Rush Enterprises Inc
NASDAQ:RUSHA
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
38.49
64.3953
|
| Price Target |
|
We'll email you a reminder when the closing price reaches USD.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Rush Enterprises Inc
You don't have any saved screeners yet
Good day and thank you for standing by. Welcome to the Rush Enterprises Incorporated Reports Third Quarter 2022 Earnings Results. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.
I would now like to turn the call over to Rusty Rush, CEO, President and Chairman of the Board. Please go ahead.
Good morning and welcome to our third quarter 2022 earnings release conference call. On call today are Mike McRoberts, Chief Operating Officer; Steve Keller, Chief Financial Officer; Jay Hazelwood, Vice President and Controller, and Michael Goldstone, Vice President, General Counsel and Corporate Secretary.
Now, Steve will say a few words regarding forward-looking statements.
Certain statements we will make today are considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Because these statements include risks and uncertainties, our actual results may differ materially from those expressed or implied by such forward-looking statements.
Important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, those discussed in our annual report on Form 10-K for the year ended December 31st, 2021 and in our other filings with the Securities and Exchange Commission,
As indicated our news release, which achieved third quarter revenues of $1.86 billion, net income of $90.4 million, or $1.59 per diluted share. We're -- excuse me, we're proud to declare a cash dividend of $0.21 per common share.
We're pleased with their results in the third quarter, which were largely driven by pent-up demand for new commercial vehicles and continued strong demand for aftermarket parts and service. New truck production remains limited due to component suppliers, but our Class 8 new truck sales significantly outperformed the industry.
Our results were also positively impacted by 17 locations in the South and Midwest acquired in the fourth quarter of 2021 and 15 locations in Canada, where those operating results are now included in our financials due to our additional investment in Rush Truck Centers of Canada Limited.
In the aftermarket, our parts, service, and body shop revenues were $622.1 million, up 34.4% year-over-year, and our absorption ratio was 136.2%. In the third quarter, we experienced strong widespread demand for most market segments, especially refuse, leasing and energy.
Our growth was also driven by the addition of aftermarket sales professionals and service technicians throughout our company, which allowed us to better support our customer base, especially large national fleets.
While parts supply constraints are still impacting the industry, we're beginning to see parts supply catch up through the needs of the market. In addition, we expect demand for repairs and maintenance to remain strong through the end of the year, but to be tempered by fewer working days in the fourth quarter and seasonal softness to the industry typically experiences through the winter months.
Turning to truck sales. We sold 4,200 new Class 8 trucks accounting for 6% of the total U.S. -- U.S. Class 8 market and 1.4% of the Canadian Class 8 truck market. While new truck production remains limited, we continue to experience healthy demand from most market segments, including both over-the-road and vocational customers.
ACT Research forecasts Class 8 U.S. sales to be 258,600 units in 2022, up 13.7% from 2021 and Canadian Class 8 retail sales to be up 3,150, up 7.2% from 2021. We expect truck production to remain lotions to be constant. And for our fourth quarter Class 8 commercial vehicles to be similar to what we achieved in the third quarter.
Our Class 4-7 truck sales reached 3,223 units in the third quarter, accounting for 5.3% of the U.S. Class 4-7 markets and 1.7% of the Canadian Class 5-7 market. While production remained limited, we saw a healthy demand from a variety of market segments, particularly vocational, food and beverage customers. ACT Research forecasts U.S. Class 4-7 retail sales to be 230,975 units in 2022, down 7.5% from 2021, and Canadian medium-duty retail sales to be 11,025 units, down 16.6%.
As we look ahead, we expect the production of Class 4-7 trucks to improve slightly, and our results will align with the industry in 2022. Our used truck sales reached 1,763 units in the third quarter, up 8% over 2021.
Overall demand softened for Class 8 on-highway used trucks due to an uptake in new truck production, weak spot rates, rising interest rates and high fuel prices, which continue to burden owner operators and small fleets.
As we expect used truck values to continue to decline for the remainder of the year and into 2023, we made the decision to minimize our used truck inventory to a historically low level during the third quarter.
We will continue to closely watch used truck values and manage our inventory levels to allow us to meet the needs of the market while minimizing the negative effect of declining used truck values.
Our lease and rental operations continue to be a significant contributor to our company's overall profitability. With third quarter lease and rental revenues increasing 37.1% year-over-year. This growth is driven largely by our recent acquisitions as well as higher than normal rental utilization rates caused by limited new truck production.
As we look to the future, we are carefully monitoring inflation, interest rates, fuel prices and other economic factors, which may impact consumer spending, our customers and our industry in general.
