Good morning. Welcome to the Carrols Restaurant Group Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session, and instructions will be given at that time. If anyone should require operator assistance during the call, please press star zero on your telephone keypad. I would like to remind everyone that this conference call is being recorded today, Thursday, February 24th, 2022, at 8:00 A.M. Eastern Time and will be available for replay. I will now turn the conference over to Tony Hull, Chief Financial Officer. Please go ahead, sir. Actually, we're gonna turn it over to Gretta Miles. Gretta, go ahead. Thank you, Paul and Tony, and good morning, everyone. By now, you should have access to our earnings announcement released earlier this morning and our earnings presentation. That are both available on our website at www.carrols.com under the Investor Relations section. Before we begin our remarks, I would like to remind everyone that our discussion, including answers to questions posed to management. May include forward-looking statements or comments with respect to our strategies, intentions, or plans, and the future direction of revenues, input costs, or other aspects pertaining to our business. These statements are not guarantees of future performance, and therefore undue reliance should not be placed on them. We also refer you to our filings with the SEC for more details, both with respect to forward-looking statements. As well as risks that could impact our business and results, including, among other things, the impact of COVID-19. During today's call, we will discuss certain non-GAAP measures that we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation. Or as a substitute for results prepared in accordance with generally accepted accounting principles, and a reconciliation to comparable GAAP measures is available with our earnings release. With that, I will now turn the call over to our Chairman and CEO, Dan Accordino. Dan? Thanks, Gretta, and good morning, everyone. Let me begin by addressing the elevated labor and commodity costs affecting us and the entire restaurant industry. Because these headwinds meaningfully impacted our adjusted EBITDA and margins during the fourth quarter of 2021. Later, I will discuss our top line trends and how we are using a combination of pricing, menu, and promotional activity optimization. To offset a portion of the margin pressures we have been experiencing. During the fourth quarter, we worked diligently to keep our restaurants open from at least 6:00 A.M. until 11:00 P.M., but given the competition to recruit and retain workers, we also had to increase average hourly wages of our team members. By approximately 14% compared to the prior year before overtime so that we could meet customer demand. Looking ahead, although we are seeing some stabilization in hiring and wage challenges early on in 2022. We believe labor rates will continue to rise throughout the year. Further, we believe that on a year-over-year basis, our labor costs will increase faster in the first half of 2022, after which we expect comparisons to ease. Supply chain constraints also greatly impacted our fourth quarter 2021 results, as they did during the third quarter. Beef represents about a quarter of our commodity basket, and beef costs increased 33% compared to last year as we lapped very low beef costs in 2020. On a sequential basis, from the third to fourth quarters in 2021, beef costs rose only 1%. Domestic food, paper producers, and distributors supplying most of our commodities are dealing with labor constraints. Along with higher fuel costs and are passing these increases on to us. As a result, commodity inflation overall was approximately 16% this past quarter compared to the prior year period. Including the previously mentioned impact of higher beef costs. While we cannot predict when these inflationary cost pressures will end, we can say that we believe that in the back half of 2022. The year-over-year percentage increases for labor and commodity costs will moderate. We also intend to continue to move pricing to partially offset inflation to the extent possible without impacting traffic. On a cumulative basis, this should also benefit margins in the back half of the year. As you may have recently read, the Burger King Brand has about a dozen menu and promotional initiatives. Some of which have already been implemented, and some that will be implemented over the course of this year. These actions contributed incrementally to our average check increases this past quarter. And are designed to limit the impact of higher input costs and help improve restaurant level profitability. Recent actions in this regard from our franchisor include lifting price caps on value menu items and reducing the number of nuggets and meals from 10 pieces to eight. The Whopper, the brand's most popular product by a wide margin, has