Q4 2022 Community Healthcare Trust Inc Earnings Call
Welcome to community Healthcare Trust 2022 fourth quarter earnings release conference call on the call today. The company will discuss its 2022 fourth quarter financial results. It will also discuss progress made in various aspects of its business. Following the remarks the phone lines.
We opened for a question and answer session. The company earnings release was distributed last evening and has also been posted on its website www Dot C. H C. T Dot REIT the company wants to emphasize that some of the information that may be discussed on this call will be based on information as of today February .
15th 2023 and May contain forward looking statements that involve risks and uncertainties.
Actual results may differ materially from those set forth in such statements for a discussion of these risks and uncertainties you should review the company's disclosures regarding forward looking statements in its earnings release as well as its risk factors and MD&A and its SEC filings. The company undertakes no obligation to update forward.
Looking statements, whether as the result of new information future developments or otherwise, except as may be required by law. During this call. The company will discuss GAAP and non-GAAP financial measures a reconciliation between the two is available in its earnings release, which is posted on its website call participants are.
Is that this conference call is being recorded for playback purposes, an archive of the call will be made available on the company's Investor Relations website for approximately 30 days and is the property of the company. This call may not be recorded or otherwise reproduced or distributed without the company's prior written permission now.
I would like to turn the call over to Dave to your point in our interim CEO of community Healthcare Trust.
Great. Thank you very much and good morning. Thank you for joining us today for the 2022 fourth quarter conference call.
On the call with me today is Liane stack, our Chief Accounting Officer, and Tim Mayer, our executive Vice President of asset management.
As we disclosed in an 8-K released on Monday February the 13th Tim Wallace Who's on a medical leave to deal with complications from a peptic ulcer and the board has asked me to step in as the interim CEO .
Everyone will join me in wishing him a quick recovery.
Now to other matters.
Our earnings announcement and supplemental data report were released last night and filed with an 8-K.
And our annual report on Form 10-K was filed last night.
In addition, an updated investor presentation was posted to our website last night as well we.
We had a busy fourth quarter, both from an operations and in acquisitions perspective at year end, our occupancy had risen to 91, 7% and we continue to see good leasing activity.
Our weighted average remaining lease term was relatively stable at seven six years.
We continue to have five properties, where signature significant portions of them that are undergoing redevelopment or significant renovations with long term tenants in place when the renovations or redevelopment is complete.
During the fourth quarter, we acquired 13 properties in four transactions with a total of approximately 241000 square feet.
For a purchase price of $50 $2 million. The properties were 97, 8% leased with leases running through 2034 and anticipated annual returns of approximately $9 two six to $10 two 1%.
For the year, we acquired 18 properties with a total of 423000 square feet for an aggregate purchase price of $97 $1 million, which were approximately 98, 9% leased with leases running through 2037 and anticipated annual returns of nine to 10 in a quarter.
Percent.
Subsequent to December 31, we acquired three properties in two separate transactions totaling 99000 square feet for an aggregate purchase price of approximately $12 $5 million.
Upon acquisition the properties were 100% leased with expirations through 2029.
The company has four properties under definitive purchase agreements for an aggregate expected purchase price of $20 $1 million and expected returns of approximately 9.2 to nine 5%. The company is currently performing due diligence and expects to close these properties in the next few months.
Yes.
We also have signed definitive purchase and sale agreements for six properties to be acquired after completion and occupancy for an aggregate expected investment of $141 million. The expected return on these investments should range up to 10.25%.
We expect to close on these properties throughout 2023 and 2024.
Right.
We continue to have many properties under review and have term sheets out on several properties and anticipated returns of 9% to 10%.
On November 2nd 2022, the company filed an automatic shelf registration statement on form S. Three with the SEC simultaneously the company entered into a sales agency agreement with various banks for the sale of up to $500 million of common stock, including the issuance of ATM shares.
Also we declared our dividend for the fourth quarter and raised it to $44 75 per common share this equates to an annualized dividend of.
$1 79 per share and we continue to be proud to say, we have raised our dividend every quarter since our IPO.
Before jumping into the financials I wanted to highlight our recent refinancing.
So for transition and swap activity given the tightening bank market, we thought it prudent to move forward, our refinancing plans and our banks were very supportive. Although we were seeking $125 million seven year three months term loan the transaction was oversubscribed, So we decided to incur.
