Q2 2023 CareTrust REIT Inc Earnings Call
Good morning, My name is faulty and I'll be your conference operator today.
At this time I would like to welcome everyone to the care Trust REIT second quarter 2023 operating results conference call.
All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
If you would like to withdraw your question again press star followed by the number one.
Yeah.
I will now turn the call over to Lauren Beale Her trust senior Vice President and controller you may begin.
Thank you and welcome to characterize REIT second quarter 2023 earnings call participants should be aware that this call is being recorded and listeners are advised that any forward looking statements made on today's call are based on management's current expectations assumptions and beliefs about care trust business and the environment in which it operates these statements may include projections.
<unk> future financial performance dividends acquisitions investments returns financings and other matters and may or may not referenced other matters affecting the company's business or the business isn't its tenants, including factors that are beyond their control such as natural disasters pandemics, such as COVID-19 and governmental actions.
The company's statements today and its business generally are subject to risks and uncertainties that could cause actual results to materially differ from those expressed or implied herein listeners should not place undue reliance on forward looking statements and are encouraged to review characterize the SEC filings for a more complete discussion of factors that could impact results as well as any financial or other.
Tickle information required by SEC regulation G.
Except as required by law care Trust REIT and its affiliates do not undertake to publicly update or revise any forward looking statements where changes arise as a result of new information future events changing circumstances or for any other reason.
During the call the company will reference non-GAAP metrics, such as EBITDA S. F O S. A D or fad and normalized EBITDA S. F O S. A D.
When viewed together with GAAP results. The company believes these measures can provide a more complete understanding of its business, but cautions that they should not be relied upon to the exclusion of GAAP reports.
Yesterday care Trust filed its Form 10-Q, and accompanying press release and its quarterly financial supplement each of which can be accessed on the investor Relations section of care trusts website at Www Dot care Trust week Dot Com a replay of this call will also be available on the website for a limited period.
On the call. This morning are Dave Sedgwick, President and Chief Executive Officer, Bill Wagner, Chief Financial Officer, and James Collister, Chief Investment Officer, I will now turn the call over to Dave Sedgwick characterize <unk>, President and CEO Dave.
Well good morning, everyone and thank you for joining us.
Q2 saw continued positive momentum on many fronts <unk>.
Investments, operator relationships, the existing portfolio and equity issuance I'll.
I'll touch briefly on these and other regulatory environment before handing the call over to James and Bill to provide more color.
First investments and operator relationships.
Investing in roughly 200 million at our historic yields across eight transactions with six new operators and one quarter.
Represent some of the best work done in that short amount of time in our history.
Last year with the dearth of attractive acquisition opportunities, we decided to lend more than in years past our view of lending is that in most cases those loans do not directly produced real growth because of the short term nature of the returns and the need to immediately recycled payoffs. However.
There is a strategic case for measured lending activity here.
Several criteria are met that lead us to believe there will be real growth opportunities with that borrower or operator in the future.
In fact of the roughly $200 million invested in the quarter of $128 million as an indirect result of last year's lending activities.
Capital has not historically been the constraint for us to grow procure trust. The choice of operator has always been the most important consideration for new investments.
We are thrilled to welcome six new operators in the quarter.
That deeper bench opens up new markets and new opportunities for investment.
We are eager to help grow these relationships and to continue to expand our existing operator relationships as well.
Second looking at the existing portfolio last quarter I gave more color around one skilled nursing operator, not in our top 10 with negative lease coverage that accounted for roughly $5 million of contractual rent.
We decided the best path forward is to classify these assets as held for sale and are currently negotiating the sale of these properties we have.
Therefore removed this operator from the supplemental.
And the stuff we have reported on lease coverage in an expanded way since the pandemic began.
We have been reporting coverage in three ways first on a pre pandemic basis, two excluding the provider relief fund.
And three amortizing those provider relief funds through their eligible periods.
When you look at coverage, excluding the relief funds.
Mailing 12 property level EBIT Dara coverage for the portfolio through March 23 increased to $2. One three times overall compared to the 12 months, leading up to December 2022.
Two one times.
Removing the property is now held for sale contributed to nine bps to the overall coverage improvement.
Finally on the regulatory front two quick comments.
First we continue to wait for the proposed minimum staffing requirement from the by the administration. We don't have any more insight really into what to expect and has been speculated by many others.
