Rollins Inc

NYSE:ROL

Earnings Call Transcript 2021-Q3

[Operator]

Greetings, and welcome to Rollins Inc Third Quarter 2021 Earnings Conference Call. at this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Joe Calabrese. Thank you. You may begin.

[Joe Calabrese, IR]

Thank you. By now you could have all received a copy of the press release. However, if anyone is missing a copy and would like to receive one, please contact our office at [phone], and we will send you a release and make sure you're on the company's distribution list. There will be a replay of the call, which will begin 1 hour after the call and run for 1 week. The replay can be accessed by dialing [phone] with the pass code 13723477. Additionally, the call is being webcast at www.viavid.com, and a replay will be available for 90 days.

On the line with me today and speaking are John Wilson, Vice Chairman; Jerry Gahlhoff, Jr., President and Chief Operating Officer; and Julie Bimmerman, Interim Chief Financial Officer, Vice President and Treasurer. Management will make some opening remarks, and then we'll open the line for your questions.

John, would you like to begin?

[John Wilson, Vice Chairman]

Thank you, Joe, and good morning. We appreciate all of you joining us for our third quarter 2021 conference call. Julie will read our forward-looking statement and disclaimer, and then we will begin.

[Julie Bimmerman]

Our earnings release discussions -- or sorry, discusses our business outlook and contains certain forward-looking statements. These particular forward-looking statements and all other statements that will be made on this call, excluding historical facts, are subject to a number of risks and uncertainties, and actual risks may differ materially from any statement we make today. Please refer to today's press release and our SEC filings, including the Risk Factors section of our Form 10-K for the year ended December 31, 2020, for more information and the risk factors that could cause actual results to differ.

[John Wilson, Vice Chairman]

Thank you, Julie. Before we begin, I am sure you have noticed that Gary is not on today's conference call. He is actively rehabbing from a knee replacement operation. And while he is recovering quickly, he is doing very well. He's just not in a position to physically join us today. We wish Gary well with his physical therapy and look forward to having him rejoin us on future calls.

During the third quarter, we achieved some very strong business results, and Jerry will go over those with you shortly. In the interim, I wanted to share news of the latest addition to our Rollins Board of Directors. As you already know, over the previous year, we have enhanced and diversified that group with several new members. I am very pleased to announce our latest addition is Rollins' President and Chief Operating Officer, Jerry Gahlhoff. This is in recognition of his strong leadership and his deep commitment to the company's long-term success. We are proud to have Jerry serving on our Board moving forward.

Jerry is an important part of the Rollins leadership team, and his in-depth knowledge of our business and experience gained from working in our industry since 1991 adds perspective. We're fortunate to have him assume a greater role in the direction and future of our company.

Before turning the call over to Jerry, I have 2 items to first update you on. The first will represent a recent development in Rollins' environmental, social and governance commitment. We take very seriously the responsibility that we have to the communities in which we work and live. As a recent example, we're pleased to share that Rollins has made an in-kind donation originally costing $4.6 million worth of Personal Protective Equipment, or PPE, items during the third quarter. Working with the Federal Emergency Management Agency and several philanthropic organizations, including the Friends of Disabled Adults and Children, the Foundation of Hope Food Bank as well as Cope Preparedness in Los Angeles, we donated 27 pallets or 6.8 million pieces of masks, gloves and other items.

In addition to achieving the successful execution of our strategies as well as solid business results, we also have a responsibility to the communities in which we work and live. EFC is a

facet of our business is becoming more and more important to us. We are proud to support these initiatives.

Last, as we have previously disclosed, the company has been responding to an investigation by the U.S. Securities and Exchange Commission. In accordance with accounting standard ASC 450, we have established a reserve related to this matter, which we consider immaterial. Given that the investigation is ongoing, we cannot answer any questions during our Q&A, but we remain focused on resolving this inquiry.

With that, I will turn our call over to Jerry.

[Jerry Gahlhoff, President and Chief Operating Officer]

Thank you, John. Good morning, everybody. We're very pleased with our third quarter results. Revenue increased 11.4% to $650.2 million compared to $583.7 million for the third quarter of last year. Our net income totaled $93.9 million or $0.19 per diluted share compared to $79.6 million or $0.16 per diluted share for the same period in 2020. Julie will review the GAAP and non-GAAP results shortly.

