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spk05: Good day, and thank you for standing by. Welcome to the Ensign Group Q3 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. It is now my pleasure to introduce Executive Vice President Chad Keech.
spk08: Thank you. Welcome, everyone, and thanks for joining us on our call today. We filed our earnings press release yesterday, and it is available on the investor relations section of our website at nzinegroup.net. A replay of this call will also be available on our website until 5 p.m. Pacific on Friday, November 25, 2022. We want to remind any listeners that may be listening to a replay of this call that all statements made are as of today, October 27, 2022, and these statements have not been nor will be updated subsequent to today's call. Also, any forward-looking statements made today are based on management's current expectations, assumptions, and beliefs about our business and the environment in which we operate. These statements are subject to risks and uncertainties that could cause our actual results to materially differ from those expressed or implied on today's call. Listeners should not place undue reliance on forward-looking statements, and are encouraged to review our SEC filings for a more complete discussion of factors that could impact our results. Except as required by federal securities laws, Ensign and its affiliates do not undertake to publicly update or revise any forward-looking statements where changes arise as a result of new information, future events, changing circumstances, or for any other reason. In addition, the Ensign Group, Inc. is a holding company with no direct operating assets, employees, or revenues. Certain of our wholly-owned independent subsidiaries, collectively referred to as the service center, provide accounting, payroll, human resources, information technology, legal, risk management, and other services to other operating subsidiaries and standard-bearer healthcare REIT, our real estate subsidiary, through contractual relationships with these entities. In addition, our wholly-owned captive insurance subsidiary provides certain claims-made coverage to our operating entities for general and professional liability as well as for workers' compensation insurance liabilities. The words Enzyme, Company, We, Our, and Us refer to the Enzyme Group, Inc., and its consolidated subsidiaries. All of our operating companies, the service center, standard bearer, and the insurance captive are operated by separate, wholly owned, independent entities that have their own management, employees, and assets. References herein to the consolidated company and its assets and activities as well as the use of words like we, us, our, and similar terms are not meant to apply, nor should it be construed as meaning that the enzyme group has direct operating assets, employees, or revenue, or that any of the subsidiaries are operated by the enzyme group. Also, we supplement our GAAP reporting with non-GAAP metrics. When viewed together with our GAAP results, we believe that these measures can provide a more complete understanding of our business, but they should not be relied upon to the exclusion of GAAP reports. A Gap to Non-Gap Reconciliation is available in yesterday's press release and is available in our Form 10-2. And with that, I'll turn the call over to Barry Port, our CEO. Barry?
spk07: Thanks, Chad, and thank you for joining us today. We're proud to report another strong quarter and are pleased that we have been able to continue to improve our clinical and financial results across our portfolio. We are grateful for the efforts and commitment of our teams, caregivers, and leaders who work endlessly to love one another and support each other which allows for the high quality patient outcomes they consistently achieve. In spite of yet another quarter of impressive results, we also recognize that there are many opportunities to improve on certain operational fundamentals, both in existing operations and the growing number of new acquisitions. During the quarter, we experienced steady improvement in occupancies, Medicare revenue, and managed care revenue. Our operators also achieved sequential growth in overall occupancy for the seventh consecutive quarter. Our operations experienced strong quarter-over-quarter growth in skilled mixed revenue with same store skilled mixed revenue of 54% and transitioning skilled mixed revenue of 48%. Additionally, we saw continued improvement in occupancy with same store and transitioning operations increasing by 2.4% and 5.3% respectively over the prior year quarter. Recently, the federal government extended the state of emergency to January 2023, which keeps in place many of the regulatory and other forms of assistance helpful to patient care. We continue to benefit from improved Medicaid funding in several states. While we certainly can't know for sure what the COVID future looks like, it is possible that this additional funding will not continue to be extended. Given the improvements we continue to see in occupancies, skilled mix, and reimbursement, we are raising our annual 2022 earnings guidance again to $4.10 and $4.18 per diluted share, up from the previously increased guidance of $4.05 to $4.15 per diluted share. In addition, we are raising our annual revenue guidance to $3.01 billion to $3.03 billion, up from the previously increased revenue guidance of $2.96 billion to $3 billion. The new midpoint of this 2022 earnings guidance represents an increase of 14% over our 2021 results and is 32% higher than our 2020 results. We remain confident that our operating model will continue to allow each operator to form their own market-specific strategy and to adjust to the needs of their local medical communities, including methods for attracting new healthcare professionals into our workforce and retaining and developing our existing staff. We are very excited to be adding new operations in several geographies. These transitions will take time, particularly given the continued labor pressures, but with each new operation, we are creating new opportunities for the next generation of leaders and look forward to working together to help each operation reach its enormous clinical and financial potential. An important part of the Insight story has been our local leaders' ability to acquire struggling operations and transform them into facilities of choice for their communities. We are confident that as we diligently apply our proven principles, all of our recently acquired operations will become high-performing, end-sign caliber operations. To be clear, when we evaluate our expanding portfolio, we see more organic growth potential within our existing portfolio than ever before. Combine that with a number of very attractive acquisition opportunities we see on the near and far horizon, And we are poised to again showcase our ability to find, acquire, and transition performing and underperforming operations by applying proven InSign principles developed over two decades. As we relentlessly follow and protect the cultural fundamentals that got us here, we are confident that we will continue to consistently produce world-class clinical and financial performance. Next, I'll ask Chad to discuss our recent growth. Chad?
