Q4 2019 Earnings Call
Ladies and gentlemen, thank you for standing by welcome back.
2019 fourth quarter results conference call at this time, all participants are in listen only mode. After the speakers presentation they'll be a question answer session. So that's a question. During this session you want me to press. The Star then one key on you touched on telephone. Please be advised that today's conference maybe recorded if he would cooperate assistance. Please pass.
Dan So I.
I would like for Handbook, often so what's your speaker today couples that differ. Please go ahead Sir.
[music]. Thanks, Olivia good morning, everyone in and we appreciate your joining bad years 2019, Q4 in our annual Investor call. Joining me. This morning is our CFO during your worst keep our COO, John Kelley and Jay Bachmann RVP of financial operations.
Our Q4 earnings release, you haven't DNA financial statements and <unk> were released after the market close yesterday and are available on the Investor section of our web site and also on SEDAR.
Before we get into that so the to call today, we're required to note that some of the statements made on the call may contain forward looking information in fact, all statements made today, which are not statements of historical fact are considered to be forward looking statements.
We make these statements based on certain assumptions that we consider to be reasonable. However forward looking statements are always subject to certain risks uncertainties and undue reliance should not be placed upon them as actual results may differ materially from those expressed or implied.
For more information about material assumptions risks and uncertainties that may be relevant to such statements. Please refer to Badgers Q4 press release, the 2019, M. DNA and Badgers 2019 annual information form.
Further such statements speak only as of today's date and Badgers not undertake to update any such forward looking statements.
I, usually read this every quarter and it sounds, but you're clearly germain in Q4 2019.
So let's get into it I'd like to start with an update on our ERP implementation a huge focus for the entire organization throughout 2019.
We're delighted to confirm that through Q4 and into January 2020, We successfully went live with ERP across the entire company. This is a very significant accomplishment and we're very pleased to have the rollout behind us.
As we now move into the refinement phase of implementation throughout 2020, you'll see us focused on driving efficiencies of the system in order to get the many managers who are dedicated a lot of time and effort to this project back to their day jobs of growing Badger and at the same time, allowing us to move forward on a number of efficiency initiatives.
I'll speak more on the ERP implementation in a couple of minutes.
Now some comments on Q4 financial and operational performance.
Q4 revenue was 167.2 million adjusted EBITDA of 35.8 million in consolidated RPT of $31075 Q4 revenues adjusted EBIT da and RPT were consistent with the outlook that we put it out in November with full.
Your adjusted EBITDA of 158.4 million.
On a quarter over quarter basis, Q4 is lower than the prior year, which is due primarily to an exceptionally strong Q4 last year as you may recall in as highlighted in the Q4 release. The prior year fourth quarter results included the benefit of 20 million emergency response revenue, which did not recur this year.
Sure.
That workers related to hurricanes in the southeastern U.S. and also related to the wildfires in California.
They had emergency response revenue was the primary driver of Badgers record it to 2018 Q4 performance.
Some color on our Q4 revenue.
Q4 revenue was 9% lower in the U.S. and U.S. dollars with revenue in Canada down 10% compared to prior year.
Although overall growth was lower in Q4 relative to recent quarters, excluding the impact of emergency services revenue, we continue to experience positive growth in majority of our U.S. regions.
Revenues in Q4 continue to be original story as it generally is that badger with a combination of factors driving consolidated revenue and EBITDA.
As detailed in our Q4 earnings release revenue growth in the quarter was impacted by the following.
The various variations in regional revenue and the growth rates with the majority or regions continuing to deliver overall revenue growth.
I mentioned the lack of the 20 million of emergency response from Q in Q4 from that earlier years quarter.
Revenues in Western Canada declined and have declined the last several quarters as a result of reduced oil and gas activity. This market in Alberta insists catch one in particular is looking like it's gonna be sauce list for some time with some real structural challenges and we continue to optimize the branch network.
Looking at our expenses and of course relocating trucks.
In addition to lower oil and gas activity in Western Canada, we've seen activity levels, and our U.S. oil and gas markets be slower versus prior year.
Again, we anticipate a continued slow down in these markets and really really highlighted by the recent market in commodity by volatility in those markets.
And we expect that a lot of uncertainty to continue here in the coming months.