also been removed as a core discount item and is no longer available in the two for $6 or two for $5 promotions. We believe this to be one of the most impactful initiatives underway. Turning to sales, comparable Burger King Restaurant sales rose 7.4% during the quarter. Our monthly results fluctuated, which we attribute to the impact of COVID variants on both consumer behavior and staffing. For the entire quarter, we estimate that we lost about 1% of operating hours due to COVID and staffing-related challenges. Eat-in and takeout channels combined contributed about 14% to total sales at our Burger King Restaurants, while drive-through was approximately 80%. This was on par with the third quarter as well. We also benefited from a delivery sales mix of 5%, which compared favorably to a 3.5% mix in the fourth quarter last year. The average check size for delivery rose to $17.58 compared to $17.53 in the third quarter. While the average check overall, including delivery, rose to $9.57 compared to $9.23 in the third quarter. The Burger King average check increased 12.1% year-over-year as a result of higher menu prices and reduced promotional discounting. In terms of sales trends at Burger King by day part, we were most encouraged by the recovery of our breakfast and evening late night day parts, c ompared to the same quarter in 2020. Breakfast increased 9.5% and contributed 12.8% to our sales, while evening late night improved 15%, and contributed 11.2% to our sales in the fourth quarter. We also outpaced the U.S. Burger King System in comparable restaurant sales as we have now done for 22 out of the last 24 quarters. On a calendar comparison basis, our comparable Burger King Restaurant sales for the fourth quarter. Exceeded the U.S. Burger King System by approximately 600 basis points, which is among the largest gaps in recent history. We believe that this was accomplished through a combination of quick execution of menu price actions and actively maintaining restaurant hours. Turning now to January 2022, this was a challenging month for comparable sales as three major snowstorms hit most of our largest markets. And due to staffing issues caused by the spread of the Omicron variant. Comparable sales at our Burger King Restaurants decreased 1.4% in January 2022 compared to January last year. But were up 4.1% compared to January 2020, one of our last pre-COVID months. During January 2022, we estimate that we lost about 4% of Burger King Restaurant operating hours. Compared to January 2021 due to these unplanned restaurant closures that meaningfully reduced traffic to our Burger King Restaurants. More encouragingly, as of last week of January, COVID-related staffing closures and reduced operating hours had abated for the most part, and for the first several weeks of February had been promising. Burger King's Royal Perks loyalty program is now available to our dining room and drive-thru guests as well as through the BK Mobile App. Mobile orders represent a small but growing part of our sales mix, and we believe the brand has a significant opportunity. To increase one-on-one engagement through the digital channel while reducing the use of paper coupons. There is no question that our current cost challenges are among the toughest, if not the toughest. I have seen in all my decades as a restaurant operator. We are combating these headwinds as best we can through aggressive pricing, menu changes, and lower promotional discounts. We believe that these efforts will serve to alleviate margin pressure, which we further believe will be most evident in the back half of the year as cost comparisons ease on a relative basis. With that, let me turn the call over to Tony to review our quarterly financials. Thank you, Dan. Total restaurant sales for the fourth quarter, a 13-week period, were $416.1 million. Compared to the 14-week period of $420.5 million in the prior year. The 2020 sales number included $28.4 million from the additional operating week. Adjusting out the extra week in 2020, restaurant revenue increased 6.1%. Our Burger King comparable restaurant sales increased 7.4% during the quarter. Average check growth came in at 12.1%, which reflects menu price increases taken during the year and lower promotional activity, partially offset by a traffic decline of 4.2%. Average weekly sales per Burger King Restaurant were $29,812, representing an improvement of 6.6% from 2020 levels. While exceeding 2019 levels by 5.6%. During 2021, we acquired 19 restaurants, opened four new restaurants, and closed six restaurants. Let's now discuss our Burger King quarterly performance by region, as we operated 1,026 restaurants at year-end across 23 states. In the Northeast, representing 21% of our Burger King Restaurants, comparable sales were up 10.3%. In the Midwest, representing 29% of our Burger King Restaurants, comparable sales were up 8.4%. In