Cable One, Inc.

Good afternoon and welcome to the Cable I first quarter 2021 earnings call. All participants will be in a listening mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Stephen Cochran. Please go ahead.

Stephen Cochran Thank you, Chad. Good afternoon and welcome to Cable One's first quarter 2021 earnings call. We're glad to have you join us as we review our results. Before we proceed, I'd like to remind you that today's discussion may contain forward-looking statements relating to future events that involve risks and uncertainties. You can find factors that could cause Cable 1's actual results to differ materially from the forward-looking statements discussed during today's call, in today's earnings release, and in our recent SEC filings. Cable 1 is under no obligation and expressly disclaims any obligation except as required by law to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise. Additionally, today's remarks will include a discussion of certain financial measures that are not presented in conformity with U.S. generally accepted accounting principles. Reconciliations of non-GAAP financial measures discussed on this call to the most directly comparable GAAP measures can be found in our earnings release and on our website at ir.cable1.net. Joining me on today's call is our president and CEO, Julie Lawless. With that, let me turn the call over to Julie.

Thank you, Stephen, and good afternoon, everyone. We appreciate you joining us for today's call. Before getting into our results, I want to welcome our more than 800 Hargrave colleagues who are now Cable 1 associates. The acquisition of Hargrave closed on May 3rd, and we are extremely excited to have Hargrave as part of the Cable 1 family of brands. I'd also like to take a moment to welcome Megan Detz, our new Senior Vice President of Human Resources, who comes to us from Hargrave. Megan is a valuable addition to the Cable One leadership team. She brings extensive experience in successfully guiding, motivating, and integrating teams in fast-paced, high-growth companies. She will provide unique insight into Hargrave's culture and initiatives as we begin the process of bringing our two companies together. We will get into more details on the acquisition later in the call. I'll begin by reviewing some highlights and important events from the quarter before handing the call over to Stephen for a full recap of our financial performance. We are pleased to have once again delivered a quarter of robust customer and financial growth. In the first quarter, revenues increased by 6.2%. compared to prior year quarter. Adjusted EBITDA increased by 14.4% and adjusted EBITDA margin improved 380 basis points to 52.9%. The record-breaking residential HSD customer growth we and others in the industry experienced in 2020 has led to conjecture about whether last year was predominantly a pull forward versus a more sustainable long-term trend. It is still early in 2021, but so far, customer growth has remained resilient. In the first quarter of 2021, we added 22,000 residential high-speed internet customers on a sequential basis versus 19,000 in the first quarter of 2020. On a year-over-year basis, that reflects an additional 86,000 residential HSD customers, or 12% growth. And that figure also excludes the roughly 17,000 residential data customers as of March 31st, 2020, that we contributed to Hargrave, and 5,000 customers acquired from ValueNet in July of 2020. From the beginning of 2020 until now, our HSD penetration has increased nearly 500 basis points from 33.2% to 38.1%, highlighting how far we have come as well as the significant growth opportunity that remains available for us to capture. While it is reasonable to believe that residential HSD customer gains will eventually revert back to historical trends of stronger growth in the first and third quarters of the year, our healthy customer ads have continued so far in the second quarter of 2021. In fact, our April customer growth was our best month of 2021. Given the pandemic surge in 2020, We believe that comparing 2021 customer additions to pre-pandemic 2019 figures provides important context when gauging growth. In this vein, note that in the single month of April 2021, residential HSD customer ads were significantly higher than during the entire second quarter of 2019. Residential HSE demand not only remained strong as far as net additions, but also increased for higher-tier product offerings as well. Sell-in for packages with a download speed greater than 100 megs increased from about 70% in the fourth quarter of 2020 to approximately 78% in the first quarter of 2021. That, along with other contributing factors, such as an increased take rate of our unlimited data plan, as well as migration of existing customers into higher tiers, contributed to our 6% year-over-year residential data ARHU growth. As a reminder, we haven't had a rate increase on our legacy systems since the fall of 2015, and we actually decreased price on our higher tiers at the start of 2019 compared when we launched our new pricing and packaging across the legacy footprint. Business services revenues began to show positive momentum this quarter, with growth of 4.3% year-over-year and 5.8% on an organic basis after taking into account our Anacin divestiture and ValueNet acquisitions. Businesses are reopening, and thanks to our seasoned sales associates, robust network, and extensive suite of products, We continue to be optimistic about our rebounding growth in this area. We are particularly proud of this team for proactively seeking to partner with government and local entities