Welcome everybody to our 11:00 session, which I've been promised this is gonna be the highlight of the entire conference. We are super excited to have you from National Vision. National Vision is an optician retailer that runs America's Best, Eyeglass World, and a few other segments. We're gonna hear all about the story today. With me to my immediate left is Reade Fahs, the company's CEO. Melissa Rasmussen is the recently appointed CFO, following in the very large footsteps of our friend Patrick Moore, who's also with us today. It's been an interesting time for the National Vision story. I'm gonna turn it over to Reade to address a few topics, then we're gonna get into some of the elements of what's going on. We're excited about it.
Good. First of all, I'd like to compliment, Michael on his sock choice. We at National Vision every year come up with new socks that we distribute to all the associates in the company and to our favorite analysts as well. I'm shocked that he remembered that. This is last year's socks, these are this year's socks.
Any company who's willing to provide such colorful advertising, I am more than happy to.
We came to it because we thought we were spending just too much time on this part of the body. We thought we'd spend a bit more time on the other side of the body. It's astounding what a culturally unifying thing it is to have an annual sock distribution at your company. I don't think that's what they came to hear about. No, I actually wanted to start because we had our earnings call now, two weeks ago, and you asked the first question, and frankly, most people said that that sort of just nailed the key question there. 'Cause we had been talking a lot about the optometrist market and how there was a scarcity of optometrists post-pandemic. This is happening in healthcare, throughout, that there's a scarcity of providers.
Many providers retired, many providers cut back the number of days they work. This is across many healthcare categories, but it's happened with optometrists as well. Your first question was, "Hey, given the scarcity of optometrists and the cost pressures that no doubt will have on the category, is that a threat to the structural margins of your low-cost model?" We are the low-cost provider of eye exams, eyeglasses, and contact lenses. I thought it was a great question because we talk a lot about that. We'll probably speak a lot about optometrists here today as well. Our feeling is this. Yes, we are a low-cost provider, where our entry price is a wonderful entry price. People save money on eye exams, eyeglasses, and contacts when they come to us.
Low cost provider of a medical necessity. The cost challenges are facing our entire category. The optometrist challenge, most people get their eyeglasses and contacts where they get their eyes examined. Those of us who sell those products need to have optometrists. These cost pressures are across the category, and if they persist, then it will push the pricing up across the category. There will still be high, medium, and low players, and we intend to be the low cost player. We love that positioning. We have taken price since the pandemic on a few occasions. We have not exhausted the pricing lever at all, and we think that there is more to be had there if we need it.
I will say that the category, we like our customers to leave us saying, "I saved money by choosing the National Vision brand versus the other vendors out there." We also are very aware that if people don't like the price they pay, then they might choose someplace else two years from now. It's a delicate balance. We do take price more peripherally than our headline price, and could see doing that going forward. We do think our major initiatives that I know we'll be talking about more, which is about remote medicine and offering our doctors sort of scheduling options they really like, are gonna improve our throughput. We know our job is to get back to the sort of strong profitable growth foundation that we had pre-pandemic.
we're now dealing with the many challenges to our marketplace that the pandemic has wrought.
I think this is a great topic to dig into because it has been of debate recently. I also wanted to get into it a little further. We've known each other a long time.
Yeah.
Since the start of the IPO in 2017.
One of the messages that National Vision has been consistent about since then has been, look, our customer is not only the person who comes in and gets the glasses, our customer is the optometrist.
Yeah.
If you take care of the optometrist, then everything else takes care of itself. One of the questions, and maybe this is a misperception, from external observers, is that the optometrists might have to work a little harder at National Vision. With the thought process being that if you go to an independent and that average ticket, as anyone who's gone to an independent knows, is very expensive.
Yeah.
It might be $400.
Yeah.
At National Vision, the average ticket might be $120, somewhere in that ballpark. Just to have the same level of revenue, the optometrists need to bill 4 times as much in order to be on a level playing field with the independent. Not that that may not be an issue, but how does National Vision address that?
four times is a big number. That is not a number.
Those are my numbers. We are a price player, so we see more patients than the normal patient come to us. Our entry-level offer is two pairs of eyeglasses for $79 with the eye exam included. This is a great deal. It's hard for many people to find even an eye exam for $79. It really is a great deal. Our doctors do tend to see more patients than the average independent does. We set up our systems in such a way that the optometrist only does things that you need a four year degree to do. An optometry degree is four years post your undergraduate. We have lower cost technicians gathering all the data in a way that makes the doctors able to be more productive.
