Q1 2023 Ryan Specialty Holdings Inc Earnings Call
Good afternoon, and thank you for joining us today for Ryan Specialty Holdings' first quarter 2023 earnings conference call.
In addition to this call the company filed a press release with the SEC earlier. This afternoon, which has also been posted to its website at lion's specialty dot com.
On today's call management's prepared remarks and answers to your questions may contain forward looking statements.
You should not place undue reliance on any forward looking statements.
These statements are based on management's current expectations and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today.
Listeners are encouraged to review the more detailed discussion of these risk factors contained in the company's filings with the SEC.
Company assumes no duty to update such forward looking statements in the future except as required by law.
Additionally, certain non-GAAP financial measures will be discussed on this call and should not be considered in isolation or as a substitute for the financial information presented in accordance with GAAP.
Reconciliations of these non-GAAP financial measures to the most closely comparable measures prepared in accordance with GAAP are included in the earnings release, which is filed with the SEC and available on the company's website.
With that I'd now like to turn the call over their founder Chairman and Chief Executive Officer of Ryan Specialty Pat Ryan.
Good afternoon, and thank you for joining us.
So our first quarter results with me on today's call is our President Tim Turner.
Our CFO Jerome I broke them.
C O of underwriting managers miles ruler, along with low ends are loving it.
Most of it from the Investor Relations first quarter represents a great start to the year.
We grew total rubbing or 18, 3%.
But by organic growth of 12, 9%.
On 24, 1% organic growth in the first quarter of 'twenty to 'twenty two.
We also achieved double digit growth of adjusted EBITDA.
And there's also the net income on a year over year basis.
In the first quarter, we saw broad based strength in many lines of business, including continued growth in property.
The specific headwinds we noted on our prior calls or in line with our expectations and offset some of our property tailwind.
We anticipate that these headwinds will persist into at least the second quarter.
Overall, I'm very pleased with our performance, especially when viewed in the context of the volatile macroeconomic environment.
Despite headlines in the banking sector to.
Persistent inflation.
Heightened macroeconomic uncertainty we believe our firm will continue to perform well through this economic cycle.
Our products are largely compulsory.
Risks become ever more complex, we're uniquely positioned to provide our clients with.
<unk> expertise and innovation they required to seamlessly manage their insurance needs.
We're also leaving US marketplace continues to outpace the overall P&C insurance market and.
And it is providing solutions.
Otherwise be attainable or hard to place risks.
Given today's macroeconomic and broader insurance challenges.
Yes, Mark it was resilient NIM.
Offers Ryan specialty a tremendous opportunity for growth.
Specific to ron's specially.
Our specialized industry is losing broker teams navigated the complexities of the market.
Each of the micro cycles within the hundreds of lines that comprise commercial insurance.
Providing solutions that are uniquely tailored to our clients' needs.
Our delegated authority special losing binding and underwriting management continued to generate underwriting profit on behalf of our trading partners and delivered strong topline growth widespread marketing exercises and strong relationships with our carrier with trading partners.
Experts find coverage for a hard to place risks like crafting and weaving together large towers of capacity for our clients.
This is particularly valued by our clients and ensures the challenging insurance market.
We have also expanded our ability to serve brokers agents and carriers.
Innovation and the creation of alternatives to traditional reinsurance placements.
This is especially meaningful in areas like cat property and transportation.
We continue to serve our clients and trading partners with distinction thanks to the exceptional team we've assembled since our founding and we take great pride in developing the next generation of teammates and leaders.
We continue to make targeted investments during the quarter I.
Having underwriters and brokers to further deepen our current capabilities developed burgers, we anticipate our clients will need in the future.
With that and we've seamlessly picked up from where we left off in 2022, when we on boarded the largest production class in our history.
These investments, particularly in the recruitment of new colleagues.
Offer the greatest returns for our shareholders.
And are part of a proven winning formula to maintain our long term growth prospects.
On the M&A front, our pipeline remains robust.
The opportunities that would bring foundational capabilities.
Also employee benefits.
As a reminder, we closed the highly strategic acquisition for.
Brooklyn underwriting services at the beginning of the year.
Contributing to both our binding authority and brokerage specialties.
We remain disciplined in our pursuit of acquisitions, particularly.
Particularly in the current environment.
We will only move forward.
When all of our criteria are met.
