Q2 2021 Insperity Inc Earnings Call
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And.
The next turned and everyone. My name is Erica and I will be your conference operator for today I would like to welcome every once a day and spirit <unk> second quarter 2021 earnings Conference call.
At this time all participants lines are in a listen only mode.
And I'll start the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded if you require any further assistance. Please press star zero.
I would like to introduce today's speakers joining us.
Paul It's our body sharp and of the board and Chief Executive Officer, and Douglas Sharp Senior Vice President of Finance, Chief Financial Officer and Treasurer.
I'd like to turn the call over to Douglas Sharp Mr. Sharp. Please go ahead.
Thank you and we appreciate you joining us let.
Let me begin by outlining our plan for this evening's call.
First I'm going to discuss the details behind our second quarter 2021 financial results.
Paul will then comment on the key drivers behind our Q2 results and our plan over the remainder of the year.
I'll return to provide our financial guidance for the third quarter and an update to the full year guidance.
And we'll then end the call with the question and answer session.
Now before I begin I would like to remind you that Mr. <unk> or I may make forward looking statements during todays call, which are subject to risks uncertainties and assumptions.
In addition, some of our discussion may include non-GAAP financial measures.
For a more detailed discussion of the risks and uncertainties that could cause actual results to differ materially from any forward looking statements and.
Filiation of non-GAAP financial measures. Please see the company's public filings, including the form 8-K filed today.
Which are available on our website.
Now, let's discuss our second quarter results, we achieved 91 cents and adjusted earnings per share and $60 million of adjusted EBITDA with our growth rebounding ahead of plan from the pandemic close a year ago.
As for our growth metrics. The average number of paid Worksite employees increased by 7% over Q2 of 'twenty 'twenty 1.
Above the high end of our forecasted range of 5% to 6%.
And this was a sequential increase of 4.3% over Q1 of 'twenty 'twenty 1.
Both works out employees paid from new client sales and net gains from hiring and our client base exceeded our targets and.
And second quarter client retention came in at our historical high level of 99%.
Now along with Worksite employee growth, our revenue per Worksite employee, which included a 6% increase and pricing.
And the non recurrence of the 2020, FICA deferral and customer service fee credits exceed exceeded our expectations.
And our Workers' compensation program also continues to produce favorable results.
In spite of these 3 factors we experienced a decline in gross profit of 9% from Q2 of 2020.
Related to the dynamics associated with the pandemic.
First during Q2 of 'twenty 'twenty with the onset of the pandemic, we experienced unusually low utilization and our health plan and therefore lower benefit costs.
Over the first half of this year, we have seen an increase and health care utilization, including elective care that was previously deferred and COVID-19 related vaccination testing and treatment costs.
Along with changes in claim and claim payment patterns by our carrier associated with these claims.
Our second area of gross profit unemployment taxes had been has been favorable relative to our expectations coming into 'twenty 'twenty 1.
We prudently budgeted for an increase and state unemployment tax rates coming off of the Hy 2020 unemployment levels.
Ultimately many states elected not to raise their rates at anticipated levels, including Texas lose weight who's right and we received during Q2.
Also we experienced a change and client mix that had a favorable impact on our suite of course.
So the gross profit contribution from a payroll tax area has exceeded our budget through the first half of 'twenty 'twenty 1.
Moving forward into the second half of this year, we have appropriately lowered our pricing to allow our clients and prospects to benefit from our lower pseudo costs, while still targeting our initial budgeted spread between price and cost.
We will closely monitor pseudo rates as we enter 2022 to determine the need for any further pricing adjustments.
Now another positive outcome and the payroll tax area. During Q2 weather was the receipt of $11 million of federal payroll tax refunds related to prior years.
As for our Q2 operating expenses, we continued to balance managing costs relative to the ongoing pandemic, while also investing and our current and long term growth plans.
We have increased our marketing spend related to lead generation activity.
And have incurred cost related to our sales force implementation.
Other corporate employee head count has remained relatively flat from the first half of 'twenty 'twenty 1.
We have rents reinstituted travel for certain employees and events. However, these costs along with other G&A costs continue to be managed at historically low levels as the economy and our growth recovers from the pandemic.
Our financial position and liquidity remains strong as we continue investment and our growth and provide returns to our shareholders.
