Addus Homecare Corp (ADUS) 2015 Q4 法說會逐字稿

Good morning and welcome to the Addus HomeCare Corporation fourth-quarter 2015 earnings conference call. Today's call is being recorded.

This presentation will contain forward-looking statements within the meaning of the federal securities laws. Statements regarding future events and developments, the Company's future performance, as well as management's expectations, beliefs, intentions, plans, estimates, or projections relating to the future are forward-looking statements within the meaning of these laws. These forward-looking statements are subject to a number of risks and uncertainties, including factors outlined from time to time in the Company's most recent Form 10-K or Form 10-Q, earnings announcement, or other reports filed with the Securities and Exchange Commission and available at the SEC's website.

The Company undertakes no obligation to update publicly any forward-looking statement, whether as a result of new information, future events, or otherwise. I would now like to turn the call over to the Company's President and Chief Executive Officer, Mr. Dirk Allison.

Thank you, Scott. Good morning, everyone, and thank you for joining us for our fourth-quarter conference call. Today I am joined by Don Klink, our Chief Financial Officer; Maxine Hochhauser, our Chief Operating Officer; Darby Anderson, our Chief Development Officer; and the Zeke Zoccoli, our new Chief Information Officer.

I would like to begin with some general comments and observations and then Don and I will discuss the fourth-quarter results that we issued yesterday afternoon. After that we would be happy to respond to questions.

Let me start by saying how excited I am to have joined Addus HomeCare as the President and Chief Executive Officer. Many of you know that I have been in the healthcare service industry for over 29 years. During that time, I have been associated with many great companies in various parts of healthcare.

Based on that experience, I know that Addus is a great company that is providing services that are desperately needed by our consumers. It has a long and successful history, which I appreciate and respect.

Addus also has a solid management team and I am pleased to be able to work alongside each of them. I not only appreciate their hard work, but also the hard work and dedication of each Addus employee. The management team and the quality of the organization were important factors in my decision to accept the CEO position.

As you may know, I have been on the Addus Board for six years and served as Chairman of the Audit Committee for the last three years until becoming CEO. During that time I saw that Addus was extremely well-positioned to capitalize on the postacute care trends in healthcare. This knowledge, along with strategy and culture of the Company, were also important reasons why I was excited to take on this new position.

After six weeks at the Company, I now believe that we can continue to offer high-quality care, while at the same time, reduce our costs, allowing us to meet our strategic goals. Going forward, we will continue to focus on organic growth in our current markets and we will look for acquisition in new markets that have a strong need for home and community-based services. We will strive to provide the highest quality of care for our consumer, while we seek to be great partners for our state and governmental customers.

And we will be a value-added partner to managed care organizations as they become more involved in community-based care. I strongly believe that Addus has the market opportunity to become a much bigger company, while continuing to be a market leader in the personal care industry.

Whenever there is a change in the CEO position, people understandably have questions; however, I want to repeat that I believe that Addus is a strong company with a sound strategy. We will continue to move Addus in this direction.

That said, we believe that there is opportunity to execute more efficiently and effectively than we have in the past. Our primary initiatives at this time will center on the enhanced capabilities and effectiveness in our IT function, the simplification of certain operational processes in order to best serve our consumers and employees in a highly-efficient manner, and the development of consistent procedures which will enhance our ability to serve our consumers' needs.

In the past several weeks we have begun to implement a number of operational changes and are pursuing additional initiatives to ensure that we have a proper return on the investments we make as a company. Our team is focusing on our expense structure to ensure that we are obtaining the proper operating leverage as we continue to grow our revenue. Our overriding objective is to invest in and build an organization that can provide high-quality care and support growth, while maximizing shareholder value.

In order to help drive some of these changes, we have made an important addition to our senior management team. Zeke Zoccoli, who I introduced earlier, has joined us as our new Chief Information Officer. Zeke has a solid background as an executive officer in various healthcare service companies, including a number of companies which had a distributed service model such as the one we have at Addus.

Zeke understands the importance of IT functioning as a partner with our operations team to help us meet our goals, particularly around the increasing use of information technology to improve care and lower costs. In addition, Zeke has in-depth experience in acquisition integration and is already involved with the integration team for South Shore. I've worked directly with Zeke in years past and want to welcome him to our team.

