Q3 2020 Sixth Street Specialty Lending Inc Earnings Call
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Ladies and gentlemen, thank you for semi line your conference call will begin momentarily. Thank you for your patience.
And I.
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Good morning, and welcome to six great specialty lending Inc. September Thirtyth 2020 quarterly earnings conference call before we begin today's call I would like to remind our listeners that mark.
Made during the call may contain forward looking statements sales.
Statements other than statements of historical facts made during this call may constitute forward looking statements are not guarantees of future performance or results and involve a number of me and uncertainty.
Actual results may differ materially from those in the forward looking statements. So we sold off a number of factors, including those described from time to time in six weeks specialty lending Inc filings.
Science with the Securities and Exchange Commission.
The company assumes no obligation to update any such forward looking statements.
Yesterday after the market close the company should <unk> earnings press release for the third quarter ended September Thirtyth 2020, and posted a presentation to the Investor resources section of its website www.
<unk> specialty lending dotcom.
I think they should be reviewed in conjunction with the company's form 10-Q filed yesterday with the <unk>.
Six to specialty lending Inc, earning suneet. It's also available on the company's website on that being best for me personally section.
Unless noted otherwise all performance figures mentioned in today's prepared remarks are as old and for the third quarter ended September 30, Twentytwenty assigned minded. This call is being recorded for replay purposes.
I will now turn the call over to Josh what he said he chief Executive Officer of three specialty lending Inc.
Thank you good morning, everyone and thank you for joining us we recognize that the ongoing pandemic continues to present real is very real and unique challenges for everyone and their families.
Were grateful to those were able to join us today and thank all our stakeholders wherever they are.
For their continued interest in partnership.
Once again I'm here today with my partner President both family.
CFO, Ian Simmonds, both who we will hear from later on this call.
After the market close yesterday, we reported strong third quarter results with net investment income per share of 61 cents.
Overeating or Q3 base dividend per share of 20 cents.
Net income per share for the quarter was $1.21.
Its old.
Corresponds to an annualized return on equity on net investment income of 15.1% net income of 30.1%.
On a year to date basis.
We generated an annualized return on equity on net investment income of 13.5% and net income of 14.7% they sort of beginning year pro forma net asset value per share of 16, 77, which is adjusted for the impact of our Q4 2018 supplemental dividends of six cents per share.
Of note easy annualized year to date return or are we both exceed or average annualized performance since our IPO through the end of the F 2019, which we think is notable given the difficult operating conditions experienced during the first three quarters of 2020.
I said based on market conditions today, we've moved or tail with all BDC portfolios are subject, you, including credit risk and Irene headwinds from my board, which in our portfolio is offset by our LIBOR floors and floating rate nature of our liabilities.
Our strong net investment income this quarter was a function of both robust interest and fee income as well as lower interest expense attributed to the 100% floating rate nature of our liability structure, which he will cover in more detail. This quarter's net income was supported by unrealized gains related to portfolio companies specific events spread related.
The unrealized gains from the continued tightening of credit Suisse premiums during Q3 and realize gains from the sales were a F. S equity position at a price that was significantly above our prior quarters unrealized Mark which bill will cover later on the call.
This quarter's operating results contributed to the growth in net asset value per share, which hit a record high of 67 at the end of Q3. This represents approximately a 5% increase from Q2, and a 1% increase from or 2018 year and pro forma NAV per share of 677, if we were to add back the impact of the 50 cents.
Per share special dividends that were paid during Q2, we've grown net asset value per share by approximately 4% year to date.
To reflect on it for a moment and a year, we've experienced tremendous market volatility and economic uncertainty is actually been able to grow net asset value per share well pay our highest level of dividends for the first three quarters of the year. This reinforces our belief that we've created a differentiated business model that not only survive, but has the ability to outperform during periods of uncertainty.
Notable drivers of net asset value growth year to date include 47 cents of ovarian cancer based evident 23 cents of unrealized gains from the impact of effective why workforce of 1.1% across our portfolio versus 36 basis points for the broadly syndicated loan market.
I have confidence in you know more health of our bars, well none of our portfolio companies I've been immune to the economic impact of Covid only 11 per cent of a portfolio by fair value a quarter and have experienced meaningful performance issues directly related to it.
We believe the relative resilience of our portfolios, mostly he was also the deliberate chef we made in late 2014 towards a more defensive portfolio construction today 95 per cent of our portfolio by fair value is firstly and nearly 75 per cent of our portfolio by fair values comprised of mission critical software businesses with sticky predictable.
