Chemed Corp (CHE) 2015 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the third-quarter 2015 Chemed Corporation earnings conference call. My name is Jasmine and I'll be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, Ms. Sherri Warner. Please proceed.

Good morning. Our conference call this morning will review the financial results for the third quarter of 2015, ended September 30, 2015. 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 October 22, 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 October 22, 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 third-quarter 2015 conference call. I will begin with some of the highlights for the quarter, and David and Tim will follow with an additional operating detail. I will then open up the call to questions.

Chemed generated $386 million of revenue in the quarter, an increase of 7.8%. This revenue growth translated into a 17.3% increase in net income. Excluding certain discrete items, Chemed total net income increased 18.7%. Our adjusted diluted earnings-per-share aggregated $1.78, which is an increase of 20.3% when compared to the third quarter of 2014.

VITAS and Roto-Rooter continue to generate solid operating metrics, which translate into excellent profitability and cash flows in both operating segments. During the quarter, VITAS provided 1.4 million days of care to 32,000 unique patients. This generated $285 million of revenue, representing a 7.4% increase when compared to the prior year.

Admissions increased 3.1% and average daily census increased 7.4% in the quarter. Admissions totaled 16,131, which took our daily average census to 15,722 patients in the quarter. Roto-Rooter generated sales of $101 million. This was a revenue increase of $8.2 million or 8.8% compared to the prior year. Water restoration accounted for $2.8 million of this revenue growth, with water restoration services aggregating $8.2 million in the quarter.

With that, I would like to turn this teleconference over to David Williams, our Chief Financial Officer.

Good morning. As Kevin noted, net revenue for the VITAS was $285 million in the third quarter of 2015, and that's an increase of $19.6 million or 7.4% when compared to the prior-year period. This revenue increase is comprised of an average Medicare reimbursement rate increase of approximately 1.4%, a 7.4% increase in average daily census, along with a favorable comparison from Medicare CAP.

These growth factors were partially offset by mix shifts in level of care as well as patient census geography. In the third quarter 2015, VITAS did not record any adjustment in estimated Medicare Cap billing limitations. This compares to $2.5 million of Medicare Cap billing limitations recorded in the third quarter of 2014.

At September 30, 2015, VITAS had 34 Medicare provider numbers, none of which have an estimated Medicare Cap billing limitation for the 2015 year. Average revenue per patient per day in the quarter, excluding the impact of Medicare Cap, was $197.04, which is 0.9% below the prior-year period.

Working home care reimbursement and high acuity care averaged $164.22 and $699.04, respectively. During the quarter, high acuity days of care were 6.1% of our total days of care, 54 basis points less than the prior-year quarter. The third quarter of 2015 gross margin, excluding the impact of Medicare Cap, was 23.3%, which is 64 basis points above the third quarter of 2014.

Our routine home care direct gross margin was 53.7% in the quarter, a decrease of 10 basis points when compared to the third quarter of 2014. Direct inpatient margins in the quarter were 3.8%, which compared to 4.9% in the prior year. Occupancy of our 34 dedicated inpatient units averaged 72.4% in the quarter and compared to 71.1% occupancy in the third quarter of 2014. Approximately 78% of our inpatient days of care are in these dedicated units, with the remaining [22%] of our inpatient care utilizing short-term contract types.

Continuous care had a direct gross margin of 15.7%, a decline of 170 basis points when compared to the prior-year quarter. Average hours billed for a day of continuous care was 18.2 in the quarter, a decline of about 30 minutes when compared to the 18.7 average hours billed for a continuous care patient in the third quarter of 2014.

Our selling, general and administrative expense was $22.2 million in -- that was in the third quarter of 2015, which is an increase of 10% when compared to the prior year. Adjusted EBITDA margins, excluding Medicare Cap, totaled $45.3 million in the quarter, which is an increase of 11.0% over the prior year. Adjusted EBITDA margin, excluding the impact from Medicare Cap, was 15.9% in the quarter, which is 65 basis points favorable to the prior-year period.

Now let's turn to Roto-Rooter. Roto-Rooter generated sales of $101 million in the third quarter of 2015, and as Kevin noted, that's $8.2 million or 8.8% above the prior-year. Commercial drain cleaning revenue increased 7.0%, and commercial plumbing and excavation increased 12.3%.

Overall, our commercial revenue for Roto-Rooter increased 10.0%. Residential plumbing and excavation increased 7.9%. Residential drain cleaning increased 1.2%, and water restoration increased 69.7%. Again, that equates to total residential water restoration revenue of $8.2 million in the quarter. Overall, residential sales increased 10.5%.

