Q3 2022 Agiliti Inc Earnings Call
Please standby were about to begin.
Good afternoon, and welcome to your agility third quarter 2022 earnings Conference call. Today's call is being recorded and we have allocated one hour for prepared remarks and Q&A.
This time I'd like to turn the conference over to take tighter senior Vice President of corporate Communications and Investor Relations of agility. Thank you you may begin.
Thank you operator, and Hello, everyone. Thank you for joining us on today's call as we provide an overview of agility results for the quarter ending September 32022.
Before we begin I'll remind you that during todays call well be making statements that are forward looking and consequently are subject to risks and uncertainties.
Certain factors may affect us in the future and could cause actual results to differ materially from those expressed in these forward looking statements.
Specific risk factors are detailed in our press release and our most recent SEC filings, which can be found in the investors section of our corporate website at agility helped dotcom.
Well also be referring to certain measures that are not calculated and presented in accordance with generally accepted accounting principles on this call.
Can find a reconciliation of those measures to the most directly comparable GAAP measures and a description of why we use these measures in our press release.
A copy of the presentation that we'll use to facilitate today's discussion. Please visit our website at agility helps dotcom.
What's the investors section at the top of the screen and then events and presentation. Finally select the presentation titled Agility, Q3, 2022, earning slides.
With that I'll turn the call over to our CEO Tom Leonard.
Good afternoon. Thank you for joining us to review our third quarter performance for 2022.
Joining me today is our president Tom banning and our CFO Jim Carrey.
Tomorrow is veterans day I'd like to begin today's call by thanking all of our agility team members and especially our veterans for their service to our company.
Customers and.
Our country.
Agility is an active supporter of the defense departments skilled bridge program.
And training internships and long term employment for military members transitioning to civilian life.
Nearly 8% of our current workforce myself included.
<unk> thousand veterans.
Thank you all for your service.
Turning now to our business.
Actual results met our expectations for the quarter with reported revenue up 3% to $271 million.
Excluding the Covid benefit we saw in Q3 2021, our third quarter revenue was up between six and 7% year over year.
Adjusted EBITDA was $66 5 million as a result developed in line with the financial drivers. We described in Q2.
Agility space business remains strong and durable.
Over the next two quarters, the impacts of COVID-19, and the delay associated with the H H S contract should be behind us.
Thereafter, our results were more clearly reflect our underlying organic growth momentum.
Jamie will spend a few moments on the trends within the business and then Jim will walk through our financial performance and expectations for the balance of the year.
On August 5th agility submitted its formal RFP response for the department of Health and Human services, New multiyear agreement for the management of the federal emergency stockpile of medical equipment.
On November eight.
He was notified that the government accountability office protest had been filed by another bidder.
Challenging the government's determination of their bid is technically unacceptable.
We anticipate a short delay while the government works through its formal protest process.
Agility remains confident in our performance our competitive position.
And then the ultimate expected award of a new long term contract.
In the meantime, we continue to operate under our existing one year extension agreement with HHS. It was awarded in February of this year.
In general terms of which already reflects the normalized post COVID-19 management duties for the medical device stockpile.
As we described on our last call and beginning in Q2 this year.
Utilization for our peak need rental devices trended to a new lower level.
Somewhat below pre pandemic utilization levels.
As of Q3 peak need rental volumes appear to have stabilized much as we had anticipated.
We expect to see a normal seasonal uptick in utilization in the back half of Q4 and continuing into Q1 of 2023 with.
With the actual impact driven by the severity and length of the Covid RSV and flu season.
So we'd related impacts and the HHS agreement had been the primary transient drivers of variability in our reported results during our first 18 months as a public company.
Throughout this same period, we've shared that our base underlying business has continued to show positive momentum.
Noting exceptionally strong new business performance from our selling teams.
The result has been a solid backlog of sizable new contracts for agility on top of the normal high volume pace, a smaller new business orders.
And just the last few quarters, we've signed more seven and eight figure annual value contracts than ever before in our company's 80 plus year history.
And the transition from supporting our customers' COVID-19 driven needs to executing on larger longer term strategic contracts.
We expect to see some near term lumpiness in our financial results over the next few quarters related to this growth trend.
A reminder, that COVID-19 driven customer needs generally resulted in short term immediate impact high margin revenue.
The three to five year contracts. We're now implementing will once again provide a highly visible and predictable financial outlook more typical of our long history as a company.
For the balance of the year, we're revising our financial guidance to reflect a more conservative near term outlook on this continuing transition within our business.