No doubt many of you are aware of the budget conflict underway in Illinois between the governor and the legislature. Their differences are broad-based and extend to virtually every aspect of state funding, including healthcare and, thus, personal care. As a result, Illinois's politics have negatively impacted our accounts receivable balance those of our consumers funded solely by the state. However, to date it has not affected our Illinois Medicaid or managed care business.

For some time, Addus, along with other companies that provide personal care services in Illinois, have been talking to representatives and officials of the state at all levels about possible solutions and our management team remains focused on doing what it can to resolve the issue before it becomes a major problem for Addus. We hope to be able to update you further during our first-quarter conference call in approximately 60 days.

Now let me turn to our financial results for the fourth quarter of 2015.

Revenues for our fourth quarter were $84.8 million as compared $82.6 million for the same period in 2014, an increase of 2.6%. Our adjusted EBITDA for the fourth quarter of 2015 was $5.1 million, or $7.1 million in the fourth quarter of 2014. Our adjusted EPS for the fourth quarter of 2015 was $0.29 compared to $0.36 in the same period in 2014. Don will cover our financial performance in more detail in a few minutes.

In past quarters we have discussed our recent conversion to a new HRIS platform. This conversion was not without issues and, as such, has cost a large increase in our annual cost to provide payroll services to employees. At the same time, we have had a number of issues with both the system as well as our payroll process. These difficulties led to the weakness in our internal controls for 2015.

As a company we are taking these issues very seriously. Starting in mid-January we created a focused task force, which is now being led by Zeke, which will recommend ways we can both improve the process of delivering paychecks, while at the same time reduce the ongoing expense for this function. While this is a big project, we are confident that we will be able to reduce these costs and strengthen our internal controls by the end of 2016.

I am very pleased that we were able to complete the acquisition of South Shore effective February 5, 2016. This transaction gives us a great platform as we enter the New York City metropolitan area. We are excited to have Eileen Girard and her team at South Shore as part of Addus and I want to publicly welcome them to our company.

Before I turn this call over to Don for a more detailed review of our fourth-quarter performance, let me again say that it is great to be at Addus at a time of such great opportunity. Our company provides a much-needed service to over 31,000 individuals. I know that our employees agree with me when I say we are confident about where we are as a company, and although we recognize there is hard work before us, we look forward to continued growth in the future.

With that, let me turn the call over to Don.

Thanks, Dirk, and good morning. For the fourth quarter, net service revenues increased 2.6% from the fourth quarter of 2014, as Dirk mentioned earlier. Of this overall 2.6% increase, approximately 1.6% came from higher volume, 0.6% from increased hours per census, and 0.4% from higher reimbursement rates from our Northwest region and our fourth-quarter acquisition.

For the full year 2015, revenues increased 7.6% with higher volume representing 5.6% of this increase, increased hours per census at 1%, and increased reimbursement rates in the Northwest region and acquisitions at 0.9%.

The adjusted diluted net income per share results for 2015 exclude $0.05 per diluted share from an increase in workers' comp and station reserve expense, $0.03 for the South Shore acquisition transaction expense, $0.03 for an expense accrual related to an IRS audit of prior years. In addition, adjusted results for 2015 exclude the positive $0.09 per diluted share impact from the worker opportunity tax credits that relates to the first three quarters of 2015, which reflects the renewal of this legislation in the fourth quarter of 2015 for 2015 until 2019.

Due to the longer-term extension of this WOTC legislation, our ability to consistently qualify for these benefits through ongoing hiring practices and the meaningful tax savings these benefits provide, we included an in-period WOTC tax credit in our adjusted results for the fourth quarter and for the full year 2015 and will continue doing so going forward.

As we discussed in the last call, we exited certain underperforming locations during the third quarter, all of which were in our same-store base. Adjusting our revenues to remove the impact of these closed locations, total company revenues increased 6.1% and same-store revenues increased 2.9% for the fourth quarter. Adjusting revenue for these closed sites for the full year 2015 and 2014, total company and same-store revenue growth are 10% and 6.8%, respectively.

Gross margin for the fourth quarter of 2015 was 26.2% for the quarter, down 120 basis points, primarily due to a mistake in the third-quarter worker's comp reserve that was corrected in Q4. If you adjust Q3, the GM percent would be 27.2% and Q4 26.9%. Q4 also had approximately a 20 basis point charge for two large auto claims related to prior-year incident. The margin percentage trend is still positive on a full-year basis, up 30 basis points. Lastly, we put in place safeguards to prevent this type of mistake in the future.