the South Central, representing 24% of our Burger King Restaurants, comparable sales were up 8.3%. Finally, in our Southeast region, representing 26% of our Burger King Restaurants, comparable sales were up 2.5%. Turning to our Popeyes restaurants, which represented 4.8% of total revenues in the fourth quarter. Comparable restaurant sales increased 1% versus a decrease of 12.9% during the same period in the previous year. Staffing challenges during evening hours were particularly impactful on our Popeyes sales. Nevertheless, we outperformed the Popeyes U.S. system by 300 basis points in the fourth quarter of 2021. As a result of the inflation challenges experienced in the fourth quarter, adjusted EBITDA decreased $17.9 million- $13.9 million, while adjusted EBITDA margin decreased 430 basis points to 3.3% of restaurant sales. Cost of food, beverage, and packaging as a percentage of net sales increased 138 basis points. Primarily because of higher beef, pork, and other commodity costs, and in contrast to the extremely favorable commodity conditions in the fourth quarter of 2020. In particular, beef costs during the most recent quarter were $2.71/lb, compared to $2.04 in the year ago period. They were also only slightly higher than the cost per pound in the third quarter, which was $2.68. Sequentially, cost of food, beverage, and packaging as a percentage of net sales improved 30 basis points between the third and fourth quarters of 2021. Restaurant labor expense rose 170 basis points as a percentage of restaurant sales in the fourth quarter of 2021. Compared to the same quarter a year ago. Compared to the third quarter, labor expenses as a percentage of net sales only rose 50 basis points. Excluding the impact of the extra week of labor in 2020, labor costs increased $15.3 million- $141.4 million in the fourth quarter of 2021. This increase was primarily due to the higher hourly wages, which, inclusive of overtime. Increased $8.3 million or about half the total increase this past quarter compared to the same number of weeks last year. The remainder of the increase was due to the necessity of paying team members premiums to take on additional responsibilities. Such as opening and closing our restaurants, and higher management labor expense due to salary increases for our assistant managers to improve retention. Restaurant rent expense in the fourth quarter increased 50 basis points as a percentage of sales, compared to the prior year period. Primarily due to the benefit from the extra week in 2020. Other restaurant operating expenses increased 45 basis points due to a number of factors, including higher recruiting spend. And other employee related incentives, as well as utility rate increases. We also now have smart safes in the majority of our Burger King locations that provide for labor efficiencies, faster cash collection, and greater security. But this initiative added to operating expenses. General and administrative expenses fell to $22.4 million in the fourth quarter of 2021 from $24.2 million last year. And declined 40 basis points to 5.4% of restaurant sales. The decrease in dollar terms was due to lower incentive compensation accruals this year. And was partially offset by higher regional administrative costs. Our net loss was $16.4 million in the fourth quarter of 2021 or $0.33 per diluted share. On an adjusted basis, excluding certain non-operating items, fourth quarter adjusted net loss was $7.5 million or $0.15 per diluted share. In the prior year period, adjusted net loss was $5,000 or $0.00 per diluted share. Free Cash Flow for the fourth quarter of 2021, was $8.8 million compared to $9.4 million in the prior year period. For the full year, we generated $22.9 million of Free Cash Flow. We ended the fourth quarter with cash and cash equivalents of $29 million and long-term debt, including the current portion of debt and finance lease liabilities of $449 million. There were no borrowings drawn under our $215 million revolving credit facility. And we had $9 million of letters of credit issued under such facility at the end of the year. This left $206 million of unused availability under our credit facility. And when added to our cash balance, provided us with $235 million in liquidity at that time. As of February 23, 2022, we had $25 million drawn on our credit facility. Which we expect to repay as we get into our stronger seasonal period. As a reminder, our ability to utilize our revolver capacity requires compliance with one senior secured leverage ratio. And is only in effect when more than 35% of the available capacity is being used. We are currently below that threshold and have no maintenance covenant requirement. When in effect, we need to stay under 5.75x Senior Secured Net Debt to Covenant EBITDA. Our Senior secured leverage ratio was 1.67x at the end of the fourth quarter. So, we have headroom to use our