Q4 2019 Earnings Call

Yep.

Thursday

dead dead dead dead.

Good morning, ladies and gentlemen, welcome to Clyde's fourth-quarter and full-year 2019 conference call during today's call. All participants will be in a listen-only mode. So you need assistance with any time placing an all-conference specialist by pressing the star key followed by zero.

Aside presentation accompanies today's webcast in participants are invited to follow along advancing the slides themselves to access the webcast follow the instructions posted in this morning's wage earnings release alternatively. You can access the slide presentation on the investors section of quads website under the events and recent presentations link following today's presentation. The office call will be open for questions to ask a question when prompted. You may press star and then one of your touch-tone phones, so it's all your questions. You may press star into please also note today's event is being recorded and at this time I'd like to turn the call over to Kyle Keegan quads director of investor relations and assistant Treasurer, please go ahead.

Thank you operator and good morning everyone with me today or Joe quadracci quads chairman president and chief.

Executive officer and Dave Holden quads Executive Vice President and Chief Financial Officer in terms of our agenda today. Joe will lead off the call with an update of our fourth quarter in 2019 performance and it continued progress. We're making with our quad 3.0 transformation. Dave will follow with a summary of quads fourth-quarter and full-year 2019 Financial results and a summary of our 2020 guidance office followed by a Q&A. I would like to remind everyone that this call is being webcast and forward-looking statements are subject to Safe Harbor Provisions as outlined and recorder a news release and in today's slide presentation on page two quad Financial results are prepared in accordance with generally accepted accounting principles. However, this presentation also contains non-gaap Financial measures including adjusted ebitda margin free cash flow and debt leverage ratio. We have included in the slide presentation reconciliation of these non-gaap Financial measures to gaap financial measures dead.

Finally a replay of the call and the slide presentation will be available on our investor section of quad shortly after our call concludes today. I will now hand over the call to Jewel. Thank you Kyle and welcome everyone. I am pleased to report that her fourth quarter results, exceeded expectations driven by continued execution against our strategic priorities including aggressive cost management and increasing factoring productivity as well as winning new work to offset organic sales decline. We had one of the best quarters in the past decade in terms of customer service performance package eating strong quality and on-time delivery performance for our clients in their busiest season. This strong performance is due in large part to our decision to invest forty million dollars a month to increase our early production employees wages as we saw significant productivity gains throughout the quarter given this performance. We ended 2019 with net sales.

Just leave it and free cash.

Exceeding revised 2019 guidance and we reduced our debt leverage ratio to 3.1 times in 2020. We will continue to transfer him quad as a Marketing Solutions partner direct consistent focus on our five key strategic priorities as shown on slide three. Our first priority is to grow our business probably over the long term by faith in our data-driven print expertise as part of an integrated marketing Solutions platform this unique platform helps our clients not only plan and produce marketing programs, but also the birthday boy manage and measure them across all traditional and digital channels. It creates greater value and growth opportunities for our clients by helping them to reduce the complexity of working with multiple agency partners and vendors eliminating multiple hand off that compromise both the strategy of the programs as well as the speed at which they are executed increase efficiency wage.

Your workflow re-engineering content production and process optimization and improve marketing spend Effectiveness across all channels through data-driven consumer insights planning and creative and campaign strategy.

our second

Priority is to walk in the shoes of our clients by listening to their needs and developing solutions to help them grow their businesses.

We made it a priority to strengthen relationships at all levels within our clients organization so we can better understand and anticipate and sell their problems. We're Advance conversations Beyond execution to be more consultative and centered on enterprise-wide Marketing Solutions to facilitate these conversations. We continue to hire additional experience Market hotel with client-side or agency experience.

Our third priority is to strengthen our core print manufacturing platform in 2020. We will continue to optimize our platform and make the necessary long-term investment to streamline automate and improve efficiencies and throughput and drive labor productivity so that we remained Industries high-quality low-cost producer.

