Thanks for joining us. My name is Joshua Long. I'm the restaurant analyst at Stephens. Really excited to have you all join the afternoon presentation here with us. This is an opportunity to hear about a best-in-class, full-service growth story with Chuy's. We have Steve Hislop and Jon Howie from the company as the CEO and CFO, respectively. Really excited about that. We'd love to make this an organic session, so to the extent that you have questions here in the room, feel free to raise your hand, chime in, and then we're also taking questions in the earlier sessions via email. So if you're on the webcast, feel free to email me at joshua.long@stephens.com, and we'll work those in as well. We've got about 45 minutes here to have this conversation, so keep those questions in mind and get them ready. And then with that, I'm gonna turn it over to Steve for some introductory comments, followed by Jon, and then we'll get into those questions. Perfect. Perfect. Good afternoon. Who are we? We're a little concept based in Austin, Texas. What we are is fresh Mexican. Everything we do is made from scratch in our restaurants. We hand-squeeze all our limes for the margaritas. We have all fresh chicken. We have 8 to 9 different sauces that we make from scratch every single day. And we're not only just authentic with our food, you know, we're authentic with our building. It's very eclectic. When you walk in, we have a soft thought process that if you've seen one Chuy's, you've seen one Chuy's. We have 100 and 101- or we have 100 of them, and we'll have 101 at the end of the year in 16 states. But when you go into our buildings, you know, we love what we call hermit crabbing. You know, those are refreshes, remodels of other buildings. Or we'll go into the bottom of an office building, we'll go into a bottom of a residential building. As long as the kitchen remains somewhat the same in all of them, we're pretty flexible on the outside and, and, and from there. But we're also authentic with the way it looks. If you come into our restaurants, you're gonna see palm trees, metal palm trees out throughout the restaurant. You're gonna see wooden fish that are hand-painted from a town in Mexico that we get them, and, you know, they, they do them for us, and we used to order 1,000 of them, now we order 10,000 at a time. So the whole village is actually painting these things for us, and we hang them in our buildings. You'll see all of the Mexican art, where we're actually sourcing it from Mexico, and the tile. And even in the bar, you'll see where we skin the bars. We'll use cathedral wood from Mexico, and we'll come up and re-skin it. So you get a different feel in all our restaurants, but again, when you're in any part of our restaurant, you're gonna have a different feel no matter where you sit, definitely in any ones. And that's the key things, you know? And then, you know, bringing you up to date, you know, obviously, we had the horrible COVID that started in the year 2000. We took that as an opportunity, and Jon will talk a little bit about it in a second with our third quarter results thing. But we took that opportunity to go and say, "Let's take these boulders and turn them over and see what's on the other side." But we went further than that. We really looked at every single pebble, and we had a lot of decisions we made. We, you know, first thing we did is we had to obviously look at our menu, and we looked at the size of it and which stations are coming off it. We had about 66, 67 items. We currently now have 43, but we also do what we call LTOs, what we call CKOs, and this gives a variety on our menu. But we also looked in our kitchens. We took 1.5 stations out of the kitchens. We also looked at the number of tables in our restaurants, and we found our sweet spot to be in that 42-44 range, not the 56-60 range. We looked at all our hours of operations, and we looked at each one, and our last hour of the day was not very profitable for us, so we cut that out, and that never returned. We looked at the simplicity of the menu, we looked at the number of stations and how many tables each of our servers could have. We looked at that. We also looked at the simplification and the hours and realized that instead of 6.5 managers, we probably needed 5.5 managers. So all that really, you know, helped us really fix our base and really, not fix it, but really adjust our model. Then we also introduced a smaller prototype, around 5,500 sq ft, because we wanted enhanced to-go area in this, so you could do more to-go, because before COVID, we were in 12%-13%, now we're in the high 20s, and we're holding onto that and maintaining it. So along with that, those are all the things that we did during COVID that really helped us shape our new model. And as we said in that, as we went along, that we expected to maintain the margin improvement, basically 300 basis points-350 basis points better than what we ran in 2019. And in 2019, we ran a bout a 15.4. Out of trailing twelve months right now is right around 19.5, and that's where we like to play, in that 19%-20% range. Anything more than that, we wanna really look at the value that we're giving our guests and make sure we're reinvesting it back towards the guests. So that's where we like to play, in the 19%-20%. With that, Jon? Yeah. So I'll take you through an update of last quarter, just the numbers. Revenue increased about 6.4% to $113.5 million. That was compared to $106.7 million last year in the third quarter. Comparable restaurant sales were 2%, compared to the third quarter of 2022, and adjusted net income increased 33% to $7.9 million, or $0.44 per diluted share. Restaurant-level operating margin increased 17.6% to $22 million, and restaurant-level operating margin as a percentage of revenue increased 190 basis points to 19.4%, as compared to 17.5% last year. Cash and cash equivalents were approximately $70 million, and the company had no debt, with $35 million available under its revolving credit facility. We also bought back approximately, year to date, $23 million in stock during the year. Leaves us approximately $27 million left on our authorization of $50 million through the end of next year. That takes us to a share count of around 17.5 million at the end of the quarter, compared to 18.3 million last year at this time. So a decrease of approximately 5% during the year. We opened our third restaurant for the year, like Steve said, in Harker Heights, which is just north of Austin, and we're looking to open one more restaurant during the fourth quarter. ... With that, kind of gives you an update, and we'll- Yeah Start with the questions. Great. Thanks so much. So, I mean, a lot of really great content to drive, to dive into there. When we think about, you know, what we write about in our research, we think aligns favorably with your brand. If you think about the balance of, consumers want to eat out, want to engage with food service, they want those differentiated experiences, and they want that authenticity that you're talking about. So that said, the environment's been, somewhat interesting and volatile the last couple of years, and so you made a lot of moves relatively early on. Can you talk a little bit about that? And then as we get back into a normalized environment, you mentioned some of those items haven't come back, whether it's the reduced hours, you've learned how to do things more efficiently. What's the environment look like going forward? Is it kind of... Are you able to do more with less in this kind of optimized footprint and really hold on to those margins that you mentioned? Yeah, absolutely. Yeah, we definitely have. And then what you're gonna end up doing, let's just take them one by one a little bit here, is you're dealing with the shoulder times of the day. You know, everybody, our restaurants are always busy at 12:00 to 12:30 to 1:00, okay? What we really wanted to work on is the 11:00 to 12:00, to 2:00 to 4:00, the 8:00 to 10:00, right in there. So that's what we've been able to do with the energy that you get from 42 to 44 tables. You know, and no one wants to go into a restaurant that's half full and to have the energy, so all those type of things. So we think the moves that we've made during COVID and really reshaping our model and our mindset was really long-term, long-term gains for us. You know, it allowed us, when we go down to 44 items on our menu, to be able to do what we call CKO, which is really our menu evolution forever. So it allowed us to do that 'cause in the old one, it was so complex and so many stations, you couldn't add anything on top of that. Really, we would make a mess of the production sheets and all that type of stuff. So we believe we have a building blocks to really, really get excited about our growth over the next 3 or 4 years as we ramp up that growth back up to 10% in 2025. Yeah, I mean, rightfully so. I mean, those elements all drive back to both improved margins, improved financial profitability and results, but then also maintain that guest experience, which is gonna be important going forward. When we think about kind of sales by channel and the opportunity to bring in a more optimized store footprint, can you talk about how that's worked? I mean, obviously, there's probably still some opportunities for maybe midweek lunch or traffic on those elements, but it feels like the industry is starting to normalize to some extent in terms of just how and when and where consumers want to spend their time getting into more, you know, seasonally standardized trends, if you will- Yeah ... as we look back over the last couple of years. Yeah, there's a few different ways to go on that. You know, definitely, if you're looking at the things that we really focus on: safety, value, and convenience. Convenience is a big one. That's what you've seen in our To Go. You know, it's more convenient, we believe, to get To Go in our restaurants, where you're pulling a park up, we run it out to you, and you already paid for it, gone, than it is at Chipotle, where you have to still walk in and grab it off the counter. So again, different businesses, different industry, but it's the same type of thing. So those things are the convenience of it is key. And really identifying all your drivers, whether it be the catering piece that- Mm-hmm ... we're really improving on to the delivery piece, to just the pick up and go piece, to the patio piece for us. And it's really enhancing all of those right now, in an environment that's a little choppy out there. A little choppy, you know, whether it be the forgiveness of the colleges and all that stuff that they finally had to start paying back, it seems like. Mm-hmm. You know, so you it's a little choppy out there. So I think you have to attack each of your avenues and really enhance them all and work on those. And at the end of the day, you have to have a turtle mentality in your business. And a turtle mentality for us is simply get in your shell, which is in your four walls, and execute. Execute, execute, execute, 'cause if you do that, you'll take share. And that's what the name of the game is long term, not just in the choppy weather as it is right now. Yeah, this is a great point. I mean, one of the themes that has been going on this week in terms of restaurants is this idea that restaurants aren't necessarily a complex business, but they're hard to do, hard to do well, and hard to do consistently. So that operational backbone is key, and I think it's fair to say you had really strong operational capabilities pre-COVID, and if anything, you were proactive, thoughtful in that approach, and now you have a much more optimized model to work with going forward. When you think about that and then balancing the what I would call best-in-class value proposition, I mean, everyone's been taking price over the last couple of years because of