current available revolver capacity. Our total Net Debt compared to Covenant EBITDA was, as defined in the Senior Credit Facility, 5.2x at the end of the fourth quarter. We did not repurchase any shares of our common stock during the fourth quarter as we were above the leverage guidelines set by our board. Once again, from an M&A perspective, we do not have any multi-restaurant transactions in the pipeline. We currently intend to use cash flow generated this year primarily to repay debt. Net Capital Expenditures for 2021 were $48 million, which included seven completed remodels and four new restaurants. This total also includes $10 million that was used to commence work on a number of remodels and new restaurants, that are scheduled to be completed in 2022. Our Net Capital Expenditures have been under $50 million per year over the last two years. For 2022, we expect our Net Capital Expenditures to come in at a similar level. Which is reflective of the construction supply chain delays we have been experiencing. To conclude, while the ongoing cost headwinds affecting our business model are clearly evident and pronounced. We have made and are continuing to make adjustments to our pricing, menu, and promotional strategies. That would enable us to gain a portion of the margin erosion we experienced in 2021. This should be particularly true in the back half of 2022. From a combination of continuing average check gains, along with potentially easing cost pressures on a year-over-year basis. With that, Paul, let's go ahead and open the lines for questions. Thank you. 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. A confirmation tone will indicate that your line is in the question 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 poll for questions. Thank you. Our first question is from Jake Bartlett with Truist Securities. Please proceed with your question. Great. Thanks for taking the question. My first is on menu pricing, you know, and related to that. You know, your comfort in taking pricing, you know, given concerns about the lower income consumer. You know, potentially being squeezed by inflationary pressures. One question is, you know, what was menu pricing? I'm sorry if I missed it, if you've mentioned, but what was the menu total menu pricing in the fourth quarter? How should we think about menu pricing progressing throughout 2022? Second, you know, as part of that, you know, are you seeing any signs. It sounds like mix is still, you know, very positive, but are you seeing any signs of trade down in the menu or maybe increased value mix? Anything that would, you know, you know, address some of the concerns around the lower income consumer. Dan, I could take that if you want me to. Yeah, go ahead, Tony. The 8%, Jake, 8% was the menu price increase in the fourth quarter. The remainder was lower promotions and discounts. We improved our promotions and discounts by about 4%. You know, our you know, we're looking at price increases for this year. And we think that we're in, you know, given what the competitors are doing. We're in a mode which is probably something we couldn't have said for sure in 2019 or 2018. But we're in a mode and the industry is in a mode where we think we can take price without affecting traffic that dramatically. You know, we expect to continue to do that during the year as we lap some of the price increases, we put in place last year. We're not seeing any, you know, traffic indicators. That would, you know, say that we're going too fast on menu price increases. Okay. You know, the 8% that you saw in the fourth quarter, you know, just considering what you're lapping. Do you expect that to go up? I think the comment in the press release was that. You know that maybe pricing would help more in the back half of the year. I think the implication it would be higher than we're seeing now. Just so we understand, you know, how that progresses throughout the year. Yeah, we expect to take pricing in 2022, so that will, you know, on a cumulative basis. That'll get the average check, you know, above the $9, you know, whatever it is, $9.40. It'll continue to grow, next year. On a cumulative basis, when we get to the back half of 2022. You know, we should see a continuous, steady growth of the average check. Okay. Then the other question I had was on some of the other, you know, offsets to the inflationary pressures that you're seeing. You mentioned, you know, operating efficiencies. My impression is that Carrols runs a very tight ship, probably, you know, I mean, I think better than most in the system. Can you talk about the opportunity there, you know, that you have to support margins through better operations? Maybe what some of those more efficient operations are. Maybe if there's any way you can kind of quantify what kind of benefit you think that there's to be had on that front. Yeah, I think the point on