Every acquisition must be a strong cultural fit.
Strategic and accretive.
As is evident by our consistently strong performance.
Do not require acquisitions to achieve our growth targets in any given period.
Looking ahead I remain confident that 2023.
Another strong year for our firm.
We are well positioned to capture the broader E&S tailwind.
Capitalizing amount or specific areas of accelerated growth.
Our flexible business model continues to enable us to quickly adapt and pivot.
Ever changing market conditions.
Proud of our entire team for staying focused and delivering outstanding results for our clients.
Trading partners and shareholders.
Our differentiated business model continues to stand apart from our competition.
To us up to continue delivering significant value for years to come.
I am pleased to turn it over to Tim Tim.
Thank you very much Pat we had a strong start to 2023 across our specialties and our entire team remains determined to maintain that momentum throughout the year.
Ongoing industry trends, such as social inflation climate change and older mass tort claims combined with economic inflation are driving more risks into the E&S marketplace, which offer significantly more freedom of.
And for them.
We remain well positioned to continue successfully executing our playbook.
Diving into our specialties.
Our wholesale brokerage specialty achieved another quarter of strong growth balanced across most lines of business.
In property, we are seeing multiple forces at play including.
Including recent years elevated loss activity for both Attritional and secondary perils inflation driving higher cost of materials and labor.
Higher reinsurance pricing.
And diminished capital levels.
This has led to historically hard market, which continued into April with significant rate increases.
We expect the hard property market to continue as the effects of reinsurers derisking their portfolios at January one and April one reinsurance renewals are felt and as insurers approach a continued challenging renewal at 6171.
These factors are driving the flow of new business into the non admitted market and our industry leading team of experts allow us to fill that need with innovative insurance solutions.
We believe property will continue to be a strong driver of growth in 2023.
Our transportation practice had another strong quarter and continues to see substantial flow fueled.
Fueled by social inflation and carrier need for continued rate increases.
We continue to win our fair share of business and remain well positioned to capitalize on additional growth opportunities.
In our casualty practice, we're seeing higher loss trends inflation and reserving issues that are driving more flow into the E&S channel, particularly in lines like healthcare sports and entertainment.
Higher education habitation, all and real estate.
Regarding the recent events in the banking sector to date.
We have seen only a modest impact on DNO focussed on the banking sector.
While losses may end up being material to the market.
At this time, we do not see a systemic risk for D&O insurers or any signs the market is materially hardening.
However, there remains some uncertainty about further.
Banking failures and we are closely monitoring the market as the risks evolve.
But especially in times of uncertainty our producers to add value and deliver the best solutions to our clients.
We believe wholesale brokerage is well positioned to grow consistently in the coming months and years.
And our binding authority specialty we saw another quarter of solid growth in traditional binding which includes smaller commercial businesses.
Somewhat limited by capacity constraints in personal lines.
We continue to see further potential for panel consolidation as a long and steady growth opportunity and we are well positioned to execute.
Our underwriting management specialty continued to post strong results.
Led by steady and profitable growth and property and casualty and our reinsurance MG you Ryan Reed.
As Pat noted the specific headwinds in certain lines in the first quarter were in line with our expectations Spa.
Specifically, we saw a rapid rate decline and public company D&O, lower external M&A and IPO volatile volumes in transactional liability.
And delayed project base starts in construction.
Pricing in the E&S market largely held firm or is accelerating in many lines of business.
With property continuing to see the most rate momentum.
Exceptions are public company D&O, where we saw further rate pressure and cyber which is now seeing modest rate declines.
As with all cycles as pricing continues to increase and certain lines are perceived to reach pricing adequacy, we see admitted markets that back in on certain placements.
<unk> early within large towers.
But overall the standard market carrier competition, as yet to meaningfully impact rate or flow in the aggregate.
As we frequently noted we expect the flow of business into the non admitted market.
It continued to be a significant driver of Ryan specialties growth more so than rate.
With that I will now turn the call over to our Chief Financial Officer, Jeremy <unk>, who.
We will give you more detail on the financial results of our first quarter. Thank you.
Thank you Tim in Q1, we grew total revenue 18, 3% period over period to $458 million fueled by another strong quarter of organic revenue growth at 12, 9% as we continued to see the benefit of ongoing tailwind and much of the E&S market broad based strength in many of our lines including property.