During the during the quarter repurchase 98000 shares of stock at a cost of $9 million.
<unk>, our dividend rate by 12, 5% paying out $17 million and cash dividends.
And invested $9 million and capital expenditures.
We ended Q2 with $213 million of adjusted cash and $370 million of debt.
Now at this time I'd like to turn the call over to Paul.
Thank you Doug and thank you all for joining our call today, let me begin by providing some color around our strong second quarter and first half results and the solid execution driving our growth acceleration.
Follow these comments with the discussion of priorities for the balance of this year and I'll finish with some thoughts about the exciting market opportunity. We see ahead for inspire D. The PEO industry and the overall HR services sector.
We've had an excellent first half of 2021 and the face of considerable uncertainty from the ongoing effects of the pandemic our priority as we entered this year was to accelerate our growth momentum and returned to double digit growth and paid worksite employees as soon as possible while managing through the uncertainty.
As the year began we were optimistic we would achieve this growth rate by year end or early 2020.2 despite the loss of our largest client which represented just under 3% of our Worksite employee base. Our confidence was based upon our solid sales momentum underlying client retention improve.
<unk> and steady hiring and the client base.
Our guidance provided today indicates we now expect to return to double digit unit growth in the third quarter, well ahead of schedule and building off our strong recent trends and all 3 of our growth drivers.
Outperformance and paid Worksite employees from previous booked sales combined with stronger than expected hiring within the client base and historically high client retention to produce a rapid acceleration and our unit growth in fact paid worksite employees were up 9% and.
4 months by the end of June over our low point of the year in February news.
New sales and the second quarter met our targets with book sales for new clients and Worksite employees up 39% and 30% respectively over last year. This positions us well to fuel third quarter growth since book sales from a given quarter typically become paid worksite employees and the following quarter.
Another highlight from our sales organization. This quarter was booked sales for our traditional employment solutions work force acceleration, which achieved 94% of forecast we are beginning to see decent traction with this offering with gross profit contribution in Q2 from this offering increasing significantly.
Over the same period last year, although the numbers are still small relative to other contributors to gross profit. We believe this trend bodes well for the future since the potential for this offering is substantial.
Our client retention and the second quarter continued at historically high levels as our client service interactions have continued at rates dramatically above pre pandemic levels. We would have expected the level of service interactions to recede to historically normal levels by now, but it appears more of our COO.
Beth has discovered the depth of our service teams expertise and the capability of a sophisticated HR function to help their businesses succeed.
The most significant driver to our rapid growth acceleration and the first half of the year was growth and our client base above our expectations.
And we budgeted this metric at the low end of our historical range for this year and it appears we are more likely to end up near the high and even with some potential cooling off and hiring over the balance of the year.
We expect continued hiring within the client base over the back half of the year, but the labor market is showing some stress level around availability of candidates that could dampen the rain.
The competition for qualified candidates is quite pronounced leading to wage inflation, signing bonuses and an increase and employee turnover to pursue better opportunities we.
We saw some of these effects and our own data this year with average wages and bonuses up 7% and 44% respectively.
Tightening labor markets also the result of a significant increase and retirements and career decisions, reflecting personal way prioritization coming out of the pandemic.
This dynamic represents a considerable opportunity for its Barry since 1 of the major advantages of our workforce optimization offering is the immediate capability to compete for employees against much larger firms once again, a sophisticated HR functions needed to respond to address these marketplace changes.
To gain a competitive advantage.
The second quarter and first half of this year also reflected the expected volatility and 2 of our direct cost areas. Most affected by the pandemic, specifically unemployment taxes and healthcare costs. There are simply many moving parts and these 2 areas that'll take some time to settle out as the pandemic waned.
So we will continue to set wider ranges than normal for our expectations in these areas.
So we have delivered solid profitability year to date and we have a good plan for the balance of the year to continue to set the stage for long term growth and profitability. Our plan includes strategic investments and sales and service capacity.
We expect to begin ramping up the number of business performance advisors.
At a rate of approximately 10 per month and go into 2022 at around 700 BPH across the country.
We are re instituting our Paul campaign kickoff and early September with simultaneous events held across the country and linked together remotely.
We also have budgeted and increase of several million dollars and radio and digital marketing span extending campaigns that had been successful generating qualified leads.
We are also continuing our investment to implement sales force and are on schedule for our target rollout to the sales organization next spring and.