<unk> to $150 million. The three month stub period was added to make the maturity towers consistent with our existing term loans, which occur every two years beginning in March of 2026.
The proceeds were used to refinance the $50 million term loan due 2024 pay down the revolver and fund acquisitions.
Simultaneous with the refinancing we transitioned our borrowings from LIBOR to sofa.
Shortly thereafter, we swapped floating rate exposure to fixed through sofer based swaps and finally in January we transitioned all our remaining swaps from LIBOR to sofa.
After this refinancing we anticipate having enough availability on our credit facilities to fund our acquisitions and we expect to continue to opportunistically utilize the ATM to strategically access the equity markets.
Now onto the numbers.
I am pleased to report that total revenue for 2022 was $97 $7 million compared to $96 million for 2021, representing seven 8% growth over the prior year.
Meanwhile, total revenue for the fourth quarter of 2022.
It was approximately $25 3 million.
Versus $23 2 million for the same period in 2021, representing 9% growth over the fourth quarter of 2021, while quarter over quarter growth revenue grew two 2%.
And on a pro forma basis, if all the 2022 fourth quarter acquisitions had occurred on the first day of the fourth quarter.
Total revenue would have increased by an additional $1 million 116000 to a pro forma total of $26 5 million in the fourth quarter.
From an expense perspective property operating expenses increased year over year.
From $15 2 million in 2021 to $16 6 million in 2022 or nine 8%.
During the fourth quarter property operating expenses increased from $3 5 million in 2021 to $4 2 million or 17, 6% for the same period in 2022.
Sequentially property operating expense decreased from $4 3 million in the third quarter to $4 2 million in the fourth quarter.
Four 4% due to normal fluctuations in property operating expenses that occur quarter over quarter.
And for the year G&A increase from $12 1 million in 2021 to $14 8 million in 2022 or 22, 5% in the fourth quarter G&A expense G&A increased from $3 2 million in 2021 to $4 1 million in 2022.
Or 31, 5% and increased 10, 3% sequentially.
For the year cash G&A increase from approximately $4 9 million in 2021 to $5 4 million in 2022 or nine 6%.
While in the fourth quarter cash G&A increase from approximately $1 2 million and 21 to $1 5 million and 22 or 29, 8%, while increasing 15, 8% quarter over quarter.
Increases in G&A were driven by compensation expenses related to both new and existing employees increases in professional fees expense and increases in amortization of deferred compensation from the issue of restricted stock, including a compressed amortization schedule based on retirement Ella.
<unk> ability dates.
Please refer to page eight in the supplemental information report as included with our 8-K filing for more details on cash versus noncash G&A expenses.
Yeah.
Interest expense increased year over year from $10 5 million in 'twenty, one to $11 9 million in 'twenty, two or 12, 6% quarter over quarter interest expense increased from 3 million to $3 5 million or 14, 4%.
The increase in interest expense was driven by an increase in interest rates borrowings under our credit facility to fund acquisitions and the addition of a new of the new $150 million term loan, which closed December 14th 2022.
For the year, our net debt to total capitalization remained conservative at 34, 8%.
Our net income decreased from $22 5 million and $21 million to $22 million and 22 or two 1%.
For the quarter net income decreased from $6 1 million in 'twenty, one to $5 2 million in 'twenty, two or 14, 3%.
Sequentially net income decrease from $5 7 million to $5 2 million or seven 7%.
For the year funds from operations <unk> increase from $52 9 million or $2 20 per diluted share in 2021 to 50, $54 6 million or $2 24 per diluted share or <unk>.
Resenting per share <unk> growth of one 8% for the fourth.
One 8% for the fourth quarter <unk> decreased from $13 8 million or <unk> 57 per diluted share in 2021 to.
To $13 6 million or <unk> 56 per diluted share in 2022.
On an annual basis adjusted funds from operations, which adjusts for straight line rent and stock based compensation grew from $56 5 million or $2 35 per diluted share.
To $60 6 million or $2 49 per diluted share or <unk>.
Representing per share <unk> growth of 6%.
On a quarterly basis <unk> increased from $14 9 million or <unk> 61 per diluted share in the fourth quarter of 'twenty, one to $15 4 million or <unk> 63 per diluted share in the fourth quarter of 2022.