We continue to adapt our platform for the realities of a changing print industry such as the need for quicker make readies and shorter runs. We also offer our clients the ability to efficiently produce multiple different product lines Under One Roof. We continue to engage in Power employees to find a better way every day. We Foster an environment that encourages employees to embrace quads cultures continuous Improvement in an effort to not only drive ongoing productivity improvements, but also product service and Technology Innovation, all of which helps our clients succeed in today's evolving landscape. And finally we managed all aspects of our of our business to enhance Financial strength and create shareholder value over the long-term in 2020. We will connect you to prioritize the leveraging the company's balance sheet through debt reduction.

Our transformation is a Marketing Solutions partner.

Is our strategy to counteract ongoing print industry volume declines and reposition our company toward growth during 2019. This strategy led to $225 off of organic incremental sales growth helping to significantly offset. The decline in organic principles. Our ultimate goal is to completely offset Thursday Klein through growth of our higher margin of marketing Services, which also Drive incremental print Revenue across all our product categories.

As we turn to slide for I want to share a few examples of how we plan to accelerate our transformation as a Marketing Solutions partner and continue to offset organic print sales decline first. We will continue to aggressively manage our product portfolio evaluating are offering with a focus on long-term value-creation and strategic fit last month. We completed the divestiture of our own new packaging plant which specializes in high-volume low-cost converting for folding cartons and is a better fit with a vertically integrated supplier that operates both paperboard Mills am eating facilities. However, we are committed to packaging for the long term and this sale allows us to focus our efforts on higher value packaging solutions that help clients create a couple of brand experience across all channels from consumer packaging to print broadcast and digital advertising and in-store signage and displays.

Last year, we divested our industrial would creating business trans back.

Announced her decision to divest our book business which is progressing as expected as we reviewed our product portfolio. We determine these businesses could not be leveraged as part of our greater injected Marketing Solutions offering by shifting away from certain product lines were not only better allocating our Capital but also better allocating our Focus allowing us to make significant gains in other product areas over the last few years. We have made bold decisions to strengthen our platform to ensure marketers and Publishers have access to a stable supply of we have used our economies of scale strong balance sheet and access to Capital markets to take advantage of consolidating acquisition opportunities using a very disciplined approach to remove rxs inefficient and underutilized capacity with our strong and stable platform. We continue to gain new volume.

For example, we recently gained significant segment share in long-run Publications earning 100% of print volumes from two large National magazine Publishers, representing more than sixty million dollars in additional annual revenue these titles a mix of weeklies monthlies and special editions are transitioning to our Nationwide manufacturing Network right. Now. These Publishers will benefit from the strength and skill of our platform including the industry's largest coal mail postal optimization program as well as access to our Enterprise solutions that sells marketing and process challenges bath.

the second way we can

Need to accelerate. Our transformation is through expanding our Partnerships with clients. For example, given the tremendous amount of pressure retailers are under to Market to a changing consumer expanded offer and creates an opportunity for us to help them in a unique way specifically by optimizing their marketing spend across all media types to achieve improved return-on-investment off with printed newspaper inserts Under Pressure. We can help retailers identify and Implement higher-performing media mixed strategy that includes Direct Mail catalogs online broadcast out of home and install programs then with our data analytics expertise. We can measure outcomes. So retailers can further Taylor campaigns for even greater Effectiveness a result is we are able to help retailers lower their new customer acquisition costs Drive repeat purchases and most importantly grow their businesses.

For example, we recently developed a robust technology solution.

Simplifies and streamlines the process a national Home Improvement retailer uses to update its in-store signage weekly at its $1,700 Plus locations.

This solution has created in excess of ten million dollars of additional Revenue with this twenty-year retail insert print Klein because we are trusted partner. The client asked for our assistance in creating a solution that would get in-store promotions and shelf price tags tailored to individual stores needs into local markets faster and make it easier for store employees to adjust the signage client-facing Technology Group innovated a solution that allows each store to verify its data for signage all in one central location. We then access the data to print and ship the office in kids packed according to each store's layout as a result of our efforts. We help the retailer increase speed to Market allowing it to be more responsive to changes in consumer Behavior reduce in-store resources to install the signage prenup employees to focus on customers and significantly reduce waste by producing and delivering signs that match each individual

visual stores actual needs

Another quad Innovation gaining momentum among our clients is accelerated insights are proprietary virtual testing platform that allows clients to rapidly test print creative and formats and formats and identify precisely what combination of format offer messaging and imagery will be most successful.

