Chemed Corp

NYSE:CHE

Earnings Call Transcript 2024-Q3

[Operator]

Good day, and thank you for standing by. Welcome to the Chemed Corporation Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Holley Schmidt, Chemed, Assistant Controller. Please go ahead.

[Holley Schmidt, executive]

Good morning. Our conference call this morning will review the financial results for the third quarter of 2024 ended September 30, 2020.

Before we begin, let me remind you that the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 apply to this conference call. During the course of this call, the company will make various remarks concerning management's expectations, predictions, plans and prospects that constitute forward-looking statements.

Actual results may differ materially from those projected by these forward-looking statements as a result of a variety of factors, including those identified in the company's news release of October 25 and in various other filings with the SEC. You are cautioned that any forward-looking statements reflect management's current view only and that the company undertakes no obligation to revise or update such statements in the future.

In addition, management may also discuss non-GAAP operating performance results during today's call, including earnings before interest, taxes, depreciation and amortization, or EBITDA, and adjusted EBITDA. A reconciliation of these non-GAAP results is provided in the company's press release dated September 29, which is available on the company's website at chemed.com.

I would now like to introduce our speakers for today. Kevin McNamara, President and Chief Executive Officer of Chemed Corporation; Mike Witzeman, Chief Financial Officer of Chemed; and Nick Westfall, Chairman and Chief Executive Officer of Chemed's VITAS Healthcare Corporation subsidiary.

I will now turn the call over to Kevin McNamara.

[Kevin McNamara, executive]

Thank you, Holley. Good morning. Welcome to Chemed Corporation's Third Quarter 2024 Conference Call. I will begin with the highlights for the quarter, then Mike and Nick will follow up with additional details. I will then open the call for questions.

We continue to be pleased with the exceptional operating metrics at VITAS. In the third quarter of 2024, admissions totaled 16,775, which equates to a 6.3% improvement from the same period of 2023. Our average daily census, or ADC, expanded 2,926, an increase of 15.5% when compared to the prior year quarter.

These historically good metrics were positively impacted by the $85 million acquisition of Covenant Health, which was closed on April 17, 2024. Through the end of the third quarter, Covenant Health acquisition is meeting all of our internal financial projections developed at the time of the acquisition. Nick will provide further commentary on the Covenant integration.

Hurricane Helene, which impacted the Panhandle of Florida and other parts of Southeastern United States in late September, did not result in any significant property loss or damage to VITAS. However, as with other similar events, we did experience a slowdown in admission activity while our health care partners prepared for the hurricane and dealt with the aftermath. We estimate that admissions were negatively impacted during the quarter by approximately 60 to 100 patients.

We also believe that the Florida admission impact will be more significant in the fourth quarter with a combination of hurricanes Helene and Milton. Finally, we're excited that early in the fourth quarter of 2024, our new program in Pasco County, Florida accepted its first patient. We believe this program offers an exciting growth path for Florida in 2025 and beyond.

Now let's turn to Roto-Rooter. We continue to be disappointed in Roto-Rooter's results. Roto-Rooter generated quarterly revenue of $214.8 million in the third quarter, a decrease of 6.9% when compared to the prior year quarter. Overall, our call volume was down 11.7% when compared to the prior year quarter. Close rates at the call center at the time of dispatch and when our technician reaches the customer location, remain consistently strong compared to historical levels.

Residential revenue at Roto-Rooter declined 6.3% and commercial revenue declined 5.9%. Our residential business experienced a very choppy quarter. We continue to believe that there is lower demand across the entire industry, resulting in high levels of competition for both Internet marketing position and related job leads.

Residential demand and the resulting revenue varies significantly on a month-to-month basis during the quarter. In early July, we replaced our search engine marketing firm, or SEM, responsible for managing our paid search marketing program. There was both a transition time and ramp-up costs that we believe led to some of the disruption during the quarter.

Finally, we don't like to talk about whether there's a general rule. Weather patterns had to normalize over time and, therefore, did not have a significant impact on the business over an extended period of time. However, in the summer of 2024, there were parts of the Midwest and Northeast regions that were abnormally dry. This includes the location of some of our largest branches. We believe this contributed to an overall residential softness in the quarter.

