Apria, Inc. (APR) 2021 Q1 法說會逐字稿

Good afternoon, and welcome to Apria's First Quarter 2021 Earnings Conference Call and Webcast. (Operator Instructions) Please note that this event is being recorded.

Leading today's call are Dan Starck, Chief Executive Officer; and Debby Morris, Chief Financial Officer.

Before we begin, we would like to remind you that certain statements made during this call will be forward-looking statements as defined by the Private Securities Litigation Reform Act. These forward-looking statements are subject to various risks and uncertainties and reflect our current expectations based on our beliefs, assumptions and information currently available to us. Although we believe these expectations are reasonable, we undertake no obligation to revise any statements to reflect changes that occur after this call. Descriptions of some of the factors that could cause actual results to differ materially from these forward-looking statements can be found in the Risk Factors section of the company's annual report on Form 10-K for the year ended December 31, 2020, and its other filings with the Securities and Exchange Commission. Additional information will also be set forth in Apria's quarterly report on Form 10-Q for the period ended March 31, 2021, which is expected to be filed later today.

In addition, please note that the company will be discussing certain non-GAAP financial measures that they believe are important in evaluating performance. Details on the relationship between these non-GAAP measures and the most comparable GAAP measures and reconciliation of historical non-GAAP financial measures can be found in the press release that is posted on the company's website.

With that, I'd like to turn the call over to Apria's CEO, Dan Starck. Please go ahead.

Thank you, operator. Welcome, and thank you all for joining us this afternoon to discuss our first quarter 2021 earnings results. I'm joined today by Debby Morris, our Chief Financial Officer. I'll begin my remarks with some high-level comments on our results from the quarter and context around our activities, and Debby will provide a more detailed review of the financials later on the call.

We built on our momentum coming out of 2020, delivering a strong quarter, ahead of our expectations on all 3 of our key metrics. Our first quarter revenue grew to $275.3 million, a 2% increase over Q1 2020. Adjusted EBITDA grew to $48.3 million, a 15% increase over Q1 2020. And adjusted EBITDA less patient equipment CapEx grew to $24.7 million, a 41% increase over Q1 2020. We have built a very solid foundation on which to grow this company and manage through these unprecedented times. I believe this promising start to the year is reflective of that position.

I'll spend the bulk of my time today sharing some updates on our continued pursuit of the priorities that I outlined in our first call as a public company; execution, leveraging technology to drive operating efficiencies, and growth, both organic and through M&A.

Starting with our priorities for the year, I'll begin with execution. As we all remember, the country faced a massive surge of COVID cases from the holiday season through mid-February. As a result of the surge, in January, our new patient starts per day on oxygen were the highest single month total on record. And while the virus prevalence began to dissipate to some extent in the back half of February, we again had historically high new patient starts on oxygen. In meeting the incredible challenge posed by those increased levels, the entire Apria team pulled together to work night and day to meet the needs of our referral customers and our new respiratory patients across the U.S.

Throughout this pandemic, Apria and the industry have served as the pressure relief valve for hospitals by getting people home to free up beds for the most severe cases, and we continue to serve in that critical role during Q1. Further, during the quarter, we leveraged our national infrastructure to move assets and people around the country according to need. We have now lapped Project Simplify, and we continue to realize the benefits as evidenced in our Q1 2021 results.

Despite the dampening effect of the spike early in the year on our non-oxygen products, we are encouraged by the new patient volume trends that we saw towards the very end of the first quarter. We saw increases in our non-oxygen business lines that had been impacted previously, and we exited March 2021 with incoming volumes nearly back at pre-pandemic levels. We believe this bodes well as the virus continues to subside, vaccine prevalence increases, and a more normal patient flow returns to the healthcare system. With new patient volumes increasing, it's important to clarify that it will still take some time for our revenues to increase accordingly as the compounding effect of new patients on service builds and our patient census grows. Even so, we are cautiously optimistic, but remain conservative in our expectations as we've learned to anticipate uncertainties related to the ongoing pandemic.

Finally, in terms of ensuring continued seamless execution, we are starting to address what our organization will look like in a post-COVID world. As a reminder, the vast majority of our patient-facing staff and operations have been and continue to be working on-site in our branches across the country. The remainder of those frontline employees who had been able to transition to remote work over the last year will largely return in time. We have embraced and will continue to embrace the flexibility of work from home and telecommuting. Our ultimate goal is to use this flexibility to our advantage and to leverage our well-equipped technology infrastructure and security layers to facilitate this hybrid work structure.

