Concentra Group Holdings Parent, Inc.

Good morning, and thank you for joining us today for Concentra Group Holdings Parent and Earnings Conference Call to discuss the third quarter 2024 results. Speaking today are the company's Chief Executive Officer, Keith Newton, and the company's President and Chief Financial Officer, Matt DiCanio. Management will give you an overview of the quarter and then open the call for questions. Before we get started, we would like to remind you that this conference call may contain forward-looking statements regarding future events or the future financial performance of the company, including without limitation statements regarding operating results, growth opportunities, and other statements that refer to concentrous plans, expectations, strategies, intentions, and beliefs. These forward-looking statements are based on the information available to management of Concentra today, and the company assumes no obligation to update these statements as circumstances change. At this time, I'd like to turn the conference call over to Mr. Keith Newton.

Thanks, operator. Good morning, everyone. Welcome to Concentra's third quarter 2024 earnings call. I would like to start today with a brief refresher on our business. We previously provided comments during our second quarter earnings call, but we know we continue to gain new followers of our company. Incentra is the largest provider of occupational health services in the United States. We have over 700 locations across 45 states, including both our occupational health centers and our onsite health clinics at employers' workplace. We see approximately 50,000 patients per day and serve approximately 200,000 employer customers across our occupational health centers, onsite health clinics, and our telemedicine platform. We serve almost every industry and have little to no industry concentration. Manufacturing, distribution, transportation, retail, healthcare, government, schools, construction, hospitality are just some of the examples. Our mission is to improve the health of America's workforce, one patient at a time. We provide employer-focused healthcare services, and we are patient-centric in everything we do. We deliver a consistent, high-quality patient experience as exemplified by our high patient satisfaction scores. Our value proposition is focused on supporting the improvement of injured workers' health with a timely and safe return to work. Injured employees tend to recover better through early intervention and a quick return to normal activities. We expedite employees' safe and sustainable return to work and help lower medical and indemnity claims cost incurred by employers. Workers' compensation patients treated in a concentra health center have an approximate 25% lower average total claim cost than in non-concentra centers. Within our occupational health center's operating segment, which represents 94% of total revenue for the third quarter, we provide three service lines consisting of workers' compensation, employer services, and consumer health. Reimbursement for our workers' compensation services is guided by the various state workers' compensation fee schedules, which are set by legislative bodies and paid for by employers, typically through their workers' compensation insurance company or their third-party claims administrator. The reimbursement for our employer services line is paid directly by employers at market rates or through entities who manage these types of visits on an employer's behalf. We have virtually no reimbursement from government programs such as Medicare or Medicaid or from commercial healthcare insurance. As existing and potential investors look at Concentra on a standalone basis or as compared to other companies in the healthcare services sector, we would point you to the unique reimbursement environment in which we operate, our growth opportunities, our margin profile, our cash flow statistics, our diversification across geographies and industries, our experienced management and leadership teams, and our strong track record over a sustained period of time. For those interested in learning more about our business, we welcome you to spend time reviewing our publicly filed registration statement and other quarterly filings, or by following the company through one of our many communication channels. Now, switching to our third quarter performance, where we saw a continuation of themes from our Q2 2024 performance. Overall, we had a successful quarter in line with our expectations, made progress on strategic initiatives, grew our development pipeline, and continued to execute on the steps to separate from select medical. Concentra ended the quarter with 549 occupational health centers and 156 on-site health clinics for a total of 705 locations, which is 21 more than at the end of Q3 2023. In the quarter, revenue was $489.6 million compared to $474.0 million in the prior year, representing a 3.3% growth year-over-year. Adjusted EBITDA was $101.6 million in the quarter versus $98.9 million in the same quarter prior year, or a 2.7% increase. EBITDA margin decreased slightly to 20.7% for the quarter compared to 20.9% for the same quarter prior year. Net income was $45.8 million, and earnings per common share were $0.37 for the third quarter 2024. The lower net income in EPS versus prior year was due to the recapitalization of the company at the time of the IPO and the associated higher interest expense as compared to prior year. From a patient visit standpoint, we had a very similar quarter to the second quarter of 2024 in terms of year-over-year comparisons. Total visits decreased 0.7% in Q3 2024 as compared to the prior year. This was driven by a 2.6% decline in our employer services visit. This decline is something we have been experiencing for several quarters now on a year over year basis. The employer services decrease was offset by a 1.7% increase in our workers' compensation volume. After adjusting for the one additional revenue day in Q3 2024 versus Q3 2023, Employer services and workers' compensation per business day visit volumes were 4.1% lower and 0.2% higher than the prior year, respectively. Our workers' compensation and employer services visits are driven by employment levels and hiring events across the United States. Approximately two-thirds of our employer service visit volumes are driven by hiring events, which have experienced a slowdown over the last year as quit rates and job openings have fallen. Q3 saw some positive and negative economic news prints, which we are following closely. Within our occupational health centers, our visits were softer in July but trended better in August and September. Hurricane Beryl and the CrowdStrike-related IT outage contributed to the softer July visits. The takeaway for Concentra is that the number of people employed has continued to rise, which is a positive driver for our workers' compensation visit volumes. The decline in employer services volume is not a new trend, as hiring events, employee quit rates, and job openings have all receded. It has been something we have been experiencing for more than a year now. We have adjusted to it accordingly and have continued to show profit growth and stable margins. From a rate standpoint, we had a 3.9% increase in revenue per visit principally due to increases in the reimbursement rates payable pursuant to certain state fee schedules for workers' compensation visits and increases in our employer services rates per visit, which we negotiate and set directly with employer customers. The higher percentage mix of the workers' compensation visits with their higher revenue rates per visit also contributed to the blended higher rate per visit. Overall, we are proud of our company's performance and our team's continued dedication to our mission. We are optimistic for the coming quarters and 2025. We are well positioned to continue our growth trajectory, especially with a more normalized visit volume profile. Matt will share more details as well as some guidance for full year 2024 in a few minutes. Before I hand it over to Matt, I wanted to highlight some other important developments in the quarter, including some great work the team has done to advance our development pipeline, the early but significant progress we've made as it relates to the separation from select medical, and our continued advancement of key technology initiatives. We spoke about all three of these areas during our IPO process in our last quarter's call. I'm excited about the continued accomplishments in these areas. and the roadmap we have in the coming quarters. This concludes my overall company remarks. I now turn the call over to Matt to provide more color on our operating segments, key operating metrics, cost and expenses, cash flow and balance sheet, and full year 2024 guidance, as well as provide further detail on some important strategic work streams.