Through our platform we are able to slash testing times to 60 days versus traditional methods which can take from one to two years accordingly. We are able to reduce testing costs by 90% off and helps clients avoid incremental loss in sales from underperforming test packages while also driving enhanced personalization accelerated insights was a catalyst behind 40% off of our new customer engagements for a direct mail business in 2019. A third example of how we continue to accelerate. Our transformation is by introducing the power of direct-to-consumer Brands many of these Brands Market, exclusively and social media channels. However, they are finding that social media alone is not enough to support their long-term growth.

this is one reason why we

Chose to partner with Tim Armstrong and his DTS company, which is revolutionising the way consumers discover new direct-to-consumer brands as online customer Acquisitions Club increase in the effectiveness of those efforts decreases print is prized for its ability to effectively create a connected experience Drive trackitt traffic and increased frequency of a judgment. In fact, just last week the Harvard Business Review published an article on why catalogs are important in the media mix the article said many Brands and retailers are investing in catalogs quote even pure online retailers that pride in themselves and creating efficient and digitized consumer experiences such as Wayfair lenovo's Birchbox and suck.

The article concluded with what we at quad know to be true as physical products catalog stand apart from cluttered email inboxes and social media feeds them cuz they linger in a consumer's home. They also do a great job of increasing top of mine brand awareness and driving traffic to all channels.

We continue expand our relationship with a large direct-to-consumer retailer who is successfully using catalogs and direct-mail to increase his household presence in certain Market verticals. We printed tens of millions of logs for its 2019 holiday campaign, the print catalog performed exceptionally. Well established in Quad is a strategic Solutions provider. Now, we are expanding to print relationship to the Retailer's other Market verticals. We're also putting employees on site to assist with design and production integrated agency services including creative development.

Looking ahead. We will continue to make investments and establish Partnerships that support the continued evolution of our integrated marketing Solutions offering and help accelerate our overall company transaction information.

As I turn the call over to Dave I want to take a moment to take all of our employees for the dedication and hard work to make certain we delivered strong customer service performance in the fourth quarter off. They were able to deliver top quality products with low waste shipped on time and the accomplices all all this while hitting a historic record across all safety factors congratulations and thank you to all our employees with that. I will turn the call over to Dave. Thank you Joel and good morning everyone. We ended 2019 performing. Well, both operationally and financially customer service performance was exceptionally strong with high quality and on-time delivery metrics and great safety performance in our facilities the strong operational Performance Set the stage and it's a year with adjusted ebitda and free cash flow above our latest guidance ranges. We look to build on that performance in 2020 while continuously improving productivity and focus

sing on reducing debt levels

Y v shows are in 2019 net sales breakdown as compared to 2018. These product types are classified into three Marketing Solutions category with integrated solution targeting Prince and large-scale print Integrated Solutions represents 21% of our net sales and includes higher-margin agency Solutions such as marketing strategy creative management production and media planning and buying as well as Logistics Services Integrated Solutions is a growing category home with Organic growth of just over 1% per year over the past five years. This growth is despite a significant change in the mix of our service sales from large-scale wage related services and into surrounding targeted print and other media channels.