And our ability to win substantial amounts of new business.
Net income for Q1, 'twenty, three was $36 million or <unk> 11 per diluted share.
Adjusted net income for the quarter was 72 million or <unk> 26 per diluted share.
Adjusted EBITDAX for the first quarter grew 16, 5% period over period to 125 million, while adjusted EBITDA margin declined 40 basis points to 27, 3%.
Our EBITDAX margin was impacted by continued investments in our business and TNT continuing to return to normalized levels, both of which were partially offset by higher fiduciary investment income.
Regarding our adjusted EBITDA margin on a seasonal basis, the second and fourth quarters are historically, our largest quarters in terms of revenue and therefore, the strongest in terms of margin while the first and third quarters are typically smaller and lower from a margin perspective.
Turning to our accelerate 2025 program, we had a small charge in the quarter and we expect charges to ramp up in the second half of 2023 and throughout 2024.
As a result, very little P&L savings will materialize this year.
Things will gradually increase as 2024 progresses, and we remain on track to generate annual savings of $35 million in 2025.
We made significant progress in the first quarter and Onboarding additional underwriting and broking talent and we expect that our recruitment efforts will continue as we progress throughout the year.
Cost of these investments along with the <unk> of our 2022 head count growth will be partially offset by increases in fiduciary investment income during 2023.
As Pat said these investments in talent, particularly in the recruitment of new colleagues offer the highest returns for our shareholders and are part of a proven winning formula to maintain our long term growth prospects.
We are now guiding organic revenue growth rate for the full year 2023 to be between 10, 5% and 13.0%, which reflects an increase of 50 basis points to the floor compared to our previous guide range of 10.0% to 13.0%.
We are maintaining our adjusted EBIT margin guidance of between 29.0 and 30.0%.
As we noted on our prior calls we expect the headwinds affecting organic revenue growth will persist through at least the second quarter of this year.
In summary, we were pleased with our first quarter performance and we remain very excited about our near term and long term prospects with that we thank you for your time I would like to open up the call for Q&A.
Operator.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
A confirmation tone will indicate your line is in the question queue.
Press Star two to remove your question from next year.
Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment. Please while we poll for your questions.
Okay.
Our first questions come from the line of Elyse Greenspan with Wells Fargo. Please proceed with your questions.
Hi, Thanks, Good evening My first question on <unk>.
Just given the fact that you know once you get to the second quarter.
There is a.
Later concentration of property business.
And I know you guys still said that you will have some of these headwinds persisting, but what does that more than offset that I E.
You know the first quarter could conceptually be the lowest organic quarter of the year. If you get a property in the business mix any headwinds start to go away.
Hi, Elyse. Thank you, yes from a information perspective, especially on the property side Q2 will be a lot more telling theres more property business in Q2, and it's also just a bigger quarter from a seasonality perspective.
And then but am I wrong. It does does it feel like the impact that the headwinds is like keeps getting malware right, meaning probably felt it a little bit less than the Q1 that the Q4 and then the same could apply to the Q2 and in the other quarters of the year.
There is a.
A number of headwinds that are still in play of leaf and I suspect we may get into them a little bit more detail later in the call but.
The headwinds related to public company D&O, given that we'll have hopefully lapped the.
The hardest part of our book.
By Q2, we do expect some relief there, we're not calling for a relief in the overall market, but as it relates to our book it should get easier the macroeconomic related headwinds.
Who's to say, but as you can see from the pretty strong results here in Q1, our teams are really resilient and innovative.
<unk> found ways to win and create new opportunities. So we're we feel good about the Q1 results we feel good about the rest of the year.
But Q1 is our smallest quarter from a seasonality perspective, so there's there's not too much information that you can glean from it.
Yeah.
Okay. That's.
That's helpful and then one last one on <unk>.
I seem to speak positively about the M&A environment.
Yeah, Pat just hoping to get a little bit more color just on what youre seeing out there and you know things that Ryan is looking at these days.
Sure. Thanks Elyse.
I said in my comments as Jeremy just to confuse.
The M&A pipeline is very strong.
We're actually.
Okay.
A robust pipeline as we said.
I'd like to remind.
Everyone.
We're not a roll up.
We're not an investor in companies, we buy the other.
Great.
But companies good companies better.
Really.
Really good companies great.
And so I think it's really important to keep in mind.
