Insperity Inc

NYSE:NSP

Earnings Call Transcript 2019-Q2

[Operator]

Good morning. My name is Jay, and I will be your conference operator for today. I would like to welcome everyone to the Insperity Second Quarter 2019 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions].

At this time, I would like to introduce today's speakers. Joining us are Paul Sarvadi, Chairman of the Board and Chief Executive Officer; and Douglas Sharp, Senior Vice President of Finance, Chief Financial Officer and Treasurer.

At this time, I would like to turn the call over to Douglas Sharp. Mr. Sharp, please go ahead.

[Douglas Sharp]

Thank you. We appreciate you joining us this morning. Let me begin by outlining our plan for this morning's call. First, I'm going to discuss the details behind our second quarter 2019 financial results. Paul will then comment on the key drivers behind our Q2 results and our plans for the remainder of the year. I will return to provide our financial guidance for the third quarter and an update to the full year 2019 guidance. We will then end the call with a question-and-answer session.

Now before we begin, I would like to remind you that Mr. Sarvadi, or myself may make forward-looking statements during today's call, which are subject to risks, uncertainties and assumptions. In addition, some of our discussion may include non-GAAP financial measures. For a more detailed discussion of the risks and uncertainties that could cause actual results to differ materially from any forward-looking statements and reconciliations of non-GAAP financial measures, please see the company's public filings, including the Form 8-K filed today, which are available on our website.

Now, let’s discuss our second quarter results in which we achieved $0.83 in adjusted, a 22% increase over Q2 of 2018 and adjusted EBITDA of $56.7 million, also an increase of 22%. As from the details, average paid worksite employees increased 14% over Q2 of 2018 resulting from new client sales driven by an 11% increase in the average number of Business Performance Advisors. Client retention averaged just above 99% during the quarter, near our historical high level.

Net gains in our client base were lower than expected particularly during the month of June as a result of less hiring of fulltime and seasonal employees by our clients. During the second quarter, net gains in our client base were down by 15% from Q2 of 2018, even though the client base is significantly larger.

Gross profit increased by over 12% over Q2 of 2018 and included higher than forecasted benefit costs, partially offset by favorable results in our workers’ compensation program and higher pricing. The higher benefit costs resulted from large healthcare claim activity, in which these claims were approximately 22% of total healthcare claims during Q2 compared to normal and recent historical levels of 18% to 20%.

Now, while the higher than expected large claim activity may happen in the quarter from time-to-time with a plan our size, a detailed analysis of the underlying Q2 claims data, benefit plan participant data and plan migration still indicates a full year 2019 expected benefit cost trend of only 2% to 2.5%.

Second quarter adjusted operating expenses increased 12% and include continued investments in our growth including costs associated with the increase in the number of Business Performance Advisors and the opening of eight new sales offices over the past four quarters. We have also continued to invest in service personnel with client growth and our client-facing, back office and cybersecurity technology.

Our effective tax rate in Q2 came in at 28%, similar to our estimate for the latter half of this year equating to an estimated full year rate of 22%.

As for our balance sheet and cash flow, we ended the second quarter with a $131 million of adjusted cash. This is up from $129 million at December 31, 2018, after the repurchase of 315,000 shares of stock at a total cost of $39 million, of which 85,000 shares were repurchased in Q2 at a cost of $10 million. Additionally, we have paid $25 million in cash dividends during the first half of 2019 and this reflects our continued focus on providing shareholder return as we invest in a long-term growth of our business.

Now, at this time, I’d like to the turn the call over to Paul.

[Paul Sarvadi, Chairman and Chief Executive Officer]

Thank you, Doug. Today, I plan to cover three topics of interest to shareholders. I’ll start by highlighting significant developments in Q2; second, I’ll cover our plan for the balance of the year to continue our momentum; third, I’ll discuss our strong competitive position supporting our long-term strategy

The second quarter included continued solid execution of our 2019 operating plan, contrasted with two significant challenges from factors outside our direct control. New sales, client retention, expansion and product development, all progressed on plan, while lower net hiring in our client base and frequency and severity of large healthcare claims presented impediments.

Despite these challenges, our business model demonstrated substantial resiliency and our earnings outlook is on track for the year.

New sales were 101% of forecast over the first half of the year as sales efficiency stayed the same despite an 11% increase in average number of Business Performance Advisors. This demonstrates our success in hiring and training new Business Performance Advisors, which is the key driver for future growth.

