Q2 2021 Deluxe Corp Earnings Call
Ladies and gentlemen, and thank you for standing by and welcome to the Deluxe second quarter 2021 earnings conference call at.
At this time, all participants are in listen only mode.
And today's conference call is being recorded.
We will begin with opening remarks and introductions.
At this time I would like to turn the conference over to your host Vice President of Investor Relations. Tom Morabito. Please go ahead Sir.
Thank you operator, and welcome to the Deluxe second quarter 2021 earnings call.
Joining me on today's call is Barry Mccarthy, our President and Chief Executive Officer, and Scott Bommer, Our Chief Financial Officer.
And in today's prepared remarks, we will take questions.
Before we begin and Athena and this slide I'd like to remind everyone that comments made today regarding management's intentions projections financial estimates or expectations about the company's future strategy or performance are forward looking and nature as defined in the private Securities Litigation Reform Act of 1095.
These comments are subject to risks and uncertainties, including without limitation risks weighted the COVID-19. The risks at the company's recent acquisition of first American payment systems or any other acquisitions does not produce anticipated results or synergies and the risk for any future acquisitions or day versus divestitures.
Divestitures will not be consummated.
The locks and implemented our historic transformation.
Keith will be leaving deluxe next month and I wish him continued success.
Before I share our impressive second quarter results I want to first share how proud I am of my fellow deluxe offers for their grit and perseverance over the past 18 months.
Our team dug in and delivered every day for our customers.
Despite COVID-19 challenges the team is making great progress unlocking the incredible potential of our transformation.
Turning now to second quarter results.
We delivered nearly 10% growth for deluxe.
And 16, 5% growth, including first American payment systems.
All 4 segments payments cloud promotional solutions and checks experienced solid year over year revenue increases.
Payments performance was driven by the acquisition of first American as well as sales driven growth and all our major businesses.
You will recall, we completed the largest acquisition and our company's history with the addition of first American that closed in June.
Cloud growth was driven by our data driven marketing business.
Promotional solutions was led by branded merchandise and business essentials.
While check growth was driven by business checks and new competitive wins.
Our strategy is working.
The second quarter performance is further evidence we are executing on our 1 deluxe strategy across the board.
As I've said many times before.
We say, what we're going to do and.
And then we do what we say.
Consolidated highlights from the quarter include the following.
Revenue was $478 million up 16, 5% year over year, not including the impact of first American revenues were up 10%.
Adjusted EBITDA margin was 24% at the midpoint of our guidance.
Adjusted EPS improved nearly 9%.
Despite the largest acquisition and our history first American.
Our strong liquidity improved sequentially.
We ended the quarter with $456 million of liquidity and a cash balance of $163 million.
On the sales front, we remain on pace to exceed last year's record sales performance.
Our 1 deluxe go to market approach is showing strong results with the addition of 2 more wins for the top 10 largest over the past decade.
So to put a finer point on our sales capability.
Over the past 7 quarters since we started the 1 deluxe approach.
We've closed 10.
Of the 12 largest deals of the last decade.
And 2 of the largest in company history.
Of course, it will take time to implement these wins, but the deal certainly give us confidence and our outlook.
Moving on to some segment highlights.
Our payments segment, largely driven by the acquisition of first American improved 43% year over year.
We experienced growth and all of our major business is especially payroll and HR and our payables as a services offering which includes our deluxe payment exchange and medical payment exchange.
These businesses are seeing significant growth and we continue to be very optimistic about their future prospects.
Similarly, we recently announced our new HR management solution, which offer small to medium sized businesses and integrated HR and payroll platform with a modern user experience.
This is another fast growing area with great upside potential for deluxe.
We knew first America, and what's going to be a tremendous addition for the deluxe portfolio and.
And and outperformed even our lofty goals.
Since the acquisition the business has been exceeding expectations and has been experiencing 1 of the strongest periods and its 30 year history.
As we've mentioned on other calls.
And it's helping first American and succeed.
