PJT Partners Inc

NYSE:PJT

Earnings Call Analysis

Record Performance with Strategic Growth

PJT Partners achieved record Q2 revenues of $360 million, up 4% year-over-year, and record midyear revenues of $690 million, up 26%. Adjusted pretax income rose 19% for Q2 and 41% year-to-date, while adjusted EPS increased 20% and 43%, respectively. Despite a subdued fundraising environment, PJT Park Hill rebounded sharply. Restructuring remains strong, and global M&A activity has modestly improved. With no funded debt and a robust balance sheet, PJT Partners continues investing in talent and strategic advisory capacities. The firm projects substantial revenue growth, driven by proactive strategies in a dynamic market.

Record Performance in Q2 2024

PJT Partners achieved its highest quarterly revenues in the firm's history during Q2 2024, amounting to $360 million. This robust performance was reflected in a 19% year-over-year increase in adjusted pretax income and a 20% rise in adjusted EPS. For the first half of the year, revenues soared to $690 million, up 26% from the same period in the previous year, while adjusted pretax income and EPS increased by 41% and 43%, respectively.

Driving Growth Through Investment and Expansion

PJT Partners' strategy continues to focus on long-term growth through investment in talent, industry expertise, and global expansion. The company’s systematic and disciplined investment in these areas is starting to manifest in its financial performance. The firm remains committed to enhancing its product offerings and expanding its reach to better serve its clients.

Revenue Breakdown by Division

In the second quarter, PJT Park Hill’s revenues significantly outperformed last year, driven primarily by private equity and private capital solutions. Strategic Advisory revenues also saw a modest increase, despite a subdued restructuring environment compared to the previous year’s record levels. Notably, for the first half of the year, all divisions reported meaningful revenue growth compared to the previous year, contributing to the record first-half revenue of $690 million.

Managing Expenses Efficiently

The firm maintained disciplined expense management, with total adjusted non-compensation expenses remaining flat year-over-year for Q2 at $44 million, and witnessing an 11% increase to $89 million for the first half. This was largely due to higher occupancy costs, increased travel expenses, and investments in communications and information services. Despite these increases, non-compensation expenses as a percentage of revenue were 12.3% for Q2 and 13% for the first half.

Profitability and Taxation

Adjusted pretax income for Q2 stood at $66 million, resulting in an 18.2% adjusted pretax margin, up from 16% in the prior year. For the first half, adjusted pretax income was $121 million, with a margin of 17.5%. The effective tax rate for the first half remained at 22%, and the company expects it to stay at this level for the full year.

Earnings Per Share and Share Repurchases

The adjusted if-converted earnings per share (EPS) reached $1.19 for Q2, a 20% increase, and $2.17 for the first half, a 43% rise from the previous year. The firm’s weighted average share count for the quarter was 43 million shares. PJT Partners repurchased approximately 710,000 shares in Q2 and 2.2 million shares in the first six months, marking a record level of open market repurchases.

Strong Financial Position

The company ended the quarter with a record $351 million in cash, cash equivalents, and short-term investments, and $438 million in net working capital. Notably, PJT Partners has no funded debt and recently secured a new $100 million revolving credit agreement, replacing an expiring facility.

Dividend Announcement

The Board of Directors approved a dividend of $0.25 per share, payable on September 18, 2024, to Class A common shareholders of record as of September 4, 2024.

Strategic Outlook and M&A Recovery

PJT Park Hill’s revenues rebounded sharply, supported by private equity and capital solutions growth, despite a subdued fundraising environment. The firm expects 2024 results to be significantly higher year-over-year. In restructuring, PJT Partners continues to benefit from elevated activity in liability management amid high interest rates and business model disruptions. Strategic Advisory revenues showed improvement, with the firm anticipating further growth post-U.S. elections, driven by potential rate cuts from central banks.

Recruitment and Talent Acquisition

The mandate count in Strategic Advisory is at a record high, reflecting ongoing recruitment of top talent. This has enhanced PJT Partners' ability to capitalize on a recovering M&A environment, with the firm focusing on long-term performance. Strategic Advisory revenues increased during both the 3- and 6-month periods, driven by a growing pipeline and mandate count.

Earnings Call Transcript 2024-Q2

[Operator]

Good day, and welcome to the PJT Partners Second Quarter 2024 Earnings Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Sharon Pearson, Head of Investor Relations. Please go ahead, ma'am.