And second we are pleased to see the announcement this week of the net 4% increase in Medicare rates.
Effective October for fiscal year 2024.
Yes.
So the first half of the year was extremely busy for the whole team here. We're excited for the new investments in the new operator relationships.
Pleased to see the vast majority of the portfolio doing well in position to expand together.
Including the investment in equity issuance from the ATM forward year to date, we have already funded 96% of the $215 million of new investments.
And are going into the second half of the year with ample dry powder to continue to grow the business and set up the company for a return to growth in 2024.
With that James will talk about our recent investment activity and pipeline Jay.
Thanks, Dave and good morning, everyone I'll start by adding some additional color on the transaction as Dave referred to in his remarks and will then turn to discussing the current acquisitions market and our deal pipeline Q.
Q2 was an exciting and busy quarter for the acquisitions team of care Trust as Dave mentioned during the quarter, we closed eight transactions seven acquisitions and one mortgage loan.
Quire 12 facilities and added six new operator relationships with a total investment amount for the quarter of approximately $200 million at an initial blended yield of eight 4% and we expect the stabilized yield on these assets after two years to be nine 5% not including annual CPI based rent escalators.
Of the 12 facilities, we acquired during this quarter seven or skilled nursing for assisted living and memory care and one of them is a skilled nursing and assisted living campus. We also closed on a $26 million mortgage loan.
Several of these transactions closed subsequent to the date of our Q1 earnings call. During June we closed on a four facilities skilled nursing portfolio in southern California and entered into a 15 year Master lease agreement with links healthcare links as an established California skilled nursing, operator, who we have known and admired for many years.
Year, one rent under the links Master lease is approximately $6 8 million, increasing seven 6 million in year, two and $8 $9 million in year, three with CPI based annual rent desk escalators thereafter.
In June we also closed three other transactions the acquisition of 125 bed skilled nursing facility in Katy, Texas. The acquisition of a two facility memory care portfolio in Michigan, and Ohio, and the funding of a $26 million mortgage loan secured by a skilled nursing assisted living and independent living campus located in Loma Linda.
California.
In July we followed these transactions by funding of $15 $7 million mortgage loan on two Florida skilled nursing facilities to our existing tenant the elevation group at an interest rate of 9%.
We are excited to have put $215 million out to work. This year, we do not feel like we are down overall deal flow remained strong at a pace relatively unchanged from last quarter.
We continue to Opportunistically pursue deals, where we feel our access to capital low execution risk and reputation as a quality transaction partner, making so, particularly attractive buyer with respect to the skilled nursing acquisitions market.
Pricing has continued to adjust as we have seen a further tightening of credit by lenders, who continue to increase borrowers equity requirements and require additional recourse liability to borrowers and guarantors there continue to be attractive opportunities to source and pursue skilled nursing acquisitions, particularly in those states.
So are there have been favorable Medicaid rate increases.
With respect to seniors housing, we are still seeing a gap between seller and buyer pricing expectations much.
Much of the seniors housing deal flow coming across our desk involves increasing numbers of facilities in some stage of operational distress as sellers face heightened variable interest rate loans and our maturity date risk.
Moving forward with many of the high leverage buyers not as active in the acquisition space as they have been previously and given the company's access to funds through our low leverage and ability to issue equity we remain focused on external growth opportunities.
We continue to foster and enhance our relationships with the broker community, but we are also seeing promising results from our decision last year to direct additional resources and manpower towards sourcing off market opportunities and towards developing new operator relationships in geographically strategic areas.
The last we are careful to continue our history of a disciplined approach to underwriting and valuation as we work closely with operators to focus on key factors that will allow them to execute on their business plans with a sustainable rent structure.
The pipeline today sits at approximately $150 million as we continue to look for opportunities that can be accretive to our operators. We will continue to execute on our acquisition strategy of disciplined growth with risk adjusted returns consistent with our characters has been built over the past nine years and with that.
I'll turn it over to Bill.
Thanks, James for the quarter normalized <unk> decreased two 8% over the prior year quarter to $34 6 million.
Normalized <unk> decreased by three 6% to $36 1 million.
On a per share basis normalized <unk> decreased <unk> <unk> to <unk> 35 per share and normalized <unk> decreased three to 36 per share.
Rental income for the quarter was $47 7 million compared to $46 2 million in Q1, the increase of $1 6 million is due largely to the following items.
