US Physical Therapy Inc
NYSE:USPH
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US Physical Therapy Inc
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Good day, and thank you for standing by. Welcome to the U.S. Physical Therapy First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I'd now like to turn the call over to Chris Reading, President and CEO. Please go ahead, sir.
Okay. Thanks, David. Good morning, and welcome, everyone, to our U.S. Physical Therapy First Quarter 2024 Earnings Call. With me on the line this morning include Carey Hendrickson, our CFO; Eric Williams, who is our COO East, and Eric will be assuming a larger role in our company as he takes over as President in just a few weeks after our Annual Meeting later this month. So we congratulate him on that. Graham Reeve, our COO West; and Jake Martinez, our Senior Vice President, Finance and Accounting.
Before we begin our prepared remarks, I'll ask Jake to cover a brief disclosure statement.
Thank you, Chris. This presentation contains forward-looking statements, which involve certain risks and uncertainties. These forward-looking statements are based on the company's current views and assumptions. The company's actual results may vary materially from those anticipated. Please see the company's filings with the Securities and Exchange Commission for more information.
Thanks, Jake. Okay, I'm going to keep my remarks reasonably brief, but I do want to give you kind of an overview of what I think are some important takeaways for the start of the year. So let me begin by saying that while these past few years have not been easy for anybody in our industry, I think our team has done some remarkable things in that period. We feel like we're off to a good start for this year as well. For some of you, I know that it may feel like this first quarter is a little bit of a disappointment, having enjoyed an all-time record Q1 in 2023. This quarter was actually ahead of where we expected to be, and that expectation was baked into our original guidance, which you will see we are updating today.
While we experienced a tough start to the year, not based upon demand, which has been very strong, but a rough weather start for sure compared to last year. However, we bounced back very quickly and visits have again been at or above previous record levels for visits per clinic per day. Visits per clinic were all-time highs for both February and March of this year, and I'm happy to report that April is another all-time high for that month as we have built slowly, but steadily in our volume progression so far this year. So what does that mean?
Well, for one, it means that our facilities are being recognized and sought out for the great care we are providing to patients and the families and by the physicians who refer to us, and so demand has been very high. I will also tell you that staffing, while improved, is really still the gating factor to being able to capture even more volume. We're working hard on that. We have a new leader over that recruiting department. And I expect we will continue to make adjustments that will further assist us in meeting the demand that we're seeing for our services. Our partners are working with the ops team to network differently than maybe we have done in the past, to increase the number and the quality of seeds planted, so to speak, with respect to talented clinicians in their markets. It's an all hands-on deck exercise, but I'm buoyed by the fact that demand is really strong and that underpins all of this.
Coupled with strong demand and record monthly volumes once we get outside of January is the progress the team has made with respect to net rate. In spite of the impact of a rather large, approximately 3.5% Medicare reduction to start the year, we were able to produce some uplift in our rate and some improvement in our work comp mix. It created some overall incremental improvement that we hope to build upon as the year progresses. For this first quarter, we saw non-Medicare rate improved another 2.8% overall from Q1 2023 and up 5% since the same quarter in 2022, and we're not done yet. We continue to work to lift reimbursement for the life improving work that we are delivering across the more than 5 million patient in [Audio Gap].
While demand is also improving -- where demand is also improving is in our injury prevention business. First, you saw our recent acquisition announcement with respect to a really terrific company led by a fine team, who recently joined our Briotix partnership. That opportunity will further -- will help us to further broaden our exposure to several additional industry, we call them, verticals, essentially industry types where over time, we expect to gain additional sales traction as well as cross-selling opportunities, given that we have a much broader subset of services available now to sell.
For the quarter, revenue grew 9.8%, which in turn produced a gross profit increase of over 15%. I'm very proud of our teams and our partnerships in this area. They continue to attract opportunities for further expansion, while they make a large difference for these companies in terms of the injuries they prevent and the cost that they save as a result of the fine work of our embedded clinical and technical resources.
We have other highlights to cover. So let me turn the call over to Carey to discuss our results in more detail before we open things up for questions.
Thank you, Chris, and good morning, everyone. Our first quarter results, as Chris noted, were better than we anticipated coming into the quarter, driven by strong volumes in February and March and a growing net rate. As we noted in our release and also in our year-end earnings release, we had the significant adverse weather events in January of 2024 that Chris noted that we knew we're going to make comparisons to the first quarter of 2023 challenging since there weren't any significant weather events in the first quarter of last year.