the operating efficiencies is that, you know, in the first half of this year. You know, we expect to see the same kind of increases for labor year- over- year, and for commodities year- over- year that we saw in the third and fourth quarter of last year. In the back half, when we start to lap those higher levels. We think the increases of those two categories will be less. At the same time, you know, we're seeing comps going up because of average check going up. So that's where I think that's where we think we'll get some leveraging on Cost of Sales and Labor Costs in the back half of the year. I think, you know, in terms of efficiencies, we would agree that we run the business pretty effectively. I think some of those efficiencies are really coming through the price increases. That, you know, our franchisor is allowing us to do on, like, the value menu went from $1- $1.29 like last week. Or I think on the 10th of February or so. You know, the two for $5, the two for $6 became two for $5, but the Whopper came out. That on a, you know, that's very valuable to us to have the Whopper come out of the combo meal. Or not of the combo meal, but the deal, you know, the value menu. Those types of things that our franchisor is doing is really helping us offset some of those. You know the higher costs we're seeing and the higher input costs we're seeing. Got it. Just to be clear, you didn't mention, you know, anything you're gonna be doing differently operationally. And I'm thinking maybe of the, you know, how much the slimmed down late-night menu might impact. Are there any changes to operations that your kind of proactively doing. Or is there really no opportunity there since you already run such a great ship? No, we're not. This is Dan. We're not doing anything differently from an efficiency standpoint in that respect. You're right. I think we're pretty efficient. We've looked at hours of operation, and which hours make the most sense to stay open in which restaurants. And we've adjusted for that a s Tony said, the efficiencies are gonna come from various promotional activities from Burger King. As well as the opportunities that we have to take price. Okay, great. Last question is on G&A. You know, it was G&A increased pretty, you know, sharply in the fourth quarter from the third and is the highest of the year. Is that the fourth quarter G&A the right run rate as we think about 2022? Or was there anything, you know, abnormal, you know, in the fourth quarter G&A that wouldn't be recurring going forward? Yeah. You have to adjust out some of the. I mean, the biggest thing in G&A last year was we had lower merit and lower bonus compensation. So that actually got us to a pretty low number as a percentage of sales. So, I think the kind of level, I don't think the level of G&A. Excluding the bonus, is really gonna change between this year and next year, i.e., 2021 versus 2022. The big difference in G&A in 2022 is gonna be restoration of the bonus, which is about a $5 million headwind on G&A. To be clear, there was the bonus did not get paid, so all else equal, at the very least. We should see G&A up $5 million in 2022. Is that what you're saying? Mm-hmm. Okay. Thank you very much. Appreciate it. Thank you. Our next question is from Jeremy Hamblin with Craig-Hallum Capital. Please proceed with your question. Thanks. First, I just wanted to ask about beef prices, as you noted, 25% of COGS. I think, Tony, the math is it like about $2.71 a pound in Q4. I just wanted to get a sense of where the current run rate was. It's at about that level. Hasn't really moved. Okay. In terms of thinking about, you know, Restaurant-Level Margins for the year. Carrying, you know, quite a bit of menu pricing, which seems to be helping some degree. But obviously, pretty hard to cover the labor numbers, the hourly wages that you're talking about. In terms of thinking about for the year, where menu pricing needs to be for Restaurant-Level Margins to be up, you know, you're 9.5% for the year in 2021. You know, are your expectations, you know, given the current conditions. And the expectations, at least for the first half of the year, you know, do you think that Restaurant-Level Margins can be up. You know, in 2022? If so, what's the menu pricing that you need for that to happen? Well, we haven't, you know, we have a budgeted number for menu price increases. But obviously we're gonna be, you know, testing and, you know, looking pretty hard to make sure anything we put into effect doesn't, you know, doesn't hurt traffic. You know, we're also gonna take advantage of the things that the franchisor is doing for our menu pricing. That's gonna have an interplay, you know, as the year progresses. You know, I guess on a big picture level, I think the first half, you know, our expectations. The first half Restaurant-Level Margins are gonna look a lot like the third and fourth