First we received approximately $1 1 million from new investments.
We received approximately 369000 and CPI bumps.
Third tenant reimbursements, which are non income and <unk> producing because they have a corresponding expense increased 507 to $1 2 million.
Lastly, these positive items were offset by 200 to lower cash related to a prior tenant that we've mentioned on the last two calls.
180000, lower cash collections collections from existing tenants that are on a cash basis and 63000 from properties that we have sold.
If you exclude the tenant reimbursements amount of $1 2 million contractual cash rental revenue was $46 5 million for the quarter.
Another way to reconcile the contractual cash rent of $46 $5 million is to take last quarter's supplemental where we disclosed annualized contractual cash rent at $3 31 of $184 3 million.
If you back out the one tenant we've been talking about who represents about $5 1 million you get an annualized number of $179 2 million.
Divide that by four to get a quarterly number of $44 8 million.
Add in the $1 $1 million of new investments 280000 of CPI bumps.
370000 of cash collected from that one tenant and you get $46 5 million.
There are some other immaterial items in there that net to zero.
Im hope this I'm hopeful this helps you better reconcile this number.
Interest income was down 635000 due to a $15 million note that was paid off at the end of Q1, the quarterly interest income rate on our notes portfolio is approximately $4 4 million.
Interest expense was up $1 2 million from Q1 due to higher borrowings and rates.
Also subsequent to quarter end, we drew 30 more million dollars on the revolver.
G&A expense decreased 343000 from Q1, due mostly to show lower short term incentive comp.
Stock compensation continued to be roughly $1 million due to stock forfeitures in Q2 related to certain performance criteria.
Needed to occur that likely will not be met I expect that it will return to a quarterly run rate of around $1 6 million in Q3, and Q4 and G&A expense for the year will be around $21 million.
Cash collections for the quarter came in at 96, 7% of contractual rents and in July we collected 98%.
We entered into a forward sale agreement under the ATM program and to date have issued approximately $10 6 million shares at an average gross price of 1984 net proceeds of $207 million.
As a result, our liquidity remains extremely strong with approximately $12 million in cash.
$290 million available under our revolver.
And the $207 million of future ATM proceeds.
I expect we will settle this contract during the third quarter and used the proceeds to pay down the line.
Leverage also continued to be strong with a net debt to normalized EBITDA ratio of three eight times, which is below our stated range of 4% to five times, our net debt to enterprise value was 26% as of quarter end and we achieved a fixed charge coverage ratio of four five times and with that I'll turn it back today.
Great. Thanks, Bill we hope to report that helpful to you and happy to take your questions Bill.
At this time I would like to remind everyone in order to ask a question. Please press Star then the number one on your telephone keypad.
We'll pause just for a moment to compile the Q&A roster.
Your first question comes from the line of tile cue from Bahrenburg capital. Your line is open.
Hey, good morning out there congrats on a very active quarter I think I lost count of how many transactions that came through by the street was certainly impressive.
Yes. My first question is on the $5 million of tenants I think last quarter. You said, what's the main reason that keeps you from issuing four full year earnings guidance.
Assets have been moved to you how do you see some brands this quarter and some more in third quarter. It doesn't seem to be a lot of downside from here are there any other variables that we are now considering from a guidance perspective.
Great question, I'd say that this tenant.
<unk>.
How it ultimately plays out continues to be the primary factor.
For us and.
And not issuing guidance quite yet.
The sales price.
Rent.
Yes.
Is in play is significant enough for us to do.
The hold off on guidance at this point.
Got you.
So up on I think in Iowa, I saw their Medicaid rate rose by $50 in April and I think another $15 in September so understanding the starting rate in that state is pretty low, but curious why would you choose to sell the assets today, rather than kind of seeing through the rate gains.
Yes.
Yes.
We believe the best path forward for these particular assets is probably a sale.
Nothing is set in stone at this point we're negotiating.
With a buyer right now and we think that that's the best path forward.
As we look at the proceeds from that and what our ultimate rent reset would be.
And the likelihood of.
Being able to turn it around at the existing rent when you look at all of that we.
We think that our sales probably the most.
Advantageous outcome for us.
That's fair and one last from me is on the forward ATM sales how should we think about the settlement schedule from like from a modeling perspective should we expect that to be settling in multiple tranches. Just curious how we should build that into our models. Thank you.
