Chatham Lodging Trust

Greetings and welcome to the Chatham Lodging Trust fourth quarter 2021 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Chris Daly, President of Daly Gray Public Relations. Thank you. You may begin.

Thank you, Daryl. Good morning, everyone, and welcome to the Chatham Lodging Trust Fourth Quarter 2021 Results Conference Call. Please note that many of our comments today are considered forward-looking statements as defined by federal securities laws. These statements are subject to risks and uncertainties, both known and unknown, as described in our most recent Form 10-K and other SEC filings. All information in this call is as of February 24th, 2022, unless otherwise noted, and the company undertakes no obligation to update any forward-looking statements to conform the statement to actual results or changes in the company's expectations. You can find copies of our SEC filings and earnings release, which contain reconciliations to non-GAAP financial measures referenced on this call, on our website at chathamloungingtrust.com. Now, to provide you with some insight into Chatham's 2021 report, Fourth quarter results. Allow me to introduce Jeff Fisher, Chairman, President, and Chief Executive Officer. Dennis Craven, Executive Vice President and Chief Operating Officer. And Jeremy Wegner, Senior Vice President and Chief Financial Officer. Let me turn the session over to Jeff Fisher. Jeff?

Thanks, Chris. Appreciate that. And I appreciate everyone who's joining us this morning for our call. It certainly was an interesting end of the year and January, as we all know. The fourth quarter started off strong with October producing the second best month since the start of the pandemic. As the quarter progressed, we were hit with the onset of the Omicron variant, exacerbating the impact on December, January, and early February, already seasonally slower months. Now, as we sit here today, we've seen a dramatic rebound in travel. We've seen business travel pick up since earlier this month and this past weekend produced our best results of 2022. Through February 21st, RevPAR has jumped significantly from January RevPAR of $67 up $20 to $87, a whopping 30% gain. Gains have been sequential each week, with RevPAR of $75 for the week ended February 7th, $89 for the week ended February 14th, and $96 for the weekend at February 21st. Revpar was over $120 this past weekend, and occupancy hit 77%, with 20 of our hotels achieving occupancy of over 90% on Saturday night during the holiday weekend. Weekday travel also continues to rise this month and year-to-date, signifying the return of the non-leisure traveler. We've been seeing improving occupancy during the week, with weekday occupancies bottoming out at 46% during the week ending January 8th, and we've seen growing midweek occupancies each week of February, currently at 60% midweek for this past week. We've been encouraged by the return of some tech-related group business in Silicon Valley and Bellevue, Washington, as well as smaller convention-related business in San Diego and downtown Dallas. Like we saw with the explosion of leisure travel in 2021, we believe that business travel is going to come strongly back this year. A clear signal has developed in Silicon Valley and Bellevue, Washington, as tech companies have announced the return, finally, of workers to their offices, which will bring along with that incremental business travel to the area, training, and product launches. Tech companies have been a bellwether for the timing of a return to office for many other companies across the country, as we know, so this should kick-start business travel. Additionally, and meaningfully, we believe that tech companies are going to be hosting in-person internships this summer to which accounted for over $7 million in revenue in the summer of 2019 for us, and should be a major boost to our five hotels in these two markets. As a reminder, our 2019 hotel EBITDA at these five hotels was approximately $35 million, and those same hotels produced a mere $5.5 million of Hotel EBITDA in 2020, and only $7 million of Hotel EBITDA in 2021. So it's those hotels that have really kept our numbers down as the recoveries progressed, but we are seeing a definite different result for 2022, we believe. Chatham is emerging from the pandemic with an even stronger balance sheet, more buying capacity, and an even higher quality portfolio. We minimized cash burned throughout the pandemic by generating impressive operating results, and we were the second fastest hotel read to become corporate cash flow positive. In 2021, we generated positive cash flow before CapEx, of $12 million, and excluding principal amortization, cash flow was $20 million. Now, this is something that I'm extremely proud of, that since April 2020, essentially the start of the pandemic for our portfolio, cumulative cash flow burn before cap expenditures and before principal amortization was zero. Since the start of the pandemic, we have not used any equity dollars to fund our corporate operations. I think a pretty remarkable achievement. As we look forward here, again, beyond the projected REVPAR results and business that we see coming back for this year, we're being pretty active on the asset and capital recycling front. We have and are working on variety of things