Our marketing success is continuing to support our growth and expansion. In the second quarter, total worksite employees sold for marketing leads increased 25% over the same period last year. Total visitors to our website increased 13% while organic search traffic was up 22%.

In addition, consistent with our 2019 goal of expanding our authority in HR space, unique visitors to our blog was up 25%. Client retention was above 99% in the quarter, continuing to demonstrate the value of our unique offering to small and medium sized businesses and our ability to sustain excellent service levels in a high growth mode. This is particularly impressive, considering we are in our fifth consecutive year with double-digit growth in worksite employees.

Our office expansion plan is marching on as we opened new offices in LA, Portland, Austin, Tampa and San Diego in the first half of this year. We expect five more new offices in the second half, including Las Vegas, Chicago, Sacramento, New Jersey and Providence. Our product development plans are also progressing nicely as we gained sales momentum in our traditional employment solution. Workforce Acceleration, an increase in WX sales activity from Q1 translated into a solid increase in closed accounts at targeted prices in Q2.

We also continued our rollout of our new HR analytics engine within our technology platform, Insperity Premier, by training our HR professional services staff and introducing the new technology to enterprise and mid-market accounts. This new capability has been very well-received by current clients and has added energy to the sales process for potential clients.

So while all these key components of our plan for this year performed admirably over the first two quarters, two issues in the second quarter presented challenges. First, in the month of June, we experienced substantially less hiring within our client base than we expected based upon relevant history. Interestingly, the reason for this appears to be difficulty finding qualified talent rather than any slowdown in demand.

Our recruiting team identified some trends -- recent trends resulting from the unusual combination of the unemployment rate at a 49 year low, and more job openings than people looking for work. Competition for employees is substantial and many candidates are receiving multiple offers and have their pick of opportunities.

Companies have responded by accelerating the hiring process with many candidates receiving offers within 24 hours of an interview.

In addition candidates are turning down offers because they've accepted counteroffers from their current employers. As a result, the ratio of recruiter interviews to hires is tracking at 14:1 which is much higher than previous year’s at 7:1.

Now even though a tight labor market can make the net hiring in our client base a bit choppy, it’s an overall positive for our business. Through Insperity, clients have the benefits and services they need to compete against big companies in hiring and retaining authorities. This is certainly the advantage our prospective clients are seeking today.

A second issue that presented in the second quarter was an unusually high incident and severity rate of large healthcare claims. As we have discussed on many occasions, the predictability of the cost of our health plan is excellent on an annual basis which is how health plans are typically managed. However, somewhat random over the course of any given year, whether a concentration of large claims may occur within one particular quarter. This is what we believe happened in the second quarter this year.

We’ve analyzed our underlying plan trends including large claim activity, plan utilization and plan demographics. Based on that analysis we expect large claims to normalize and overall benefit cost trend to remain relatively low for the remainder of 2019.

Both issues, lower worksite employees from net hiring and a higher percentage of large claims have direct impact on earnings in our model. However, our business model demonstrated considerable resiliency as other positives for managing pricing, direct costs and operating expenses have offset these unfortunate occurrences.

Fewer worksite employees from client hiring has adjusted our expectation for the full year to the low end of our previous worksite employee growth range at approximately 14%. We also expect to be in the range of our previous guidance for the full year in earnings despite the higher than expected large claims we experienced in Q2.

Now, for the balance of the year, we’re full steam ahead executing our growth and expansion plan to continue the strong momentum we have experienced several years in a row. The key metric to follow to continue our strong growth momentum is the number of Business Performance Advisors we have in the marketplace. We ended Q2 with a 13% increase year-over-year in this metric and we expect to continue hiring and training BPAs over the last half of 2019.

We expect to have approximately 620 BPAs in Q4, a 14% increase which sets the stage to a continued solid double-digit growth in 2020. We are also focused on our mid-market and enterprise segment opportunities where we believe we are now delivering the same type of game changing service that we provided to many small businesses for many years. Our new analytics engine is allowing us to demonstrate our software with a service differentiation and meet the high level of need for strategic HR in these companies.

We have the strongest pipeline in our history for these larger accounts. However, determining closing and enrollment days are less predictable. Our average time from sale to enrollment for last two years is 63 days which is remarkable. However, there are also situations like this past quarter where a large acquisition failed to obtain a regulatory approval and has been significantly delayed.