Revenue characteristics. These businesses also tend to have variable cost structures and it can be flux down a sport that service and protect liquidity in cases of challenging operating environments.
The general nature of our portfolio along with his firstly orientation shorter weighted average life and above market LIBOR floors contribute to a lower beta character ethics to the benefit of our shareholders and tons of market volatility.
At quarter, and our debt portfolio had a weighted average fair value Mark of 99 up three percentage points from its recent trough at the end of Q1, but below a pre covid levels of approximately par at the beginning of the year. Meanwhile, the leveraged alone index at quarter and had a weighted average big price of approximately 95 up 11 percentage points and.
The end of March and also below is pretty covered levels of approximately 97 at the end of the year.
As we've previously pointed out the Lord beta of our portfolio is due to a shorter weighted average life and higher LIBOR forest compared to the the levee slow market note that the weighted average bid price for a L. C. D. First lean software names like our portfolio also experienced less volatility within the broader alone index. During this period.
Wow portfolio is held up relatively well over the past couple of quarters, we'd like to reiterate that credit tell rescue exists in our portfolio and more so today and pre covered.
At quarter, and 12% of our portfolio had a fair value mark of less than 90 98 compared to only eight per cent of the portfolio in Q4 2019.
The way to have which for a value market.
For for for names in this tale at the corner and was 88 compared to 96 Q4 2019, we've.
Cool and monetary stimulus supporting ongoing investor demand for risk assets.
Secondary loan prices continue to recover in Q3 and primary issuance activity slowly reemerged in connection with opportunistic financing M&A.
On an absolute basis, however, our leverage loan activity in Q3 remained muted compared to historical levels, resulting 10 year low for year to date, new issuance volumes.
Continues to exemplify the strength expertise of six streets health care franchise.
Other new investments we originated this quarter include $175 million, a b L term lounge for a designer brands of which we hold $50 million and 125 million dollar accounts receivable securitization facility for centric, France, both of which continue to exemplify are differentiated capabilities a solution providers and the consumer in retail.
Sector.
Most court around we fully exited our investment in state centric brands in connection with a new financing obtained by the company has that emerge from bankruptcy is.
Is josser alluded to in his opening remarks during a three month old period, we generate a piano a $3.8 million on our investment represent a gross unlevered IRR of 31% on our capital invested.
Other ways, we created value during the short burst of volatility across Q2, and Q3 for through small opportunistic secondary market purchases and sectors or name so that we know well.
For example, we purchased 50 million dollar par value of Tech data syndicated phyllo term loan at 92 in July and completed the sale of her entire position postcode around it a weighted average price of 98.4.
Verna Force first leaned term loan was another liquid security that we purchased in late March at a price of 78.25 and sold during Q3 at a price of 99.8.
Finally, the combination of our small triple B and W. B rated C. L O purchases throat Q2, and Q3 have to say resulted in nearly half a million dollars a piano for our portfolio.
So not one of our primary investment themes. These opportunistic secondary market purchases continue to be in a fishing way for us to enhance the return profile portfolio when the market environment permits.
Q3 was also active for us on the repayments side with $253 million of repayments across eight four and five partial realizations and the combination of of funding and repayment activity during the quarter resulted in net fundings of $79 million.
The bulk of this quarter's repayments were driven by three investments are 72 million dollar Neiman a b L. Five O upon that.
Upon the companies reemergence from bankruptcy are 51 million dollar diamond or first lien loan in connection with the companies IPL and our $45 million F. S. Firstly alone in equity positions in connection with the sale of the company to a strategic buyer.
The Neiman ABL five of the term loan.
Pro forma the pay down of centric brands, our retail and consumer exposure would have been 10.5% at quarter end and retail names.
With retail names comprising 9.5% of the portfolio and 77% of this exposure consisting of ABL investments.
In September upon the full repayment of the Neiman, maybe I'll follow and dip loans. We subsequently funded a new $17 million par value of first lien loan related to our exit financing backstop commitment.
Our schedule of investments roughly $4 million difference between the par value on a cost basis at the new name and loan reflects our fees on the backstop, which for payroll and common stock of the Reorg company.
Phone today is trading at a price of approximately 104.75. This again was another way that we created value during the volatile market environment earlier this year.
19 million quarter of a quota to 2.1 billion, primarily driven by this code is <unk> funding activity and the net unrealized gains on there and just investments.
Total principal amount of debt outstanding was 932 million and net assets were 1.14 billion or $16 87 for sure I'll.