In addition, we invest in the best technologies in order to help the doctor be able to see more patients while still providing great care that they care about and making sure it's a great experience for our patients. The most common thing you hear from our patients is they've never had an eye exam so thorough. I've always liked the position of you come to us because you save money, but the eye exam experience especially is so high tech. It's this, "Wow, I can't believe I paid this and got this," and that equates to value and it conserves funds.
Yeah. You might want to add for this great deal, you can get things that are as slick and cool as the ones that you're wearing.
Aren't you kind? Aren't you kind? These are very nice. They're Jamie Foxx in brand eyeglasses, and they're very popular. Nice pictures of Jamie Foxx, if you can appear to our
They will probably be the only presentation today that references Jamie Foxx.
Okay. All right.
That is...
Well.
That is quite all right.
We're just getting started.
Yeah.
Who knows?
National Vision's had this interesting experience over the last few years where pandemic, stores were closed, people got a lot of money, especially the core National Vision consumer, and came out and bought glasses because they're a medical necessity. You know, last year was a tougher year across the industry. National Vision felt that. To what degree, I'm gonna ask two questions.
Okay.
One, to what degree that some of the demand was simply pulled forward for the industry in 2021, and there's a normal replacement cycle, and folks said, "I got new glasses in 2021. I don't need to get them in 2022." Are you seeing any evidence of that? Broadening out, you know, what are you seeing for the consumer? It's been a very dynamic environment for the consumer. You've got good insight, good eyesight to what's happening with the consumer.
Let me just unpack the beginning part of that and then ask the two questions for the people who are newer to National Vision. Prior to the pandemic, we had 72 consecutive quarters of positive comparable store sales growth. From 2002 to the pandemic, we never had a negative comp quarter, and our average quarter across those 72 quarters was a 5% comp. If you look at the four years prior to the COVID shutdown, well, our average comp quarter was +7%. An immensely consistent-
Much in traffic.
Yeah, on traffic. We love to drive our business via traffic and not average sale. Our customers to come in, have a great experience, tell their friends. It was always majority traffic driven, and we're really quite proud of that. Pandemic happened, we shut our stores. We reopened our stores very, very safely mid 2020, and the business just exploded. It was a stunning and wonderful year. Our customer, who tends to live paycheck to paycheck, when they have found money, comes to us. The highest seasonality period historically has been March when our customer gets tax return, you know, gets a tax refund.
When they get their tax refund, they come in and buy the medical necessity of the eye exam and the glasses or the contact lenses. That's always been optical Christmas was tax refund season. What happened when we reopened from COVID? Our customers had been staying home for several months and not spending money. They got a huge amount of money from the government. Our customers had never been more flushed than they were that year. Yes, they came in in droves and spent more. The average ticket was higher than it ever was because they're saying, "Oh, I've got a lot of money. This is great." That was sort of late 2020 and, you know, in 2021.
Yes, they bought a lot of glasses, and that was not so long ago. I do think it's fair that that did disrupt the purchase cycle. We got to around April last year, a few weeks after the Ukrainian War broke out and gas prices started to rise and inflation started to rise, and our consumer then became very strapped. That consumer that about a year earlier had more cash than they had ever had, all of a sudden became very strapped. We are still seeing that today. You know, the brunt of the inflation is borne by our customers. They are very strapped. Today in The Wall Street Journal, it was talking about natural gas prices and the pressure that has.
All these things are coming together. The story of last year for the optical category, and us was about April, the optical category diminished significantly. Primarily related to economic reasons, but also due to the fact that there weren't enough optometrists. Optometrists retired a lot during COVID. Many of them got burned out by the really busy year after COVID. Many optometrists cut back saying, "I used to work five days. I'm tired of five days. I need four days or three days." The great rethink. We're seeing this again across healthcare and across various aspects of the workforce. Last year was a balanced story for us of the challenge of our consumer, our budget-conscious consumer, and the scarcity of ODs, of optometrists.