Revenues for the first 9 months of 2021 were $1.824 billion, an increase of 12.2% compared to $1.625 billion for the same period last year. Net income for the first 9 months increased 44% to $285.3 million or $0.58 per diluted share compared to $198.2 million or $0.40 per diluted share for the comparable period last year.

For the quarter, we experienced solid growth in all our business lines with residential increasing 11.7% and termite presenting 15% growth over the third quarter 2020. Additionally, commercial, excluding fumigation, delivered an impressive 10.1% growth over the third quarter last year. This is also an improvement of 7.9% growth over 2 years ago when we were not experiencing COVID-related shutdowns.

Overall, we are pleased with our performance. Rollins remains well positioned for the remainder of the year and into 2022

Looking deeper at our operating results, we're attracting customers to all our services and brands. And one area I'd like to focus on today is our continued strong growth in our wildlife service offerings. Trutech Wildlife joined the Rollins family in 2010, followed by Critter Control in 2015. Since 2010, the business has grown 800%. Day-to-day operations of operating a wildlife control business is quite different than running a typical pest and termite business, and we are proud to have a dedicated team focused on this much needed service. Originally concentrated in the Southeastern United States, the business has expanded across the nation as well as into Canada. And with Critter Control's expansion into Canada, it's Rollins' first brand to enter an international country without acquiring another business as a platform.

The Wildlife division also operates a thriving franchise system. There are currently 84 franchises with the most recent franchise launching in Mansfield, Ohio. We anticipate finishing the year with 12 new franchises, one of our strongest years in adding franchisees.

We have also been fortunate to add 9 former corporate employees as franchisees, employees who have an entrepreneurial drive and a passion for wildlife and customer service have multiple career path opportunities, be it ownership of the franchise or growth within our company. We believe there is meaningful opportunity for continued growth in our Wildlife business and look forward to updating you in the quarters ahead.

I'd now like to discuss Hurricane Ida. Our hearts go out to our Gulf Coast region and those that were affected by the hurricane. But I must admit we are inspired by our team in that area. They implemented an amazing plan that helped our team members and alleviate the negative impact of the storm. I have shut down several of our branches for days, but 2 locations were shut down for about 2 weeks. The impact to our employees in the days following the storm was far worse than the impact to our business in the quarter. Thankfully, all of our employees in the area were safe, yet they did need assistance. Through the Rollins Employee Relief Fund, we granted 137 emergency grants to impacted employees within the first week following the hurricane to enable employees to address their personal essential needs. Since then, another 7 employees who endured greater hardships received full grants to address their more significant needs. Additionally, our Orkin South Central division, led by Leland Morris, quickly initiated a preparedness and mitigation plan to assist our team members. This included immediate procurement of much needed supplies for our employees and their families, such as generators, fuel, portable air conditioners, fans, water and other essential emergency provisions that were not readily accessible to them locally.

Our team members in adjacent areas that were fortunate to avoid the brunt of Ida's force volunteered their time and energy, often after work hours, to load these supplies into box trucks and drive them to those most in need. For weeks, they continue to shuttle fuel to these employees to keep their generators up and running. This was a total team effort, and we are tremendously proud of their care, compassion and commitment to one another. In fact, we're so pleased with their effort that we plan to expand and formalize this program in other areas of the country so that we can rapidly respond in case of a natural disaster or emergency.

Now let me turn the call over to Julie to discuss our financials.

[Julie Bimmerman]

Thank you, Jerry. As we measure our performance and think about how to best articulate Rollins' business in the future, along with what routine questions we received from the investment community, we will now be presenting 3 additional measurements quarterly moving forward. The first is a measure we have referred to periodically and that is EBITDA, or earnings before interest, taxes, depreciation and amortization. Due to our consistent high volume of acquisitions and hence, high amortization expense related to these acquisitions, presenting EBITDA regularly will provide a clearer picture of our operation's ongoing financial performance.

Think about this, over the last 3 years, we have averaged 30 acquisitions per year.

Next, we will begin presenting our revenue growth through both constant exchange rate and actual exchange rate. By utilizing historical baseline revenues for acquisitions betted through the

due diligence process, we were able to include all acquisitions within the calculations, both stand-alone and tuck-in. This will bring clarity and consistency to both our acquisition and our organic revenue growth measurements.