I'll debt to equity ratios quarter and was stable at 0.81 times due to the combination of the Delevering impact from this cold is increase in net asset value all set my neck portfolio funding.
I'll average debt to equity ratio increased from 0.87 times to 0.93 times quarter over quarter due to the timing of al Q3, repayments, which will mostly weighted towards <unk>.
Into this quarter's net investment income where applicable.
Also benefited from a positive 22 cents per share impact from unrealized gains related to credit spread movements on the valuation of our portfolio.
And other changes added a further 46 cents per share to this quarter and as a.
Breaking this loss component down the leading contributors was 17 cents per share realized gains on our equity position eight cents per share of unrealized gains on out of the tell us equity position and seven cents per share of unrealized gains on our new Neiman Marcus position.
Hello, These with the predominantly floating right nature of our assets, which are protected on the downside throughout leibold floors.
We do this by implementing fixed the floating interest rate swaps on a fixed rate debt.
While our hedging policy means that before goes some earnings upside in higher interest rate environment. It provides us with valuable earnings and capital support and low interest rate environment, which is when we may need it the most given their correlation with recessionary periods.
And falling right environments likely the experienced you Tonight, we benefit from net interest margin expansion given a decrease in the cost of that floating rate liabilities, while the earnings power of that contractual floating rate assets is protected by the libel laws that we stretch it into a loan agreements.
A combination of these two forces as being the primary driver of the 100 basis points of net interest margin expansion. We've experienced you to date equating to incremental earnings approximately 2.4 million or four cents per se.
Looking ahead to queue for based on a current asset level yields and assuming average leverage in line with Q3, we would expect further net interest margin expansion of approximately 10 basis points based on this cold is movement in libel.
On the capital side, you to date, we benefited from unrealized mark to market gains on our interest rate swaps given the download movements in the shape of the <unk>.
At quarter, and we had $31.3 million accumulative unrealized gains with 13.3 million or 20 push it embedded in a 930 and I Z.
The remainder is reflected in the carrying value of about 2024 nodes due to our application of hedge accounting on those fault.
As we've seen the inverse relationship between movements in the forward to mark to market on a swaps creates valuable incremental capital cushion for our business in periods of high volatility.
I'd like to note that as we approached the maturity of about 2022 in 2023 notes and therefore, the maturity of our respective swap instruments any cumulative swap related unrealized gains or losses will unwind from N. A D. As we recognize that are all setting impact through interest expense.
Record originations activity on track to deliver one of the strongest full year or are we use for our shareholders and our view now this would have been possible without understanding of a unique constraints and challenges of the BDC model.
In the measures we've implemented on both sides of our balance sheet to help our business drive in periods of uncertainty.
That said, we continue to evolve our thinking based on our assessment of underlying risk trends and developments in the world around us. This.
This includes an ongoing assessment of our liquidity and funding profile as well as an evolution of investment themes into new sectors of strategies, we believe our human capital can be applied to generate value for both our shareholders and our clients.
As a business, it's hard not to hard not to be reflective given that we found as sixthree during the financial crisis 11 years ago and today, we are faced with an ongoing pandemic and our view is to be aggressive events have shed light on a second on the fact that we still haven't confronted the history and the legacy legacy of institutional racism racism.
And we've continue to live with the consequences of our failure to deal with massive wealth inequality.
We firmly believe that the adversity and our people and our society today can create tremendous opportunities for improvement not just sleep dark places.
Looking ahead, our hope is what our hope is that we all and whatever ways. We can focus on healing conversations equity in our roles as market actors insist that we preserve the power of capitalism, which we firmly believe which we firmly believes belief creates the best outcomes for Saudi albeit in a better.
Modified way.
Again, what appears to be a different type of investment in that particular company. It's actually not its the same exact investment that we had in ironwood and Nexstar to live where large biotech companies, who had an in place and place IP and drugs that had sales and then they were investing Orient.
R&D to expand the portfolio and so if you look at the exists. If you. If you had if you had looked for you if.
Okay.
Hey, good morning, everyone. Thanks for taking my questions.
Hi, Devon welcome.
Thank you I appreciate it maybe start here with a bigger picture question since it's on top of everyone's mind loved that baby just get a little perspective around how you guys were thinking about a scenario to the extent, we do have a bite and white house, but a redstone it probably don't see tax legislation changed probably less stimulus.
Related related to that you mentioned you had to pick up and deal flow over the past couple of months I think that's consistent with a broader M&A markets, but if credit and equity markets remain reasonable and either call. It political outcome that could happen here do you see anything that could change kind of this drama.
