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spk01: Good day and thank you for standing by. Welcome to the Insight Enterprises Inc. Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. Thank you. I would now like to hand the conference over to your speaker today, Glynis Bryan, Chief Financial Officer. Please go ahead.
spk02: Thank you. Welcome, everyone, and thank you for joining the Insight Enterprises Earnings Conference Call. Today, we will be discussing the company's operating results for the quarter ended September 30th, 2021. I'm Glynis Bryan, Chief Financial Officer of Insight, and joining me is Ken Ramnik, President and Chief Executive Officer. Today, we also welcome Joyce Mullen, President, Insight North America, who will succeed Ken as her President and Chief Executive Officer, effective January 1st, 2022. If you do not have a copy of the earnings release of the accompanying slide presentation that were posted this morning in front of the Securities and Exchange Commission on Form 8K, you will find them on our website at insight.com under Investor Relations section. Today's call, including the question and answer period, is being webcast live. and can be accessed by the investor relations page of our website at insight.com. An archived copy of the conference call will be available approximately two hours after completion of the call and will remain on our website for a limited time. This conference call and the associated webcast contain time-sensitive information that is accurate only as of today, November 4, 2021. This call is a property of Insight Enterprises. Any redistribution, retransmission, or rebroadcast of this call in any form without the express and consent of Inset Enterprises is strictly prohibited. In today's conference call, we will be referring to non-GAAP financial measures as we discuss the third quarter 2021 financial results. When discussing non-GAAP measures, we will refer to them as adjusted. You will find a reconciliation of these adjusted measures to our actual GAAP results included in either the press release or the accompanying slide presentation issued earlier today. Please note that unless highlighted as constant currency, all amounts and growth rates discussed are in U.S. dollar terms. As a reminder, all forward-looking statements that are made during the conference call are subject to risks and uncertainties that could cause our actual results to differ materially. These risks are discussed in today's press release and in greater detail in our most recently filed periodic reports and subsequent filings with the SEC. With that, I will now turn the call over to Ken, and if you're following along with the slide presentation, we will begin on slide four. Ken?
spk06: Thank you, Glynis. Good morning and thank you for joining us today in what will be my last earnings conference call as President and CEO of Insight. I'm delighted to hand this responsibility off to Joyce on future calls and I'm confident about Insight's future under her strong and capable leadership as she steps into the role of President and Chief Executive Officer on January 1st. As we all support Joyce in her transition to this new role at Insight, we remain committed to delivering on her financial objectives and long-term priorities. As a reminder, our long-term priorities are to continue to innovate to capture share in high-growth areas, grow with solutions that drive business outcomes for clients, expand and scale our strategic clients and markets, and demonstrate client obsession by optimizing client experience with operational excellence. Now turning to the third quarter of 2021 and operating results on slide five. We had an excellent quarter driven by 26% top-line growth, including hardware growth of 36% compared to prior year. We delivered a double-digit increase in adjusted earnings from operations up 30% compared to last year's third quarter. Hardware booking trends continued strong throughout third quarter, while supply constraints did not ease up as originally anticipated throughout the supply chain. We continue to support our clients by helping them better forecast their IT needs. We exited the third quarter with elevated hardware backlog above levels at the start of the quarter. We expect about 50% of this backlog will shift in Q4. We're pleased to see the pipeline for future sales continue to build to healthy levels into 2022. Clients continue to focus on business agility and continuity by leveraging the cloud solutions, a trend that increased in pace during the pandemic. Through our deep expertise delivering digital solutions, we've grown sales of both SaaS and infrastructure service mid to high-divided sales growth for the quarter. This drove cloud gross profit to 21% of total gross profit, up more than 200 basis points year over year for the trailing 12 months. Over the last 18 months, we've seen a rapid acceleration of digitalization. IT has gone from supporting the business to becoming the business in many industries. For our clients, challenges arise and growth can be impaired if necessary investments in technology and transformation strategy are deferred or poorly implemented. It incited me to bring a wealth of knowledge and share best practices that help point our clients in the right direction to reimagine how they work. And a recent example of this in slide six, we helped a client migrate their on-premises data centers to the cloud as part of a shift to digital headquarters. Our client, a food services chain with 250 