Brinks Co (BCO) 2022 Q3 法說會逐字稿

Welcome to the Brink's Company's Third Quarter 2022 Earnings Conference Call. Brink's issued a press release on third quarter results this morning. The company also filed an 8-K that includes the release and the slides that will be used in today's call. For those of you listening by phone, the release and slides are available in the Investor Relations section of the company's website, brinks.com. At this time, our paricipants are in listen only mode. In question and answer session, we'll follow the formal presentation. As a reminder, this conference is being recorded. Now for the company's safe harbor statement.

This call and the Q&A session will contain forward-looking statements, actual results could differ materially from projected or estimated results. Information regarding factors that could cause such differences is available in today's press release and in the company's most recent SEC filings. Information presented and discussed in this call is representative as of today only. Brink's assumes no obligation to update any forward-looking statements. The call is copyrighted and may not be used without written permission from Brink's. It is now my pleasure to introduce your host, Ed Cunningham, Vice President of Investor Relations. Mr. Cunningham, you may begin.

Thanks, Andrea, and good morning, everyone. Joining me today are CEO, Mark Eubanks; and CFO, Kurt McMaken. Also joining the call is Ron Domanico, former CFO and current President of Brink's Capital and Sustainability. This morning, we reported third quarter results on both a GAAP and non-GAAP basis. The non-GAAP results exclude a number of items, including the impact of Argentina's highly inflationary accounting, reorganization and restructuring costs, items related to acquisitions and dispositions, costs related to frozen retirement plans, charges related to an antitrust matter in Chile, valuation allowance on tax credits is in certain allowance estimates. We're also providing our results on a constant currency basis, which eliminates changes in foreign currency exchange rates from the prior year. We believe the non-GAAP results make it easier for investors to assess operating performance between periods. Accordingly, our comments today will focus primarily on the non-GAAP results. Reconciliations are provided in the press release and the appendix to the slides we're using today and in this morning's 8-K filing, all of which can be found on our website. I'll now turn the call over to Mark.

Thanks, Ed. Good morning everyone, and thanks for joining the call today. This morning, we reported strong third quarter results, including double-digit organic growth in revenue, operating profit, adjusted EBITDA and EPS. We achieved these results in a macro environment that continues to be challenging, demonstrating the resiliency of our business. We remain on track to achieve the midpoint of our full year guidance for adjusted EBITDA and earnings per share of approximately $775 million and $5.75, respectively. Full year revenue and operating profit are now expected to be at the low end of the prior range due primarily to the impact of foreign exchange translation. Our guidance includes full year organic revenue of about 12% and strong double-digit growth in operating profit, EBITDA and EPS, reflecting approximately 100 basis points of margin expansion driven by our organic growth, lean cost initiatives and leverage from a lower fixed cost base. Through the first 9 months of 2022, we achieved 8% revenue growth, 15% operating profit growth, a 14% increase in adjusted EBITDA and EPS growth of 23%.

We delivered these results despite a slower-than-expected start to the year due to the Omicron related shutdowns around the world, a war in Europe and an aggressive global monetary tightening trend, all of which have led to extreme movements in FX as the U.S. dollar continues to strengthen. We expect the operational momentum in both organic growth and profit expansion to continue through the fourth quarter, which has historically been our strongest quarter. It's important to note that our 2022 guidance does not include any contribution from our recent acquisition of Note machine, which we expect to be accretive to our results starting in the fourth quarter of this year of approximately $0.04 per share. In addition to the positive impact of the Note machine acquisition, we will continue to be very proactive in taking steps to optimize our operating model, not only to drive organic profit growth, but also to mitigate the potential impact of a sustained economic slowdown in 2023.

To that end, we are announcing a global restructuring plan that's expected to yield $40 million of savings in 2023 as a result of sustainable fixed cost reductions across the business. We continue to pursue additional opportunities to reduce costs, streamline our operations and optimize our business model. We expect a strong finish in 2022 to lead to an even stronger performance in 2023. Our recent share purchases reflect our confidence that we will continue to deliver strong growth in revenue, profits and free cash flow. We look forward to providing our guidance in 2023 when we report our fourth quarter results in February of next year. I'd like to take this time to thank our more than 70,000 associates around the world who have been the driving force for the acceleration of our strategy by relentlessly serving our customers and executing our business improvement imperatives related to safety, quality, cost efficiency all across our global footprint.