[Sharon Pearson, executive]

Thank you very much. Good morning, and welcome to the PJT Partners Second Quarter 2024 Earnings Conference Call. I'm Sharon Pearson, Head of Investor Relations at PJT Partners. And joining me today is Paul Taubman, our Chairman and Chief Executive Officer; and Helen Meates, our Chief Financial Officer.

Before I turn the call over to Paul, I want to point out that during the course of this conference call, we may make a number of forward-looking statements. These forward-looking statements are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. We believe that these factors are described in the Risk Factors section contained in PJT Partners' 2023 Form 10-K, which is available on our website at pjtpartners.com.

I want to remind you that the company assumes no duty to update any forward-looking statements and that the presentation we make today contains non-GAAP financial measures, which we believe are meaningful in evaluating the company's performance. For detailed disclosures on these non-GAAP metrics and their GAAP reconciliations, you should refer to the financial data contained within the press release we issued this morning, also available on our website.

And with that, I'll turn the call over to Paul.

[Paul Taubman, executive]

Thank you, Sharon. Good morning, and thank you all for joining today's earnings call.

We delivered record performance in the second quarter. Our Q2 revenues were the highest in the firm's history and helped us to deliver adjusted pretax income, up 19% year-over-year and adjusted EPS up 20% from year ago levels. Year-to-date performance also reflected strength across all of our businesses with record revenues of $690 million, up 26% year-over-year, adjusted pretax income up 41% year-over-year and adjusted EPS up 43% from year ago levels.

While we are pleased with our midyear results, our focus continues to be on investing to build the strongest firm for the long term. We continue to invest in talent at all levels. We continue to expand our industry expertise, our product capabilities and our global reach. And we continue to work in close collaboration within businesses and across businesses to deliver the best outcomes for clients. The results from this consistent and disciplined investment is now beginning to show through in our financials.

After Helen takes you through our results, I will review our business performance and outlook in greater detail. Helen?

[Helen Meates, executive]

Thank you, Paul. Good morning.

Beginning with revenues. Total revenues for the second quarter were $360 million, a record quarter, up 4% year-over-year. PJT Park Hill revenues were meaningfully higher compared to year ago levels. Strategic Advisory revenues were up modestly year-over-year, while restructuring revenues were similar to first quarter revenues but below the prior year's record revenues. For the 6 months ended June 30, total revenues were $690 million, a record first half, up 26% year-over-year. For the 6 months, revenues in all of the businesses were up meaningfully compared to year ago levels.

Turning to expenses. Consistent with prior quarters, we presented the expenses of certain non-GAAP adjustments, which are more fully described in our 8-K. First, compensation expense, we accrued compensation expense at 69.5% of revenues for the first half of the year. This ratio represents our current expectation for the full year 2024.

Turning to adjusted noncompensation expense. Total adjusted noncompensation expense was $44 million for the second quarter, flat year-over-year and $89 million for the first half, up $8.7 million or 11% year-over-year. As a percentage of revenues, 12.3% in the second quarter and 13% in the first half.

The main drivers of the expense increase for the first half of the year were higher occupancy costs, higher travel and related expenses as well as investments in Communications and Information Services. Overall, for the full year, we expect that our non-comp expense will grow in the low double-digit percentage year-over-year, similar to the growth rate we experienced in 2023 and consistent with our prior guidance.

Turning to adjusted pretax income. We reported adjusted pretax income of $66 million for the second quarter and $121 million for the first 6 months. Our adjusted pretax margin of 18.2% for the second quarter compared with 16% for the same period last year and 17.5% for the first 6 months compared with 15.7% for the same period last year.

The provision for taxes. As with prior quarters, we presented our results as if all partnership units have been converted to shares and that all of our income was taxed at a corporate tax rate. Our effective tax rate for the first half of 2024 was 22%, and we expect this to be our effective tax rate for the full year.

Earnings per share, our adjusted if-converted earnings were $1.19 per share for the second quarter, up 20% and $2.17 per share for the first 6 months, up 43% versus the same period last year.

On the share count for the quarter, our weighted average share count was 43 million shares. During the second quarter, we repurchased the equivalent of approximately 710,000 shares primarily through open market repurchases. Our repurchases in the first 6 months totaled approximately 2.2 million shares with record open market repurchases of 1.7 million.