locations across the U.S., India, and Thailand, recognized that eliminating its physical headquarters would require replacing on-premises data centers with a cloud solution. Because our client has a long-standing relationship with Insight, they knew we offered the expertise and experience to advise and support every step of the migration process. The Insight professional services team worked with the client on a cloud economics assessment to better understand which workloads would be moved as part of the migration and which cloud solution provider would be the best fit. The Insight team walked the client through the right-sizing process to determine the configuration needs for its new cloud-based data center. At Insight, what started as a professional service engagement now includes ongoing managed services, providing our client greater flexibility, better redundancy and resiliency, and improved operation and automation for net new workloads that have migrated to the cloud. Whether our clients are reimagining their workplace or looking to evolve with IT in today's digital-first business climate, organizations are seeking more guidance on how to navigate these key changes. These include the shift to the intelligent edge, multi-cloud and hybrid environments, and managing spend as they move from traditional IT procurement to as-a-service consumption models. On slide seven, one example of innovation changing the way our clients do business is in wireless connectivity, which has become an increasingly critical part of everyday life. We combine innovative services and strategic partnerships to offer a full suite of integrated network and security solutions to our clients. We achieved the designation of 5G for enterprise branch specialization from CradlePoint, a global leader in cloud-delivered LTE and 5G wireless edge solutions. With this designation, we're positioned to sell CradlePoint's comprehensive portfolio of 5G solutions. These capabilities are pivotal to delivering fast and consistent communication required for edge computing. Through these efforts, our clients are enhancing their business through 5G secure connections and taking a step towards the future. The Insight CreativePoint partnership represents our commitment to offering innovative services in a way that takes the complexity of adopting next-generation technologies by assessing the unique needs of our clients, building a strategy to embrace the best solutions, and then delivering and supporting those solutions for lasting success. Our end-to-end skill set across our broad portfolio promises a faster, more strategic way to implement innovative technologies. We will continue to make the strategic investments and go-to-market solution areas in order to achieve our long-term priorities and drive value for our shareholders. Our long-term priorities are aligned to deliver on our financial commitments. We continue to be pleased with the execution this year and remain optimistic about the prospects for the supply chain and market recovery continuing to strengthen into 2022. Today, we increased our outlook for 2021 from our previously issued guidance, which reflects continued progress towards these goals, as well as our long-term goals that we outlined at our Investor Day in late 2019. I'll now hand the call back over to Glynis to review the details of our financial performance.
spk02: Thank you, Ken. In the third quarter of 2021, we continued as well against our financial and strategic priorities, posting continued growth across our business. We accomplished these results while continuing to invest in strategic areas to scale and support our future growth. Moving on to slide 10 and 11 for our consolidated results. Our net sales in the third quarter were $2.4 billion, up 26% in U.S. dollars and 25% in constant currency compared to the third quarter of 2020. This represents record net sales per insight. Higher hardware net sales of 36% drove gross margins of 14.9%. SG&A expenses were up 12.6% year-over-year in constant currency, and 13.8% in U.S. dollars. As a percentage of net sales, adjusted SG&A was 11.1%, down 110 basis points year-to-year, and in line with our expectations for the quarter. As a percentage of net sales, SG&A in a gap basis was 11.4%, down 130 basis points year-to-year. For the full year, we continue to expect adjusted SG&A as a percentage of net sales will be around 11.7%. Adjusted earnings from operations was $93.5 million, up 30% year-over-year, compared to a 35% increase in earnings from operations on a GAAP basis. And adjusted diluting earnings per share was $1.87, up 36%, and $1.51 per share on a GAAP basis, an increase of 37%. Moving on to the results of each of our operating segments and starting with North America on slide 12. Net sales were $2 billion in the third quarter, up 30% year-over-year, primarily related to an increase in hardware net sales of 38%, driven by devices, networking, and storage solutions, and services primarily related to cloud. Similarly to the last quarter, as a result of continued supply constraints and extended product lead times, we're entering the fourth quarter with higher backlog. We expect about half of this to ship out within the quarter. Gross profit of $296 million in North America was up 20% year-over-year, and gross margin was 14.7% compared to 15.9% in the prior year. North America's adjusted SG&A increased 16% year-over-year, which represents 10.5% of net sales. The increases were driven by investments in overall team and headcount