Next slide. This slide provides a brief update on the progress we're making with our tech-enabled solutions, which we formally referred to as Strategy 2.0. The solutions are the basis for our 2 technology service platforms, Digital Retail Solutions or DRS, and ATM managed services referred to as AMS. Our digital retail solutions, which include Brink's Complete and other similar global service offerings such as CompuSafe, grew organically by more than 20% during the first 9 months of the year. We continue to evolve our service offerings to satisfy specific local marketing customer needs, and we're seeing growing customer acceptance across all regions. Our digital retail solutions aim to make cash as easy to use as debit cards, credit cards and other digital payments and allow our retailers to create full value stream visibility for all payment methods, especially cash. These higher-margin solutions enable us to offer enhanced services to our current customers as well as what we believe is a very large addressable market of unvended and underserved retailers around the world who currently do not have a cash management solution.

Our ATM management services offering provides a flexible turnkey solution that enables financial institutions and retailers to outsource their entire ATM estate to Brink's, thereby maximizing their ATM network performance and freeing up more resources for their core business. Year-to-date, our AMS business has grown organically by more than 50% over last year. We've been actively growing our AMS business both organically and inorganically across all geographic segments. The biggest driver of our year-to-date organic growth is a successful execution of our agreement to provide end-to-end ATM services for BPCE, the second largest bank group in France. Our recent acquisition of Note Machine has further added to our AMS footprint, and we're well positioned to leverage note machines expertise and infrastructure to accelerate AMS growth in Europe and around the world. Our confidence in our AMS growth strategy is further supported by a strong pipeline of additional organic ATM outsourcing opportunities in all 4 of our geographic segments.

On to Slide 5. Here, we provide 2 examples of how we're better serving customers through tech-enabled solutions of DRS and AMS. On the top of the slide, we're highlighting the success of our BPCE relationship. This is the largest Tier 1 financial institution outsourcing award that we're aware of, and our team in France has really stepped up to implement this groundbreaking partnership. BPCE is outsourcing their entire network of more than 10,000 ATMs to Brink's, and we expect the deployment to be fully complete by the end of this year. We expect to generate annual revenue of about EUR 50 million over the course of this 10-year contract. This is not only an opportunity to provide a valuable service to a major customer. It's also an opportunity to leverage our infrastructure and internal expertise to become the global partner of choice for future ATM outsourcing customers. Another customer deployment that's underway involves a major multinational retailer who has selected one of our DRS solutions as their POS integration solution.

We developed a proprietary self-checkout device that uses our software to integrate with the retailer's existing POS system, allowing consumers to seamlessly use any payment method, cash, coin or card. Our device also has recycling functions that not only improves productivity, but also provides additional features to enhance customer service and the retailer's visibility to their cash ecosystem. We expect to deploy the initial 400 units in 2023, and this comes with a 5-year recurring revenue contract. The next slide here is our most recent acquisition. While we have strong focus on organic growth, we're also looking for ways to accelerate and build capability through acquisitions. Earlier this month, on October 3, we acquired NoteMachine, one of the leading ATM networks in the United Kingdom for approximately $179 million or 5x the adjusted EBITDA. No Machine brings a strong team of ATM managed services experts and a global technology infrastructure that will allow us to more effectively capitalize on the ATM outsourcing trends in Europe and around the world.

For the fiscal year ended June 30, 2022, no machine generated revenue of approximately $131 million and adjusted EBITDA of approximately $36 million. This acquisition is expected to add approximately $5 million of operating profit and $0.04 per share to the fourth quarter earnings of this year. The NoteMachine acquisition builds on our organic growth initiatives and is an important step in the execution of our long-term strategy to grow our ATM Managed Services business. This next slide highlights our global restructuring efforts. As I mentioned earlier, we're taking actions across our global footprint to enable growth and mitigate the potential impact of a recession. Our main focus is on realigning and reducing our headcount, streamline our infrastructure and operating footprint and shifting our business mix to more profitable offerings such as ATM managed services and digital retail solutions, all are in accordance with our long-term growth strategy. We expect our onetime restructuring costs to be approximately $30 million, about $18 million of which was recognized in the third quarter.