Turning to the commercial business. We did experience some sequential improvement in our commercial revenue. Our third quarter 2024 commercial revenue was a 5% improvement over the second quarter of 2024. Historically, there's little to no sequential growth in revenue between the second and third quarters of a given year. This trend gives us some optimism that our action plans implemented earlier in the year are starting to show positive results.

To summarize, we are excited about the continued strong results of VITAS. VITAS' management has consistently demonstrated the ability to accelerate hiring and retention of licensed health care professionals. This has translated into continued strong admission and census growth. We are very bullish on the prospects for VITAS for the remainder of 2024 and beyond.

We believe Roto-Rooter is well positioned despite the difficult operating conditions that it faces. Roto-Rooter maintains its core competitive advantages in terms of excellent brand awareness, customer response time, 24/7 call centers and aggressive Internet presence.

With that, I would like to turn the conference over to Mike.

[Michael Witzeman, executive]

Thank you, Kevin. VITAS net revenue was $391.4 million in the third quarter of 2024, which is an increase of 17.3% when compared to the prior year period. This revenue increase is comprised primarily of a 15.5% increase in days of care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.6%.

The acuity mix shift negatively impacted revenue growth, 144 basis points in the quarter, when compared to the prior year revenue and level of care mix. The combination of Medicare Cap and other contra revenue changes increased revenue growth by approximately 64 basis points.

Average revenue per patient day in the third quarter of 2024 was $199.16, which is 139 basis points above the prior year period. Reimbursement for routine home care and high acuity care averaged $175.82 and $1,094.97, respectively. During the quarter, high acuity days of care were 2.5% of total days of care, a decline of 26 basis points when compared to the prior year quarter.

Adjusted EBITDA, excluding Medicare Cap, totaled $73.1 million in the quarter, an increase of 33.1%. Adjusted EBITDA margin in the quarter, excluding Medicare Cap, was 18.6%, which is 212 basis points above the prior year period. The financial results just discussed include the impact of the Covenant Health acquisition. Covenant Health contributed $10 million to $11 million of revenue in the third quarter of 2024. This revenue translated to net income of approximately $1.8 million to $2 million. Adjusted EBITDA in the quarter attributed to Covenant Health is between $2.4 million and $2.6 million.

Now let's turn to Roto-Rooter. Roto-Rooter branch residential revenue in the quarter totaled $146 million, a decrease of 6.3% from the prior year period. Based on Roto-Rooter's disappointing revenue results over the past few quarters, a decision was made to look for a new marketing agency to provide a fresh look at how Roto-Rooter's paid search program is operating. That process culminated in Roto-Rooter transitioning to a new SEM in early July.

The ramp-up time required by the new provider caused some of the softness in demand in residential revenue experienced in the third quarter. Roto-Rooter management believes that the new provider will provide more positive results on a go-forward basis.

Roto-Rooter branch commercial revenue in the quarter totaled $53.5 million, a decrease of 5.9% from the prior year. The commercial revenue results in the third quarter were within the range of our expectations as given in our revised 2024 guidance from July. This represents a 5% sequential improvement over the second quarter of 2024. Roto-Rooter management has put a tremendous amount of effort into improving the commercial revenue trends, including hiring more salespeople, contacting new and existing customers through a variety of channels and implementing targeted initiatives specific to struggling branches.

Adjusted EBITDA at Roto-Rooter in the third quarter of 2024 totaled $56.4 million, a decrease of 15.8% compared to the prior year quarter. The adjusted EBITDA margin in the quarter was 26.3%. The third quarter adjusted EBITDA margin represents a 275 basis point decline from the third quarter of 2023. Of this decline, approximately 95 basis points relates to the ramp-up of the new SEM, as previously discussed. Additionally, Roto-Rooter invested more in different non-Google advertising channels, such as billboards and radio spots. This represents approximately 40 basis points of the margin decline.

Based solely on Roto-Rooter's continued softness, we have reduced our full year 2024 earnings per diluted share, excluding noncash expense for stock options, tax benefits from stock option exercises, costs related to litigation and other discrete items, estimated to be in the range of $23 to $23.15. This range represents a 13.3% to 14% increase from Chemed's 2023 reported adjusted earnings per diluted share of $20.30. This guidance assumes an effective corporate tax rate on adjusted earnings of 24.3%, and a diluted share count of 15.2 million shares. Chemed's previously issued 2024 guidance range was $23.55 to $23.80.