We are very pleased with increased revenues and operational performance in eastern Canada. Those improvements have been made in Ontario over the past year in a really moved the needle inherent in our interior business on both growth and profitability.
In 2019, we opened 16, new service locations and of course, we have plans for additional locations for 2020.
The opportunity in the U.S. is to expand not only at existing locations, but also continue to open new locations to drive growth and that remains a key driver in a focus for us.
For Q4 and for annual 2019.
U.S. revenues accounted for 78% of our total revenue.
We added 49, Hydrovacs and retired eight in the quarter for a net added 41 units and for the year. We added 199, Hydrovacs and retired 56 for a net out of 143.
Hydrovacs build in retirement for fiscal 19 were both in line with the outlook that we talked about in November.
As I previously noted adjusted EBITDA for Q4 was 35.8 million with an EBITDA margin of 22%.
The primary factors driving the change in a duck adjusted EBIT da and an EBITDA margin were.
As I mentioned, the absence of 20 million an emergency response revenue.
Which more than offset continued growth in a number of our U.S. markets.
It also reflected continued pricing.
Initiatives and improvements related to that with hydrovacs rates consistent to modestly higher across the majority of our regions.
Lower activities in Western Canada.
As a result to continued weakness in oil and gas more than offset stronger revenues and financial performance and lower Canada.
Also impacted Q4 in overall 2019 year to date margins were higher gionee costs related to the ERP implementation, which we had highlighted as a headwind and a factor in our outlook back when we released our Q3 earnings.
And lastly, the adoption if I ever I have for rest 16, he had a positive impact similar to previous quarters of approximately 1.1 million.
Some comments on net earnings in the corridor and net earnings were 17.8 million compared to 31.9 million in Q4 last year.
Net earnings were impacted by the same drivers as discussed a minute ago on adjusted EBIT da with a further impact related to higher depreciation expense due to growth in the fleet offset by lower share based compensation expense due to a lower share price in Q4.
Now just a couple of comments on the balance sheet and shareholder return initiatives Badger's balance sheet continues to be strong providing the necessary flexibility to support growth opportunities strategically to strategically manage capital allocation and deal with uncertainties in the economy.
As of year end total debt less cash was 170 point 877.3 million or 1.2 times trailing 12 months compliance EBIT da.
Badger continue to utilize the NC I'd be program during Q4, and under which we repurchased and canceled 210000 shares in the quarter.
Since we began repurchasing shares under the NC IB and Q4, 18, we have repurchased and canceled approximately 2.2 million shares or 6% or the float.
As a follow up to our discussion from last quarter I'd like to make a couple of comments on our accounts receivable in our aging.
Due to a combination of growth in the business a lot of internal focus on ERP aging of our receivables portfolio at year end is not at Hearst historical levels, or where we foresee or expected to be in the future.
Darren and John's teams are focused on getting back to Badgers, historically, our standards and improving beyond those.
We anticipate steady progress on the portfolio throughout 2020 and are pleased with progress in Q1 on dsos compared to our Dsos at year end.
Badger also continued its focused on overall shareholder returns.
We increased the dividend by 6% back in March 2019, well at the same time continuing to repurchase shares under the MCB.
In Q3, Darren extended an upsized, our credit facility, which together with Badger strong balance sheet provides the company with ample financial flexibility to support growth in operations across a wide variety of economic conditions.
Considering badgers financial position the board approved an additional increasing the dividend for this year of 5% effective with the March payment.
Now that I provided some color on Q4 I'd like to spend a minute to highlight the progress made during 2019 on several key initiatives as well as providing an update as to what we're going to be focused on for 2020.
2019 was truly a transformational year for the company, we focused on building out our systems standardizing business processes and strengthening key business functions. All of this work to to allow us to establish a platform to support growth in capturing the north American market opportunity that we.
See over the long term for non destructive excavation.
These investments began to be made during 2017 continued at 18 and in particular ramped up with our ERP implementation in 2019.
These are long term decisions and actions, we've taken to sustain long term profitable growth.
Our new year ERP system is now live across the entire organization.
It's quite an accomplishment.
Corporate Apple <unk> operations went live in Q4, and we ended up with our franchisees and operating partners going live in the month of January.
We're very pleased with the regional rollout the strong execution on this project would not have been possible without the dedication and significant commitment of time and energy from the entire badger team.