to provide connectivity in rural communities. Our recently committed construction of a fiber optic network for Crown King School in Crown King, Arizona is one of our latest examples. This effort is just one piece of a larger project for the Yavapai County Education Service Agency that will deliver high-speed internet to more than 72 schools and libraries and 100 businesses within Yavapai County. Prior to our build, Crown King School had access to just 5 megabits per second internet service, a speed well below FCC bandwidth recommendations for schools and libraries. Table 1 was also recently awarded a $1.4 million grant in partnership with the Arkansas Rural Connect Program to construct an all-fiber network delivering symmetrical speeds of up to 1 gigabit for residential customers and up to 5 gigabits for business customers in the rural communities of Ogden and Wilton. Both partnerships illustrate our steadfast commitment to bridging the rural broadband divide in the communities across our footprint. As an update, residential and business data growth for the businesses in which we have minority investments also accelerated sequentially, as these companies added approximately 25,700 new customers in the first quarter of 2021. These customers are not reported in our results, but they demonstrate the continued demand for high-quality HSD services, as well as the shared commitment of our strategic partners. Also, keep in mind that hard gray net ads are included in that figure and that a partial quarter of hard gray results will be reflected in our second quarter 2021 financials. Turning to our network. As a result of our continued investment in upgrades targeted at expanding capacity, our downstream plant utilization improved meaningfully from the prior year. Although average data usage increased 29% year-over-year to just over 500 gigabits per month, our downstream traffic at peak improved from 28% utilization to 20%, and upstream utilization remained steady at 18%. It is rewarding to know that we met the unprecedented surge in Internet usage throughout the pandemic, and we're continuing to plan and invest as we expect to remain prepared for the future needs of our residential and business customers. The integration of Fidelity continues with plant upgrades throughout the small cities and large towns Fidelity serves, most recently in our Missouri and Arkansas markets. Despite the disruptions of the past year, we are still on schedule operationally and ahead of the original run rate cost synergy estimates laid out at the time of the acquisition. Recently, we reached another milestone as we successfully migrated all Fidelity associates onto technical platforms that connect Fidelity associates to internal Cable 1 tools. Earlier this week, we completed our acquisition of the remaining equity interest in Hargrave that we did not already own. We appreciate the efforts of Hargrave's management team, who worked diligently with us over the past several months. Our combined company of more than 3,500 associates now serves more than 1.1 million customers across 24 states. We believe Hargrave's fast-growing markets, like-minded strategy, and commitment to providing fast and reliable internet service to rural markets make it a natural fit with Cable 1, while at the same time providing a platform for future organic and inorganic growth in the Southeast. As integration planning continues, we are excited to build on what we have learned from our prior acquisitions. We will work closely with our Hargrave associates to gain insight into their best practices in order to seamlessly combine both companies. We are very encouraged by the reception we have received thus far. As a reminder, we anticipate realizing approximately $45 million in estimated annual run rate synergies over the next three years. As the communities we serve continue to feel the impacts from COVID-19, we are proud to participate in the FCC's Emergency Broadband Benefit Program. Through this program, eligible households participating in that program will receive up to $50 off their monthly bill based on their current internet service and equipment rental, or up to $75 off for customers who live on qualifying tribal land. Alongside this effort to ensure our customers stay connected to their loved ones, work, and school, we have kept in place other COVID-19 relief measures, including providing free public Wi-Fi hotspots across our footprint, a 15 megabit service for $10 per month for the first three months to help low-income families, and our partnership with ACA Connects and the Education Superhighway for the K-12 Bridge to Broadband Initiative which helps school districts and states provide internet access for students in low-income households. In addition to our COVID-19 relief measures, we are pleased to support Title I schools in Arizona, Idaho, Illinois, Louisiana, Mississippi, Missouri, and Texas this year through our Chromebooks for Kids initiative, now in its eighth consecutive year. We recently donated 500 Chromebooks for the 2021-2022 school year to help bridge the digital divide for underprivileged children by providing computers to schools that lacked funding. Supporting nonprofit organizations in our communities remains a priority as they work tirelessly to provide services to individuals and families during a time when the need is greater than ever. With the launch of Cable One Charitable Giving Fund last month, We will provide grants to nonprofit organizations throughout our markets, concentrating on the areas of education and digital literacy, hunger relief, and community development. And now, Stephen.