quarter of last year. Then when you have that cumulative effect of the average check going up by the end of the year. Plus, moderating, you know, input cost increases, that's when we would expect to see Restaurant-Level Margins start to improve. Okay. Got it. That's helpful. Just thinking about the geographic performance, notable call-out on the Southeast as a laggard. Is that more of a, you think, a reflection of, you know, kind of COVID impacts or more a reflection in Q4 of, you know, weather impacts or. You know, cause the three regions I think averaged, you know, close to 9% or maybe even a little over. Northeast, Midwest, South Central, and your Southeast was, you know, quite a bit behind that. Any color you might be able to share on that? Sure. Our sense is that the weakness in that region or the softness in that region is across the board for the Burger King System. It's not just our restaurants in that region. There's been a lot of building of you know introduction of new competition in that region. And we think that's been the biggest drag in Q4. You know, that was sort of the adjustment we saw in Q4. After we get through that, we think we should you know see improvement in those comps. As we start to lap that digestion of you know the new competitors in that market. Okay. Got it. Last one from me. In terms of, you know, there's just so much going on here. You know, as Dan mentioned in his decades, you know, maybe the most challenging headwinds in terms of inflationary pressures. You know, when you look at what, you know, parent is doing to help manage that. You know, is the focus more on, you know, adjusting the, you know, the items on the value menu. And you know, pricing thoughts as opposed to, you know, kind of new product pipeline? Is that something where we should be thinking for the BK Brand that, you know, this is gonna be less about. You know, new products this year as opposed to, you know, kind of reimagining the menu to fit the current operating environment? This is Dan, Jeremy. You're gonna see both. There are some new products in the pipeline. I think that the major change promotionally is gonna be a focus on the core menu. The Whopper & Variations of the Whopper and a burger focus as opposed to 2021. Which was the primary focus was chicken. There will be some modifications in the chicken lineup, but the primary focus is gonna be around burgers. Yes, there is gonna be variability in the menu as well as at breakfast. There's some new product introductions there as well. In conjunction with, as Tony said, the modifications to some of the pricing on the value menu caps and that sort of thing. I think it's gonna be a balance of the two. Got it. Thanks so much. Best wishes, guys. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. Our next question comes from William Reuter with Bank of America. Please proceed with your question. Good morning. My first is, you mentioned that pricing for the fourth quarter was up 8%. It sounds like margins in the first half of next year are expected to be relatively in line with the back half of this year. Is there any pricing actions that were taken during the fourth quarter. That might lead to modest sequential improvements? No, but we are looking at a price increase, you know, for next month of this year. In the fourth quarter, I think all the price increases that we took in 2021 were before the fourth quarter. So you saw the impact of those in the fourth quarter. Got it. The pricing that was referenced in terms of 8%, that pricing is anticipated to be the pricing through 2022. The pricing that Tony's talking about is what we are attempting to do or what the company's attempting to do. Is to simply have price increases at the same time and same level as what we experienced in 2021. Which will keep the price increase at roughly the same level. It's not incremental to the 8% that we had last year. Okay. To make sure I understand, I think it sounds like you're saying. You've taken this pricing and, as you're not really anticipating additional price increases on top of that at this point. Is that kind of the takeaway there? You're gonna lap the price increases that occurred the prior year. Therefore, you will have. Right. An increase in the average check. I understand. Yeah, the average. Yeah. Okay. Right. There won't be sequential, it'll be year-over-year changes. Because you've pushed through the price increases in the back half of 2021, basically. Then there was commentary about rising wages, and there was also some commentary about. You know, hey, a lot remains to be seen. Some of the data that we have about restaurant staffing kind of implies that we're actually seeing sequential improvements. I was a little surprised to hear that we would still see sequential increases in wages through the year. Even though we'll have year-over-year increases. I guess, what are you seeing