The ERP implementation of course was a top focus for us during 2019 significant employee involvement from across the entire business, which we acquired from design to testing to.
Right through to rollout.
The team committed significant time away from day to day operations to ensure this project is a success. We've all heard about companies, where this has not been a success and I'd much rather take the time away and the commitment to make it go right. The first time.
It makes all the difference in the implementation.
However, this time away from the business was a distraction in a significant one.
A lot of work and especially when you get into their rollout phase, it's all consuming theres no turning back.
So, whereas the ERP project moves now from rollout into the operational phase, you'll see us seek to aggressively realized the operational and financial business benefits that are inherent in the system design.
Our focus in 2020 will be on continuing to drive organic revenue growth of course, realizing the benefits from the ERP system and managing margins as we always do through operating cost and strategic pricing initiatives.
So a comment on our 2020 financial outlook.
As outlined in the Q4 press release, we are staying with and confirming our 2020 financial outlook as outlined back in November. However, the events of the last several weeks have really brought forward a tremendous amount of economic uncertainty probably as high as it's been.
Since the last financial based recession.
We are very closely monitoring events surrounding the Corona virus and also recent financial and commodity market volatility, we will actively manage any impact to the business customers and employees were working to ensure that appropriate policies are in place and communications are in place to predict our employees.
And customer safety in any impact on the business.
We will take all necessary steps to manage the situation as events unfold and this week there is certainly unfolding.
Given the dynamic nature of their Corona virus, it's really difficult to determine the exact nature of its ultimate impact significant uncertainty exists across financial when commodity markets with the potential impact on the global and North American economies quite uncertain at this point.
It's unclear what the long or short term impact may be on operations.
But you can be assured in the event of any economic downturn in any of our markets. You. All know what we're going to do we will proactively reallocate hydrovacs across the branch network in response to different activity levels in different regions. This is our been our historical past practice will continue to manage our capital expenditure.
Ladies and build very prudently and we'll continue to push hydro VAT growth in many markets, where hydrovacs is underutilized.
When we get to the point, where we can provide an update on the outlook and we have a view based on the the future in as things start to clarify will provide an update.
Despite the near term disruption that the Corona virus has created we remain focused on generating profitable long term sustainable growth to drive long term sustainable shareholder returns.
With that in conjunction with our 2019 Investor day, and consistent with past years, we had confirmed our three to five year strategic financial and operational milestones, which we talk about each quarter, which consist of number one doubling the us business from fiscal 2019 levels over a period of three to five.
Five years growing adjusted EBIT da by 15% a year targeting adjusted EBITDA margins of 20% to 29% in driving fleet utilization and maintaining revenue per truck per month above $30000.
In closing, we want to reiterate the key to Badgers business model is consistency of approach.
We've always historically managed for the long term, we've made a lot of investments over the last several years that set badger up for a very very good future in health and safety and environmental and human resources in sales and marketing and manufacturing fleet, we've strengthened the finance organization and in 2015 have implement.
At a very successful ERP system.
These investments are being put in place to create the operating platform to profitably catcher significant market opportunity that we see in Canada and the us for non destructive excavation.
So with that why don't we turn the call over to the moderator Livia open it up for questions.
Thank you, ladies and gentlemen, I wanted to ask a question.
The one key on you touched on telephone.
So with all your question please press the pound.
Please standby Wally kubacki many roster.
And our first question coming from the line.
Link with Canaccord Your line is open.
Okay.
Hi, good morning.
Hey, Gerry.
Paul.
Little more color. Please on what went on in Canada in in the quarter.
I mean, you saw your RPT come down.
Quite substantially in the quarter.
Normally I would've thought that.
We would have seen an exodus of trucks from Canada, but it looks like you added nine so just why add trucks. When you know your margins are down in RPT is down and I guess more importantly is there anything that's prohibiting those trucks in the in the oil fields.
Alberta from moving into other applications.
Yeah, no good question very much or regional east and west different story there Uri.
The trucks added we're in the east.
We've had a really nice growth run in 2019, not only in our corporate operations, but also with our operating partners our franchisees in eastern Canada that are growing so that's been real gratifying for us in the west there were some projects that finished up.
That required to units in the west and we're looking very carefully and very closely at what needs to be moved that's that's the way we always do it and it's just a matter of timing.
The trucks in the West Paul.
Are they all could could those come right out and go and move into.