labor inflation, food inflation. But I think one of the key themes that we see and that we're writing about is that it's starting to show up, guests and consumers are starting to feel that impact. And so I think at some point, there's this reevaluation of just when and where you spend your dollars, so that you're making sure you're getting as much money and as much value as you can. Can you talk a little bit about the value proposition? I know in prior times, I mean, you've always been relatively judicious with that, give a lot of value in terms of proportion, high-quality food, and then your, the landscape has changed such that it feels like it's almost accentuated the value that you guys put on the plate. Yeah, I mean, that's key for us. I've been always stubborn with price increases 'cause I guess the value prop is I want the best one in the market, not only against my competitors that are Mexican food, but also casual dining. And we always do that when we look at our menus. We make sure we're the value prop in all the markets that we're in and in any interior that we're in. Like right now, we're probably carrying 3.5% the second half of the year from last year. That will roll off in this February, but most of our competitors are probably in that 6% range currently. And then for next year, you'll see us get back to what we've traditionally always done, probably in that 2.5-... 2.5+ range is what we'll probably look at again next year. 'Cause the value is, as I mentioned, safety, value, and, and convenience are the staples that we need to lead at, at all the concepts in. So we believe that is our shares. That's, you know, that's, it's, that's and when you're talking about the hard times and a little bit choppy right now, go back to 2008 and, you know, when that recession happened, we were the last ones in and the first ones out. I really believe it was our execution and our value proposition at that particular time. And so we believe in the same thing. So those are things, and as I was mentioning to you, we like to play in that 19%-20% range. Anything higher, we'll probably put it back into value and give it back to the guest. Yeah, that, that's very fair. I mean, 19%-20%, best-in-class region right there. Mm-hmm. I mean, there's not many- there's very few, if any, other brands that are doing that in a meaningful way and as consistently as you are. So maybe as we think forward to, you know, kind of some of the... Talk about some of the challenges and how you reacted and proactively and adjustments you made. Seems like we're maybe getting into a more normalized environment going forward. We're starting to see things come in line, whether it's food costs, labor costs. Can we talk a little bit about what you're seeing on those line items, and then as you think about maybe tying that into your kind of view on pricing that you just shared? Sure. So when we're looking at commodities, you know, this quarter we were about 5% deflation. Obviously, we're getting a lot of credit for the chicken that hit its all-time highs last year, so that came in a lot favorable this quarter. The end of Q4, we're looking at flat to slightly, you know, probably 2% down in deflation as well in the fourth quarter. Next year, we're looking from a commodity standpoint, more normalized, probably in that 2%-4% increase like we, you know, had in the past. From a labor perspective, we're probably looking in the mid-single digits again. That's kind of where we're gonna come in at the end of the year, this year, and that's kind of what we think is gonna happen next year, without any unforeseen things, that may happen. So with that, we think we can maintain, our margin, or maybe it could be slightly, you know, 10, 20 basis points here or there, but I think we can maintain that with that, that price increase that we're thinking about here in February. Yeah. And I mean, again, you mentioned if you got much higher than that, there's an opportunity to reinvest in what's already a really high quality, valuable experience. Right. Can you talk about that, what you've learned, where you might... How, how you might kind of approach that from a framework perspective? Because, again, value is really key. It's scratch cooking. That's not something that everyone can say these days. And you've really optimized the store model in such a way that it feels like it gives you a lot of flexibility in when and where you can choose to deploy some of those things, especially as you have these new value layers across the menu. So just as you think about where the consumer's at and where your consumer's at, where would... You know, if, if and when you got that opportunity to reinvest, how would that- how could that possibly show up? One way we'd definitely look at it is in our CKO models, and, and making sure that they remain value, even though we have a barbe ll approach that we started in the fourth quarter, which is an item that will probably never be on the menu, but it'll be... You know, currently, we have a short rib that we're running as, as a special. Short ribs on all our competitors' menus are $35-$40. We're doing it for $25. We've never done a $25. Okay, that's like a big deal, so we're seeing how that works. You'll never see that on the menu, 'cause that menu has to scream value, but we are seeing how that goes. But also, if we have the opportunity, we'd probably keep those prices at a very kind of unbelievable value, and still run them and understand it's not a loss leader, you know, you just sell 25% of them, but really to make sure it's an avenue of different offering. And then we'll be able to really identify what direction we still wanna go through the evolution of our menu long term. That'd be one area we'd look at. Mm, that's helpful. Jon, Jon, when you think about what you were able to do on the margin, piece coming out of COVID, it seems like there were a lot of elements where maybe savings could come