When completed, the current restructuring actions are expected to drive annualized savings of approximately $40 million, all of which are expected to flow through our results in 2023. The next slide. I want to remind everyone about our history of steady performance in organic revenue growth across economic cycles. This graph shows our annual organic revenue growth over the last 16 years, starting with the great recession of 2008 and 2009 when many companies were down 10%, 20%, 30% or more. Brink's organic revenue growth was basically flat in 2009 or down less than 1%. We recovered quickly back to 4% in 2010 and then returned to 7% growth in 2011 and remain in the mid-single-digit range throughout the next decade. Then came another crisis, a global pandemic. Even during the height of the pandemic, when organic revenue initially contracted by 7%, we recovered the 5% growth in 2021, and we're up 12% so far in 2022. Looking back over the past 4 years, across a global pandemic, our average organic revenue growth has been about 5%.

It's important to note that even during recessions and other times of crisis, with some retailers are taking in less cash, our services are still needed to transport and protect cash that they're bringing in. For example, the customers' cash volumes are down 10% or 20%, they still need our services for the remaining 80% to 90% of their cash. And our AMS business is equally resilient since our networks serve as key distribution points of cash for daily commerce. In other words, Brink's is an essential provider of services throughout all business cycles. Now let's turn to the third quarter results, Slide 9. This slide summarizes the strong revenue growth and profit growth that we achieved in the third quarter. Revenue was up 6% and organic growth up 13%, driven by double-digit organic growth in North America, Latin America and our Rest of World segment. Organic growth in Europe was about 8%. Operating profit was up 9% with organic profit growth of 22% and acquisition-related growth of 1%, partially offset by a 14% negative impact from FX translation, primarily due to the Argentine peso and the euro. This profit growth was driven by strong year-over-year margin expansion, especially in North America and our Rest of World segment.

Adjusted EBITDA was up 11% and up 22% in constant currency with a margin of 16.6%, up 80 basis points over last year. Third quarter EPS was up 18% over the year ago quarter, which included a $0.03 per share gain from the sale of our position in MGI. Excluding this gain, EPS was up 21% for the quarter. I'll now turn the call over to Ron Domanico, who has been a driving force for Brink's success in the past 7 years. I want to thank him for his contributions to both Brink's and to me personally for his help in the last year since I've been here. Ron?

Thanks, Mark. As I'm approaching my planned retirement, it's been my honor and privilege to work with you and to onboard my successor. Kurt McMacken joined as Brink's CFO in August and has hit the ground running. As I've been transferring my institutional knowledge, our experienced team of professionals continue to provide exceptional support. While this is my final earnings call, I'll retain a significant investment in Brink's, knowing that the company is in great hands. Kurt?

Thanks, Ron. It's been great to work with you on this transition, and thank you for all you've done for Brink's. Good morning, everyone. Let's move to Slide 10, which provides more details on our Q3 revenue and operating profit versus the prior year. As Mark mentioned, revenue versus the prior year was up 14% on a constant currency basis, almost entirely from organic growth of 13%. Our organic growth benefited from price increases, further implementation of our AMS rollout in France and strong Brink's global services volumes. Foreign exchange translation was a headwind of 8% versus the prior year, driven primarily by the euro and Argentine peso. Our reported revenue was $1.1 billion, up $61 million or 6% versus the third quarter last year. Next, turning to operating profit, which in constant currency was up 23% versus last year. Organic growth was 22%. Acquisitions added another 1% and ForEx was a 14% headwind, resulting in reported operating profit of $127 million and an 11.2% operating margin, which was 40 basis points above last year and 30 basis points higher sequentially.

Our organic operating profit growth was primarily driven by revenue growth and was partially offset by an increase in security losses, including the previously discussed $10 million related to the jewelry robbery in Los Angeles and expenses related to variable compensation. I think it's interesting to note that this is our fourth consecutive quarter of double-digit constant currency growth in revenue and profit and the second consecutive quarter of double-digit organic growth in revenue and profit. Now let's turn to Slide 11. Starting with our operating profit and walking left to right, third quarter interest expense was $34 million, up $7 million versus the same period last year, primarily due to higher interest rates and to a lesser extent, higher levels of debt. Next, tax expense was $32 million, up only $1 million versus last year as higher income was mostly offset by a reduction in our effective tax rate. Our full year effective tax rate forecast was lowered by 40 basis points to 32.1%, which is 150 basis points lower than the full year 2021 rate. And doing the math, $127 million of operating profit less interest expense, taxes, and $3 million in noncontrolling interest and other, which includes higher interest income on held cash, generated $64 million of income from continuing operations, upto $7 million over last year.