For deluxe scalable includes first.
Customers Trust us and half are over 100 years.
Second our sales reach to millions of small businesses thousands of <unk>, 5 and 100 of the world's leading brands.
And third our financial strength.
Our combined sales teams were quickly able to bring first American products to deluxe customers.
Building on the trust and relationships we've had in place for years.
This is very encouraging for the future.
We are close to securing several transactions with financial institutions are and and are in active engagements with dozens of other <unk> not only for merchant services, but and adding other products like payroll payables and receivables at the same time.
We're pleased with this early sales momentum and unsolicited inquiries for services we've received.
These customers were not in the pipeline prior to the transaction.
Providing solid evidence of the deluxe Halo.
Another example of the power of 1 deluxe and payments.
We recently secured an additional contract with our best.
Privately owned financial institution with over 230 branches and $24 billion and assets.
Deluxe will be providing several new payment services to harvest.
<unk> had been a check customer for 3 decades buying 1 deluxe product.
Now our best by several of our products in all 4 of our business segments.
This shows both the power of 1 deluxe and bringing the best of luck for every customer.
And the power of our existing check business as a lead source.
Cloud solutions had a very strong quarter, improving 26, 3% year over year led by our data driven marketing business or DBM as continued low interest rates drove increased demand amongst several of our large financial partners.
Excluding business exits from 2020.
Clouds growth would have been even more impressive coming and closer to 40%.
As we've said before our data strategy is to diversify beyond our core banking and mortgage vertical.
The strategy is working.
For example, we recently signed a deal to partner with a top retail electricity provider to identify and acquire new residential and business clients and select deregulated markets.
Our web site services also showed resiliency driven by our international business and favorable exchange rates.
Our incorporation services continue to perform very well.
Now onto our promotional solutions segment.
Promotional solutions improved 14, 5% as branded merchandise and business essentials, both performed well.
As a reminder, business essentials is where we deliver custom forms and other products that business is consumed and their routine operations.
This business is rebounding well consistent with the overall economy.
We expect to see further recovery and branded merchandise as events and in person and activities return.
Promotional solutions second quarter was positively impacted by the PNC deal, we announced last quarter.
Expanding our relationship with the eighth largest commercial bank and the U S.
Lots is offering multiple products for P&C, which ramped up in the second quarter.
Relationships such as these are key components of our cross selling enabled growth story.
And this is also a great example of key wins quickly converting to revenues.
Our best was also a key win and promo.
The our best marketing Department now utilizing our deluxe branded center platform or <unk> to provide their employees access to customize marketing collateral and tools.
And another key win leading security company ADT, and we'll use deluxe to order and manage promotional items and apparel for a new hire and training programs.
These BBC platform wins and highlights our strategy shift for.
Our promo to a recurring revenue model rather than a 1 time sale.
The DPC platform gets integrated simply and easily into our customers web properties.
This makes us the only integrated partner for the customer's marketing and promotion needs shifting our relationship to a re occurring model.
Finally, our highly profitable cash generating checks business improved 3.2% year over year, largely due to solid growth from business checks.
While the sectors and secular decline, we continue to secure competitive wins.
Moving to mitigate those impacts.
Key wins and checks occurred across several top tier financial institutions, including leading regional FIM and feedback and a renewal for a top 5 fi in terms of ASUR.
Our product superiority and the strength of our balance sheet and enable us to keep winning market share and protect our outstanding cash flow.
Checks play a very strategic role for deluxe.
Check delivers low cost leads to our other businesses and generate strong free cash flow, which we will first invest in our growth engine payments and data and also deployed to reduce debt and summary, we're very proud of our transformation progress.
All 4 businesses are showing positive momentum our strategic acquisition for American is performing better than expected and the deluxe Halo is helping even more.
Our cross selling results are currently and our sales momentum is real.
We are clearly fulfilling our promise.
And to become a payments company delivering sales driven growth.
And our robust second quarter results further validate the strength of our team.