At them and and new deal flow.
No look I think I think you're right, which is I'm not that way I'm not I think I think both sides wanted to get some type of stimulus down which I think is.
No net positive or.
Small positions and those those were not none of that was related to restructuring.
So those were related to you know investment choices, we made the activity level on amendments or significantly down quarter over quarter.
Alright, I think this is actually you mentioned knowable, increasing sponsor activity at the end the cutesy into cute well I mean, that's consistent with with what we've been having but at the same time, you know obviously bioherm even design a bench centric you know those are the the more nishi asset by really good credit security bear.
Hi, Ah Ah, which we can obviously see.
It's already been realized what.
The the the sponsor type business tends to be a Lola maybe longer asset, but then the ABL stuff high a shortlived asset looking for [laughter] tough question, what what do you what areas do you expect to see and I'm not just talking about coupons.
2021 et cetera, do you expect to see the most capital deployed into is the market shifting right now for them what was more a D L.
Tucker kids to maybe more sponsored in 21 or can you give us any thoughts on that.
Yeah. So it's a it's a great great question I'm I'm not sure I'm Gonna have the greatest answer how how we've set up a business model is really to focus on multiple channels.
And and investments and industries that we might be an investment types of issues that we like and we think of good care credit characteristic I that they because you don't even and the sponsor business, even though they might be longer weighted average life, you don't really own a right tail like you know you're not gonna make four or five times your money and so you.
Gotta figure out you Gotta spend your time and truncate the left hail and and so you know that's when we think about our business, we think about looking for and and prospecting for a a deal that has a you know a return profile that doesn't have a left tail and so that's both in and then.
Set up a business, where we're kind of agnostic towards channels, and so or an agnostic towards sponsored channel non sponsored channel.
Stressed rescue financing healthy businesses as long as had distribution. You know is is consistent unacceptable and you know on vacation we might take you know some probability of loss, but you Gotta you Gotta you Gotta have you know really have a higher expected M O M. A.
Our.
And you know continuing to see a massive based stuff you know where companies have broken balance sheets through carving out [laughter] assets either through inventory or receivables. So I think that will continue to be an opportunity, but I also think that you know there though.
You know the the regular way sponsor finance in our and in in our industries that we like well also could you give me an opportunity. So I don't know what to answer your question I guess the answer is we don't know we're set up the cover worse as a platform and a 40.
So that should continue along with what everybody else mentioned retail at B L asset based restructurings and the like.
Like fishy.
I I I appreciate that.
Said, Bob Bruising, I'll post cristobal questions, but I've I've I pressed the color just one kind of follow up on the the M&A activity in this bunch of activity I mean can you give us just a quick view on on how pricing is I mean, I presume spreads spread wide and plugging it back where it did it seems but documentation I'm.
Can you give us any could come with sir.
In edge and <unk> credit risk or a manufacturer of strong credit risk premiums, we don't really have the ability to figure out.
You know the macro and so LIBOR as you say levels close dependence zero that being said, there's there's and there you know arguably negative real rates right now and there's negative a nominal rates in Europe, So I like I don't.
I don't you should not think about LIBOR as a as I I would not think about livewatch is a floor now I'm not calling for negative rates, but you know you shouldn't think as zero is an absolute floor zeros.
There's a number just like negative 30, the number so you know I would say we will continue to have well look at when we when we make that call, but we'll continue to have a bias where we think we can we think we do some things well and have the skill set and we continue and we do some things.
Not well or don't have the we might do well. We we don't think we have the skill set to do well which is the macro.
And so it takes us a little came to US you know would you stop hedging your firm.
Foreign currency currency exposure by you know borrowing in local currency and so the answer is independent of where you think there's going to be a reversion to mean or independent where do you think are you.
You know currency swap rates or cross currency swaps are we probably we probably want to do so just because we don't have that skill set. So I would I would expect you know we haven't talked about it for a while but I would expect that are general North star remains unchanged and I you know I would you know our libel or swaps just to be clear.
Unlike our bank or or or bank deal does not have floors.
And so you know five or does go negative our cost of funding is going to go down or on on on our on our notes whether its existing swap.
As you know, there's there's a floor of zero on our on our bank revolver, but in <unk> is that there's no. There's no there are four.
Do you have anything better than others.
No I think when you actually understand the concept anyway, because I'm on day, one when we entered into a swap the NPD zero. So they're not just for the back to the comments the job site about where Oh skill set lies beyond that in terms of forecasting on a macro basis.