Matt? Thanks, Keith. Good morning, everyone. I'll begin with some additional commentary on our operating segments and our major expense categories, as well as other key performance indicators. In our occupational health center operating segment, revenue of $463.1 million in Q3 2024 was 3.3% higher than the same quarter prior year. Keith outlined our 0.7% visit decline year-over-year driven by the continued and expected lower employer services volume, which are lower revenue visits, and the 3.9% increase in revenue per visit from $136.11 in Q3 2023 to $141.42 in Q3 2024. Within the center operating segment, workers' compensation revenue of $298.7 million was 4.5% higher than prior year. Q3 2024 work comp visits increased 1.7% from prior year or 0.2% on a per day basis. The Q3 2024 work comp revenue per visit increased 2.7% versus prior year. Workers' compensation revenue represents 64.5% of our total center operating segment revenue in Q3 2024 versus 63.8% in Q3 2023, or a 0.7 percentage point increase. Employer services revenue in the center operating segment of $154.8 million increased 0.9% from prior year. Employer services visits decreased 2.6% from prior year, or 4.1% on a per day basis. and in line with expectations and continued trends from recent quarters. The Q3 2024 employer services revenue per visit increased 3.6% versus prior year. On-site revenue of $15.6 million in Q3 increased 3.9% from the same quarter prior year. We had a solid business development quarter in this operating segment, winning more than 10 new onsites that will open in the coming months. including additional onsites with our advanced primary care service offering that we recently launched. Other business revenue of $11 million increased 4.4% against same quarter prior year. Our cost of services expense, excluding depreciation and amortization, a major component of which is personnel costs, includes all direct and indirect support costs related to providing services to our customers. Cost of services was $351.1 million, or 71.7% of revenue in Q3 2024, compared to 71.1% of revenue for the same quarter per year. General and administrative expense includes corporate overhead such as finance, legal, human resources, marketing, corporate offices, and other administrative areas. Our general and administrative expenses were $37.1 million, or 7.6% of revenue, in Q3 2024, compared to 8.1% of revenue in the same quarter prior year. Our total company labor costs in the quarter was helped by fewer full-time equivalents, or FTEs, quarter over quarter, despite having 10 more occupational health centers and 11 more on-site health clinics compared to the same quarter prior year. The lower FTEs are primarily in the center operating segment, consistent with prior quarters, where we have fewer FTEs year-over-year, largely due to the lower employer services visits. For the third quarter, we had strong cash flow generation, with operating activities providing $65.9 million in cash flow and our Days Sales Outstanding, or DSO, at 44 days at September 30, 2024, which was three days better than prior years. Our cash flow metrics continue to improve over historical levels. Investing activities used $17 million of cash in the third quarter. This includes $15.1 million in purchases of property and equipment and $1.8 million for the one center acquisition in the quarter. Our teams have done a nice job of managing to consistent levels of maintenance and growth capital expenditures each quarter. Financing activities provided $37.2 million of cash for the third quarter, and with the cash retained by the company from the debt and equity transactions in the quarter, we now have a cash balance of $137 million. With our cash flow in the quarter and our higher TTM EBITDA versus June 30, 2024, our total net debt is now $1.35 billion, and our net leverage came down from 3.9 times at IPO to to 3.7 times at September 30, 2024. We still have our undrawn revolver of $400 million, less $14 million of outstanding letters of credit. Given the solid financial performance and following up on previous quarters' comments about a potential dividend, we are pleased to announce that on October 28, 2024, Concentra's Board of Directors declared a cash dividend of $6 Per share, the dividend will be