in, whether that was the menu optimization- Mm-hmm ...store-level operations. Can you talk about how that flows through? I mean, I think a lot of times we talk about margins as being intimately tied to price, which of course they are, but there was a kind of a holistic approach to how you reworked the model, and that's something that not everyone can do, not everyone can do nearly as quickly as you did, and then not do it while also maintaining the overall quality. So- Right ... as you think about, maybe key pieces in terms of menu optimization or some of the stations you mentioned bringing out of the store level, what had the biggest impact in getting you to where you are today? Sure. I mean, the biggest impact, obviously, is labor. We did have some impact of in cost of sales. We had to shut down our happy hour nacho car- Mm Because it was a self-serve type situation, which is not really, it's kind of frowned upon now. So we've taken that out, and that was all free, right? So, I mean, that was 50 basis points-75 basis points, kind of in cost of sales, but the rest, for the most part, is labor. And the way we looked at that, like Steve said, we looked at optimizing the tables, which reduced the number of staff. We also increased by simplifying the menu. We're able to expand a table for the servers, and so it reduced the number of servers there. We also and we were doing this prior to the pandemic, but looking at optimizing the number or the par level of managers, and so we were able to take a manager out of the store each store. So instead of 6.5, we got 5.5. And then cutting off a lot of labor hours just in that extra hour at the end of the day, basically cut a lot of hours off. And then the 1.5 stations, that's simplifying the menu as well. We took a lot of the breading-type items off the menu, and we'll consider taking them, putting them back maybe on a CKO, and instead of breading them real-time, maybe do a prep in the morning to where they're- Mm-hmm ... pre-breaded, and it's just a stop and drop, so we don't have to bring that, that station back in the back of the house. But you're looking at probably 300 basis points -400 basis points just in labor alone that we did. We were probably in the mid-30s when we went into the pandemic, and we're, you know, optimally, I think it's, you know, probably 31-32% once we get back, but we've been averaging right at that 30-31% now in labor. And also go over the finance stuff that we've done, 'cause that also helped us, our awareness in finance and the cash flows and all? Yeah, that's so obviously, when you're, I mean, you're looking at every payment that goes out the door and every revenue dollar that comes in, our finance department kind of put together something on BI. Initially, it wasn't on BI, but it gave us transparency on a day-to-day basis, where we could basically project our cash flow by store, by day, which is really the holy grail of restaurants, something that I'd hadn't seen before. We've always tried to get there, but we got there during the pandemic. We had to, 'cause we needed to know what stores were actually putting cash in the bank and what stores weren't. And now we've automated all that stuff. So basically, 6:00 A.M., we have all that. We have, we have the labor by hour, we have cash flow, per restaurant per day, and then week to date, and we can see that, and we can, we can sort it by rest or by cash flow. We can sort it any way we want, and it's there when we wake up in the morning and we look at it. Also, we've improved the way we project sales. We've hired some a consultant to come in with an algorithm that basically projects sales on a daily and weekly basis, that's really hardly off more than 1%. And so that helps us manage labor. When you know what sales are gonna be, it helps you manage labor a lot more efficiently. And so a lot of that transparency into, you know, our daily results, has helped tremendously. I mean, before we would get daily results in sales, obviously everybody does, and then you'd get the weekly results, and then you try to... You know, you would make management decisions on that. But by getting a daily, you can correct in the flow of the week and make those corrections. And make their ultimate owner. So all these pebbles and rocks that we turned over weren't just operations. It was every area in our company had this opportunity, whether it be what Jon just talked about, finance, or what we're doing with IT, or what we're doing with our real estate and our model, and so forth. So again, it was an opportunity to go over everything, and that's what we did. I mean, in a world where we constantly hear about, you know, technology solutions that are on the horizon, whether that's AI this or some sort of, you know, far-flung opportunity, I mean, you really stepped up the game here over the last couple of years, just using technology that's right off the shelf. And so to be able to get to next day, being able to see the day right prior, I mean, that's gonna be a very meaningful tool set for you and your teams to really, you know, course-correct and navigate on a more or less real-time basis. Right. Mm-hmm. Absolutely. When I had a question come in online, so appreciate that. If we have others, again, it's joshua.long@stephens.com. Curious, the question was really aimed at: what did you learn as you went through a lot of these changes? Obviously, it's not done in a vacuum 'cause everything at the time was changing. But when you... You know, what you learned from the guests and how the guests responded to whether it's, you know, the shortened menu or kind of the optimized menu or the store hours. I mean, were there any elements that were particularly surprising, or I mean, did you feel like you got it right the first time around? Yeah, we heard it all. Because, again, when you went to the simplified menu that you had to run during to-go, obviously you lost some specials. And that's