I will now turn this call over to Nick.

[Nicholas Westfall, executive]

Thanks, Mike. I continue to be very pleased with our demonstrated sustainable expansion of our workforce and patient capacity. The third quarter of '24 marked our ninth consecutive quarter of expanding our clinical workforce capacity in disciplines identified as part of the retention program. The expansion of headcount during the quarter was in line with our expectations and similar to the headcount expansion as we've discussed in prior quarters. We believe that this predictable level of headcount expansion is, for the foreseeable future, VITAS' new operating normal to continue to meet elevated demand for our services across the country.

In the third quarter of 2024, our average daily census was 21,785 patients, an increase of 15.5%. VITAS has generated quarterly sequential ADC growth over the last 8 quarters. In the third quarter of '24, total VITAS admissions were 16,775. This is a 6.3% increase when compared to the third quarter of 2023.

In the quarter, admissions increased in 3 of the top 4 preadmit location types. Our nursing home admissions increased 8.2%, hospital directed admissions increased 9.4% and our home-based patient admissions expanded 10.3% when compared to the prior year period. Admissions for assisted living facilities slightly declined by 0.2% Our average length of stay in the quarter was 102 days. This compares to 103.1 days in the third quarter of 2023. Our median length of stay was 18 days in the quarter and compares to 17 days in the third quarter of 2023.

Our teams have now completed all aspects of integrating the operations of Covenant. The integration went smoothly, both from an operational and cultural perspective. I'd like to thank our collective VITAS team members, including those that transitioned over from Covenant, for this successful integration. It would have not been accomplished without the unwavering commitment, dedication and focus each team member showed towards fulfilling our mission in every community served across the Florida Panhandle and Alabama.

As Kevin mentioned, we are very excited about the opportunity to provide service in Pasco County, Florida. We admitted our first patient in October. We believe our entry into Pasco County is a win-win for both the people we will serve in Pasco and for the future growth potential of VITAS. As Kevin also mentioned previously, Florida and our Southeastern locations experienced 2 significant hurricanes in late September or early October with Helene and Milton.

While we did experience a temporary slowdown in referral volume, I'm proud to say our collective team enacted our emergency response protocols and successfully supported one another, while providing exceptional care to our patients and the impacted communities. In certain instances, we assisted in caring for patients who were displaced from evacuation areas from our competitor hospices to ensure these patients and their families receive the care and attention they deserve. Our locations and teams were available throughout the storms and immediately back out in their communities once it became safe to do so.

Over my career of VITAS, these natural disasters, while unfortunate, have been unifying events for our team with inspiring stories of heroics, compassion and companionship, which invoke a great degree of pride for what we do each day.

To quickly recap what our team has accomplished, we've now generated 9 quarters of sequential net growth in licensed health care workers and 8 quarters of sequential growth in ADC. We have also demonstrated the ability and interest in partnering with other providers through acquisitions to ensure communities continue to receive the best possible patient care. We are extremely optimistic about the ability of VITAS to maintain an above-average historical growth, both organically and through potential acquisitions over the next few years.

With that, I'd like to turn this call back over to Kevin.

[Kevin McNamara, executive]

Thank you, Nick. I will now open this teleconference to questions.

[Operator]

[Operator Instructions] The first question comes from Ben Hendrix with RBC Capital Markets.

[Benjamin Hendrix, analyst]

Maybe a first question here for Nick. Clearly, you guys are seeing really good traction with the community access strategy, with that strong census growth you referenced and the margin contribution from that. Perhaps there could be a little bit of pressing some cap limits in some areas. We're still seeing a lot of good occupancy momentum among kind of referral settings. Could you maybe talk about all that in terms of your long-term growth expectations for census? How do we think about it? And if there's any kind of regional considerations we need to think about going forward?

[Nicholas Westfall, executive]

Sounds good. So I'll start at the end of the question. In terms of regional considerations, I don't think there necessarily is any that are new. Of course, certain markets, particularly California, have their own expected operating level given the dynamic of how Medicare Cap is calculated out in that market.