On the balance sheet, we ended the quarter with a record $351 million in cash, cash equivalents and short-term investments and $438 million in net working capital, and we have no funded debt outstanding. We have entered into a new $100 million revolving credit agreement with Bank of America as the administration agent; and JPMorgan Chase and MUFG collectively as lenders. The credit agreement has an initial 2-year term and replaces our existing facility with First Republic Bank now part of JPMorgan, and that was due to expire in October this year.

Finally, the Board has approved a dividend of $0.25 per share. The dividend will be paid on September 18, 2024, to Class A common shareholders of record as of September 4.

I'll now turn back to Paul.

[Paul Taubman, executive]

Thank you, Helen.

Beginning with PJT Park Hill. For the 3- and 6-month periods, revenues in our PJT Park Hill business rebounded sharply from last year's challenging performance with private equity and private capital solutions delivering the greatest gains. While the fundraising environment remains subdued, it has improved meaningfully from a year ago. We expect PJT Park Hill's 2024 results to be up significantly year-over-year. Although full year 2024 revenues will lag 2022's record setting levels.

Turning to restructuring. We are benefiting from a multiyear cycle of elevated restructuring activity as corporates and sponsors across industries continue to work their way through the impact of higher interest rates, challenged business models, technological disruption and changing consumer preferences. Much of the growth in our restructuring business is the result of clients increasingly turning to PJT for advice on proactive liability management to address balance sheet issues. Our restructuring performance reflects the continued level of elevated activity -- this continued level of elevated activity and our leading market share. First half restructuring revenues increased relative to last year's first half performance, and we now expect full year 2024 restructuring revenues to closely track 2023's record results.

Turning to Strategic Advisory. At the beginning of the year, we foresaw a slow but steady build in global M&A activity as markets stabilized and historical relationships between M&A activity and broader market benchmarks began to reemerge. The year is playing out pretty much as we expected, with global M&A run rate activity tracking modestly ahead of 2023 levels. We expect the global M&A recovery to continue with the potential for a step function increase post the U.S. elections if, as seems increasingly likely, the Fed initiates rate cuts and other central banks continue their rate-lowering policies.

Our Strategic Advisory revenues for both the 3- and 6-month periods increased relative to year-ago levels as our announced pending close pipeline and our mandate count grew steadily in the first half of the year. Our mandate count is now the highest in our firm's history. Even in today's more active M&A environment, we are seeing an increase in attractive recruiting opportunities for our Strategic Advisory business, due in large part to our firm's broadening track record of success. We continue to recruit highly talented professionals to our Strategic Advisory business, and these additions to our talent base has significantly enhanced our ability to capitalize on a higher velocity M&A environment.

In closing, we continue to measure our performance in years, not half years. And even though our full year growth is unlikely to approach 26%, we will undoubtedly deliver a third successive year of revenue growth and a second consecutive year of record revenues, which is all the more impressive given the relatively muted macro environment in which we have been operating. We have high expectations for what our ever-stronger firm can deliver in the years to come. And as before, we remain confident in our near, intermediate and long-term growth prospects.

And with that, we will now take your questions.

[Operator]

[Operator Instructions] We will take our first question from Devin Ryan with Citizens JMP.

[Devin Ryan, analyst]

Appreciate all the outlook commentary, Paul, and particularly just on the broader M&A market and kind of what you're seeing and expecting. If you look at PJT specifically, I heard the comment about a record mandate count in Strategic Advisory, which I believe would imply an improvement from last quarter. I think last quarter, you mentioned record preannounced pipeline. So I'm not sure if there's any distinction there, but just curious how that's trended. And then just more broadly, whether you're seeing any change in tone around the speed to progress deals? I appreciate there could be kind of an inflection post-election. But are you actually seeing an acceleration here even in recent months, maybe post the prior quarter?

[Paul Taubman, executive]

Well, I mean, everyone -- it's a Rorschach test. Everyone probably looks at every situation a little bit differently. I continue to think that deals are still hard to bring to the goal line and that there has always been in this downturn, what has made this downturn so different than prior periods of inactivity is the desire to transact remains very robust. And there is a clear desire to investigate transactions to diligence transactions to try and be creative in bringing them to fruition, but it has just been more difficult, and there have been different issues along the way.