We expect to kick off our fall sales and retention campaign for our core business in early September with excellent alignment across the organization around the objectives, strategies and tactics necessary for a successful campaign.

We also expect to continue improvement in execution around sales and service in our traditional employment bundle, Workforce Acceleration. This endeavour provides a significant opportunity to leverage the size and professionalism of our BPA channel to obtain more clients from their same sales activity in the field. Another aspect to our plan for the balance of the year is to balance our growth and profitability by making some operating adjustments to line up with our revised unit growth expectation.

Our long-term outlook for Insperity is very positive. Our competitive position in the marketplace is stronger than ever with our industry-leading technology and unparalleled service excellence. Simply put, no one delivers more value to clients in the business services space than Insperity. We’re an ideal place to capitalize on our substantial market opportunity in both our flagship co-employment Workforce Optimization solution and our new traditional employment Workforce Acceleration bundle.

So in summary, we are continuing our consistent execution of our long-term strategic plan and our specific operating plan for 2019 remains on track for excellent growth and profitability.

At this time, I’d like to pass the call back to Doug.

[Douglas Sharp]

Thanks, Paul. Now, before we open up the call for questions, I’d like to provide our financial guidance for the third quarter and an update to our full year 2019 forecast. As Paul has just mentioned, we’re now forecasting full year 2019 growth in average paid worksite employees in a range of 13.5% to 14.5%. This forecast assumes Q3 worksite employee growth of 13% to 13.5% and then accelerating to 14% in Q4. Our updated earnings guidance is in line with our previous guidance with some minor tweaks as we’re now half way through the year.

We expect the impact of the revision to our worksite employee growth outlook and a slightly higher benefit cost trend to be offset by pricing and continued effective management of our direct cost programs and operating costs.

So, we are now forecasting full year 2019 adjusted EBITDA in a range of $278 million to $286 million, an increase of 16% to 19% over 2018. This compares to our previous guidance of 15% to 21% adjusted EBITDA growth. Adjusted EBITDA for worksite employee per month which is our measure of unit profitability is expected to remain at our historical high of $98. We are forecasting full year 2019 adjusted EPS of $4.59 to $4.74, a 22% to 26% increase over 2018 and this compares to our previous guidance of 21% to 28% growth.

As for the third quarter, we are forecasting adjusted EPS of $1.00 to $1.04 and adjusted EBITDA of $67 million to $69 million.

As for the Q3 year-over-year earnings growth, please note that we had significantly lower than expected benefit costs in Q3 of 2018.

So in summary, with our solid results for the first half of 2019 and our outlook for continued strong growth and profitability, we remain on track for another record year in earnings. And we look forward to updating you on our progress over the remainder of the year.

Now, at this time, I’d like to open up the call for questions.

[Operator]

Our first question comes from the line of Jim MacDonald from First Analysis. Jim your line is open.

[Jim MacDonald, First Analysis]

Thanks. So, question was, the sales result in the second quarter, you said it was 101% for the first half, but was the second quarter in line with your expectations? Are you seeing any impact of any recession or slowdown or beginnings of such?

[Paul Sarvadi, Chairman and Chief Executive Officer]

No, so we haven't seen any sign of a slowdown, Jim. The sales in the second quarter were good.

[Jim MacDonald, First Analysis]

Anything you can say about mid-market versus the core business?

[Paul Sarvadi, Chairman and Chief Executive Officer]

Sure. The mid-market, it’s a little newer of course, a little choppier just because it’s fewer sales people out there and -- but the channel is really strong right now. We've got the biggest pipeline we’ve had and we are above last year in sales for the year. We did have a really large account last year that came on midyear. We didn't have a repeat of that yet in this year but there’s a lot of things in the hopper. So generally very pleased with the way we're going in mid-market, and really all across the business we're continuing to click along.

[Jim MacDonald, First Analysis]

And you mentioned you had strong results in the Workforce Acceleration and that’s started to hit the revenue, even though it's sort of smaller than your core business in the second quarter. May be you could -- what kind of growth rates are we talking there?

[Paul Sarvadi, Chairman and Chief Executive Officer]

Yes. So, what we're talking about -- what we're looking for there right now, as I mentioned last quarter, the goal was to really get that activity up and we’re starting to see the number of discovery calls and the amount of activity start to increase. In the second quarter that activity did turn into a nice uptick in closings. So, we're closing the business and the good news is, we closed the business at targeted prices for the new offerings. So, all on track. We just need to continue to increase that activity, which of course was the plan over the course of this year and on plan on that front.