spk08: Thank you, Barry. As we expected, we continue to add to our growing portfolio and are very excited about the 17 new operations we added during the quarter and since, making this one of the biggest acquisition quarters in several years. All of these additions were carefully selected amongst the many opportunities that came our way so far this year and were chosen because of the enormous clinical and financial potential we saw in each operation. We have mentioned many times that we were seeing many opportunities, but that a pricing that was still, in our view, too high in many cases. However, as the consummation of these recently announced deals show, we have seen pricing improve in certain pockets. We have been patient and are very excited to see our discipline paying off with a successful addition of these additional operations, all of which represent significant potential for operational and financial improvement. We look forward to seeing them contribute to the success of their clusters and their markets as they implement proven enzyme operational and clinical principles. These operations include a healthcare campus and a skilled nursing operation in Arizona, one skilled nursing operation in Nevada, two skilled nursing operations in South Carolina, and 12 skilled nursing operations in Texas, totaling an additional 2,276 new operational beds. While most of them are located in some of our more mature geographies, like Arizona and Texas, others are in relatively new healthcare markets for us, like South Carolina and Nevada. We are particularly excited about doing our first set of acquisitions in South Carolina since we entered that state several years ago. As we've said before, entering new states is challenging and can often take time to gain the trust of the local healthcare community. With this new growth in South Carolina, we hope that we will be able to continue to build the Enzyme footprint in the Mid-Atlantic region. In total, Standard Bear added seven new real estate operations, all of which will be leased to an Enzyme-affiliated tenant, and Enzyme affiliates entered into 13 new long-term leases with third-party landlords. As this recent activity illustrates, the ratio between leased and owned will vary depending on the circumstances. We are first and foremost focused on the operational health of acquisitions. So when it makes sense and the pricing is right, we will opportunistically purchase a real estate. At the same time, when attractive long-term leases come our way, we'll sign those too. As we've shown over our 23-year history, there will be many opportunities to do both. Looking forward, we have another busy fall and winter ahead of us and are preparing for even more growth in 2023. While we expect the pace of closings to slow for the remainder of the year, we continue to see a wide range of large, medium-sized, and small portfolios, some of which are strong performers, that we expect to participate in early next year. With our locally driven operating model, we have lots of operational bandwidth to grow across dozens of markets. And with our recently updated credit agreement and a healthy amount of cash on hand, we have a lot of dry powder to grow and expect some of the industry-wide changes to lead to even more opportunities in the near and long-term future. We continue to provide additional disclosure on Standard Bear, which is now comprised of 102 properties owned by the company and leased to 74 affiliated skilled nursing and senior living operations, and 29 senior living operations that are leased to the tenant group. Each of these properties is subject to a triple net long-term leases and generated rental revenue of $18.7 million for the quarter, of which $15 million was derived from Enzyme-affiliated operations. Also for the quarter, Standard Bear produced $12.5 million in FFO as of the end of the quarter, had an EBITDA to rent coverage ratio of 2.2 times. Lastly, during the quarter, we paid a quarterly cash dividend of $0.055 per share. Given our strength, we plan to continue our 20-year history of paying dividends into the future. We also continue to delever our portfolio, achieving a lease-adjusted net debt to EBITDA ratio of two times. Currently, we have $593 million of available capacity under our line of credit, which, when combined with the cash on our balance sheet, gives us nearly $900 million in dry powder for future investments. We also own 107 assets, of which 102 are held by Standard Bear, and 83 of which are owned completely debt-free and are gaining significant value over time, adding even more liquidity to help us with future growth. And with that, I'll turn the call back over to Spencer, our COO, to add more color around operations. Spencer?