At one point in this recovery, it was more about access to financing. I think financing is far more plentiful today. I think there continues to be a bid-ask on valuations, although I believe that has narrowed. There continues to be the sole searching issue of do you want to subject your company and the target company to an extended period of regulatory review and who bears the risk of degradation and performance between signing and closing. That one, I think, continues. The others have probably gotten a bit better, but we're not at a place where it's easy to get deals done. And those deals that have been announced still are set up particularly larger transactions and consolidating transactions, the regulatory review process remains quite long and uncertain.

But I definitely see a healing in the marketplace. I've always had the belief that while we've never had 3 down years in a row, we had 2. This was going to be an up year. I think people were driving past their headlights a little bit in the sense that the first year of a rebound tends to be reasonably modest. And you've seen the year-to-date activity levels, they were tracking in the 30s, up 30% year-over-year. That's continued to come down. We focus much more on just what the annualized run rate is, and it's up single digits. And even if we end the year stronger, it's still going to be a reasonably pedestrian first year of a recovery, but we see more and more of the elements building, and we're very focused on '25 and beyond.

[Devin Ryan, analyst]

Got it. Okay. That's great color, Paul. And then I'll just ask another one on the advisory but restructuring business. And zooming out a little bit, so I appreciate some of the more near-term color and expectations for 2024. And obviously, you're kind of operating at a record level here. Do you see any potential catalysts that could drive maybe even a further acceleration in activity outside of kind of an economic stress period? Like is there anything that you think could actually drive an acceleration from here? And how should we think about the backdrop for restructuring in kind of the next couple of years in your mind relative to what does sound like potentially an inflecting higher M&A market. Clearly, historically, those 2 don't go together, but I'd love to just get an update on kind of more of an intermediate-term view of how these businesses could relate together here over the next couple of years?

[Paul Taubman, executive]

Well, look, I think this sets up potentially where they can both coexist. And one of the reasons for that, and I've talked about this repeatedly, is in a world of technological innovation and disruption, not everyone is a winner. And the issue is not whether it's the macroeconomic conditions necessarily that caused a lot of companies to need to restructure their balance sheets, but whether or not their business models have been severely disrupted.

So when I just look out with a crystal ball, my crystal ball is equally cloudy to yours, it's far from perfect, but I look at a world where there's tremendous disruption, innovation, which is creating more disruption and whether it's generative AI, whether it's electrification, whether it's digitization, the world is changing. And that means that not everyone is going to be a winner. And regardless of macro environment, if you're going to have industries that are going to be severely disrupted, that's going to pressure balance sheets. And lower interest rates are not going to bail out those companies. So there are industries that will be right for liability management. That is one issue.

The second is you're just dealing with a sheer quantum of debt, which is greater today than it was in prior cycles. So if you apply the same percentage of companies that are likely to get caught up and need balance sheet repair, it's the same constant percentage multiplied against a much bigger debt stack, that would suggest greater restructuring activity.

And then I think the third is in a world where there have been relatively few governors on how borrowers can conduct themselves because of strip down covenant packages and the like, the opportunity to more creatively figure out how to restructure or recapitalize a balance sheet, there's more options available. So to me, those are the secular tailwinds, which suggest elevated activity for a considerable period of time.

Now what may be a headwind to that business is if rates come down precipitously, that may just mean that the capital markets may be so open and inviting that a lot of those companies will be able to find other ways to muddle through. So I don't know exactly where it's going, but I certainly see a reasonable probability that you can have a more active transaction marketplace and you can have a more active liability management marketplace.

[Operator]

We'll take our next question from James Yaro with Goldman Sachs.

[James Yaro, analyst]

Paul, maybe just starting with the M&A side of the business. Could you just touch on the dialogues that you're having with sponsors? I think we've heard from some of your peers that those are improving, but how you seeing those dialogues relative to the beginning of the year, let's say, over what time period would you expect those to fully normalize? And do we need rate cuts for a full normalization of activity among those clients?

[Paul Taubman, executive]

I think the answer -- let's start at the back. I think the answer is yes on the back end. I think you do need rate cuts for full normalization. So if you can just look at the data. The data shows a quite sluggish sponsor activity level in Q1, it was stronger in Q2, and it happened to be particularly active in the month of July. So those are just the facts. The facts are you see more sponsor activity as the year has progressed.