[Operator]

Thank you. Our next question comes from the line of Jeff Martin of Roth Capital Partners. Jeff, your line is open.

[Jeff Martin, Roth Capital Partners]

I was wondering if you could elaborate, you mentioned a large acquisition fail to obtain regulatory approval. Has that impacted your worksite employee guidance for the balance of the year?

[Paul Sarvadi, Chairman and Chief Executive Officer]

Yes. Sure. I mean we have that in for coming in late in the second quarter, which was what was scheduled, about 700 or 800 employees and that did not get approved. And so, we obviously didn't enroll the account. But we kind of just took that out for the year as the customer said it’s going to happen. But at this point, it's best to when it happens, it happens.

[Jeff Martin, Roth Capital Partners]

Alright. Okay. And then in terms of the acceleration of worksite employee growth from Q3 to Q4 of this year, is there anything in particular that gives you a basis for seeing that acceleration?

[Paul Sarvadi, Chairman and Chief Executive Officer]

Certainly, it’s just our normal sales plan in terms of the sales per salesperson per month, number BPAs and how that rolls in over the balance of the year. So, you're going to can see that acceleration just as we hit our sales numbers as the year progresses. Keep in mind that the sales budgets are higher as the year progresses. And so, that’s how that flows in. That’s the normal way a new sales flow into the model.

[Jeff Martin, Roth Capital Partners]

Okay. And then in terms of talent acquisition on the BPA side, are you seeing challenges there given the tight labor market and how are you fighting that?

[Paul Sarvadi, Chairman and Chief Executive Officer]

Yes, no question. I mean it is a tight labor market out there. Fortunately -- you basically have to really throw a lot of muscle at it and you have to be as creative as possible and we’ve got a great group of recruiters and even though it’s taking a lot more interviews and a lot more activity to bring the same number on, we have that advantage of being recognized as a best place to work and this is a great opportunity in the sales world. This is a tremendous opportunity for people. And so, we get -- we certainly get our fair share and we’re capable of growing that base of Business Performance Advisors at the targeted levels.

So like I said we’re at about 13% at the end of the quarter for June year-over-year and we’ll continue to ramp that up to around 14% over the balance of the year. And that’s where we want to be going into 2020.

[Jeff Martin, Roth Capital Partners]

Okay. And then last question. Could you speak to client retention on the mid-market and enterprise level and enterprise is fairly new and probably has some noise in it. But just what you’re experiencing so far this year with the mid-market client retention?

[Paul Sarvadi, Chairman and Chief Executive Officer]

Yes, that’s been very good so far. If you recall for the first quarter which is kind of your year-end transition and et cetera, we went through that period in good state on both core and mid-market and are still targeting that kind of new normal of 85% to 86% retention for the full year. So that’s a very good number for the business services world and that fits exactly within the way we like for the model to work.

[Operator]

Thank you. Our next question comes from the line of Tobey Sommer from SunTrust.

[Tobey Sommer, SunTrust]

Thank you. I was wondering if you could tell us what your payroll data is telling you in terms of kind of quantifying the attitude and postures of your other customers in the market?

[Paul Sarvadi, Chairman and Chief Executive Officer]

Yes, thank you, Tobey. So what we keep track of within our customer base of course is over time as a percentage of base pay and that’s been running above that 10% number that we look for. Last quarter was continued over 11%. On the commissions front, we generally look at around 6% is really strong. We’ve had periods over the last year or year and a half or so where that number also was up over 10%. It’s now closer to the 6% number but it’s still a good number. And so, that’s part of why we don’t really see any change out there among the client base. That commission number I just reported was commissions paid to the sales staff of our clients. And so, that gives us a little bit of insight into the sales pipeline for the customer.

The other thing I would say is I’ve been on the road a lot lately talking with customers directly and with prospects and across the board I’ve been all across the country and the optimism about business and I’m talking about just what it looks like for the future, but what’s happening in their businesses right now has really been positive. I mean really just I’ve been searching for and having my antenna up to see if there is any negative sentiment building yet in the small business community and I haven’t heard of any.

[Tobey Sommer, SunTrust]

Thanks. With respect to your guidance, how does customer hiring contribute to that WSE growth. And how does that differ from ‘18?