Third, we'll be providing you with our free cash flow. We believe that this will properly illustrate Rollins' strong ability to generate cash. We have taken a simple approach to defining free cash flow, which is calculated as net cash provided by operating activities, less purchase of equipment and property. Our hope is that these measurements will enable investors to better assess our operating performance in the future and provide a deeper view of our business. We have included GAAP to non-GAAP reconciliations on each of these metrics on our earnings press release published this morning.

So on to the numbers. Our third quarter revenues of $650.2 million was an increase of 11.4% over last year. Of the 11.4% actual exchange rate revenue growth, acquisition growth was 2.2% and organic equated to 9.2%. For the constant exchange rate, the growth percentages calculated within the hundreds of the actual exchange growth rate, therefore, presented the same. For the 9 months ended September 2021, revenues of $1.824 billion was an increase of 12.12 percentage over year-to-date 2020. Of this actual exchange rate, total revenue growth of 2 -- or excuse me, of 12.2%, 2.7% was related to acquisitions and 9.5% organic growth. The constant year-to-date exchange rate total revenue growth for 2021 equaled 11.6%, 2.7% represented acquisitions and 8.9% organic revenue growth.

As Jerry pointed out, residential, commercial and termite all grew double digits this quarter over the same quarter last year. So in determining my focus for today, I decided to take Jerry's lead and discuss Wildlife, yet I'm discussing specifically company-owned Wildlife operations. For the third quarter in 2021, Wildlife revenues grew 24.1% over last year. And year-to-date, Wildlife has presented an overall revenue growth of 27.6%. What makes this particularly impressive is that this is after their strong growth of 20.4% last year. So similar to our residential pest control, Wildlife did not feel a negative impact to revenue growth during the pandemic. So way to go to the Wildlife team.

Now on to our income. For the third quarter and year-to-date, we are presenting adjusted EBITDA for comparison purposes due to the onetime super busting of our late Chairman stock grant in the third quarter of 2020 and the impact of our gain on sale of several of our Clark properties in the first 6 months of 2021. The third quarter 2021 EBITDA was $150.9 million or 8.7% over 2020 third quarter adjusted EBITDA of $138.9 million. Third quarter 2021 EPS was $0.19 per diluted share or 5.6% improvement over the 2020 third quarter adjusted EPS. For the 9 months ended September 2021, our adjusted EBITDA was $421.2 million or 22.1% over last year's adjusted EBITDA of $344.9 million. Year-to-date, 2021 adjusted EPS was $0.53 per diluted share or 26.2% over last year.

For the third quarter 2021, gross margin increased to 53% or 0.4% over last year. Strong improvements in our materials and supplies were negatively offset by high overall fleet costs, primarily from an increase in fuel of approximately $4 million over third quarter 2020 and lower vehicle gains of $900,000 compared to last year.

Sales, general and administrative third quarter margin increase over last year was strongly impacted by the PPE donations and the SEC accrual previously mentioned by John. Travel expenses have also increased $1.3 million in the third quarter as we have begun to lift our company travel restrictions.

Amortization expenses for the third quarter 2021 increased $1.4 million due to the amortization of customer contracts from multiple acquisitions. This was offset by a decrease in depreciation of $201,000 due to the sale of owned vehicles and centralizing of IT function. Overall, this equated to a 5.1% increase in depreciation and amortization over the third quarter 2020.

Our dividends paid year-to-date 2021 was $119.7 million or an increase of 30.4% over last year. We ended the current period with $117.7 million in cash, of which $73.6 million was held by our foreign subsidiaries.

So this brings us to the final of our new 3 measurements, free cash flow. For the third quarter of 2021, our free cash flow was $72.9 million or a decrease of 27.5% over the same quarter last year. For the 9 months ended 2021, our free cash flow equals $278.9 million or 13.6% decrease over year-to-date 2020. This fluctuation occurred due to the deferral of $30.3 million in FICA taxes payable in 2020 as allowed under the CARES Act. These associated taxes were then remitted in September of 2021.

We hope that the discussion of these new measurements, you will receive a greater clarity while reviewing our financial performance.

Lastly, I want to discuss that yesterday, we were extremely pleased to announce that our Board has approved a 25% increase to our dividend. The quarterly dividend increased $0.10 -- to $0.10 per share from $0.08 per share and will be paid on December 10, 2021, to stockholders of record at the close of business on November 10, 2021. Additionally, the Board also approved a special dividend of $0.08 to be paid on December 10, 2021, as well. The dividend increase reflects our strong performance in the first 9 months of the year and underscores our financial strength, our solid capital position and the Board's confidence in our outlook for continued growth.

