Chemed Corp (CHE) 2012 Q1 法說會逐字稿

Good morning, ladies and gentlemen, welcome to Chemed Corporation's first-quarter 2012 conference call. My name is Fab and I'll be your conference call facilitator today. Please note that today's call is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer period. I would now like to turn the call over to Sherri Warner with Chemed Investor Relations.

Good morning. Our conference call this morning will review the financial results for the first quarter of 2012 ended March 31, 2012. Before we begin let me remind you that the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 apply to this conference call.

During the course of this call the Company will make various remarks concerning management's expectations, predictions, plans and prospects that constitute forward-looking statements. Actual results may differ materially from those projected by these forward-looking statements as a result of a variety of factors including those identified in the Company's news release of April 19 and in various other filings with the SEC.

You are cautioned that any forward-looking statements reflect management's current view only and that the Company undertakes no obligation to revise or update such statements in the future.

In addition, management may also discuss non-GAAP operating performance results during today's call including earnings before interest, taxes, depreciation and amortization or EBITDA and adjusted EBITDA. A reconciliation of these non-GAAP results is provided in the Company's press release dated April 19, which is available on the Company's website at Chemed.com.

I would now like to introduce our speakers for today -- Kevin McNamara, President and Chief Executive Officer of Chemed Corporation; Dave Williams, Executive Vice President and Chief Financial Officer of Chemed; and Tim O'Toole, Chief Executive Officer of Chemed's VITAS Healthcare Corporation subsidiary. I will now turn the call over to Kevin McNamara.

Thank you, Sherri. Good morning, welcome to Chemed Corporation's first- quarter 2012 conference call. I will begin with some of the highlights for the quarter and David and Tim will follow with additional operating detail. I will then open up the call for questions.

Chemed consolidated revenue in the quarter totaled $353 million and net income was $20.4 million. If you adjust for certain non-cash items and items that are not indicative of ongoing operations, adjusted net income for the quarter totaled $23.3 million and equated to adjusted earnings per diluted share of $1.21. This is an increase of 13.1% when compared to adjusted earnings per diluted share in the first quarter of 2011.

During the quarter our hospice business segment generated revenue of $261 million, an increase of 10.7% over the comparable prior year period, and provided adjusted EBITDA of $35.5 million. This equated to an adjusted EBITDA margin prior to Medicare cap of 12.7%. Admissions in the quarter totaled 16,322, an increase of 3.3% over the prior year.

Our adjusted EBITDA margin, excluding Medicare cap, did decline to 99 basis points in the first quarter of 2012; this is primarily the result of increased costs related to our new start initiatives and inpatient unit expansion.

We now have five new start initiatives in process that reported aggregate losses of $1.4 million. These losses negatively impacted the quarterly margins by 55 basis points. We also have five inpatient units under development. Losses for these inpatient units aggregated $500,000 in the quarter further reducing margins by an additional 20 basis points.

During the first quarter of 2012 VITAS reversed $2.6 million of Medicare cap liability that was recorded in the fourth quarter of 2011. This compares with $1 million of Medicare cap reversed in the first quarter of 2011.

Of VITAS' 35 Medicare provider numbers, 31 have a Medicare cap cushion of 10% or greater during the first six months of the 2012 Medicare cap year. Two provider numbers have a Medicare cap cushion between 5% and 10% and two have a cap cushion between 0% and 5%. VITAS has generated an aggregate cap cushion of $207 million during the most recent 12-month period.

Now let's turn to our Roto-Rooter business segment. During the first quarter of 2012 Roto-Rooter's plumbing and drain cleaning business generated sales of $92.1 million, a decline of 3.3% over the prior year quarter.

Rarely do I ever mention weather as a factor in our operating results. In most cases unusual weather patterns tend to average out over a quarter. Basically unusual weather patterns benefit some locations, penalize others and seem to have minimal impact on our overall operations. This was not the case in the first quarter of 2012. The usually warm winter resulted in the almost complete elimination of jobs derived from severe cold and related frozen pipes and materially impacted our residential job count and revenue.

I was disappointed by this impact on our residential job volume. However, Roto-Rooter was able to offset a portion of this weak residential demand with a 4.2% increase in commercial jobs. With that I would like to turn this teleconference over to David Williams, our Chief Financial Officer.