And from a pro forma perspective, if all of the fourth quarter acquisitions occurred on the first day of the fourth quarter <unk> would have increased by approximately 576000 to a pro forma total of $16 million, increasing fourth quarter <unk> to <unk> 65 per share.
Yeah.
I believe we're ready to start the question and answer session.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys to withdraw from the question queue. Please press Star then two the first question is from Rob Stevenson of Janney. Please go ahead.
Hey, good morning, guys.
Dave at the end of the 23 or 'twenty four lease explorations of known move out or likely downsize at this point or you expect them all to renew in place.
You know we've got Rob Thanks for the question, we've got a relatively.
Relatively few leases that are expiring in 'twenty three so.
We think we know pretty well what those whether those are going to be.
Released Tim I don't know if you've got any color on that but feel free to add I mean, we're.
Fairly confident with our lease pipeline that we have today, both with renewals and new leases.
With the portfolio there is a natural churn rate that you see with leases that do expire to those that do move out, but we've been we've seen strength with our retention rate.
Particularly through 2022, and we see that continuing in 2023, so even if tenants do move out were pretty <unk>.
Confident in what we can do with the leasing that to new tenants and Rob that's showing up in our.
Occupancy what we've seen in terms of momentum and growing occupancy over the last few quarters.
Okay, and I guess on that standpoint, I mean, what is.
What is the outlook you guys are just a shade under 92%.
Leased as of year end.
In terms of incremental leasing within the portfolio, what's the outlook for that.
In terms of what you have visibility on today.
I think historically, what we've messaged and I don't think that would change based even on what we're seeing is we think it's tough for this portfolio to be.
Be leased.
Any more than kind of 93% there is always going to be a natural.
Piece of vacancy in the portfolio. So I think we've got an ability to continue to increase our occupancy and continue to build that but.
Anything beyond 93%, we certainly wouldn't expect and so.
Continued to see good leasing activity and what we've always said is when you see good lease activity you see good leasing so.
Well I think we're confident that we will continue to post solid leasing results going forward.
And then the last one for me your average property acquisition costs, and 22 was a little under $5 million and you're basically right. There again with the stuff that you either have closed or have under contract for <unk> for 23 other than the six properties for 141 million in the pipeline are there other deals that you guys are.
Starting to look at these days are they still in that sort of $5 million ish on average range or some of these larger deals.
Moving up the scale pipeline.
Yeah.
I think we see a mix some of those I think the average is five five to 10 is probably what we consistently see but occasionally if it's the right opportunity, we see two and a half or $3 million acquisitions, if we feel like it's a good.
A good opportunity for us in particular, if there is repeat business but.
Look we've seen a mix we're continuing to look at a lot of different opportunities out there, but I think that that's $5 million of average maybe trending a little bit higher just based on the fact that we're going to start closing on some of those.
Larger.
Inpatient rehab facilities over the upcoming year, I think that might push that average up just a little bit.
Okay. Thanks, guys appreciate the time.
Thanks, Rob.
The next question is from Alexander Goldfarb of Piper Sandler. Please go ahead.
Hey.
Good morning, good morning down there and obviously police and best wishes for a speedy recovery to Tim.
Definitely need him back on.
On the call.
And then the saddle.
So two questions for you Dave.
The first is you know obviously, everyone across all real estate sector is talking about transaction market.
Big gap between buyers and sellers frozen obviously, you guys made a lot of progress in the fourth quarter. It looks like Youre restock the pipeline as well, but big picture is the frozen transaction market the gap between buyers and sellers that we hear about another sectors is that not really as applicable in Europe , what youre targeting because.
Of the nature of who the sellers are often medical practices or.
People that you have.
Yes, pre sales with or should we think that even though you are restocking. The pipeline you still are finding the same issues that have befuddled other sectors in real estate as far as the gap between buyers and sellers.
Yes. Thanks for the question, Alex I think it's actually it's hard we're still.
Looking at opportunities real time, but we're actually very encouraged to see a significant amount of activity continuing on the acquisition front and I would say you put it well or type of client tends to be smaller physician base.
<unk> physician practices et cetera, and they're less sensitive to that type of dynamic in the marketplace and since we're looking at opportunities in that 9% to 10% cap rate, we feel like the increase in rates is actually kind of a tailwind to our business because all of a sudden you're.
Not seeing these.
Crazy transactions for this type of those types of assets coming coming out so anyway, we feel good about it and we.