Hi.
Bill I would probably model that as settling at in in.
In the third quarter, we would probably hold it out a little bit longer if interest rates weren't where they app arent, where they add but given how high they are.
The accretion of holding it out on the forward isn't really there. So we'll probably settlement in Q3 all of it.
Great. Thanks, guys.
Thank you.
Your next question comes from the line of Wes Golladay from Baird. Your line is open.
Hey, guys. How are you looking to develop a lot of new relationships and I'm just curious how big the pool is of a high quality operators, they're actually looking to monetize assets.
We love that question.
When we what.
One of the things that makes us a little bit unique I think is the level.
Former.
Operator experience that we have here at care Trust and so.
The.
The.
Priority that we get there.
That decision in any investment.
Is really paramount.
If you look at the first real big wave of growth that we had we had found.
A number of hungry younger.
Operators and we played some some pretty good bets on them and dosing.
For the most part really paid out beautifully.
And we feel like as we look at this next phase of growth.
That's going to come from expanding those existing relationships, but it's also going to require some new ones and so last year, we made some decisions around human capital here at Coeur Trust and move some people over into.
Investments with the express mandate to build that operator bench.
Off market deals and to find operators that we don't know.
And to see the crude.
<unk> decision and effort happens so quickly it's been really gratifying to us as we welcomed in six new operators already we're.
We're not done so we're going to continue to look for the best of breed operators that have.
Some of the same characteristics as our most successful operators have demonstrated.
So that we can have new geographies and new opportunities for growth that we haven't quite had in the past.
Okay, and then looking at the balance sheet I'm, just curious how low would you take leverage and I guess what is the delta between your cost of debt and cost of equity would you put the rigor issue short term debt in the near term at any point just curious how the balance sheet will be going forward.
Yes. This is bill I'll take that one.
Right now.
Yes.
Our revolver and our equity.
It is not that is not that great. So as long as we're doing deals at the yields that we're currently doing in our stock price holds that where it's currently at I think you can assume that we will continue to issue equity.
To match fund these investments as we go.
And that inevitably will take leverage down but over time, I think as interest rates call. It lower and we continue to do more investments will probably use a little bit more short term debt with that revolver.
Okay. Thanks for the time everyone.
Thank you.
Your next question comes from the line of Steven Valiquette from Barclays Capital. Your line is open.
Okay. Thanks, guys. Thanks for taking the questions.
A couple here I guess first just based on some of the comments from other healthcare Reits this quarter seems to still be a pretty wide range on sniff transaction valuations either from a per bed or a cap rate perspective, because the cap rates are maybe eight five to 10, 5% range and forbade us anymore.
75 to maybe 125 somewhere in there. So just curious to get your thoughts on how you think the industry valuations are trending directionally right now.
And then I got a follow up on a different topic at all.
I'm not asking that in a minute I guess.
Sure Stephen this is James.
I guess I would say that.
First.
Per bed is really to us.
Useful when the assets really are cash flowing in.
The variation in pricing amongst different geographies is really huge.
You can go from.
Some markets trading.
200000, a bed to other markets trading 30000 of that so it's really all over I would say and its hyper geographical for us as we look at it I think that there is definitely on the skilled nursing side.
And upward trend in yields.
That are being used to price the deal I think that.
Sure.
Starting in the high nines or even 10 for bids on skilled nursing and I think that.
As some deals slowly start.
Then we look at to actually become positive cash flowing then you do look at the per bed, but you also were super closely with your operator to make sure that you are really trying to dial in a stabilized value that will give them a rent stream they tend to really be successful with.
Which can be difficult in today's environment, particularly with labor or do you think.
Like I said rates are up in terms of the yield but cap rates are still pretty.
Much the same in the skilled nursing world of around 12, 5%.
Okay. Okay.
Okay. That's helpful.
And shifting gears here, a little bit amongst some of the.
Health care payer and provider companies that we cover.
That's been a buzz that behavioral health demand has accelerated this year. It seems like both from either a per visit basis, but also for a facility based care settings. So I guess in light of that just looking for maybe the latest update on the progression of some of the facilities that you are repurposing for behavioral.
Whether we close now to some reopening.
How you are feeling about the pace of your strategy around this and also just thinking about the page nine.
The supplement where you kind of break down the portfolio performance by property category.