And most importantly, we intend to invest to add service team capacity for the growth we are experiencing and expect to continue in the months ahead.
We believe a successful fall selling and retention campaign will build upon our recent success and increase the likelihood of double digit growth into 2020.2.
Disparity has a tremendous market opportunity and the years ahead demand and recognition of the value of our services has never been higher.
P O industry has reached a stage of more rapid adoption and the total addressable market is large and my.
And my optimism for the long term future is rooted in a different dynamic than I've seen in the 35 years building a company and industry at the core of this optimism is the recognition of the importance of the HR function and the need for consultative HR support to achieve business objectives.
I have mentioned throughout the pandemic the increase and the number and average length of time of interactions with our client owners and C level management and.
Another element and may be the most significant change to note is the topics being discussed at this level, including corporate culture diversity, and inclusion and employee communication and emotional support and talent acquisition and retention.
It is apparent that developing and implementing and ongoing people strategy is front and center and the minds of business owners and the C suite.
This reality highlights the value of the PEO option for small and midsized firms and general and even more so the distinct competitive advantage and spare these premium service offering so.
So we believe it's time to pour gas on the fire and prepare for the growth potential and the years ahead, we are and a great position to ride the wave of the recognized value of a sophisticated HR function on top of a second wave of the growing awareness of the PEO solution on top of a third wave and the value and spare and he can deliver with our super.
Barrier service model.
We intend to continue to capitalize on this expanding market opportunity by investing in innovative ways designed to drive awareness and adoption of its parities best of class offerings. We believe this will allow us to continue to deliver on our mission of helping businesses succeed so communities prosper and.
And provide exceptional returns to our shareholders at this point I'd like to pass the call back to Doug.
Thanks, Paul now, let me provide our guidance for the third quarter and an update for the full year 2021.
We're now forecasting sovereign and 5% to 6.5% Worksite employee growth for the full year.
And improvement over our previous guidance of 4% to 6% growth.
This increase is based upon our outperformance during the first half of the year, leading to a higher starting point going into Q3.
<unk> momentum and sales and client retention and segment and some continued hiring by our clients.
We are forecasting Q3 paid worksite employee growth of 9.5% to 10, 5% over Q3 of 2020 since coming off the 7% year over year growth and the prior quarter.
And as we approach our annual fall sales campaign, we have taken a portion of the upside and earnings created during the first half of this year and.
And invested it and initiatives.
Designed to build upon our strong sales momentum.
These initiatives include the continued hiring of business performance advisors increased investment and advertising and re instituting our corporate sales and client retention Paul campaign event.
Also as I mentioned, a few minutes ago as a result of the 2021 suite of rates coming in lower than anticipated.
We have taken the opportunity to pass savings through our renewing clients and prospects through lower pricing allocations over the latter half of 2021 to further support our sales and retention goals.
Now there does.
Seem to be a continued uncertainty surrounding the pandemic and its impact on our direct cost programs.
Particularly in our benefits area, where COVID-19 related costs potential deferred care higher acuity and the delta variant or potential factors.
Therefore, we continue to take the approach of adopting a wider than usual range around our earnings expectations.
When considering this factor and the investment of a portion of the earnings upside for the first half of the year. We are now forecasting adjusted EBITDA and a range of $258 million to $288 million.
This is up from our previous guidance of 250 million to $280 million.
As for full year, 2021 and adjusted EPS, We are now forecasting and a range of $4 to $4.59 up from our previous guidance of $3.83 to $4.40.
As for Q3, we are forecasting adjusted EBITDA and a range of 52 million to $62 million.
And adjusted EPS from <unk> 74 to 93 cents.
Now at this time I'd like to open up the call for questions.
Okay.
At this time and the flow oriented part question I would like to remind everyone in order to ask a question you May press star 1 on your telephone keypad again Thats star 1 on your telephone keypad and we'll pause for just a moment to compile the Q&A roster.
Your first question comes from the line of Anthony Nicholas from William Blair. Your line is open. Please go ahead.
Hi, good afternoon, and thanks for taking the questions.
My first 1 and and I apologize if I missed missed this in the prepared remarks, but I just was hoping you could provide an update on on the mid market specifically any color on sales momentum there a commentary on the pipeline conversion rates et cetera.