This aligns with another of our stated goals for the year, continually leverage our technology to drive operating efficiencies. The pandemic challenged all of us to rapidly change the ways in which things get done as well as opening new opportunities to leverage technology in order to improve processes, provide greater access for patients and drive efficiency. One area that has benefited greatly is telehealth, which we believe will have a long-lasting effect and will become a normal means of access for patients to interact with their healthcare providers.

During the public health emergency, the relaxation of the telehealth guidelines made nearly any means of telehealth possible. When the PHE expires, we expect that the requirements for HIPAA-compliant telehealth access will be reinstated. We are ready for the post PHE environment from a technology perspective and expect that we will leverage telehealth far into the future in order to increase patient access to Apria as well as increased efficiencies for our team members.

Finally, we remain committed to growth. On the organic front, as I mentioned earlier, we're seeing promising trends of incoming patient volume, though it does take time for those volumes to translate to replenish census numbers and ultimately revenue growth. We are clearly not past the challenges presented by COVID just yet, but I'm confident, with the investments that we made in our sales efforts and service capabilities, we have positioned ourselves well to increase our rate of growth as new patient volumes return.

And in terms of M&A, we continue to have a robust active pipeline. Our M&A team has no shortage of opportunities to review and work on. While taking a measured and judicious approach, we do expect to pursue strategic opportunities throughout the course of the year.

Prior to turning the call over to Debby, I'd also like to share a quick update with respect to the current regulatory environment. Since our last call, we've received more clarity around a few aspects of the interim regulatory environment modifications that exist today due to the COVID-19 pandemic. First, as of April 15, the public health emergency has been extended through July of this year. The PHE provides an interim price increase for Medicare patients in the non-bid, non-rural areas of the country and keeps intact the 50-50 blended rate in the rural areas of the country. While the PHE extension was largely expected, the extension still needs to go through the mandatory process and this is done in 90-day increments. Therefore, we expect to provide an update on the PHE on a quarterly basis.

Secondarily, the suspension of sequestration was officially extended through year-end. And lastly, as a reminder, as of April 1, CMS has permanently removed the budget neutrality rate adjustment for oxygen equipment that has resulted in a reimbursement rate increase for some oxygen systems. These are tailwinds for Apria and the entire industry. And the combination of these actions will help reduce some of the uncertainty in our industry as the country begins to normalize.

To sum things up, we reported solid first quarter results and continue to build on momentum from last year. We're executing at a high level and driving operational improvements. The regulatory environment is stable, and we're seeing some benefits for the remainder of the year. Importantly, we're seeing encouraging patient volume trends, while our M&A pipeline remains robust. I'd like to thank the entire Apria team for their dedication and hard work helping to drive these results. They are the heartbeat of Apria, and they are the individuals that deliver our mission every day, improving the quality of life for our patients at home.

I'll now turn the call over to Debby to review our financial performance in more detail and provide our outlook for 2021.

Thank you, Dan, and thank you to everyone who joined the call today. To echo Dan, we delivered a solid start to the year. Net revenue, adjusted EBITDA, and adjusted EBITDA less patient equipment CapEx for the quarter were all up year-over-year. Net revenue of $275.3 million, increased 2% year-over-year, largely due to growth in oxygen and sleep supply, offset in part by the negative impact of COVID on some of our other therapies. Net revenue came in above the high end of the range as we saw a stronger than projected quarter end, including the return of new sleep equipment patients as well as some rebuild of noninvasive ventilation census. The rebuild in noninvasive ventilation census stemmed from new patients coming on service as well as the stabilization of the patients on service as we work through beginning of the year, processing of patients who changed insurance coverage. As you may have already seen, we've included a product level revenue table in our earnings release to provide further clarity into the breakdown of the revenue contribution in the quarter and how that compares on a year-over-year basis.

During the quarter, gross margin contracted slightly year-over-year to 68.4%, primarily as a result of the increase in sleep supplies, coupled with higher depreciation costs associated with the increase in oxygen therapy, and lastly, an increase in reserves for non-recoverable patient equipment.