and other employee expenses, as well as variable compensation due to higher gross profit attainment on our new variable compensation plans implemented this year. SG&A's percentage of net sales on a GAAP basis was 10.9% in the third quarter. For the full year of 2021, we continue to expect adjusted SG&A's percentage of sales will be 11.3%. Adjusted earnings from operations increased 31% year-over-year to $84 million for the quarter. On a GAAP basis, earnings from operations increased 37% year-over-year to $74 million. Moving on to our main operation on slide 13, net sales in the third quarter increased 7% year-over-year in constant currency to $381 million due to an increase in hardware net sales driven by increased volumes to corporate clients and services, primarily inside delivery services and cloud solutions. Gross profit increased 6% year-over-year in constant currency. We invested in the business, resulting in a 6% increase in SG&A, which led to adjusted earnings from operations of $6 million in the current quarter, up 3% in constant currency. Moving on to APAC on slide 14, net sales of $46 million and gross profits of $13 million in the third quarter increased 21% and 26%, respectively, year-over-year in constant currency due to increases in hardware net sales driven by large transactions with corporate and enterprise clients and services, primarily insight-delivered services. Adjusted earnings from operations of $4 million in the quarter were up 52% in constant currency. Moving on to our tax rate, our effective tax rate for the third quarter of 2021 was 25.4% compared to 23.8% in the prior year quarter. The higher effective tax rate was primarily due to beneficial changes in tax laws that were issued during the prior year, which did not recur in 2021, partially offset by current tax benefits related to equity compensation. turning to the details of our third quarter cash flow performance on Thrive 15. Year-to-date through the third quarter of 2021, we invested in our operations and used $118 million of cash compared to cash generation of $462 million during the same period last year. The decrease year-to-year is due to a 36% increase year-over-year in hardware net sales, changes in partner mix, including increased volume with distributors and associated early pay terms, as well as an increase in inventory purchase to support clients year-over-year, which contributed to increased use of cash, resulting in low cash flow from operations generated year-to-date September 2021 compared to the prior year. In addition, there were discrete items in 2020 totaling $180 million that consisted of partner payment deferrals and a customer advance payment in the prior year with no comparable activity in the current year, and deferred federal and other taxes through COVID-19 relief measures in the first nine months of 2020. We saw hardware growth of 36% in the third quarter, above our original expectations for the quarter. We now expect double-digit hardware growth in Q4, which will further impact our cash flow generation. Our current estimate of cash flow from operations for the full year 2021 is between $50 to $75 million. In the first nine months of 2021, we invested approximately $28 million in capital expenditures, mainly related to technology and facility investments. We also received $27 million in net proceeds from sales tree buildings in Tempe, Arizona, and our property in Woodbridge, Illinois. Lastly, we used $50 million to repurchase shares of our common stock in Q2. We continue to have $75 million remaining under our share repurchase authorization. As of September 30th, 2021, we had approximately $1 billion available under our ABL facility, and we had ample capacity to fund future growth. At the end of the third quarter, we had a cash balance of $107 million, of which $91 million was resident in our foreign subsidiaries. We had $527 million of debt outstanding, including our senior convertible notes at the end of the quarter, compared to prior cash balance of $75 million, and total debt of $293 million. Moving on to liquidity on slide 16, we exit the quarter with a leveraged position at 1.3 times debt to cash flows, or EBITDA, which is well within our level of comfort. Under our ABL agreement, our primary compliance covenant is a fixed charge coverage ratio, which includes 12 months EBITDA coverage over capital expenditures, interest, and cash interest. As of September 30th, we're at 4.3 times the minimum requirements at 1.0 times, and we're confident that we can support our capital requirements on liquidity needs. For the full year guidance on slide 17, we're increasing our previously issued guidance for 2021 that we discussed in our call last quarter. We now expect to deliver low double-digit net sales growth over the prior year, and we expect adjusted earnings per share for the full year of 2021 to be between $7 and $7.10. This outlook assumes interest expense between $25 to $28 million, an effective tax rate of 25% to 26% for the full year 2021, capital expenditures of $65 to $75 million, including the build-out of our new corporate headquarters, and an average share count for the full year of 35.5 million shares. This outlook excludes acquisition-related intangible expenses of approximately $32 million, the non-cash convertible debt discount and issuance costs, reported as part of interest expense of approximately $12 million, and assumes no acquisition related with severance and restructuring expenses. I will now turn the call back to Ken.