As it relates to community access, we continue to see strong -- as you alluded to, strong occupancy levels and strong demand across every market throughout the country. And while we'll continue to execute on our community access strategy, I just have to reaffirm that throughout that entire time period where we've talked about it, in no way, shape or form have we deemphasized our commitment to our hospital partners and others. And so that continuity, as you can see through the third quarter performance of the hospital segment, admits being up almost 10%, I would continue to expect and anticipate.

And that's for 2 reasons, right? One is that's who we are, that's how we operate and it's what the community needs. And then secondarily, as you point out, both short, mid and long term, it continues to be part of our effective strategy of operating a hospice company and ensuring we're managing Medicare Cap. As your -- Ben, as I know you're aware, we ended the Medicare Cap year, because when this quarter completed and started a new one as we lifted it up -- and as you can see in the results, our Medicare Cap forecast came right in line actually with where the Medicare Cap year ended, and we anticipate that being the same case for 2025 and beyond.

So we'll speak about long-term growth trajectories when we come out with '25 guidance, but we feel good that they'll continue to be above pre-pandemic historical growth levels from a volume standpoint. That range was 4% to 6%. It will be above 4% to 6%, but where it exactly lands, we'll fine-tune as we get into our guidance for '25.

[Benjamin Hendrix, analyst]

Really appreciate that, Nick. And then just maybe switch over to Roto-Rooter real quick. With this new marketing initiative and the marketing investments you have kind of on the residential side, can you talk about -- and also commercial, too, I guess, can you talk about just any kind of hurdle rates or benchmarks or any kind of milestones that are set to achieve in the near term underneath this new marketing strategy? Or are there any kind of any measures of improvement you're looking for kind of in the near term from that marketing?

[Kevin McNamara, executive]

Well, Ben, let me start before I turn it over to Mike. But just to say it's a tough one. We don't expect any big breakthroughs. I'll tell you that the shortfall in Roto-Rooter this quarter, if you ask me from my perspective, big picture, it was 2 things. It was kind of the ramp-up costs and marketing expenditures in July, the first month of the quarter. And it was the kind of the poor performance of the residential market, just about 4% worse than we thought just in one quarter.

Not tied to anything, it's just in demand. If just to just say the number of telephone calls we're getting were less than -- fewer than expected. And we're just blocking and tackling on a market-by-market basis approaching that. I think that the short -- in the short term, the improvement that we're going to see, to the extent we see it, is going to be on the commercial side because that's an area that is -- we're putting a lot of effort in and it can have -- 2 things. It can have some short-term positive impact because you tend to get -- let's say, it's a big apartment complex, you might get 25 jobs over the course of 1.5 months and -- as opposed to one every 14 months on the residential side. So it's a tough one.

But really to answer your question, that's a shrink from it, is that we don't expect any big breakthrough. We just think that as -- I'll put it -- in our mind, it's this. This is the process we're going through. When Roto-Rooter was -- when all the jobs came from the Yellow Pages, Roto-Rooter had ideal position. And it was listed in the first 2 pages in every plumbing section of every Yellow Page book. Well, as the Internet became the preeminent source for job leads, we went back to square one. We were just fighting on a daily basis on the Internet for placement.

And given our size and our structure, it wasn't long before we became very dominant on that spectrum. And to the extent that we'll bore you with this call, the changes made on the marketing side, the nature of paid search, well, it's just a normal or some of the other facets that Google has added, it's something that -- it's a process we're going through. But I have no doubt that we're positioned to be dominant, more dominant. We're still dominant, but we're more dominant in the near future. But I guess what I'm really saying, it's a process. It's not like -- it's not a blip. When something has happened for 3.5, 4 quarters in a row, we can't describe it as a blip. And it's got full -- got our full attention, to say the very least. Mike, anything else to add there?

[Michael Witzeman, executive]

Yes, Ben, I think, I mean, to be direct, I think we will believe -- and it doesn't boil down -- as Kevin is saying, it doesn't pull it down to one specific metric or one specific thing. But if there was one thing that we will judge the marketing program successful by, it's call count. As we talked about, it was down 11.7% year-over-year, and that's a tough metric to overcome for a revenue perspective. As Kevin also said, we're doing a lot of other things, and I think we're doing them well at Roto-Rooter. Our conversion rates are good. In fact, historically good. So we're doing a lot with what we get. But until that call count number starts to grow or at least not decline significantly, the residential business is going to struggle.