Adjusted EBITDA in the quarter of $48.3 million, increased 15% from $42.1 million in the first quarter of last year and adjusted EBITDA less patient equipment CapEx of $24.7 million, increased 41% from $17.6 million. Both metrics were at the high end of their respective ranges. The combination of top line growth, namely in oxygen and sleep supply, Project Simplify, and continual variable cost management while the patient census rebuilds, drove the year-over-year improved performance.

Moving on to the balance sheet. As of March 31, we had $171 million in cash and total debt of $396 million. This correlates to a trailing 12-month leverage ratio on an adjusted EBITDA less patient equipment CapEx of approximately 1.6x.

Let's turn to the outlook for 2021. As Dan mentioned, as of April 15, the public health emergency has been extended through July of this year and the suspension of sequestration was officially extended through year-end. We also have the benefit of budget neutrality, which we talked about last quarter. While we had assumed the public health emergency would be extended through the second quarter, the benefit of the deferral of sequestration and budget neutrality are now reflected in our second quarter guidance. For the second quarter of '21, we expect net revenues of $277 million to $282 million, adjusted EBITDA of $51 million to $55 million, and adjusted EBITDA less patient equipment CapEx of $28 million to $32 million. For full year '21, we are increasing our guidance to account for the first quarter performance as well as the impact of the suspension of sequestration through the end of the year.

While we outperformed our first quarter guidance, we continue to see some volatility associated with COVID-19. The COVID surge, which continued into the first quarter and while undoubtedly very positive for oxygen and the business overall, further delayed the rebuild of the census for our other therapies. As such, we expect the favorability in Q1 to be partially offset by lower-than-expected census heading into the second quarter. In other words, while oxygen returns to a more normalized level, there may be a lag or an air pocket while sleep, noninvasive ventilation, negative pressure wound therapy and other equipment census and revenue rebuild.

We continue to see strong cash collections, benefits from the public health emergency in terms of Medicare reimbursement rates and relaxed documentation requirements, and we continue to manage our cost structure effectively. We expect labor and some operating costs to increase as we rebuild patient census as volumes return. Although we have not seen a material impact of those yet, we are also carefully monitoring labor and materials costs.

In summary, we are increasing our 2021 guidance for favorability in the first quarter as well as the benefit of the suspension of sequestration, partially offset by slower census and revenue rebuild as well as some increased costs. As a reminder, we incorporated budget neutrality into our guidance last quarter, and our guidance does not include future M&A. For full year 2021, we are increasing our guidance to the following: Net revenue of $1.12 billion to $1.14 billion from $1.11 billion to $1.14 billion, adjusted EBITDA of $207 million to $216 million, up from $203 million to $212 million, adjusted EBITDA less patient equipment CapEx of $113 million to $120 million, up from $108 million to $115 million. We believe maintaining a conservative outlook on '21 until the future of COVID unfolds further continues to be prudent. I'm pleased with Apria's start to the year and maintain confidence that as an organization, we are well positioned to manage and communicate effectively through whatever occurs.

To close out our prepared remarks today, I too want to thank the entire Apria team for helping achieve our mission of improving the quality of life for our patients at home.

Operator, we will now open the call to questions.

(Operator Instructions) Our first question comes Kevin Fischbeck with Bank of America.

This is actually Joanna Gajuk filling in for Kevin today. So first, just to make sure I get it right in terms of the guidance rate. So you mentioned you're only weighted for Q1 outperformance versus your guidance, right? So that's about almost $2 million at the midpoint and then the sequestration release. So last time you talked about $3 million to $4 million for the sequestration relief right through the end of the year. So is it still the number you're thinking about for that benefit?

Yes, Joanna. That's correct.

So that would bring us to more like, I guess, $5.5 million of guidance raise? And then would I get it correctly that you're not including anything incremental for the extension of the PAG.

So both -- to answer both your questions. In regard to the PAG that we already had assumed that would be effective through July of this year. So that did not change our guidance point. As far as the -- your math, it's correct. So the other component that's just the $1 million, relatively small number is, as I said, the offset to those 2 effects as we see the impact of COVID and the delay in the census build, we expect some volatility still and some delay in that revenue and earnings build. So that's why it's just slightly offset from the increase over Q1.

And then you mentioned also something about increased cost, so wasn't quite sure what you're referring to?