spk04: Thanks, Chad. As Barry and Chad have indicated, an important part of our story has been our local leaders' ability to acquire struggling operations. and transform them into ensign caliber operations. We also want to be clear that while our teams are urgent and decisive in taking steps to quickly improve the operations we acquire, our primary commitment in acquisitions is building sustained performance and long-term value. This is important because after years of COVID-related challenges, expiring emergency funding from the government, and in the midst of a very difficult staffing environment, Many of the deals we're seeing, including the recently acquired facilities, are deeply distressed operations. The past couple of years have been very difficult for skilled nursing operators, and we see evidence of that in the low occupancy, high utilization of contract labor, and poor clinical and financial health of the facilities we recently acquired. However, we are confident that as our clusters and resource teams continue to infuse culture, and systems into these facilities, they, like the hundreds of others that we've transitioned over the past few decades, will become sustainable, quality operations that provide strength to our organization while benefiting the communities they serve. Notably, many of the acquisitions of the past few months are located in Texas, and so we'd love to share an example of a Texas facility that was acquired a few years back to illustrate the post-acquisition turnaround process that continues to be so fundamental to our long-term success. On November 1st, 2019, we acquired Westover Hills Rehabilitation and Healthcare, a 124-bed skilled nursing operation located in San Antonio, Texas. This operation was a one-star facility when we acquired it, and it suffered from a poor reputation in the community, which was evident in persistent staffing challenges, low occupancy, and poor survey results. In spite of these challenges, Jerry Hoyler, Executive Director, and Jenny Rodriguez, Nurse Practitioner and Director of Nursing, saw boundless potential in the facility. They forged a strong partnership and built a culture of developing staff and increasing clinical competence. For example, to ensure adequate staffing in an extremely tight labor market, they became one of just a few facilities in Texas to be approved and licensed to have their own CNA classes. At the same time, they pursued partnership agreements with multiple nursing schools in their area and became a training site for LPNs and RNs. Because people want to work at Westover Hills, they have increased their clinical competency, which enables them to accept high-acuity admissions and deliver great outcomes and to increase their CMS quality rating to five stars. As a result, hospital systems and managed care organizations have chosen Westover Hills for preferred partnership agreements. This has led to an incredible 225% increase in managed care days compared to Q3 from last year, while overall occupancy has jumped by over 25% during that same period. As you would expect, financial results have followed. Revenue has increased over the prior year quarter by 32%, while EBIT has improved by an incredible 151%. While these changes didn't happen overnight, the tireless efforts of the Westover team in doing the right things for their residents, staff, and their community has built a sustainable ensign caliber operation that will produce exceptional results long into the future. The second example comes from South Carolina. We entered the state back in 2016, and since then, our talented leaders at the four existing facilities have relentlessly strengthened their results. to the point where each facility is financially solid and has achieved an overall CMS rating of four or five stars. Because of these results, our local teams have determined that they are strong enough to help bring on new growth, as evidenced by our recent announcement of acquisitions in that state. For example, Opus Post-Acute Rehabilitation is a skilled nursing facility in the Columbia metro area. It is led by Administrator Andrew McQuillan and Director of Nursing, Amanda Cussworth. These two leaders have helped turn Opus into a facility of choice. In addition to cutting their clinical turnover rate in half, they have grown occupancy by 18% and skilled revenues by 58% over Q3 of 2021, all without using any contracted labor. These results in combination with similar progress in the other three cluster facilities have allowed the Opus team to play a very active role in supporting the two new South Carolina acquisitions. And now they are hard at work helping these new partner operations begin their own similar transformation. We hope that these examples are helpful in illustrating some of the many different levers that our local operators are pulling in order to meet the needs of their health care continuing partners. With that, I'll turn the time over to Suzanne to provide more detail on the company's financial performance and our guidance. Suzanne?