And when should we think that behavioral might be like a separate category within that is that something that might start happening for 2024, or maybe you guys havent thought about that yet, but just curious when that might become an additional category within the.
Property type breakdown of our performance.
Yeah, that's great. So our strategy with respect to behavioral has been to shoot.
Some.
Symbolic before Cannonballs.
We want to we want to.
Take a bit of a measured approach.
And test out the thesis.
And so we haven't been super.
<unk> and trying to.
Growing that space just to grow.
Just to do it.
<unk>.
Our philosophy.
Haynesville is exactly the same as it is with skilled nursing, which is we've got to have.
Conviction and the operator their model.
And have a really strong relationship with them in order to do that.
Candidly, we've been so busy with our bread and butter and has seen so many great opportunities.
The skilled nursing and seniors housing.
Yet.
So thats taken.
All of our attention.
So the conversions that are in play are still tracking they are coming along.
The renovation work is underway.
And.
Those will come online in general we are ready.
<unk>.
Early next year.
We have had.
Close on a sale leaseback with the behavioral operator this year. They ultimately brought us they had brought us in a little bit late into their process.
And decided to go ahead with the.
Normal.
Nancy that they had planned.
And so it's still very much a.
An area of interest for us the priority to identify that.
The best operators in the space.
It's a space that is even more.
<unk> then the skilled nursing spaces in terms of the operators in building those relationships and finding those those best operators is a bit of a challenge, but it's one we're here for and we want to we want to grow that segment over time, but it's really going to be dependent on finding those operators and finding the right.
Accretive deals.
And so I think until we have a little bit more critical mass.
That's what we'll that's when we'll start reporting on that as a separate segment.
Okay, Great that's definitely helpful update thanks.
Alright, thank you.
Your next question comes from the line of Michael Carroll from RBC capital markets. Your line is open.
Yes, Thanks, David I wanted to touch back on the assets that you have held for sale. I know you said you have one interested buyer into that property.
I guess what is the level of interest I mean are there is that as the deal didn't get done with that one buyer potentially or is there other players kind of on the sidelines that aren't they're looking at it too.
Yes, we have fielded interest we are working with a buyer right now.
We've been negotiating purchase sale agreement in terms and all of that.
That's moving forward pretty well, but.
We're sort of gotten out on the process and we have fielded interest.
From some backup of options and <unk>.
<unk>.
There are a host of purchasing versus <unk>.
<unk> with a purchase option and different things like that but where are all of all of our energy right. Now is really with the group that we are negotiating with.
And then the existing operator, I know they still continue to pay a tiny bit of rent I guess why are they still paying those.
Paul stub pieces of ranch are they interested in buying the portfolio.
Yes, they have expressed interest in that.
<unk>.
I think that.
By staying active and engaged in.
Improving the performance there.
Paying some rent, giving them an advantaged position.
The negotiations.
And our thought process.
Okay, and then what's the timeline should we be expecting on this I know for the past few quarters, you've kind of highlighted that you would have a plan in place and it could get done pretty quickly I mean could this get done by the end of the year.
Oh, Mike I hope so.
But given.
Given the environment, we've been in and that we remain in.
Transactional.
The most challenging market for buyers who have to finance stuff.
We've ever seen and so.
I want to.
I don't want to not make any prediction on the timing on this one.
And would you provide or you would be willing to provide seller financing to the buyer.
That's a possibility our preference would be to have a clean break but that might be required to get a deal done.
Okay, great. Thank you.
Thanks, Mike.
Your next question comes from the line of Conor Seversky from Wells Fargo. Your line is open.
Either happy Friday, everyone.
It seems to be running out of question ideas here, but maybe taking a more abstract view on underwriting.
I'm curious as we've gone through Covid and the risk factors change dramatically for skilled nursing.
Is your perception of risk in the underwriting framework changed and I mean that in the context of looking at the risk curve as rates have gone up would you actually would it be reasonable to assume that your underwriting standards have gotten more stringent.
Following what happened over the past couple of years.
Hum.
It's a great question James you can <unk>.
Correct me, if I'm wrong on any of the risk.
Yeah.
I think.
The short answer is no that our underwriting hasnt.
It hasnt become more stringent I think we've always tried.
And worked at having a very disciplined collaborative underwriting process with our operator.