Targeted print represents 39% of our net sales and includes highly targeted and personalized print products such as catalogs Direct Mail in-store signage packaging and special interest Publications. The clients used to create a connected personalized consumer experience targeted print organic sales have remained flat over the past five years as marketers, utilize more forms of targeted and personalized print to realize higher Returns on Advertising to drive sales and brand exposure. The combination of Integrated Solutions wage and targeted print now represents 60% of our net sales and is growing as a result of our quad 3.0 strategy lastly large-scale print accounts for 30% of net sales includes retail inserts magazines and directories that are primarily mass produced and marketed this area of print still represents great value for our clients who wish to reach ma'am.

audiences over the

That's five years organic volume decline in this category has averaged 10% per year and has migrated to other media channels including more targeted and personalized forms of print. We continue to aggressively manage costs in this category to offset organic decline. However, it remains critically important to our Co-op 3.0 strategy as it provides both the scale and cash flow necessary to support future value creating products and services and also provides further Quattro 3.0 opportunities as we work with our clients needs to flexibly adjust their media mix two more forms of media.

Flight six provides a snapshot of our fourth-quarter and full-year 2019 Financial results as compared to 2018. We're pleased to report that each of our key financial metrics Nets am adjusted even a and free-cash-flow, exceeded our revised Financial guidance net sales were 1.1 billion in the fourth quarter down 4.9% from 2018 Chevy Sonic sales, which exclude Acquisitions declined 5.9% during the quarter and benefited from new revenue generated from the Quad 3.0 strategy offset by ongoing print industry volume pricing pressures primarily in the large-scale print category and a negative Point three-per-cent impact from foreign exchange.

0 mm nut sales were three point nine billion as compared to four billion in 2018 down 1.6% excluding Acquisitions organic sales declined three and a half percent off. You're getting sales results reflect new revenues generated from the Quad 3.0 strategy offset by ongoing print industry volume and pricing pressures primarily in the large-scale print category and age of forty six percent impact from foreign exchange our quad 3.0 strategy drove $225 million dollars of organic net sales growth in 2019. This helped offset over wage five percentage points of annual print sales declined.

Adjusted ebitda was ninety six million in the fourth quarter of 2019 as compared to $180 million in 2018 and the adjusted even a margin was 9% as compared to 10 and 5% respectively the variance the prior-year primarily reflects the impact from the organic sales decline of 5.9% of $13 decrease in print profits from a reduction in market prices for paper by product recoveries, the impact of a six-million-dollar non-recurring gain in 2018 in Peru and five million of strategic Investments wage increase our early production wages partially offset by cost reduction activities full year 2019 adjusted ebitda was $335 million as compared to $428 million in 2018. And the adjusted even a margin was eight and a half percent as compared to 10.7% respectively the various the prior-year primarily reflects the impact from organic sales decline wage.

a three and a half percent

Thirty-three million dollars and non-recurring benefits in 2018 that did not repeat at the same level in 2019 a $29 impact from strategic and best investments maging hourly production wages and a $27 decrease in print profits from the reduction in market prices for paper by product recoveries. All this was partially offset by cost reduction activities month or year 2019 free cash flow was a hundred six million and excludes $61 in payments from a terminated acquisition during the year. This compares to 164th and 2018. The reduction of free cash flow is primarily due to lower net earnings and increased Capital expenditures on long-term investments in Automation and productivity improvements in a factoring platform. In addition free cash flow includes the impact of the discontinued operations of our book business, which negatively impacted our Consolidated free cash flow in 2009.

by 25 million

5 7 includes a summary of our debt capital structure as of December 31st. We finished 2019 with a debt leverage ratio of 3.12 times each decrease from 3.24 times as a September 30th. Our year end 2019 debt leverage ratio is above our long-term targeted leverage range of 2 to 2 and 1/2 times. And while we may operate outside of this range do the timing of compelling Strategic investment opportunities such as the Periscope acquisition in 2019. We will continue to Target this long-term in the near-term are priority for Capital allocation will continue to be debt reduction. Our debt capital structure is 65% fixed and 35% voting with the Blended interest rate of 5.2% as of December 31st, 2019 available liquidity under our $800 revolver with $764 off.

And we have no significant majorities in.

So may of 2022 we have the financial resources to pursue future growth opportunities and return Capital to our shareholders through our quarterly dividend. Our next quarterly dividend off fifteen cents per share will be payable on March 9th 2020 to shareholders of record as of February 28th 2020.