really what CKO is about, is bringing back some old favorites and so on, and now they appreciate that stuff. And we've learned from him, and I've got every one of them, what we call those Hey Chuy's. And Hey Chuy's for these last couple of years was Steve, you know, so I talked to a lot of the customers about it. So, but yeah, everybody was tremendously understanding because everybody's going through, one way or another, this pandemic in their own way. But when, you know, right now, I think it's really balanced. Everybody still understands we have a tremendous value in our menu, but we also have, you know, we've still a concept that you come in and you can customize every meal you have. Mm-hmm. You can customize it any way you want. So, in Austin, I'd say that's about 80% of the plates. Now, in Tennessee, it's probably about 30% of the plates. So again, as more people use us, they learn our customization. But there's nothing that was adversely affected. I think everybody, you know... I don't think your experience, except maybe being a little crisper- Mm-hmm ... it hasn't really changed much. Yeah. Can you talk about how you go about deciding where to open? Sure. Yeah. All right. That's great. The question was on unit growth, which is obviously an important part of the story, and how the site selection works. Yeah. So during the pandemic, we also took a look at that. Prior to the pandemic, we brought in eSite, and we were, at that time, putting data into their model, our basically development model. During the pandemic, we continued to put that data off, so we had to throw out 2020. That wasn't meaningful. But so when we're done, we also looked at what states we really wanted to focus in on, because, those states that had great, tipped wage for us, you know, not like a Colorado maybe that has a $12 tipped wage or even Florida, right? So we looked at the five states that were most profitable and had the highest AUVs and the most brand recognition. So then we went to eSite when we got comfortable with the model and said, "Here's the 5 states that we want you to look at. Can you tell me how many sites we can find in those 5 states that can do $3.5 million or better and not cannibalize our existing sites by more than 5%?" And they came back just in those 5 states with 98 locations. And so you think about it, right? You still got to identify the site, you got to negotiate the lease, you got to open the store. So let's just say 50% of those come out. That gives us the growth when we're talking about 10% for the next 3-5 years. There is de-risked your, your development because you already are doing above AUVs in those states, you're doing above margins in those states, and you feel highly confident in what those revenues are and highly confident what the margins are. We've opened 5 stores with that model thus far, and all of them have exceeded the revenue estimates of eSite. And the cannibalization of the existing store has been less than these sites. So we've been very, very pleased with the results of those so far. They also get up to margin in year 2, probably instead of year 3, as you move outside. So a much quicker ramp-up. We've also expanded that to 2 more states as well. We've got 7. You know, increase that by 10 or 20% of what we have out, that we can do for the next, you know, 3-5 years, for sure. Awesome. Yeah, that's, that's really helpful. Follow up. Sure. So yes, I mean, our costs are up 40%, since 2019, so during the pandemic. We are starting to see the costs kind of level out, not increase, but they're definitely not coming down. So obviously, that hurts the returns a little bit on the cash-on-cash. We still look for a 30% cash-on-cash return or kind of an ROIC of 20%, all in. So when we're talking about purchasing the location, we figure in a sales- leaseback into that calculation. So, you know, you're looking at, say, $3.5 million-$4 million today to kind of build the restaurant. And then you're looking at an extra maybe $1.8 million-$2 million to buy it. So you take all that, but then if you basically take, say, one that's doing, say, $4 million, and you put 6% rent on that, which, you know, we're comfortable with 6%-8% on occupancy costs, and then do a cap rate of, prior to these interest rates going up, 5.75%-6%, then you can get out probably three quarters of what you put in it, and then increase that ROI. So, you might have a total cost after purchasing the thing of, say, $5.5 million. You get probably $4 million back out of it and lower that overall investment cost in it, and so and then increase your overall return, if that makes sense. Mm-hmm. Sales-l easeback. Yeah. Yeah. Yeah. And so, you know, we haven't really decided when we'll do that, but, I mean, obviously we'll wait for the cap rates to come back down, and probably do kind of a strategic, maybe not one at a time, but a big kind of sale-l easeback to get that back. Got it. That's helpful. And when we think about, kind of a follow-up question that came in via email, when you think about, you know, your point earlier, Steve, you've seen one Chuy's, you've seen one Chuy's. And so it seems like that could work both ways, right? I'm sure you've optimized the build process over time, but when we think about other operators, it always seems to be, you know, a lot of the savings and highlighting just the efficiency of having a cookie cutter model from a build cost perspective. But I imagine the flip side is you have a very authentic look and feel, but then you still have a lot of flexibility in terms of how you can attack site by site. Can you talk through that and just what skill sets you have at the development side? Sure ... to manage that? Yeah, and you're never not working on value engineering. I mean, you do that forever, but obviously, when costs go up 40%, they have not come down yet, you even continue to ramp that up. But that's also why we came up with a 5,500 sq ft prototype now, you know, with