When we do acquisitions, we're looking to expand the scope.
Scope could be geography scope.
Lines of business.
Everything we do.
A strategic.
On the opportunistic we're not doing acquisitions.
Acquisitions, just for scale, but when we expand our scope we got scale.
For example, we.
Clothes Griffin.
The Pacific Northwest.
Earlier in the year.
We're very pleased on how they already are assimilated.
And advancing our binding authority strategy in our brokered strategy.
So those acquisitions.
We look at.
And we're bringing them in.
Already we're getting.
Improvement in performance.
As we've said in the past.
Those acquisitions are tomorrows organic growth.
And we're seeing that from prior acquisitions.
Productivity.
Improvements are really quite high.
We've been holding.
Some very serious discussions we're optimistic.
These discussions.
In the states, where we currently exist.
We're hopeful we'll be able to communicate.
Positive results.
In the weeks and months ahead.
We're very excited about the strategic objectives.
Deals with bring us.
And we want to stay disciplined we've said that we've repeated.
And we're only going to do it.
M&A transaction.
When it meets all three of our criteria.
Through strategic and accretive.
These discussions were holding.
Right.
Could emerge in the next weeks months.
Fit all those criteria.
So I think we're being consistent discipline.
But we're up we're quite optimistic.
Thank you.
Thank you. Our next question is coming from the line of Weston Bloomer with UBS. Please proceed with your questions.
Hi, good afternoon.
My first question just on the full year organic guidance does imply a slowdown versus the <unk> results and if property is accelerating and it seems.
You seem to say that other headwinds are abating I guess, what else are we missing in the stronger results or where else could we see a slowdown like where client wins or submission submissions. Just ahead of your initial expectations. It just feels like the property more than offset the other headwinds you guys have been referencing.
Hi, Weston, it's Jeremiah so the reason, we ticked up the floor of guidance will part of the reason obviously, we've got one solid quarter in the books, but we thought it was prudent to reiterate the 10, the implied 10% to 13% outlook that we started the year with and.
Just as a reminder, we kicked off the annual guidance for 'twenty three with a 300 basis points range for organic revenue growth because we all thought it was prudent to acknowledge there is a healthy degree of variability and uncertainty mostly in macroeconomic conditions.
But since we last spoke those factors really haven't improved and a lot of people would tell you they've gotten worse.
Our business, though is in quite good shape. When you look at renewables submissions new business, which of course, we do those indicators all very very healthy, but as I said to at least a moment ago. It's still very early in the year and there's not much new information since we last spoke and while Q1 was solid it's still our smallest quarter. So.
Factored all of that and as we raise the floor and have basically just reiterated the 10% to 13% range that we started with.
Q2 off to a good start and in spite of all the macro uncertainty that still exists in the economy that all companies are facing we're really confident in our ability to deliver on this guide range.
Thanks, and could you expand on the macro backdrop, that's implied within the guidance range either from like a GDP or inflationary perspective.
Well just a couple of examples.
The IPO market.
Lack thereof has an impact on.
The public D&O pricing that is a headwind for everyone in the space.
Global economic conditions, including rising interest rates are affecting M&A volume, which globally is down 20% to 40% depending on who you are reading.
Great.
You referenced in the prepared remarks, the build out of the employee benefits practice can you just give an update on where you are there and some of the initiatives you're taking to grow that.
Yes.
We're quite optimistic.
But we will be.
They will announce.
<unk>.
Relatively soon.
Completion of the.
We've talked about a lot of activity.
But.
The room.
Alright, I talked about having serious discussions.
We've spent.
By the time to filing.
Roll that we shouldn't be flying and we're very optimistic.
Where we're going to be played.
Significant organic growth.
Sure.
Sure.
Quite good margins.
Great.
All we want to say about that at this point.
Thank you I appreciate the answers.
Thank you. Our next question is coming from the line and then Tracey Bengie with Barclays. Please proceed with your questions.
Thank you.
A follow up you mentioned that the headwinds related to public company D&O should improve by the second quarter is that because you've already seen reverse flow to limited market. So have you already contemplated that when you develop to organic revenue guide.
Okay.
Correct, we are not predicting a change in the overall D&O market. We just think to the extent that there was business in our book that could be placed directly that after a full lap will be through most of that.
Great.