there? Our wages are up about 1% over where they were in the fourth quarter. I would expect that, you know, you'll see some increases just through the normal merit increases and that sort of thing. It's the year-over-year impact certainly will diminish as the year goes. On because we had more significant increases in 2021 towards the second half of the year. Okay. Sequentially, yes, it slowed down dramatically from where we were. Yeah. Okay. There were obviously many portions of 2000-2021, that were challenged due to operational restrictions and lack of labor availability. Excluding kind of the storms that we saw in January, thinking about this year. Is there any way to think about what the tailwind of just incremental operational hours will be on comps? I mean, I don't think in the first and second quarter. Well, the first quarter we had in February of the first quarter last year. We had very severe weather. So, I think, you know, the February comps are looking, you know, we're seeing in our current, you know, the first couple weeks of February. We're seeing pretty dramatic increases in our comp sales, but a lot of that is that we got whacked so hard a year ago in February. You know, the one thing that, you know, the one indicator I'm looking at. That I think is pretty interesting is last year we were comping about, you know, especially in the fourth quarter. We were comping about 15% traffic decline versus two years prior, you know, the pre-COVID period. That has improved to be down 10%. That sort of takes the weather out of the equation. If you look two years before because there wasn't a weather event. You know. Yeah. We had like COVID, but we did not have a weather event in February of 2020. I think the fact that we're seeing you know, this two-year increase you know improvement in traffic from down 15%- down 10% is very encouraging. I think you know we, we think that's you know we think that's a strong you know indicator for the balance of the year. Even though it's just one month, and it's really noisy just to compare the two years. And then January looked worse than obviously January of 2020 because of you know if you looked at those three snowstorms that hit in January. They line up perfectly with our you know with our store footprint. You know, I think I'm feeling pretty good though about what we're seeing in February about the traffic improvement versus two years ago. Okay. Just one last one. When you speak about new competition in the Southeast. Is this just additional store openings from Traditional QSR Competitors, or are you? Yes. Seeing new concepts? Okay. It's kind of more Traditional. Yes. Competition? Exactly. Okay. A lot of. All right. Cool. All right. Thanks. That's all for me. Thank you. Our next question comes from Jake Bartlett with Truist Securities. Please proceed with your question. Great. Thanks for taking the question. Mine was about abnormal costs, you know, in labor. You mentioned labor retention bonuses, hiring bonuses, recruiting costs, overtime. You know, how much of the costs you're seeing in labor are kind of. You know, abnormal that might, you know, wane as the year goes on that you saw in the fourth quarter, maybe some in the first? I think it's gonna be pretty similar in the first quarter. You know, because most of that incremental pay is due to. You know, having team members open and close doors because there's not a. You know, Assistant Manager available, that sort of thing. We haven't seen, you know, I'd say in terms of hiring trends. It hasn't gotten worse t han it was in the fourth quarter, but it hasn't materially improved either. I think until you see, you know, the manager, you know, the Assistant Manager Ranks. Sort of those vacancies fill in, and we don't have to use the team members to do that, those activities. I think you'll see some, you know, you'll probably see some improvement. You know, we haven't seen it yet. We're not, you know, sort of forecasting a pretty tight labor market for the year. Got it. In terms of that tight labor market, I mean, maybe if you can help us understand kind of where you are now with staffing. And where you'd like to be, maybe what percentage down you are from optimal staffing levels. Do you think that staffing, you know, is gonna be a headwind to the sales recovery? Is that still kind of a gating factor towards, you know, a more material improvement in traffic? Our staffing is better than it was throughout 2021, Jake. We're down, and again, it's there are pockets where they're more problematic than others. But we're down to two or three employees per restaurant, which is not a big deal. In terms of the staffing negatively affecting our sales, as you can see, we increased. Our sales were pretty formidable in Q4, and we continue to outperform the Burger King System. As well as other competitors in terms of our continual sales increase year-over-year. I