sites. As I turn the call back to Arie, I will note that this has been another great quarter of financial results. We continue to execute as we navigate through this challenging environment. Thanks, Don. I will close by saying that we believe we have the right long-term strategy in place as well as execution capability that make me confident about delivering growth for the long term. Our business has performed exceptionally well in a challenging environment. Our model is very resilient, and I believe we're well positioned to deliver future value to our stockholders. We're very excited about the second half of this year. We will now take your questions. Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad and a confirmation tone will indicate your line is in the queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we pull for questions. Our first question comes from the line of Kelly Bania with BMO Capital Markets. Please proceed. Hi, Arie and Don, this is Ben Wood on for Kelly. Thanks for taking our questions. We wanted to start with the retail gallon same-store sales decline. How did that come in relative to your own internal expectations for the quarter? If you could, just give us a cadence of same-store gallon sales over the quarter. Just trying to get a sense of how maybe peak gas prices may have impacted gallons. Sure. Thank you. Well, as I mentioned on the call, you know, higher prices did lead to lower volumes. There is no question about it, especially the market that we currently operate. You know, as I mentioned always, our strategy is to optimize margin. That's basically what we did over here. You know, we stay very competitive in the market we do business. You know, when price goes to $5, which I never seen, by the way, through my entire career, obviously, you know, in those markets, you know, people driving less, coming more often to the store, but driving less, and that's what really led to that. you know, as you can see, the overall results at the end of the day were, you know, to increase profitability and while staying competitive over here. Great. Thank you. That's helpful. I guess, so following up on that, on the wholesale side, gallons looked equally kind of challenged. What opportunities are you seeing for wholesale growth or does that more or less track in line with retail? You know, those wholesale accounts, most of them are mom and pop. You know, the challenge that we saw in retail, or at least the slowdown when price actually hit the $5, you know, national average, I mean, they saw the same thing. As you can see, their gallons are down, probably, you know, the same percentage that our gallons were down. But at the same time, you know, last time we saw $5 was, you know, sometime in the mid, you know, mid-June. As you can see from the beginning of July, prices are down dramatically. I mean, we're talking around almost $1. We see, you know, right now all of a sudden we see trends coming in a different direction. I mean, we see volume up right now because of that. I think those guys are gonna enjoy, you know, the same thing as we see over here on the retail side. Okay, that's super helpful. If I could sneak in just one more question, kind of on the merchandise inside store side. Wondering if you could just give us any more commentary on inflation in the quarter and what impact that had on prices. Or were you able to pass everything through and are you seeing more price increases coming down the line on the supplier side? You know, there's no question that, you know, we, you know, during the last quarter, we saw price increases. You know, we were able to, of course, to continue to be very competitive while we have to increase some prices in some cases. You know, I think what we actually were able to do is increase, you know, promotion with our loyal customers and make sure that we actually provide, you know, great prices to all our customers. That's the reason we saw an increase in loyal customers. You know, as we continue, you know, during inflation, we see, you know, the difference between a loyal customer to a non-loyal customer. You know, the loyal customers are spending over $90 more than the non-loyal customer. I think that's gonna continue to basically be the trend over here as we continue to go through inflation. Awesome. Thank you, guys. Our next question comes from the line of Bobby Griffin with Raymond James. Please proceed. Good morning, buddy. Thanks for taking my questions. I guess, Arie and Don, the first question for us is back on retail gallons and more just kinda curious, as you guys look at the strategy of maximizing, you know, fuel gross profit dollars, is there a certain level of gallon decline that you think starts to hurt the inside the store business from a traffic standpoint or something? So just anything there to help us, you know, circle up on how you think about balancing the gallon decline versus the GP when you think about inside the store as well. As I mentioned earlier, Bobby, you know, the $5 mark, this is something that, you know, I don't think any one of us saw, you know, during our career, other than the people in California, of course. You know, and we watched this very, very carefully. That's the reason I mentioned. You know, we maintain our in-store market share, and this is based on IRI data. And this is something that we're always watching. We're always watching and making sure that, you know, we stay competitive. You know, when we talk about, you know, gallons down, in lieu of, you know, increasing profitability, it's not that the gallons were there. It's not that, you know, I don't believe we lost market share. It's just the markets that we did business, people just drove less, you know, just because they don't have the discretionary income over there. I think that's really the reason for that. I don't believe that that's impacting any of our in-store visits. As I said, I mean, that's, you know, we maintain, you know, market share in the markets that we actually do business. But as you can see, you know, we were able to increase profitability inside the stores, because of that. I mean, people are coming more often to the stores right now. They may have, like, small purchases, but they're actually coming in more often. That's the reason, you know, while gallons are down, we make sure that we have the right items, we make sure we have the right promotions. You know, we're working with a manufacturer to, you know, to be able to actually put the right promotions in place. That's also the reason why we are investing our time on reformatting our stores with coffee, with lunches, with food service. I mean, so those are the things that, you know, we have to do, you know, while, you know, people