G&A increased 150 basis points as a percent of revenue, primarily due to the expense accrual related to the IRS audit and an increase in our accounts receivable allowance reserve. Our IRS accrual in Q4 covers prior years 2012 through 2014. We expect the final IRS settlement to occur later this year.

With regard to our allowance, Illinois has slowed our cash collections since June 1, 2015, when the state no longer had an approved budget. The Illinois accounts receivable at the end of this year is approximately $54 million and it has a DSO of 101 days. Our overall DSO is 92 days, an increase of 12 days from Q3 and is primarily due to Illinois.

We did achieve some Q4 expense reductions in our discretionary cost areas from Q3, excluding the M&A and the IRS expenses. We had a WOTC tax benefit in the fourth quarter of 2015 due to the renewal of the program late in the year, which forced most of the tax credits to fall in Q4. Q4 had a tax benefit due to this WOTC credit, compared with a tax rate of 27.8% for the fourth quarter of 2014. With the multiyear renewal of the WOTC program, we would expect the credits to occur each quarter and be more consistent in 2016.

In part due to our increased accounts receivable with the state of Illinois, we had net operating cash used for the fourth quarter of $4.7 million and net operating cash generated for the full year 2015 of $4.1 million. Our cash at year-end was $4.1 million. We had $58.3 million of availability under our revolving credit facility.

During the fourth quarter we expanded our credit facility to $100 million from $55 million previously, giving us access to a term loan of up to $25 million and a revolving credit facility of up to $75 million. We borrowed $22 million on the term loan facility in conjunction with the completion of the South Shore acquisition in February of 2016.

This concludes our comments. Operator, would you please open the floor for any questions?

(Operator Instructions) Mitra Ramgopal, Sidoti.

Good morning. First, I just wanted to get your sense of going forward, as you look at what's going on with Illinois, could you let us know first back in the South Shore acquisition, what percentage of your revenue comes from Illinois? And would it make you more aggressive in terms of looking to diversify a way into other states?

Mitra, thank you. Let me talk a little bit about what we're going to be looking forward from this wave of acquisitions and then I will Don talk to you about the percentage of revenue from Illinois.

Clearly, our goal as a company is to continue to diversify away from the dependence on one state. And so, as you saw with the South Shore acquisition, we were able to bring in approximately $50 million of revenue from New York.

You will continue to see us in the future as we look to enter into new areas and as we look to our acquisitions will be moving away from the state of Illinois. Not because it's bad business, but because we believe very clearly that we need to make sure that it is a lesser percent of our overall revenue going forward.

Mitra, just to give you a little bit of some numbers on it. Excluding the MCO of Illinois, that revenue, the state programs are about 50% of our revenue, just to give you an idea, at the end of 2015.

Okay. So if we add a full-year of South Shore it should be even less then?

Yes, it should.

Okay, okay. And I don't know if you could give us an update in terms of the pace of transition. I know the last quarter you mentioned that it had slowed in terms of moving people over to managed care. I don't know if you have an update on that.

Darby, why don't you talk about that?

Mitra, this is Darby. Yes, we're pretty much through those transitions here in Illinois. I will say though that we did see good growth within the MCO line, which is very favorable given the state of payments otherwise. But we are through the bulk of the transitions and so new members would be assigned to us as they enroll with the health plan.

Okay, thanks. And regarding the expense reduction initiatives, I don't know if it's possible for you to give us a sense how much you think you can sort of take out of the system that right now might be considered redundant.

Let me handle that, Mitra. You know, it's a little early; as you know, I've been on board six weeks working with the management team. We have identified a number of areas where we feel confident that we can reduce expenses.

We run a little over 21% of combined G&A for the Company, up around 21%, almost 21.5%. And while we're not ready to give real targets of what we believe we can achieve until we maybe get together in another 60 days, we do believe that during this year it would be the goal of our management team to get our G&A down below the 20% level.

Okay. Finally, Don, I was wondering if you could give us a sense of what we should be modeling for tax rate 2016.