including a sale of three or four of our hotels we don't have anything specific to announce as of this minute but I do think that we're far enough along to generally talk about those as well as our acquisition pipeline which I had said before we thought this year would be more active it's turning out I think a to be more active. We've got, you know, one or two particular hotels that we're kind of, you know, winding down in terms of, I think, the ability to put them under contract. And I look forward to doing that. Again, I think similar to the acquisitions we made in the domain at Austin last year, and in terms of opening our Warner Center Hotel, really exciting new earnings to be generated this year, and again, increasing the quality of our assets, our REVPAR on an absolute basis, and I think a little more diversity as well in terms of location and market. So I'm really looking forward to this year from that perspective also. Oh, let me talk a little bit more about Warner Center. The Home 2 suite is open. I spent about four or five days out there. During the opening week, it has really opened to great reviews, both from me talking to customers walking in the door, as well as some of the corporate accounts that have already tried us out. The rooms are really far and away the best in the market. The amenities at the hotel are incredible, a huge fitness room, great indoor pool area, and a very large indoor-outdoor bar, which for the L.A. weather should really and is already proven to be quite an attraction for the local folks and the many, many new apartment buildings that are being built all around our hotel within one block. So hotel occupancy there has already been over 50% on a few nights, and we basically haven't even been open a month there. ADR last week was at $186, a very strong result, and $10 above the comp set, and that's in an opening stage of the hotel. Shifting back to the fourth quarter, let me highlight a few things before Dennis gets into all the details. Compared to 2019, our monthly REVPAR improved each month of the fourth quarter, down 26, 24, and 16%, respectively, before slipping back to down 36% in January, obviously the result of Omicron. Through February 21st, REVPAR of $87 is down 27% compared to the first three weeks of 2019. Our margins remain strong and particularly impressive compared to 2019 levels when you consider absolute REVPAR levels. Our fourth quarter gross operating profit margins were strong, 41% on REVPAR of $92, only down 100 basis points to 2019 when Revpar was $26 higher at $118. December was particularly impressive with margins 330 basis points higher than 2019, even though Revpar was $17 lower. It's too early to tell what the margin growth will be at this point, but no REIT is better than us at regularly delivering these kind of results, and we fully expect that same store margins will be higher post pandemic now not operations related but equally important in early 2021 we launched our corporate responsibility section of our website i encourage you to take a look at that which included our inaugural corporate responsibility report and formalized our efforts relating to esg just last month we published a supplement to our report that included more disclosures in compliance with TCFD, SASB, and GRI. It's also included our first disclosure of waste data and disclosed my commitment to the pledge for the CEO action for diversity and inclusion. Chatham is fully committed to sustainability, social matters, and proper corporate governance. We have recently formed an ESG committee comprised of members of management, and our Board of Trustees, and we fully intend to participate in Gresby and its real estate assessment in 2022. Let me just mention dividends for a second here, because recently Host and Apple have announced a dividend that is something other than a nominal dividend. We've minimized equity dilution as I said, more than most of our peers over the past two years, and we're confident in the ultimate recovery and the trajectory of that recovery in our portfolio before reinstating a dividend, though I think I'd like to see continued improvement specifically in our business travel in Silicon Valley and Bellevue because, as you know, that is a very significant piece of of our overall EBITDA, and we will look forward to that recovery as the year progresses. We've historically targeted paying out 100 percent of taxable income, so when we look at any potential dividend, we'll carefully analyze our taxable income for the upcoming years while also, of course, considering use of tax-deductible net operating loss carry-forwards, you know, that came as a result of the pandemic. and we'll look and review at our dividends on a quarterly basis with our board. Let me close by saying and reminding everyone that our relative strong performance to date and expected performance moving forward is going to be significantly enhanced in 2022 and 2023 by three key factors. First, tremendous upside, as I mentioned. in our tech-driven market. Second, meaningful, incremental new cash flow from our Austin acquisitions and the opening of our new home two suites at Woodland Hills. Together, thirdly, with recycling capital from the sales of lower-tier hotels into higher-returning acquisitions. So with that, I'd like to turn it over to Dennis.