spk06: Thank you, Glynis. I'd like to thank our Insight teammates for all we've accomplished during my tenure. Together, we have transformed Insight and begun the journey to become a global solutions integrator, helping solve our clients' most pressing challenges. We've seen revenue grow from $4 billion to $9 billion, and adjusted diluted earnings per share on an annual basis grow from $1.08 to over $7. Most importantly, we've seen Insight become a best place to work with numerous recognitions throughout our global locations, and as evidenced by Forbes' recent release last week, the top global companies were Insight ranked number 95 overall and number 12 for all technology companies. It has been my greatest professional honor to lead this amazing company, to work alongside our incredible teammates around the world and join forces with our partners to serve our clients. Not only is Insight a great place to work for our teammates, but we are creating value for our shareholders, partners, and clients in all we do. That concludes my comments. Thank you again for joining us today. And we'll now open up the line for your questions.
spk01: Thank you. And as a reminder, to ask a question, you will need to press part one on your telephone. Again, that's bar one on your telephone. Please stand by while we compile the Q&A roster. Your first question comes from the line of Matt Sherine from CISL. Your line is open.
spk03: Yes, thank you, and good morning. My first question, Ken, just sort of around the gross margin and also just the strength of hardware. Could you maybe be a little bit more specific in terms of that mix there? Was it more client devices versus solutions? And if it's on the infrastructure side, I would think there would be more services attached to that, meaning offset the margins. So could you give us a little bit of color on that mix?
spk06: Yes, we discussed that we had 36% hardware growth, pretty significant. Certainly the biggest portion of that was in the device area, as we continue to see constraints and tremendous demand in that area. So that was the biggest portion. But in that mix, we did see certainly high single-digit growth in our data center products as well. So even though there were constraints, there's still product flowing in there. But again, the majority of it being certainly in the device category.
spk03: Okay. And by devices, are we talking about, like, commercial notebooks and desktops?
spk06: Yeah, the biggest portion, of course, being notebooks, which, of course, has really accelerated. Desktops continues to be a good piece, but it's declining certainly from where it was prior to the pandemic. And there's, you know, there's handhelds in there, which, you know, is classified as iPad-type devices. And there is some certainly smartphone devices in there that we also utilize, really not for consumer use, but certainly for aspects really more like, you know, a mini iPad kind of a situation. So that's what we would call on the device area. But the biggest portion of that by far is notebooks.
spk03: Got it. And in terms of your outlook for Q4, backing into the outlook for the year, it looks like you're going to be up modestly one or two points, perhaps sequentially. Typically, there's a little bit more seasonality, I know, in your business, particularly in in Europe and then also in North America Enterprise. So were there pull-ins in the quarter? You know, why you're not going to be up that much sequentially? Or are the product constraints a part of that as well?
spk06: Yeah, I think it's certainly all of the above. And then, of course, you've also got to look at, you know, Matt, the comparison as well. Q3 compared to last year was certainly far easier than Q4 is when it started to really recover. As you might recall, and we did have growth in Q4 last year. So I think it's that combination is what you're seeing there. So nothing abnormal. I think the supply constraints are going to continue as we all know for a bit. But again, we also have to keep in mind that we did grow hardware 36%, so it's not like it's a tremendous constraint. I think it's working through the system. And the good thing about that is it will lead to, I believe, you know, next year where people are talking about devices decline, and certainly Gartner's predicting that. We don't see that at all. We think that devices are going to continue to be strong through 2022 because there's so much pent-up demand that's not being supported. And clients are basically increasing sort of their cycle. And instead of refreshing sooner, they're having to basically sweat those assets longer. So I believe it bodes well for the next year or two for devices as well.
spk03: Okay. And just lastly, looking at the Q4 gross margin, based on the SG&A guide, you can back into it looks like an increase in gross margin sequentially. Is that, again, a mix-based reason where, you know, more services or less hardware mix?
spk06: Yeah. So, Matt, you're spot on.
spk02: It's going to be the fact that hardware, while it's continuing to grow, there's low double-digit growth in Q4. It is not at the same pace as the 36% we saw earlier. So the impact of hard-run overall gross margins is a little bit more muted in Q4 than it was in Q3.
spk03: Okay. Well, thanks very much. And, Ken, congratulations on your career at Insight. And, Joyce, best of luck to you.
spk00: Thank you.
spk03: Thanks, Matt. Appreciate it.