are driving less. Again, I think that what we saw in June, that was something. It's really historically, I never saw anything like this in my life. I think that right now in July, you're gonna see that it's actually turning, you know, in another direction when price of fuel is basically at almost a dollar less. Okay, that's very helpful. Don, on the store operating expenses, I think in the press release, it called out $8.4 million of personnel cost increase. Is that all just per hour cost, or is there more hours being ran in the stores right now? Just trying to think of the difference between the labor side on a per hour basis and, you know, the number of hours you're running inside the stores. Really great question because it's a combination of a couple things. Number one, obviously, the average wage we're paying is up as everybody's experiencing across the market. There are more hours being worked because we're you know, the hiring pool is getting a little bit better, although not where we want it. But there's another factor in there, too. We're doing things, we're still offering incentives. One of the things that we did, which I think our existing associates appreciated, is we offered $500 for 500 hours for all employees, so that we. That's part of the numbers, too. We offered that for anybody employed as of Memorial Day. Not just new employees, but employees who have not gotten any recognition for that are also getting something too. I think it's a combination of all three, but I think one of the biggest drivers is the hourly wage itself going up. Okay. Then lastly from us, just on the realignment and streamlining, any early expectations about the savings and that you think you could gain from that over a multi-year period or anything there to help us think about what the potential benefit could be once that's all done in the third quarter or into 2022? We expect, you know, at a minimum, just at a minimum, over $ half a million a year, but we think it could be much higher than that. At a minimum, from a starting place, we think it'll be over $ half a million. Okay. I appreciate the details and, best of luck here in the second half. Thank you. Our next question comes from the line of Anthony Bonadio with Wells Fargo. Please proceed. Hey, good morning, guys. Congrats on the beat. Just quickly wanted to ask on fuel margins. The OPIS data has sort of continued to accelerate into July as prices have declined, which I think makes sense given what we've seen historically. Is that in line with what you guys are seeing so far in the first five weeks of Q3? How should we be thinking about what a more sustainable level looks like, assuming gas prices sort of level out again at some point in the foreseeable future? I can, you know, I can't comment on Q3. The only thing I can comment on, Anthony, is that, yes, with price of fuel come down, and this is something that we saw historically, people are driving more and we see an increase in gallons. There is absolutely a correlation between price of fuel, you know, declining and correlation of people driving more, and getting out there. I just think that at the end of the day, you know, we are not relying only on fuel. I just wanna make sure that everybody remember that. If you're looking on our insights, you know, inside sales excluding cigarettes. This is something very, very important, you know, because we are a little bit different than some others are. You know, the health of our business is very, very good. I mean, you know, we deliver an increase of 170 basis points inside the stores. I mean, if you're really looking at the end of the day, our gross profit inside the store, in light of that was $3.4 million, you know, up in gross profit on the same store. I think that's what you can see. I mean, this is with $5, you know, price of fuel, as you can imagine, you know, what we are going to see when price of fuel is down by more than $1. Got it. That's helpful. Thank you. I guess, just piggybacking on that, on merch margins, obviously another solid quarter. It sounded like mix was a big contributor based on what you guys said in the PR and the prepared remarks. Can you just help us understand how much of that 170 basis points came from mix versus other factors? To what extent your different initiatives, things like the grab-and-go coolers, the new coffee machines are starting to play a role there. Sure, sure. The bigger driver, you know, this quarter, you know, we're actually frozen food, as I mentioned, 81.5%, with an increased margin of over 7%. Packaged sweet snack was up, you know, also over 17.8% with an increase of 7%. Again, the same thing goes to, you know, the salty snacks, alcohol. You know, we see an increase in, you know, beer sales. I think the only thing we see right now is that, you know, given inflation, people may not buy 24-pack. They may go to 12-pack or 6-pack, but we see an increase, you know, in alcohol sales as well. As well as OTP. You know, OTP was another driver. You know, I always mention that, you know, cigarettes continue to decline, and cigarettes, of course, have, you know, a lower margin. However, OTP increased this quarter an additional 1.6% with margin basically increase of 4.22%. And that's a lot. That's, you know, those categories are really the categories that driving the, you know, the increase in margin. And I believe we're gonna continue to see that moving forward because of that. Cool. That's helpful. Thanks so much, guys. Good luck. Thank you. Our next question comes from the line of Mark Astrachan with Stifel. Please proceed. Hey, thanks, and morning, everyone. Two quick questions for me. One, Arie, could you maybe talk a bit about the general drivers of heightened retail fuel margin that we're continuing to see today relative to pre-pandemic levels? You know, just sort of broader strokes on why we're here. I think we generally get kind of how to think about the ebbs and flows of gas prices up and down. Then second question, maybe building or asking slightly different some of the other questions on the same store sales or even traffic into stores and trying to get a sense of the relative magnitude of impact from higher fuel costs in June. Maybe if you could talk about cadence through the second quarter, we can kind of get a sense of how to think about it going forward and kind of looking backwards. Does that make sense? Thank you. Sure. I had a hard time hearing the full question, Mark. The line was a little bit buzzy. You know, I'm gonna comment first of all on, you know, second quarter, as you said, with you know, with basically high fuel prices. You know, as I said earlier, I think high fuel prices, especially in the markets that we do business, you know, we