I'll now turn the call to Tom banning to add his perspective.
Thank you and Hello, everyone.
I'm happy to build on Tom's remarks, with some context on our accelerating commercial progress.
First as just mentioned, we're seeing tremendous new business momentum driven by our selling organization.
The emergence from the pandemic has brought a clear shift in our customer's mind share and a renewed focus on longer term strategic initiatives initiatives.
As housing cost control and quality of patient outcomes.
<unk> remains well positioned to help.
The impact our solutions have on our customers' operations is increasingly being recognized including by the industry's largest group purchasing organizations, where gpo's, who support these health systems purchasing decisions.
Historically, our solutions appeared as a standard line item on a broad base GPO sourcing schedule.
Today, we operate under a number of preferred relationships, including unique arrangements under which the GPO directly positions agility solutions to the C suite of our customers more recently, we were one of only three vendors of a list exceeding 200 companies to be nominated for.
Our recognition as a supplier of the year by a major group purchasing organization clear recognition of the cost and quality benefits, we deliver for their membership.
In the last few years, we've worked to elevate our value proposition.
<unk>, our solution portfolio and train our teams for these higher level customer engagements.
That work has resulted in a strong pipeline of sizable new business opportunities, including many of the largest contracts in the company's history.
This positive evolution toward more system wide and IGN level engagements is a testament to the essential nature of our work and the value we've long prove to our customers.
That said these larger deals require somewhat longer and more complex implementations as we embed ourselves deeply into our customers' operations to unlock value and their medical device value chain we.
We expect to work through this transition in our business over the next few quarters.
We've long described agility as a company on the right side of health care, meaning that no matter, what the near term pressures facing our customers.
Our role in sustaining our nation's health care industry is always necessary and in high demand we.
We saw this clearly as we responded to our customers' short term COVID-19 driven needs and we see in our current momentum with the new agreements we are signing.
Looking forward, we remain confident in our growth trajectory.
For now our teams are focused on disciplined execution and delivering a strong close to the year.
I'll now turn the call over to Jim.
Thank you Tom.
I'll start with an overview of our Q3 financials and then offer some comments on our outlook for the year.
For the third quarter total company revenue totaled $271 million.
Representing a 3% increase over the prior year.
Excluding the favorable impact of Covid in the prior year, which.
Which was estimated at $7 million to $10 million.
Revenue in Q3 increased 6% to 7%.
Adjusted EBITDA totaled $66 5 million.
19% decrease compared to Q3 last year.
And adjusted EBITDA margins totaled 24, 5%.
Adjusted EBITDA margins versus the prior year were negatively impacted by the continued delay in the award of the new HHS contract.
As well as lower medical device rental utilization in the quarter.
Adjusted earnings per share of <unk> 19 in the quarter compares to 23 in the year ago period.
Driven by both a slight decline in adjusted net income.
And an increase in the effective interest rate on our debt.
Which amounted to about a penny per share for the quarter.
On a year to date basis.
Net income has increased over $12 million compared to 2021.
Taking a closer look at the third quarter across each of our service lines.
Equipment solutions revenue totaled $103 million.
Up 33% year over year.
Our October one 2021 acquisition of size wise contributed approximately $39 million in revenue in Q3.
These gains were partially offset by lower customer utilization of our peak need rental medical equipment fleet in the quarter.
A reminder, that when comparing year over year performance for Q3.
In the prior year period, we estimated a favorable impact from COVID-19 driven demand of approximately $7 million to $10 million.
Excluding the Covid impact equip.
Equipment solutions was up between 46% and 52% in Q3 this year.
Moving to clinical engineering.
Q3 revenue was $104 million representing.
Representing a year over year decline of 7% for the quarter.
Revenue from our HHS agreement with lower year over year.
As this work continue to shift from Covid, driven deployment and in market support of medical devices.
Back to pre pandemic maintenance and management activities.
Finally, onsite managed services revenue totaled $64 million rep.
Representing a year over year decline of 12% for the quarter.
This was primarily driven by the renewal pricing and revised scope of our HHS agreement as expected.
Looking forward our customers are focused on longer term more strategic cost and quality initiatives, which.
Which is driving new onsite managed service opportunities through our sales funnel.
Over the next few quarters, we expect to benefit from these new agreements to be more clearly visible within our financial results.
Continuing down the P&L.
Gross margin dollars for Q3 totaled $102 million.
A decrease of 2% year over year.