Yeah No I.
Yes. Thank you appreciate it actually one more question popped, Okay and then the one I know you get that's the one thing just for other people who might be listening.
That there's a there's a significant correlation between.
When rates go down matters, a ton of economic uncertainty right because as a policy manager as a policy matter people or easy use rates and monetary policy as a as a form of stimulus and so the you know in a <unk> and right now we basically have on Earth.
Asset side, we have we have basically fixed at a fixed rate of return given our LIBOR floors and so any in environments. When there is a ton of uncertainty and policy makers are pushing rates down you know, we probably have credit losses, and so we like the benefit in that environment.
From the net interest margin experience, which we which we've massively which we've actually you know massively Uh huh.
It's helped us or you know by 150 basis points to 110 basis points projecting next quarter and so you know what we do give up is we give up a <unk> and <unk> and massive risk on environments and as you know we give up some or are we expansion. If we have a whole bunch of fixed rate debt.
The other thing I would say the last thing I'll say on the subject of a another theme is like.
Is that our dividend is you know could be argued excluding the environment. We live in today, which is expected some credit losses as safer today than it was you know a year ago. So you know it because of the net interest margin expansion and so.
I think that is one you know we have we have more net interest net interest margin than we've had historically wishes protect you know, which actually provides safety for our dividend and safety for the four for future credit losses.
Sure. Thank you.
Okay and on spill over I know you guys you paid out the 50 cents and I think first quarter.
Your your undistributed and <unk> is already above.
Above where it was before that are we looking at another are we looking at another.
Special special or you may call. It extra [laughter], yeah. So it's kinda I'll, let you answer the second thing is there's a little bit of a bummer right. We were we did that we did we do we.
Try to avoid doing large specials.
You know when we put in there you know recurring <unk> supplemental dividend framework to two and half years ago.
And then you know given that the level was set at only a 50 cents. You know we ended up having friction cost and kind of growing the the the the spillover income and growing a unfortunately.
Unfortunately on a per share basis, the Ah the excise tax and so we wanted to clean it out I think we're basically back.
Pre clean out is that right in.
Yeah at the beginning of this year when we went to the board with the proposal we were at $1.61 per share of undistributed income and at the end of Q3, where the dollar 55, so it's pretty much back there is.
So I I they as they I think you know what we'll look at it correct me if I'm wrong. The plan is to look at where we sit on a tax basis and look at a 90% rule and look at you know how much of excise taxes. This is a drag on earnings and you know we'll go through the same work we did as you know at the end of your.
At the end of this year.
Awesome. Thank you. Thanks, so much and congrats on the quarter great. Thank you and hope you and your families are safe.
Thank you our last question is from Ryan Lynch with KBW.
Hey, good morning, Thanks for taking my question.
You know a lot of Bdcs you know its talked about really positioning their portfolio or you know late cycle over the last several years, but but not all bdcs portfolios are really held up as well.
Well as you all have so far and I know, there's you know you mentioned, there's still a lot of credit risk you know in your portfolio and we're still in the midst of a downturn, but you know so far you guys have had grown book value meaningfully in 2020 in the mix of this downturn and have had actually one of your.
Your best ROI, we net income or are we a generation years, let you guys pack in mid town turn so.
No I'm just curious are you guys surprised you know how well your portfolio has held up you know in the midst of this downturn and how much value you guys have been able to create.
Yeah, I I Wonder I look I'd say, it's always 2020, so I think we feel very good about where we are today.
And the portfolio today, you know I'm, a little bombed that you know and in the midst of you know and again hindsight is 2020 and and have had these conversations with you know people a little bump that we turned off you know our stock you know we didn't buy enough bonds back you know in in those moments a little button that we didn't we didn't buy back.
Oh, we turned off for our stock buyback program and and you know in middle of March the protect liquidity.
A little bump that you know, we created quite frankly, a whole bunch of value in and in Q2 Q3 by be a little bit active there was probably more opportunity to be had there.
But uncertainty was very high and so I I don't give a give us a path, but 2020 hindsight im a little bombed.
You know so I feel very good about what we were able to accomplish in how we protected the balance sheet and you know, but that all started with I think protecting the balance sheet, and you know and and and it was only a decision on what assets. We chose to finance it was because there's doors.
Some of our peers, who had you know financed similar assets, but they were they they got back into doing a natural thing because they didn't you know reserve for unfunded commitments. They didn't think about drawdowns as net asset value during times of volatility and what that what that meant for offense and so.