Volumes in January of 2024 were light as expected, but volumes quickly picked up back up in March -- February and March, and we experienced record volumes in each of those 2 months. Our hard work on rate negotiations and our focus on increasing workers' comp as a percentage of overall business continue to take root in the first quarter of 2024 and resulted in a net rate increasing year-over-year despite that Medicare rate reduction that was in effect for most of the first quarter that Chris noted.
From an EBITDA standpoint, we reported adjusted EBITDA for the first quarter of 2024 of $16.7 million compared to $18.5 million in the prior year. We noted in our earnings release that the Medicare rate reduction brought our 1Q '24 EBITDA down by about $1.7 million and then the adverse weather in January was a negative impact of about $1.3 million. Our operating results were $7.7 million and built the first quarter of '24 and the first quarter of '23. On a share basis -- on a per share basis, operating results were $0.51 in the first quarter of this year versus $0.59 in the first quarter of last year, and that's because of the decrease related to the increase in shares that we had associated with the secondary offering that we completed in May of '23.
Our average visits per clinic per day in the first quarter was 29.5%, which is the second highest volume in the company's history for first quarter, second only to the $29.8 million that we had in the first quarter of 2023. January was at 27.4% and that compares to 28.9% in the previous year. So we're down from 28.9% to 27.4%, but then February was at 30.4%, and March was at 30.8%. And both of those months, as Chris noted, were higher than the same months in the previous year.
Volumes continued strong in April with our average visits per day just north of 31, and that's a record high average visits per day number for the company ever, and the first time we've ever had average visits per day at or above 31 per month. Our net rate was $103.37 in the first quarter of '24, which was an increase of $0.25, again, despite that Medicare rate reduction that was, in fact, for most of the first quarter of 3.5%. The increase was largely related to our strategic priority of increasing reimbursement rates through contract negotiations with commercial and other payers and then our focus on growing our workers' comp business.
Excluding Medicare, our net rate was up 2.8% versus the first quarter of last year with increases in each of the major categories other than Medicare. Workers' comp, which is one of our highest rate categories, increased from 9.3% of our revenue mix in the first quarter of '23 to 10% in the first quarter of '24. And both of those initiatives increasing net rate to rate negotiations and the workers' comp business will remain high priorities throughout the year.
Our physical therapy revenues were $134.4 million in the first quarter of 2024, which was an increase of $5.3 million or 4.1% from last year despite the setbacks that we had from weather and the Medicare rate reduction. The increase was driven by having 28 more clinics on average in the first quarter of this year than we had in the first quarter of last year, coupled with the increase in our net rate. Our physical therapy operating costs were $110.4 million, which was an increase of 8.1% over the first quarter of the prior year, due in part to having 28 more clinics on average in the first quarter -- than in the first quarter of last year.
On a per visit basis, our total operating costs were $85.50 in the first quarter, which was up from just under $82 in the first quarter of 2023. Our average cost per visit was high in January because we had less operating leverage due to the lower number of visits, and then it returned to more normal levels in February and March, which averaged $82.90 per visit. Our salaries and related costs was really the same story. They were $61.42 in the first quarter of 2024. That was up from $59.14 in the first quarter '23, but again, those salaries-related costs were high in January, but then they returned to more normal levels in February and March, which averaged $59.42 per visit, which is comparable to that $59.14 that we saw in the first quarter of '23.
Our physical therapy margin was 17.9% in the first quarter of '24. That margin was also impacted by January due to having less operating leverage, but then it increased to 20.6% for February and March on a combined basis, which is back to very close to the first quarter [ 2023 ] margin, which was 21%. Chris talked about IIP and what a great job they did. In the first quarter, revenues were up almost 10%. IIP income was up 15.1% and that our margin increased -- increased from 19.5% in the first quarter of '23 to 20.4% in the first quarter of 2024.
Our balance sheet continues to be in an excellent position. We had $143 million of debt on our term loan with a swap agreement in place that places the rate on that debt at 4.7%, which, as you know, is a very favorable rate in today's market, and it's well below the current Fed funds rate. In the first quarter of 2024 alone, the swap agreement saved us $900,000 in interest expense with cumulative savings of $4.2 million since we put that in place in the third quarter of 2022.