spk03: Thank you, Spencer. Good morning, everyone. Detailed financials for the quarter are contained in our 10Q and press release filed yesterday. Some additional highlights from the quarter include the following. Gapped diluted earnings per share of $0.99, an increase of 19%. Adjusted diluted earnings per share was $1.04, an increase of 14%. Consolidated gaps and adjusted revenues were both $770 million, an increase of 15%. Gapped net income was $56.2 million, an increase of 19%. And adjusted net income was $59.2 million, an increase of 14%. Other key metrics as of September 30th include cash and cash equivalents of $309 million and cash flow from operations of $222 million. We also wanted to address the current status of the state of emergency and reimbursement matters. Recently, HHS extended the public health emergency for another 90 days. With this extension, the federal government will continue to provide various waivers and enhance FMAP funding through January 11, 2023. Also, on October 1, 2022, the PDPM Medicare payment rate increased by 2.7%, which included a net annual market basket increase of 5.1% that incorporated a positive forecasting error and a negative productivity adjustment, offset by a negative 2.3% parity adjustment. Additionally, as a reminder, the full 2% sequestration is back in place on July 1st, 2022. As Barry mentioned, we are once again raising our 2022 annual earnings guidance of $4.10 to $4.18 per diluted share, and annual revenue guidance to 3.01 billion to 3.03 billion. This guidance is based on diluted weighted average common shares outstanding of approximately 57 million, a tax rate of 25%, the inclusion of acquisitions close to date, and the inclusion of management's expectation on reimbursement. With the primary exclusion coming from compensation, a one-time legal fee, gains on the sale of assets. Additionally, other factors that could impact quarterly performance include variations in reimbursement systems, delays and changes in state budgets, seasonality and occupancy and skills mix, the influence of the general economy on census and staffing, the short-term impact of our acquisition activities, variations in insurance accruals, surges in COVID-19, and other factors. And with that, I'll turn the call over to Barry. Barry?
spk07: Thanks, Suzanne. We'd like to apologize for the earlier delay due to technical difficulties, and we also just want to thank you all for joining us today. Once again, express our appreciation to our shareholders for their continued confidence and support. It's always important to conclude by recognizing our local leaders, service center partners, and field resources for their heroic efforts, along with those of our nurses, therapists, and other frontline care providers. who continue to provide industry-leading example of life-enriching service to our residents, coworkers, and communities. We simply would not be who or what we are today without their incredible ownership and personal sacrifices. Everyone mentioned is working tirelessly to love one another as they provide a wonderful experience for our residents and patients in spite of the challenges they continue to face. So thank you for making us better every day. We'll now turn to the Q&A portion of our call. Andrew, can you please instruct the audience on the Q&A procedure?
spk05: Certainly. As a reminder, ladies and gentlemen, to ask a question, you will need to press star 1-1 on your telephone. Once again, to ask a question, please press star 1-1. Please stand by while we compile the Q&A roster. And our first question comes from the line of Tao Chiu with Stifel.
spk02: Hi, good morning guys. So Barry and Suzanne, you talk about the phasing out of some temporary state relief next year. Just thinking about the various drivers and the recovery in Arkansas is still in progress. Still makes me normalize and we got, you know, the Medicare rate update across some pretty strong Medicaid rate increases. So could you maybe give us some pointers on how we should think about the revenue building blocks for, you know, in terms of growth for 2023 and whether we can see the impressive 8% organic growth that you achieved this quarter. Maybe that will moderate, but maybe offset by higher transitional performance, similar to the two examples that Spencer highlighted, and obviously more acquisitions. And how about an early read on the labor cost for next year as well?