Thanks, Jeff. With the onset of the Omicron variant and normal seasonality, all our key markets except Dallas saw RevPAR decline sequentially from the third to the fourth quarter. Not surprising that there's generally a 30% to 40% drop off in RevPAR between October and December anyways. Dallas benefited from the return of some smaller convention and conference related events. Silicon Valley, our largest market, which comprised almost 25% of our EBITDA in 2019, remains the laggard with REVPAR of $74 in the quarter. Occupancy was 61%, which is up 40% over 2020, and ADR was $121, up 15%. Indicative of market with limited demand growth. As Jeff spoke, things are starting to look up this month, and those four hotels are going to provide substantial growth for us in 2022. As a reminder, it was about 25% of our hotel EBITDA in 2019. In 2021, those four hotels comprised only 9% of our hotel EBITDA this past year. Our coastal northeastern hotels and our suburban New York hotels continue to produce solid results in spite of, obviously, seasonality in November and December with cooler weather. Our five highest hotels with absolute rev par In the quarter were our residence in Fort Lauderdale on the intercoastal waterway with rev par over $200 on occupancy of 84%, followed by our residence ends in White Plains and New Rochelle, New York, again, the suburban New York hotels, and then our residence in Anaheim and the Hilton Garden Inn Marina Del Rey with Southern California showing some pretty strong performance, as Jeff talked about, even at our newly opened Woodland Hills Home 2. It's showing good, quick ramp-up results. Our top six absolute occupancy hotels in the quarter were residents in New Rochelle, New York, our residents in Lauderdale, our residents in White Plains, followed by our Homewood Suites in Maitland. And the reason why I added a sixth hotel is we actually had two of our hotels in Silicon Valley at our San Mateo and Mountain View hotels actually coming in our top six hotels in terms of total occupancy. So again, an encouraging sign. of some business travel or non-leisure travel in those Silicon Valley markets. Our portfolio did significantly better than the industry, with fourth quarter occupancy of 65%, compared to industry-wide occupancy of 58%, and our weekend occupancy was 71% during the quarter. As Jeff mentioned, the business traveler was returning before the Omicron variant hit the U.S., and yet again in February, we are now seeing the business traveler start to return. Weekday occupancy, which more correlates to the business traveler, reached 69% in October, higher than our overall third quarter weekday occupancy of 68%, so showing some growth, and then before easing to 63% in November, 57% in December, and further to 49% in January. Encouragingly, as we've seen weekday occupancy increase, which now stands at 56% in February, including just a bit over 60% this past week. Although our length of stay has clicked down a little bit in the quarter, we continue to see an average length of stay much longer than our historical levels. At our residence in hotels, our average length of stay was three nights, still well above the 2.4 nights pre-pandemic. And then for our Homewood Suites hotels, our average length of stay was 3.3 nights, Again, pretty meaningfully above our pre-pandemic average of 2.7 nights. For the quarter, total revenue of $57 million was almost double last year's revenue of $29 million. We were able to generate incremental GOP of $16.3 million for flow through of almost 60% on that incremental revenue. A great result given the ramp up in operations to October as it was our second best month of the pandemic and then quickly pivoting to a lower operating model caused by the onset of Omicron. We generated positive GOP and hotel EBITDA each month during 2021. At the corporate level, we generated adjusted EBITDA 15.2 million versus essentially nothing last year, and we generated FFO per share of 12 cents, which is up 30 cents over the same quarter last year when we had an FFO loss per share of 18 cents. During the fourth quarter, 41 hotels generated positive hotel EBITDA, not GOP. Again, positive hotel EBITDA. Our top five producers of GOP in the fourth quarter were our residents in San Diego Gaslamp, our residents in Anaheim, which is the first time since the first quarter of 2021 for it to be in our top five, our high at Place Pittsburgh, which is the first time it's made the list, which was sparked by really strong weekends around Steeler games. followed by the Steady Eddie residence in New Rochelle and White Plains, New York. As a point of reference, our newly acquired residence in Austin would have placed 10th on the list, and the recently acquired Town Place Suites in Austin would have been in our top 20 of producers. On a per occupied room basis at our 40 comparable hotels, payroll and benefit costs were approximately $32, which is down from $33 in the 2020 fourth quarter, and 14% below fourth quarter 2019 per occupied room cost of 37. In the second quarter of this past year, we reinstituted complimentary breakfast in most of our hotels where it's offered to guests. Comp breakfast costs were $0.9 million in the quarter, which is up about a half million dollars over the same quarter last year, but down approximately $400,000 compared to the 2019 fourth quarter. As we've talked about before, the brands proposed new standards that reduce some of the offerings and should lead to same store savings. And so far, that seems to be the case on a preoccupied room basis. Breakfast costs were $2.47 in the 2021 fourth quarter, which compares to $2.99 in the 2019 fourth quarter, a significant decrease of approximately 17%. On the CapEx front, we finished 2021 with CapEx spending slightly over our budget of $6.5 million. And as we look ahead to 2022, our CapEx budget is $23.5 million, which includes $17.5 million of renovation costs at five hotels. And then we also have a remaining $6 million budgeted, which includes almost a million dollars related to associate alert devices and another million dollars related to brand initiatives for signing and signage and betting. With the hopeful end of the pandemic, We are looking forward to seeing most of you in person this year, whether that be at a conference or in connection with direct investor meetings. Jeremy?