I would like to say that of the on the customer front, we have about a third of our customers are insured and two-thirds are uninsured. We're less developed in the insurance category than most other chains because our budget-conscious consumer isn't insured. They don't have a job that gives them vision insurance. Our insured business, where it wasn't our customers' money, that comped positively all year long. It comped positively in Q4. When it wasn't their money, when it was the insurance company's money, that business was doing just fine. The challenge for us was the uninsured customer.
Yeah. It is so fun to sit next to Optical Santa Claus during Optical Christmas.
Thank you. Thank you very much. Right. Right, right.
With that being all... That was all very helpful. You know, tax refunds are gonna be down this year. Inevitably that might have some impact on the business. At some point, it is a medical necessity. When would you expect the replacement cycle from those folks that did buy glasses in 2020 and 2021 to get into their replacement cycle and lead to more normal trends in the, in the industry?
Yeah.
In the meantime, you can't just sit there and wait, so what is National Vision doing to drive traffic?
Right. Thank you. Thank you for that. That is the question that we in the industry are asking, when does the purchase cycle normalize? The purchase cycle had been normal for decades prior to the pandemic, and we are dealing with the weird swings of the purchase cycle now. You know, we've always said an investment in National Vision is an investment on the biology of the human eye. The biology of the human eye has not changed. As we age, our sight worsens. How is it addressed? Through glasses and contact lenses. It is an inevitability that they do have to come back sooner or later because you have to be able to see. When that occurs, I don't know. You can delay this purchase.
Again, there was a huge influx of the market in the year after, we reopened. I cannot answer that question. We are confident that it will normalize eventually because it had been normal for so long beforehand. What do we do? You manage what you can manage, you control what you can control. For us, the other part of the equation was we simply did not have enough doctors for the demand that was there. In some areas, there was demand constraints, but also there was demand that we cannot fill because the process starts with an eye exam. What did we do?
We did 2 major initiatives, that started last year, in an attempt to ensure that as things normalize and as we come out of this, we become, the very strong player who has high market share in the number of exams, exam capacity that is out there in America. We did two things. One, optometrists like to, would like to practice from home, just like many of you are working more from home than you ever have before. We had been testing, in late 2021, a method whereby our patients are in our store, they're in the exam room surrounded by very expensive diagnostic, equipment, and that is capturing, a lot of information about their eye digitally and sending it to the optometrist who is sitting in their den.
The optometrist comes live on the screen to the patient sitting in the chair, having looked at all the data they would have looked at had they been in the exam room. They're just getting it at home, and they do the final check through pushing buttons in their den that move the dials in the store. This is a great eye exam. Our patients really very much like it. We always warn them ahead of time, this is a synchronous remote exam, but you're talking to the doctor in the same way you would. Many of them say, "You know, I don't really particularly like somebody breathing six inches from my face," as generally happens with previous eye exams. There are even some advantages there.
We said, okay, if this is a key way optometrists are gonna wanna practice in the future, we wanna be able to offer that to optometrists. We enabled 300 of our stores last year with remote exams, and we could talk about that more if you'd like. The separate initiative is we had historically been the most rigid in requiring a consistent schedule from our optometrists. We were pro-consumer. You have to be there when the customers wanna get their eyes examined, and that means, Doctor, if you wanna be a full-time optometrist with us, your days off are going to be Sunday and Wednesday because those are the days where people are least likely to want to get an eye exam.
Sadly, if you're gonna be our optometrist, you have to work every Saturday because that's when the customers wanna come in. In a world of scarce doctors amidst the great rethink of post-COVID values. That wasn't gonna work anymore. The biggest reason people were leaving us was because of our lack of flexibility and because they had to work every Saturday. The biggest reason people weren't taking our job offers was around the rigidity of our scheduling. We said, "Okay, this is a new world. Champions adapt.
We have to adapt to this new marketplace. In early Q4 of last year, we developed a menu of four different scheduling options that they can select from, one of which is the status quo, but one gives you every other Saturday off, one gives you two days in a row, Sunday, Monday, et cetera, that sort of thing. We started testing that in early Q4. We liked what we saw. We made an expansion decision at the end of last year, and then earlier this year, we made another expansion decision so that all of America's Best will be in that flexible scheduling options arena by mid-year of this year. In answer to your question, how are we driving sales amidst the challenging economic backdrop for our consumer?
It is by ensuring that there's eye exam capacity there for everyone who wants it, and attempting to drive consumers to that. We think that will be helpful, and we think we are making the right offensive decisions to ensure that we have strong market share of eye exam capacity, as the purchase cycle normalizes so that we can take most advantage of it.