Strategy and overall execution.
Now I'll turn it over to Scott, who will provide more details on our financial performance.
Thank you Barry and good morning, everyone I'm looking forward and meeting all of you in person in the coming months as Barry mentioned, we are pleased with our second quarter results.
Our strong execution and improved marketplace conditions.
Let's say for the enterprise highlights for the quarter before moving on to the segments.
Posted total revenue of $478.2 million of 16, 5% year over year.
Including first American revenues came in and $450.8 million up 9.9% year over year.
We reported GAAP net income of $12.1 million or 28 cents per share and the quarter.
GAAP net income was impacted by $15.9 million of costs related to the first American acquisition during the quarter and.
And then adjusted basis EPS came in at $1.25 of 8.7% per year.
Adjusted EBITDA grew 16, 3% to $97.5 million, while adjusted EBITDA margin remained healthy at 24%.
Due to margin strength, and the cloud and promotional solutions segments.
<unk> year over year revenue growth and as the team continued to drive efficiencies within the post COVID-19 operating structure.
Turning now for a segment details.
Payments grew second quarter revenue 43, 1% year over year to $103.3 million largely impacted by the acquisition of first American and sales driven growth for stand alone deluxe.
Excluding first American payments revenues increased 5.3% year over year.
In addition to the first American strong performance that Barry mentioned, we experienced growth and all of our core payments businesses.
Including first American adjusted EBITDA increased 35, 9% and the quarter and adjusted EBITDA margin was 25%.
10 basis points due to increased investments in it.
Sales and marketing for Standalone deluxe.
With the addition of first American and payments segment has more than doubled in size and now rivals our check business and revenue scale.
Longer term, we expect payment segment to deliver a high single digit revenue growth rate, reflecting our continued ability to deliver sales driven growth.
We also expect adjusted EBITDA margins to remain and the low 20% range for the full year.
Cloud solutions had a very strong quarter segment revenue increased 26, 3% year over year to $68.1 million and the quarter and increased 9.4% sequentially from Q1.
And that was particularly hit hard by Covid and the second quarter of last year, providing a favorable comparison.
Overall cloud continues to benefit from our data driven marketing solutions, which continued to see a nice rebound with a recovering economy and increased marketing spend.
We signed several new data driven marketing clients during the quarter and will benefit us in future periods.
Our strong ongoing execution.
And Q2 clouds, adjusted EBITDA margin improved 140 basis points versus prior year to 27, 6% driven by strong cost management.
For the remainder of 2021, we have good visibility on the marketing campaigns being planned by our financial institution customers.
Do you expect the pace of spending to moderate and the second half of 2021 and as a result, we expect to see mid single digit revenue growth on a reported basis.
We expect cloud margins to remain healthy and the low to mid 20% range.
Promotional solutions second quarter, 2021 revenue was $135 million.
And 14, 5% year over year and <unk>.
884% sequentially.
Adjusted EBITDA margin for the second quarter was 15, 9% up 410 basis points.
And keeping the impact of nonrecurring PPE sales and 2020, we are anticipating 2021 topline growth and a low single digit range and improved adjusted EBITDA margins and the mid teens due to the value realization initiatives partner consolidation and cost actions taken in 2020 and and the early part of 2021.
<unk> second quarter revenue increased 3.2% from last year.
171, $8 million and strength and business checks and new competitive wins.
Lee anticipated secular declines and the business.
Second quarter, adjusted EBITDA margin levels continued to be strong and 46, 7%.
Although this is a 300 basis point decline from last year, largely driven by increases from the continued 1 deluxe infrastructure improvements.
Well as inflation and product mix.
Based on high renewal rates, and new business, 1 and 2020 and and the first half of 2021, we anticipate check the decline and the low single digits for the full year.
Turning now to our balance sheet and cash flow.
We ended the quarter with strong liquidity of $456 million, including $163 million in cash and both of which are up year over year and please.
Pleased with this result, given the improvement occurred even while we closed the largest acquisition in company history.