Our gross margin rate was 38%.
Compared to 39% in the prior year period.
The decline in margin rate was volume driven primarily due to lower medical device rental placements.
As well as factors related to the HHS agreement.
As previously described.
SG&A costs for Q3 totaled $86 million.
An increase of $11 million year over year.
The increase was primarily due to SG&A costs from our 2021 acquisitions.
Net of achieved synergies.
Moving to the balance sheet.
We closed Q3 with net debt of one point O 4 billion.
Which includes one point over $7 billion in debt.
Less $32 million of cash on hand on our balance sheet.
Our cash flow from operations through September 2022.
It was $162 million.
By strong operating results.
In addition.
Our cash flow from operations less cash from investing activities totaled over $100 million.
Strong cash flow generation and our LTM adjusted EBITDA performance resulted in our reported leverage ratio of three three times in Q3.
Year to date, we have utilized cash on hand to retire over $120 million in debt obligations.
These principal reductions are reduced our cash interest payments.
Roughly $3 million annually.
Looking forward, we will remain diligent in determining the optimal uses of our strong cash generation.
We continue to target leverage in the low to mid three <unk> range.
Agility maintains our position of solid liquidity.
With 242 million available as of September 2022.
This includes our revolving credit facility.
Well as cash on hand.
A reminder, on the terms of our debt given the macro view, our near term interest rates.
Of our one point O 4 billion in debt.
We maintain an interest rate swap agreement on $500 million.
Which is swapped floating rate terms for fixed rate terms.
This provides a partial hedge for any anticipated market rate increases in the short term.
Turning now to our 2022 guidance.
Giving consideration to the previously discussed delay of time and materials work under the HHS agreement.
And the expected.
Timing.
We're on boarding of a higher proportion of a larger new contracts. We are taking a more conservative view on the balance of the year.
We now expect full year revenue in the range of one <unk>, one 1 billion to $1, one 2 billion.
Adjusted EBITDA between 290 and $300 million.
And adjusted earnings per share in the range of 83.
The 88 per share.
I'll now turn the call over to our operator to provide instructions for our Q&A.
Thank you Mr Mccarron, ladies and gentlemen at this time any question press Star one.
Finally, your question has already been addressed you cannot remove yourself from the queue by pressing star one again and we do ask that you. Please limit yourself to one question and one follow up question. We will take our first question. This afternoon for Matt Misha <unk> at Keybanc.
Hey, good afternoon, everyone.
Thank you for taking the questions.
Quickly what is the change in expectations.
That's implied in your guidance from from not from the region from not getting the renewal.
The HSN H H H H S contracts.
In the fourth quarter.
What's like what's different.
Okay.
Yes, Thanks, Matt I appreciate the question.
If you think about the walk from our prior guidance on revenue of 11 60 down to our current guidance think about it in two pieces of approximately equal pieces. The first piece being the HHS timing.
And then the second piece being the timing of the Onboarding of the new business that TB had described earlier.
Youll recall in Q2 I had described that we expected to start Onboarding some of the T. N M work in Q4. So that's that first piece that I, just described and that work.
Okay.
And then.
Next question is on the on boarding of the new contracts.
I guess is.
Why is that going to be lumpy.
I figure those contracts are incremental.
And so they should be coming on.
Memorial, we get a ratable fashion I could see them starting slowly, but I just don't understand why it would be like lumpy.
Yes, Matt Yes, it's Tom.
Good to connect with you again.
The Lumpiness really is in the transition from the type of contracts, we saw through Covid tend to be very quick.
Onboarding of revenue very high margin flow through.
Those come on and off fairly quickly or mix is now very quickly shifted to these much larger.
Three to five year contracts and while that.
Mix is much like our historical mix.
Given the size of these contracts were not doing implementations across quarter, sometimes 80 sites not one or two sites as we would have been done historically.
And so that's created some.
Lumpiness in the.
The shorter term high margin.
Contracts have rolled off that were primarily COVID-19, driven and as we roll into these and until we get these.
The flywheel really going on these new much larger contracts.
Okay. Thank you.
Thank you. We'll go next now to Ahmed Hassan at Goldman Sachs.
Yeah, Thanks, Hey, good afternoon.
Maybe start with a quick one on just the fourth quarter as we thinking about that.
We actually Havent.
Can you guys perform in a in a flu season before so maybe help us out a little bit in terms of what you're already seeing given the early start to the flu season, and how much impact that actually has on your business and I don't know I would have thought that that could have.