This is a great place to ask a question that comes up for debate a lot on this top-topic that's been prevalent for the last six to nine months, which is walk us through why constraints on exam capacity have been so much of a challenge. The perception from an outsider has been, if I'm going to America's Best because it's such a compelling value proposition, I mean, I can't find an appointment on Tuesday, I may have to wait until Saturday, I would just come then.
Yeah.
How does it work?
It's not Tuesday to Saturday. It's Tuesday to a week on Saturday.
Okay.
The way this purchase works is, here's the patient journey. You're starting to notice you can't read close up or you can't see the street signs, and then you go through a period of denial because it really bums you out that your body is failing and you're getting older, and you sort of hope the problem will go away. Then, the problem doesn't go away, and you gradually get to the point of saying, "I have to address this," and then you decide to act. That's when you start looking for an eye exam. Again, if it's a question of three, four ,five days, that's one thing.
If it's booking out further, the further you book out, the less likely you are to actually show for that. The further you have to book out, the more you might look for another option nearby. This is something we watch a lot is show rates. Cause, like with your dermatologist, like with your dentist, why do you get 1,000 texts every time saying, "You're gonna show up, right? Your appointment's set. You haven't forgotten, right?" It's because there's nothing worse than having the professional time there, the patient not showing up and having the wasted professional time. The further they book out, the less likely they are to show, and it throws off the whole system.
Understood. This is also a good time to ask, is some of the good guys for the optical industry, older people, more screen time, aging, all the factors that we know are driving an increased demand for optical services also creating its own set of challenges? Because correct me if I'm wrong, there just hasn't been an increase in the education system for optometrists. There is a mismatch between the supply of available optometrists and the demand for optometrists. I guess the good news is that National Vision is starting to see greater success from on-campus recruiting.
Yeah.
More so than it's ever-.
Record campus recruiting last year.
More socks.
Yeah. Yeah. They all get socks.
Yeah. Right.
Um.
How is this issue solved over the long run? It doesn't seem like with that mismatch existing, it's gonna get better anytime soon.
Right. Right. That is true. The schools are not sending out any more optometrists. What I like about this remote system we have is it's a very efficient system of having the doctor appear when they're needed. A remote doctor who's looking at the screen for the next exam, there's never a no-show. Because they're covering a whole state, sometimes several states. The way the rules work is if you, if the doctor has a license where the patient is sitting, it doesn't matter where the doctor is sitting. What you do is you take your doctors and make them much more efficient across space and time.
You know, right now, if a walk-in appears, and we have a lot of walk-ins, in a store that doesn't have capacity, and we have capacity, you know, five miles away, that doesn't necessarily help us. With a remote doctor, it can go either which way. The planning scenario is like a remote doctor can just appear where the patient walks in. The planning scenario is no more optometrists are created every year. What you have to do is be the place that's offering the sort of options that they want, the flexible options there, and be a place that offers the mode of practice that they want, which is the remote, the remote-
Yeah.
A-approach.
How does this translate to the wage environment for optometrists and how National Vision is managing through that? Like we're pointing out, it's a very tough labor market, broadly speaking, and even more acutely within the optometrist segment. What has been the approach, and is it working, and what can be done moving forward?
Again, it's sort of for the optometrists, mid-single digit wage growth. We're trying to make more of it now incentive-based. More of it, more of it based on how many patients they see.
Mm-hmm.
Variable incentive, that seems to align everyone's, that's good for everyone. That better for the whole system. Really, again, we're in a world where these other considerations, like the flexible timing and being able to practice from home, weigh as equally as compensation these days.
Understood.
Part of the great rethink post-pandemic.
Yeah. Adapting to that is critical.
Right. That's what I'd like to point out. What I see us doing is rapidly adapting to a new environment. To me, it's so that over the long term, we can get back to the sort of consistent predictable growth that we've had. I mean, we could have not made these investments, and you just wither then. This is about our long-term ambitions of continuing to be a leading growth value optical player in America.
I think one of the messages that you've been offering has been, look, National Vision wasn't always the most dynamic, the most, company that was on the forefront of making some of these changes. That mindset has shifted, and now you're in the mindset where you need to make the changes, and that's resulting in some co-additional cost pressure. I think this would be a great opportunity to outline what those costs are, because that is probably one of the reasons what, you know, the market has been reacting to most intensely.