However, there is still significant demand for new commercial vehicles and aftermarket parts and service, which we expect will continue through the year. With our ongoing focus on disciplined expense management and executing our strategic initiatives, we believe our financial results will remain strong for the foreseeable future.
As always, I would like to thank our employees for their outstanding work this quarter and for their continued commitment to our company's goals.
With that, I'll take your questions.
Thank you. [Operator Instructions]
Our first question comes from Jamie Cook from Credit Suisse. Your line is open.
Good morning Jamie.
Sorry, she cut out I couldn’t hear say my name. Sorry about that. Hey, good morning. Nice quarter. I guess, Rusty, a couple of questions. First, I mean, you gave a little color on the used inventory and how you're trying to reduce the inventory levels.
Can you just give color on how much we did in the quarter? What's left in just the used impact on margins on a go-forward basis, like how to think about normalized margins on the new and used trucks?
And then my second question, I was impressed with the growth in the parts and the service business. Again, this, I mean all year. It's been fairly impressive. So can you talk about market versus market share and assuming the macro were to continue to deteriorate, how do you think about the parts ability to grow in a normal truck downturn? Thank you.
Sure. Well, the reviews. Well, as the last five quarters, Jamie, I'll step back a minute and look back in history. We're the biggest most craziest quarters I've ever seen for used truck values, right? And I complement our people for taking very good advantage of that, right? If you look back, we had quarters that were averaging 18%, 19% in margin. Well, as always, we used, that's going to turn, but we did the right thing.
So, if you look into this quarter and dive deep into it, we determined actually midway through the last quarter, but we really going to get started until this quarter. But hey, values, obviously, it started dropping. And we had our inventories had actually gotten up to as large as 2,400 units. By the end of this quarter, we had cut our inventory to 1,200 units and mark them to market.
So, if you look at what we did, we went from running -- we were down, we weren't that high. But if you look back -- we had gotten that high end used truck margins. We were 1.6%. So if you look at the effect of what that was on the company, if you go back and compare it, say, just compared to Q2, it was $13 million, $14 million.
So, really, if you strip out the onetime gain in Q2 from the Canadian acquisition that we had, how you book it, we're like $1.75 in Q2 between used truck was 90-plus percent of the difference between two and three. So but doing that, I can tell you going forward that we will start moving more towards more normalized margins. I don't expect to run 1% again in used truck margins.
So, understand that, that cleanup of the inventory we got rid of and making sure hopefully that our inventory is mark-to-market, if inventories continue to value continuing to decline, that will be a little bit of a drag, but I do not expect used truck margins to get 1% again.
So, all that was done inside the quarter. So, I'm kind of proud of it, to be honest with you, when you really look at it where we're at. So, we're in a position, I think, going forward.
We've told you for years, normalized margins on used are 8% to 10%. I don't know that we'll get 8% to 10%, but I would expect at least crawl back to 6% as we've been through the bottom, right? I do believe that for sure. And from an inventory perspective.
So, I feel good about that. That was all inside of this last quarter. So maybe it gets closer to 8% is somewhere, somewhere between 5%, 6%, 7%, 8%, but it's not going to be 1%, okay? That's what we did this last quarter and got it all cleaned up inside of that quarter. But it was -- what we did the five quarters before was the right thing to do, which is just when you start dropping it drops really fast.
I mean where you typically look at used truck values going down to 1.5%, 2% a month. They've been running 6% to 7%. Obviously, we're still continuing. But we feel that we've got everything market pretty good, but what we've got left and cut it in half from where we had been. Parts and service.
Yes, go ahead. Sorry, I was just going to say that--
So, I'm just going to say that. Yes, you bet. No, do you want me to ask the parts and service. So, from a parts and service perspective, obviously, we've had an outstanding year, record absorption rates at the same time while even bringing in new stores that probably don't perform to the levels of some of the other stores we got, right?
So, I'm kind of -- I'm very proud of that. So there's some runway in there, we think, as we really integrate these other stores. We just got -- in August, we just finished putting the Canadian operations on our SAP business systems. We just finished in May with the Summit acquisition.
So, there's a learning curve inside of there for them. So, I think there's a lot of runway for us in all those new stores, yet in spite of all that, and by the way, it can be a little bit of a detriment front side that first 60, 90 days of business system changes can be tough on them.
So, I would tell you there's probably -- that was inside of all of what happened, too. As you -- but as we look and go forward, our outlook backwards a little bit, we took share, but we also benefit from inflation.