In addition to the term loan, we also have a $175 million revolving credit facility that had nothing drawn on it during the first quarter, and we have approximately $105 million of excess cash over and above what we need for working capital, ready for deployment into growth initiatives. Including the April 30 acquisitions that we announced last week, we've deployed just over $40 million of cash into acquisitions so far this year. As we noted in our release, we're raising our EBITDA guidance range for the full year of 2024 to $82.5 million to $87.5 million. That's an increase of $2.5 million on both ends of the range.
Our guidance previously considered that a 3.5% Medicare rate reduction versus last year's rates would be in a place for all of 2024. However, as we noted in an 8-K that we put out in March, Congress addressed the Medicare reduction in the Consolidated Appropriations Act of 2024 and adjusted that reduction from 3.5% to 1.8% that's effective March 9 through the end of 2024. It was not retro to the beginning of the year, but it will be from that March 9 forward at 1.8% reduction rather than 3.5%.
The outperformance of our internal expectations in the first quarter of 2024 due to our strong volumes in February and March and our continued progress in that rate gives us confidence to raise the range by more than just the $2 million effect that's related to the Medicare rate change, even though it's early in the year. As a reminder, the expected EBITDA contribution from acquisitions we've closed so far this year and another one that we expect to close by the end of July are included in their guidance just as they were in our previous guidance.
In closing, our first quarter was ahead of our internal expectations. February and March were strong months from a volume, revenue, EBITDA and margin perspective. Our net rate grew in the first quarter over the prior year, even with a 3.5% Medicare reduction in place for most of that first quarter, and we had very good momentum as we start the second quarter as evidenced by our average visits per day in April. And we increased our full year guidance by $2.5 million to reflect all of those things.
So with that, Chris, I'll turn the call back to you.
Really appreciate it, Carey, great job. Thank you. So operator, let's go ahead and open up for questions or comments.
[Operator Instructions] And we'll take our first question from Brian Tanquilut from Jefferies.
Eric, congrats. Chris, maybe my first question, as we think about your commentary that Q2 -- or Q1 was essentially in line with internal expectations. The salaries cost stands out to us up 3.5% sequentially. So just curious, what are you seeing there? And what needs to happen for that to maybe normalize? Or are these the normalized levels that we should be thinking about from a salaries and related costs as a percentage of revenue perspective going forward?
Yes. Well, I think -- and I may pull Carey back in for part of this. Certainly, I think the impact in January on like revenue, like volume impacted us there on a percent of revenue basis. When we look at the rest of the quarter, the February and March numbers, which I'll get Carey to revisit here momentarily, those return to a more normal level. And I think that's a better indication of where we think this will be going forward.
So Carey, you want to hit those again quickly?
Yes, you bet. So salaries and related costs in February and March, they were $59.42 per visit. And that is up only slightly from $59.14 in the first quarter of 2023, which is a good comparison because the Januaries were so different in each year. January of last year didn't have any weather. And of course, we know we had the weather event and other events in January of this year. So I think that's a better comparison and something you should look at for going forward is something around that $59.42 kind of per visit from a salary standpoint. And that will actually probably go down, look it varies because there's a certain amount of your salaries related costs that are relatively fixed. So a lot of it varies with the cost per visit, but you do have just some base level of employees that are on -- that make that fixed.
So it will vary and probably come down a little bit in the second quarter from the first is what I would anticipate, given that we'll have -- that's one of our -- it's actually usually our highest volume quarter. So that may be a little less in the second quarter, but then vary a little bit from that as we go into the third and the fourth. So I feel like we're in a decent place from salaries and related costs. It's just that, that January impacted that number quite a bit because we didn't have the operating leverage that we did in the February and March months.
Brian, is that...
Yes, that makes a lot of sense.
Yes. Okay.
And then maybe my follow-up question, Carey. As I think about -- I appreciate your comment that Q1 was within your internal range and you're obviously raising guidance for the year. Any color you can share with us to help us think about how your -- or what your internal expectations are for Q2, understanding that you're off to a really strong start in April?
Yes. I mean, gosh, we don't usually give guidance by quarter, but I would just say, we expect it to be at a level that is -- that is up from last year's first quarter -- second quarter, excuse me, and certainly up from where we were in the first quarter of this year. It's a lot of it -- honestly, a lot of it's going to depend on what net rate, obviously, and then just how strong those volumes are in April, May and June, but that's certainly an expectation. I mean we've added acquisitions since the second quarter of last year. We've -- and we've improved our net rate since the second quarter of last year, it certainly should be up.