Thanks, Kevin. The net revenue for VITAS because was $261 million in the first quarter of 2012, which was an increase of 10.7% over the prior year period. If you exclude the impact of the Medicare cap, our VITAS revenue increased 10.1%. The revenue growth was a result of increased average daily census of 6.1% driven by an increase in admissions of 3.3%, increased discharges of 4.1% and Medicare price increases of approximately 2.5%.

Revenue growth was further enhanced by an additional day of revenue due to the first quarter of 2012 being a leap year, reversal of Medicare cap liabilities and a slightly favorable geographic mix shift within the patient base. Average revenue per patient per day in the quarter, excluding the impact of Medicare cap, was $207.12 which is 2.6% above the prior year period.

Our routine Homecare reimbursement and high acuity care averaged $162.75 and $713.38 respectively per patient per day in the first quarter of 2012. During the quarter high acuity days of care were 8.1% of our total days of care.

The first-quarter of 2012 gross margin, excluding the impact of Medicare cap, was 20.4% which is a decline of 108 basis points from the first quarter of 2011. As Kevin noted earlier, this decline in margin is primarily the result of increased costs related to our expansion of start-up locations as well as the increased costs associated with our continued buildout of inpatient units.

Our home care direct gross margin was 50.4% in the quarter, a decline of 70 basis points when compared to the first quarter of 2011. Direct inpatient margins in the quarter were 14.1% which compares to 13.0% in the prior year. Occupancy, upper inpatient units average 78.3% in the quarter and compares to 76.8% occupancy in the first quarter of 2011.

Continuous care had a direct gross margin of 19.9%, a decline of 60 basis points when compared to the prior year. Average hours billed for a day of continuous care averaged 18.9 in the quarter, a 2.2% decline over the average hours billed in the first quarter of 2011. VITAS' selling, general and administrative expenses were $19.7 million in the first quarter of 2012, which is an increase of 5.5% when compared to the prior year quarter.

Now let's turn to Roto-Rooter. The Roto-Rooter plumbing and drain cleaning business generated sales of $92.1 million which was a decrease of 3.3% over the prior year. Roto-Rooter's gross margin was 43.7% in the quarter, a 46 basis points decline compared to the first quarter of 2011. Adjusted EBITDA in the quarter totaled $14 million, a decline of 9.9%, and the adjusted EBITDA margin was 15.3%, a decline of 111 basis points.

Unit for unit job count in the first quarter of 2012 declined 4.2% when compared to the prior year. As Kevin said, we attribute the majority of this decline to the mild winter which virtually eliminated jobs that are triggered from frozen pipes. In the first quarter of 2012 our total residential jobs decreased 7.5% as residential plumbing jobs declined 2.5% and residential drain cleaning jobs decreased 9.9%. Residential jobs represented 69% of total job count in the quarter.

On the positive side, commercial jobs increased 4.2% with commercial plumbing and excavation increasing 7.6% and commercial drain cleaning increasing 3.1% when compared to the prior year quarter. The all other residential and commercial job category, which is less than 2% of our aggregate job count, decreased 5.7%.

When you look at our consolidated balance sheet, we have $169 million of debt at March 31, 2012. This is net of the discount taken as a result of the convertible debt accounting requirements. Excluding this discount aggregate debt was $187 million and is due in May of 2014. Our total debt equates to less than one times our trailing 12 months adjusted EBITDA.

In March of 2011 Chemed entered into a five-year credit agreement that consists of a $350 million revolving credit facility. The interest rate on this credit agreement has a floating rate that is currently LIBOR plus 175 basis points. In addition, an expansion feature is included in this credit agreement that provides Chemed the opportunity to increase the revolver or enter into term loans for an additional $150 million.

At March 31, 2012 this facility had approximately $321 million of undrawn borrowing capacity after deducting $29 million for letters of credit issued to secure our workers' compensation insurance. Capital expenditures through March 2012 aggregated $12 million and compares to depreciation and amortization during the same period of $7.4 million.

The company increased its quarterly dividend from $0.14 to $0.16 per share in the third quarter of 2011. We have $75.3 million remaining under our previously announced share repurchase program. We did not purchase any shares during the quarter.

