SONC
#I think from our perspective, <UNK>, we're comfortable at that 3 times range.
So, the questions then become ---+ we believe in our business, we believe it's going to grow over time, and our EBITDA is going to continue to allow us to naturally delever ---+ so then the question just becomes how do we pace and sequence that.
I think, whether we're at 3 times, whether we're at a little over 3 times and naturally delever, that's what we look at.
We also look at the fact of, as we look at the state of our business, our targeted debt ratio, what are the opportunities that we have to return cash to shareholders.
I think we feel comfortable at 3 to 3.5 times.
You're going to find that kind of fluctuation.
When you take on the leverage, it's going to bump up above it, and when you operate well and reduce it over time we're going to hit periods of time where we're below it.
That kind of range is slightly below and then a little above.
<UNK> mentioned 3 to 3.5.
Once you take that step, you've got to step up or you're deleveraging, you start deleveraging immediately.
We haven't given a number on that but the objective is to have the rate of growth pick up year by year.
So, not just the absolute number, but have the percentage growth rate pick up year by year.
The objective would be over time to push toward that 3% on a net basis but that will be a multi-year build.
<UNK>, as an example, for instance, when we roll out the mobile app, our mobile app will be applicable to the majority of our drive-ins whether or not they have POPS or POS.
So, the benefit of having that mobile app will not be dependent on having the digital menu board in your drive-in.
That's where it becomes a little more nuanced.
As compared to, we will have increased functionality on our digital menu screens in our POPS locations, and those would obviously only apply to drive-ins that have POPS.
So, in that situation, they would only see those benefits in POPS locations.
So, while we're looking at those and we're seeing it internally, from our perspective, from a market perspective, our goal, again, is to continue to drive 2% to 4% same-store sales on an annualized basis driven by these multiple initiatives.
But that's where it becomes a little more nuanced because unlike our other initiatives that you can say ---+ this one applies to all, this one's being phased in ---+ we're going to be in the process of implementing multiple initiatives that have different impacts depending on what they are and what equipment you have.
Does that make sense.
A couple of things on wage rate pressure.
From a Company drive-in perspective, we have not seen any significant wage pressure.
Again, we know it's coming but we haven't seen anything significant, and that may be, we believe, in great part due to the fact of where our footprint is.
Two, we know our franchisees, depending on the markets they are in, are seeing a little bit more of that, so we're monitoring that.
From a turnover basis as a result of we're not seeing any major wage pressure at this time, we're not seeing anything significant on our employee turnover.
Our overall multi-year goal, again, as we work towards getting to $1.5 million AUV is we have been starting last year, as you know, been making investments in our human capital at the drive-in level so we cannot only prepare for this but make sure that we're in a good position to, over time, decrease turnover and build a strong workforce and a good, strong bench.
With respect to the NLRB, at this point we're not doing anything with franchisees.
We're waiting to see.
We're letting it work through the process.
We've had nominal discussion with franchise leadership.
We have not had formal engagement with franchisees on a broad basis on that topic, but private discussions with franchise leadership as a group because we do have formal structure with them.
But no action or plan to discuss with you today.
No, I think that 1% closure rate is a good way to think about the number of drive-ins that we'll be looking at every year.
We don't ordinarily discuss that and we probably won't today either.
But I would say that with the variety of products we promote and the manner in which we promote them, has resulted in positive daypart growth this past quarter, all dayparts.
And for roughly for the last two years we've seen ---+ as a matter of fact, in the last two years we have seen it but even month by month roughly for the last two years we've seen positive daypart growth for all dayparts.
I should say positive growth for all dayparts.
I think when we look at it I would probably tell you about, at this point, it's skewed a little bit more towards the commodity costs just because they were so high in the first fiscal quarter of 2015.
But, again, still seeing very good improvement from our inventory management tool.
And then, as I will say, we had the partial offset this past fiscal quarter of approximately about 30 to 35 basis points from implementation of our employee meal program.
The sales of the system are something more than 20% from developing markets.
We do not ordinarily break out comps by market type.
I would tell you that in the last quarter that all market types were positive from a sales standpoint, and last fiscal year all types of markets were positive from a comp standpoint.
So, they're all healthy but we don't break that out.
And part of the thing is, at any given point in time, based on the maturity and the circumstance of those stores and the initiatives that are under way, even local promotions, et cetera, there could be variable results, and it doesn't mean that the brand is unhealthy in a different market just because comps are different.
We had those initiatives quite intentionally based on market type.
But we don't break that out on a quarterly or annual basis.
I would say about 30 to 40 basis points.
It ramped up a bit.
We started to see the benefit of that in the second fiscal quarter.
The third fiscal quarter was the first full quarter where we saw a full quarter benefit.
Thank you.
I think that was the last question.
I want to thank all of you for participating today.
We'll be available here after for questions that you have.
But we felt very good about the first quarter and feel good about the momentum of the business.
We'll look forward to visiting along the way and should be a good ride.
So thanks for being on-board.
Take care and happy new year.