Yes, Brian, I mean, we're not going to get to the point, and I know you're not asking us to do this where we're going to guide by quarter. ATI just did that. I don't think that's the right move for us. But we're comfortable in the guidance that we updated for the year. And you guys have the hard job of trying to parse that out between quarters.
We will take our next question from Joanna Gajuk with Bank of America.
So I guess coming back to volumes and the comments around the February, March were pretty good months. And then I guess, April, in particular, looks like it's pretty good. So -- the question is, what is driving this better volume here? And also, what do you assume, I guess, for the rest of the year?
I got to tip my hat to our clinicians and our partners, 95% of whom are clinicians. They're doing a great job with patients. We're doing, I think, a better-than-ever job in outreach, not just the physician referral sources, but to communities, social media, other things, driving patients. Frankly, our demand is high enough that if we could just magically import staffing on an incremental basis, where and when we need it, we could drive volumes even higher. And so the gating factor for us right now is staffing, teams worked very hard. Turnover for this quarter is at the lowest level that I can remember since I've looked at turnover going back many, many years. So our partners who largely influence that are doing a very good job. We're continuing to work to try to get it down even further. But staffing is really the gating factor. Demand is high.
That's great to hear. So essentially, met demand there. So for the turnover, are you willing to share the actual percent of turnover you've seen among your clinicians?
It's nicely below 20%. I don't want to get into a pattern where we've got to put it out every single quarter because it's going to move around a little bit. But it's lower than it was last year, and it's well below 20% at this point.
That's great. That's helpful. Just to have a magnitude of things always good. And I guess your other segment, the industrial injury prevention revenue is up nicely and profit of 15%. So I just want to clarify, this is all organic. There's not really -- the deal that you announced that didn't even close in the quarter...
That's right.
And the second -- and then what is really driving that? I mean, are you like growing with your existing partners, you're adding in new clients? Like, I guess, what's driving that 10% revenue growth and obviously, nicely translating into profit, but I guess it starts with top line.
Yes. Thank you. So Eric, if you can -- you guys are -- both Eric and Graham doing a great job, working with these 2 partnerships. Our partnerships, in fact, doing a very good job, and Briotix has come out really strong.
So Eric, do you want to speak to that?
Yes. And actually, it's both of those. I mean, we are adding new clients. We're adding new verticals. We're heavy in distribution, retail heavy in automotive, adding additional manufacturing and distribution clients as well. And then we're expanding product lines within existing clients. So it's a combination of both the business development pipeline for both of our injury prevention businesses, progressive and Briotix are very, very deep right now. So terrific same-store growth, a terrific new client growth. We're really bullish in terms of the direction we're headed and really excited about the acquisition that we just announced here on April 1. So it continues to go really, really well, and we expect good things out of our injury prevention business as we move forward through the year.
It sounds like if that business staffing maybe is not a gating factor? Or would you say -- is it that much better or maybe not that much better, But it sounds like maybe better.
It's different. So when you take a look at the big gating factor that we deal with in the physical therapy side here, we are predominantly higher in PTs and big shortage of those, and you really got to be good at recruiting and retention in order to make an impact on your business. And as Chris mentioned, we're doing well on both fronts there with the best retention rates we've had a in long, long time. When you look at the injury prevention side, we have the luxury and flexibility of going in a different direction from a staffing perspective. So you're looking at athletic trainers in those businesses. So it's a slightly different hiring requirement.
The challenge on the injury prevention side really -- and we have them, it's not -- they're not all full-time physicians. So a lot of the various accounts and clients that we staff for aren't looking for 40 hours a week. They could be looking for 6 hours a week, 8 hours a week. So it's a challenge for those injury prevention businesses to be able to bundle those positions, to have an easier time finding someone because it's always easier to find somebody full time this part time. So slightly different type of clinical need, which makes it a tad bit easier on the injury prevention businesses as opposed to PT.
I would say this, and Eric -- I think Eric did a great job outlining that. Our turnover rate in injury prevention is really low [indiscernible] job, it's lower even than at our facilities. And they've been very creative. And so I think that combination, again, we have more demand at any given point in time, and this will always be the case then we can staff to. There's always a bit of a lag, but they're doing a really good job right now, and I'm proud of that group.