Onto the highway and move into other applications, whether they're not overweight or different different configuration.
No not is no no physical restrictions on operating jurisdictions, that's the way we design Badgers and they are designed to be compliant and all regulatory jurisdictions across North America.
Okay.
You ended you ended the year.
About two and a half million lower on SGN a than than I think where you indicated Bakken back in the Investor day.
Okay.
Was was that SGN, a pushed into into 2020 or.
I guess in hindsight is it just appear that you were a bit of it conservative in your and your outlook for us DNA for the year.
Yes, not so that's a good question SGN A's near and Dear to our heart and we'll continue to be.
Anytime you have a monster project like the ERP.
You know, there's there's lots of expenses.
That get booked in did get paid so we did a really good scrub at year end as to what expenses were part of ERP, what what might not have been what needed to be capitalized what needed to be expensed based on all the IR for ESC guidelines. So we did a good scrub on that and wanted to end the year.
Nice and tight so that's basically what it reflected.
Okay.
[music].
Last one from me I'll turn it over I, just want to dig in a little bit on on your gross margin expectations.
If if if if I compare.
This 20 2019 was 2018.
You did get a bit of a boost from from I. FRS. So.
Think on a like for like basis, you're down about 100 bps.
So you would think it would be a bit of an easier compare.
And 22020, so what are some of the puts and takes that's that or perhaps weighing on on margin and what you're doing to address them.
Yes, well some of that takes so in 2019 had been labor we've had to respond to some regional labor pressures in the us.
That's been the most significant one on the gross margin perspective, and you know that you'd have some regional regional differences for sure in that area, but that would be their major category. That's that's our biggest operating expense.
And.
You try to.
Increased pricing to make up with that there has been a lag on that in several markets.
With the new system in the visibility we have going into 2020, we're in a much better position.
Visibility into the regional pricing.
To to try to stay ahead of that and a very different world. We're in going into 2020 on ability to see what's happening in the business so mostly lagging on on.
Making up for labor increases.
Okay, I believe it there and turn it over thanks.
Okay.
Our next question coming from the line of Maggie.
With Stifel. Your line is open.
Good morning.
Okay.
So.
First question and this may be difficult to answer but obviously.
Okay conditions and economic conditions are changing.
Great rapidly for everybody and I'm wondering if you are able to help us out this understanding.
Should the U.S. shale.
Market go the way that the Canadian energy market has gone over the past several years.
What.
Type of exposure would you have to that or perhaps.
What would be the magnitude of badges that would be potentially moved around into new markets in order to put their network and other places.
Yeah, no great Great question Maggie.
I I go back to the disclosure in the AI us and in oil and gas from Badger is 22% last year.
Generally and this is a broad generality, but pipeline and distribution systems the utility piece.
Of the oil and gas segment. If you were is approximately half of that and then the other half of that would be a combination of facilities work.
And.
Upstream field work. So the question you asked is really the impact on upstream field work.
Course, with a broad economic downturn people could cut capital budgets on the other segments.
But it's really about say a half of a half quarter, 25% of this segment.
Okay.
And.
I'm wondering if we could discuss just a little bit this indirect versus direct cost.
That's related to the CBP.
And ERP implementation.
So.
Do you have any direct costs remaining related to the the ERP I suppose we could discuss in isolation and then.
On the indirect cost component.
What amount was actually embedded in the Q4, SG, ne and perhaps stick to the path this year to sort of wines does indirect costs down.
Okay.
There there will be continuing CBP implementation costs as we're still in hyper care. We're in post rollout hyper care, where we have support.
From consultants and that continues that will continue for a few months very normal.
And we just finished going live about six weeks ago. So that that's pretty normal with ERP is and I guess, Darryl and I might refer to you on the second half a Meg his question about the direct and indirect in Q4, we did call that out in our full year guidance.
And I don't know how you might think about answering your question.
I would have to refer back to the guidance on that sure.
Big Maggie that the breakdown that we gave in in Toronto back in November is pretty much still par so just to refresh everybody.
There is three bracken components, there is the consulting costs.
Associated with the implementation itself, which went from being capitalized to expense.
In Q4 for the chunk of those costs. The second component was the infrastructure that was the infrastructure spend that we accelerated to ensure that we had.
The network strength to be able to to run Oracle.
Then the third the IP costs. So similarly.