We're seeing good activity.
Okay. Second question is your comments and forgive but it was the way Youre comments on funding transactions came across it seemed like you're biased towards line of credit and secondary is ATM, but in the quarter. I think you issued at an average of 35 Bucks obviously your stock is.
Is it up from there so sort of curious was it just random that you said line of credit first and then ATM or is there something about where you see the balance sheet that you'd prefer to use line of credit over ATM and especially given that your stock is up from where you issued in the quarter.
Listen.
We continue we will continue to as we said access the ATM market I think you're reading too much into my comments I think is basically because I was talking about the fact that we just refinanced and as you will know when you do refinancing it tends to be chunky and we were opportunistic our banks were very supportive.
And as a result.
Upsize from the $125 million term loan to $150 million term loan and so yes, I think youre reading into that we will continue as as we have in the past.
It's very important to us to be.
Our low Levered business I mean, that's always been that's part of the DNA is foundational to the company and so I think you should expect us to to.
To be in the ATM over time and not just rely on the line of credit.
And that's why Dave that's why I asked because I know what your strategy is in general and that's why the comments I wasn't sure maybe I over read or not but it sounded like I did so I appreciate the clarification.
Sure. Thanks, Alex Thank you.
The next question is from Michael Lewis of <unk>. Please go ahead.
Thank you so first.
Back of that we certainly wish Tim a fall a speedy recovery.
As well.
Dave for you you can correct me, if I'm wrong, I think last quarter.
You guys said you had $72 million of acquisition do you expect it to close by the end of the year I don't know.
If that's the case what caused some of those slip into <unk> into this year and I'm wondering if there were any under contract that got cut off completely or if this is simply a timing issue.
Hey, Michael and Thanks again for your words.
About Tam as far as the acquisitions are concerned we were we really were highly motivated we wanted to get those closed.
The fourth quarter, but I think we just ran into some issues once you get past Thanksgiving.
It's kind of a sprint to get things closed and they were just a handful that ended up.
Not to getting close but.
As you point out we ended up acquiring a couple of those.
So far this year that we talked about subsequent to the year end and then we have.
Four additional properties as we mentioned at $20 1 million.
That we're looking to close here over the next few months. So nothing was scuttled and so what we're doing is just continuing to.
To work on getting those.
Properties closed through due diligence and done and I think we just ran out of time a little bit.
Third party diligence.
Folks start.
Shutting things down a couple of weeks before Christmas and that.
Resulted in us not getting where we wanted to get to.
Okay, Great and then I have asked you about this before each of the past several quarters presentation slides have included these dialysis center developments for a potential $60 million I don't think you've closed on any.
Since that program with announced are there projects underway or whats happening with that pipeline I don't think any anticipated timing was provided like you've done for some of your other.
Identified acquisition targets.
Yes.
Candidly, Michael we're a little bit disappointed that that has been slow and the reason it's been slow as since that operator received some private equity funding they've been very focused on acquisitions and a lot of our prior work with them and frankly, our term sheets.
Related to development and so I think they have been focused more on the acquisition front. We do have a term sheet on a development project and we're negotiating that with them now, but it's it's been a slower process than we would've hoped unexpected but listen I understand in these.
<unk>.
That I've referenced that.
Operator is making.
Don't have real estate as part of the acquisition, it's all leased real estate and so it's been a little bit slower than what we would've hoped.
We are hopeful and expecting to start seeing some of the fruits of their development activity.
And really.
Hope to see that but part we've been intentional and not putting a timeline on it because we just don't have a good sense for how quickly those projects are going to come online and candidly there could be an acquisition that does have real estate as part of it that we would hope to be a part of as well, but at this point, we don't have a ton of visibility on on that.
On that term sheet.
Okay got it and then my last question also dialysis related I saw.
Fresenius is considering selling its dialysis business. So I don't know if you've been following that but I was wondering if you thought there were.
Any read throughs to the future of the industry or any impact or opportunity or anything in terms of your company.
I think dialysis is going to undergo a transition and transformation over time youre going to see a lot more home dialysis one of the reasons, we really enjoyed the relationship with this partner and think they are on the right track is they've got a business model.
Model that addresses both home dialysis as well as.
Clinic dialysis treatment, which I think is going to be in.
We're going to have for years and years to come home dialysis really works well if you have a caregiver somebody.