So, don't make for a minute that it was all just us taking share. It was a combination of both. Sometimes it's hard for me to discern how much was what as you look through it. But I would tell you we probably high single-digits with share and the other was some inflationary activity that was out there.
Looking forward to next year, we think that the first, I'm guessing now, I do believe we'll see continued inflationary pressures. On the parts side, I know we're seeing it on the labor side too because that's also in our quarter. We had labor but get into some G&A questions. Cost because we have to. But I do believe that next year will not be quite as high because I think inflation will subside.
We still expect to take share, and I still expect to have some inflation, high singles, low doubles somewhere around the 10%, that's what we're looking for. That's based upon subsiding inflation.
What if inflation continues to run rapid like it did this last year, that number could go up. But I expect to take share somewhere in the mid to high and single-digits and then inflation will be on top of that. That's our goal. That's the investments we continue to make in all our systems and all the things we have going on.
And we're -- right now, I'm investing in a lot of stuff, we're not even seeing in the numbers. But you're always doing that. So I think our continued investment over the last 10, 12 years, you can see it in the numbers, Jamie, you want around long enough. And we will continue that. And hopefully, we'll continue to grow our absorption rates and our returns just like we have been.
Okay. Thank you. I appreciate the color.
You bet.
Thank you. One while we prepare for our next question. The next question that we have is coming from Andrew Obin of Bank of America. Please go ahead.
Good morning Andrew.
One moment I'll bring that person on stage. Andrew your line is open.
Yes, I'm not on mute. Can you hear me?
Yes, we can hear you now.
Now I can Andrew.
Okay, sorry about that. Yes. Just a question. Look, as I said, our earnings estimate, I think when we started the year was like four something, and it looks like you're going to print well over six. So how should we think about just sort of normalized earnings power of Rush?
And if I look at just generally at the multiples for a lot of distributors, people sort of clearly seeing across the board were at peak numbers. But what sort of a normalized number for Rush through the cycle these days given everything you've done? And how much should we expect Rush to make in a recession? I'm not asking you to say when a recession is.
But as I said, the numbers seem to be like 50% plus higher this year than I expected to sort of try to recalibrate how to think about Russia's earnings power going forward in the long run. Thanks.
You know I'm not wanting to go much out on in, Andrew, but here you go. Obviously, we are in an industry that does have a little cyclicality. Just like this whole country does to it. So, as I look back and I try to look at troughs and Steve and I get out there a little bit here. But I go back to '16, split adjusted -- that was a trough to me. We made $0.75.
In 2020, we made $2, we believe that we could probably -- when I say trough, get somewhere down with new product sales in around 200 to 210. We believe we can double what 2020 was. How is that for a trough, okay? Now, if it goes lower than that, we'll figure it out from there, but hopefully not doesn't go lower than that. Most projections are not for it to go lower than that.
So, obviously, and we continue to do the things we're doing, we peak back in 25, 26. I'd like to think there's more to be at, or to do more to return, especially when you look at new acquisitions and things going on that are just being integrated and, those are some of the tailwinds, I still believe some of the big tailwinds in the organization are still on the Navistar side.
I mean they just got bought by TRATON a year ago. Backlog's always going to be a tailwind for us. But I think the transistor, their investments will continue to flow out into the future for those dealerships. And from the Peter perspective, we will always continue to do an outstanding job. I think we've been a peer review so long with Packard's commitments there.
So, with both our OEMs commitment, our commitment, how we manage what we do, the things that you can see in the numbers now that are just drive you a little bit crazy if you're me. And I realize I'm getting a peak multiple, it's barely a multiple, but we're getting a peak at the same for, I guess, treated like that now, but that gives you a little color. When you say normalized, I don't want to see anything normal in this industry, okay? There's not much normal anywhere.
But there are peaks and there are troughs, and that should give you where I think we can -- I don't make your rates, but we're using pretty good at delivery, where we think a trough around you got down to a U.S. market around that number would be. Is that what you're looking for?
Yes. No, I mean, I think it's useful. So, like sort of $4 plus at the trough seems like the new number, at least that's what I've heard. Second question, if you could -- the usual question that I asked, you have very broad presence across the U.S. Clearly, you have some of the best systems out there.
If you could just walk us through what you're seeing in different regions of the U.S. and also what are you seeing by verticals, because obviously, you have exposure to energy, you also sell to FedEx, you sell to truckers, you sell to contractors. So, you have as good as anybody of you in the industry and you have a lot of experience. Thank you.