Mitra, I think we do expect these credits to continue, like I said, more evenly I think in 2016. I would probably go high 20%s, low 30%s is probably the range of where we will fall in the tax rate given these credits. They will still be a little uneven because it's a matter of how they process them and they are not exactly even, but that's probably the range I would pick.

Okay. Finally, on the payroll system. Again, you pretty much expect to have that resolved by the end of the year and as of right now there are no other issues you are concerned about?

Well, obviously one of the big issues for us is the payroll system; not only because of the additional expense it has created upon the public company, but also it has created process problems. Just we have had to struggle this last year in just some of the basics that you would normally associate with creating payroll. So we're going to work on that.

Then, as was mentioned, it did have a weakness in our internal controls that revolved around the payroll system. So this needs to be a complete relook at our payroll system from start to finish and we're in the process of doing that. We do believe we will be able to do that during 2016.

Okay, thanks for taking the question.

Dana Hambly, Stephens.

Good morning, thank you. Dirk, just on the -- I know you're not given targets right now, but do you plan on giving targets and timelines for reducing G&A in 60 days or maybe is that as early as we could expect?

Dana, I would expect that we will have more information to share with you in 60 days. We will at that time share some of the procedures that we are undergoing, some of our tasks to reduce these costs, and we will be able to share with you some of our goals at that time, which would include numbers and timelines.

Okay, thanks. Then on the organic growth, Dirk, you called out in the press release the billable hours per day and I would think organic growth would be primarily driven by census. So I just wanted to get an update on where the key drivers for organic growth; should we be thinking billable hours per day as a driver or is it really more on census?

We have always had billable hours and in the past we tended to focus more on census, but as we expand outside into other markets, in order to do a better comparison and really look at the variance between authorized hours in different programs throughout the country, we are really moving the focus more to billable hours per day because that normalizes it. And you really get to see the shift in -- particularly with New York that also has a higher billable hours per day than we have experienced in some of the other states.

We are continuing to focus on census growth because the hours per day are a factor of both the census growth. It's the hours that are authorized and ensuring that we are providing the services to authorization. So that really becomes a cleaner metric for comparative purposes.

Okay. That's helpful, Maxine. Then maybe if we could segue, Maxine, to New York. Given its size, can you lay out maybe the growth that that agency has seen and any metrics around billable hours per day or price margins you can provide would be helpful?

It's a little early for us to provide that, Dana. Historically, they have experienced growth and even in the first six weeks that we've been with them, they've continued the type of growth that they have seen. But I would expect next quarter to have more visibility into exactly some of our projections for ongoing growth.

But as I said, it's been about six weeks since we closed. We closed on February 5 and they have consistently grown each week, so we expect that to continue.

Okay, all right. We will look for more details there. Lastly for me, just a technical question on the managed care. In Illinois, the managed care AR is that separate from the state AR or is that all lumped together?

Yes, that's separate, Dana. It's not -- it has nothing, at least not from our standpoint; our AR specifically with the managed care organization.

You are getting paid for the managed care organizations in Illinois?

That's correct.

You are. Okay, great. Thanks very much.

(Operator Instructions) Toby Wann, Obsidian Research Group.

Good morning. Thanks for taking the questions. Could you guys maybe detail the operating changes that you have recently begun implementing or is it still too early to give more details on that?

Good morning, Toby. It's a little early to give details. Listen, we talked about during my comments some of the areas we're going to focus on.

We are focused on process improvements and cost reduction revolving around our payroll system in particular. We are also looking at things, such as our centralized contact center and where it fits in as part of our company going forward, making sure that we have the most cost-effective way to deliver the efficient services to our consumers and customers that we need.

We will continue to focus in IT. It's an area of big expense in the Company and we want to make sure that those dollars that we are implementing into IT or putting into IT are effectively driving the operations of our company to be more effective and more efficient. So those are two or three areas of general concern that we are looking at and we will have some further detail for you about this in about 60 days.

Okay, thank you. Then with regards to the payroll systems, or HRIS system, implementation and the issues that have been uncovered there that led to the weakness in financial controls, could you maybe give us a little bit more detail as to were those weaknesses present before the new HRIS system was installed or were they a result of the new system? Just maybe expand on that a little bit.

Then what -- given that the upgrade has been ongoing for almost a year now, where does that stand? Do you have any recourse with regards to going back to the vendor, selecting another vendor? Just kind of an update on those sorts of issues.