And the other needed infrastructure in the home to be able to treat the patient. Unfortunately this patient base doesn't have a lot of that and so there's a portion of the patient base that I think could be effectively treated at home and and we're very mindful of that.
But there is always going to be I think a patient base thats going to need to come into the clinics and so will it grow from a clinic perspective, the way it has grown historically, probably not but as long as youre partnering in the right markets with the right operators I'm still quite confident that dialysis is here and we're just going to be very.
Focused on making sure we pick very carefully in this space going forward.
Okay, great. Thank you.
Thanks, Michael.
The next question is from Dave Rodgers of Baird. Please go ahead.
Yes, good morning, David I mean, Tim I wanted to Echo the same comments, obviously, hoping for a speedy recovery for him.
Two questions for you David as you look at the acquisitions I know there was a little bit of delay you just kind of answer to that question, but I guess looking forward to the next set of acquisitions are you seeing more construction delays difficulties getting materials.
It gets kind of further prolong any of these additional acquisitions that you have already tied up in terms of timing or do you feel like that timing is pretty secure for you guys.
Thanks for the question Dave.
Okay.
I think Tim has been asked this question before.
The supply chain delays have been a little bit frustrating for us and certainly frustrating for our operators who is trying to get these projects.
Opened in.
Going so.
Listen, we still feel like that the six that we have under purchase and sale agreement.
We'll close in 'twenty, three and 'twenty four.
Hi.
In 'twenty, three where we're looking at at least two hopefully three and then in 'twenty for the remaining three to be.
Up and running but honestly.
We are still seeing some delays from a supply chain perspective, and not only that we are seeing delays just from getting the due diligence done and getting all the.
Checking all the boxes with the municipalities to get these projects underway. So it's been a little bit frustrating for us and for our operator, but we still feel very good about those projects and we will continue to update folks as we get.
Better information precisely on when those projects will close but.
But yes.
We're very busy in that regard, we're very focused on getting them.
Get them getting them through construction and finishing them, but it's it has.
We have been a little bit disappointed in the slowdown that we've seen and so anyway.
I wish I could be more precise in terms of windows facilities will be opening, but we will certainly let you know as we get better information.
Great appreciate that and then the last question, maybe a little more nuanced, obviously tinder is instrumental in sourcing your acquisitions and the relationships that he has.
Obviously investors are going to focus on as well. So curious if you can give us a little bit more detail on just kind of the breadth of the relationships across the company that you guys have with the partners and in creating new partners just any any potential fears obviously.
Tim not being there for some period of time.
Yes, no I appreciate that and understand that.
What I would say is over the last four years, Tim is very intentionally added to the team and so we have a VP of investments.
Isn't it doesn't join these calls but isn't very engaged in our business development activities, it's really.
Him and Tim Meyer and myself that.
Or have these relationships and they are spread across the organization, but we're very focused and continue to see a lot of activity from an acquisition standpoint.
And listen as a company that is a growth oriented company is we are where <unk> growth and <unk> growth are critical.
<unk> been very focused on making sure that those relationships that you highlight are institutionalized and attempts credit he has done a good job.
Of getting us all involved in that process and so while there is absolutely.
Our GAAP and we definitely want Tim to come back as soon as he can I feel like we are in a in a situation where we continue to be engaged with the folks that we've historically been engaged with that have been good at providing opportunities for acquisitions for us and.
I really hopefully.
Everyone sees we continue to see be very busy from an acquisition standpoint, and from a pipeline building standpoint in the in the business and so.
So that I think will continue and I think it's going to be up to us to.
To fill that void in it but I think we've got the right team in place that can do that.
That's great. Thanks, Dave.
Thank you Dave.
Again, if you have a question. Please press Star then one the next question comes from Steve <unk> of Evercore ISI. Please go ahead.
Yes. Thanks, Good morning, Dave Yes, please send our best wishes to.
Tim.
Thanks, Steve.
<unk>.
So a lot of my questions have been have been asked I just wanted to maybe focus back on the leasing and you talked about the 93% I'm just curious for the leases that are kind of turning over in <unk>.
<unk> three and maybe 24.
What sort of pricing power you guys see on the renewals or on the new leasing front and I am just trying to get a better handle on contractual rent bumps and what happens as leases turn our rents kind of going up down flat on say the 'twenty three and potential 24 explorations.