We think it is another demonstration of the financial discipline and responsibility of the leadership team.
We ended the quarter with a net debt level of $1.67 billion up from $714.6 million due to the first American transaction.
As a reminder, this included a $500 million senior unsecured notes offering and as we replaced our previous revolving credit facility with a more robust and flexible facility to allow for future growth.
While our net debt to adjusted EBITDA ratio increased to 4.3 times. This quarter, we expect a lower this leverage ratio by at least 1.5 turn per year for long term strategic target of 3 times.
Importantly, and July within 60 days of closing the first American transaction, we retired $24 million of debt another demonstration of our financial discipline and commitment to delever.
Free cash flow defined as cash provided by operating activities less capital expenditures was $37.2 million for the first half of 2021, a decrease of 55% from $82.6 million last year.
And relative decrease was primarily due to costs related to the first American transaction higher capital investments and cares Act tax deferrals and the prior year.
Our board approved a regular quarterly dividend of <unk> 30 per share.
And the shares.
The dividend will be payable on September 7.2021.
Shareholders have left.
And just 23.2021.
We did not repurchase common stock and the second quarter.
As a reminder, our capital allocation priorities and to responsibly invest in growth for your dividend reduce debt and return value to our shareholders.
We will evaluate future purchases and on opportunistic basis.
Turning now to guidance.
And its promise today, we're updating our 2021 expectations to include first American as a reminder, we announced the transaction on April <unk> and.
And closed on June <unk>.
The guidance assumes a continued economic recovery and is subject to among other things and macroeconomic unknowns associated with the COVID-19 pandemic.
Cleaning the delta variant as well as potential supply chain constraints labor supply issues and inflation.
For full year 2021, we now expect the following.
Revenue growth of 10% to 12%.
Excluding first American revenue growth of zero to 2% and exiting the year with growth and the mid single digits.
Adjusted EBITDA margin between 20, and 21% with the fourth quarter being stronger than the third.
Capital expenditures of $95 million to $105 million as we include first American and we continue with important and important investments disposition deluxe for long term growth on an adjusted tax rate of approximately 25%.
To summarize I'm pleased for the second quarter results, we are executing on our 1 deluxe strategy and believe the company is experiencing strong momentum.
Operator, we're now ready to take questions.
If you would like to ask and audio question. Please press star 1 on your telephone keypad.
And again Thats star 1 to ask and audio question.
Your first question comes from the line of questioning Kumar with Sidoti and company.
Hi, This is Christina <unk> from Sidoti and stepping in for Chris Mcginnis.
Congrats on the strong quarter and thanks for taking my questions. So.
So first 1 just wanted to ask.
Good morning, and good morning.
So first question is I just wanted to ask with the acquisition of first American and.
Given the already announced and is it seems positive.
How has it changed the way you are talking to your customers and prospective customers about your payments offerings and what has been the day surprise now that you had a few months towards for Ken.
Yes.
Net.
And I think our customers have been.
And then very pleased to see us cement our position as a payments company and with the acquisition of first American.
And saying, we're going to become a payments company and that we were investing and becoming a payments company and our customers appreciate our commitment to be there and salute us and honestly are calling us directly about new opportunities that we had not seen before and our pipeline as a result of the move that we have made.
I think it also gives us the opportunity to talk to our customers Holistically about how we can help them pay and get paid whether they are a customer on the treasury side, whether they're a small business, but there are mid size business, we have a solution to help them.
And help them get say and to get paid.
<unk> and optimize their business for growth. So it's given us an extraordinary opportunity to go back to our customers and how the deluxe story about our future and the reception has been terrific. We're very very pleased.
The reception.
I think going forward.
Think there is even more opportunity to cross sell our payments solution, even broader set of our customers and just 60 days into it.
Great and we're getting and we're seeing great great initial results.
Okay.
And so from there.
So.
Obviously share.
The success of cross selling but I wanted to ask about.
And.