Next question?

[Operator]

The next question comes from Joanna Gajuk from Bank of America.

[Joanna Gajuk, analyst]

So I guess maybe first on Roto-Rooter. In terms of that last comment around the change in your vendor to manage the online searches. What exactly can they do differently versus the prior vendor? So understanding the goal is to, obviously, increase the call volume coming through and then convert those. But is the problem what's really the Google algorithms were preferring the local providers? Like what is, I guess, this new vendor can do differently?

[Michael Witzeman, executive]

Joanna, I'll be the first to say that no one in this room is an Internet marketing expert. So we'll start there. But when we talk to Roto-Rooter management, they talked -- there's more dependence, for instance, between paid and nonpaid and how Google algorithm puts that all into one bucket. And I think the new marketing agency is going to be experimenting on how that interdependency works. And is there a way, for instance, if we increase our paid advertising, does that also move us up or down on the nonpaid?

And I think there's -- it's just they have new ideas that our old agency didn't have. And I think at the end of the day, I think to some degree, we view it as, call it, every 3 to 5 years, it's good to go out, get a new agency with new ideas, different strategies and see if they can drive something that maybe the old agency has overlooked.

[Kevin McNamara, executive]

To put it very simply, the former agency assigned 3 full-time people to our account. We have 7 in the new agency working full time, making sure it is a constantly changing -- I mean, changes every minute or so as far as placement in all the different cities. And you just have to say -- and it's a bidding and you bid for position. And it's bidding is constantly evolving depending on time of day, day of the week, whether it's raining or not. And I mean, again, it's -- the better mousetrap is able to capture prime position at a reasonable cost more often than not. And to the extent that we think that we're doing a better job of that -- there's no doubt in our mind that we're doing a better job of that.

But as overall conditions are tough, that is the -- you've supplied the information that shows that just total searches on the plumbing side are not up, they're down a little bit. You have -- Internet being the competition for those number of leads currently, and it's a battle, but more people fighting over the few that are there. And again, I think that over time, Roto-Rooter has demonstrated they have the staying power, the commitment to throwing more -- and have the ability to throw more resources at it.

And ultimately, there's no doubt -- I'll put it this way. I mentioned this, I don't want to -- some information that we've looked in much closer, Roto-Rooter has a dominant position in every market where we have a branch, every one. And it's just a question of returning to a higher level of dominance. And again, when you're talking about whether you have a 50% advantage over the second best competitors. You got to return it back to a 60% dominance. I mean that's the area that we're talking about here. And I have confidence we'll be able to do that.

[Joanna Gajuk, analyst]

Okay. That's helpful. But I guess staying on Roto. So you said you reduced your EPS guidance essentially on the Roto-Rooter, but you did not give us details the usually do. But is it fair to assume in your guidance, you have some kind of similar revenue decline in Q4, and also margins, I guess, how to think about it? So you called out those 2 items. So should we think about those 2 combined kind of reversing and then Q4 margin, I guess, tends to be better seasonally? So kind of what are you assuming for revenues and margins in Q4 for Roto?

[Michael Witzeman, executive]

So Joanna, VITAS' guidance hasn't really changed. There might have been a couple of tweaks, but really hasn't changed for the fourth quarter. So the entire decline in EPS is relating to Roto-Rooter. If you want to call out specifically what we're talking about in the fourth quarter, if you want to put it into your model, I would expect a similar revenue number as the third quarter from a year-over-year comparison. We didn't really project a significant amount of improvement in the fourth quarter for Roto-Rooter compared to its third quarter year-over-year comparison. So that's the revenue side.

From a margin side, I would say we projected not spending 150 basis points on extra marketing. That was mostly the transition to the SEM. So the margins will be back at the levels they were like, call it, second quarter EBITDA margin level, which was 125 basis points down from 2023. And that's purely a volume -- revenue volume covering fixed cost issue.

[Kevin McNamara, executive]

And Joanna, one other thing I'd like to add, the kind of things that-- kind of caused mix shift is when we missed the number on the residential side, that has almost a multiplier effect. Because we get much more ancillary service, but many more excavation jobs and water restoration jobs on the residential side. So if you miss there, again, it has a multiplier effect.