Our 2012 full-year guidance is as follows. VITAS expects to achieve full-year 2012 revenue growth, prior to Medicare cap, of 5% to 8%. Admissions in 2012 are estimated to increase approximately 2.5% to 4% and full-year adjusted EBITDA margin, prior to Medicare cap, is estimated to be between 15.0% and 15.5%.

Effective October 1, 2011 Medicare increased the average hospice reimbursement by approximately 2.5%. Our guidance assumes VITAS will incur $3.75 million of estimated Medicare contractual billing limitations for the remainder of calendar year 2012.

Roto-Rooter expects to achieve full-year 2012 revenue growth of 2.0% to 4.0%. The revenue estimate is a result of increased pricing of approximately 2%, a favorable mix shift to higher revenue jobs with job count estimated to be roughly flat with 2011. Adjusted EBITDA margin for 2012 is estimated in the range of 16.5% to 17.5%.

Based upon the above, management estimates 2012 earnings per diluted share, excluding non-cash expense for stock options, non-cash interest expense related to accounting for convertible debt and other items not indicative of our ongoing operations will be in the range of $5.35 to $5.50. This compares to Chemed's 2011 reported adjusted earnings per diluted share of $4.78.

I'll now turn this call over to Tim O'Toole, Chief Executive Officer of VITAS.

Thank you, David. Our growth strategy continues to put a high priority on field based personnel in order to provide our patients and referral network with timely information and education about our services. In addition, we have an extremely responsive admissions process including 24/7 call centers and highly skilled admission coordinators.

As of March 31, 2012 we have 339 sales representatives, 163 admissions coordinators, 372 admission nurses, 102 community liaisons and 24 long-term care liaisons. We've expanded our resources in this area by 10% compared to the first quarter of 2011. This focus has resulted in VITAS generating 16,322 admissions in the first quarter of 2012, an increase of 3.3% over the prior year period.

Admissions increased in two of our four largest referral categories. During the first quarter of 2012 home-based admissions increased 12% and our hospital referred admissions increased 2.5%. Assisted living facilities declined 1.6% in the quarter and nursing home admissions declined 0.1%.

VITAS' average length of stay in the quarter was 82.4 days which compares to 78.9 days in the prior year quarter and 79 days in the fourth quarter of 2011. Average length of stay is calculated using total discharges during the quarter.

Median length of stay was 14 days in the quarter. Median length of stay is a key indicator of our penetration into the high acuity sector of the market.

Our days of care totaled 1,246,976 days in the quarter, an increase of 7.2% over the comparable prior year period. Non-nursing home routine Homecare days increased 10% in the quarter and nursing home routine Homecare days declined 0.5%.

Nursing home days of care currently represent 21.8% of our total days of care. Currently on any given day about 22% of our average daily census or about 3,000 of our patients reside in a skilled nursing facility. Approximately 80% of our total nursing home based hospice patients reside in a skilled nursing facility where we have three or less patients within that nursing home. This illustrates our diverse referral network.

Continuous care and inpatient days of care both increased 6% when compared to the first quarter of 2011. At March 31, 2012 we had five programs classified as start-ups. Total operating losses for these five start-ups totaled $1.4 million in the quarter and compares to losses of $130,000 for locations classified as a start-up in the prior year period. With that I'll turn the call back over to Kevin.

Thank you, Tim. At this point it would be appropriate to consider questions.

(Operator Instructions). Darren Lehrich, Deutsche Bank.

Couple things here. I guess just on the Roto-Rooter segment, I obviously understand the weather issue that you're describing. I guess the question is how easy is it for you to parse out the residential impact from just the weather and could there be other factors as well still weighing on the business? Just curious to really understand how your insights into the business trends feed up to you? Thanks.

Let me start, Darren, and suggest that what we usually see is a bit of seasonality in the Roto-Rooter business and the first quarter is -- we usually see a bump up which we would say is often associated with extreme cold weather plumbing services -- we talk about the frozen pipes, thawing pipes. And it's just a couple percent on the business, but it was almost, as Dave indicated, totally eliminated this year. And so that was a couple percentage points.

We also say one of the things that we can really do something about is on the commercial side a little more direct active marketing that has more of a short-term effect and that was fairly good for the quarter. But to really answer your question, do we see something else other than just this -- the absence of a positive bump in the first quarter on the frozen pipes?