are in rural and secondary markets, a lot of small towns. I think that, you know, the issue is that, you know, I'm gonna repeat again, you know, people were just driving less. Again, this is just because there's less money in their pockets. I think. Again, I think that it did not impact our in-store sales. Our in-store sales, as I said, are in line with our expectations. I think the only difference is that the change in behavior over here was really that people came more often and they just did small trips versus you know the trips that they did in the past. In the pandemic, before the pandemic, you know, people were coming in more often during the pandemic. You know, people came less often, but you know bought big sizes, large sizes over there. I think what we see right now that it's coming back again. I think that we see people coming more often, driving less, but coming more often and just buying you know smaller baskets over here. I don't think this is, again, unless you know, unless price of fuel will you know, will jump again over $5, I don't think this is something that you know, will actually impact. As a matter of fact, I think actually it's gonna improve our business dramatically, as price of gas settles below the $4. Right. Mark, let me jump in. I don't think Arie could hear the first question about the increased margin level. One of the things also, I think when we talked about this to think about is even though margin has increased, I mean, credit cards have gone up a tremendous amount. You know, they went up $4.1 million due to higher retail prices. So most of our fuel is bought on credit cards. When you see higher margin, we have to think of it after credit cards as a way, you know, most people think about it. We've also got a lot of increased costs due to inflation just to run the site, which were different than we had. You have increased labor costs, you know, all kinds of costs going through. These are things that our competitors are talking about. You know, we've been in an area of increased margin. I think, you know, no one knows what the future is gonna hold, but there's a lot of cost drivers. That kind of support, some of what we're seeing because of the increased costs between labor, credit cards, and also lower business that has happened since the pandemic started. Got it. That, that's great. Thank you, Don. Our next question comes from the line of Karru Martinson with Jefferies. Please proceed. Good morning. Historically, I feel like the industry has been able to hold or even expand margin as gas prices come down. Given the kind of unprecedented spike we had this summer, do you feel that those dynamics are still holding, or is this a different situation? Yeah, I think the dynamic is still holding. I think, you know, as you mentioned, as you know, it really depends also, you know, volatility is great. It's always good to have volatility. Like you mentioned, historically when price dropped dramatically, like in a very short period, and that's what we saw from the beginning of July. The same thing, I mean, the price dropped really dramatically. I mean, in basically almost a couple of weeks, I mean, price dropped by over $0.50-$0.60. That's something that always is very helpful to maintain margin. Okay. When you look out, certainly recognizing you just did the 2021 acquisition, what's the landscape look like today for additional tuck-ins for you guys, or perhaps even a larger, more transformative acquisition? Sure. That's a good question. You know, I can tell everybody over here that the pipeline is very, very active. The pipeline is very, very active because a lot of, you know, small chain or mid-size chain are probably having a hard time, you know, operating in this environment. You need to be a very, very savvy operator. You know, I think that's a great opportunity for us. I mean, this is one of our, you know, best areas that, you know, that we practice over the past 10 years. You know, we have enough liquidity, you know, we have the deal-making ability, of course. You know, the strategic partnership with Oak Street, of course, will help us tremendously, you know, over the next few months to basically go after those acquisition. There's some, you know, meaningful acquisition, you know, out there that we, of course, are, you know, exploring. Thank you very much, guys. Appreciate it. Thank you. Our next question comes from the line of Hale Holden with Barclays. Please proceed. Hi, good morning. Kind of on the same theme there. I was wondering, as you're considering M&A options, if either the higher financing cost that's out there in the market or, you know, the above normal kinda gas spread that's out there, fuel cost spread that's out there, changes the way you're thinking about valuations or, if you've seen sellers kinda bring down their valuations. You know, sellers don't bring down valuation, as you can imagine. You know, everybody got a big expectation given that, you know, we see what is happening out there, you know, in terms of the amount of transactions out there. You know, we believe that, you know, our strategy of pursuing deals at a reasonable valuation are going just to continue. I mean, we are not going to overpay for deals as we never paid, you know, over the past 21 acquisitions that we did. I just think sellers' expectation, it's one thing. I think the market will determine, you know, who is out there. As you mentioned, you know, interest rate is going up. Our agreement with Oak Street, we have a commitment with Oak Street for $1.15 billion available, you know, for the next basically for the next year. Plus the cash on hand that we have in the line of credit that are available at a very, very attractive rate. I think this is something that's gonna put us, you know, gonna put us basically in a very, very good spot. As you guys remember, we raised our bonds at a fixed rate for the next seven, you know, a little bit over seven years. I think that make us very, very attractive in terms of, you know, the valuations that we can actually put on those deals. Great. Thank you so much. I appreciate it. Thank you. Thank you. Ladies and gentlemen, this concludes our question and answer session, and I'd like to turn the call back to Arie Kotler for any closing remarks. Thank you, operator. Again, thank you everybody for joining us today. I would like to, you know, of course, make sure that you guys enjoy the rest of the summer. I wish you all the best. You know, while you're enjoying the rest of the summer, just make sure you stop at one of our stores to try one of our excellent iced coffee cups. Enjoy the rest of the day. Thank you. This concludes today's conference. Thank you for your participation. You may now disconnect.