Thanks, Julie. The first quarter of 2021 generated exceptional financial results. Revenues for the first quarter were $341.3 million compared to $321.2 million in the prior year quarter. a 6.2% increase. This increase, which included $3.2 million of revenue from ValueNet operations, was fueled by a residential HSD revenue increase of 18.5% and a business services revenue increase of 4.3%. Meanwhile, first quarter 2020 revenues included $9.1 million from our divested Anniston operations. To give a sense of our year-over-year organic growth, when we exclude first quarter 2021 ValueNet results and first quarter 2020 Anniston results, we would have seen first quarter total revenue increased by 8.3%, residential HSD revenue increased by 20.5%, and business service revenue increased by 5.8%. Residential HSD customers grew by approximately 86,000 or 12% year over year, which as Julie mentioned, excluded approximately 17,000 from the Anniston system that were contributed to Hargrave and included 5,000 that were acquired from ValueNet. Operating expenses were $101.5 million or 29.7% of revenues in the first quarter compared to $105.9 million or 33% of revenues in prior year quarter, a 330 basis point improvement. Selling general administrative expenses were $69 million for the first quarter of 2021 compared to $62.9 million in the prior year quarter. These expenses were 20.2% of revenues in the first quarter of 2021 compared to 19.6% of revenues in the prior year quarter. Net income in the first quarter was $68.6 million. Net income also included a $5.6 million non-cash gain from fair value adjustment associated with the mega broadband investments call and put options. We discussed last quarter. As a reminder, these options are subject to mark-to-market accounting and on a quarterly basis. Until these options are exercised or expire, any changes in the assumptions used to determine their fair value could increase or decrease the resulting valuation, which in turn could cause significant non-operating fluctuations to our GAAP financial results from one quarter to another. Net income per share on a fully diluted basis was $11.19 per share, inclusive of the non-cash gain I just mentioned. Adjusted EBITDA was $180.4 million for the first quarter and increased 14.4% from the prior year quarter. Our adjusted EBITDA margin increased 380 basis points year over year, going from 49.1% to 52.9%. We historically have seen our organic first quarter adjusted EBITDA decline from the fourth quarter as we paid the increased cost of programming at the start of the year while our video rate adjustment was not fully recognized until the second quarter. But in 2021, as yet another indication of the diminishing impact video has on our business, revenue and adjusted EBITDA increased sequentially despite the timing mismatch. Capital expenditures totaled $71.9 million for the first quarter of 2021, which equates to 39.8% of adjusted EBITDA. During the quarter, we invested $11.5 million of CapEx for network expansion and $4 million for integration activities. Adjusted even to less capital expenditures was $108.5 million for the first quarter and increased 16.7% from the prior year quarter. In the first quarter of 2021, we paid $15.1 million in dividends to shareholders. In March 2021, we issued $575 million of 0% convertible notes due 2026 and $345 million of 1 1⁄8 convertible notes due 2028. The net proceeds of the offerings were $895.2 million after deducting initial purchaser discounts and other offering costs and expenses. From a liquidity standpoint, we had approximately $1.5 billion of cash and cash equivalents on hand as of March 31st, and we continued to generate significant free cash flow. At quarter end, our debt balance was approximately $3.1 billion, consisting of approximately $1.5 billion in term loans and $650 million in unsecured notes, $920 million in convertible notes and finance lease liabilities. We also had $459 million available for additional borrowing under our revolver of March 31st. Overall, our debt to last quarter annualized adjusted EBITDA after netting cash on hand against debt was 2.2 times as of March 31st. As Julie already mentioned, earlier this week, we closed our purchase of the remaining approximately 85% of equity interest in Hargrave that we didn't already own. The transaction implied a $2.2 billion total enterprise value for 100% of Hargrave on a cash-free and debt-free basis. The acquisition was funded with cash on hand, including the proceeds from the convertible notes and the net proceeds from the new $800 million incremental term loan fee. Following the closing of the Hargrave transaction and the term loan fee financing, we had approximately $3.9 billion in total debt outstanding and approximately $400 million of available cash and approximately $460 million of undrawn revolver capacity. Based on the current LIBOR rates, the projected annual interest expense on our outstanding debt is approximately $107 million with approximately 71% being fixed rate debt a weighted average duration of approximately six and a half years, and a weighted average interest rate of approximately 2.7% after giving effect to our existing swap transactions. Chad, we're now ready for questions.