John, I'll turn it back to you.

[John Wilson, Vice Chairman]

Thank you, Julie. We are happy to take any questions at this time.

[Operator]

[Operator Instructions] Our first question comes from Tim Mulrooney with William Blair. Please proceed with your question.

[Tim Mulrooney, William Blair]

John, Jerry and Julie, good morning. Thanks for taking my question and sending my best to Gary on a quick recovery. So yes, just 2 questions for me. The first one, Julie, I apologize if I missed it, but did you give organic growth by segments in the prepared remarks?

[Julie Bimmerman]

No, we did not. We just gave the organic on the overall.

[Tim Mulrooney, William Blair]

Is it a change in policy for the company now that you won't be providing that? That's been pretty critical in terms of us understanding how the company is performing.

[Julie Bimmerman]

At this point, with our change, we're trying to give you additional clarity by giving a very clean organic and the acquisition growth numbers. So we will be staying for here for now.

[Tim Mulrooney, William Blair]

And I did want to confirm that because I know that's been an area of focus. The organic number this quarter excludes all acquisitions, both large and bolt-on?

[Julie Bimmerman]

Yes, 100%. All acquisitions are excluded.

[Tim Mulrooney, William Blair]

My next question is on margins. EBITDA margin contracted, I think, about 60 basis points year-over-year and 140 basis points sequentially. Can you talk about the primary factors that caused that 140 basis point contraction from the second quarter to the third quarter of this year? I have to imagine that it's probably labor related because I don't think materials and supplies are a large enough component of your COGS to really cause us much of a headwind. But I wanted to get your thoughts on that.

[Julie Bimmerman]

I'm going to go ahead and kick this first to Jerry, and then I'll see if I want to add anything on to that.

[Jerry Gahlhoff, President and Chief Operating Officer]

The biggest headwind we had, Tim, this is Jerry, in the quarter, was fuel prices. Fuel expense was up significantly. We were able to manage the labor part pretty well. From -- as a percentage of revenue, labor wasn't as big of a deal. So we just had higher fleet expenses probably more than anything.

John, what would you add to that? Anything?

[John Wilson, Vice Chairman]

Yes. I would second the labor part. I mean our labor as increase a percentage of revenue was -- one of the ways we track it, Tim, is our expenses growing less fast than our revenue, and that's always a focus for our operations. And labor was -- grew less than that 11% revenue increase.

[Tim Mulrooney, William Blair]

No, that's really good color. I appreciate that. Can you remind me what percent of your sales typically fuel represents?

[Julie Bimmerman]

Well, we don't break out the fuel specifically. We keep that buried into our fleet number as you well know. So also think about it's not only the fuel increasing, as you said, the $4 million. But we're also talking about the increase because we had fewer vehicle gains this quarter as well, just under $1 million on that as well.

[John Wilson, Vice Chairman]

I think in our prepared remarks, Julie said $4 million in increased fuel cost, Tim. And as you know, we've had active routing and scheduling efforts for several years. With 1 million stops per month or more, without that effort and the reduced miles per stop that our field teams are achieving, it would have been worse.

[Operator]

Our next question comes from Mario Cortellacci with Jefferies. Please proceed with your question.

[Mario Cortellacci, Jefferies]

Just kind of piggybacking off of the margin part of it. Maybe you can just give us a sense for how pricing is running right now. I think last quarter, you guys said that you could flex it up above the 1% to 2% historical range to help offset some of the cost pressures. But is there any lag in there, like the fuel side of the equation? The receivable? Or the fleet side of the equation? Or is the pricing running hot and just helping offset maybe some of the labor pressures?

[John Wilson, Vice Chairman]

So you broke up a little bit on part of that. We've not taken any real extraordinary pricing action as a whole. As we talked about previously, many of our -- the vast majority of our people are paid on a productivity pay plan. So any sort of impact to wage inflation doesn't really reflect. What we do, do is use our call center team and our close rates and our branches to sort of evaluate do we have room in pricing. And then that's been a sort of effort that we've always looked at. But if our close rates in a particular market are trending well above the norm, then that tells us we have room for pricing increasing, no matter that the economic or concerns that are going on, right? And conversely, if it goes the other way, we have the same -- then we would take maybe a different action.

