Addus Homecare Corp

NASDAQ:ADUS

Earnings Call Transcript 2019-Q1

[Operator]

Good day ladies and gentlemen, and welcome to the Addus HomeCare Corporation First Quarter 2019 Earnings Conference Call. [Operator Instructions] As a reminder this conference call is being recorded.

I would now like to introduce your host for today's conference Ms. Dru Anderson of Corporate Communication. You may begin.

[Dru Anderson, Corporate Communications]

Thank you and good morning and welcome to the Addus HomeCare Corporation first quarter 2019 earnings conference call. To the extent any non-GAAP financial measure is discussed in today's call, you will also find a reconciliation of that measure to the most directly comparable financial measure calculated according to GAAP by going to the company's website and reviewing yesterday's news release.

This conference call may also contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding Addus' expected quarterly and annual financial performance for 2019 or beyond. For this purpose, any statements made during this call that are not statements of historical fact may be deemed to be forward-looking statements.

Without limiting the foregoing, discussions of forecasts, estimates, targets, plans, beliefs, expectations, and the like are intended to identify forward-looking statements. You are hereby cautioned that these statements may be affected by important factors, among others, set forth in Addus' filings with the Securities and Exchange Commission and in its first quarter news release.

Consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

At this time I would now like to turn the call over to the company's President and Chief Executive Officer, Mr. Dirk Allison. Please go ahead, sir.

[Dirk Allison, President and CEO]

Thank you, Dru. Good morning, everyone, and thank you for joining us for our first quarter conference call. With me today is Brian Poff, our Chief Financial Officer. I will begin with some general comments, and then Brian will discuss the first quarter results that we issued yesterday afternoon. Following our comments we would be happy to respond to any questions.

I want to start by welcoming Sean Gaffney, our new Executive Vice President, Chief Legal Officer. Sean has joined Addus after served independence four years as the General Counsel for Encompass Home Health & Hospice. Sean brings many years of healthcare services and acquisition experience to Addus. Many of our Senior Executives have previously worked with Sean and we are excited about him joining us again as we continue to lead Addus HomeCare.

As we announced yesterday, our solid operating performance continued in the first quarter of 2019. Revenue for the first quarter was $139.3 million compared to $109.5 million for the same period in 2018, an increase of 27.2% which included 5.6% same-store revenue.

Adjusted earnings per diluted share for the first quarter of 2019 increased to $0.52 as compared to $0.42 for the same period in 2019, an increase of 23.8%. Our adjusted EBITDA for the first quarter of 2019 increased 23.1% to $10.8 million from $8.8 million. In addition, we continue to have a strong cash position with little waste.

Our first quarter same-store growth exceeded our ongoing target of 3.5%. We continue to see nice growth in our New York market as the narrowing of the provider network is progressed. This were sized and coverage in this market and we continue to experience MCOs directing new consumers to Addus.

As expected, we also saw increased referrals in New Mexico as the transition of the MCOs who manage the space Medicaid program was completed. Also our referrals in the Illinois returned to a more normal level as oppose to what we experienced in our fourth quarter of 2019 as the CCU transition which we mentioned in our last earnings call has progressed. We remain confident in our targeted same-store growth rate of 3% to 5%.

As we mentioned on our last call though, the lack of the rate increase to offset the July 1, 2018 Chicago and South Shore minimum wage increase continues to negatively affect our margins with our first quarter margins impacted by approximately 70 basis points as compared to our margins in the first quarter of 2019.

Our team has continued to work with the state association to educate the Illinois state leadership on the need to pass the rate increase and we continue to believe their understanding and support already increased for our industry.

While we have no assurances that the upcoming state budget will include this rate increase, we believe we have been successful in demonstrating the importance of passing a reimbursement increase to offset the mandated minimum wage increase the industry experienced.

During our first quarter, we received the approval from the public health and the health planning counsel of the New York Department of Health for our previously announced purchase of VIP Health Care Services, a New York City based provider of personal care.

We're completing the last items needed for us to close on this transaction. This acquisition is an important step to further our strategy of enhancing our operation ability in states where we currently have a strong presence. Together with our South Shore operations on Long Island, we believe VIP will allow us to offer full market coverage to our MCO partners on both Long Island and in the five boroughs.