enhanced to-go, 'cause we've more than doubled our to-go, and we've kept it. And then, and we also a little bit larger patios for us in our stores. But that will continue, but every single day we're looking at streamlining everything, including the equipment you put into the building also, all the way through. But we'll definitely... You'll, you'll start to see, over the next year, year and a half, you'll start to see the six-foot in deals will start coming back. They haven't been for a while 'cause they don't have to with the landlords, but those will start to come back, but it's gonna get more competitive out there as far as that goes. What you have seen, because we are so good at what we call hermit crab or remodels, you're seeing everybody get involved in that because of the construction costs. Mm-hmm. So now those sites are definitely in more demand. So the basic, the ground up stuff, but the cost now is gonna be more pressure on them, and they'll continue to feel the pressure as the year goes on. And then you'll see some things return to normal. And the normal isn't gonna be 2019 numbers, but it's definitely not 2022 numbers. So somewhere in the middle, they'll come back and if we get ahead of the curve on the value engineering and the equipment and our furniture, we'll be ready and we'll be set up well for that. That's exciting. When we think about that more optimized footprint, you mentioned 5,500 sq ft, is the idea that that offers some room for supplementation of the unit pipeline? Does that... Do we eventually go to all 5,500 sq ft units, and is that the limit? Have you done some tests in and around, kind of where the, you know, pivot points might be for where- Both. Yeah. But it really opens up, it opens up on things that we can go and hermit crab. You know, we never would have thought, you know, 5 years ago, I'd take an Applebee's that's 5,000 sq ft and be able to put our building in there somehow and rechange it. So now we're much more comfortable, whether it be 48-55, we're okay going in there, and we can make it work, and we feel comfortable. And we might have to have some enhancements on the to-go area, okay? And that's where you just need to make sure you'll be able to do that. But it's just a staging area 'cause everything else is run out to the car if they pull in, or you have a DSP that would be coming by and picking it up. So those are things, but we're comfortable on our, you know, just basic footprint, and we can be chameleon-like in all the approaches. And in our larger buildings, you'll end up cutting off a room, and it'll be a party room. Mm. Just get comfortable with that, on our remodel, 'cause, you know, at the end of the day, site wins... wherever site wins, whether it's a buy, whether it's a lease- Mm-hmm. The site wins all that. So, and same thing with size. Yeah. Just make sure it fits to your model of 44-46 tables, and the rest is waiting area and a party room. Got it. Well, another topic that's come up a lot today is the labor environment. And so much like cost of goods, things have started to normalize, which is, you know, definitely positive for the industry. And then when we think about your more optimized footprint, you know, increased table counts for servers that often's, you know, a very attractive valuation or kind of earnings capability for them. But can you talk about labor pipeline, the pool, human capital, and what you're seeing there, and kind of how you're able to support this steady unit growth going forward? Yeah. Yeah, it's tough. It's still tough. But I think we're staffed, and it's good, but the biggest thing and the biggest change is the experienced servers, the experienced bartenders are nowhere to be seen. So right now, we're where the fast food was 20-25 years ago, where the first job was fast food? The first job for young kids nowadays coming in are casual dining. Okay? Casual dining. So you really gotta look at your training methods. We have an LMS that we started basically a year ago, which is, there's no book learning anymore. I mean, that's the way I learned, but that was it. So now everything's LMS, and everything's on digital, everything's on their phone, everything's, you know, as much as they can do without saying a word, they wanna do it that way. And then that way, when we get them, we just gotta tell them that they have to talk- Yeah ... a little bit. And that's what it's getting to, but you have to be poignant. You have to keep their attention. And so you have to adjust. The old days of teaching and teaching these young kids or anybody right now on the methods of what we wanna do, it's changed, and you gotta stay with it. So we're real excited about that. That's helped us. We also have started that with all our managers go through LMS right now, and everything's done digital. Some is done at home, some is done in the restaurant. So those are the big things that you have to stay in front of. But there's definitely more investment on the training piece in our company, and it had to be. Makes sense. I mean, the key elements of hospitality, value, convenience, all the things that the food service industry and restaurants particularly are known for, I mean, the key elements are there. The expression of it might change over time- Right ... and so you gotta have some of that flexibility, but luckily, everyone's pretty good at being flexible the last couple of years. Yeah. We've had to kinda rethink models. And this maybe is somewhat of an interesting question for you, but also, you know, maybe more so for your peers. When we think about that unit growth pipeline, you're backfilling or kind of building out markets where you have brand awareness, so that's certainly helpful. You've also got a really interesting piece of the story in terms of everything being made from scratch, very authentic. You mentioned kind of the tie-in to some of those Mexican towns where you get your fish and all these key