spk00: We'll be with you in a few moments.
spk03: What?
spk01: And your next question comes from the line of Adam Sindel from Raymond Sheen. Your line is open.
spk05: Okay, thanks. Good morning, everybody. Ken, my congrats as well. I always enjoy your strategic commentary on these calls, so I wanted to throw an open-ended question to have you maybe reflect on industry evolution during your tenure and your expectation for the next decade or so. It's still very fragmented at the bar level. The distributor level has recently significantly consolidated. Wondering if you see an era of bar consolidation in a bigger way or any big themes that you want to highlight on a group board basis.
spk06: Yeah, thanks Adam for that. Certainly the model that we've seen, certainly in my tenure, has been moving certainly from, in general, the reseller-type model to really being what we call a solutions integrator. There's no question delivering more value, and I think you're seeing that with many of the scale players delivering more and more services, more and more solutions to the marketplace. There's a big trend, of course, towards as-a-service consumption models that's occurring as well. And I do believe that that does favor, in many cases, the larger scale players due to the complexity of that, the systems that are required to really implement that properly. So I do think those aspects do favor the scale players. Not to say that the smaller niche players aren't still going to have a how to play. They always do. They're very, very nimble. But I think overall there's some pretty big changes there. The challenge, and we've been pretty inquisitive, as you know, the challenge that we find on a lot of the smaller players in trying to consolidate them is in many cases there isn't a lot of cost synergies, as you know. They're very, very heavily geared towards an owner model where the owner does quite a bit of the work and has a lot of relationships. So Those things become a little bit challenging when you try to roll those things up, and we spent a lot of time trying to understand if that was a possible play. Now, there's a lot of mid-tier companies that certainly have more scale that does make some sense, and I think you'll see more consolidation there. on that front. But yeah, that is certainly the trend. I think it's what our partners are demanding, and very importantly, what our clients are demanding. It's difficult to go to a client today and just basically be one trick. The clients are looking for a company that really can deliver solutions across, as an example, their data center. You can't just do one aspect of the data center anymore. You've got to do it all, and you've got to have a security umbrella under that as well. It takes a lot of skills and a lot of complexity there. So I do believe that that is starting to favor. And you're seeing that, of course, in the growth areas when you look at the numbers and so forth, where the larger scale players are having more significant growth than the smaller players are over the past few years. Yeah, so I think the industry couldn't be in a better position in my mind. When you look at what's going on, it's all about the data. It's all about AI, which is just starting. It's all about the intelligent edge, which is, again, just starting. So I think it's going to be a really robust outlook for the next 10 years in my mind.
spk05: Interesting. I do want to talk about some near-term questions, and, Ken, I'm sure you're not going to miss these. But maybe we can touch on backlog, the composition of backlog in particular. I'm just wondering if devices are the predominant portion of mix within your backlog, and if so, you know, how do you vet demand as you invest in inventory to fulfill that? Is there any penalty for cancellations or double ordering?
spk06: Yeah, I'll ask Joyce to touch on some of that, and I'll add some commentary as well. So, Joyce, why don't you start? Let's jump in and give you a perspective on that.
spk00: Yes. So, Adam, I think that the – so first of all, I would say that we still see very robust demand. The backlog is reflective of our overall demand that we've seen. So notebooks certainly are still a very significant component of our backlog. We did see some – I wouldn't call it recovery because the backlog still grew in notebooks, but we did see us catch up in terms of demand and invoicing. over Q3, so we got those numbers a little closer together. We did see increased backlog in networking and storage and desktop, especially, and displays. So our backlog is pretty robust. As Glynis and Ken both stated, we expect about 50% of the backlog to ship in Q4, and we've seen no evidence, zero evidence of the demand, perishable demand or double bookings. We have, of course, seen and actually supported some cancellations of orders and rebooking to make sure we optimize for delivery time and helping clients get what they need. But we have not seen evidence of double booking, and we certainly keep in very close contact with our distributors and our partners to make sure that's not happening.