Our team has continued to work together on the transition plan, which should allow us to close this transaction on June 1. Once the transaction is completed, New York will become our second largest market behind Illinois.

In addition to VIP, our development team continues to work with other acquisition targets. We are making progress on a number of these potential deals, although we are never certain that we will be able to get through final financial, operational and compliance due diligence on any particular opportunity.

However, we are excited about our ability to close additional acquisitions during 2019 as we continue to have a strong pipeline of potential transactions. As we discussed on our last few earnings call, we are excited about opportunities for Addus under Medicare Advantage and further encouraged by the CMS announcement on April 1, 2019 that expands the flexibility under supplemental benefits for Medicare Advantage plans.

We currently have contracts with large Medicare Advantage plans to provide personal care services to their members during 2019 and continue to receive referrals under these contracts. We are working with these partners to gather appropriate data that will allow Addus to help Medicare Advantage plans as they continue to expand and refine their supplemental benefit offerings.

I believe this is a positive step towards expanding the provisions of our services under our value based payment system and continue to indicate the awareness of CMS of the value of personal care services in improving the quality and lower the cost of healthcare.

We continue to believe that these opportunities will expand as MA plans begin to realize the cost savings potential of personal care services through a more integrated care delivery model. While we anticipate additional MA plan participants with personal care offerings in 2020, we feel 2021 on later is the true upside for this additional opportunity for Addus.

One issue that has received a lot of discussion over the past few weeks is the potential for a federal change to Medicare for all. Without commenting on the likelihood of passage of a Medicare for our proposal or same details of any proposals, we believe the net impact that Addus HomeCare such a proposal likely should be neutral to incrementally positive.

If under such a program individuals under the age of 65 gain Medicare coverage, Addus would expect to see expansion in the universe of individuals eligible to receive home health and hospice, which are currently smaller service segments for Addus.

In terms of the personal care services under our Medicare for all proposal, our concern consumers currently receive services through Medicaid and Medicaid waver programs and we believe that Medicaid likely will continue to be a primary source of payments for these consumers even if Medicare for all progresses.

Before I turn this call over to Brian for more detailed review of our first quarter performance, let me again thank all the employees of Addus. We as a company continue to bring a very important and much needed service to our consumers at a low cost. Our services enabled these consumers to stay in their homes instead of progressing to a much more expensive healthcare, which occurs in our last interment setting.

The good work that Addus does is only possible due to the commitment and hard work of each of our employees, I am very appreciated of the ongoing efforts of team

With that let me turn the call over to Brian.

[Brian Poff, EVP and CFO]

Thank you, Dirk, and good morning to everyone.

Addus had a strong start to the year as we produced solid same-store revenue growth of 5.6% in the first quarter of 2019 compared with the first quarter of 2018 and sequential same-store growth of 2.6%. We continue to execute on our strategy and believe we are well positioned to continue this trajectory in 2019.

In addition to favorable growth trends in our current operations, we look forward to incremental benefit of the acquisition of the assets of VIP healthcare services expect to close on June 1, 2019. We also continue to evaluate and work towards other acquisition opportunities from an ongoing pipeline of potential transactions.

As Dirk mentioned, total net service revenues for the first quarter increased 27.2% to 139.3 million from 109.5 million for the first quarter of 2018. Personal care revenues accounted for 92% of revenue for the first quarter and increased by 17.5% over last year. This growth reflected a 15.6% increase in billable hours per business day and a 3.3% increase in revenue per billable hours.

The remaining growth in revenue was attributable to our hospice and home health services with no contribution from these segments in the prior year period. These service lines added approximately 10.6 million in revenue for the first quarter of 2019 with sequential growth of 6.2% driven largely by growth in our hospice ADC as our operational strategies in that segment begins to take effect.

Our gross margin percentage was 27% for the first quarter compared with 25.5% for the first quarter last year reflective of the impact of the higher margin profile of our acquired skilled business with our personal care business remaining materially constant.

G&A expense was 21% of revenue for the quarter compared with 19.7% for the first quarter last year. This increase is primarily attributable to the profile of personnel and other costs associated with the acquisition and operation of our skilled businesses.