We had gone from a very lean he grew to a much larger group to be able to support the implementation and through that process. A lot of those people that were hired where we're consultants and our consultants. So there is a higher cost structure versus our anticipated run rate on the IP side of thing.
Okay.
So I refer back to the Mdna for this quarter I think there was 1.9 million in DNA directly associated with ERP and so should we expect that run rate to continue for a few moments.
While you are still sort of in.
Hypercare I think is what you called it a and then the indirect cost the 10 million that you referenced.
Is that Gionee related.
And should that be expected to continue for a few more months or is it more like for a couple of quarters or just trying to guess senses to how to model that.
Sure so the the discrete costs in in.
In Q4, though the 1.9 million.
We would anticipate some of those cost to leak into Q1 of 2020.
Back to Paul's point about supporting the hyper care and stabilization of Oracle, which is quite frankly going really well.
With regards to deal with other indirect costs the infrastructure component will continue to run in DNA.
But we'll see a marked improvement in our IP.
Personnel Genie costs.
Likely the second half of here.
Okay.
And then a final question for me on.
Priorities for.
I guess capital allocation.
No we see the market have a very significant sell off in the last couple of days in particular and I'm wondering.
If that has need your view of your end CRB.
As it.
You know mechanical a bit more attractive for.
Hi, just sort of thinking three things as they're quite dynamic at this point.
Yes, well they certainly are different dynamic megi, probably an understatement. This morning.
But.
As as we did announce the board did approve another 5% increasing the dividend we consider this to be a very good use of capital and in part of our overall shareholder value.
Equation and we do have the existing NC IB that is in place through May.
And we are looking at options as to what we do after that which were not in a position to disclose yet.
But we're currently in blackout.
We're buying under the NC IB and as our blackout ends.
Thank you will what you'll see as our activity reflected in the public filings.
Paul could you. Please remind me how much you have remaining under the current NCB.
Yes, it's about half on just a little under a million shares I believe Maggie.
Okay. Thanks very much.
Thank you.
Our next question coming from the line Jonathan.
From BMO capital markets. Your line is open.
Good morning.
Jonathan.
Paul a question on the Q4 in your prepared remarks, you mentioned there were variations in us revenue by region.
Were you referring to declines for the hurricane markets only or.
Declines for any other.
Market. Thank you for.
No well, if we did touch on earlier on oil and gas and of course, we've seen continued year over year declines in Western Canada, we've seen declines in in.
West, Texas, and the mountain states related to oil and gas.
And then when you when you look at other markets.
Badger is always a story of our regions, but we talked about Ontario earlier, good growth in Ontario, good growth year over year in the northeast and and slightly lower sales in the southeast.
Texas non oil and gas has been very good and solid.
In the West Coast, California up into BC have had good over year over year growth. So so it gets yet as usually with badger its theres different activity in different regions, but that would be the characterization of Q4.
Okay, and we're pretty well into Q1.
Like our revenue per truck trends, then through Q1 state.
Well, we typically would would disclose all of that along with our our Q1 earnings.
But just some general color on revenue.
We've had revenue the first couple of months slightly lower than last year and anytime you're in winter you have pluses and minuses there and for March we're seeing very typical seasonal uptick from February very very good growth from February and and so now we just to get into my.
In April and May now you have different markets transitioning from winter weather into spring weather patterns and our March up tick. So far has been very typical as to what we've seen in past years.
Thanks.
And.
You highlighted the opportunity in the west.
Western us.
Do you have plans to recruit a.
BP to manage those operations.
Yes, what we've done is John has restructured our overall operations span of control with Lynn Peterson, taking approximately half of the eastern the eastern half of North America.
North to south across the Canadian border and Tim Reiber, taking over though the west half and it splits Badger approximately 50 50 based on truck count employees.
And we're very very pleased.
With both lives and Tim taking on those responsibilities and expect great things.
And as the last question.
Yes, we have spent some time talking about economic uncertainty out there.
Just to be clear are there any indications of changes in customer activity.
To date.
And you have any comments on how we should think about potential.
You know effect for the.
Infrastructure and markets.
Yeah, No. That's that's a that's something we're obviously watching very closely I mean, we have had economic and industry impact in the oil and gas segments that we talked about earlier and it looks like there's going to be more of that uncertainty to come we're watching very closely what the MP companies are saying about there there.