Sure no problem and I didn't really mention mid market this quarter.
There are of course embedded into the total sales growth numbers and I mentioned the <unk>.
Last quarter that we had.
Really rung out the mid market sales pipeline it toward the end of the year and it's built really strong over the course of this year.
And we're looking forward to a good fall and in mid market.
But not much else to report on that front at this time.
Got it. Thank you and then in terms of the guidance specifically around Worksite employees, obviously, a pretty big increase there is there any way to kind of dimensionalize.
How much of that is a consequence of better hiring from the base versus new sales just trying to understand the change and and how much is a function of the stronger end market.
Yeah. It was certainly we.
Mentioned in the prepared remarks that we.
We generally have a range that we use for.
Net gain of hiring and the client base over the course of a full year and.
And we had budgeted and for this year to be at the low end of our range.
Which would be and the.
Around or maybe let les and 4% or so.
And the high end of our range would be typically over the course of the year and the 6% to 7% range. So.
You know that that gives you a little bit of color going from the low end to the high and over in terms of our estimate for the full year, but as you look back over the first half.
Certainly you had outperformance and sales you had.
And the incredible retention at historically high levels, which form the base for the net.
And that changed from the clients to be upside for you, which is exactly what happened. So very good for this part of the year, we havent really but it isn't that for the balance of the year at these kinds of rates, we've seen simply because we know the labor market is tightening up some.
It'd be nice if it could continue like that but that's not where we're building and our expectations.
Your next question comes from the line of Tobey Sommer from true with Securities. Your line is open. Please go ahead.
Hi, Thanks.
And I was wondering if you could dig into the pricing.
I think you said up 6%, but then maybe some sort of a reaction to the payroll situation being better and.
Alleviating some of that to your customers how should we think about pricing if.
If we are.
Kind of net out those 2 pieces on a go forward basis. Thank you.
Yeah. Thanks for the question Tobey. So we are continuing to move price appropriately with underlying trends were saying and the marketplace.
And so that what you've seen and the total.
Revenue per employee increased going up is does reflect strong pricing and.
And what we're doing and of course, we manage each of the allocations for each of the ultimate cost that come out so relative to the unemployment tax we had boosted rates early in the year anticipating additional.
Additional cost that would be passed on from the layoffs during the pandemic a lot a lot of that did not come through and so we have opted to.
Reduced the allocation rates.
For the balance of the year and then take another look as we get some insight into next year's potential cost, but this is the ongoing aspect of managing price and cost within each of the buckets that we manage that contribute to gross profit.
Thank you.
From a a BPA perspective.
Where would a 700 puts you year over year in terms of growth.
At the year end and then you talked about.
And some incremental sort of investments and the upside you're investing it helps stimulate growth could you give us some color about.
What what areas you're applying the increased investments thanks.
Yeah, absolutely you know we've had a great first half with.
With the maturing of our sales staff, allowing for us to hit.
Hit our sales targets.
Without a lot of growth and the net number of BPH, which was the plan as the year began as we ramp up.
The number of BP as the 700 number should put us around 5% ahead of the year prior and so we'll be continuing to benefit from.
Some of the sales efficiency gain.
We're investing over the last half of the year additional.
Marketing dollars and both digital.
And also.
Radio advertising that's proven to be.
<unk> and helping us get in front of qualified leads and so it's you know that investment is a little bit of insurance policy on hitting those sales targets over the balance of the year and continuing to build on the strong sales momentum we have and in the company as we sit today. So it makes sense to both starting at go head back to <unk>.
<unk> the number of BPH and that's your investment really and in 2023 growth.
Because it takes 12 to 18 months.
Train BPA, so we'll be ramping up over the back half of this year and in the first half of next year.
Moving that BPA count up to the right number.
And in the meantime, we're investing more to help support.
The success that our current <unk>.
Trained BPA and are having.
Your next question comes from the line of Josh Vogel from Sidoti. Your line is open. Please go ahead.
Thank you good afternoon, Doug and Paul you guys are doing well.
Thank you my first question.
You've talked about.
Increasing the client count.
Last quarter, it was offset a little bit by a reduction in average size of client. So I was just curious when we're looking at your wins and prospect pipeline today, what is the average client profile look like relative to the existing base.
Yeah. So both we saw over the course of last year about an 8% decline and the average coming out of Covid.