Thanks, Dennis. Good morning, everyone. Chatham's Q4 2021 REV PAR of $92 represents a 93% increase versus our Q4 2020 REV PAR of $48 and a 22.7% decline versus our Q4 2019 REV PAR of $119. The Q4 decline of 22.7% versus 2019 showed continued sequential improvement relative to Q2 2021, which was down 39% from 2019, and Q3, which was down 26% from 2019. While the positive trends reversed a little in January, where REVPAR of $67 was down 36% to 2019 in early February due to the Omicron variant, We expect performance to continue recovering with decreasing rev par declines relative to 2019 throughout the remainder of 2022. Through our significant efforts to contain costs, we were able to generate a Q4 GOP margin of 41.1%. The 41.1% margin achieved in Q4 at a rev par of $92 was only 100 basis points lower than our Q4 2019 GOP margin of of 42.1%, which was achieved at a rough par of $119. Our Q4 2021 Hotel EBITDA was $17.6 million. Adjusted EBITDA was $15.2 million. Adjusted FFO was $12.4 million. And cash flow before capital, which represents Hotel EBITDA less corporate G&A cash interest and $2.2 million of principal amortization, was positive $5.1 million. I think it's worth noting that these solid results were achieved even with a somewhat limited amount of business travel in Q4. As Jeff mentioned, some of our largest and most profitable hotels before the start of the pandemic, like the four residence inns in Silicon Valley and the residence inn Bellevue, are very dependent on business travel and have seen the least amount of recovery of all our hotels to date. When business travel starts to recover in a more meaningful way, our portfolio should experience significant upside from its current level. Based on feedback from our management companies' conversations with key corporate accounts and advanced bookings for Q2 2022 at some of our business transient focus properties, we are optimistic that business travel will start increasing in a meaningful way in 2022. We have taken a number of steps to strengthen Chatham's balance sheet in non-dilutive ways during the pandemic, and the balance sheet is now in the best shape it's ever been. Between March 31st, 2020 and December 31st, 2021, We reduced our net debt balance by $250 million, which represents a 32% reduction, despite spending $40.9 million on our home to Warner Center development over this period and spending $71 million to acquire the residence in and town place Suites Austin. At December 31st, we had $199 million of liquidity between our unrestricted cash balance of $19 million and $180 million of revolving credit facility availability. In Q4, we exercised an option to extend the maturity of our revolving credit facility to 2023 and obtained additional options to further extend the maturity of the facility to 2024. With our reasonable leverage, solid liquidity, and meaningful free cash flow, we are well positioned to opportunistically pursue attractive investments. In addition to coming out of the pandemic with a better balance sheet than we had going in, we're also going to be exiting the pandemic with a better hotel portfolio than we had going in. The Q3 2021 acquisitions of the Residence Inn and Town Place Suites Austin and recently opened Home 2 Warner Center will meaningfully enhance Chatham's growth and the quality of our portfolio by adding three newly constructed high rev par hotels in markets that have very strong demand growth. We plan to continue enhancing the quality of our portfolio by acquiring new high quality hotels in markets with strong growth and recycling capital in cases where we believe sale prices are attractive relative to future growth prospects. We are very optimistic about the future given the potential for significant improvements in operating performance as business travel begins to recover in a more meaningful way. The growth we expect from the Austin acquisitions and Warner Center development and our ability to pursue additional growth opportunities given our strong balance sheet and significant liquidity. While we're not going to provide guidance at this time, for those of you building your own projections, I want to remind you that during the construction of the Home 2 Warner Center, we've been capitalizing interest associated with the $70 million development, and after it opened on January 24, 2022, we began recognizing this interest expense. Factoring in the opening of the Home 2 Warner Center, we expect interest expense, excluding amortization of financing costs, to be approximately $6.3 million in Q1 and $27 million for the full year. This concludes my portion of the call. Operator, please open the line for questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start button. One moment, please, while we poll for your questions. Our first questions come from the line of Ari Klein with BMO Capital Markets. Please proceed with your questions.