Toby, those are all great questions and things we are looking at, honestly, as a team and as a focused task force how we correct it. Let me go to the first part of the question.

If my history serves me correct, when I was on the Board, we actually -- the first year that we were a filer as far as SOX is concerned, we had material weaknesses and those revolved around the payroll system and the lack of controls. If you will remember, we grew in size enough to become a filer about midyear of that year so we didn't have a lot of time to actually make sure the controls were working.

The following year, which I believe is 2014, we actually put controls in place and we no longer had material weaknesses at the end of the year. So the controls were in place and were effective.

What happened when we converted to the Ultipro system it did not work as we had expected in a number of areas and so there were difficulties early in the year getting paychecks out on time and correctly. And so the decision was made by management at that time to really focus on getting those checks out to the people, and in doing so, some of the segregation of duties that you would normally associate with a system were lightened up a bit to allow people to get in there and get the paychecks out.

The failure I think of the team, and we recognize that now, is that after that period past, there was not a tightening back of those controls that had been in place and had been effective. By the time year-end rolled around and there was a review, we decided that those things needed to be corrected, there just wasn't time to get those tested and passed as they needed to in a normal SOX environment.

I would say you today, even with the difficulties we have with the Ultipro system, we do have controls in place. They have been effective in the past; I believe we can make them effective now. And in those areas where there are some gaps in the controls, we have a team in place to start working on those and make sure we don't have a problem at the end of the year.

No, that's helpful and I appreciate the additional color on that. That's all for me at this point, thanks.

Greg Macosko, Montrose Advisors.

Thank you. Could you talk a little bit about the diversification? I think it sounds like a good strategy.

I believe you are in 22 states now or perhaps more. Is that the right number? And when you look to diversify, have you ruled particular states out? Are there states that are particularly attractive at this point?

Yes, we have looked at the various states. Darby works with us. He is the one of our management team that is most familiar with the states, he and his team, and where we would like to move.

There are -- in the 22 states we are in, we are pleased to be there. We are happy. We believe that we have good sites; however, we do believe that there are additional states that we can look at as a team and would be proper and actually be a very good thing for the Company there in those states.

So Darby and his team are focused in those areas where, if we enter into a new state, we can go there with enough volume to make a difference and to give us a good base to enter into those states.

Darby, would like to add to that?

No, just a couple of fundamentals that you look at in states just from the demographics that Dirk alluded to in terms of volumes. But payment rates and program requirements and funding for primarily Medicaid personal care services. But as we have been I think pretty consistent, we are also targeting those markets that are transitioning their traditional Medicaid and Medicaid waiver services to managed care.

And so increasingly states are doing that; new states all the time doing RFPs and other programs to transition those populations. So we will continue to focus on those states as well as other states that have the right demographic and rate profiles for us to grow the business.

So those states that are more interested in growing faster in managed care, I'm assuming, would be more attractive than other states. Could you talk a little bit about managed care? I'm assuming it's more -- in general has a higher profit percentage or is it more because of its -- there's more security in collecting the accounts receivable?

Well, uniquely I would say in Illinois it is better for us to be contracted with the managed care companies as we are getting paid more timely there. But, generally, I wouldn't necessarily draw to higher profitability overall. What it is is the opportunity to increase volumes.

There are states out there with very, very large networks of personal care providers. And we foresee in the future that managed-care companies will narrow those networks and narrow them to providers that have a broader and deeper geographic footprint in those markets, have the technological and other capabilities to really serve as a partner to them to help avoid other costs of physical health through the use of our very low-cost services in the home.

I believe you have -- well, at least you had -- 127 sites and you exited some. Are you -- at this point have you made a decision? Have you exited all, other than on an ongoing basis? Is that number at a good point right now?

This is Maxine. We ongoing evaluate our various sites. We did exit three during Q4 and we will continue to evaluate it.

As Darby had just touched on, we look at things like payment rates, we look at the ability to gain market share. We look at what our cost basis is in those markets and that's an ongoing process. So we continually take a look at that and ensure that we are able to grow within those markets and that they make sense for us to continue to be in.

Finally, just with regard to sites, clearly acquisitions is a key part of growth, but if I look on a longer-term basis in terms of your site growth, would the majority of those be coming from acquisitions or do you expect more openings as we look out for the next few years?