How conversations are changing with clients that are not currently working with <unk> and given the changes that have taken place.
Over the last few years, our people and just taking notice.
Chris and I would say absolutely the marketplace has noticed.
The locks and been a trusted brand for over 100 years, we support for bank customers and millions of small businesses and as a result, we have gotten a number of unsolicited inbound inquiries about how we could help a business and succeed and.
And I think it has changed the perspective of what the lungs is and the marketplace and has been it's been very clear on <unk>, I think and the marketplace, both for our customers and non customers.
And really is a payments company and that's led us to a variety of new conversations.
I think for customers, we have the good fortune of having as I said thousands of that volume customers millions of small businesses. So for.
For those companies that are not in.
And 1 or more of the launch product, it's given us another way to go engage and a conversation with customers that are not in our portfolio. So first American for example, and.
$100140 and small business customers of 120 bank partners, plus or minus and what is giving us the opportunity is to take and deluxe products to those customers and not just cross sell for Americans and deluxe customers, but to sell deluxe products. The first day.
<unk> customers and we're seeing first for us on that as well, where we're able to take for example, our payroll product and we are able to push that into the first American channel.
We didn't have access to before so it is this notion that we've talked about that I talked about of the deluxe Halo it's real.
In fact that we are a trusted brand and net amount of transit brand for 100 years. The fact that we have these incredible distribution channel and then we have a we're financially strong and.
A way to have broader conversations with our customers. Both on first American and we even have more things to talk about and the reception to where we're going and what we're doing and as been done very significant.
Okay.
Alright so.
Last question on payments are you missing anything that you need to compete within the marketplace and what is the opportunity to expand the offering from here.
The software upgrades, our ability to expand the offerings.
Okay.
Christine when we announced the first American transaction. We said we were closing what we perceived is our largest GAAP.
Have customers that buy and solution from us at the beginning and incorporate let me get on to decide and our logo when they get when they do web design and when they filed and our web host, but then we didn't have a way to help them get paid and that is 1 of the most important things and our business is interested and because obviously, we can't get paid and bill.
Have the sheet business, so with the acquisition of first American we're plugging that hole and we have done that with what we think that the market leading asset and the performance I think speaks for itself.
Over time, and I think you could expect to look and see us.
Net assets that would sort of meet a couple of criteria for first is that you would add scale to 1 of our existing payments product.
So it would add scale.
Allowing for agree.
Accretion for <unk>.
Second thing would be and new capabilities, specifically, our new market. So if we decided that there was a market segment. We wanted to go Chase a there was a and ingredients that we need as you can imagine is going to get that for.
A new capability to serve existing customers better.
And most important thing there of all of those decisions, we would make to grow inorganically would obviously be driven with the lens of driving shareholder value.
But a very fine point on it and we believe we have a major outstanding GAAP today and the answer is no. We think that there are a number of places where we and expand that business more aggressively and then we'll do some of that organically and of course, we'll be opportunistic and.
Things and as.
We go to the market and and.
And look for additional growth opportunities.
Okay.
Okay great.
And so now thinking about the outlook for the full year and the expectation exit the year at mid single digit revenue growth.
Given the new Delta and and inflationary environment, what do you see as the biggest hurdles to achieve that outlook.
So Christina Scott. Thanks for the question. So we built our outlook based on a stable macro economic environment.
Certainly there are a lot of concerns and under.
And the marketplace right now and inflation supply chain pressures.
Lots of things happening, we're certainly not immune.
And we will continue to monitor them and make sure that it should have and we respond accordingly, but we still feel comfortable and our and our outlook and feel like we're in.
And good shape.
And even in the current environment.
And have customers.
And a bad customers and Canada, 2 years ago, and now we have 2 of the leading banks and Canada that our customer.
We have 1 and what we believe is the largest reseller up non-bank reseller of checks and direct to consumers and we'd have 1 both sides of a number of bank combinations.
Have led to massive scale wind and our check business.