Maybe you can help you a little bit here in the fourth quarter relative to what you might've been expecting given how strong. The season has started so any color on that seasonality factor and how that factors into your guidance.
That'd be the first question.
Okay.
Yeah happy to answer that one for you in.
In terms of the seasonality.
It does begin about mid Q4.
The way to think about that what we've reflected in our guidance is.
The ramps starting in call it mid November .
In terms of quantification of it if you think back in terms of our history. You can think about it in terms of say a 5% to 10% increase.
That we have built in and that's principally within equipment solutions.
Within that service.
Service line.
Okay.
And then just on the on the EBITDA side. The reduction was it was more meaningful.
So maybe just help us out a little bit there on.
Why we saw such a bigger reduction in EBITDA, just given there's one quarter left what are you expecting there.
Yeah. It was.
Fairly consistent with the take down if you think about our EBITDA margins that we achieved in Q3, and then think about the math in Q4, and the takedown of the topline and the bottom line. It was fairly consistent so no big things to call out there per se.
Okay.
Okay.
And then just last one for me on the government contract just just.
As we all kind of try to understand the moves here in the protest can we infer from the protests that because there was a protest do you would you were actually in line to win that contract is that is that a is that a fair inference.
I don't think while we're going through that the G. I was going through its.
Its review of the protests that we want to speculate.
So as to where we sat in this.
Simply what we know is a statement of fact, where that all of our bids were due on August 8th.
And on November eight we were notified that.
One bidder had.
<unk> filed a pre award protest.
Challenging the government's determination of their bid as being technically unacceptable.
Those are the facts as we know them.
We would expect that this gets rather quickly resolved.
And we remain confident in the strength of our proposal.
I'll jump back in queue. Thank you.
Thank you we'll go next to Kevin Fischbeck with Bank of America.
Hi, this is going to be a good shares on for Kevin. Thanks for taking the question.
First question would be can you talk about 2023 headwinds until and I know, it's early but how should we be thinking about the implied Q4 guide I in reference to 2023.
Well I would say that.
You know, it's a bit premature to talk about 2023 overall, what I would tell you is that if you think about the guide for 2022.
And as we previously provided a bit of color on the top line.
What I would say is that if you did the math in Q4 based upon the guide.
It would be safe to assume that on an organic basis top line would be coming in around mid single digits for the year for this year.
As far as we can go I think <unk> TB, perhaps.
It provided a bit of color as it relates to more broader strokes tail on TV I don't know if you want to hit.
And anything else there.
Okay.
Yes Tommy.
So I was just going to say I mean, we.
Certainly in terms of the momentum we're seeing from a new business perspective, there's a lot of great business that still to be had and that we're on boarding right now.
I think generally speaking Jim nailed it.
Probably what we're going to see going into 2023.
Yes, just to pile on that six point, we're signing as much business actually more business than we've ever signed in the company's history.
And the macro environment is not slowing that down because the work that we do ultimately helps our provider customers.
Save money and B compliance with regulations that guide their access to medical devices. So we are spending as much business as fast as we ever have.
And some of the largest contracts in the company's history. So we feel really good as we get into 2023.
Again really ramping this backlog that we've been growing a new business that we've been recently signing we feel really positive.
It is about the outlook and the increased visibility we will have in 2023, but the other benefit we're going to get as we turned the corner.
By the time, we are out of Q1.
All of the Covid impacts all of the prior M&A impacts.
We'll be in the rearview mirror.
To really be able to see the underlying organic growth engine that this business has.
Thanks, and then can you talk about Banco utilization and how that's trending versus pre pandemic levels. Thanks.
Sure. What we described last quarter was as this final wave of Covid subsided in Q1.
Utilization trended it to a place below what was our pre pandemic utilized.
Utilization levels, we quantified that impact as somewhere between 20 and $30 million.
Italy of high margin flow through revenue.
We call that cost.
For lack of a better description a rebase lining.
And what we have seen since we discussed that last quarter.
We've done exactly that seems to have stabilized we baselines at that new lower level.
Seeing as that the current flu season is starting to uptick our starting to see is an uptick.
And our utilization as well, leaving us confidence in that assessment of the business.
From this point forward, we followed the same normal season.
Seasonality.
Historically had in our business and it is currently implied in our financial guidance.
Thanks.
Yeah.
Yes.
Okay.
Operator, do we have any more questions.
Okay.
We will take our next question now from Jason Cazorla at Citi.