Thank you, and good morning. The signs of recovery in Silicon Valley are pretty encouraging. I'm curious how you think about the trajectory of the recovery there relative to San Francisco, which is also lagged and certainly has some longer-term question marks. Can Silicon Valley and San Francisco run on kind of independent track for the recovery?

They really are. Hi, Ari. This is Jeff. I mean, we've always said it's really different demand generators that Obviously, a lot of convention business related in San Francisco. Silicon Valley is very much dependent on its specific Facebook, Apple, those kind of customers, Google, obviously, and what they're doing relative to travel and having their office open or not open, which are all pretty much spitting distance from our hotels, depending upon which one you're talking about there. So that's really the driver. I wouldn't draw any specific correlation, I guess, for whatever else you're looking at.

Got it. And then maybe turning to some of the assets, acquisitions and dispositions you kind of highlighted. Any more specifics as far as the markets, maybe where you're looking to potentially sell and buy? and what kind of pricing kind of looks like in those markets?

You know, we're really trying to focus on looking at older hotels that really are on the bottom end of the absolute rev par as you look at the hotels that we own, and also considering CapEx needs in those hotels. As we move forward, we're just trying to really maximize our cash flow here as the recovery continues. So combining, I think, all those factors, it's really somewhat less market-driven, I think I'm going to say. For example, you might see us sell an older hotel in Dallas, but we love Dallas. And we would buy something in the same day in Dallas, depending upon, obviously, brand and price, et cetera. So I think it's more oriented towards the age of the asset and where it really sits in the food chain here.

Okay. And then just maybe on labor, are you where you want to be from an employee standpoint, the number of employees you have? And what are you anticipating in 2022 from a wage growth standpoint?

Hey, Ari, this is Dennis. Yeah, I mean, as we sit here today, we're in good position from a labor perspective. Honestly, it's lower seasonal months anyway, so normally we're trending down. in terms of our absolute labor count at this point of the year anyway, and then we'll start to ramp up to the summer. So, you know, I think we, you know, certainly saw that alleviate, you know, as we got into the fall last year, we were pretty happy, even though our absolute employee count was still down kind of 30 to 35%, if you looked at kind of our September and October levels. So we don't foresee any problems at the moment, you know, filling any labor, major labor needs as we head to the more busier months coming up here as we get through the spring. And I think from a labor cost perspective, I think we're, you know, we had a pretty big increase in 2021 on wage per hour. And I think as we look kind of to 2022, we're kind of a mid single digit increase for our average labor costs. So we still project that to be, you know, higher than you know, what might have been historical but still kind of middle single digit because we did absorb a lot of that last year. Got it.

Thanks for all the color. You're welcome.

Thank you. As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Our next questions come from the line of Tyler Brattori with JANI. Please proceed with your questions.

Good morning. This is Jonathan for Tyler. Thanks for taking our questions. First one for me, I wanted to follow up on the labor cost discussion. I was wondering if you could provide some color on what drove those GOP margins in December. And I wanted to parse out a little bit in terms of the key drivers of the cost savings going forward. I mean, is that all driven by presumed labor savings or is there something else in there?

It's mostly labor savings. I mean, we'll have a few things here and there that that might, you know, change one month to the next, but it's predominantly labor.