I think it's a combination of the are we used this period or a combination of assets. We picked the the finance and position in the left hand side of the balance sheet, but it's also how we position the right hand side of the balance sheet to be able to make the business you know at minimum robust.
But possibly anti fragile, where we were able to attack opportunities you know during times of volatility, which we've always talked about and so you know I. It's in my little in my little surprised yes.
But I think it's what we thought about <unk> and how we thought about the business and quite frankly, I thought a lot of the disciplines. We put into our framework ahead of the other crisis allowed us to capitalize a little bit in hindsight I wish we would have capitalized more aim bo or fishy anything.
No I think that's right.
Okay, great Okay yeah.
Yeah, well well well done.
You mentioned some of your earlier comments prepared remarks, you know some of the secondary opportunities did you guys have him and the value created in the second or third quarter.
Looking to the fourth quarter or are there still any opportunities in those markets at all or are given the right kind of run up in prices or is that kind of market kind of kind of gone away at this point.
It feels like it's gone away I mean things are not obvious.
You know so for example, the structured credit market it is not as obvious to us.
On an opportunistic basis, I think you're so value to be had there, but given that its kind of you know I would not want to outside the lane, but as an adjacency is it's it's there's it's not that screen value that you know, we're going to kind of go out of our lane.
I would say.
You know I think there's opportunities in regular way you know direct lending or that you know we think it's interesting but.
But we are positioning look the passive cove it is highly uncertain.
And we we are I think we are continuing to position our balance sheet.
To not saying that there is going to be more volatility to calm, but if there's more volatility to come both from how much capital we have and how much liquidity they have to be to be positioned to Ted to lean into that volatility. If it does come and so I'm you know our balance sheet was.
I think you know you know pretty well and position.
He covert it's actually in better position today, given we have more capital we have <unk> debt to equity is lower with basically the same amount of liquidity.
And.
Well no I think you captured all that Josh.
Okay, and then I just had one more.
I think earlier you were talking about.
Robert was asking about the yard.
The kind of terms and structures on sponsored deals I think you said they were.
Maybe modestly better from leverage levels are documentation and maybe a little bit better on pricing, but maybe that's coming down just curious your thoughts on that.
You know, even if terms documents structures, you know how think materially improve certain sense, where they were maybe pretty cold there.
Would you still consider a new investment to Dave Hirst, There's you know a year or two ago potentially a better risk adjusted opportunity just because if you're making an investment into a new portfolio companies. Today you are at such an information advantage versus where you were a year or two ago because you've had this.
Most recently just seeing how this particular businesses is performing during a very severe downturns, while the terms and structures.
May not have improved significantly the risk adjusted return is better because of the information and banners you potentially house.
Yeah. So I think that's a that's a very valid framework.
And a very valid argument I think it all comes down to the underlying radius it kind of credit I mean, I don't see.
Ah I don't see that you can underestimate the that the volatility in both our portfolios and how businesses perform because most definitely muted by the significant stimulus.
And so you can you kind of got a window, but he and to how things performed.
Which I think you are most definitely has its an informational advantage and which is helpful. In your underwriting or that being said you know you had a whole bunch of stimulus.
You know proved PV view owns or through just broad based stimulus that you really that tied kinda went out and then kind of got stopped.
If that makes sense.
Yeah, I think I think I think your I think your framework is they have as a valid is a valid framework, which is yeah. Like you know you get you get to see how cost structures behaved how management behaved.
How sticky where the revenue is the.
And in the backdrop of Cove, It and then I would say plus as the backdrop of stimulus.
Yeah, Yeah. So I guess a couple of different factors. Yeah. There you know one won't the government coming in and helping a bunch of stimulus so [noise].
Well, great well those are all my questions Ryan I appreciate the time today, Yeah, we have a good day I know, it's a busy day for you all thank you so much.
Thanks, everyone.
Thank you and this concludes our kinase fashion I would like to turn the call back to Josh easterly probably gets finally, Mike.
Great you know, we have a little bit of a history of you know wishing people happy holidays.
You know the Thanksgiving is coming up and so what I would say to people is I think one of the silver linings of Cove. It is as you know people for better or worse, because it's been a lot of time with her family for me.
Been been quite frankly, Oh amazing is that people have where people.
Take the time, given all the strife in the world and on Thanksgiving and really take the time and appreciate the things they happen.
And figure out how to make the world a better place. Thank you.
[noise] sort of.
Thank you ladies and gentlemen. This concludes today's program you may now disconnect have a wonderful day.
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