Great. Thanks, and good afternoon, just going back to those new contracts. You guys are highlighting are you seeing demand for some of the newer services or incremental demand for some of those services and capabilities you've added more recently.
Then just a follow on to that how are you seeing the pipeline developing I guess beyond the implementation of these new contracts just any more detail there would be helpful.
Yeah. Thanks for the question, it's Tom betting.
With Covid proved really to many of these customers is just how important we were to help them optimize their current fleets and that opened a lot of doors to more strategic conversations that we've had with customers and as a result of that really it's a balanced demand across all of our solution lines not just.
The acquisitions, we had done but the solution lines at the company was founded on and what we're finding is it and IGN or edge.
A broad based system level is they're wanting to rollout of solutions across their entire enterprise and doing so its complicated the implementations a bit.
But they're equally motivated as we are to get them time to value as rapidly as possible, but it really is a balance across our entire portfolio assisting them in the repairs with our clinical engineering augmenting their fleets with our own fleets on the equipment solution side, and then onsite managed ties it all together so there's no one.
Particular product line, that's in highest demand, it's really helping them optimize their fleets and maximize the utilization of their devices across their enterprise.
And that's what are these larger deals is primarily made up within our pipeline.
Got it okay. Thanks, and maybe just a follow on to that.
It seems like it's a broad based demand for all of your services, but maybe at this point are you looking for other adjacent capabilities.
Tom.
Yeah, So we clearly have.
Years and years to run with our current solutions in terms of headroom in the market.
That said M&A has always been a part of the story for us and when we can see we're a better owner leveraging that local in market infrastructure that we have for services and product that is best and most capably delivered locally to customers.
We will continue to.
Augments, what we already own.
With high impact M&A, we do maintain a fairly healthy funnel of opportunities.
Hey, guys.
Our money doesn't burn a hole in our pocket, our we're very diligent in our evaluation criteria I would look at any opportunities.
For the very few that we end up.
For me in precisely because our organic growth.
Mentum and visibility is so strong.
I'll need to take to create risk, but when we say, we're a better owner.
Bill and do pull that pull the trigger on.
New opportunities.
Okay. Thank you.
Thank you we'll go next to drew Ranieri at Morgan Stanley .
Hi, Jim.
Yes.
Maybe just one question for you and then maybe another for Jim but.
You mentioned kind of out of 'twenty.
Out of the first quarter 2023, youre going to have all COVID-19 and the M&A impact really behind you and we're going to see I think in your words.
Growth engine of agility I was just curious if you could touch on kind of the other piece of that which is profitability and how we should be thinking about the company.
And maybe margin expansion from here.
Yes, let me, let me have Jim help out.
On the mass piece on that Jimmy.
Yeah look drew as it relates to the.
Bottom line and margin expansion, what we've shared before is our FERC.
Focus first and foremost as topline revenue growth.
The benefits that as you know we get as volume expansion.
This shared infrastructure provides.
Provide some nice leverage for us.
We'll provide more color more broadly when do we get into 2023 guidance, but our focus first and foremost as topline revenue growth through <unk>.
How you can provide any other cause.
Or you would like to provide there.
And the other thing we've shared over the last 18 months as a public company.
In the absence of us be in a position to provide guidance for next year at this moment.
We've tried to drive folks back to take a look at.
That 15 to 2015 to 2019 period I take a look at our historical gross by solution area.
Historical margin profile.
And the.
Our goal is to get back to that circle margin profile and see what are they.
Things that we still have to work to do to achieve that margin profile is not just completes the integration of the acquisitions that we've made but also as we blow them out too.
Thats, a nationwide footprint and scale that we enjoy over the rest of our business.
To get their margins up to what has been our corporate average.
That's where we're driving toward getting back to the same place we were pre COVID-19.
Same RASK growth profiles, and then bringing the acquisitions that we've made.
So two to our corporate average has been.
Got it and maybe just on acquisitions with sidewalk size wise since it's going to be lapping can you just remind us like where you are in terms of integration are you satisfied with your are you satisfied with being hurt.
Integration of the acquisition.
And.
I mean, it looks like it's been hovering around $40 million a quarter, but.
Kind of we've been at 38 39 over the last couple of quarters, but just can you help like reset our expectations. There just remind us of like what.
The growth rate or growth will be in your hands with the asset. Thanks, so much for taking the questions.
Yes, we don't guide below the level of co company.
We are extremely pleased with the success that we've had.