Now let's look at our consolidated balance sheet. As of September 30, 2015, Chemed had total cash and cash equivalents of $38 million and debt of $138 million. Capital expenditures through September 30, 2015 aggregated $30.2 million in the quarter, and compared to depreciation and amortization during the same period of $26.1 million. The Company purchased $18.2 million of Chemed stock during the quarter, and this equated to 135,765 shares of Chemed stock repurchased at an average cost of $134.28.

Chemed currently has $63.8 million of authorization remaining under the share repurchase plan. We have also increased our full-year 2015 year earnings outlook as follows. Full-year 2015 revenue growth of VITAS, prior to Medicare Cap, is estimated to be in the range of 4% to 5%. Admissions in calendar year 2015 are estimated to increase 4% to 5%, and our full-year adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 14% to 15%.

Medicare Cap billing limitation for calendar year 2015 are estimated to be approximately $1 million. Roto-Rooter is forecasted to achieve full-year 2015 revenue growth of 6% to 7%. This revenue estimate is based upon continued expansion in water restoration services coupled with increased pricing of approximately 1%. Adjusted EBITDA margin for 2015 is forecasted to be in the range of 19.5% to 20%.

Based upon these metrics, management estimates the full-year 2015 adjusted earnings per diluted share, which excludes non-cash expense for stock options, costs related to litigation, and other discrete items, will be in the range of $6.75 to $6.80. This compares to Chemed's 2014 reported adjusted earnings per diluted share of $6.07.

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

Thank you, David. Admissions in the quarter totaled 16,131 patients, an increase of 3.1% over the prior year. On a year-to-date basis, VITAS admitted 50,082 patients, which equates to an increase of 4.8%. During the quarter, admissions generated from hospital referrals which typically represent over 50% of our admissions, increased 6.2%. Home-based referrals were relatively unchanged. Nursing home admissions declined 5.6%, and assisted living facility admission referrals increased 2.2%.

Our per patient per day pharmaceutical cost averaged $6.64 in the quarter, which is equivalent to the prior year. Medical equipment per patient per day cost in the quarter totaled $6.66, which is slightly favorable to the third quarter of 2014. VITAS's average length of stay in the quarter was 78.6 days, which compares to 83.7 days in the prior-year quarter, and 78.5 days in the second quarter of 2015.

Average length of stay is calculated using total discharges during the period. Median length of stay was 16 days in the quarter and compares to a median of 15 days in the prior-year quarter and second quarter of 2015. Median length of stay is a key indicator of our penetration into the high acuity sector of the market.

Our days of care totaled 1,446,461 days in the quarter, an increase of 7.4%. Non-nursing home routine homecare days increased 8.9% in the quarter, and nursing home routine homecare increased 5%.

With that I'll turn the call back over to Kevin.

Thank you, Tim. I will now open this teleconference to questions.

(Operator Instructions) Frank Morgan, RBC Capital Markets.

I think you called out a little bit higher level of legal expenses in the last quarter and I'm just curious is -- could you give us any commentary on that? And maybe any kind of updates on what may be going on?

Well, Frank, I'll just start by saying that this is a stage of the litigation that's purely like in the middle of discovery, but a lot of depositions taken at this point. And that's just -- that's where you run into the expense. A lot of preparation; the deposition of people identified by the government, a number of representatives of the Company just testifying in their official capacity, kind of recordkeepers and things like that. So, a busy, busy quarter in terms of activity.

And Dave, I don't know if you have anything to say on the actual expense levels.

No. We expect it to come in lumpy. Obviously, we are up about $700,000 for the quarter, and we are going to be -- right now, year-to-date, we are about $2 million pretax higher than the prior year. Ebbs and flows, but we are certainly in an expensive part during the deposition. But we expect it -- I expect it to be lumpy even for really the next couple of years.

And I think I saw a number. With litigation costs in both periods were still up 19% -- over 19% in the period.

Got you. And anything you can read into -- I know there is a AseraCare of the old Golden Living in the old Beverly seems to be tangled up pretty extensively right now down in Alabama. Is there anything about that particular scenario that you can read through to you? Or is that just -- any thoughts on that?

Well, I'll give you my thoughts. First on that, let me give one caveat. I'd say that the allegations in that case are different. I mean, there were specific programs and activities that were alleged to have occurred, which don't really seem to be a part of our litigation. I mean, ours tends to be more that -- you know, in the main part that you have more continuous care than everybody else. Rather than you have a program that's incentivizing doctors, that type of thing.