[Jerry Gahlhoff, President and Chief Operating Officer]

Yes. The call center has a lot of ability to look at data real time and make those adjustments to what they're selling, how they're selling it, what the demand is like and adjusting price based on that. But we also did implement our annual price increase this summer just as our core price increase that helps offset some of those costs. But certainly, the fuel is certainly the most impacted component of that this past quarter.

[Mario Cortellacci, Jefferies]

And then just more of a housekeeping issue. I guess with the new organic growth disclosure, are you guys going to provide any historical so that we have some context in how things have trended? Or -- and then also, I guess, within the quarter, can you give us any context within how ready and commercial trended relative to the corporate average? Was resi slowing, commercial slowing? Is it continuing to pick up or commercial accelerating? Just any kind of context there would be helpful.

[Julie Bimmerman]

Well, basically, it's what we're getting down to the new numbers. We're going to -- we put these new measurements in place from this point on and will be going forward. So as of today, we told you how this growth relates to, obviously, Q3 of last year, so we gave you from that perspective. But we are not planning at this point to go back and give historical numbers. So hopefully, that makes sense from that standpoint.

[Mario Cortellacci, Jefferies]

And then can you help with the resi and commercial trend within the quarter just so that we can gauge how each is performing?

[Jerry Gahlhoff, President and Chief Operating Officer]

I would say -- this is Jerry. Residential remains strong. I mean it's been real consistent all the way from the pandemic to now, it remains strong. The commercial function appears to have completely rebounded and, again, is doing well. I would probably see some acceleration on the termite side. And so there's really a lot of positive things going on in our termite and ancillary services across the board. And that's been probably a more important growth driver for us in the third quarter. But all are really strong and continue to trend in positive direction.

[Operator]

Next question comes from Ashish Sabra with RBC Capital Markets. Please proceed with your question.

[Ashish Sabra, RBC Capital Markets]

Just a follow-up on the resi side. I was wondering if you can talk about the sales momentum coming out of the key summer selling season. And maybe a related question is also on the retention side, how retention has been tracking, particularly again on the resi side with -- like as people relocating post summer as well as return to office?

[Julie Bimmerman]

I'll jump in and then you can add anything if you want to. So on the residential side, still very strong. As we said, we were sitting there with an 11.7% increase over Q3 of last year. And just to bring you around that, if you think about it, last summer, we still had a 10.5% increase on our resi. So residential was -- we did not see a decline last year like many businesses did or like we did on our commercial side. So the level -- that double-digit increase was on top of the double-digit increase last year. So from that standpoint, it is still running very strong. On the -- we have not seen any strong fluctuations on our retention this quarter.

Is there anything else, John or Jerry, you would like to add to that?

[John Wilson, Vice Chairman]

No. Frankly, Ashish, I've been a little bit surprised and pleased in our team's ability to handle the load that we've put on them with the new customer influx over the summer and the increasing customers that we added over this last year. Our 2 primary measurements are customer sat for the near term or the medium term. And then our customer retention is more of a lagging indicator. And both have remained relatively steady.

[Ashish Sabra, RBC Capital Markets]

That's very helpful color and good to hear that. Maybe if I can just ask a question on the technology rollout. I was wondering if you could provide an update on how the Phase 1 and 2 are progressing and as well as the timing of the launch for Phase 3 and 4.

[John Wilson, Vice Chairman]

Do you want to handle that?

[Jerry Gahlhoff, President and Chief Operating Officer]

I can. This is Jerry. So we are very heavily focused on adoption in the field of the phases that we're in and different operations in the field or different phases of -- or different, I guess, maturity levels of adoption. John often describes it like a baseball game and what inning we're in. And we're still -- there's still an awful lot of upside there for us to drive utilization. And with this increase that we're seeing in fuel, there's a lot more desire to get that done and increase the adoption along the way. So we still have plenty of runway in that regard to doing that. And we're continuing to see incremental improvements. And that's what we're all about is continuous improvement and getting better all the time. But we still have a long way to go.

[Julie Bimmerman]

And I'll just back to John's analogy that Jerry referenced to on the baseball is we said that we're still in the early sides of the game, early

[Jerry Gahlhoff, President and Chief Operating Officer]

The early sides of the game?