Well, what I had said is we are anticipating, as volume grows, that we'll have an increase in cost, that we have anticipated. We're also keeping our eye on as the macroeconomic we're hearing about materials costs and such. And we have not seen a significant increase in either labor costs or materials costs, but obviously, just keeping an eye on that.

So you're pretty much just including some conservatism in the number for those reasons?

Yes.

And my other question was the wound therapy business, the revenue, so it's very good. I guess it's very helpful that you provided the segment revenues in the press release. So the wound therapy revenue rate declined slightly year-over-year. So you're pretty much saying that things kind of are slower to rebuild. Is that the way to think about that?

Yes. In Q1, we still saw, because of the surge of COVID, there's still an impact on negative pressure wound therapy with the increase. We do expect, when you look at full year guidance that we will see some increase as patients return to surgical procedures and such.

And also on the segments, right, I know that you're deemphasizing the other business, the other equipment revenues or business. And those revenues were down still a lot, 9% year-over-year, right, and actually came in below how we were expecting it. So is this a similar dynamic? Or are you kind of exiting more parts of that business?

No. We're not exiting anything else in other equipment and services, but we have seen a further deterioration of the census because there is a large part of rental census in the other equipment. So that too has been impacted by the COVID surge. So while we had products that were up, mainly oxygen and sleep resupply, other equipment and services also has been negatively impacted, including the census. So we expect to see that start to rebuild again as some of the volatility diminishes. And we have not -- we're not exiting any other services in there.

And I guess that's what you were talking about before and just to close that loop. So as you expect these businesses that were impacted negatively kind of returning to normal over time. And since it's rebuilding then, I guess, the expectation is that the oxygen business is going to kind of normalize, meaning the decline from the peak numbers that you've seen so far, right?

We'll see some slower growth rate in home respiratory therapy as oxygen slows and noninvasive event picks up. We'll see increase in the OSA treatment, increase in negative pressure wound therapy, and increase in other, albeit not likely this year as high as the other products.

But on that front, I guess, would you say that there's -- on the respiratory demand, is there any indication that you actually -- these patients actually might stay longer with you, they were kind of turning to chronic patients? Or are they pretty much kind of stop using it at some point, and that's why you expect normalization?

Well, we have some increase with acute patients, acute COVID patients, and those are the patients that we expect to ultimately come off service. And there are still COVID patients. We still do have some of the volatility across the nation. So we do expect the acute patients to come down. We do -- we have seen some rise, expect, we may continue in COPD patients just with the higher awareness of the disease and the importance of respiratory health.

Our next question comes from Ralph Giacobbe with Citi.

I hate, if you guys can -- but hoping you could talk more about the rebuild and the air pocket. I'm not sure I'm exactly following. And I guess part of it was Dan's commentary of sort of encouraging patient volume trends. So obviously there's a lot of effect and maybe it's sort of a specific segment that I'm not getting, but just help us sort of tie those 2 together.

Yes. Sure, Ralph. This is Dan, and I'll let Debby pick up after I finish. But one of the things we're uncertain about is the duration on length of stay for the COVID patients. And we had a significant amount of COVID patients that came on service and they have a much -- we're expecting to have a much shorter length of stay than our normal COPD population. So -- and then we're offset by the delay in kind of growth of replenishing the census on the other therapies. So what we saw coming out of March was basically back to pre-pandemic on a new patient start basis for the other therapies, but the census had essentially had a setback because of basically 10 months of lower starts and new patient starts. So we're not quite sure how the transition of the COVID patients off of oxygen, if that will outpace essentially the growth in the census and the other products in order to make sure that the revenue continues to accelerate. Does that make sense at all? What I'm trying to paint there.

That's helpful. And then I did want to ask also about the OSA business because that actually did a lot better than we had and especially when considering the still heightened COVID period. Anything there to call out in terms of being able to tell if some of that was deferring, coming back, or anything on what drove that stream?

Yes. I think -- so 2 things. One, all of last year, really, we saw an increased demand from a sleep supply, resupply business, and that performed very well in the first quarter. And then really through kind of March and towards the very end of March, really, we've seen the return of pretty significant volumes from a new patient start standpoint and essentially exited March specific to new patient starts on CPAP right at where we were in Q1 of 2020. So that was a pleasant surprise with how quickly it kind of snapped back after the virus prevalence started declining in late February -- mid to late February. That came back pretty quickly.