Yes, we see continued relatively weak demand in -- consumer demand on the residential side, particularly in the Midwest and West. And if you said, what -- is that predictable? Well, one of the things that we've said all along is if you look at our business over the last 30 years on Roto-Rooter, the best indicator for residential demand for our services is unemployment rate.

And if you really follow that you might feel the unemployment rate has improved a little bit. But it's basically improved by changing the numerator. I mean the number of jobs aren't being created as much as they're reducing the number of people looking for work. So do we continue to see reduced call counts on the residential side? Yes, we do. So there's a little bit more to it. But it's nothing that, again, is of great worry.

Any time your business is lower than expected in a quarter you expect to say is that going to be -- are you continuing from just a lower base in the following quarters. And we pretty much have not seen that.

I would say to the extent that the shortfall was attributable to the lack of freezing temperatures, that's -- it's been -- our observation has been that decline was kind of limited during that period and the regular business is achieving results close to expectation with the one caveat is, yes, it's still -- we don't have a burgeoning demand on the residential side. David, anything you want to add to that?

No. Except when we code out jobs, Darren, we code out for the procedures performed. When you replace a faucet you put down replace a faucet; we don't put down what caused it. So to have a direct correlation of frozen pipes is very difficult, except usually if a pipe freezes it creates a lot of damage. Occasionally -- it's rare that we catch a pipe just as it froze and the only thing we do is thaw frozen pipes.

Obviously it's just a small fraction of the work we get when a pipe bursts because it's frozen. But we saw an 81% decline in thaw frozen pipe work which leads us to believe the problems when a pipe freezes and it cracks a faucet, cracks a pipe, of course that will be coded out repaired anterior wall for a hose (inaudible). We'd lose that work. So an 81% decline in thaw frozen pipes clearly is a leading indicator where we lost a lot of repair work, but we can't pin it down specifically.

Okay, no, that's real helpful. I appreciate those comments. The other question I had is just there was a tiny -- little bit of acquisition-related CapEx in the cash flow statement. So I'm just curious what that was and any broad commentary that you would give this at this point on just what you're seeing from an acquisition opportunity in either segment?

And that was a small what we call an independent contractor, so small Roto-Rooter territory we acquired. Beyond that, Kevin, in terms of --?

Yes, I'd say on the acquisition front with both companies it's as quiet as I've seen it in the last couple years.

Okay. Last thing, just housekeeping wise. I know you had a cash flow quarter ending last year. Is it just the seasonality in this quarter -- anything to call out from a working capital standpoint?

No, nothing actually to call out at all. Literally it -- well, of course the fourth quarter of 2011 we had like $66.4 million of cash from operating activities and that was because of a huge reduction in receivables because December 30 of 2011 was a PIP payment. The end of this quarter we actually fell in between the two PIP payments. So it was just a timing of that.

And it really does work its way out over a four quarter period. But basically, whenever you have a strong cash flow period, it's either because you preceded a weak one, or the impact is going to be -- the next one is going to be a buildup of receivables and that's what we saw in this case.

And, generally speaking, it continues our free cash flow, it's just about equal to our net income and that remains the case. But that's exactly right.

Okay, thank you.

Jim Barrett, C.L. King & Associates.

Kevin, I heard the commentary on plumbing. The drain cleaning segment was down 9%, 9.9%. I assume that would relate to tree roots and debris rather than pipes freezing or unfreezing. Could you just clarify what happened there?

It would be freezing pipes as well. First of all, Jim, it's freezing pipes as well, there's a carryover just as far as our coding out. But generally speaking I would say, Jim, which I've mentioned, I don't want to suggest that call volume is in any way improved, it's tough, it was -- I'll give you an example.

I don't (inaudible) much political implication, but it was particularly tough in Ohio, a key swing state when you talk about recovery. And Ohio is one of the states where they would say that the unemployment rate has fallen a little below the -- the rate is below the national average.

But I would just say that there's some pockets in the Midwest where hard to -- where call counts are really down and there's no indication that -- as far as market share, there's no indication we're losing any market share. It's just a little bit tougher than you would expect.

But again it's -- to the extent that you see a decline like that without ready explanation but you do have something that has been very disruptive on the normal call it January and February operations that is cold-weather related work. It's too early -- I'd be speculating at this point because there's no other explanation for it.