spk07: Okay, I'll try to remember all those, Tal. I'll start with the revenue side. I mean, obviously, there are some Some pieces to the revenue picture next year that aren't entirely clear, but for the most part, there's a lot of visibility into kind of where we're headed. I feel like CMS has been really thoughtful about the changes they've made within the confines that they operate, and so we have a good outlook there. On the state side, obviously, the overhang there would be on the FMAP funding and whether or not the state of emergency continues. That all said, we have really good visibility into our state-by-state funding for the most part. Whether the state of emergency sticks with us or not, we have in our larger states like Arizona and California and some of our other states, we've got good long-term visibility into our rates for 2023 that will be stable regardless of the state of emergency and FMAP funding. We also have a pretty clear indication that in Texas, one of our bigger states, that a rate increase is on the horizon, a really healthy increase that's much needed. The only piece that's uncertain there is on the on the timeframe between when the potential FMAP funding might go away and when the rate increase would happen towards the latter half of the year. And that's a piece that will become more clear over the next couple of months. And that's really kind of the only piece of the picture that isn't entirely clear for us. So overall, we feel really good about the revenue picture for 2023 and how it's shaping up. On the other front, you know, I would just tell you, you know, the fundamentals behind our revenue, which is obviously occupancy, we feel really strongly about our continued progress that we've had through this last quarter. But also, more importantly, the six preceding quarters where we've had very stable, steady growth, regardless of whatever COVID challenges we've faced. And that's been very encouraging for us. to see that trend continue in spite of what is typically somewhat of an up and down road as we experience seasonality. And so we feel real confident about that. As far as the labor environment goes, we were seeing some really good indicators going from first to second quarter where we saw our agency utilization drop When we entered into the third quarter, as you know, we experienced quite a large step up in COVID cases that affected both our patient population as well as our employees. We had 80% growth in both those populations, both employees and patients. And obviously, when you've got a situation like that, you tend to go backwards a little bit on your progress with agency. But that all said, in spite of that, because of the offset we saw in our really good skilled mix and the acuity level of the patients that we were taking care of, we were able to mitigate a lot of that. We expect our progress to continue on our decreasing agency utilization rate. And amongst our affiliated entities, we also see indicators that our wage growth is stabilizing. It's the lowest it's been since last year in terms of quarter-over-quarter wage growth. It's not that we expect that the labor situation will moderate in the near term. It'll probably take several quarters for us to get to more of a stable, steady state. But that said, our expectation is that we'll continue to see progress, especially when we're not dealing with ups and downs of COVID cases. But that all said, even when we do have COVID surges that affect our operations, I think we've shown and we feel confident that we'll be able to deal with it, even if we have to have a temporarily increased utilization of agency labor.
spk02: got it thanks for the great color um my phone up is for chad you know i saw in the press release that you said you expect some that you expect the pace of deal closing to slightly slow down in the next few months i think spencer also mentioned some deals that you recently closed a more distressing nature just curious and if you are seeing more macro uncertainties out there or is this slow down anything you need to the type of transaction you're working on
spk08: Yeah, no, great question, Tal. Thanks for that. It's really just a matter of, you know, just the rhythms of the deals and closings and, you know, the timeline that it takes to get licenses in place and those sorts of things. So there's probably no science really around that so much. We will have some deals that will happen throughout, you know, the remainder of the year, but Just, you know, 17 and a quarter is, you know, a significant amount. And certainly, you know, in certain markets, you know, like the Austin, Texas market just added, you know, four buildings. And so, you know, the way our model works, right, is each local geography is, you know, responsible to transition those new operations. And in doing so, you know, they often – leave their existing building to go support the new operation. And so our bandwidth to grow varies by geography and based on the number of deals we've done in that particular geography. So that's also probably something just to mention that we always keep in mind. When we have a big surge in deals, we want to make sure we're able to digest those and transition them the right way. That said, doing four deals in Austin, Texas doesn't impact our ability to grow in Houston or obviously other states. We definitely continue to see a healthy pipeline of opportunities and are excited about the deals that we see on the near-term horizon and You know, at this point in the year, you know, unless the deal is pretty far along, it's likely to slip into next year. And so that's a little bit why we're kind of guiding towards, you know, next year, you know, Q1 is maybe the next quarter where we see some, you know, some more significant growth activity. So hopefully that helps.
spk02: Great. It certainly does. Thank you.
spk05: Thanks. Thank you. And our next question comes from the line of Scott Fidel with Stevens.
spk01: Great. Hi. Thanks. Good afternoon. First question, just wanted to just pick back up on occupancy and, you know, you've had a pretty sort of predictable ramp in recovery and occupancy that you've been talking about now and we've been seeing for a while. Just interested as we sort of look ahead now to both the fourth quarter and then into 2023, you know, how you're thinking about sort of occupancy trends. Would you expect to see sort of that continued, you know, ramp higher? Or is there any seasonality that you would also call out that we should be thinking about too?