And then last one for me. Debby, I think I heard you say some increase in reserves. I wasn't following exactly what that related to. If you could just give us some details there.

Yes, Ralph, that related to gross margin comment, the slight contraction in Q1. So we had increase in reserve for lost equipment. I would say it's partially attributable to some of the craziness, for lack of a better word, but with all the volatility last year, an increase in certain equipment and then difficulty in certain cases, getting into patients' homes as we looked at reserves, we increased those reserves for lost equipment. And it's not something that I would expect to repeat, but there was some impact of, call it, 40, 50 basis points in Q1.

Sorry, 40 to 50 basis points to the gross margin?

Gross margin, yes.

And that's not going to repeat, so that's sort of a, let's call it, a one-timer?

Correct.

Yes. Ralph, maybe to add just a little color. In our -- in the normal course of business, when there's not a pandemic, we have a great opportunity when we instruct patients about how to contact us, where to find us, when to contact us, when they need it picked up. And through the COVID period, there was -- we don't always have patient contact upfront as direct as we normally do. So we took just a conservative view there that Debby alluded to for the course of the past year from an equipment reserve standpoint.

Our next question comes from Chris Neamonitis with Piper Sandler.

Congrats on a strong quarter. I just want to touch on some of the margin improvement on the quarter. I just wanted to square in on really what's been driving that. Has it been primarily like a product mix thing? Are you guys getting outsized benefits from Simplify or your continued focus on RPA or maybe it's a little bit of COVID benefit related. So just maybe any color around that and the expectations for the year would be great. It looks like the midpoint of your updated guidance implies about a 20 basis points lift for the year versus prior?

Yes, Chris, I think some of that is -- you've hit on some of them, right? The continuing, and Dan hit on in his opening remarks, the continuing benefit of Simplify, which continues to be difficult to precisely carve out. But we see continued favorability in our costs. In addition to that, we continue to benefit from, whether you call it Simplify or other, being able to manage our variable costs. So while volume returns or has it returned in certain cases, we can continue to manage to keep costs down. And so to the extent they're not coming up in advance of the revenue build. And if you look at, yes, go ahead.

No, go ahead, you can finish your thought.

I think that those are like the 2 primary areas that I would point out.

And then just on the sleep new start, are you still getting the benefit of at-home testing? I'm kind of thinking like would it be fair to attribute the stronger new starts as kind of getting a lift from maybe more at-home testing and in combination with some of the traditional sleep labs that are likely opening back up?

Yes. I think that's a really good observation. Yes, basically, home sleep testing kept the industry afloat for a period of time last year. And then with the labs beginning to reopen and trying to get back capacity, get back to 100% capacity as well as the addition of home sleep test, there is an opportunity to open the top of the funnel, if you will, around the diagnosis of new sleep patients.

And then last one for me. Just kind of another interesting call out on telehealth in your prepared remarks. But can you just remind us again what the biggest benefit has been and really what processes it's really been replacing or maybe enhancing in your operations?

Yes. From our perspective, what it really does is drive efficiencies and the ability for our teams to be able to talk and actually see a patient and/or what's happening in order to avoid going to the home. And that really, historically, in this industry, everything was done that, you get a call, you go to the home. COVID drove and forced not going to the home, so we could learn to use telehealth and we use it for instruction. We use it for diagnosing of patient equipment problems, which makes them going to the home physically really the last resort, if it can be solved that way. So it's driven just a tremendous amount of efficiency within our organization. And really the -- what it really does, also not just (inaudible), but it really opens access because an individual that whether respiratory therapist, someone diagnosing an issue, they can look, touch, and feel many more things going on every day than if they're moving around the city to try to do so. So we think telehealth is beneficial. The patients -- most of the patients enjoy it, and they don't all enjoy it, but some still want the personal interaction, but it's been a very high uptake on it, and we certainly think it will be, again, a normal means of access in the future.

Our next question comes from Jamie Perse with Goldman Sachs.

I wanted to just -- as we get towards the end of COVID potentially here, just go back to the impacts you actually experienced from COVID, both positive and negative. I know you've spoken to these qualitatively a lot on this call. But wondering if you can put some numbers to them. I know there're some positives in oxygen and sleep supplies. To the extent you can quantify that, that would be great and the negatives on NIV and new sleep patients, just so we can get a sense of how you're thinking about where you might have been ex-COVID and where we should think about being this trending as we get on the other side of this?