elements of your story. Can you talk about how, you know, you communicate that and kind of help add some texture around what everyone knows you for, which is great food, great experience, but you know, from a marketing perspective, how do you use those dollars? When and where? You know, how do you balance messaging and/or just brand building? Yeah. That's first, it starts with your employees. All right? And that's just where our cultural piece starts, 'cause the one that has to sell you and also be able to teach that culture is the kids who are talking to the kids, right? So that's the key. So our marketing first goes towards our employees. And they gotta believe, and they gotta be willing to share those stories with everybody. So that's where it all starts for us. But we, we do... We spend about 1.45% of our total sales goes to our marketing bucket, and that was what it was in 2019. So obviously, we've grown there, but we feel that's great. We deal with a lot of social and digital, and that's our baseline. It's a baseline that we go out to all stores, that we really talk about, you know, our keywords and what we are, and so forth, and really talk about our defining differences, but that's throughout the whole company. To enhance that, where you think, you know, that's not basic. That's kinda like remodeling a restaurant. If you have to do that, like you have to do a remodel to stay current, to keep your share of voice, if that makes sense. Maybe not increase the sales, but just to keep you where you're at and keep that share of voice. On top of that, you know, we have all the... We run some videos of 15 seconds, 30 seconds, and then we have 6-second bumpers that we feed to the people after they've seen the 30 and the 15. And, and they're really talking about really what's different in our restaurants, our food, where we make it from scratch, and we'll talk about our CKOs on these type of things, and they will be on YouTube, they'll be on TikTok, and TikTok will be organic and not. And, and then we'll do a lot of programmatic TV, which is getting on ESPN for sports, getting on Hulu, and, and we'll show these videos. And, and we have three big-time assets in less than a year of doing this, so we, we feel real comfortable, and we did a nice investment in that. And then we'll do the Yelp, and then you'll do your regular stuff like your billboards in certain instances. We have about 15 billboards that we use currently in our, our company. And then the whole wrapper, though, is really what we call local store market. That's where the GM has to be the mayor of that town. He has to be involved in the schools, the churches, Knights of Columbus. He has to own that town and really get to know it and be involved in it, be involved with the athletics in the area. And that's the wrapper, 'cause that's the stuff that stays long-term. That's all relationship building. Mm-hmm. Relationships stay longer than a piece of film that's... it's a certain amount of money to do, 'cause the relationships last forever. That's a great point. I mean, to building off of that, we think about maybe sales by channel, right? We think a lot of times it gets broken down to just on-premise and off-premise, but, I mean, you've got a great patio business. There was a period there during the summer where it was really tough to utilize patios because of the heat, but we've gotten back into a more normalized timeframe and weather patterns. So that's great. And as you think about catering and some of these other channels, how have those grown, and how are you thinking about those as longer term drivers? ... Sure. So, I mean, if you look at the third-party delivery, right, that has grown for us, especially starting last year. We brought Uber on, which was our second DSP, in November of last year, actually October, late October last year. And that basically, when they brought it to us, they said that we could provide you incremental sales of X. And basically, what they're saying is it could be probably about 70, 75% or 80% incremental, which I would, it was hard for me to believe that they would have incremental above DoorDash, but it was. Basically, it's been 90, 95% incremental. Now, this quarter, we're rolling over that, right? So we implemented it last year, and that was probably 200 or 300 basis points, that's increased all through last year. Now we're rolling over it in this quarter, so it's a tough comparison. And so that's kind of hurting us a little bit there. But we are now up to about 11.4% of our sales are delivery sales. And then our catering is the next avenue that we're really starting to push. You know, it's a little over... It was about 3.3% last quarter. If you look at the fourth quarter last year, it was just under 4%. I think we'll be comparable, if not higher than that, here in the fourth quarter of this year. We continue to focus on that. We have 17 markets each. Most of those markets have an individual manager that's totally focused on those catering sales, and gets incentivized for the catering sales they bring in, and they have a catering van with all the utensils and equipment. We've also brought in ezCater, which basically really markets that, that office lunch person, if you will, that secretary that's looking for the lunch. We're currently in about 70 restaurants, and we hope to be rolled out to all the restaurants by year-end. So we think that business can be 4%-6% long-term for us. Those are the big avenues of growth I think that we have in that. Yeah. Yeah. And then continuing to grow, obviously, you know, we'd love to continue to grow, dine-in- Mm-hmm ... 