Let me do the first part. You do the second part on the cost piece. I think it would be fair to say that pre-pandemic, we as a company were more leaning towards, we're more of an analog company. You walked into our stores, you saw.
Dot matrix printers.
Yeah. You saw paper records everywhere. It was not a digitized experience. It worked. It just worked. It ticked along. It was a thing of beauty. It was when you've got something that working, you replicate, replicate. I would say that in the post-pandemic environment, we have rapidly shifted towards digitization, and that's digitization of our stores with electronic health records, with remote medicine, digitization of our marketing efforts. We were probably leaning more towards traditional marketing and are now leaning much more towards digital marketing, streaming as an ever higher percentage of our business.
Our focus on e-commerce and creating the e-commerce experiences, which are now equal across, you know, the category and marketing the e-commerce side, and even investments that we talked about on our call in updating some aspects of our ERP system. A big theme is that post-pandemic, the people who were probably a bit too analog prior, very much got behind digitization, and that, over time, creates great efficiencies. Now to the cost question that Michael was asking.
Yes. I'll take you through two parts of that. As we think about the 2023 guidance that we put out, there are a few factors in that. Excuse me. We are addressing the doctor capacity constraint that we are dealing with. As we continue to address that constraint, we'll see our comps increase because we'll have more capacity. The guidance that we put out has about a 100 basis point headwind related to doctor compensation costs, the flexibility initiatives, as well as increased product costs. That's about 50 basis points each related to that. As Reade had talked about, the incentive compensation, we have aligned more towards the productivity levels of our doctors. Where our doctors are more productive, their incentive compensation is going to reflect that.
That's rather than putting it all in the base, so this rewards the doctors that see more patients and that want to work more hours and the doctors that would prefer a more laid-back schedule. We also have wage inflation in there as well for our doctors. On the product cost side of the house, we have increased product costs that we have largely mitigated over the past several years. We had done some inventory buy-aheads for some of our products. As we entered 2022, late 2022, our vendors had told us that they'd be increasing some prices. In 2023, they increased them again. We had more price increases than we had experienced in the past. Also included in that, we have freight, and we have lab productivity.
As we continue to address the doctor capacity piece, those will get some increased comps, and that will leverage all of those expenses. As you fast-forward into our investment phase, once we finalize the implementation of the remote medicine rollout, so 2024, mid to late year, we'll expect to see at least 100 basis point improvement in our margins. That's largely driven because of a few factors. We have doctors that are learning to be productive on the remote platform, in addition to the electronic health records, which causes, you know, everybody that was used to writing things on paper, now they're having to do it digitally. Some doctors pick that up within a couple of days. Some doctors, it takes a couple of weeks, depending on their tech savviness.
With the electronic health records, that's kind of a whole store initiative as well. You're going from these paper files that you once had to these electronic files, and that's fully digitizing our boxes of whole. Once we have that implemented, that investment will end, and the training teams that we have that are going around store to store, state to state, training the employees, the doctors, on how to use this equipment, will disband as well. That's what's going to lead to the 100 basis point improvement, the cost of implementation, the productivity. At the rolling scale, what you can think about is the stores that were implemented with remote medicine in 2022, they're primarily productive at this point. However, you're seeing a drag on margins because we're still implementing.
The 2023 implementation, those stores are coming up on productivity. They're ramping. Even though you're productive in some stores, you're not yet in others. As we move into 2024, you'll expect both 2022 and 2023 to be fully productive. You'll just have the drag from the 2024 or the 2023 stores. That is where we are seeing this kind of up and down scale as we do this rolling rollout. When it's finally complete, we'll expect to see.
In 2025.
In 2025, we'll be fully productive in all stores.
Okay.
You'll see it gradually improve throughout.
Between now and 2025.
Yes.
Yeah. Can you give us a sense for, so you have 300 remote medicine stores last year? Remind us what the expectation is for this year?
we're gonna do at least 200 stores this year.
200. What does this curve of productivity look like? Bob Lassiter, retired gastroenterologist, left the field of medicine because he didn't want to deal with technology, speaks to the relationship that medical professionals can have at times with technology and illustrates maybe some of the challenges that National Vision has had as you deploy this, because it's a big cultural change.