That then leads us to third quarter adjusted EBITDA of $189 million, up $19 million or 11% versus last year, primarily due to the higher operating profit and noncash variable compensation. And as Mark mentioned, EBITDA as a percentage of revenue was 16.6%, up 80 basis points versus Q3 of last year. Finally, a note on our shares in EPS. As Mark noted earlier, we generated $1.34 of earnings per share, up 18% versus last year on a reported basis. Share repurchases reduced our weighted average diluted shares outstanding by about 2.8 million shares versus last year or about 5%. And accounted for about a $0.05 increase in EPS. Our lower effective tax rate provided about $0.03 versus last year. Next, we'll turn to free cash flow on Slide 12. Our 2022 full year free cash flow target has been adjusted from last quarter for several items that I will discuss in a few moments. But first, let me explain this chart. The solid gray bars on this chart reflect our prior target. While the shaded gray areas reflect the changes to that target. Variances at the bottom of the chart reflect the changes from last year and from our previous targets. Starting on the far left, adjusted EBITDA is expected to be approximately $775 million, around the midpoint of our prior guidance and about $92 million higher than the prior year. We now expect to use about $95 million of cash for restructuring and working capital, an increase of $25 million over our prior target of $70 million.

This change is primarily due to our new restructuring plan. As Mark reviewed, we see this as an attractive investment given the favorable economics associated with the plan. We've also included some risk for the change to Mexico invoicing regulations that we discussed last quarter and that has temporarily increased our accounts receivable. Our teams have been working diligently on this item, and we are seeing progress with our Mexican DSO improving month-over-month. However, it is taking longer than we originally anticipated. We see this as a timing matter at this point and expect to return to historical DSO levels in Q1 of next year. Cash taxes are estimated to be about $120 million, up $10 million from our prior guidance due to changes in earnings and tax regulations. Cash interest is expected to be around $125 million, also an increase of $10 million versus our prior target and $19 million higher than last year, primarily due to higher variable interest rates and higher debt levels.

You'll see on the next slide that we are still well below our debt covenant levels. Net cash CapEx is targeted at $180 million, which brings us to a free cash flow target of approximately $255 million and a conversion of about 33% of adjusted EBITDA. We see the $25 million change to our midpoint in the restructuring and working capital come as more onetime in nature or a matter of timing, which will be resolved next year. If you were to adjust our full year target by the $25 million, that would yield a 36% free cash flow to EBITDA ratio in line with last year. Note that we have returned $45 million to shareholders from our recent share repurchases, which we see as a positive for our shareholders and has been a contributor to our higher interest expense. Next, we will look at net debt and leverage on Slide 13. This slide illustrates our net debt and financial leverage at the end of 2021 and the first 9 months of 2022 as well as our estimate for the end of 2022. Our higher level of net debt is primarily due to funding our share repurchases, offset by $67 million in proceeds from our hedge monetization, which was disclosed in the last quarter.

As we look at leverage, dividing our estimated year-end 2022 net debt by the midpoint of our expected EBITDA range yields a net debt leverage ratio of 3.2x. Our leverage-based pro forma adjusted EBITDA, including a full year of note machine should be approximately 3x. Note that our credit facility has a covenant based on net secured leverage with a ratio maximum of 3.5x. We are well below this maximum level with our expected 2022 secured leverage ratio of 1.9x. With this result, we maintain room for disciplined M&A or other capital allocation opportunities. Next to Slide 14. To summarize, we've delivered another strong quarter and remain on track to deliver strong full year results. The full year guidance provided at the beginning of the year was based on FX rates at the end of last year, including the projected Argentine peso devaluation. Since then, we've seen significant strengthening of the U.S. dollar, especially against the euro. Based on current rates, we expect to see continued FX headwinds as we approach year-end. And as a result, we've updated our guidance to reflect the impact of FX translation in the second half of this year. Despite these significant FX headwinds, our EBITDA and EPS guidance remains at the midpoint of our guidance range.