spk07: Yeah, look, I mean, I think it's a great question, Scott. And, you know, it's obviously one that we're focused on a bunch operationally. And, you know, I think there's a pretty high degree of confidence that our trend will continue. You know, we're, you know, sitting on a same-store basis, you know, almost 77%, which is getting really close to kind of where we were, you know, pre-pandemic. We have several markets that are ahead of their pre-pandemic occupancy. It's more of the kind of rural markets and secondary markets that kind of take their time to build back. But, you know, fundamentally, I think we feel – optimistic that the pace will continue. It typically accelerates in the fall. So I wouldn't be surprised for a rate of growth in the fall. It's higher than is typical. And that might, you know, accelerate our ability to get that closer to kind of where we were before. But, you know, that is one area that we look at is kind of getting back to pre-pandemic occupancy. I think our thought and expectation, though, is that there's so much potential in so many of these operations that our sites are well beyond kind of pre-pandemic levels. I think our feeling is that we'll continue to see growth for quite a while.
spk01: Okay, got it. And then just, I know we've drilled into pricing across the payer classes quite a bit. Would be interested just if you could give us an update on your managed care contracting for for 2023? You know, how are your updates looking in terms of factoring in the inflationary environment? And then just interested just, you know, with some of the Medicare Advantage plans and, you know, some of the focus around value-based contracting, if there's any, you know, sort of new or innovative contracts that you're exploring, you know, when you think about your commercial managed care payers.
spk03: Yeah, thanks for the question. It's a good one. You know, as we've been talking to with a lot of our managed care payers, they are starting to recognize the additional inflation, both on the wage front and other supplies front. And so definitely looking at and in negotiation with a lot of them to have higher than typical rates going into next year as a recognition of that additional inflation on the wage as well as supply front.
spk01: Okay, and then just the last quick one. Just on adjusted EBITDA margins all in, you know, you settled at around 12.5% in the 3Q. Just interested as, you know, how you see that as the jumping off point for fourth quarter. And obviously there's a number of moving takes, you know, to 2023, and you haven't gotten a guidance yet. But would you view this as being in the range of what you would see as a sustainable sort of margin in terms of, you know, what you've been producing looking out at the third quarter? Max, and that's it for me.
spk07: I'll start, and Suzanne can add any color. Yes, I think so. I mean, you know, with the high acquisition activity, there's some obvious, you know, pressure on margins. Whenever we acquire a bunch, we typically see higher expenses in the beginning. The offset, though, thankfully with the timing of this growth is that, you know, we'll see the full impact of our Medicare increase. We'll we start to see some of the state increases kick in more fully during the fourth quarter as well. And so I think all in all that sets the stage for what we think is a pretty stable margin going from Q3 to Q4. Yeah.
spk03: And I think the other X factor always is the COVID. But again, what you've seen us do every single time when COVID does come in is that we grow revenue. They've got the revenue growth with maybe a little bit higher cost of services on that. But overall, it's done well and kind of consistent with what we saw come in during Q3.
spk02: Okay. Thank you.
spk05: Thank you. And our next question comes from the line of Ben Hendricks with RBC Capital Markets.
spk06: Hey, thanks, guys. Most of my questions have been answered, but just a quick numbers question on standard bearer. Can you guys offer any guidance on the total rental revenue and FFO on a run rate basis suggested for the, I guess, the pro forma contribution of the real estate acquisitions that you guys have done over the past quarter? Thanks.
spk08: Yeah, appreciate the question, Ben. There really was only one. So, yeah, it certainly isn't a material increase or change there, but I know, Suzanne, anything else we can...
spk03: Yeah, I would say, you know, that there's one that's happening in the Q4, and then you see the other ones already in. So, the ones that happened during the quarter, those three that occurred, are already in the Q3 number. So, it's going to be just a small increase. It's not going to be a large increase kind of running into Q4.
spk06: Okay. Thank you very much.
spk05: Thanks, Ben. Thank you. and I'm showing no further questions. So with that, I hand the call back over to CEO Barry Port for any closing remarks.
spk07: Thank you, Andrew, and we'd like to thank everyone for joining us today. Once again, we appreciate your time and support and hope you have a great day. Thanks, everyone.
spk05: Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may now disconnect.
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