Mm-hmm.
Give us a sense of, at the micro level, like, What have been the challenges, and how do you see it playing out from here?
You know, I don't like to generalize, but I will say sort of I was talking to one of our area doctors who was talking about the implementation in, I think it was Arizona. They said, "Well, you know, I had to teach some of the doctors what right-click meant.
Mm-hmm.
Uh, so, so-
Uncertain teach me the same thing.
Right. Right. Yeah.
We get it.
It does show just a curve of adoption and getting used to it. We have not had people leave the building because of it. That has not been a big factor. It is for many old school doctors a change.
Yeah.
Yeah. There's, you know, this is a startup.
Yeah.
We, you know, we feel that we're still in the early innings of getting the benefits from it, but it's a startup within the company. We're pleased that, you know, this year it's gonna be profitable. You know, Uber wasn't profitable in its second year.
Yeah.
There is a learning curve to it. It's something new.
Of the 100 basis points compression that's gonna be experienced this year, how much is coming just from this learning curve of the doctors getting up to speed on remote medicine?
We haven't quantified the breakout specifically between the productivity levels and the training team. The overall bucket of that is 100 basis points. Think about it from the aspect of if a doctor had typically seen four patients in an hour, but they're learning how to use the EHR system and the remote system, they may only see two patients in an hour while they're coming up this curve.
Okay.
That flows all the way down.
How will the productivity of a doctor look when this is fully deployed? Can you go from four to five, or is it more like four, but you can draw from a doctor in Albuquerque, New Mexico, that's serving a patient in Richmond, Virginia, so it just helps with the.
The productivity of the overall store a full system. You know, you might have a live doctor and a remote doctor and EHR records going throughout the store to make the entire store more productive.
Got it.
We would expect to see the remote doctors, once fully productive, to have higher productivity than in-store doctors because you're getting your patient out of the queue. You're not having to wait for the chairs to be cleaned. You can bounce from queue to queue to see whatever patient is there, and if the patient doesn't show up, that doesn't impact the doctor's productivity level. They just bounce on to the next patient that's available for them.
One of the big critical questions that the market wants to know is: how do all the changes that are being made, electronic health records, remote medicine, increase in the penetration of the insurance as a form of payment, how is this gonna impact National Vision's profitability over the long term? It's been quite a journey seeing a big step up in margins in 2021 and stepping down now.
Yeah.
What is the, you know, getting the 100 basis points back. What are gonna be the puts and takes to determine the profitability of this looks like?
What we've said is that we're looking at in late 2024 and 2025, mid-single digit comp yielding, mid-single digit margins. That is a stairstep along the way. We are aiming for higher, but we wanted to put a marker in place saying that we hope to be there then, but we're not stopping there. We're working on ever greater efficiency and productivity of our stores to go up from there.
It seems like one of the potential good guys, if there is such a thing in this economic environment, is the old idea of nicer cars in the parking lot. You started talking about that and this whole idea of trading down, where consumers are facing a little bit of pressure, and they go to the low-cost provider to get the really nice Jamie Foxx glasses and at a quite a reasonable price. You started talking about it middle of last year.
Yeah.
It seems like it's happening.
Yeah.
Maybe at a slower pace than previous experiences with, you know, the history of National Vision. Is that right, and why, and why is that slowing out like that?
Just to share what Michael's referencing there. In the 2008, 2009 recession, we pumped steadily through that. And when you called stores and said, "Why, why are you doing so well?" They would respond with some version of nicer cars in the parking lot. And frankly, at that point in time, our data systems were such that all we could really talk about was nicer cars in the parking lot. We didn't have the level of data and information we have now. Now when we talk about trade down, we can say people who live in households that make over $100,000 are increasing as a percentage of our business. That's been steady and gradual since Q2 of last year, a steady gradual improvement.
It's very hard to compare, a database answer to the subjective answers of 2008 and 2009. I really I can't. Again, it is a little different. The recession of 2008 and 2009 had a high unemployment but not much, inflation. Now we're dealing with, a highly inflationary, environment, which is just a different type of economic, circumstance.
If there were to be an economic shock, like some of what's happening in the banking industry starts to impact Main Street, then it might be more analogous to what happened in 2008, 2009, and that it could be.
I'm not rooting for any more shock.