Al.
And we've seen it.
Half of that come back and it's been interesting to watch how it's pretty consistent between the average size of the customer base and the prospect base. So.
And I would say, we're half to maybe 60% back on average size both in the base.
And and it seems to be flowing to also.
And the prospect base that means to me there is still some more to be gained there before.
And we're back at that level.
And so it may be some more room there, but also you also have to consider that businesses may have just kind of tightened their belts, a little bit and found other efficiencies.
So may not get back to that level, it would take new growth for new.
Growth within their company to go beyond that.
Great I appreciate those insights and.
Now looking at how the state unemployment rates have come in below expectations. We had at the beginning of the year and now you're using these lower rates pass along savings for the support sales and retention.
And this may be silly and I apologize, but if we see some lockdowns.
Or extended stimulus efforts can can states change those tax rates on the fly which could potentially squeeze your connected can not only be done once a year at this point and any changes would be at 2020.2 event.
Thank you yeah, it would be highly unusual for there to be some kind of unemployment change midyear.
And it's not impossible.
<unk>, but.
Good.
Would be highly unusual.
And so this is really at this point more above.
Just looking ahead to 2022.
Adjusting for what.
We prepared for that didn't occur this year will be adjusted for that and pricing and we will have a look at pricing going into <unk>.
2022, with more insight into what's happening on the cost side.
And the good news about unemployment tax is when you change the rate rates and the system, both on the pricing and cost side.
Those changes flow right through so it's much easier to match.
The pricing and cost.
And in the unemployment tax area.
Your next question comes from the line of Jeff Martin from Roth Capital Partners. Your line is open. Please go ahead. Thank.
Thank you.
Thanks for taking my questions and hope you hope you're both doing well here.
I wanted to get a sense on the revenue per Worksite employee.
Pretty significantly both on a year over year.
And 201 hundred $75 or so.
Help us kind of parse out what the sources of that ours and workforce acceleration being.
Yeah.
And within the gross profit dollars, but it's not and the Worksite employee count.
Versus wage inflation and higher commissions versus maybe some additional ancillary features like your software and service platforms offer.
Yeah, So if you're looking at the year over year increase for the for Q2 and that.
Revenue per employee number.
Well first and total revenues and I think it was about 19%.
<unk>.
And and 7% obviously is the increase and Worksite employee volume so you're left with the 12% number and we talked about the fact that.
6 of that 12% was increase in pricing that we've been passing through and the other 6% or so has to do with.
What was happening back in 2020, with the government stimulus and deferral of FICA payments.
So you had a comparison issue so you didn't.
Had that money.
Flowing through your revenue per employee last year and that has since been.
Lessen significantly and so.
And then we gave customer service fee credits back in Q2 of last year. So.
And so that's the other piece of that revenue.
And per employee number.
Okay, Great and then could you also speak to your client retention and that first are there any unique things youre doing today that.
Maybe you weren't doing year and a half 2 years ago pre pandemic.
Well there are quite a few things down and more subtleties in the way that the processes that are going on there and.
And the interactions with clients like I've mentioned.
And as we look forward to this year.
In terms of the year and transition I'm really excited about it I think where we're in a good place right now in terms of how those processes.
And <unk> and continue to work and this year, we don't have the.
Kind of large or jumbo clients that could affect that type of retention.
Or attrition like we had and the last couple of year and so.
It's early but.
We feel good about the way your retentions going to this point and are optimistic about the balance of the year.
Yeah.
The next question that we have is from Mark Marcon from Baird. Your line is open. Please go ahead.
Hey, good afternoon, and Paul and Doug I was wondering if you could talk a little bit about.
You know what you're seeing on a couple of gross cost elements..1 just the health care costs, how did that trend over the course of the quarter I know there's a lag.
Between when the costs are incurred and when and when you become fully aware of them, but what are you seeing just in terms of the sequential trends and particularly as it relates to those elective.
Procedures, and how how you're thinking about it as the year unfolds.
1 aspect of it and then the second aspect of it is can you talk a little bit about the service infrastructure and what youre seeing in terms of interactions and length of interactions and.
How we should think about the service group.
Spending.
Sure.
If we want to talk about the benefits side first.
It's you know, it's really interesting to watch the dynamics of the pandemic as they play out.
Because as you know there have been moving.