Having said that, I'm sure it emboldened the government. You had a situation where you have a government witness, as they normally do, would say all long-stay patients are improper. And at least at this stage, the litigation, as I read it, the jury pretty much blocked the government's experts' theory on that. So, not good. It is preliminary, certainly from a litigation point, but it's not positive. I mean, I'm sure it will embolden the government to pursue that line of expert testimony, no question.

Got you. Switching gears, you talked about pharmacy costs, and certainly in the -- we hear a lot of talk about generic inflation. And I'm just curious -- are you seeing anything on your front in terms of either specialty or either old generics where you are seeing some inflationary pressures?

Well, I mean, this is Tim. There is inflation in generics, and that's been accelerating the last year and expected to a little bit in the future. We've been very pleased with our efforts to really have a good handle on the transparency of it, and we have been able to lower the cost of our drug utilizations is another area just by being very aggressive in our negotiations with providers, et cetera.

So, again, that is a fact that is happening with generics, but we have not seen it increase our costs necessarily. And I do not expect that to impact us in the near-term.

Okay, thank you very much.

Jim Barrett, CL King & Associates.

Tim, I had just three questions for you. You had above-average daily census growth in the quarter. What is your sense as to how that compares to the industry growth? And do you believe this is the new normal?

Well, let me just say that we are very pleased with our growth and our results in the last several quarters. And we think it's because of all of the issues that we've talked about over the last several years with our resources at VITAS being above the level of resources competitors are putting in the marketplace, and our strategies of working with the very large hospital groups that need transition care, and they need people to be connected with them that they can track the patients, and see that they are not being readmitted to the hospital, that that's not appropriate. And all of those issues are falling our way. So, as far as -- we don't see that changing and we feel very comfortable with our outlook.

Good. And Tim, what are your thoughts on the changes in payment for hospice by Medicare for the current fiscal year?

I'm favorable to the changes. It's -- there were a lot of things that have been happening over the last several years. And they had several methodologies, and this methodology to provide a little more on the daily rate for patients under 60 days and a little less above 60 days -- it mirrors what the government wants. They want their costs aligned to the shorter stay patients, not to the longer stay.

The marketplace is moving to have more focus on the shorter stay patients. And you can see that our average length of stay has moved down a little bit over the last year -- four or five days. And the industry, I think, you will see that continue. And under the new methodology with higher reimbursement for under 60 days, as our total length of stay comes down, more of our mix will be in that higher reimbursement area.

And it plays right into the strength of VITAS, because we do take on a lot of short-stay patients. As you know, our medium length of stay is 15 days and the industry is about 18. So with us, that's favorable.

So we do not expect it to be a big impact. It's a couple of percentage points one way or the other as you look out to next year, depending upon our mix of business, which we cannot predict necessarily. But we -- I'm favorable to it. And it will have implementation issues. We are working very hard. We will be prepared to do everything correctly.

Some of the payor systems of the state level and federal system might have to catch up. Might be a little issues there as we go through it, but we've been preparing. We know we are prepared. So, on balance, I'm favorable to that change and I think it will help the industry align to what the government seeks.

Now, so --

Jim, this is Dave. So, as Tim said, we are very favorable with being directionally correct. We fully anticipate over a period of time of years CMS will continually evaluate the data and make adjustments to how they reimburse over a timeframe; the over-60/under-60 might end up with more parts.

A very simplistic approach -- we have a very complicated clinical care model. We get a lot of our -- over half of our admissions come from hospital discharge planners. Those patients come in very ill. Some of those patients never see a day of routine homecare. So the mix between high acuity and routine homecare, and the fact that our shorter length of stay tend to be high acuity patients, there's a fair amount of moving parts, if you just want to then carve out routine homecare.

So that's a long way of saying that this is going to impact the industry's clinical care model as well as VITAS's, and the government is reallocating resources to different types of patients depending on length of stay. So we expect to see an evolution on our care model as well as on the business model. A long way of saying this -- this is going to be dynamic. We think it's positive for VITAS's care model in the long-term, but it doesn't mean there's going to be a windfall of revenue starting with this next year.

So, should investors view it as financially, in broad terms, to Tim's point, a few percentage points either way as neutral to VITAS?

Yes. Here -- I agree, I think yes, exactly what Tim said. Put it this way -- and I'll give you the most simplistic way to review it. And keep in mind that there are about 11 moving parts and I'll talk about two of them. As you know that for the -- for people, for patients under 60 to [80] get about $28 more. For people over 60 days, it's $14. You do the math and you could -- if you say -- if 66% of your patients are over 60 days and 33% are under, you can see how that would be a breakeven in that regard.