The company's adjusted EBITDA increased 23.1% to 10.8 million for the first quarter of 2019 compared to 8.8 million in the first quarter of 2018. Adjusted EBITDA margin was 7.7% inclusive of the negative impact of approximately 70 basis points from the non-reimbursed Chicago minimum wage increase compared with 8% for the first quarter of 2018.

Adjusted net income per diluted share grew 23.8% to $0.52 for the first quarter from $0.42 for the first quarter of 2018. The adjusted per share results for the first quarter of 2019 exclude the following; M&A transaction expenses of $0.03, restructuring severance and other costs of $0.05, and non-cash stock-based compensation of $0.08.

As previously reported, our adjusted per share results for the first quarter of 2018 exclude interest income of Illinois of $0.16. M&A transaction expenses of $0.07, restructuring charges, severance and other costs of $0.03, and non-cash stock-based compensation of $0.06. As a result of an excess tax benefit generated by our stock compensation our tax rate for the first quarter of 2019 was 16.7% below our standard expectation. For the full year 2019 we continue to expect our tax rate to be in the low 20% range.

DSOs increased to 78 days at the end of the first quarter of 2019 compared with 70 days at the end of the fourth quarter of 2018. DSOs for the Illinois Department on Aging were 67 days at the end of the first quarter of 2019 compared with 55 days at the end of the fourth quarter. The increase in DSOs and impact on our cash flow during the first quarter was primarily related to payer system delays with the transfer of CCUs in Illinois and the MCO transition in New York and New Mexico. These issues have been largely resolved we expect to return to more normal levels in the second quarter.

Our first quarter net cash used in operations totaled 3.2 million and at March 31, 2019, we had 66.2 million in cash on hand. With our new credit facility announced last year we continue to have capacity to support our acquisition strategy with only 20 million of bank debt.

This concludes our prepared comments this morning. I want to thank you all for being with us. I'll now ask the operator to please open the lines for your questions.

[Operator]

[Operator Instructions] And our first question comes from the line of Brian Tanquilut with Jefferies. Your line is now open.

[Brian Tanquilut, Jefferies]

I guess the first question Dirk for you as I think about M&A obviously it's one of the key question for the story. If you don't mind giving us any updates on what the pipeline looks like and conversion on deals that you've been working on over the last put it six to nine months?

[Dirk Allison, President and CEO]

Yes, thank you Brian. Our M&A efforts continue to be extensive. We have a pipeline of a number of deals we're working on however you guys know as we go through the financial operation and compliance due diligence at times deals fall out, so last time I mentioned we were working on two deals, we're working on more than those two deals today although one of the particular ones we talked about is no longer in our pipeline due to the due diligence issue.

So for us we're confident that we should be able to close additional deals in 2019. We'd like to believe we'll able to announce something in our second quarter our third quarter of this year. So we continue to work hard towards that goal.

[Brian Tanquilut, Jefferies]

And then follow-up to the comments you made about New York as we think about the opportunity there, is there further consolidation or shrinking of the network that you expect to happen in the New York market that theoretically would drive market share to you guys?

[Dirk Allison, President and CEO]

Yes, there is an ongoing effort to continue to shrink the provider network in New York. I think October 1 of this year is another deadline for the second what we would call the second phase of that particular tightening and we're continuing to see the MCO partners that we have in that market drive business into Addus.

As you saw in the first quarter with our 5.6% sensor growth, a large part of that was due to the fact that New York is experiencing this higher growth than normal because we are able to consolidate that market as other providers are going out are not being allowed to continue in the network.

So we're excited honestly, this is what strategy is all about is building strength in the market and being prepared if other markets takes a lead of New York and start to decide that they are going to narrow their networks in the future.

[Brian Tanquilut, Jefferies]

And just a follow-up to that point that you made, I guess given the comment that you just shared with us I don't think is that right to think there is no reason for a same-store to slow down necessarily. And how is that relate to 3% to 5% guidance when you put up coming of 5.6% north of the quarter is that just conservatism?

[Brian Poff, EVP and CFO]

Yes Brian, I'll take that one this is Brian. I think going forward we expect New York continue to be strong as we discussed towards our October deadline. I think 3% to 5% we think is still the same general range as we experienced in Q4 we were under in Q1, we were little over but we still think that's a long-term range for us going forward.