And why are we winning and check and it's really quite simple we have a demonstrably superior products you have been a responsibly and passing for some time and we continue to do that is to make sure that we can maintain margin.
And and the strength of our our financial strength that was really highlighted for us and and.
Covid crisis, but.
A number of financial institutions were really running to the safety of deluxe because of the quality of our management team, our the quality of our products and.
Ability.
Our financial situation. So we think there's still opportunity to win more share.
We at any time, we go up to the at bat.
We win far more than we don't.
And that comes with new market share gains for us and.
And then allows us to have great cash flow, which gives us confidence in our Ah and and our ability to delever, while and vast thing for growth and our payments.
And you know a number of vertical for payment for continue to be attracted to somebody and we'll get to answer answer through.
<unk> first American things are non profit.
So.
<unk> is and core piece of the company's business and overall performing well and it's good against the run way to do the great minds, reviewing and payments cloud entities.
Okay, great. Thank you I'm very sky. Thank you for taking my questions that Sapp, that's all I had and congrats again on the corner.
Great. Thank you.
Your next question comes on the line and Charlie's Trouser with S. C. S C J S.
Hi, good morning, Charlie.
Oregon.
However, when during the day.
For doing great.
And proud of encore.
Thanks for.
If we could talk a little bit more about the guidance.
Maybe give us a little bit of help in terms of how we should think about the segments for the bad cat for the year.
Also maybe some of the high level thoughts like cash flow and then just sits and housekeeping on the expense and D. A day for the year as well.
Sure sure throw it and let me start let me start with guidance so.
<unk>.
And we're coming out our guidance and to <unk>.
For setting first American and 2021 per cent adjusted EBITDA.
Which is sort of and the point is that the first half. So you can get a free could feel for how we think about the second half we are suggesting that we will be stronger than Q3, something and he might go up there.
[noise] carpeted and its guidance and put out there for my total company and respect.
As it relates to free cash flow and have a couple of 1 time and factors and Q2, the Dell repeat going forward.
Biggest which should be returned to normal capital expenditure levels, and so 2022 recall and Q2 weeks pullbacks significantly to returning to more standard and traditional capex levels that would've been the guy.
Model of that off for the back half of the your expenses cash flow numbers to protest and numbers and return to the border or traditional levels.
And then from a semi view broken out some detail bones were how big form of business.
To the questionnaire.
The segment for.
And I'm just looking at all for signatures.
What what assumptions Lee building and for you know for each of the segments to get for you guys.
So.
Payments for what 1 thing I would call out about the second half guidance.
Including the first of Eric and obviously is the biggest impact and we have for the half and.
And it will be modest dilutive for more right perspective, adjusted EBITDA perspective will have to have a meaningful impact them adjusted EPS of between 25 and 30 cents a share I think that's the main factor to contemplate.
And second.
Cloud where expenses normalization of the sales rates with reference that is a bit single digit growth for for for 2.2 age for them.
Okay, and we had some very favorable compares to last year business is performing well 2020, overall hotline and boosting digits and.
And checks and get a really sharp quarter Q too, but we are anticipating a full year decline and a very loose.
Scott just to be clear and for you Charlie.
The 25 to 30 and Pat from first American is that and expense associated with that and then sort of.
And have a low fat about half of the growth and.
Income we're getting from.
First America and will be offset by Dennis.
Got it and so how should we think about interesting and she slipped interest expense I'm sorry for the for the year.
Yeah. So.
Well, we'll be issuing.
Got to get the details for the new debt structure should be up and the model of interest expense, they're free carefully let me, let me modify with Barry said.
The profitability his first marriage and a contribution to net income wall, essentially offset half of the incremental debt expenses.
Got it and then also if you have any thoughts on.
DNA for the use of for years well.
Yes, we do have typically guide that TNA, but.
Capital expenditure rates and we're going to return to a normalised level of 95 to $105.
Got it thanks, and then just 1 more time and the bigger picture Barry if he could on the.