Just another factor that we haven't talked about a lot, basically, when we talk about Google's changing strategy, and I saw they just had record results yesterday. I mean part of the change of strategy is to have fewer people search on a natural basis, that is where there's no fee, and they prefer to drive traffic on the paid side, not surprisingly. And this order of magnitude in the last 12 months, the percentage of our jobs that are free that came from somebody looking on a natural basis, is down about 5% from its high.

Now you can imagine if 5% of your business, you're paying a substantial marketing fee, whereas before they were free, that has effect on margin. And that's their strategies to deal with that, and we're pushing back on some of Google's efforts in that regard. But that's another thing that has affected margin. Again, despite in Roto-Rooter, from their perspective, very good operating metrics. That is we've been able to retain at very reasonable levels.

Our service force, we've done a much better job of retaining our good branch managers. Whereas 2 years ago, we were losing all to PE firms. Our close rates, as Mike has said, have been very strong. I mean all those aspects are very good, we're just dealing with some overarching issues that not susceptible to easy fixes. But it's got our full attention. And when I look back at the 44 years that Roto-Rooter and its management has been dealing with problems like this, it's an unbroken, unparalleled story of success. So it gives me a lot of confidence.

[Joanna Gajuk, analyst]

Okay. And I guess thinking about next year, I know you don't have guidance yet, but I guess just high-level comments on Roto-Rooter and, I guess, VITAS, too, when it comes to top line and margins. So it sounds like maybe on Roto-Rooter, the margin pressure is going to continue, I guess, when it comes to that -- what you just described around the paid searches and such. But how should we think about both businesses into next year, high level in terms of the growth algo?

[Michael Witzeman, executive]

So from -- I'll start, and then Nick will give a little -- probably a little more color on VITAS. But from a Roto-Rooter side, we are cautious about 2025. We see some actual green shoots and some positive things coming from commercial, and we are hopeful that, that continues and the momentum actually gains steam in 2025. We think that is well within Roto-Rooter's management to fix a significant portion of that.

The residential side is a little more uncertain, and we haven't put pen to paper, so I can't really give you numbers. I would say we've seen some articles that are about industries that are sort of adjacent to our industry that suggest that there's going to be a change or a return to some growth by mid-'25, but those are sort of anecdotes. And so I think our hope is that by mid-'25, we start to see some strengthening just in the demand in the overall industry. We would not expect -- again, let's call it, flattish revenue in '25, we would not expect any significant margin expansion at Roto-Rooter, but not deterioration either.

On the VITAS side, I think Nick mentioned it before, but we expect above average -- above historical averages growth. I don't know that we expect 15% to 16% days of care growth like we're seeing at the moment. But certainly, high single, low double-digit day of care growth and then a little bit of margin expansion potential from there. We haven't put pen to paper to anything, and you'll get more details when we give guidance in February.

[Joanna Gajuk, analyst]

And I guess with '25, the Medicare rate out there is also maybe a little bit better than historical average. So that helps, too. So combined with the high single to low double-digit census, there's maybe a couple of percent from pricing, so to speak, for rate update, Nick, into next year?

[Nicholas Westfall, executive]

Yes. And since the rate update is now done and finalized, as you're aware, October 1, basically our anticipated -- if we look at our current blend, everything created equal, we're looking -- we would anticipate about 3.9% like we had alluded to, which is about 100 basis points above the national average, just given where we operate today. So yes, that provides a little additional upside that is included in our fourth quarter guidance this year and will be incorporated in 2025 for the first 9 months, and we'll use all available public data to inform our fourth quarter of 25% as that rate increase matures and gets issued in early fall of next year.

[Operator]

I'm showing no further questions at this time. I would now like to turn it back to Kevin McNamara for closing remarks.

[Kevin McNamara, executive]

Thank you. I just wanted to obviously restate that it's a little bit tough quarter for Roto-Rooter, a little tougher than we expected. We still have a lot of confidence in VITAS doing great. When you look at our current guidance, it's -- we're still expecting our adjusted net income to be up 13% to 14% over last year. Not a bad year as we were expecting it to come in, but tough sledding to get there, no question.

But I'd like to thank everyone for their attention. And I guess we'll reconvene in -- after we have the fourth quarter and our guidance for next year. Thank you.

[Operator]

Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.