[Brian Tanquilut, Jefferies]

And then Brian last question from me. As I think about G&A and cash flows, I know you had to call out on DSOs but how are they trending close to one or we see a normalization in the cash flow now in DSOs and then also if there is just anything that we should think about if there is G&A progression for the year?

[Brian Poff, EVP and CFO]

Yes on DSOs, so New York and New Mexico those issues that payers are kind of updating their systems and given to the transition early this year are largely over. So we're seeing a positive trend there already Q2. The Illinois with the transition of CCUs that takes a little bit longer for them kind of process through their updates on the ramp are working hand to hand with them to get that done and hope to have that back in all about the end of Q2.

In G&A I think sequentially we were up slightly we had to reset our payroll taxes that we would expect, so nothing out of line from that perspective we'll continue to see a normal seasonal trajectory for us to 2019 year.

[Operator]

And our next question comes from the line of Matthew Gillmor with Robert Baird. Your line is now open.

[Matthew Gillmor, Robert Baird]

Maybe following up on the discussion you have with Brian on the New York narrowing networks there. It seems like that had a larger impact this quarter than in prior quarters, was that just the natural progression of providers consolidating or did something occur this quarter that sort of accelerated that consolidation?

[Dirk Allison, President and CEO]

No, I think if you go back and look at the process for October of last year there was an initial reduction in the number of providers and that followed the second year by further reduction of the providers. So I think what we have seen earlier, we saw a nice step in our growth in New York we continue to see that as the second phase moves through. So nothing particularly this quarter that drove that with the exception of the October 1 deadline this year where they have to be down to the next level.

[Matthew Gillmor, Robert Baird]

And are you able to recruit caregivers as part of that transition to that come along with the patients that makes growth a little easier or are you having to kind of go out and staff as well just trying to understand that dynamic?

[Dirk Allison, President and CEO]

Well, one of the great things about a narrowing of the network is that these consumers already are receiving care, they're just receiving care from another provider and so in most cases, the vast majority of cases as that business shifts over to someone such as Addus, the caregiver comes with the consumer. So it really makes our job of having to recruit caregivers to provide this service much easier during this process. So I would say probably 70 plus percent or so come with caregivers as they transmit for over.

[Matthew Gillmor, Robert Baird]

And then I was hoping to get an update on the Illinois rate timing issue and the legislation, that's in the House and the Senate that would increase your rates and offset the minimum wage increases, I know you mentioned you're working with your local trade associations on this, it seems like the legislation has a large number of co-sponsors in both the House and the Senate. So I just wanted to get a sense for where the process stands and is there any change to your confidence level in terms of getting that resolved?

[Dirk Allison, President and CEO]

Well, we always remain confident that we're going to get this resolved because we believe ultimately the leaders of the State understand what happened when they passed the minimum wage increase to companies and industries like ours in the State that are dependent on these minimum wage caregivers. So we do remain encouraged. The good thing is as opposed to previous times we've had to go through this.

The Governor supports an increase right now in all honesty the Governor's budget put in about half the money that we would like to see put in and so we're working with the Governor's staff to educate them on why that needs to be increased and work. We're having good discussions there. We do continue to have strong support in both the House and the Senate and the leadership in those particular areas to give us this increase and realize again, let me point out and I know this goes without saying but I want to make sure you understand that this is not just an Addus issue.

There are a number of companies that are being severely impacted in a negative fashion. Companies that provide specialized services such as to various population base that they're able to provide the service level to that, if they no longer paid properly and they have to go out of business. It'll be difficult for companies like Addus to pick them up quickly due to maybe language barriers and other things that we would have to deal with.

So we have partnered with our association and with a number of these smaller providers to let the State know that this is an issue that affects many of the folks in the State. So we've received a lot of great feedback. Our team led by Darby Anderson is working very hard on this. And I must say, we remain confident that we will get a price increase soon and from timing standpoint, we would hope by the end of May to first part of June we would have much greater clarity on what's going to happen July 1st. So right now we remain optimistic.

[Matthew Gillmor, Robert Baird]

And then last numbers question properly for Brian. Was there any calendar headwind in the quarter, I know there's a shift in the number of days this quarter. But curious if that had had an impact on your voluntary revenue?

[Brian Poff, EVP and CFO]

Yes, with two less business days this quarter sequentially. So the way we look at those in the first quarter specifically had held a bit of an impact. We take that into consideration when we talk about same-store but nothing else seasonally that really impacted us in Q1.