On Friday, we've included a summary of our 2020 Financial guidance, which excludes the discontinued operations of the book business in all metrics with the exception of cash flow.

We anticipate 2020 that sales to be in a range of three and half to three point seven billion dollars. This includes a 2% decrease from 2019 related get the best return the best picture of our Omaha packaging plan in January of 2020. In addition. We expect organic net sales to decrease by 6% at the midpoint of our guidance primarily due to anticipated declines in sales in our large-scale print category full year 2020 adjusted ebitda is expected to be in the range of $285 to $350 representing a 10% decline versus 2019 the midpoint of our Guidance the primary factors impacting the decline between years are related to lower net sales primary choice in our large-scale print category Lower Print profits do to lower market prices on paper by product recovery, which significantly weakened in the back half of 2019 and are expected to negative.

impact the front half the two

2020 by approximately twenty million dollars and continued impact from the long-term Investments made to increase hourly production wages in the front half of 2020 by approximately $10,000. We are encouraged by the strong labor productivity Improvement seen in 2019 from these Investments and expect to realize more savings over the long term setting these impacts. We've doubled our previously announced cost Reduction Program to 100 million dollars. These savings will sequentially build throughout the year and we expect all of the one hundred million dollars in savings to be realized in 2050 given the pressures in our industry. We will continue to proactively work on additional cost savings project including even enhancing sales growth through our quad 3.0 strategy.

The impacts of the decline and paper by product rates and the long-term Investments and hourly production wages combined with the seasonal nature of our revenues will result in the majority of our expected decline your over your adjusted ebitda to be realized in the front half of the year. We expect to see sequential Improvement in the year-over-year comparisons and adjusted ebitda as the year progresses.

We also expect to

2023 cash flow to be in the range of 100 to 130 million dollars representing an eight percent increase from 2019 at the midpoint of our guidance as a reminder. We realize our strongest volumes in the back half of the year due to seasonality and as a result the majority of our free cash flow will be generated in the fourth quarter of the year.

The remainder of our guidance includes interest expense in the range of seventy to eighty million dollars depreciation and amortization in the range of $185 to $190 cash restructuring charges in the range of forty to fifty million dollars Capital expenditures in the range of seventy to eighty million dollars pension contributions of approximately twenty million and less than ten million dollars of cash taxes as we continue to accelerate our quad 3.0 transformation. We will remain focused on reducing death and delivering long-term sustainable value to all stakeholders wage. We believe that are integrated marketing Solutions offering which comes at a time of continued media disruption make Squad a compelling long-term investment for our shareholders as we move forward in 2020 will continue to serve our clients well and drive productivity improvements and sustainable cost reductions to remain a high-quality low-cost producer all while continuing

to generate signal

If we can free cash flow, this Focus will allow us to maintain a healthy balance sheet to help us adjust to changing industry conditions invest in our business and return Capital to our sisters among other priorities. And now I'd like to turn the call back to our operator who will facilitate taking your questions, Jamie ladies and gentlemen will now begin the question-and-answer session to ask a question. You may press star and then one in your telephone keypads, if you are using a speakerphone, we do ask that you please pick up your handset before pressing the keys to enjoy your questions. You may press star into Iraq and then a star and then one to ask a question. And our first question comes from James Clement from Buckingham, please go ahead with your question. Hey, good morning. Good morning. Good morning, Dave if I could go to you real quick. I was just trying to jot some of this stuff down. So, you know thinking about annual leave it. Guidance and kind of the Cadence between first half and second half dead.

So paper by-products. Did you say an incremental twenty million dollar hit the first half. Is that right?

Sorry, go ahead experience. We experienced the decline rate towards the last the last half of last year. This will analyze through this year. So we have built into them guidance twenty million dollars of Angel Eyes impact all hitting the front half of the Year. Okay. And then on the labor side is that another ten million in that would be the first half also correct wage. So is a way to think about this just kind of at the midpoint. I I think you said I did you say substantially all of the year-over-year decline in the first half of the things flattened out in the back half or if I'm not working out there a little bit of words of my mouth but directly, correct your correct that we expect sequential Improvement. So a year-over-year comparison basis wage. Um, the first quarter will be the most decrease followed by the second quarter was with improving decrease year-over-year and then on throughout the battery decrease gave a moderated right dead.