Okay, great. Thank you for that color. And then switching gears a little bit, I guess, how much of that lower rated early pandemic, you know, government responder, first responder type business remains in the portfolio? And what's the possibility that as we look out into, you know, later 2022, we see that re-rate into higher business?

Yeah, I mean, we really don't have a whole lot of first responder business, we still do have some traveling nurses, especially in a few markets. There are more of our urban markets, whether that's suburban New York, specifically for one of them. And we've seen some of that in Southern California as well. But I think a reason why we were able to pivot pretty quickly in the early days of the pandemic and throughout the pandemic was because of our predominantly extended stay rooms and select service rooms, we were able to get demand from the people who were traveling at the time, but also as the business traveler starts to recover. For example, in Silicon Valley, we do have a hotel that has a good number of still traveling nurses that we would look to eventually shift out of that as we move towards later in the spring especially for some of this intern business and Apple-related business, and essentially reduce that room count down to pretty much nothing and transition to the higher-rated customer. So we have nothing on the books from a long-term obligation committed perspective that would not allow us to make that shift, which I think is important.

Okay, great. I appreciate all the details there. And then last one for me, if I could, Jeff, I believe you mentioned in 2022, looking into different mixes and geographies for the acquisitions. And I'm curious, as you look out longer term, maybe three, four, five years, is there any way you more broadly think about reshaping or retooling the portfolio, whether that's geographic exposure or more or less extended stay? Any thoughts on that?

Well, we've said on a couple different conference calls we want to be about 80% extended stay. So that's a primary driver and goal for us. But to be opportunistic in this kind of acquisition environment, our focus is to remain in the kind of markets that we already own in. but we want a diversified demand generator base, and we do, over time, I think we end up with less of our EBITDA on a percentage basis in Silicon Valley, only because we most likely will grow outside of Silicon Valley. Some of those markets are the obvious Sunbelt markets that it seems like everybody wants to be in, but we've always been just attracted by demand generator growth and where that's occurring in the country. And I think we've been pretty good in matching up our acquisitions, you know, with pretty vibrant sources of business.

And I think we'll just continue to focus along those lines. Okay, great. Thank you for all the color. That's all for me. Okay, thanks.

Thank you. Our next questions come from the line of Anthony Powell with Barclays. Please proceed with your questions.

Hi, good morning. Just one for me. I guess any early learnings or observations from Home 2 in LA? How has it gone so far? Any surprises in terms of demand or cost structure there? It would be super helpful.

No, I think that honestly, hi, Anthony. It's Jeff. I mean, Dennis or Jeremy might want to chime in after, but I will tell you that it's absolutely according to pro forma and, you know, both on the revenue side and the expense side. You know, we've been very lucky, I think, in having enough bench talent to particularly to staff that hotel, you know, in the most important positions and staff it early on. You know, unfortunately, we were delayed a little bit in getting it open, only primarily from the wonderful folks in Los Angeles and their, you know, never-ending request for other things to be added vis-a-vis the inspection process, but that's my minor political comment for the day. Beyond that, though, operationally, it does feel good, and, you know, our

our folks there are really encouraged by what they're hearing from our guests as well.

Got it. And maybe, I guess, based on that, I know you want to buy more stabilized hotels, but is more development kind of an option for you in the coming years, given the experience there?

Yeah, I think so. We've talked about you know, always specifically some extra land that we've got in Portland, Maine, but we really have, and we have another piece of land on our balance sheet. But I think that we're encouraged particularly, you know, just as I said in a prior response to what would you sell? I mean, you know, having brand new or hotels that are, you know, five years old or less is a pretty attractive place to be. in the upscale extended stay business and generally select service business. Hotels fare well. We know how to open them. We know how to pre-open them on the island side. So, you know, we're not going kind of whole hog into the development business, but certainly I think adding two or three hotels that way over the next two or three years is something we look forward to do.

All right. Thank you.

Thank you. There are no further questions at this time. I would like to turn the call back over to Jeff Fisher for any closing comments.

Well, I appreciate everybody being on the call today. Obviously, there's a lot of other news that can preoccupy us, but we look forward to working well beyond those kind of current events and, frankly, continuing to do the good things we talked about on the call today, hopefully the rest of the environment, particularly on the virus front. you know, will be favorable for all of us. And we look forward to talking to you next time. Thanks.

This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.