payable on or about November 22, 2024 to stockholders of record as of the close of business on November 13, 2024. From a capital standpoint, we remain focused on growth efforts and deleveraging in addition to this return of capital to stockholders. The dividend does not change our growth outlook and prospects. Now switching gears to our corporate development efforts. In July, we acquired a practice in Bolingbrook, Illinois, to further expand our presence in the greater Chicago area. In September, we opened a new center in Chattanooga, Tennessee, and we are close to opening a new center in nearby Knoxville, Tennessee. Both are new areas for Concentra, and we look forward to providing additional access points nearby in the future. Post-quarter end in early October, we opened a new center in Orlando, Florida as well. We also had a very good quarter in terms of building our acquisition and de novo pipeline. We are excited about some opportunities we're working on and hope to have more information available soon. We intend to pursue continued organic growth within our existing occupational health centers and onsite health clinics at employer work sites and to take advantage of opportunities to continue to grow our footprint and base of customers via strategic acquisitions and the opening of new centers in key areas. Regarding our separation process from Select Medical, as Keith mentioned in his opening remarks, we made solid progress with these efforts, though it is early in the process. We recruited and successfully hired some key senior leaders that will help support the and they have already taken productive steps towards achieving our end goal of operating completely independently from select medical before the end of 2026. Our hires include a new chief legal counsel who has 30 plus years of healthcare experience, a vice president of transition services and HR who is an individual with years of prior experience at Concentra and in healthcare, a chief information security officer with many years of experience in this area, as well as leaders in accounting and tax to help us replace the services we currently pay Select Medical for. It has been a solid start to the process. Our teams are well synced on what we need to do, the associated costs, which have not materially changed from previous estimates. And finally, just some overarching comments from me on the results from the quarter. and our outlook for the remainder of the year and beyond. Looking back on what we discussed during the IPO process, we feel good about the progress and execution we have shown since becoming a public company. We discussed how we navigate as a company through economic headwinds, including the negative employer services decline, and we showed that through our execution in the second and third quarters. Our reimbursement rate growth has been strong It is predictable and is insulated from any election-related uncertainty. Cost of services remains consistent as a percentage of revenue, as our teams have managed staffing levels very effectively. Cash flow remains robust and margins consistent with prior periods. Our development pipeline continues to grow. We declared a dividend to show our commitment to returning capital to our stockholders. and we have made good progress with our separation from Select and our latest technology efforts. As we continue our path forward as a public company, we will continue with transparency. To that end, we are providing guidance on where we believe we will end the full year for 2024. We expect revenue to be approximately $1.9 billion, adjusted EBITDA to be in the range of $370 to $375 million, capital expenditures to be in the range of $65 to $70 million, and our net leverage ratio to be in the range of 3.5 to 3.6 times. We will have guidance for 2025 early into the new year. With this information and all the remarks from myself and Keith, we hope investors are becoming more familiar with and excited about Concentra. We believe we remain very well positioned for continued success. With that, this concludes our prepared remarks. Thank you for your time today to go through Consentra's business update and third quarter financial results. At this time, we'd like to turn it back to the operator to open the call for any questions.