Great. And talking about deals, just also clarification, confirmation when it comes to what's included in your guidance. So there was no change in there, right? You kind of the $2 million is the Medicare rate and $0.5 million, I guess, in Q1. I just want to make sure there's nothing around -- moving around the deals, like I guess the deals are tracking in line with your initial expectations in terms of the contribution in the guidance?
Yes. I would say this, one of the deals that we had factored into our original guidance, it didn't happen and isn't going to happen, but we've got other activity and all of that has been included in our guidance for the remaining part of the year. And so we had a little -- and net-net, we're comfortable where we are for the year at this point.
We'll take our next question from Larry Solow with CJS Securities.
Question, I guess, just on the good price momentum, it sounds like outside of Medicare. I know that the core contract negotiations sound like they're going even a little better than expected. And also -- good to see workers' comp picking up a little bit. That's kind of lagged, I guess, even since COVID. So maybe a little more color on the workers' comp side and then just overall the progression of your contract [ negotiations ].
Eric, why don't you go ahead? And then Carey, if have something to add, you can jump in...
Sure. You bet. Yes, sure. On the work comp side. So look, we talked about this on a number of quarterly calls over the course of the past 1.5 years, there's been a tremendous amount of effort to really drive both volume and rate, and it's not an overnight turn unfortunately. And we're really starting to see the fruits of the efforts that we put in here over the course of that time frame. One of the really key drivers for us here is the fact that since second quarter of last year, we signed 10 new work comp payer contracts, 4 of which came online mid-Q1. So -- and we have a number of additional contracts in process, just as Carey has a number of different contracts that he's looking to renegotiate rates on. So a lot of effort to beef up in this area, and we expect this trend to continue as we move forward through the year.
Yes. And Larry, I'd say this mix of growing from 9.3% to 10%, it's both. It's both volume and rate. So volume picked up, so it's the volume outpaced the growth of the other categories so that it would increase as a percent of the mix. And then also net rate increase as well. So good on both fronts and that resulted in that overall mix of revenue increasing.
Great. What about just -- I know no one knows concerned, but just Medicare outlook, obviously, they reduced their rates, they cut a little bit -- give you a little bit of relief on the original cut from this year. I think physician fee schedule and all that balancing should be done by next year. Is that kind of what industry partners kind of believe or again, not holding you through this, but what is sort of the current, I believe, going forward on that side of thing.
Yes. If I was -- predict what Medicare CMS is going to do business, I probably need a couple more jobs. So I'm not sure exactly. I think we get out of the system that we're in completely in 2026. We were actually just a big group of us in D.C. Now it's been 3 weeks ago. We had a meeting at the White House, meeting at HHS. We met with the head of AARP, the regulatory head. We met with a couple of consumer-facing groups. We have a bill right now on fall prevention. There could be some additional directed volume for us. And we met with MedPAC. And I would say the MedPAC meeting was the meeting where we've got more opportunity to help educate them their original calculations with respect to the physician fee schedule as it impacted us was based on a misunderstanding of the code set under which we bill.
In short, they were trying to cut the reimbursement to what they thought were the highest income level of physicians across their fee schedule -- physician fee schedule, so included physiatrists, pain management doctors and in some cases, orthopedic surgeons. [Audio Gap] portions of our code set, but we make up -- physical therapy makes up 85% of that code set. And again, physical therapists making somewhere in $70,000 to $90,000 a year range, and they had no idea of that. And yet their recommendation to CMS was to cut because they thought they were knocking these highly compensated physicians back, and we ended up being what they called collateral damage.
[Audio Gap] demonstrating that mistakes don't get fixed quickly in Washington but, we've got good line of communication. We've got better data over a period of years with studies and other things that we've done on how much physical therapy saves the system when entered and accessed on a primary care basis, really physical therapy first for musculoskeletal problems. And so -- while this isn't an easy fight, I think it's a fight where facts matter, and facts and reasonableness are on our side. We've just got to continue to drive home the message and be more effective and more diligent with our dealing in Washington. It's a little frustrating, but we're committed to the whole industry with APTQI kind of in a leadership role now alongside the APTA, we're very focused on making progress.
Got it. I appreciate it. That's all good. I guess just last question or just a point. I just -- I noticed that you had a net 6 closures -- 6 closed facilities. Is that just -- is that -- did you happen to accelerate on some underperforming facility closures? Or what's sort of the outlook for net openings in 2024?