[Operator]

[Operator Instructions] And our next question comes from the line of Mitra Ramgopal with Sidoti. Your line is now open.

[Mitra Ramgopal, Sidoti]

I just wanted to follow-up some more on the acquisition pipeline and what you're seeing. I was just curious if from a competitive standpoint in terms of bidder as well as private equity or elsewhere, if you're seeing we had a presence there and also as you look at potential deals, should we expect more just pure play personal care or potential deals similar to what we saw with Ambercare in terms of a mix with hospice and home health?

[Brian Poff, EVP and CFO]

Hi Mitra, this is Brian. I can start with that and then Dirk maybe add some color. I think our pipeline profile remains pretty consistent in what we've seen over the last say year and a half. I think with us moving into hospice and little bit into home health with Ambercare last year those are assets that we're interested in at the right price as well.

So we continue to look there, really on the personal care side of your question about private equity, we haven't seen just a lot of pure play private equity competition out there in the market at this point, I know a lot of folks are talking about it but it's difficult, if somebody is going to start a kind of a platform of personal care assets.

I mean it's kind of hard to roll those up. We have a good foundation it's easy for us to layer on but little harder for private equity, I think to start there unless they have something as a foundation to build from what we have seen a couple of more mixed asset private equity backed companies in the past looking at personal care and nothing has really changed competitively, I'd say over the last six to nine months.

[Mitra Ramgopal, Sidoti]

And then just trying to get an update on where you stand on infrastructure build-out. I know one of the things you wanted to do as you look to increase the size of the company was improve the infrastructure. I know you converted some IT or some software systems but in the new ADP payroll system et cetera. I was just wondering, if all of that is pretty much behind you now from an investment standpoint?

[Dirk Allison, President and CEO]

Yes, Mitra, this is Dirk. Our infrastructure build out is largely behind us. Now understand as we continue to grow and bring transactions on board, there is investments to make sure that they come onto our systems in a manner that makes sense whether that be where we have to deal with some of the systems they're on and we're going to have to keep them for a while.

So we have to have an interface into our current system, that infrastructure continues to occur but that's that much more rate. As far as the base infrastructure or HR systems, excuse me our financial system, we've recently just converted to Oracle this quarter, so excuse me I think we are in good shape there.

[Mitra Ramgopal, Sidoti]

And finally just wondering as it relates to Medicare Advantage, if you're seeing, I know it's still early yet but if you're seeing any heightened interest on that front?

[Dirk Allison, President and CEO]

Well, I do believe that with the change that came out this year recently, I think in April that allowed the Medicare Advantage plans to have more flexibility around the benefits they offer. I think that's really increased people's interest level.

I think that the thing that we're seeing in the industry today and we've talked about it before is I would say today most of the Medicare Advantage plans still seem to look on the Personal Care Service as a marketing benefit on the front end of selling the plan, it is our job and our team's job to continue to work with the Medicare Advantage teams to let them know that we believe we can show that our service level is a cost reduction plan and that we can possibly affect their medical loss ratio and make this a very nice win for them.

So that's ongoing, that's going to take a little bit of time because everybody in this industry from a Medicare Advantage providers or the plans, they're new to personal care. This was not something that was offered before. So they're having to learn the benefits, they're having to learn what we can do and we as an industry are having to try to help them understand the benefits, we can bring to them.

[Operator]

[Operator Instructions] And our next question comes from the line of Dana Hambly with Stephens. Your line is now open.

[Dana Hambly, Stephens]

Dirk with the Managed Care plans, how forthcoming are they with sharing data with you guys right now?

[Dirk Allison, President and CEO]

That is always touchy, Dana. That's their data. That is we are working with them and trying to make sure that we can share data back and forth between each other, so that we at the end of the day understand on both sides what we can do. I would probably say that that's a work in progress.

[Dana Hambly, Stephens]

And just remind me some of the important things you think you can help prevent ER visits is maybe the primary quality target?

[Dirk Allison, President and CEO]

I think in the past we've done a couple pilots that demonstrated that we have the ability to help reduce ER visits which leads to a reduction at times in hospital stays. We also believe we can work with the MA plans to work on readmissions and trying to lower the readmission rate.