Thank you. At this time, we will 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 two 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 star keys.

One moment, please, while we poll for questions. Your first question for today is from John Stancil with JP Morgan.

Great. Thanks for taking my question. Strong revenue per visit in the workers' comp side of the business this quarter. Just wanted to get a sense of how you're thinking about, you know, as we think over the next couple of quarters, how rates are going to progress in the workers' comp side, what visibility you have into that. And I guess embedded in my question is a little bit of what you think now, a few months on, the Florida rate update could contribute as we think about next year. Thank you.

Hey, John, this is Keith. Yeah, what we're seeing so far as we go into this coming quarter is a continued strong workers' comp reimbursement from a rate perspective. So we don't see anything any different than what we've been seeing. It continues to be where it is. It's stable. Those increases have been put into place and will continue on. We've got good, starting to get some visibility into 2020. 25 and feel very good about what we've outlined and what our projections are going to be for that also regarding Florida we're you know that's still in line to be put into place in February believe we're not forecasting that number publicly yet this point that yeah yeah John I'll just add to that so Florida still on track no changes from prior quarter

We will give more guidance early into 2025 on where all the states shake out from a reimbursement standpoint. But again, expect that it's going into place January 1st, 2025 in Florida.

Great. And if I can just squeeze a follow-up in here. Just you called out some of the weather impacts in 3Q, and obviously there have been a few in the early part of 4Q. Anything you could do to kind of size how that may have impacted the business on either employer services or workers' comp?

Sure. Yeah, I could take that. So we had Hurricane Beryl in July in Texas. We had Hurricane Helene in late September. And then also in July was the global cyber outage that impacted us primarily on one day in July. The total impact from all three of those, we estimate to be approximately – $1.7 million in revenue and about $600,000 in EBITDA. So definitely contributed to some of the softness we saw in July, but things were much better in August and September.

Thanks so much. Yep.

Your next question is from Jamie Purse with Goldman Sachs.

Hey, thanks. Good morning. I wanted to start with the workers' comp visits per day. I mean, that was up 0.2%. It sounds like there were some of these headwinds across the quarter, but overall, how does that compare to your expectations, and how should we think about trends developing in the workers' comp visit side of the equation going forward?

Sure. Jamie, this is Matt. Good morning. Thanks for the question. So, yeah, we saw positive work comp visit growth in the quarter. Not as strong as we saw in Q1 and Q2, but we talked about some of the events that took place that muted the visit growth. But as Keith mentioned in his remarks, the work comp visits are tied to total employment, and we continue to see total employment increase. So... Our expectations for work comp visits will be in line with Q1, Q2, and Q3, pretty much on a blended average.

Okay, and then I guess a related follow-up. You mentioned some of the sensitivity to the hiring and labor environment and that you're watching that closely. I guess as I look at estimates for next year, consensus estimates for volume growth in both businesses within the occupational health segment. It's up about 2%. I guess, do you need improvement in the hiring and labor environment to get to just roughly that type of level? Is the current labor environment conducive to that level of growth? Just any connection in terms of what you're seeing on the macro front and tying that back to implications for volume growth. Thank you.

Yeah, I would say that we would definitely need to see a little bit of improvement with the hiring and the labor force and some of the statistics out there. But we've mitigated it in other ways, and we're kind of weathering that right now. Our expectation is I think some of the employers and the hiring and things we're seeing right now, we would hope that as we get through the election process and the interest rates question as far as what happens there, that that should start to settle that down a little bit from our expectations as far as what we're seeing.

All right. That's really helpful. Thank you.

Your next question for today is from Ben Hendricks with RBC Capital Markets.

Thank you very much and congratulations on the progress, guys. Just wanted to ask a question about continuing on the hurricane theme. What is implied or what do you have included in guidance related to Hurricane Milton and its impact on Florida? And then looking further ahead, is there any hurricane damage out there or any hurricane disruption out there that's putting down speed bumps as it pertains to your expansion strategy? especially in Florida, given that it's becoming a more influential state? Thanks.