Just the temperature of small business customers and terms with you there and.
Susie is and what the recovery of the economy now that we've got the documentary projects and spikes.
And that could tempt for that.
What are your thoughts sales.
And can you talk to you for your small business groups.
So I can give you.
Some perspective based on the day that we have on and do some also anecdotal and directional things that we're seeing and the market.
And overall, we see and the.
<unk> rebound and being very nice.
And we're saying that both and new business starts. We're also seeing it and business expansion and you can see it and the ongoing consumption of our products that are used to the ongoing operation and Ah.
Essentials and our track.
Product.
And and payments volume, so we can see chaperone recovery nicely across.
And the small business landscape.
I think there is a general angst about what the downtown various teams.
But I think she'll different this time and then in March of last year and I.
I think most small business certainly many small businesses have found ways and modify their business model and.
Like of.
Vast mandates and other issues associated with the energy and the Covid and.
And COVID-19 situation, and and so business and start better equipped to handle those challenges today.
And then.
We expenses, perhaps there is a modest impact.
From Delta, but we are not modeling are expecting a sort of any dramatic change.
The results for Delta and I think we're all hopeful that.
Has has outlived simply quickly.
And it will be.
<unk> impact on the back half, but that is.
What we think is going to happen is already factored into the macro guidance and.
Scott.
Got it and then just lastly, just.
And then I work from home situation are you starting to see people would turn it back to the office.
And the place too.
And fully back and office or keeping people still working for both.
You know.
Charlie and thank you for the question, obviously, our top concern and priority is.
Moving for shareholders, but it's also simultaneously, making sure that we keep our paint and our people healthy and safe.
And we have proven really affected and doing that and our production facilities and operate and through the pandemic without stop we did not lose a single day of production net through the Covid crisis, which I think really speaks to the resilient and see the grit and the persevere and it's 1 of our core values and the company now.
Now when we talk about getting our professional staff back for the office, we will be opening our new and.
Minneapolis headquarters in September and our Tech Center and Atlanta later this month.
And we expect to have a gradual return and see the office, I mean and vendor and public with our teams that we will be and a hybrid while ago and foreign expecting them to be our teams to be in the office for off of it not we fundamentally believe and the power of teamwork and collaboration and we know so much Marc and get done.
File together than apart, but that doesn't mean that we should be and we will become and inflexible and foyer, we are doing everything and to be and a full year of choice.
So we think we will step back and be of course will be responsible and listen to the sciences and the government advice and make sure. We do the right thing here, but it is absolutely our intention to step back in 2 and a office based environment.
And the last thing I would just tell you that Charlie I think just another proof point and.
About the financial discipline and the stewardship of the leadership team here.
During the crisis Lee.
And decided to appropriately change our real estate footprint and we accident, we sold our corporate campus and had 54 acres.
And multiple 100000 square feet of real estate, and we're moving to a much more efficient space and downtown Minneapolis, that's going to give us operating savings and had a huge impact on avoiding capital expenses for retrofitting Dot net obsolete facility and the same is true and Atlanta, So we use the opportune.
Entity to consolidate our footprint and very focused and what we're calling our core harvest, which of course was or Minneapolis headquarters, Kansas City is a big production Psyched Atlanta as our Tech site and of course now with for Samaritan based in Fort worth and kind of great concentration, there and we'll add folks and their overtime and various.
And.
Oh boy.
Excellent and thanks for taking my questions.
At this time there are no further questions I would like to kind of pump.
Mr Barbados for clothing online.
Thanks, and she'd before we conclude and I'd like to mentioned and the following conferences demands and will be participating and.
The meat and vegetable Ventech Y and 1 conference and August 19, and BMO capital markets, and 2021 and technology Summit and August 20th.
And C O King 19 annual best idea and conference and September 14th.
Thank you again for joining US today, please stay healthy and based on and look forward to speaking with you and November every share and third quarter of 2021 results.
Thank you for participating and today's conference call and you may now disconnect and lines at this time.