[Paul Sarvadi, Chairman and Chief Executive Officer]

Yes. So here is what we did. In the month of June we had a lower number of net gain in the client base than what we would have expected from looking at both the seasonality of what happens in that month with seasonal health et cetera and the normal growth in fulltime employment. And for the entire quarter, we ran at about 15% below what we ran in 2018 for the second quarter in the net gain between new hires and layoffs in the client base. Now keep in mind, that’s on a base that’s 14% higher. So it’s pretty significant that you’re talking around 3,000 employees and then up shorter in June than what you otherwise would have expected based on the trends you would look at to estimate that number. So, when you come out lower by that number on that one metric, you’ve got to run that through the model. It’s not just been a magically appear the next day.

So, we of course did all the dig in the sea what would the cause of that be and we didn’t track any systemic issues about anything other than the difficulty in hiring and how it’s been a little bit choppy in the small business about trying to find new employees and get them in place. So, we went ahead and kind of took the most recent average for the normal months here in the first part of the year and used that in our model for the last half of the year. So, you lower that expectations come. And good news as you put all that together you still end up at the low end of our range that we had for the full year. So it’s when you have that happen in that non-controllable area, you’re going to run that through the model.

[Tobey Sommer, SunTrust]

Great. Two other questions from me now, I’ll get back in the queue. One, could you comment about pricing generally? And then two, you did buyback some stock in the quarter. But with the significant sell off today, what are your thoughts about deploying additional capital to take advantage of that? Thanks.

[Paul Sarvadi, Chairman and Chief Executive Officer]

Yes. Absolutely, these kind of opportunities come up from time-to-time. We’ve said this before when we’re kind of out on the road if you have kind of a concentration of large claims, a lot of times that does present buying opportunity. We did buy shares back in the quarter. And we have a significant authorization that still offers about a 1.5 million shares and we’ve got a plenty of cash and a nice debt facility. And so, we’re bullish about the company and about our shares and that's kind of the story.

[Tobey Sommer, SunTrust]

And with respect to pricing commentary?

[Paul Sarvadi, Chairman and Chief Executive Officer]

Yes. Sure. Thank you. I knew that was not a part of that question. So, on the pricing side, like I said, the pricing helped to offset this large claim number that we have. And in fact, this issue was really concentrated in this large claim story. In fact, the rest of the claims in the plan were actually below trend. So, the regular claims kind of offset part of the dramatic increase that came from the large claims. Then on top of that, pricing offset some of that as well and then we had offsets in both some of the other direct costs, and also in the operating expenses and that's why the quarter in total came out on target with our -- in the midpoint of our range actually of our expectation, in spite of the large claims.

So, everything else in the company besides the large claims and the net hiring base in June, everything else was spectacular like it's been for a considerable length of time.

[Operator]

[Operator Instructions]. Our next question comes from the line of Mark Marcon of Baird.

[Mark Marcon, Baird]

Alright. Good morning, Paul and Doug. I was wondering, can you mention why the large claims are to a slightly greater extent in terms of like, did they go from 5 to 10 or how you would dimensionalize it?

[Douglas Sharp]

Yes, Mark. This is Doug. So I talked about in my prepared remarks that we’re at about 22% of total claims versus our normal 18% to 20% and that's under definition of claims over 50,000 and above is how we define that, and it equates to about $15 million over and above recent trends. Now, as Paul mentioned, the normal trend below that ran better than expected. So at the end of the day, the benefit costs were lower versus our expectations, being that $15 million number.

Okay. Then when you offset the better pricing in the favorable areas -- other favorable areas that are direct costs and operating costs, that’s helped to offset that entirely. That gives you a little of favors as to the dollar extent of a large claim activity. I think obviously the bottom-line is that you have normal large claim activity, it would have been quite a quarter. And so, that definitely impacted us along with the net layoffs -- both lower net gains in the client base.

[Mark Marcon, Baird]

Okay. And then just staying on the large claims, does any of that's still over into the third quarter or what are your expectations with regards to gross profit for worksite employee for the third quarter and that's embedded in your guidance?

[Douglas Sharp]

Yes. So, as we also mentioned, we look at all of the detailed claims data relative to those large claims. We also look at the demographics of the plan, age, gender, geographic, the members in the plan, plan migration et cetera. All those things are running favorably for the plan itself. And so, I think we've started the year staying at about 2% to 3% medical claim cost trend for 2019. First quarter came out a little bit better than what we expected. So that was below 2% where we are today. And I mentioned now we’re forecasting this to 2.5% range or so. And so, still a very favorable claim cost -- benefit cost trend that we’re looking at.