<unk>, a lot of moving parts and components and <unk>.
You have to really dig down on to and monitor and so you have some you know.
Obviously, if you have deferral of care that lowers your cost if you have.
Early in the pandemic, we had you know pharmacy cost go up.
Dramatically, because we're allowing people to buy more.
For extended periods and then you had you have.
Covid actual claim costs start to come through.
And testing costs and of course. This year you had the addition of vaccine cost and then you have the potential for a deferral of care coming in or chronic care that was deferred so we really dug in this quarter to look at the detail and certainly <unk>.
<unk> cost were higher if you remember the peak of the Covid hospitalizations being early in the year and that plays out over.
As you mentioned plays out over time, so certainly part of the first half story, we started to see some.
And some higher levels.
You know.
Things that relate to.
Possible deferral of care like <unk>.
<unk> work and mris and things of that nature.
But it's interesting because all of it is just little bits and pieces all over the map inside the.
And the benefit plan so.
All in a little higher than we.
Would have expected or that we did expect but not outside of the range of our expectations. So for.
For the full year.
And I think we've.
Continue to be appropriately.
And conservative and and that's why we continue to have a wider range around our.
Around our.
Earnings targets.
So that's the benefit side and on the.
The service side.
It is definitely time to invest in service capacity.
Based on the.
And the way service level service needs have continued at a high level and our growth has accelerated.
Faster than than we originally.
Budgeted so it's important to make sure that we staff up effectively and.
Make sure we maintain our unique service model with our clients the.
And the unique level of care that we provide and the breadth depth and breadth of services depth of our services and the level of care is are distinguishing factor and the marketplace.
And so that's.
That's definitely something that you've got to always manage when you make the investment.
To make sure that you're ready and maintain those service levels.
That's great and then with regards to you know a couple of revenue factors. Both in terms of what's occurred so far and then in addition to that going forward can you talk a little bit about 2 dynamics, 1 just the contribution and the expectations from workforce acceleration and the successes that.
You are seeing and and workforce acceleration.
Particularly in certain regions, where it might be working better.
And gaining a lot of traction and then how should we factor and.
The lower tax rates with regards to pricing and the second half of the year or in other words, when we can obviously see the worksite employee growth, but what what's short of.
<unk>.
Declines should we see from a pricing perspective in total and.
You know relative to the first half.
Model off the second half.
Yeah. So on the unemployment tax remember most of your unemployment taxes are really incurred and the.
First quarter and second quarter and its email.
Adjusted the rates for the balance of the year it'll have a minimal effect on the actual collected allocations because a lot of people have hit their limits for many of these taxes.
But.
So it will also lower the rates will be building in for next year.
2.
The World will help us add new business.
So.
That's we don't see that that's going to have a dramatic effect on our on lowering our revenue.
For the balance of the year.
The other part of your question is interesting because on the workforce administration I felt like I needed dementia this quarter, because what I'm really saying is more of a of.
More of this with the workforce acceleration being.
Ingrained part of the sales process and it's just more routinely becoming an option that is being presented and people are taking when they're not ready for the full workforce optimization step. That's what we were hoping for and that's beginning to happen it's happening at a more.
Acceptable rate and I think we'll continue to get adoption across our BPA base.
And.
On a year over year basis, when I look at the total gross profit contribution even though it's a small number.
It has such potential I felt like any dimension it because it's it really increase a lot and 12 months and it has the potential to do that for a long time, we continue to see the same trends of adoption in the base. So it is a bright spot for the future.
And allows us to.
Continuing to drive these key factors like gross profit per Worksite employee and.
And.
And our business adjusted EBITDA per Worksite employee is really the.
The primary key metric about.
What we're what the business is about because that Worksite employees, our unit and revenue unit expansion and unit of risk. So it's really how much cash flow you make per unit of risk that you take so.
<unk>.
Anything that drives that equation, we think has tremendous potential for the future.
Thank you. The Q&A is now closed I would like to turn the call over it back and they start sorry body. Please go ahead Sir.
Well once again I'd like to thank everybody for joining the call today, we appreciate your interest and the company and.
Look forward to any follow up questions for Doug and the coming days and we look forward to seeing you at some point. This fall. Thank you again, and we'll see you next quarter.
This concludes today's conference call. Thank you all for joining you may now disconnect.
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