Thank you very much. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. And the first question will be from Craig Moffitt with Moffitt Nathanson. Please go ahead.

Hi, thank you. First, Julie, I just want to acknowledge and appreciate all that you talked about for the work that you're doing to close the digital divide at Cable 1, so thank you for that. And on to two related questions, actually, to that. One, it's a little hard to tell exactly what your organic footprint growth is. But I know a lot of your peers are fairly aggressively pursuing edge-outs and that sort of thing. Can you just talk about what your expectations are for footprint expansion organically and then separately how you would think about participating in any funds that would come from the government if indeed we get a Jobs Act infrastructure plan? And then second, if you could also just comment on your expectations for the stimulus plan. I see you've already got a page on your website for potential applicants. If you could just talk about what you're expecting to see from that and what you've done to prepare. Sure.

Thanks for recognizing what our associates are working hard to do in these communities and small cities and large towns, Craig. As far as edge out, I don't know how much I would want to divulge about what our plans are. If you think about it, wherever we're edging out, there is some other provider. There's really no place in the United States where there isn't a telco, another fiber provider, another cable co. offering services. What I would say is if it fits our profile, if it is a small city, large town, if they have a need for a more robust, more reliable internet service, that's something that we would consider. But I don't think we want to tip our hat to anyone about where we might be planning services in the future, quite honestly. As far as the EVB plan, yes, we quickly scrambled a bunch of people, obviously working very hard to fulfill the needs of the government and USAC. And I imagine that, while not having a crystal ball, that people who have our service will certainly consider upgrading since $50 of their bill will be paid for by the government. Keep in mind our 100 meg service is $55 a month. So it would be quite easy to upgrade to either our 200 meg service or our 300 meg service. But it's quite possible that we will draw some people into the service for the first time for folks to try a reliable, hardwired broadband service because of this opportunity.

Thank you.

And the next question will come from Frank Louthen with Raymond James. Please go ahead.

Great. Can you walk us through the next steps with Hargrave? What sort of incremental investment do you think is necessary? And can you give us an idea of where they are on the commercial side? They've got some networks throughout the southeast, outside of the territory. How should we think about that as an opportunity going forward?

Sure. So I think from an incremental investment standpoint, from a relative purchase price standpoint, this one is pretty low. I think we're guessing that it's somewhere in the $30 million that is much more just alignment and common technology from a capital standpoint, incremental that will be spent over a few years. But for the most part, it's a very well-invested network, a lot of fiber in the network. And commercial is a really important part of their business, given that they came from a more ILEC background, the same way that Elody did. Commercial was always part of their services, and they've been a big player in that. So It's an important part of their business, and we're excited to both build the existing Table 1 commercial business and learn from what they've done really well as we combine the two teams together. And then was there another question there, Frank? No? Okay.

Well, I'd just love to characterize the fiber networks that they have on the commercial side. How much fiber do they have outside of the network? And how can you capitalize on that and what your thinking is for that part of the business?

Sure. So they have a – I mean, they've got a pretty robust fiber network that's more of a – throughout, you know, a great deal of Georgia going over into North Florida. You know, with the acquisition of Anniston from us, increased their Alabama presence, you know, working its way over towards Atlanta, 40% of their – customers are at 40% of their homes are actually served with fiber to the home. So it's a very deep fiber network. Um, and, um, both from a commercial standpoint and a residential standpoint. So, uh, so we, we definitely, and they've been making a lot of investments in it over the last few years, uh, definitely under, uh, the Pritzker ownership. There's been a lot of investments made, um, that, you know, we feel very fortunate to get the chance to monetize over time.

All right. I see their trucks running around here. So, All right. Thanks a lot. Sure.

The next question will be from Greg Williams with Cal. Please go ahead.