I think the more interesting question is for attractive assets, there were multiple sponsor bids and sponsors do have capital that they need to put out and when there are attractive assets out there, you're certainly seeing robust competition because when those highly sought-after assets are put to market, you have an awful lot of dry powder, clear access to financing and you're seeing transactions. And we've never suggested that the private equity marketplace would shut down. So that part of it remains robust.

The question is for what I would call second-tier assets or assets that may have more compromised outlooks where I think in a lower interest rate environment, there was probably more interest in those assets. I think that appears to us to still be disciplined buying interest, and that has probably been a governor. I also think in particularly in European markets and the like, you have a lot of mid-cap companies that continue to trade significantly below their true normalized value. And increasingly, the sponsor community is looking at those as very attractive, take private opportunities, and they have been active.

So we see a steady increase in sponsor activity. But ultimately, I think when rates come down, I think a bunch of those companies that still are perhaps not able to achieve sale prices that will return to attractive multiples of invested capital or IRRs, there's a bias to hold on to those a little bit longer. And then once that shifts, then I think you see a step function in sponsor activity.

[James Yaro, analyst]

Excellent. That's very clear. Maybe just on the secondaries business. Could you give us a little bit of color on the contribution that, that had to advisory results this quarter and your expectations around the sustainability of the robust growth that we've seen across, I think, the industry in this business in recent quarters?

[Paul Taubman, executive]

Well, I think the contributions to our quarter were quite broad-based. There was really no one part of the business that dominated that we saw with our private equity fundraising. We saw it in our private capital solutions. We saw it in Strategic Advisory. And our liability management, restructuring business held up very well. We've always pointed to our private capital solutions business as a very significant growth opportunity. It's a leading practice, but I think there's still a lot more that we can do to take that business to yet another level, and some of that is reflected in the year-to-date results.

And some of that also is very clearly an increased demand on the part of GPs for monetization opportunities when they have assets that, for a variety of reasons, they'd rather continue to operate, but there's an opportunity to create choice and there's an opportunity to create liquidity for selected GPs -- for - I'm sorry, for selected LPs.

[Operator]

[Operator Instructions] We'll take our next question from Brennan Hawken with UBS.

[Brennan Hawken, analyst]

Good to talk to you, Paul. So curious to get your perspectives. We just recently got a default and the beginning of a significant restructuring in direct lending via portal sites. So not sure whether or not you -- your bankers are directly related or even if you'd comment. But as we see this emerge more as just generally like an indication for that market, what do you think is the important learning from that experience? And how does that inform your expectations for restructuring?

[Paul Taubman, executive]

I'd rather keep my comments more general and not talk about specific situations, but I think it begins to puncture this fear that somehow more direct lending, more private lending is an opportunity to bypass the ultimate need for active liability management. And the reality is that companies succeed and companies fail, whether they're financed in the public markets or the private markets and ultimately, that's sort of the way of the world. And I do think that there's a real need that's being met by private capital. But the idea that somehow a bunch of lenders can, amongst themselves, just figure out how to restructure commitments that have been made with borrowers without there being various stakeholders who have different perspectives and need expert advice and capabilities, we just don't buy into.

So no one ever enjoys seeing particular companies end up distressed. But the reality is we have unique capabilities that can help create more value out of those missteps than our competitors, and we're going to continue to aggressively market our services just to make sure that we can be helpful in as many situations as possible. And we don't view the private credit market as somehow close to helpful strategic and financial advice.

[Brennan Hawken, analyst]

Okay. Great. That's all very fair. Over time, Paul, you've provided color on the success that you've had in integrating PJT Camberview into your advisory practice, which I think is really quite differentiated. Can you talk about how that business has grown over time and how integrating those capabilities has contributed to the growth prospects for Strategic Advisory and what you expect in the medium term?

[Paul Taubman, executive]

Yes, it's a great question. And one of the reasons we don't talk about it on these calls as much is because it is so integrated into what we do. It's really the essence of what we do. We benefit in so many different ways. One way is we have a very significant group of former investors who bring an investing lens to many corporate situations and our ability to provide value-added strategic IR assistance to clients as they tell their stories as they help companies reset as they help new management teams articulate their vision, that is part of what we do at our core. So that's just one example of a Camberview capability that is now fully integrated into pretty much everything we do. And in every client conversation, we're always spending time figuring out how we can help them with their external positioning, storytelling and how they can make sure that they're matching their vision with their communications.