It doesn't seem that worrisome to us. Roto-Rooter remains -- they're making headway in their Internet placement, they're doing -- continue to do an excellent job retaining workers and plumbers. So it's one that we're -- we didn't see the bump we normally get in the first quarter.

There's no way to -- I don't want to shrink from that observation. And coupled with -- on top of that is overall lack of robust call volume, it's just something they're dealing with. But I think they're a very efficient company, every one of those hurdles I think they do a great job in addressing.

Okay, that was helpful. And can you give us an update on your legal activity, specifically as it relates to San Antonio?

Yes, the update on that is there has been no development, no significant development related to us. I will say if there was a development and that's the -- if you remember the case, part of the claim was that there was some conspiracy between some other company to send patients our way and -- inappropriate patients and we would treat them and whatnot. That other company has been dropped from the lawsuit.

So I imagine that's tied up with some of these "conspiracy" charges. But they've been dropped from the lawsuit. But we're -- but with us, no significant developments, we don't really anticipate any significant developments in the short term. But we're still comfortable and I mean Tim can jump in any time, but we're still comfortable.

We make every effort to make sure that every patient we serve is an appropriate patient. And I mean the only thing I'll say one, thing is -- I'll add something to it and we're an unusual business in that in virtually every case the patients that come to us, we don't give them the terminal diagnosis, I mean they come to us with a terminal diagnosis.

So I mean that's one of the 'benefits' if this is the Achilles heel of any hospice business, I mean given the fact that we get such a high percentage of referrals from doctors that -- or from -- related to patients whose doctors we have no connection with whatsoever, it's one of the benefits of our business.

But, no, with regard to San Antonio, no significant developments. If I just -- some of the other cases that we report on in our 10-K, the only other development -- you may have seen the Brinker case in California, meal break, wage hour class-action there which is proceeding pretty well. The California Supreme Court decided nine to zero basically in favor of the employer in that case. So that's probably a good development.

And the only other significant case to report on is the -- again, a wage/hour case, class-action case involving Roto-Rooter. That's been fully briefed; we're waiting for the court to make a preliminary ruling on that case. But other than a lot of work and to -- our reported results, a lot of it expense -- a lot of that expense is behind us and we're awaiting some results there.

But again, when you have a company that makes no effort to -- we're in this for the long run, we make no effort -- we want to comply with the law and improve one year over another year over another year. One of the comments I made fairly recently is if you have that orientation you expect good results on litigation because you just don't have -- you don't have evil intent because it's not a good strategy if you're looking to be here for the long run.

agreed. And, Tim, can you tell us how many start-ups you plan over the next -- for the rest of the year over the next 12 months?

Well, we went into the year expecting to have one new start open each quarter of the year and we've pretty accomplished that through the first quarter. So right now we have five locations, as we mentioned, that we're working on. And I think we'll allow those to mature a little bit in the next quarter, so I don't think we'll see any new starts necessarily the next quarter. But in the second half of the year at least one and probably two.

But generally our plan is not to have that expense of losses associated with new starts to be a burgeoning number, it's a number that -- we're happy with the way they're proceeding --.

The number in this quarter is kind of all-in for us. We would not expect those losses to increase, but we would like to add several more as the year unfolds. And as we've mentioned, we see the opportunity to have new starts develop our business with our own practices is a very stable opportunity compared to the acquisition markets, which, as we mentioned, are kind of slow and we haven't been successful there and the new starts are a great opportunity for us as a result.

Understood. And then finally, Dave, can you explain what underlies the capital expenditures of $12 million in the quarter?

Yes, it would be a combination of things both from Roto-Rooter and VITAS. I think the jump was inpatient units was the unusual jump and obviously we think we're a little front loaded probably for the first time in a while on our CapEx. We expect that CapEx will end up the year around $25 million to $30 million would be the rough estimate -- about equal to our depreciation and amortization for the year.

Okay, well thank you all very much.

Brendan Strong, Barclay's.

What's the -- just going back to the start-ups, what's the right base to compare that off of? I mean, it's not the 52 programs I don't think.

The right basis as far as the number we're expanding?

Yes, the five that you opened in the first quarter. I mean what's the right way to think about that in terms of the size of the business?