Great. Thanks for taking my questions. First question is on fiber to the home. Over the last few months at analyst days and earnings calls, it seems like some of these telcos are indeed at fever pitch. In addition, PE and infrastructure funds. I know you guys overlap with AT&T, who's been pretty vocal about it. and CenturyLink maybe to a much, much lesser degree. But I think Frontier also overlaps in your federated territories. And last Friday, they came out with some aggressive initiatives. Are you seeing or anticipating any encroachment on your space? And then the second question is more housekeeping. I think your SG&A intensity is up a little bit. Can you remind me what costs are sort of increasing as volumes pick up in the reopening as we think about SG&A comps in 21 versus 20? Thanks.

I'll start with the fiber to the homes. question and so we do our largest we pretty much split our footprint with AT&T and CenturyLink we have less than 10% of our homes paths have an overlap with Frontier so that's not an overwhelming concern AT&T does have fiber I mean our footprint is 20% is competitive with about 13% of that being fiber to the home, and the majority of that would be AT&T. So we do know how to go up against AT&T where they have fiber. So do we see any other encroachment? No, but you can believe that we track them very carefully, and then just to track where anyone is coming into the marketplace, not just the ones that we've mentioned so far. But then we turn the focus on ourselves. and our associates, our customers, and our community. And we make sure that we are providing a service of value. And that means the speeds that people need, the reliability that customers need, and getting service from their neighbors, quite honestly. We think that's the most important part to remaining competitive.

Yeah, and then on the SC&A side, Greg, and this is all in the queue, so you can pull it from there as well, but... One of the largest increases was $2.4 million related to M&A costs as the heart rate transaction happened, almost the workaround that happened in the first quarter. We also had higher health costs by about $1.8 million, which really tied to the fact that the second half of last year's first quarter was when we saw a lot of people stop going to the doctor. with anything other than COVID-related issues. And so that was a bit of a catch-up. We also had about $1.7 million higher in labor costs. A lot of that is actually just tied to how we accrue for our bonus and that was the greatest bonus accrual this year's first quarter compared to last year's first quarter when there was a lot more uncertainty about where we were going. And then lastly, $1 million in conversion costs, system conversion costs tied to our ERP conversion that launched effective April 1st.

Great. Thanks for the color.

Next question is from Phil Cusick with JP Morgan. Please go ahead.

Hi, guys. Thanks. Julie, maybe you can go again into that April strength. What have been the drivers there? Is that stimulus money? And how has May been so far?

All I heard was drivers. I don't know. Drivers of what?

He's the drivers of the April growth.

Oh.

The April strength story.

April, yeah. Sorry, Phil. I'm getting old. My hearing must be going. April continues what we've seen, quite honestly, from about, you know, from the start of COVID, quite honestly. I mean, it's just it has not let up. The same things that have been in play. since mid-March, April of last year, are continuing to drive growth. We see people coming to us from literally everywhere, and I mean everywhere. It could be cell only. It could be DSL, and it is DSL, but it's also fiber to the home. We have people being drawn to us for needs. They need a fast network. They need a network with a lot of throughput, they need a network that is reliable, and they need people that take care of them in a way that feels like their neighbors. And our growth is so far not slowing down.

Okay. And you talked before about what the uptake looks like on prices or plans above your basic price point. Can you update us on that?

On our packaging? I mean, our 100 meg service is 55. We have not had a... No, I'm sorry.

On the intake above the... Yeah, the sell-in above the 55. Thank you.

My apologies. So 78% in the first quarter of this year, 78% people sold in took tiers above 100 megs. Currently, our total subscriber base is... 59% of them are above 100 megs. So it's not just selling that's driving the higher take rate on tiers, but current folks upgrading as well.

That's great. And then maybe the last thing, just dig into the fidelity integration a little bit. What do you expect on pricing integration? Have you done that yet?

We have not done that yet, and I would expect exactly what we saw out of New Wave. New Wave's prices are exactly the same as Cable 1's right now. Their ARPUs, let me just put it that way, their prices and ARPUs are the same as legacy Cable 1's. I would expect the same thing to happen with Fidelity.

And the one thing I would add to Fidelity is they're growing tremendously as well. And so we definitely have a mindset of don't fix what's not broke. And so we will work through it, but no rush to need to do anything, that's for sure.