Okay, you're going to see front half pressure with back half of the Year looking a lot better as we've annualized a lot of the kind of head winds coming at us with with paper bike race with with our invest.

In labor rates to which really really benefited us this year and is a fourth quarter as we just hit record levels of on-time delivery and performance for our customers. It was just awful standing performance by our manufacturing team. And so that really led to what you saw with a strong financial performance in the fourth quarter as we exceeded guidance showed showed em to think about the labor aspect of things you still face just as you annualize those increases you still face the even the headwinds but you're already demonstrating productivity. So when you no longer have that headwind you should see margin Improvement in the numbers is that being equal? I agree with all that, you know, really the doubling of our cost reduction initiative, which also includes, you know, I'm producing Revenue wins in it that that ability that that growth throughout the year for a full hundred million dollars of impact for 2020. That's really helping to offset the head

is that we're seeing it just organic print decline, especially in that large-scale print category of we have retail inserts pressure directories pressure and

And and and magazines pressure and I fix that would be a good point to segue to Joel. If if I may obviously the organic decline as the Year progressed got a little harsh, you know with with the most severe number being being in the fourth quarter and I guess how much it is in your opinion is you know, the the the month just be the demand side of the equation the customer side changing their mix with things that you're helping them with obviously in 3.0 vs and I have to ask the club, you know versus maybe other suppliers out there that are you know, potentially running into trouble and maybe that impacting pricing in one way or the other.

Yeah, well, I think if you look at the different categories, I mean we all know that retail inserts is probably one of the most heavily pressured and if I look at like fourth quarter mystery retail inserts were down about 20% Our mix was actually down about 13% So we you know out performed and if he kind of converted that to a trailing 12-month, the industry was like 7:15 We Were Ten but in this case, you know, it's retailers are probably the ones that were were probably having the most engagement with on 3.0 because they're under a lot of pressure from lots of different angles month. And so, you know, the retail insert declined let's not forget also has to do with the decline of the carrier of the retail answer to the market which is the dumbest a poor circulation sure along with people kind of trying to figure out, you know, different mixes. And so what we're finding is as you see some significant reductions there we're actually increasing, you know, use of things like dead.

direct mail so

Heavily personalized Direct Mail, like if you look at a Kroger direct mail piece, it's almost 100% variable where there's coupons of product that you actually bought last week image to write on the package with a one-time individual barcode for you across and this is every piece across millions of pieces every month being completely variable. So some of that's that's a good example. Some of this is being diverted to other areas because our customers do know that print is important and as they lose the ability to circulate retail inserts, they obviously look at the home, but they do continue to look for other ways to use print in it and and and the example that we used in the scrip of of you know, doing retail inserts for that huge retailer that suddenly we both ended up gaining ten million dollars an in-store signage from them just through helping them with the pressures was really important because it wasn't just about printing in-store signage basically built the technology that the stone no,

managers use across 1700s

Stores to spec out the demand and then we use our own analysis to make sure that each store is getting the right amount but more importantly we're cutting the wage time. It takes for them to do this which gives them time to react to their competitive set in pricing and things like that. So, you know, that's really important and look at the catalog industry would have you know, like a JCPenney, you know went back to catalog you have other big retailers who never did catalog doing catalog right now, you know the industry a number of books in came forward down almost 7% quad in terms of catalogs mailed was up 10% and that up 10% in the fourth quarter a good chunk of that was new entry into catalog and actually new entry into print. So, you know again about rediscovering it but you also see people who are kind of cutting back on retail. Wow.

Still focus on catalog is another print.

Opportunity just so sorry. I was just going to ask you like cuz this is a theme for a couple of years. What about traditional detail or only going to catalog?