[Dana Hambly, Stephens]

The growth in same-store well above 5%. But Brian I think you mentioned the gross profit margin in personal care is about flat. And I'm guessing that it's because it's largely variable costs but when you have this kind of growth in the same-store but you're not seeing that really translate to gross profit margins. I'm just wondering why is that the case or is there a lag effect or is it just because it's so much variable costs?

[Brian Poff, EVP and CFO]

Yes, Dana keep in mind that the gross margin for personal care was flat year-over-year. But we were impacted by about 70 basis points on both gross margin and bottom line margin by the non-reimbursed Chicago rate increase last July.

[Dana Hambly, Stephens]

Okay, okay.

[Brian Poff, EVP and CFO]

On a comparative basis, if you take that into account, we actually would be up about 70 basis points as a percentage with that impact excluded.

[Dana Hambly, Stephens]

And you think that would be largely driven by just the increase in the same-store number?

[Brian Poff, EVP and CFO]

Yes, I mean there's really nothing else that's changed in the business. We've done a great job with our teams and working on rate increases in certain of our markets as government kind of go through their budget cycles, so we've had good success there. That's always been our goal was to kind of try to make sure our rates stay up with the cost of wages. It's nice to see when you have an impact like Chicago that you're able to overcome that and the gross margin piece is starting to diverge.

[Dirk Allison, President and CEO]

And Dana this is Dirk, let me also mention our operations team and give them kudos honestly. As we continue to grow in markets where we currently operate such as New Mexico, New York, there are opportunities where on a gross margin basis, we're able to eliminate some costs whether that's moving two separate offices into one offices with the one strong leader. While that's not going to be a huge upside to margin gross margin improvement, it is an opportunity that we've taken advantage of and our team has done a great job of.

So we will continue to work hard on that. The biggest area as Brian mentioned on as being able to expand margin is in both the price increase and as same-store continues to grow, it continues to grow at a higher rate. We will see slight increases in that margin.

[Dana Hambly, Stephens]

Last one from me, Dirk the idea of the fair scheduling or and I think Chicago tried to pass an ordinance, the Fair Work Week is that I think it's been passed in some other states may be but historically or the healthcare industry has been excluded. Are you seeing any pressure that maybe healthcare workers wouldn't be excluded from something like that anywhere in the country?

[Dirk Allison, President and CEO]

Well I think anytime a legislative body starts talking about fair scheduling, they have to be educated on why that won't work in a healthcare environment. I think our team has done a good job working with the States that are talking about that and trying to get the healthcare excluded. And so far we've seen that be successful.

But I will say it is always a challenge. We have to let people know that it's not like a restaurant where you can schedule out two weeks in advance and post a schedule for caregivers. We have things occur where our consumers have to go to a Doctor appointment or something happens that they're, they can't be seen today but they need to be seen tomorrow and that that just changes the schedule. So I would say it is a challenge but it is one so far we've been able to work through.

[Operator]

And our next question looks like it's a follow-up question from the line of Matthew Gillmor with Robert Baird. Your line is now open.

[Matthew Gillmor, Robert Baird]

I had a one follow-up on the New York and the narrowing of the networks. Can you give us any sort of sense for the magnitude of when you went from last year, a whole bunch of providers down to 75 and then going from 75 to 30 is 75 to 30 a bigger impact than the first narrowing just wanted to understand that create a large opportunity in the future or it's sort of about the same in terms of what it would mean for your opportunity?

[Dirk Allison, President and CEO]

Let me try to clarify, I think how that's working that last year they said for every 75 members, you had in your plan you could have one provider. And then on October of this year, it goes to every 100 members you have is one provider. So you can see continuing to tighten up a bit as far as numbers of providers, I don't, I think you'll probably see about the same reduction this year that you saw last year.

So it's hard for us to quantify exactly how many are still out there but the plans have their right to choose anybody, they're just limited to how many they can choose.

[Operator]

Thank you. And ladies and gentlemen, this concludes today's Q&A session. I would now like to turn the call back over to Dirk Allison for any closing remarks.

[Dirk Allison, President and CEO]

Thank you, Operator. I'd like to thank you all for your interest in Addus and for participating in our call today. Hope you have a great week.

[Operator]

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program and you all may disconnect. Everyone have a wonderful day.