So, to the extent that a hospice is running 65 or close to 70, you could see how there'd be a couple percentage points deviation there. And that's the number one and two moving parts, but there are about 11 more. So I guess there's really no transition period into it. It just starts January 1.

So, what Dave -- what Tim is saying is right. It's going to -- certainly going to be effective, as I look at it, is less than sequestration, which the industry seemed to shrug off and deal with. But it will just -- in day one -- and Dave is just counseling people to say remember, it's day one, it's a snapshot, and the industry will have to -- will probably in the care model, we'll just make some slight adjustments.

But going back to Tim's original comment it seems directionally correct for VITAS. In other words, the number one problem to VITAS and it's out in the field, people who are gaming the system. The government doesn't like gamers in the system. VITAS with its approach to the market is not a gamer of the system. It's going to hit the gamers of the system probably pretty hard and they will have to find a new game. It just having all long stay patients and running a high margin you know is -- that's going to take a kick in the teeth, that model.

So in that regard, we're happy with it. But what Dave is really saying is, yes, there will be some short-term issues just like there were the first quarter or two with sequestration. But that doesn't seem to be a major impediment.

Hey, thanks, Kevin. And then the last quick one, Dave, why are share repurchases running so modestly versus historical trends?

I wouldn't say modestly. I would say our share repurchase consists of kind of more methodical quarterly purchasing, call it dollar averaging, and then we still keep a chunk of it for opportunistic. And certainly when your stock is at all-time high. You don't want to be as opportunistic as when your stock is down 5% or 6%. So we just want to take advantage of markets for rationality as well as dollar averaging.

And Jim, really, we have not deviated from our belief that absent a change in better use of our capital, we expect to use our free cash flow to buy-in -- pay dividends and buy-in shares. So, if that equates to about $100 million of stock repurchases in a year, that's -- we hold to that. But Dave is really saying some years it may be $70, some years it may be $130, all things being equal.

You know, if my choice was to buy stock at $124 or $154, I like $124. But even at $154 it's still incredibly accretive.

Okay, thanks, everyone.

Toby Wann, Obsidian Research Group.

Thanks for taking the questions, guys. Just quickly on the fourth quarter, if we can kind of bridge to your guidance relative to where everybody on The Street is. It looks like it implies about $1.73 to $1.78. Consensus is out there to $1.90. I guess kind of -- my question really is what's -- help me bridge to where I guess The Street is getting it wrong, myself included.

A couple of things on that. One, of course, I don't get into reconciling or explaining to individuals how they should adjust their model, as well as we want to be conservative but not obscenely so. But just one factor, for example, I think the overall increase, after you take out all the cuts in the market basket that CMS put through, was I think between 90 basis points and a full percentage point. Last year we got more than the average that CMS increased things, based upon our IPG, a graphic location of our patients.

Typically, though, this way this year we are going to get slightly less. We think we'll get about 6/10 of a percent increase. October first based upon all the CD essays we have where our patients are located. So we're going to get a little less of an increase. But we are still getting our feel for water restoration, how that ramps up on the Roto-Rooter side.

The VITAS side, we've done very, very good. Jim and his management team has done an incredible job of managing expenses, keeping care at the bedside by pulling back on costs on the back room. And we're being a little conservative on whether that can continue to hold. And we'll see how the quarter goes as well as we are working on our 2016 business plan.

But I suspect we're being a little more rational in our price increase we got from the federal government, and we're being a little more cautious on the growth. At one area that you should be cautious on is -- for example, last quarter, Q2, our admissions was higher than our growth in average daily census. This quarter it's a little different, where our ADC is higher than our admissions growth.

And it just depends on the timing of when an admission happens. And we finished Q2 with a very high average daily census. So we really think, on a sustainable basis, we think we can get 3% to 5% growth in admissions, and that will translate into roughly a 3% to 5% growth in ADC. But the timing of when these things happen, sometimes you have a phenomenal quarter and sometimes you are slightly below the average, but we expect to stay within the 3% to 5% growth, admissions and the census. You guys may be a little higher than that.

Yes, and let me also say for all the year, if you look at the analysts, they -- our view of it and we don't -- again, we don't get involved in models as Dave said, but our view of them was they are high in the first several quarters and -- I mean, they're too low in the first several quarters and high in the fourth quarter. And if you look at the results, there's been a $0.10 to $0.15 leap every quarter.