Well, as far as the number of locations, they would all -- all of these five -- out of those five I believe that's four provider numbers as far as new provider numbers. So you can compare that to the 50. So those would be included in the results this time except for the ones we don't have a provider number for yet, which is three of the new starts. So you'd see the locations probably go up by three over the next three to six months as those provider numbers get processed by the intermediaries.

Okay. All right, that's interesting. And I apologize, I joined the call late. Tim, did you say anything about the costs in the first quarter? It seems like it's more than just the start-ups driving the cost of goods higher in the first quarter.

What we spoke about is the start-ups which incrementally added about 50 basis points or reduced our margin by about 50 --

55.

-- 55 basis points and probably 25 to 30 basis points for the investment in some new inpatient units. So we did speak about it in the commentary, those two figures. And other than that really the margins are pretty consistent with the prior year.

The other investment would have been in the admissions area. So again, the admissions area our costs were up about 14% year over year and our headcount up about 10%. So again, we're investing heavily in admissions to drive the business and support its growth, so those are the investments.

I feel very good that the labor is in pretty good shape as far as the caregiver labor in the field, we're doing a good job there. So these admission costs and the start-up cost and the IPU cost, they will work their way through over time and we'll eliminate those.

Brendan, keep in mind that we're fighting a little bit of a headwind in terms of we've got a 2.5% increase from Medicare, but inflation was really running at the low 3% range. So that's a headwind that goes through the model and then we fight like heck to be more efficient to try to offset that.

And is there -- Dave, is there anything else that's seasonal in the first quarter that there's some extra expenses that come in, extra taxes, anything like that?

Yes, first quarter for both Roto-Rooter and VITAS has a lot of unemployment. The unemployment for federal and state gets reset on the calendar year. So it takes the first quarter before we get caught up with most of those.

Well how -- how can I think about that in terms of absolute dollars? Is there any number you can give me on that?

About 50 basis points, Tim --.

Yes, about 50 basis points in the first quarter that will go away in the second quarter. It pretty much goes away by March. It's mainly the unemployment taxes that are on a lower wage base than the total wage base that we have the book in the quarter.

And I'd probably go more like 60 basis points on the Roto-Rooter side as the pure commission and the way we're structured.

Okay. So you get some natural leverage from that in the second quarter on your cost, plus you get other areas of leverage. So cost -- I mean, we should be expecting costs of goods sold as a percentage of revenue to trend lower throughout the year?

Yes. And that's actually been the pattern over the last 10 years. The first quarter is the toughest margin quarter; the fourth quarter is your best margin quarter for both operating units.

Okay. And then my last question is this, I mean I don't know if you'd be willing to speculate around this, but at what point -- as you think about next year, right, with the potential for certainly much lower Medicare rate increases than the 2.5% you're getting this year. At what point do you really worry about it? I mean is it anything above zero hey, we'll still try to manage to it? If it's a cut that's when it's a big issue? How do you -- how are you guys thinking about that conceptually?

Conceptually I can tell you we're -- historically we've been in the game of increasing margins at VITAS. Our goal here is maintaining margins at VITAS. I mean, we have the one thing that works to our advantage is the last 10 years -- in each of the last 10 years we've had central support costs grow at half or less of the rate of the top-line.

So that has given us a little bit of advantage there for growth. We're going to continue that this year on the central support costs. And then it just becomes -- the whole game then becomes managing labor costs. You can't have your labor costs go up on a labor cost per census basis; you can't have them go up more than the rate of increase one way or the other.

And you say to the extent will we worry about it, will it be tough, will it be difficult? The answer is yes, but in the very short- to mid-term, the numbers have to be in (inaudible), I mean there's just no way around it.

Yes, yes,

And it's only a couple percent. And the answer to your question is, if it was 10% or 15% you'd say, well it can't be done and the industry has been changed forever. But that's not what we're talking about. We're talking about a percentage point and a half here or there, you've just got to -- the biggest advantages we have is we literally do one patient visit per week -- per patient per week more than the national average. That's an advantage we'd like to maintain as long as possible. But again, that's a huge operational advantage that we have.

Okay, great. Thank you.

And there are no further questions in the queue. I would now like to turn the call over to Mr. Kevin McNamara for closing comments.

The comment is limited to thank you for your kind attention and we'll see you in about three months. Thank you.

Thank you all for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a wonderful day.