Yeah.
We've had enough shock.
Yeah.
The more people become frugal, the more they find us.
Sure. To the extent that there is a shock, how would you expect that to change market shares? You know, one of the interesting dynamics in 2002 or 2020 was that some of the optometrists that were independents decided they would go away. Would you expect that maybe the middle market chains that don't have access to capital would be adversely impacted and that would accelerate the share gains?
Certainly, there are a great many players in our category who are highly leveraged right now, and that causes a great deal of stress. Frankly, they have many optometrists associated with them. Maybe you'd like to comment on our balance sheet. We are in a good position relative to nice segments of the category.
Yeah, it's one area that I know folks want to hear about.
Yeah, sure. As we think about capital allocation, even before the banking instances of late, we had thought about how we wanted to manage our capital allocation. We've always made prudent and just conservative actions with our cash on hand. Our strong balance sheet affords us some flexibility. As we think about our term loan that's coming due in July of 2024, we have such a strong cash balance position that if we chose to pay that off, we could certainly do so. At the rates that we have our debt currently, it may not make sense to do so right now. We also think about how we want to return value to our shareholders.
We filed an Form 8-K in, on March ninth where we had repurchased $25 million of stock, we have $25 million remaining on our share repurchase authority. Our cash balances at the end of the year were very strong. We had $229 million in cash, $523 million in liquidity, and our debt balance is $568 million. We're in a really flexible position to be able to manage the working capital needs of our business in addition to the maturities that we have coming due. We're very fortunate to be in that position.
We had two very successful chapters of private equity prior to the pandemic with Berkshire Partners and with KKR. We had great experiences with that. Now is the time where it's really nice to be not highly levered, a lot of our competitors are not in that situation.
If there were to be more contagion within the financial system, you feel good about your capital situation, your access to liquidity right now?
Absolutely. You know, as I said, we have $523 million in liquidity. Our cash balance is a factor of that, we also have a $300 million revolving credit facility that has zero borrowings under it. We're an accretive cash positive business. Our model yields positive cash flow as we progress throughout the year.
Our primary bank is Bank of America. Doesn't get any bigger
(Crosstalk). I wanna ask a little bit about the market that some may be experiencing duress. An inclination could be to be a little bit more aggressive with promotions to try and drive market share. Have you seen any of this behavior in the marketplace? Broadly speaking, market share shifted over the last few years. There are a few competitive players now.
The only we believe that we maintained market share last year and that we grew market share in the year after we reopened from COVID. Again, and we're talking headcount market share, not dollar market share, and we think that's pretty good given that we're so much less penetrated with managed care. The most interesting thing that has happened competitively in the past sort of year or so has been the return to stores of e-commerce customers. Of course, when everything was shut down, sort of e-commerce was the cool place to be when people couldn't go to stores. Now that optical stores are open again, the e-commerce players are returning to stores. That's, it's a stores purchase.
You know, it's always been sometimes players come out and say, "Oh, we're gonna be e-commerce players, big in e-commerce," but they often end up building stores because that's where people go to get their eyes examined. Once you've got your eyes examined there, it's so much easier and more convenient, especially where you can save money the way you can with us, to buy it right there. The biggest interesting competitive trend has been the erosion of e-commerce and a return to the stores in our category.
One of the messages we're hearing is there's been a lot of change in the environment with the consumer over the last few years. National Vision is making some pretty sizable steps to evolve with the, dynamic marketplace. As you see it, what are, what are the biggest risks right here? If something doesn't go as planned, in your mind, what will that be?
Here's what you're assuming when you're looking at our stock. You're assuming that over time, a purchase cycle that for decades had been consistent will normalize again. You're assuming that our efforts in remote and scheduling flexibility will be successful in helping us retain the doctors we have and attract new ones. The evidence has been great that that's happening the past few months as we did this were the best few months of recruitment and retention in the past 18 months.
That a group of people who were when it was great to be consistent, predictable, bang out the same store every time, that when we were doing that because that was successful, can be people who can say, "All right, we're gonna work with the times. We're going to accept the new reality and aggressively go after that so that we can continue to thrive over the long term." Those are the assumptions you're making if you're interested in our stock right now.
We look forward to seeing your progress.
Yeah.
Please join me in thanking Melissa and Reade on a wonderful presentation.
Thank you very much.
Thank you.