Budgets.
And there they're drilling plan their drilling programs.
You know pipeline and distribution the utility like piece of our oil and gas.
Operations.
We see continuing activity there with projects being mobilized.
And you know as that we sit here today in the rest of our business, we've not seen significant project cancellations.
We were talking with the board yesterday that Theres, one company that had a facility that they've shut all outsiders out of and Thats, a pharmaceutical manufacturing company, which no surprise.
In that type of manufacturing operation. It makes total sense to not have outsiders in a note that would include the U P S and the post man, so, but other than that and outside of oil and gas.
As we sit here, we've not seen significant dislocation, but it doesn't mean that in a general economic decline, we won't see companies deferring decisions.
Moving to maintain liquidity and delaying things.
We just haven't seen it yet.
Thanks for your comments.
Great Great question.
And after minor ladies and gentlemen to US question. Please press the star agenda, one key on your touched on telephone.
Next question coming from the line of Daryl Young with TD Securities. Your line is open.
Morning.
Hey, Darryl.
My questions with respect to the ERP and just in the past you've talked about the revenue opportunities as well as some cost savings for truck tracking.
Just wondering if you could maybe give us a bit of update on how that progress through Q4, and maybe what strategies or plans you might have in place.
To leverage that.
To drive revenue this year.
Yes, no great question. It is an exciting opportunity for us and as I mentioned earlier relative to pricing the visibility that we've had in our early days again, we just finished go lives six weeks ago.
He is very exciting and it applies to many aspects of our business.
On the truck side [noise].
Gives me.
We are we're really looking at how else we can track utilization.
And what other ways, we can track utilization.
And to help us the manage the uptime and also helped us manage moving trucks around so there's some term opportunities there.
And I mentioned pricing earlier, but also there's there's other.
Other opportunities top to bottom in the income statement.
From direct cost management to tracking indirect costs the branch, yes DNA.
So we'll be looking at all of those but it's early days in Q4. Your question was about Q4 really we were all hands on deck to get rolled out and it's an intense process. So.
John and Darrin are very closely coordinating on the type of KPN, guys and numbers that John and his operating folks would like to see in Darrin with his business intelligence team now has access to information to start to make and reports, but it's very very early days, but we're very pleased with.
What do we have seen so far.
Excellent and then can you just remind us what percentage of your cost is fuel cost just with.
Gas prices, presumably you're about to decline significantly.
Yes, well if you look at our three biggest operating cost of direct labor on the trucks, you know plus or minus 35% to 40% range than you have maintenance and repair on the trucks in the range of 6% to 7% and then fuel will be the next biggest in five plus or minus <unk> percent range of our up north.
We're all percentages of revenues.
Okay, great. Thank you very much of that for me.
Thank you.
Our next question coming from the line.
Capital Your line is open.
Morning, guys.
Hey, Trevor.
Hey, I'm just wondering if you can give us a little better sense of what the percentage of Canadian revenues is from Alberta, and then Scotch one.
And the oil and gas industry in spirit in particular.
Yes, it's up pretty pretty well split about half and half east and west.
Okay.
And then I'm just on the receivables.
Well you guys were looking at the implementation of a pre authorize payment on smaller jobs. So just wondering how that is that system in place now or what so what's the timeline on that.
Yes that system is a follow on to the go lives. That's that's been the way we've planned it and it's a it's a Q1 early Q2 activity and and I'm pleased to report that is proceeding very well.
Good thanks.
Okay. Thanks Trevor.
Well I guess, just one quick follow and then like so you expect that to probably have an impact than in the back half there.
Oh for sure we're very excited about it and and you know there that that implementations going well, we didnt want to do it in the midst of the rollout.
But.
I am I personally very optimistic on the benefits were going to see from that.
Great. Thanks.
Thank you.
I'm not showing any further questions at this time I would like to turn the call back over time.
For closing remarks.
Okay, Thanks, Libya and thanks, everyone for joining us this morning.
Been an interesting several weeks.
And we appreciate your interest in Badger and and you know what we're going to be doing we're going to be looking at driving growth managing our income statement top to bottom and moving trucks around to optimize shareholder capital. So until we talk again in may Thank you everybody.
Ladies and gentlemen that doesn't teleconference for today. Thank you for your participation you may all disconnect.
[music].