spk05: Got it. Maybe just one final one for me so I can spread it around to everybody. um i wanted to ask on on the cash cycle so you know i did notice that you obviously had a heavy mix of uh devices that put pressure uh on gross margin of course like you talked about in the quarter hardware was up significantly but on the cash cycle we would typically think those turned quicker and helped the cash cycle so maybe you can comment on why gross margin is down and working capital is up oh so it's the combination of the types of bonds
spk02: equipment and where we get the product from. And we have shorter payment terms with certain VISTAs and OEMs versus others. And it's just the mix of the business with regard to those shorter payment terms relative to, let's just say, other OEMs where we have 30-day facilities or inventory financing facilities that we have are 60-day terms. Those support two primary vendors. Those were not the ones that were high in Q3. It was other vendors that were high in Q3, and it's just a mix of business in terms of how we have the early paid discounts that help us from a margin perspective, but also hurt us from an overall cash flow perspective.
spk05: Okay. Got it.
spk02: So we're paying off faster than we're collecting. We're paying the vendors faster than we're collecting from the client. It's the inverse of what happened in 2020.
spk05: Right. Understood. Ken, congrats again. Joyce, welcome to the call. Thank you. Thank you all. Congrats on the quarter.
spk02: Thank you.
spk01: Thank you. And your next question comes from the line of Vincent from Barrington Research. Your line is open.
spk04: Yes. What product categories currently offer the most opportunity to gain share?
spk06: Big question there. I think, again, the market is robust in so many areas. Areas, of course, that we're very focused on, as you know, is in the solutioning side. So the as-a-service consumption models, the multi-cloud approach to the business is an area that we're very focused on. So we think there's ample opportunity to continue to grow with Microsoft Azure as an example. Huge opportunities there on that front. So that's an area. And, of course, everything's about security today. There isn't one client that's not talking to us about security with all the ransomware attacks and so forth out there. So security, again, continues to be a very robust opportunity. And then, of course, as Joey's touched on, Glenn's touched on, the hardware situation, again, very robust at this stage. And as you can see with the growth factors, supply constraints are troublesome, but they're not. They're having a dramatic impact on our limiting our growth. And I think it's actually going to help us as we go into 2022, where there'll be lots of pent-up demand here still and the ability to flush this backlog out to really provide some good growth in the hardware sector next year as well.
spk04: And could you give us some more color on the mix in the software business?
spk06: Yeah, the software business, of course, for us is an extremely important big portion of our business. Very strong, of course, with Microsoft and all their product categories across the board. We do a significant amount of business, of course, You know, more and more vendors are moving there. Cisco's got a big software business today that's real important to us. Of course, VMware, very important on the infrastructure side as well. And then, of course, Adobe represents a good portion of our revenue stream. And then, of course, a whole plethora of security software solutions out there as well. So a very important part of the business. More and more, you know, partners, of course, are driving more towards software in these consumption models. So that's an area that we certainly continue to invest in.
spk04: And what areas stand out as, you know, strongest in the quarter in terms of growth?
spk06: You know, for Q3, certainly the biggest growth there is certainly hardware, as you can see. But we're also very pleased with the ability of our, you know, our cloud software, you know, offerings, you know, cloud mail as a percent of our TP is up to 21%. So that continues to be very, very robust, uh, part of our growth portfolio that, um, um, that we're really pleased with. And that's a key indicator for us coming forward.
spk04: And, um, are you seeing any impact, uh, significant impact for wage inflation, um, in terms of, uh, you know, uh, your, your existing employee base, uh, you know, is this something that, you know, you worry about when you go to sleep at night?
spk06: Yeah, I think everybody, every industry is seeing that from fast food chains to, you know, to our industry. Certainly, we're all seeing that. We've been able to manage it very, very closely, but certainly there's no question there's wage inflation throughout all positions. The most sought-after positions, of course, are the real technical architect software development areas for us, but we've been able to continue certainly to grow that headcount year over year pretty nicely, but certainly not without its challenges and certainly increases. But we're also seeing increases at our integration centers and warehouses like everybody else is as we're competing there. So we've been able to manage it. It hasn't drained in our ability to support our clients, but it's certainly something that we continue to watch, and we think it certainly looks to be that it's going to increase and continue to increase certainly into 2022. Okay.
spk04: Yeah, so Ken, congrats on your tenure, and Joyce, good luck. That's all I have. Thank you. Thanks. I appreciate it.
spk01: There are no further questions. I would now like to turn the call back to Ken for final remarks. Please go ahead.
spk06: Yeah, so again, thanks, everybody, for joining, and we appreciate you listening in. Thank you.
spk01: this concludes today's conference call thank you all for participating you may now disconnect
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