'cause that's, you know, putting butts in seats and showing them our Chuy's hospitality. That's what it's all about. Yeah, that makes sense. We've got about 5 minutes left, so if you have any questions here in the room, definitely feel free to chime in. You know, kind of a follow-up there that came in via email in terms of your kind of the incrementality on the delivery piece. That's super exciting. We've heard similar elements as well, but curious, as you experience that, maybe it's, you know, 90%-95% incremental across DoorDash, across Uber, how do you kind of get those customers into your rotation? I mean, is there an opportunity where we think about maybe... Say, your limited service peers might then try to bring them over into a kind of brand-specific loyalty program. How do you, you know, how do you maybe convert or do you, do you want to convert some of those that are in the delivery channel into kind of the dine-in channel? Or is it really a distinct experience for them, as well as being a distinct consumer versus what you have? Well, I think—I mean, that's a great question. I mean, you know, I think there's an opportunity, and I think it's through kind of our marketing. We want to bring them to our website, 'cause we have the delivering capability in our website, too. Now, it's still by one of the DSPs- Sure ... but they think it's Chuy's. And it's a fixed cost. And so actually, when you combine that and just the fixed cost of delivery, it's actually a lot lower price for the customer. So we want to really promote that, because when we do that, we're really, as I said earlier in the finance, we're really starting to accumulate data. Mm-hmm. Right now, you don't get the data from the DSP. So the more that we can bring people to our website, we can keep that data and really start to analyze it and see, you know, we know who our customer is, but even, you know, see frequency and segmentation and things like that, that we can really use to further our growth. Yeah, that's, that's helpful. I think we'd be remiss to not talk about the balance sheet and the, you know, kind of uses and application of capital allocation. I mean, obviously, unit growth is a big piece that we've talked about. Mm-hmm. You know, Steve, coming out of the pandemic, we had talked about probably the opportunity here to maintain a larger cash balance on the balance sheet just 'cause we've been in through a volatile period. That volatility is probably gonna be here longer than everyone would like to admit. So having that extra cash cushion, you know, really, I imagine, allows all three of us up here to sleep better at night- Absolutely ... knowing that you have that. Yeah. So, can you talk about just, you know, capital allocation, how you think about that across unit growth, share repurchase? And I mean, with the balance of unit development, I mean, does a dividend make sense at some point in time? I mean, you guys generate a lot of cash. How do you think about that? So we don't think right now dividend makes sense. You know, that's further down the line when we're bigger. I mean, right now, we're 100 restaurants. We think you know, the total impact into the U.S. at the you know, when we went public, thought it was 350. With our new prototype, we think that it's in excess of that. So we think we got a lot of growth ahead of us. And so right now, I don't know that dividends make sense. From a capital allocation, though, like I said, it gives us flexibility in our real estate to do these sale- leasebacks, buys, and sell them back later. We're basically, from a capital allocation, using our free cash flow to buy back stock. So we were planning to buy back $15 million-$20 million this year. You know, but a couple of stores got pushed to the following year, so we used some of that free cash flow to buy back even more stock, so we bought back $23 million. One thing that we're looking to do, as you know, we did the ATM, and talking about sleep- Mm-hmm. ... and that was the first time Steve and I slept, was when we did the ATM- Yeah ... during the pandemic, but we issued about a little over 3 million shares in stock. So we'd initially like to buy all that back, back, and we're about 126,000 shares from doing that today. And then, we did have some dilution in kind of our, over the last three or four years in our RSU program. That's another three or four hundred thousand. So we'd like to buy all that back to get back to ground zero, which we're very close and think we can do it in the remaining authorization that we have of the 50 million. So that would basically be our capital allocation at this point. Got it. That's very helpful. I appreciate that, and maybe one last one, if I can sneak it in. I mean, we think you've a very holistic approach to the business. Great, authentic, you know, operations focus. I noticed recently we had a kind of a maybe a human capital promotion or shift in terms of the Chief Operating Officer position. Probably not a big surprise to those of us who have been following the story for a long time, but can you talk a little bit about that and maybe what opportunities that unlocks for you going forward? Yeah. And this is just succession planning for the last few years. This guy, he actually ran this market as a VP, and he was based out of Nashville, but he's originally from Texas, actually Austin. So he's been working at it for a while and been under my thumb for an awful long time, and Jon, he's... But it was just a time and space. We have the current COO is Jon- I mean, the old COO was Jon Mountford. He's still with the company. He's from the culinary side of our business and procurement side of our business, so he'll be running all that. And we'll just move Jon in, who's more of the operator, and into that role. Jon was a perfect... Jon Mountford was perfect for crisis management of what we just went through, COVID, very wide shoulders, very calm. For the next stage of our development from an operating point of view, we need to make the change there. So I think I'm excited about it. I think it's strengthened both areas in our company, and that's a key point for us. Understood. Really appreciate the time today. Thank you so much. Yeah. Happy to have you here in Nashville. Thank you. Thanks, guys.