Honestly, I would say that you could probably look to more of our location additions coming as a result of acquisition. It is difficult to de novo in this business. Used to be not the case, so my answer 10 years ago might've been different, but I think you can look to acquisitions as the major growth of our location.

Thank you very much.

(Operator Instructions) Brian Rath, Walthausen & Co.

Thanks for taking the question. Just on the AR reserve increase that was mentioned in the press release, just curious if you can quantify what that delta was and also just the genesis for that increase. Because my understanding was, at least on the Medicaid payments, that that was a federal mandate to have that paid by states. It's a matter of when, not if, you get paid. So I'm just curious what's driving that higher AR reserve.

I'll take that; this is Don Klink. The AR is really a function of -- it's really two things for us: it's the collection rates and the aging.

What we have seen is, particularly in Illinois, is the slowing of the payments so that it has aged out more and it increases our AR allowance. We've also had a couple other states that have changed their system a bit, which slowed their AR as well. We expect that to return back to normal, but that again is -- because the AR has aged a bit, the allowance gets increased.

Okay. Then can you talk about just the balance sheet. You mentioned you have the increased facility and used part of the term loan facility for South Shore. But just thinking about some of these AR issues, which may be short-term in nature, but considering also a desire to pursue M&A, what's your comfort level or your flexibility to execute on maybe deals of the size of South Shore or larger, if they are available, just over the next 12 months? What's your comfort level and your ability to do that?

Let me take this; this is Dirk. Obviously, the first thing we have to do as a company is be prepared from a working capital standpoint to protect the Company should the state of Illinois continue to not pay the bill on the 40% of our business which is non-Medicaid. And so we, as a team, have been looking at that. We are developing plans that would allow us to deal with that. Again, as I said in my comments, something that hopefully we can share in greater detail in about 60 days.

But it is our goal and our desire to have the capital in place that allows us to not only make sure we have the proper working capital because of the payment issue, but also allows us to continue in an appropriate manner to acquire companies as they present themselves. One of the things we are doing now, just to make you feel comfort, is we are trying to put together a better process for acquiring and transitioning acquisitions in the future.

We are very proud of South Shore and it is one that due to the long time frames we had between announcing it and actually completing it, our teams have been able to work together. Even so, it's difficult in transition to get it done in a timely manner, largely because the Company in the past three or four years has not done a lot of acquisitions until the last couple years.

And so we are working as a management team to develop a refined process for acquiring due diligence and transitioning into the Company. Because of that, again, while we will be looking for additional acquisitions this year and hope they come about, it will probably be a few months before we are ready to do that.

Okay. Thanks, guys.

Toby Wann, Obsidian Research Group.

Thanks for taking the follow-up. Just one follow-up quickly on Illinois. Obviously the governor and the legislature far apart on getting a budget deal done. I think the fiscal year probably ends June 30.

So I guess my question is, with regards to that, since we've got, what, four months left before the fiscal year expires, should you -- do you guys anticipate having that big AR balance come down through one big huge payment or --? What's your thinking on that? I know I'm asking you to speculate on what the government is going to do, which is always a dangerous proposition, but I'm going to do it anyway.

Toby, what we would prefer occur is that the governor and the legislature get together and resolve their differences and develop a budget, at which time they could take care of the responsibilities they have from a payment standpoint for everybody that is servicing the state, including Addus. So that would be our desire.

Should that occur over the next four months, then obviously we would receive a large payment from the state as funds are available and that would make, obviously, our financial situation as it relates to our balance sheet better. The unfortunate thing is nobody can really know for sure when and if the governor and the legislature are going to get together and settle their differences. So from a management standpoint, we're having to develop plans that allow us to operate in the environment in which we currently operate.

Okay. Then remind me, I know the governor is a Democrat. Is the Legislature controlled by the Republicans and so is that the stalemate?

It's actually the opposite. The governor of Illinois elected is a Republican and the legislature is, by far, Democratic, so that's the challenge.

My apologies to the governor. I was confusing him with the mayor of Chicago. Thanks.

(Operator Instructions) I am not showing any further questions in queue at this time. I will turn the call back over to Mr. Allison for closing comments.

Thank you very much, operator. We really appreciate your interest today in our call. We look forward to updating you in about 60 days on our progress.

Thanks very much. Have a great day.

Thank you. Ladies and gentlemen, you may now disconnect. Good day.