Yeah.
Yes.
Steve Thanks for the question I appreciate it and understand.
That what we're seeing is it's very market specific.
In terms of whether those rates are going up or coming down slightly but I would also say that.
In general it's about consistent.
Don't arent seeing.
In our markets a significant difference between where our lease rates are and where the market lease rates are in general across all of our markets.
So we're seeing some where we're we're getting better rates, we're seeing some where we're getting lower rates, but it's just very market specific and frankly some of the dynamics that.
And building specific too and so that's why we're investing in our buildings to try to get those buildings.
Ready for new tenants and so.
It's a I would say in general I don't think were seeing.
Any significant variance one way or the other I don't think we've got.
Incredible pricing power in our in our buildings, but I don't think were seeing a significant any significant roll downs. It's basically market is where we're at so you'd say theyre kind of flattish on on rollover.
On a direct basis, Okay, and then just remind me within.
The leases do you I assume you have contractual rent steps in those leases is that average of kind of 1%, 2% a year within the leases on average.
I would say they are on average one 5% to 2% I mean, we have as you might expect because we're buying existing buildings with existing leases. So we see everything everything from CPI based to fixed adjusted fixed to fixed with a cap, but I would say in general you could assume that the.
<unk> is one 5% to 2% in terms of rent bumps.
Per year.
Okay.
Just to come back to the financing for a minute.
Realize you kind of keep low leverage.
And so just trying to understand marginal borrowing cost today for you on the line. It sounds like it's so for plus some spread in the bank debt market might be something similar so I'm guessing that your all in borrowing cost is at least on the debt side at least 6% today is that.
They are and maybe maybe moving a little bit higher.
I mean look we're actually very excited of where we were able to fix the.
The debt that we just.
That term loan cost is right at five 1%. So we're we're very excited it at.
That outcome.
And I would say.
Yeah.
I would I think were about 6% on incremental borrowings under the revolver I think thats, probably right I would have to go back and look at the spread but I think that's right.
Yes, I guess I'm, just going back to the there was a previous question on kind of the mix of debt and equity and if your stock is trading around a six cap and marginal borrowing costs are six.
Earnings accretion is about the same whether you use debt or equity.
So I'm, just wondering right lean even heavier into equity.
Keep the balance sheet, even more pristine shape versus using leverage when the.
The day, one borrowing costs were about the same I realize over time there might be.
Dividend growth and higher shareholder return, but at least from an earnings accretion standpoint.
It seems like it's about a push between equity and debt.
Yes, no I think.
That's a fair point and I think it's always been a priority for us to have that mix.
Our our debt our net debt.
Book Capital has always been in that <unk>.
<unk> to <unk>.
40% range and I think what I would tell you is.
You tend to add that incrementally we just did that I think it's safe to say, we're going to we're going to be looking to access the ATM over time to continue to Delever and.
Yes.
From I think from Europe from our perspective, we.
We believe that that mix will continue going forward.
Okay and then just last question anything regionally I mean, you guys are spread out in a lot of different msas larger smaller.
Across the country is there anything that youre seeing.
Generally.
The MSA that it looks good or bad or is better or worse than maybe you would've expected.
Anything to call out from a regional or other operational leasing perspective or acquisition opportunity perspective.
No I don't I don't think I don't think we're seeing anything unusual we continue to see.
A lot of growth in new building activity in the southeast not surprisingly just given the fact that there's been so much population migration into the southeast. So we can continue to see that as a tailwind in general, especially for our.
Development opportunities, but as far as our acquisitions.
We're seeing.
Look we're seeing consistency.
Across the country and we will we'll spend time in markets that are attractive for us and so.
We're not really seeing anything negative historically as a company we haven't done a lot of acquisitions in the.
And then New York, and California markets, but you shouldnt read into that that we wouldnt opportunistically look in those markets. If we saw some attractive real estate. So every deal is unique and.
This is a big country with.
A lot of.
Great markets and so big picture, we're not seeing anything that would dissuade us from one market to another.
Great. Thanks, that's it for me.
This concludes our question and answer session I would like to turn the conference back over to Dave Dupuy for closing remarks.
Well, great. Thanks, Kate and thanks, everybody for joining us today, we really appreciate everyones positive.
Our message to Tim and look forward to continuing to.
To grow and I appreciate everybody support thank you so much.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.