Well, as I said, geographically, it's still pretty strong, almost everywhere geographic. I don't see one geographic spot getting really hit. Some are stronger than others. I mean California, some region is still very strong. I thought it would have slowed down a little. I mean Florida is doing well. We're doing well in the Midwest too. I mean it's pretty broad.
Now, when you get into segments and what I expect to happen up our biggest segments would be refuse, would be we've got a larger pickup in oil and gas, but don't think for any minute now, it's like it was years ago when oil and gas was 15% of our business. It may have gone from 3% to 4.5% when I look at parts and service, but it is up on the major accounts. It is up more than everything else.
Our national account growth, which is we really look at what we do, we do take care of all our local and regional stuff, do a really nice job of that. But the biggest growth we've had on a consistent basis and what we believe will be the biggest growth for us going forward is our national accounts. And that's because of our map.
We can differentiate ourselves off a map because we got to map like no one else in our industry. And regardless of what brand we represent, you're still a Rush customer, and we can service you in ways across a larger map than anybody else. And so that is really the biggest strength in my mind. It's our people is our biggest rate. But at the same time, that map there and us continuing to leverage and go to market as one.
We realigned all our revenue creation about a year and a half ago and really put it all under one umbrella, and that's how we -- that's really how we're focused and how we go to market nowadays. And we have customers, we don't sell trucks to that we do millions of dollars of business with in parts and service because of that math. And that list of customers continues to grow and then it just creates opportunities to sell product, we do them down the road.
So I know I got off base a little from your question, but I think it's important to understand that. But really, Andrew, the leasing segment is still strong. We -- I do anticipate, obviously, housing to slow down some. But with the rates with what's going on with rates, but that's coming at us, and that will be on the rear side. But it's still strong in Texas, okay, I can tell you that I live here.
But there is going to be -- what the Feds are doing will have an effect, I think, eventually and what is going to -- as I tell me it will have an effect somewhere downstream next year, but we do believe we're well diversified in how we go from a market segment and a geographic perspective. And we'll do it well in the future and we continue to convenient believe in ourselves and how we're going to market and what we've got and the growth things that I talked about.
And just a question, just going back to the question on sort of trough. So how should we think about, and maybe you can give us an absolute number or however, how should we think about the trough and parts and services? Because it's such a driver of your earnings as a company.
How should we think about what kind of a decline can we see in parts and services and recession? Once again, if you could calibrate or just it keeps growing because you keep putting in money and we're in an inflationary environment.
Well, I don't think it will ever go down as bad as I've seen it before, given the investments we've made in it, but I'm not going to be naive enough to sit here and tell you that it couldn't slow down. Okay. That's being a little bit naive, especially in this high inflationary environment, how that assists as far as the growth rate scale.
From going backwards, Andrew, this is just a stab. I guess if we got into a pretty medium resale a little big middle size or, I don't know, people are funny with any listening to economist talk 5% maybe. I don't really see us going backwards much more than that in any case. I don't think so.
We have normal seasonality like being in the winter, things slow down a little bit typically. But as far as overall single-digits, I don't see -- and remember, we have the lever of expenses to pull. That's what absorption means. That's gross profit from parts and service over expenses.
So, that's whatever you have at other sites going to pull to try to mitigate the effect of that. And that's how we typically manage through this. That's how we manage, that was a short time, you go back to 2020 when we go bait. I mean, we shut it down there in the summer.
And then when it took back off in the fall, we took advantage of being able to mitigate expenses and then grow back with the market even though it shot back up. So, remember, our starting point to is a lot higher than us. We've never been running 136% absorption. And that's with new acquisitions and up running less than that. So, we're starting at a whole lot higher lot taller mountain than we ever have also.
So, I know I'm bouncing around or rambling here, but it's 5%, 6%, 7%, somewhere like that, I would think, on the top line. But I don't -- we don't see that now. I'm not projecting that. But I'm not naive enough to know that if the general economy ends up driving everything at the end of the day. So something like that could happen and then, of course, was up to us to manage through it by pulling some of the levers we've got.
Rusty thanks so much. Really appreciate your extensive answers.
You bet. Thank you, sir.
Thank you. [Operator Instructions] One moment while we get ready for the next question. Now, the next question is coming from [Indiscernible]. Your line is open.
Good morning. This is [Indiscernible]. Can you hear me?
Yes, I can hear you now.
Okay, great. I wanted to start with a quick question on parts and service. Do you have what the organic growth number was in the quarter? And then, Rusty, I'd love to get your thoughts on the truck Class 8 number for 2023.
Okay. The same-store parts and service growth rate, if that's what you mean by organic. Just was 19.9% in the quarter. Obviously, that has inflation in it of probably 14%, 15% and growth of 5% or so percent. So that's the organic number, I think, is what you're asking for.