would expect that to continue. We make pretty certain that our stores are adequately staffed and our hours of operation are similar to what they ought to be. In order to make sure that we continue with those sales dynamics. Great. My last question is on promotions and new product innovation. The first is on the I believe you're testing, or you were testing the toasted breakfast sandwich in a number of stores or markets. Maybe if any update there on, you know, is that a material potential new product launch, you know, for as we think about as a sales driver? The second question is, you know, recently, you know, the system launched the two for $5 with the Big King, you know, taking out the Whopper from the two for $6. What was the net impact of that? Is that neutral to sales and margins, beneficial? You know, how should we think about how that promotion might be contributing to the February results? It's a positive. The Quarter Pound King increased by about 20 units per store, and the Whopper decreased by about 20 units per store. The Whoppers that decreased by 20 units per store, all the Whoppers that we sell now are at full price. It was a positive. Got it. In terms of breakfast, we're testing a lot of different things for breakfast, Jake. In terms of the testing that you referenced, it's still in a test phase and. You know, RBI has yet to decide whether or not it's gonna be a wide scale rollout and if so, when. There will be a breakfast focus, and there are other new products that are anticipated to be launched mid-year. Great. Okay. Jake. Thank you very much. I appreciate it. Oh, yeah. Can I just I do wanna add one point to what Dan said. It's less about product innovation and more, you know, just sort of the environment is. That we talked about how strong the breakfast, you know, Daypart was in the fourth quarter. In, you know, in February, post Omicron or whatever is causing this. We're seeing, you know, this continued strength in breakfast. Whether that's people starting to go to the office again because we're sort of in a more relaxed environment or. You know, or just people are out and about more in general, we're just. You know, that is one Daypart that continues to get better and better, even without the product innovations that we have in the pipeline. Got it. Maybe last question, and this is for Dan. You've been around obviously the system for a long time and the brand and through good times and bad. You know, I think a key investor question now is that lower income consumer. And you know, you're taking you know, 8% price, reducing the really the value kind of proposition. In terms of the value items by increasing the prices there and maybe reducing the number of items. I mean, how comfortable are you that the Burger King consumer specifically is not gonna push back on that? That you might reach a point where that you know, both those two things together. Are gonna really you know, negatively impact traffic. You know, how confident are you that the system might not be overstepping there with the lower income consumer? Well, I can't speak to the system. I can speak to Carrols, and we're mindful of that, Jake, and all of the pricing that we take. Is based upon Competitive Surveys that we do with our two major competitors, McDonald's and Wendy's. Our pricing relationship has been pretty consistent relative to pricing that they take in each of the geographies. We have various pricing levels by region and by DMA. And we make certain that we maintain our pricing, on a relative basis to what they're doing as well. To the extent that the entire industry perhaps is stretching the consumer, that's something that the industry will have to evaluate. I think as it relates to Carrols, we're very mindful of our lower income consumer. And we're making certain that our pricing is done in a very systematic manner. Great. I appreciate it. Thank you. Dan, is this your last earnings call? I was just trying to make sure. This is it, Jake. Wow, Dan. This is. I wanna just wish you the best and congratulate you on a great long career and hopefully you'll have a lot of fun in the sun. All right. Thanks, Jake. Thank you. There are no further questions at this time. I would like to turn the floor back over to Dan Accordino for any closing remarks. Thanks, operator. As Jake said, you know, before signing off, I wanted to take this opportunity to say goodbye. And to thank you to all of our Investors and Analysts who cover the company. As well as our great Syracuse Team and our dedicated employees at our over 1,100 restaurants who serve hundreds of thousands of guests every day. I have greatly enjoyed my career at Carrols. Now as we welcome our new incoming CEO, Paulo Pena. I wish both Paulo and Carrols the very best in the future. With that, thank you and have a good rest of your day. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.