So before we even lobby and an LOI, we've usually already underwritten the deal together and really tested each other's assumptions and gotten comfortable and so the process is very similar to what it was pre pandemic, we just look at things.
And a bit of a different light because of the pandemic today.
But I still feel like we've been able to be successful even in the midst of the pandemic.
Underwriting these deals that maybe required return I would point your attention to the investor deck that we put out.
Along with NAREIT in June we actually put in a slide there.
This study.
A few buildings that we had underwritten with an existing operator.
In the middle of the pandemic I think that we acquired them in 2021.
We're not cash flowing so underwater basically on day one.
We had we had worked on the pro forma together and with former operators field equity.
Ken feasibility test that pretty well.
The improvement from day, one in place negative are under under one times coverage to just about 18 months later.
It was really impressive.
A lot of the investments that we've done this year kind of followed that same model, where these buildings havent been fully stabilized perfect.
We're only place to go down now theres been quite a bit of upside in them.
So I think Carter that is as we employ are.
<unk>.
Experienced operators.
And we select the right operator, and we collaboratively underwrite together.
That we can have great success.
Yes, I think comment I would just add that you know through.
Through Covid, maybe we look at one of few things differently in particular on the expense side when they really look at labor, obviously, a lot more carefully.
Just in terms of understanding where the where the facilities are what the labor situation is in the immediate geography.
Looking closer, especially if it's a rural deal at or are they really going to be able to find labor. So I think theres wanted to a few things that came out from the fallout of Covid and where market is today.
Let us to focus more carefully on a few things.
But the overall processes is still pretty consistent with what we've done before.
Great. Thank you for the color enjoy the weekend.
Thanks Connie.
Okay.
Again, if you'd like to ask a question. Please press star followed by the number one on your telephone keypad.
Your next question comes from the line of Austin <unk> from Keybanc capital markets. Your line is open.
Great. Thanks, everybody.
The existing operator capital behind the existing operator were to purchase these assets in Iowa, I guess is it safe to assume that you would require kind of market value plus any back rent to win that deal.
Okay.
Yes, I think we just have to be a little careful on what we would accept and what we would.
During an open negotiation like us so we'd probably have to.
Unfortunately, the comments on an ongoing negotiations right now.
That's fair.
And then maybe if you were to sell or finance, how much of the deal value would you ultimately be willing to finance.
Just given kind of what's happened here operationally and some of the challenges they face.
I'm really not trying to avoid it.
The same issue.
What we did.
The terms of the transaction.
How much we would finance what the price would be.
What conditions, we would mean, that's all in very much in play.
Real time, so we can't really comment on that.
Okay.
And then just speaking back to the $150 million investment pipeline, what's been kind of the timeline from the time. It enters the pipeline to where you were able to close in.
How much really beyond that $150 million is crossing your desk that meets our criteria, but just is on the back burner until you're really able to move on those.
Also I would say that how long a deal takes from when we get it in to when we close it's all over the place right. It's very dependent on a number of things.
Thank you.
A little bit of a rep in that.
June July time period, especially in California with some changes in.
The Chow regs so.
Sometimes the deals can take.
You might have to provide 120 days of notice before you can close others.
You'll get finished in 60 to 90 days I would say typically from the time, we see it it's probably a 90 to 120 day process.
And in terms of.
You know things that are on <unk>.
Outside of the $115 million I guess, I'd say that look if if if something looks good to us.
We really don't put it on the back burner ever.
And center and we're going to get the resources to it that it needs for us to be competitive and go get it.
So I think that you know.
It seems on the back burner, he like them, they're not going to stay there theyre going to move to the top or towards the top very quickly.
Yeah. It just seems like you guys have had success quickly backfill in that 150 million throughout the year. So I was just curious beyond that but.
Last one for me I'm, just curious what percent of your leases are CPI based.
Yeah.
Well outside of.
Well the vast majority of them are.
Almost all of them I mean, if we give a shot.
Short term.
Quick ramp.
That might be there, but then ultimately it goes to CPI based the vast majority are.
Thank you.
Thank you.
Yeah.
There are no further questions at this time.
I will now turn the call back over to Dave Sedgwick.
Oh, Thank you well, we really appreciate everybody's support and questions and as always if there is anything else that you'd like to talk to you about you know where to reach us have a great weekend.
This concludes today's conference call you may now disconnect.
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