Got it. Thanks to both of you.

The next question will come from Stephen Cahill with Wells Fargo. Please go ahead.

Thanks. Maybe just first on the M&A front. After Hargrave and a few recent acquisitions and some minority investments already in the pipes, Do you expect to find more M&A opportunities in the pipeline for the next few years, or should we expect the next couple of years to be more about integration, organic growth, and some of those bets that you've already made through the minority investments?

Well, I mean, I think we're always looking for opportunities to deploy our balance sheet and to grow on the strategy of, you know, broadband in rural markets. And so we'll keep our eyes open for that. I think clearly with what we have with Hargrave and what we have with Mega and You know, we've got large deals ahead of us, and so I would anticipate that the stuff we'll get to see and we'll, you know, spend time on will either be investments in other businesses that set up things for the future or, you know, smaller acquisitions that are more, you know, tuck in in scale. So, you know, I consider both mega and R-grade to be somewhat platform acquisitions and, you know, both substantive size that added both, you know, added a lot to our company in general and, and we'll continue to look for other opportunities to fill in the gaps. But needless to say that our footprint is now bigger, so things that are tuck-in might not have been tuck-in before but are now things that we can look at. So we'll continue to explore those but definitely wouldn't anticipate large transactions.

Thanks. And then a competitive one, because it's one we've heard a lot from investors. We're getting asked whether or not you see T-Mobile's fixed wireless product as being a meaningful point of risk. I thought that data point you just gave about 59% of the base above 100 meg was very helpful. Can you just help us contextualize what you think fixed wireless is going to mean for your market and whether you see it as an incremental competitive threat?

Certainly stay very close to what T-Mobile is doing, but also understand that they need to do the investment in 5G in order to take care of their own customers and their own cellular network. The needs of customers are clearly being driven by much higher data use rates than I really think this product will be able to provide in the long run. And I see it as, you know, at least half friend as they will need backhaul. So not overly concerned, but, again, keep our eyes on them and then turn the focus back in on ourselves and making sure that we are providing what our customers need.

And, Steve, I'd say that the 200 meg point is really important as far as the speed side of it, but just as importantly as the average customer using over 500 gigs a month and just the ability to have a network that supports that kind of usage. I mean, keep in mind we're carrying a lot of the mobile players traffic over our networks already. Most of their usage is in their home going over our Wi-Fi networks.

Thank you.

Again, if you have a question, please press the star then 1. The next question is from Brandon Nispel with KeyBank Capital Markets. Please go ahead.

Great. Thanks for taking the question. Steven, one for you. Could you update us on what you expect from the contribution for Hargrave either in the second quarter or in the first full year of the acquisition? And then you mentioned a timing difference in the video rate increase and your expense increase. Could you elaborate more on that? What would have even the margins been had they been matched? Thanks.

Got it. So on the first question, needless to say, we won't give guidance on what they're going to contribute as we don't give guidance in general. But what I will say is you can go back and look at what we talked about, their fourth quarter annualized numbers being, and obviously they continue to grow nicely. So it's, you know, you could extrapolate that out into what their contribution is going to be. It will be done effective May 1st, essentially, so we'll get two months of it done. in the second quarter, and then obviously for the full second half of the year. I would say in this transaction in particular, we're not expecting a lot of synergies in the first nine months, just from the standpoint of, you know, we've got their team, their team in place, executing on a plan that was already in place. And, you know, we'll work to, you know, pull them in and integrate as we move into next year. But unlike Fidelity that had a lot of synergies very early. You know, this will be definitely spread more over the time and a little bit more back and loaded comparatively speaking. And on the rate side of it, I mean, I'm not sure I could answer exactly what margins would have been without it. All I would say is we had basically a half a month's worth of rate increase on the video side in the quarter as we do a March 1st rate increase that with billing cycles really only gets you a half a month's worth. So, you know, in the second quarter, we'll have obviously, you know, the full representation of that rate increase in the numbers.

Great, thanks.

Perfect.

Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Julie Lawless for any closing remarks.

Thank you, Chad. I want to again thank our associates for all they have done and continue to do for our company and for our customers. We appreciate everyone joining us for today's call and look forward to speaking with you again next quarter. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.