Sure. Thanks for the question, Ben. So we had Hurricane Milton in October in Florida. It had an impact on us, but not incredibly material. When you look at the impact I just outlined for Barrow, Helene, and Cyber, it was in line with what we saw for the prior storms. And that is included in the guidance that we outlined for full year 2024.

And it has not slowed down our efforts as far as M&A and development in that state at this point in time. We still have a nice pipeline that we're looking at right now relative to that. I think the other impact potentially of Milton is actually a positive impact to us as far as the rebuilding that takes place in some of those areas and the potential visit volume to our centers in support of that.

Great. Thank you very much.

Your next question for today is from Justin Bowers with Deutsche Bank.

Hey, good morning, everyone. Can you remind us about the seasonality in the business? Now, the 4Q is seasonally usually the lowest quarter. Looks like last year it was down 7% sequentially, Q over Q. This year, it looks like, just based on the guide, it's The implication is down 5% sequentially, so what are some of the moving pieces there?

Yeah, I'll give an overview, and Matt can comment on any specifics. But typically in our business, the hotter the weather, the more volume we see. We've got the outdoor landscaping and a lot of the construction activities that drive that. Fourth quarter is by far our lowest quarter with the holiday season and the weather cooling. That's what we've experienced year after year and have historical trends that show that. What we see here in the fourth quarter of this year is no different than what we've seen for past history many, many years. It's pretty much in line with exactly what we've always seen.

I'll add to that, Justin. Obviously, we put out guidance for the full year, but you can apply our thoughts for Q4. But we expect to have a nice Q4 that will be up versus prior year. We had some one-time items last Q4. So when you do the calculation on what's implied, you'll see that we are estimating to do better year over year than we have for the first three quarters.

Got it. Thank you. And just a couple clarifying questions. It looks like, from the prepared remarks, we have two new centers in OncHealth coming on in the fourth quarter, and then 10 onsites as well. Are those coming online in 4Q, or is some of that going to spill over into 1Q? And then part two is just on the guidance early in the year, are you going to issue that prior to when you release 4Q results?

Sure. I'll take the first question first. So we have two more sites coming in Q4. We've got six or seven signed leases for next year. The onsites that you referenced, the 10 additional ones that we had comments about, those were onsite wins that will come over Q4 and into 2025. So they'll be spread over time. as those employers are ready for those onsites to come online. And then the second question, remind me your second question.

Yeah, just around, you said guidance early into the new year, so I wasn't sure if that meant you plan on releasing prior to when you issue, you know, 4Q results or... Sure.

So we'll have Q4 results late February, early March. Good chance that we'll provide guidance before that, but still TBD. We'll be at some of the major conferences in early January and February.

Understood. Thank you.

Yep.

Your next question for today is from Anne Hines with Mizzouho.

Hi. Good morning. I'm not going to provide any 2025 guidance, but are there any major headwinds and tailwinds that you want to call out that we should consider while we're finalizing models?

No, nothing significant from what we've said in the past and prior quarters and during the roadshow process. I think the visit trends have been pretty consistent and Keith talked about expectations for getting through the election and some interest rates coming down and our viewpoint there. We talked about our growth trajectory and our pipeline, and we've also hit the Florida increase, which will help us next year as well.

And I think we've taken good steps on the separation from select and are well on our way down that pathway with no material differences than what we were anticipating. So I think we've got good visibility into that, and I think we're fairly excited about what – 2025 shows for us.

Perfect. And I know Florida is a state that you're getting a nice bump. Are there any other states in the pipeline that you think you could get positive rate increases that haven't done it for a while?

I wouldn't say, uh, I would say no. Uh, you know, it, it depends on what the states that have been doing it, what they come back with as far as MEIs and CPIs and those type things. And like I said, it's, uh, we're starting to see a few of those, but, uh, it's still a little early before they will put those into place. But, uh, uh, there's always surprises every year, uh, uh, that we see. And, uh, But we feel pretty good about the visibility we have as far as what's going to happen from a workers' comp standpoint. And we're already sticking a stake in the ground relative to what we think we're going to do from employer services. So I think we feel pretty good about where we're going to end up on both those.

Great. Thank you.

Your next question for today is from Stephen Baxter with Wells Fargo.