[Mark Marcon, Baird]

And so would that imply with regards to the gross profit for worksite employee? And the reason why I'm asking is just trying to get a sense for what might be some of the drivers with regards to the adjusted EBITDA guidance for the third quarter particularly the lower end?

[Douglas Sharp]

Yes. So you’ve got the other areas of gross profit which is first obviously the pricing side and then the workers’ comp program which continues to run favorably for us. We’ve continued to do a good job on managing with our safety personnel but also managing the claims themselves. And so we’ve had some favorable results there. And also in -- and the pricing, there’s the gross profit. So at the end of the day our gross profit per employee number relative to our updated forecast is fairly close to our budget coming into the year. And so there hasn’t been any material change relative to that when you look at the puts and takes within that particular area. And as Paul mentioned, we’re also managing the operating costs going forward. So at the end of the day the shortfall and the workers’ are the adjustment in the workers’ -- worksite employee guidance has been offset by those factors such that we’re looking at a similar bottom-line relative to our previous guidance but still above the budget.

[Mark Marcon, Baird]

Okay. And then last year in the third quarter we had a tough comp because we basically ended recovering that really large client that we ended up adding. Can you remind us was it 3,000 employees or 1,300 employees? What was it exactly?

[Douglas Sharp]

No, it was about 2,700 employees.

[Mark Marcon, Baird]

2,700 employees. Okay.

[Douglas Sharp]

Yes. So that was a step up last year in July.

[Mark Marcon, Baird]

Yes. And that -- and as a result I mean when we take a look at the guidance as it relates to the worksite employees and we’re going to -- kind of year-over-year basis we’re going to have some deceleration in terms of the level of growth just because of the comps are a little tougher, right?

[Douglas Sharp]

Yes, absolutely. I mean if we just look at that one step up from a year ago and then you’re going to kind of -- beginning into the fourth quarter you kind of adjusted that and your year-over-year rate basically growing at the same rate of worksite employees coming in from sales offset by the attrition, you naturally move right back in around 14%.

[Mark Marcon, Baird]

Okay. And then the slowdown in June with regards to the net adds in terms of the people that could have been hired, was there any sort of regional pattern to that or was it across the board? And was it just simply the fact that it was harder to find people or were some of the clients being a little bit more selective with regards to bringing on?

[Douglas Sharp]

So as we dug into that I mean we found a couple of little things a couple of hundred employees here, another hundred or so employees over here that were kind of differences from a year ago relating to a given customer’s option on how to deal with maybe the seasonal health. That was it so the 95% of what we saw was basically across the board just less people got hired. We didn’t have fewer jobs openings. In fact job openings are as strong as ever. So, this is how we got to the end of the game saying there’s more of inability to fill the roles more than anything we could see.

[Mark Marcon, Baird]

Okay. And then are there any of your cost elements that would step up materially here in the third quarter relative to the second quarter, I am talking about G&A or asset pricing, anything along those lines that should be worth calling out?

[Douglas Sharp]

I don’t have those specifics in front of me, Mark.

[Mark Marcon, Baird]

Okay.

[Douglas Sharp]

Yes. I mean I just don’t have that -- those details in front of me.

[Mark Marcon, Baird]

I was just trying to look at the guidance for 8% to 12% adjusted EBITDA growth for the third quarter for your guidance relative to on the low end worksite employee growth of around 13%. So, just trying to reconcile the two that’s all?

[Douglas Sharp]

Yes. I think that’s more related to last year’s favourable benefits quarter, Mark, so you may want to just look back at that.

[Mark Marcon, Baird]

Yes. Can you remind us for that in terms of the benefits quarter as it relates to that, like what the accrual benefit was?

[Douglas Sharp]

Again, Mark, no, I don’t have those details in front of me.

[Operator]

[Operator Instructions]. There are no further question at this time. Mr. Sarvadi please go ahead.

[Paul Sarvadi, Chairman and Chief Executive Officer]

Alright. Well, thank you all very much for participating today. And we look forward to updating you next quarter. Thank you very much.

[Operator]

This concludes today’s conference call. You may now disconnect. Have a great day.