Well, that's what that's what we're talking about. I mean, right, you know, if you look at what's going on with with Google Facebook, you know, even Amazon. It's the U especially here at home from the new upstarts because they're a little more honest about it. But the cost of of using social media is going up in the effectiveness is going down and I think that's only going to increase as you look at the you know, the cookies going away as you look at, you know, and I trust things going on and it's really going to benefit the publisher or you know, put it this way, you know think about a big retailer advertising their own stuff direct-to-consumer as opposed to through these third parties. It only will enhance that so, you know, we we believe that there's going to be, you know, a decent amount of new Revenue coming in to print that may not have existed before and you know again will still deal with you know the wage

will decline of the industry but for us it's all data driven and

That's why it's so important for us to have our services aspect of the business which includes workflow Solutions which includes data analytics which is accelerated in sites combined with the ability to execute on the corporate products because that's where we're giving not only our current customers and edged up on how their existing Print Works with the other channels. But then when you think about the people coming, in fact, they really don't have the experience or the know-how on how to even execute on it. And so we're able to give them the equivalent of a full staff to wrap up very quickly and you'll campaigns and also to show them how to analyze it. Okay. I appreciate the time. Is there anybody else in Q? I don't want to hog. There's another important aspect here. I'm talking about shifting through print. I mean our Direct Mail volume. So in in in Q4 of nineteen, the industry was according to USPS was down about 3.8% off.

meldonium was up 13% and

Almost all of that was very much data driven type of direct mail as opposed to commodity type of direct mail and go ahead. I'm sorry. I was just wondering are there certain like wage to help people like me to help investors understand like the kind of customer verticals where where you're seeing like the the outsides growth like you help us out there.

Yeah, I mean it's it's anywhere from Financial Services to to satellite radio and to you know, even to traditional catalog hers and what's happening is with the accelerated insights program where we can show them a different way to Target people and prove to them that the increase in response that's been a real door opener and about 40% off the new sales volume in D M that we saw came because we were engaged with them about how do they use data and use content in align those to Market to people in a more effective way? Okay. Okay. Got it. Anybody else? Thank you.

No one else that you know, there is no one else. Thank you. So back to Dave if I could. Hey Dave, I may have made a mistake in my head about something. Can you talk about cuz I've heard, you know some questions about this is the adjusted ebitda you all report versus the adjusted ebitda that's used for public relations. I think I may have in my head ignored stock-based, Is there anything else I need to think about in terms of well, I think your question is those relations aren't identical we've got so what we always do is just a simple Street leverage calculation that just takes total debt. / even our covenants are negotiated. Those have any more room than that of a simple Street leverage you you highlight one key differences were allowed to add back to our ebitda non-cash expense religion.

To stock compensation. Okay, but for the you know, when you think about it in terms of of a covenant versus the street the Covenant has

More room in it than that of a street calculation. Okay, and then the other thing in terms of you know cash restructuring the spending for the year. I know you have your guidance out there should we think about is kind of even throughout the year and then also are there any kind of you know working capital movements first half or is the second half that we need to be aware of other than the normal kind of you know, if you're working capital in the first half of the year for a second half thank you. Yeah. Yeah a good question Jamie on restructuring, you know, we often make a lot of restructuring changes in the front of the year because that's our seasonally low Point. Okay. So that's that's where we have the need to reduce those fixed costs during that little point. So you won't see a straight-line basis of that. You'll probably see a little bit more in first and second quarter and then maybe kind of more smooth throughout the year, but but nothing on working capital other than the typical seasonal movement of working, Ma'am.

just a reminder, you know, we do generate the majority of that free cash flow in the

Recorder because of the working capital decline in the fourth quarter as we come out of our seasonal Peak. Okay. Thank you very much. I appreciate that.

And lady I need somebody else in the queue at this point. I'd like to turn it back over to management for any closing remarks.

Okay. Well, thank you all for joining us. We look forward to our next update at the next quarterly call. Thank you.

Ladies and gentlemen that does conclude today's conference call we do. Thank you for joining today's presentation. You may now disconnect your lines.