Hi, thanks for the question. Obviously, I understand the focus on the economic backdrop, which obviously is out of your control. I'd love to hear a little bit more about what's in your control in terms of what you're doing to work more closely with employers potentially to support maybe a greater percentage of their workers' comp or employer services needs. I guess what I'm wondering is, in the past, have there been periods where maybe those employers are under more pressure and have looked to you for a greater percentage of their needs? Or in general, how do we think about the economic sensitivity of the sales cycle into employers? Thank you.

Yeah, I would say for the most part, whether it's a down economic or an up economic trend, We work pretty consistent with the employers as far as trying to penetrate further both their injuries and their workers' comp and their employer services. We're really prospecting every single channel. It's just not the employers that can direct that business to us. It's third-party claims administrators like on the workers' comp side, like a Sedgwick or a or a workers' comp insurance company, similar to a Liberty Mutual or a Travelers, where we're putting pipelines and things in place to try to create an ease of them potentially getting patients to us. Same thing on the employer services side, where some of these aggregators, these third-party administrator aggregators on the employer services, like an eScreen or a First Advantage, Or a good example is Certify, which basically coordinates DOT driver physicals and drug screens, really developing those pipelines with them to be their choice for directing those individuals to us for whatever their needs are. So it's prospecting a multitude of pathways within the workers' comp and employer services ecosystem, not just the employers.

Okay.

Your next question for today is from Joanna Gajuch with Bank of America.

Joanna Gajuch Hi, good morning. Thanks so much for taking the question. So I guess first I want to follow up on the comments you were making on workers' comp rate increases. So I guess this year, year-to-date, I guess rates on average are up, call it 2% year-over-year. So is it a number to assume into next year, 2% call it, but maybe a little bit more because of the Florida rate update?

Yeah, so Joanna, good morning.

Thanks for the question. So yes, 2% year-to-date, 2.7% for the quarter from a work comp standpoint. Longer term, as we've mentioned in the past, we still expect plus or minus 3% on an annual basis, and we expect it to be slightly higher next year given the Florida increase.

Great.

And another, I guess, follow up on the economic backdrop and exposure there. So can you talk about your exposure to different industries? And is it different for your workers' comp versus your employer services?

Yeah. Go ahead, Kate. I was going to say, you know, from an employer services side, when there's lower quit rates and less hiring and less job growth, and certainly you'll feel the headwinds there before you feel that on the workers' comp side. Typically on the workers' comp side, you don't feel it as much until they're actually in a layoff position where that employed workforce actually begins to drop, which we have not seen that happening. And when you look at kind of the layoff situation out there, we haven't really felt anything any different than other years. So that's kind of plugging along as it historically has. And we would hope that as we continue, like we mentioned earlier, getting through the election cycle, some of the interest rate changes that the employee hiring activity starts to pick up, and we'll pick that up with our employer services volume starting to pick back up.

And, Joanne, we added a new chart in our investor deck on page six that shows our industry mix. And the main takeaway there is we're highly diversified from an industry standpoint, as you can see on that page. At any point in time, there will be some industries that are up, some industries that are down from a visit perspective at Concentra, but the diversification is key. and we wanted to call that out here on this slide six here.

Yeah, thank you. But I guess I was asking whether there's any difference between the workers' comp and employer services businesses, or they kind of look, the pie charts would look the same if you would try to split?

No, they would look very similar.

Okay, I just want to confirm that. Thank you.

And if I may just say the last one, you know, I guess follow up, you mentioned, The onsite, right, adding more location, but then also these advanced care, primary care offerings that you announced. So can you give us a little bit more flavor of how they're tracking and what this could be, I guess, over time? Is there any target you have in mind? You know, how big this business could be? Am I asking about this advanced care, primary care offering? Thank you.

Yeah, sure. So we launched officially during the quarter the advanced primary care offering in our onsites. We won 10 additional sites, as we mentioned. Some of those were primary care. Some of those were occupational health. We're early innings with that new service line, but we'll continue to grow that business. We think it would be a nice contributor, and we can be much larger in size with that portfolio as it relates to our total company.

Also, there's a lot of opportunity there from an M&A activity for us also. You look at where we are As an organization, we're probably a top 10 as far as size. Some of the bigger ones are several million larger than us, but I think there's some real opportunity relative to that industry and our ability to evaluate some M&A and opportunity here in the near future.

Thank you. Thanks for the call.

We have reached the end of the question and answer session, and I will now turn the call over to Keith for closing remarks.

Thank you, operator. Appreciate everybody joining us today. We look forward to speaking with you early 2025. Thank you.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.