However, we now expect revenue and operating profit to come in at the low end of the range, again, based on negative FX translation resulting from a strengthening U.S. dollar. Our 2022 organic revenue and profit growth targets are still intact, and we expect to be able to achieve strong growth and margin expansion despite FX headwinds of $265 million on revenue and $51 million on profit versus the prior year. For additional perspective, it's also important to remember that the 3-year targets we provided last December are driven primarily by organic growth and continued operational improvements in our core business, which accounts for approximately 90% of our 2024 target revenue and 85% of our operating profit target. Conversely, our new ATM managed services and digital retail solutions combined to account for about 10% of our 2024 target and 15% of our operating profit target. We're still on track to deliver our 2024 financial targets, which were disclosed on a constant currency basis last December. As I mentioned earlier, we intend to provide 2023 guidance when we release fourth quarter results next February. We expect our financial framework to remain intact with mid- to high single-digit organic revenue growth and 100 basis points of margin improvement annually.

Given our strong performance thus far in 2022, the resilience of our business in challenging environments, the ongoing reopening of global economies, along with our growth and productivity initiatives, I'm optimistic about our future performance. And with that, let's turn to questions.

We will now begin the question and answer session. To ask a question, you may press * then 1 on your telephone keypad, if you are using a speaker phone, please pick up your handset before pressing the key. To resore your question press * then 2. At this time, we will pause momentarily to assemble our roster. And our first question will come from Tobey Sommer of Truist Securities. Please go ahead.

Hey, good morning. This is Jasper Bibb on for Tobey. My first question was just on the revenue guidance. Beyond FX, what factors would you say came in above or below your expectations for the second half? And also, can you quantify how much revenue you expect the Notemachines to add in the fourth quarter.

Sure, Toby. Good morning. It's Mark.

Jasper,

Jasper. Yeah. Good morning. Relative to the guide, we really are only seeing sort of volume softness here really in FX. I think there are some pockets of strength in the business and back and forth. And I'd say the global services business in Asia continued to perform in the quarter, in particular as more and more metals and banknotes continue to move around the world. But nothing really fundamental for us underlying in the business of seeing that weakness. I think that you can see the organic growth in the single digits in Europe, which was not double like everywhere else. But all in all, fundamentally, I think our growth model organically is still intact. This is really just an FX issue that we see coming out of the quarter as rates moved from our last call or end of last quarter to -- into this quarter. And that's what we're projecting forward into Q4.

And then I was just hoping you could update us on your 24 margin targets with the context of what you're seeing in labor cost inflation and also, I guess, the restructuring initiatives you announced this morning.

Sure. I think our pricing and cost relative to inflation posture will remain the same, not only in the year, but across the strategic plan period into '24, we expect to continue to match those and drive productivity, but also put those through the market relative to pricing. The restructuring, we'll continue to do when we see fit, given the market outlook. But our framework is intact, as we mentioned earlier this morning, 100 basis points a year and mid- to high single-digit organic growth is still still our expectation, and we feel good about it. I think there's from a restructuring perspective, part of it could be market-specific restructuring down the road, depending on what happens in local economies. But I think it's more about realigning our cost structure as we begin to shift our business mix to higher-margin services, whether that's in our digital retail solutions or ATM managed services, those are the areas we want to invest more in and free up cost in the rest of our business, particularly as we're driving a more efficient business model that allows us to do that with our core infrastructure.

Jasper is Curt McMackin. I think you asked about note machine revenues in the fourth quarter -- in your original question, I think maybe the way to think about that is if you take the note machine revenue that we disclosed of $131 million and divide it by 4 it will give you directionally where you need to be for the fourth quarter.

Okay. Got it. And then following up on AMS, up 50% organically this year is pretty impressive. Can you maybe contrast for us why you think your business is doing so well there while it seems like some of the ATM hardware companies in the same market have really struggled this year?

Sure. It's -- maybe there's one common word in there, which is ATM, but they're definitely different business models. From our perspective, the ATM companies that you referenced are largely seeing, I think, issues on the manufacturing side, best I can see from the outside. And this has to do with not only global supply chain, but inflation as well. And so I think that's a separate issue from what we're seeing on the managed services side. I think the 50% organic growth for us, while it's a big number and it feels really good. This is really several singles and doubles along the way in our base business, whether it's PAI or the rest of our global footprint. But it's also a big step up as we're bringing on the BPCE network that we previously announced in prior year. But we're now bringing all that on and expect to have that implemented kind of on a full run rate by year-end.