With the acquisition of size wise and its integration at this point corporates purposes, we are complete with.
The majority of acquisition integration.
Integration activities for that business.
We are well ahead of the bottom line synergy benefits that we've committed to for a four year, one is actually allowing us to compete.
For new business and win new business today.
Part of that extraordinary backlog.
Of seven and eight figure deals that we were talking about allow us to compete for new business today that neither company agility, nor size wise on a standalone basis was able to compete with so it's been an extraordinary acquisition for us.
Again, the integration is complete for all kinds of purposes, and do you expect to hear more from us and the teachers can talk about our or what were able to accomplish with that fantastic company.
Yeah, and just to add to <unk> comments there Mike.
In the prepared remarks, I spoke to our progress with the GPS both north field and size wise has been integral parts of us advancing our positions with these GPS.
So that has also benefited us tremendously both acquisitions.
Okay.
And thank you ladies and gentlemen, just a reminder, star one please for any questions and we'll go next now to Matt Jeffries.
Matt Taylor at Jefferies.
Great. Thank you for taking my question Hi, everybody.
Yes.
So I had two the first one I wanted to ask.
Since you talked about the interplay of some of the short term higher margin contracts Sunsetting, and then signing up some of the bigger business I Wonder if you could take that a little bit of a step further in two ways. One can you help us with any quantification or differentiation in the <unk>.
Out of the margins of those two types of contracts and then when will you see kind of that Lumpiness that you described.
Ending as those new contracts start to take over.
Okay.
Okay.
I would say on this Matt.
Matt with respect to the new contracts one of the things Thats important to keep in mind is that.
It takes a while in year, one for us to actually onboard the business and then achieve ultimate optimal margins.
Really in year, two and for the remainder of the contract period.
So thats a piece to keep in mind as you know we don't.
Guy to specific.
Margins by solutions as we really have one overall shared infrastructure.
<unk> eight point to consider.
And to reiterate would describe.
With respect to the size wise business.
If you think about that and keep in mind that that's within equipment solutions.
The more business, we do there the more leverage we get and we're a manufacturer there because we produce more product to more leverage we get with respect to our overhead.
More and more to come on that topic as we progress into 2023, but those are a couple of important soundbites.
The LTV anything for you guys to add.
Let's take so I think you summarized it well Jim.
Okay, Great and can I ask a follow up just on HHS. So you mentioned in the commentary that it.
It could be some delay here.
And you are still confident in getting the contract. So can I just double click on those how long could that be in different scenarios.
And what gives you this confidence that you can share some of that.
Let me start with the last question first what gives us the confidence is.
Over that.
I've been with the company the last seven years.
For much of that we've actually had all of the predecessor and earned all of the predecessor.
Parts of what is now the current stockpile agreement.
And our long lives.
Our stockpile.
Perhaps those folks hadn't heard of until more recently, but over the years, we've managed to consolidate each of the predecessor components of the stockpile away from the Oems given what our unique capabilities are.
Not just storage, but to maintain it to deploy it to maintain it in the field.
Those unique capabilities allowed us to consolidate all of the parts of the original stockpile prior to the pandemic.
It's why the government directly awarded us the expansion.
And we're able to do it on an OE basis because of the unique capabilities that we enjoy and we took the theory of it.
And made it a reality over the course of the pandemic as we at the government's direction.
Lloyd and supported this equipments at their direction.
There is no other company with our set of capabilities.
We spoke to that previously.
Large reason that last part wisely.
We.
<unk> managed to keep it and our work has been.
Near flawless over the time that we've been managing it. So we feel very good about what our performance has been.
About <unk> of <unk>.
Our response to the RFP and ultimately.
The strength of our proposal and our ability to win.
How long can a.
The resolution on this protest take.
Yes.
Last October .
Our team was originally put out it was immediately protested as essentially being designed so that only agility could witness was essentially.
The nature of the protest.
And the government since then.
Yes that RFP off.
Off the table.
Evaluated it put a new one out I think scaling Larry shilling sounds about.
The defensibility of it.
We responded.
Obviously this other bidder has been found just technically unacceptable I suspect with regard might be able to make that go away very quickly.
There are days weeks or longer it's really up to the government and the government.
From an accounting office to work through its process.
Great. Thank you so much.
Thank you and ladies and gentlemen, it appears we have no further questions. This afternoon. So that will conclude the call I'd like to thank you. All so much for joining agility third quarter 2020 earnings conference call and wish you all a great remainder of your day Goodbye.
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