And as far as ACT number, I think they really got three numbers if you ask Kenny, I got a little heart, a big heart and a middle heart. I think what he prints is the 232 that's out there right now. And I'm -- some people, I know I've seen some reports are keeping fans going to be flat with this year. Those are 260. I have a problem with that.
I think your big fleets are going to continue to buy. I think you're smaller to midsized customers that are levered up that rely on good used truck values and borrowing money and they're going to have higher interest rates to pay. I think that's going to happen in that sector.
So, point being I'm going to go with that $2.25 to $2.30 range would be mine. I don't believe -- and I think -- I do think it will be more front loaded. So, I do believe that is more -- will be more front loaded because I do think what the Feds are doing will have to take hold and have some effect on that small to midsized buyer as we get back, as we get deeper into the year.
Okay. Got it. And I wanted to ask about the fourth quarter and just the cadence of EPS. You gave a few of the moving pieces on expectations for truck sales, but anything on G&A or anything else sequentially we should be mindful of moving into the fourth quarter?
No, I would look for G&A to flatten out a little bit sequentially. When I take that view of it, we'll be off a little bit in parts and service because it's fewer working days. You've got holidays that they can deal with. That's just normal. That's just the way it works. A lot of companies have we shut down between Christmas and New Year's, and that's no different than any other year.
So, similar quarter a little bit less given the fewer working days that we'll be dealing with. That's just seasonality. As far as the per day average is, right now, they remain solid, okay? They have continued in the last few months to continue to slightly go up. I don't expect them to go up. They normally typically don't during the winter.
Normally, you will see a little softening in a few less working days. So, that really would be the only negative that I see in Q4 as I look at it, it's just a few as working days, holidays, but we deal with it every year. And -- but that can soften a little bit of the -- of what the returns are. But still when you look at the numbers that we're printing and they're still pretty solid.
Got it. And last question, I just wanted to ask about capital deployment and where you're seeing the best opportunities today? And then maybe tagging on to that, Steve, interest expense went up by a good amount in the quarter. Curious what we should be thinking about going forward?
Right. We've had a consistent shareholder return plan now for five years. As we've said, we're going to return 35% to 40% of free cash flow of FCF to shareholders, and we have consistently raised our dividends averaging right now, it's $0.21 on $0.84 a year, $0.21 a quarter at is around, I don't know, 1.758 just right under 2% return from a dividend perspective.
We approved last year, $100 million repurchase. We spent $88 million repurchasing stock. And I think it's so cheap to me, that's the best thing we can do is buy more stock back, to be honest with you, from my perspective, and we'll be improving we will be approving I'm sure, soon, another repurchase. We're discussing it with the Board.
But I mean, we'll -- probably we've been consistent in that over the last few years, what we spend may change, but we have consistently bought stock back. We do not see either one of those changing over the next 12 months. The numbers can be varied, but we will continue to return dividends like we have not going backwards and continue to buy stock back, especially if we see opportunities, be opportunistic when we do we feel we're very undervalued. Steve mentioned interest rates increased $3 million or $4 million, Steve?
Yes. Sequentially, we were up $3 million from Q2, and it's a product of two things. Our floor plan levels are up because we've delivered a few more trucks and there we have more inventory on our balance sheet for a longer amount of time, and our floor plan rates are variable. So, interest expense that you see on the income statement is driven by floor plan and interest on the lease and rental fleet.
And then to the extent we have excess cash, we have the ability to lower those lines inside the quarter and kind of hedge it and keep a lid on it. But you should expect it to continue similar to current levels for the foreseeable future.
The only thing that would drag it down is if the truck market probably in 2024 when it does turn down our inventory levels will soften. And I guess we've got one more rate increase coming of 50 to 75 basis. So, that's what's driving a Justin.
Got it.
Yes. The other thing to remember is, as we know, the labor market has been extremely tight. So, we did have, in the course early on July 1, we raised pay quite dramatically across the whole company like double plus what we usually do. So, that was -- we had the full effect of that inside the third quarter, too. So, it's important to understand that also.
Makes sense. Thanks. Appreciate the time.
Thank you. I would like to now turn the call back over to management for closing remarks.
Well, I appreciate that. Well, thank you, everyone, for listening today and participating. I hope everyone has a happy holiday. It will be sometime in February before we talk to everyone again. So, wishing everyone happy holidays and thank you very much. We'll see you in February. Bye, bye.
This concludes today's conference. Thank you all for participating for the rest of your day. You may disconnect.