And then your updated guide you reiterated your EBITDA margins that you're tracking behind that I get there is some seasonality factors, but what are the key drivers you're contemplating to etsy.
Got it.
Yes.
As a reminder, we would in most years expect Q1 and Q3 to be.
Lower smaller from a size perspective in terms of revenue and then lower from a margin perspective, and often below the annual rate that we expect in sort of the inverse for Q2 and Q4.
And I appreciate that it's difficult to model. These on a quarterly basis, particularly last year, we did quite a bit of hiring in <unk> was still ramping up but actually Tracy the relationship of our margin and our revenue growth for this quarter was very much in line with our expectations and actually make us that much more confidence in the guide range that we're in.
Reiterating today and as we said just two months ago and the year end call.
Again uncertainty and variability that we felt it was prudent to reflect not only the organic growth guide range, but the margin guide range and since Q1 is.
The smallest seasonally it's really not prudent to deviate from that at this time.
Thank you.
Yeah.
Thank you. Our next question comes from the line of Rob Cox with Goldman Sachs. Please proceed with your questions.
Hey, maybe a specific question to kind of a large state of California.
The premium growth there has been it's been negative and I think it's been a drag, especially relative to some of the southeastern states just curious.
Whats driving that and when you think that could potentially turn around.
Well our position in the southwest and California in particular has been.
Driven by wildfire exposures to a high degree, creating a lot of opportunities for us in high net worth construction.
Construction habitation all <unk>.
Transportation is a big position for us in California, So the market.
Share for Us in California, I believe we're an industry leader on surplus lines tax in California. So we're very bullish on the volume of business being.
Dumped into the E&S channel.
Got it that's great and.
Maybe just with respect to the margins I think this is the most difficult comp with regards to <unk> for the year. So I was wondering if you guys could quantify the teeny headwind in the quarter and.
Maybe just.
Comment on how you expect margins to progress over the remainder of the year.
Yes, So you are absolutely right.
<unk> is going to have the most it's going to be the worst comp for <unk>. In Q1, there is still some ramp up that will flow through for Q2, just the same same.
The issue with the hiring that we did too there is a ramp up that's going to affect the comparable margins in Q2. It definitely does get better as the year goes on just because the hiring will be represented in more of the quarters and by the ended the year <unk> was.
A lot closer to what we expect expect on an annual rate. This year. So it does improve and like I said with.
The margins that came in this quarter. We're we're very confident in the range that we're reiterating today.
Yeah.
Okay, great. Thank you.
Thank you. Our next question comes from the line of Ryan Tunis with Autonomous Research. Please proceed with your questions.
Sorry, I was on mute good evening guys.
First question I guess, when we last spoke.
It seemed like you guys thought that the <unk> organic.
I don't know it sounds like you might be running lower than the full year guide in the first year, maybe in the second quarter.
What better than your expectations that had gone to the nearly 13% this quarter.
Yes.
Well I think what we.
You guided to.
The property market was.
Growing nicely in the fourth quarter.
We expect to continue.
Yes.
Got it and then.
I guess, we're not really quantifying these headwinds specifically, but.
If you had.
I take a guess like between the macro side of things in the D&O side and things seem to be kind of the biggest driver.
What.
<unk> of it is kind of macro related and what percentage of it is D&O related.
Well there is overlap between macro Ryan and.
And D&O, because we at least believe that the macroeconomic environment is affecting.
The amount of Ipos, which has an impact on the overall D&O market, which affects pricing. So there's there's overlap there.
You could maybe break it down to macroeconomic headwinds that affect everyone and then things that are more.
Specific to our book or our business mix, but we haven't and won't try to break that out or reconcile it here I think what you can take away, though is that the net of all of that all of the headwinds in in D&O M&A volume parts of our construction book all vary.
Alive, and well, but the teams are finding other ways to win in and fight through it and if our prediction or hope that the worst of our one of our bigger headwinds public company D&O is past us by the end of Q2. It does set us up for a very strong <unk> of this year.
Got it and then just lastly, I guess on these headwinds.
Jim You mentioned that there are also some admitted carriers pulling business back a little bit cyber.
Uh huh.
Let me comment a little bit of a tougher market too.
I guess to me sounds like the normal.
Type of weighted business responds at the end of a hard market when things become more rate adequate so.
I guess my question is.