Yes. I think you'll see us with strong openings similar to what we've done in the last couple of years. We're having a good organic de novo opening schedule for the remaining part of the year. We're in good shape through the end of April. And then we're finding tuck-ins at very, very reasonable prices where we can fold those into strong existing partnerships. So we expect that to go well. The closures really are a result of just what we believe is a healthy pairing of facilities that have been around some of those for multiple decades. And at the end -- at the end of their useful life and the leases just happen to be up. And so they don't carry with them a lot of closure costs. It allows us to focus efforts on where we can get the greatest return. It's kind of like trimming of fruit tree, you got to prune some branches to have more fruit at the end of the day. So that's what we do. Timing is kind of no message there.
[Operator Instructions] We'll take our next question from Mike Petusky with Barrington Research.
So on injury prevention, Chris, I think maybe 1.5 years, 2 years ago or so, you sort of expressed some caution, hey, some companies are pulling back on these types of services, concerned about recession and all the rest. I mean do you feel like in light of the comment you made about demand improving. I mean do you feel like most of these executives have sort of somehow made peace with the economic backdrop? Or can you just speak to your sense of that?
Sure. Sure. Thanks, Mike. Mike, you know us, you've known us for the entirety of the time, I've been here 21 years now, and we tell everybody what we think and what we're seeing and feeling and hearing. And going into last year, we felt like we were seeing from the CEOs and CFOs who make these decisions in some sectors that they were anxious and they were pulling back, not just with us, but with a lot of vendors in a lot of areas. We're not feeling that right now. And while there may be individual sectors or companies that are still a little tepid relative to the interest rate environment, look, I think people demand -- consumer demand continues to be high. What's in part driving some of the inflation that we're seeing. Employment still pretty good. And I think there's a sense that the Fed isn't going to run to the rescue anytime soon, and this is going to be the state of the state for a while.
And we're just feeling really good about what we're onboarding. We're seeing good opportunities. We're winning some good fights. And I think you're hearing what we think the year is going to look like, just like you heard last year that we thought things were going to be a little slower. So that's just kind of where we are.
And then maybe for Carey or anybody should take this. In terms of the place you are and the multiyear effort to sort of get better more appropriate reimbursement from commercial payers. I mean, how much work there do you feel like is -- I understand it will be ongoing for a while. But in terms of the heavy lift, what you really want to accomplish, how far into this do you feel like you are at this point?
Yes. I'd say we're through about 2/3 of the initial heavy lift, if you will. But it's -- as you noted, it's an ongoing effort. So when we get done with this, we're just start right back over again and go through it. There's always opportunities, and we're -- so it's a never-ending process. But we're -- I'd say from the initial lift, we're probably 2/3 of the way through.
And then just, I guess, last question on just M&A. And Chris, I heard you say, hey, we're seeing some really reasonable prices for some tuck-ins. And I'm just curious, in terms of the conversations you're having, are there bigger sort of needle-moving deals out there where you would say, "Hey, there's active discussions." The timing, however, it could come in 6 months, it could come in 2 years. But are there larger deals out there or larger partnerships out there that are looking for exit strategies and where you guys could be a reasonable option?
Yes. Yes, for sure. And Mike, it's interesting time right now. I know that from time to time, over a period of many years, we've sometimes gotten criticized a little bit for having a conservative balance sheet, interesting many, many of our competitors. We're really balance sheet constrained. And so we're able to continue to grow and have discussions and really to create meaningful points of differentiation not just culturally in normal life after, but really predictable stability because we're so well capitalized.
And so you're going to continue to see us grow. We're talking to some large [Audio Gap] companies. I'm not going to promise timing around that, which I know you're not asking for, but we're not afraid to grow. We want to do it the right way. And at the same time, we need to meet people where they are and that involves their own personal timing and circumstance. And so I think we're seeing in a really good light the deals that we've won recently. We haven't been the highest bidder on. And yet -- not that we've gotten them cheaply, the larger ones that we've announced. But I think in part, it's because people see us being able to execute on our strategy over a long period of time, where others are beginning to feel the effects of the capital market, which is not in their favor right now.
[Operator Instructions] And there are no further questions on the line at this time. I'll turn the program back to our speakers for any closing comments.
Sure. All right, David. Thank you. Thanks, everybody. We appreciate your time today. Carey and I are available later again, as always, when you have questions, things you want to bounce around, we're happy to speak to those. Thank you for your time today, and have a great rest of your week. Bye now.
This does conclude today's program. Thank you for your participation, and you may now disconnect.