Last one for me. Would you say the current macro uncertainty is impacting your customers' behavior at all at this point? And then do you think that macro might be also influencing your ability to sell new counts on the Brink's Complete DRS solution?

Sure. I don't know that there's been a big shift due to the macro environment. Listen, I think people are definitely getting pressured with inflation and with currency devaluations in markets, particularly outside of the U.S. But I think this is still a function of, as I mentioned, regardless of sort of where the economy -- if the economy is down 5% to 10%, there's still 80%, 90% of -- or 9, 95% of the money still has to be picked up and still cared for and processed. I will say though that as people, particularly retailers are focused on streamlining their business -- and by the way, this varies from retailer to retailer, depending on how they did with inventory forecasting through the pandemic. Some retailers are playing offense, but certainly, I think some are certainly batting down the hatches to make sure they got their cost structure in line, have their store footprint in line, which might create some apprehension. I think the sales cycle on any solution that is different or replacing a long-standing service has a longer gestation period, particularly when you think about pilot programs and getting sort of through the pipeline. But we don't see any real aversion to listening and/or pilot. And in fact, I'd say on both but even more so on the AMS side of the ATM managed services side, we're continuing to see pilots all over the world. And this is not just sort of aggregating around PAI or only around BPCE, although we're seeing opportunities in those markets. We're seeing them in markets where we are a trusted adviser, let's say, for our banking partners that have allowed us to have the opportunity to move upstream in the ATM managed services side, and we think this is a real opportunity going forward.

Okay. I appreciate the detail there thanks for taking the question guys.

The next question comes from George Tong of Goldman Sachs'. Please go ahead.

Hi. Thanks. Good morning. Slide 8 you provided a history of how Brink's responded to various economic cycles. As you look at prior performance leading into -- or heading into a recession, what are some of the indicators or responses that you would typically see from a customer in the event of a pullback? And how quickly would those signs of a slowdown show up in the business?

I'd like to say that there's notes processed or how many stops. But in fact, that really probably isn't a great leading indicator because, for instance, in the pandemic, our volumes actually went up as we nosed into the middle of 2020, just given the fact that banks and central banks, we want to make sure that there was cash available in the marketplace for consumers. And so we wouldn't necessarily see that. I think what we would see, George, would be customers either canceling locations, closing down stores, especially larger national accounts that have multiple stores, if you start to see store closures or less frequency maybe of stops if we're servicing customers 3, 4, 5 times a week, if maybe they pulled back. It's not something we've seen yet. And in fact, we're continuing to see sort of an expansion of that. But for us, our answer, and as we think through any potential situation. First of all, we look at our cost structures, we announced to restructuring to get ready for something that might happen just in case, but also shifting to Brink's complete. And our tech-enabled solutions, particularly in the traditional CIT money processing business is a benefit for us, and we have the opportunity to create benefits for customers relative to allowing them to reach maybe a better price point down the road.

Great. That's helpful. And then as you think about your pricing power in the current inflationary environment, how would you compare it to historical trends as your pricing picked up commensurate with inflation? And how does your organic revenue growth split between volume and pricing?

Sure. I'd say pricing is -- the pricing environment has been, I'd say, consistent, George, in the last -- certainly since I've been here, but I'd say even in prior times, Ron can speak to that if we need to. But I would say that this inflationary environment has certainly touched all industries, including our customers. And I think this is where the conversation with customers is one that is -- while no one wants to see increased costs, I think they also clearly understand because they're seeing it in the same place -- inside their own 4 walls. The other side of that, though, is we've got a responsibility to also drive use productivity as our lever and mix to drive profitability and deliver our commitment to our shareholders and not just put that on the backs of customers. That's not what we're doing and not what we've intended to do. I'd say the environment itself has been globally has been consistent relative to moving inflation through. I think in some markets like Europe, we tend to see a lag in inflation to price realization could be a quarter or 2, and we have seen that. But I'd say that no difference in sort of the pricing posture. On the other side, you asked sort of about the volume versus price -- we've said this historically, it's been about 50-50. It's largely in that similar range, and maybe it's in some markets, particularly in North America, we've seen that move not quite to 60-40, but closer to that towards that. But we we haven't seen a big shift there to be perfectly honest.

Very helpful. Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Mark Eubanks for any closing remarks.

Thanks, Andrea, and thanks, everyone. We appreciate the questions and certainly appreciate your support. Look forward to speaking to you next quarter. Thank you.

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.