Why would you think that these headwinds wouldn't continue to become bigger headwind just a year ago.
What makes you think that they're actually going to mitigate when we get in the back half of the year.
Well those headwinds that we mentioned are outliers, there very narrow lines of business that public D&O you could see the impact of the business going back into the into the standard market cyber is really rate declines.
A little bit of movement on the business construction is even more narrow its residential construction frame construction and theres just a slight slowdown that we think is related to interest rates. The overall market is very strong and the.
Flow of E&S business into our channel in the first quarter was up double digits. So it continues to expand it continues to grow and we see a very firm market.
All the way through 'twenty, three in and even beyond that so there is no no let up whatsoever.
Thanks, Tim.
Thank you. Our next question comes from the line of Mike Ward with Citi. Please proceed with your questions.
Mike could you check if you're on mute please.
Sorry, guys, sorry, guys I was just wondering if you could go over cash flows.
I'm wondering if there are any one time items in the quarter.
Okay.
No.
No.
No no onetime items some of the bigger.
Unusual lumpy items that were flowing through operating cash flows.
<unk>.
The what we basically think of as earn out paid to people in that have to run through.
Comp and then flow through operating versus investing cash flows like.
An acquisition would we did do we did put out.
A nine figure cash outlay for acquisition in Q1, and then we have a huge seasonal.
Working capital draw in Q1, because we accrue.
Bonuses for our producers in some sort of true them up twice a year and the biggest true up as in Q1.
No we relieve a lot of accrued comp expense that youll see every year on the balance sheet at 12 31 in in Q1, So it's a net.
Negative operating cash flow because of that.
Great. Thank you and then maybe just broadly.
You talked about strength in transportation practice.
So we're hoping for a little bit more color on how that's performing in terms of rate and flow.
The transportation market remains very very firm, it's a loss leader in the reinsurance world, our investment and Krauss and associates on the West Coast has started to pay some very nice dividends were in every aspect of transportation, whether it be long haul trucking livery.
<unk> economy.
We have transportation units in several of our offices across the country and that.
<unk> to do a lot of damage in the reinsurance world and we look for transportation as a whole to continue to get more difficult and firmer in the quarters ahead.
Okay.
Thank you guys.
Thank you as a reminder, if you would like to ask a question. Please press star one on your telephone keypad.
Our next questions come from the line of Eric Hagen with K VW. Please proceed with your questions.
Hi, Thank you so I think Tim in your prepared remarks, you talked about the healthy submission fluids in transportation health care and other markets as well as real estate, which I.
I think it's new can you just talk about what's going on in real estate.
What your outlook is if the macro worsens.
Sure habitation all on the casualty side of the house is one of the hardest parts of the casualty market.
Again, a loss leader in the reinsurance world, it's done a lot of damage to the balance sheets of standard markets.
And the rates continue to go up even in the E&S sector as we renew these accounts.
Social inflation.
The economic impact loss cost factors, having a huge impact on the deterioration of losses on these large accounts, but.
It spans through a very wide class a business apartments.
Any any type of habitation will.
Group of risks that come into the market are getting rate significant rate increases. So I would say, that's probably one of the hardest parts of the casualty market today with no letup in site and again on the property side. It can be equally as difficult. So we see that class of business come in on.
On both cylinders.
Got it that's helpful. And then my second question is on just the competitive recall that slower organic and their wholesale segment.
<unk>, we didn't really see that in your numbers at all your organic was very strong are you seeing any capacity constraints and maybe what makes you kind of different from other peers.
Well there is a capacity constraint, but again in a very narrow class of business and it's it's high net worth it's personal lines. There is a wind and flood capacity shortage and so we're doing very well despite that.
We're attracting more aggregate and more wind capacity, but it's tough it's a loss leader and the standard markets and.
We're rolling up our sleeves and bringing in as much of that wind aggregate as we can but it's tough out there.
Okay. Thank you.
Thank you there are no further questions at this time I would now like to hand, the call back over to Pat Ryan for any closing remarks.
Well, thank you very much for your support.
Good questions.
We're very optimistic as you can tell.
We feel our company is strong.
Things are going quite well.
Let's see.
We are meeting some of you at meetings, but we look forward to the next quarterly report. Thank you.
Thank you. This does conclude today's teleconference. We appreciate your participation you may disconnect. Your lines at this time enjoy the rest of your day.