Then you've got a leading governance franchise. And we have a unique ability to talk to the largest shareowners of many of our clients who are passive in terms of investing, but they're quite active in terms of governance. And ultimately, when you get to contested situations being able to have the unique window into how your largest shareholders are going to absorb information and how they're going to think about contested situations is a value that we bring that others don't bring. So being able to match that up with our leading share owner defense practice gives us unique windows. And then we have the basic footprint of all of the boardrooms and governance discussions that our Camberview colleagues are having that give us windows and opportunities to better tell the PJT story and to introduce banking teams to round out the overall service offering.

So it's become quite seamless. We've benefited greatly. The headcount in that group has grown appreciably. Their commercial contribution to our franchise has grown significantly. And as I look back on that acquisition, that combination couldn't be prouder of what we've together achieved. So it's an integral part of what we're doing.

[Operator]

We'll take our next question from Brendan O'Brien with Wolfe Research.

[Brendan O'Brien, analyst]

I guess to start, Paul, you mentioned interest rate cuts as being a potential driver of the step function increase in activity post-election. However, the election could also bring in a change in administration, given your focus on larger cap deals, I just want to get a sense as to how more accommodated FTC could impact that activity levels in your view? How much is the current more restrictive regime maybe impeded activity of late? And any color you could provide there would be helpful.

[Paul Taubman, executive]

Sure. Look, I've said for a long time that I think this election is going to be extraordinarily volatile. I've said repeatedly that I didn't think investors fully appreciated the volatility that would come with this election. I think we've seen some of it. And I suspect that as we turn the page to Labor Day and we have the sprint through election day and beyond, there's probably a lot of volatility still to come. But I think once you get past that and there is clarity and there is an understanding as to the nature of the next administration, I think that, that is going to be a positive regardless of which way this election turns out for deal making.

I think there are lots of reasons for it. I think in some respects, it may be a change in antitrust and competitive posture. In others, it may be simply that there is clarity on the world, and ultimately, companies will realize that there's no additional benefit of waiting and they're going to have to judge strategic transactions based on what's there. And then whether it's a second term of this Biden-Harris administration or the first term of a Harris administration, it's likely to have a different composition as it relates to competitive posture and the like.

And I think once you just get past all of that, my strong sense is that this will be positive for a dealmaking environment. The TBD is how incrementally positive. But as I go through all of the permutations and the like, it's hard to come up with a scenario where it would be less inviting than it currently is. So that's one of the reasons why I think once we get past the elections, I think there'll be more clarity and likely more strategic activity. And I think sponsors while they're starting to put their toes in the water, are probably going to be more forward-leaning once there's the travel down in terms of rates and the exit multiples more closely match the entry multiples.

And I think when you have the 2 of them working in combination, you have that, coupled with a lot of pent-up demand in both the alternative asset industry and with corporates for a step function increase. It's the potential, not a guarantee, but there is the potential for a step function increase.

[Brendan O'Brien, analyst]

That's great color. And I guess for my follow-up, I just wanted to touch on the comp ratio. Year-to-date results have been quite impressive, and it seems like there's a lot of momentum across your platform at the moment. However, you kept the comp ratio at 69.5%. I just wanted to get a sense as to whether we should be viewing this as an indication that maybe you won't be experiencing the same seasonality in back half revenues rather relative to first half? Or is this simply some conservatism or a reflection of the continued elevated pace of recruiting?

[Paul Taubman, executive]

Look, what goes into that ratio is you're making estimates about full year performance. You're making estimates about full year recruiting. You're making estimates about what the competitive environment is. And at this point in the year, that remains our best estimate for the year. What I have also said repeatedly is that to get real comp leverage, you need to see Strategic Advisory revenues going back to 2020 to whenever, equal or exceed headcount growth. And given the significant contraction in global M&A activity in '22 and '23 and what is still a modest recovery in '24, I've always viewed that as much more of a '25 and beyond phenomenon. And we -- one thing about us, we're consistent. That's been our view.

[Operator]

Thank you. And that concludes our question-and-answer period. I would now like to turn the call back over to Mr. Taubman for any closing remarks.

[Paul Taubman, executive]

I just want to thank everyone for participating today, for your interest in our company, and we look forward to speaking with you when we have the opportunity to report our third quarter results. So everyone, have a wonderful day.