Sure, Jamie. As we've consistently said, it's difficult to precisely measure. But we do -- we've worked very hard on trying to measure. So I would say kind of summing up what do I think the impact was for Q1. From a revenue perspective, it's essentially no impact, strangely enough, because the rate increases in PAG are offset by the reduction in volume from some of the other therapies. So if I really look at revenue, it neutralizes between those 2. When we get down to adjusted EBITDA, there is some flow-through because their price flows through at a certain full rate versus the reduction in volume, we get not the full drag on volume, hits the bottom line because we're managing cost. So I'd say, it's between $1 million to $2 million for Q1, that's an estimate, but it's really an estimate. But that's roughly from an adjusted EBITDA and adjusted EBITDA less CapEx perspective, it's in that range.

And then on respiratory, you talked about some of the benefit from COVID patients and those might having a lower period of time that they're on your census for. Can you give us a sense, what percent of your census is tied up with these more recent COVID patients? And how you're thinking about that potentially rolling off?

It's relatively -- it's very small. Our patient census is pretty significant. So the volume of COVID patients in the overall census is not a material percentage.

But it would still potentially be a noticeable headwind to the extent that rolls off or it wouldn't be material?

Yes, some has built up and now those patients will come off census. So yes, we will see a reduction over time because there's a cumulative effect, reduction of those patients while noninvasive event increases. I don't know off hand of the COVID patients, but I think it's less than 5%. I can follow up with you on that.

And then, Dan, maybe one for you, just the high level. I wanted to ask about your capitated business and relationship with Kaiser. I know that's the big part of the business, and it's a longstanding relationship. I just wanted to get an update from you on what the latest agreement looks like? What's driving growth? And then Debby, if you can chime in with any commentary on how the margin profile of that business compares to the fee-for-service business.

Yes. So I think just from a broad relationship standpoint, we are -- continue to be in a negotiation position with Kaiser. All signs are that things are moving towards a very mutually beneficial agreement moving forward, and we hope to update everybody on one of these calls that it's done. But I'd say we're making substantial progress and I think a good outcome will be in the near future here. So very pleased with having been Kaiser's partner for 20-plus years, and we expect that to go on for a few more years, so through the renegotiation. From -- interestingly enough, just maybe a little color, Jamie, around COVID and Kaiser. The 2 companies made extreme modifications to the way that we interacted. Even though 20-plus years, we've had very close relationship of working together. Kaiser and Apria really did just an outstanding job, and I give all the credit to our folks in the field of thinking of ways to make sure that they helped Kaiser specifically in the overwhelming volume that they were seeing really in the Los Angeles area, the Orange County area, and the San Francisco Bay Area during January and February, just a phenomenal job between the 2 organizations.

And Jamie, from a margin -- I was going to comment to your margin question. Margin from a payer perspective or otherwise, I would just say, it's a very important relationship for us. It is a different profile because there's certain administrative burden, right, because it's paid on a per member per month amount. So there's not some of the authorization and such requirements and a number of different aspects. But other than that, I can't comment further.

And Dan, I just wanted to follow up on some of your comments. I mean, that sounded pretty promising that you gave on the agreement with Kaiser. How should we think about the range of outcomes? I mean, could that relationship be expanded? Are you thinking about additional partners for capitated business, the way healthcare is going these days? Just any additional thoughts on how that could impact the business once you reach an agreement?

Well, I don't -- I think the successor agreement will be very similar in nature to where we are today around products and services initially. We would love to explore, and it's really up to us and Kaiser to think about that for the future. But I think the job at hand right now is to make sure that we gain the successor agreement with the current situation. And we'd love to expand and have expanded over the years with them. So I think it's getting the -- like I said, getting the successor agreement done, mutually beneficial for both and then look at potential other opportunities.

That concludes today's question-and-answer session. I'd like to turn the call back to Dan Starck for closing remarks.

Great. Well, I appreciate that. And thank you, everyone, again, for joining us this afternoon. We appreciate both your time and your interest in Apria, and we certainly are proud of the first quarter. We're absolutely proud of our team and what they've delivered, and we certainly look forward to speaking with everybody in the future. So thank you, everybody. Take care.

This concludes today's conference call. Thank you for participating. You may now disconnect.