[Julie Bimmerman]

Sorry, the early innings, early innings.

[Jerry Gahlhoff, President and Chief Operating Officer]

They must think we're playing football.

[Julie Bimmerman]

Well, okay.

[Jerry Gahlhoff, President and Chief Operating Officer]

Just an inning. It's okay.

[John Wilson, Vice Chairman]

Yes, well

[John Wilson, Vice Chairman]

Go ahead.

[Ashish Sabra, RBC Capital Markets]

Sorry, go ahead.

[John Wilson, Vice Chairman]

What I might add to that, our field leaders have adopted a sort of a mantra of, "You bought it, now utilize it." So we've got a ton of technology that our IT team has done a great job in delivering to our end users. And we're really kind of pushing the mindset if you bought it, you're paying for it, now let's use it. And so that's what we're really working on in 2021.

[Operator]

[Operator Instructions] Our next question comes from Michael Hoffman with Stifel. Please proceed with your question.

[Michael Hoffman, Stifel]

John and Jerry, Julie, and to pass on my best to Gary, rehab is challenging. On the organic growth, can you help us understand what's in it then? As you think about -- if you took [9.2%] and so it’s approximately excess new customers, excess price, excess cross-selling?

[Julie Bimmerman]

It's very similar to what it was in the past. So I think just on very broad average, 1% to 2% would be the price increase. And then we do say the rest is a combination of new customers with additional sales to existing customers. We don't break out that part, but just take out your price increase.

[Michael Hoffman, Stifel]

Okay. And then on price, you've historically had a fuel surcharge, if I remember correctly. So are you

[John Wilson, Vice Chairman]

Michael, this is John. We've never added a fuel surcharge. Well, I said never. We may have at one time and found out that it really takes our customers off -- And so then what do you do when it goes down and you have to get that back. So I shouldn't say never. But we may have one time, but we found out really quickly how that made our customers feel.

[Michael Hoffman, Stifel]

Okay. Then I stand corrected. And so how are you going to offset this inflation then?

[John Wilson, Vice Chairman]

The inflation of fuel, additional fuel?

[Michael Hoffman, Stifel]

Yes, the fleet cost. The fleet cost pressure, how are you going to offset it?

[John Wilson, Vice Chairman]

Well, we'll keep pursuing the same mission we have with reducing miles were stop. And rounding our people more efficiently and as we add new customers then we of course improve gently.

[Julie Bimmerman]

Yes. I was just going to expand on what John said. It just gets back to what we were talking about a few minutes ago is, literally, I mean, think about it, if we are in the early innings, did I say that correctly guys, early innings on the on our routing and scheduling and what we can bring in and lowering those miles per stop, I mean, we have a long -- now I'm going to change analogies here, I won't say a long runway, that would totally kill it with it. We have a long way to go on that. So this will definitely help offset, as John was saying, the fuel increases.

[Michael Hoffman, Stifel]

Okay. And then lastly, where does Wildlife exist in the 3 line items, just so we understand what it's influencing.

[Julie Bimmerman]

It will be in whichever line item it occurs. The majority of the Wildlife would be on the residential.

[Jerry Gahlhoff, President and Chief Operating Officer]

Right. But if it was a commercial customer that needed that service, say, a grocery store, it would hit commercial. But if it was a residential homeowner, it would hit residential.

[Julie Bimmerman]

I'm just very familiar with it because I've used our Wildlife service before, flying squirrel.

[Jerry Gahlhoff, President and Chief Operating Officer]

So it's going to -- it would be a mix of those. But the majority of their business is certainly residential.

[Julie Bimmerman]

Michael, I just want to make one comment just so you know. That is the way we have always presented the Wildlife. So that is nothing new on how we do split that.

[Michael Hoffman, Stifel]

Fair enough. Just needed to understand since you were emphasizing it, which part was being influenced by it.

[Operator]

Okay. We've reached the end of the question-and-answer session. I'd now like to turn the call back over to management for closing comments.

[John Wilson, Vice Chairman]

Thank you all for joining us today. We appreciate your interest in our company. As you've heard during the past calls, we have several programs underway that will make our company better as well as improve our customers' experience and our financial results. We look forward to giving you an update on our fourth quarter and year-end call. Thanks again.

[Operator]

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.