And we still said during that period and it looks still to be high in the fourth quarter. We've -- now that we've given guidance and there's one quarter left, I mean, obviously we are giving guidance in the quarter now at this point. And you know as I think Dave says is, yes, our change in guidance at this point -- it's not aspirational. I mean, you might say it's conservative but at the very least it's -- at this point when you are running two pretty basic predictable businesses, we should be able to predict it in a fairly narrow range.

So I really don't think there's too much deviation from, call it, The Street's models and what we are currently running or at least projecting for the next three months. It is now at this point here a pretty narrow range.

Okay. No, that's helpful and thanks for the additional color. And then just with regards to AseraCare and that whole case and I know it's a different animal altogether but there are some readthroughs that we could probably make. If they're -- if it's quantified that their exposure is kind of $150 million to $200 million, I mean, just if you kind of conceptually think about what Chemed's exposure could be, how can we kind of book-end to kind of know -- not necessarily with any degree of certainty, but just what's the potential range? Or is that even knowable at this point, given where we are in the proceedings?

You can't book-end it, Toby. From that standpoint, you're talking about a captive hospice of a nursing home chain, and we say we are a completely different animal in terms of where our patients come from in our clinical care model.

Let me also just say, the questions you are asking, and just it's like a different kind -- are the kind of questions we have with our accountants every quarter, to the extent that we can do what you are saying and we thought there was a significant possibility of liability, we would book something. Okay? So I mean, almost by definition we are saying it's pretty difficult.

I'll say -- I will say this that when you talk about depending on what probability you plug in -- let me -- I want to characterize it. It was bad in that the jury pretty much bought the government's experts that basically all hospice patients are ineligible. Okay? I mean it was like -- from that regard, it was in a decision that will embolden the big thinkers in government.

I'll tell you that, going on the other side would seems counterintuitive. Up to this point, the government really never faced litigation risk. In other words, every case just got settled before it even went this far. And when you go before a jury, there is risk. And you know maybe the result was something that was pleasing the government, they probably had several sleepless nights as far as waiting for the jury to come back and that's the kind of thing that cuts the other way.

So, but to answer your question, I'll state the obvious. If you said what if all of those hospice -- all hospices including ours, all patients over 90 days, an expert would ultimately say they were ineligible from the start. It's as crazy as that is, let's say it's possible that a jury could hold back and then you multiply that number by three. You're talking about numbers that are crazy. That would be ruinous to all healthcare because, as you know, every healthcare company has these whistleblower cases.

So I hope I'm not talking in circles here other than to say picking up on what Dave said, what we take from the AseraCare decision is -- and when I say decision, preliminary decision is that the jury bought the government's theory that virtually all hospice patients were ineligible. Okay? That's not good for any healthcare company. And if any healthcare company that had faced that type of finding, it would be a negative.

We don't expect that type of finding. As Dave says, to accept that you've got to remember our over 93% of our patients come from doctors that have no connection to VITAS whatsoever, and they are saying in our professional opinion they are eligible for hospice. And then our doctors evaluate them as well. A little different from a captive nursing home where they are basically getting patients who are -- who they are being found eligible by self-referring.

So -- but the answer is, I don't want to run from it. I want to say that any time you are facing the government -- there is a reason why all these cases happen. And that is the government holds the upper hand and the companies say God lived to fight another day. I'm paying it off with a shareholder's money. Let's go on.

There's a couple reasons why that doesn't really apply to VITAS. And this is not just -- I hope it's not whistling past the graveyard, number one, and I hope it's not foolishness. But you've got to remember since there is no allegation at this point of really bad activity. If you read up the plaintiff that, well, salespeople felt under pressure to impress referral sources, and if they didn't do that, they would lose their job.

If that's the worst thing that was alleged, how can we settle the case and then go on in the future? You know what I mean? If you are facing liability for something that is vanilla as that, what is -- how do you run a company in the future?

So I mean there's a couple things that make it different. But you know I could tell you right now headed that is a good decision for AseraCare, the government will laugh it off and say that's Alabama. They don't know what they are doing. That has no application to us. I mean I didn't take it as overly good or overly bad, because I knew that under the best of circumstances they wouldn't have given it any -- they wouldn't have paid any attention to it.

Okay. No, I appreciate you got from that. And then just one last question I had as RAC activity is kind of scheduled to start back up next year, assuming CMS can kind of get that whole program launched again, which is a big assumption, I admit -- kind of how are you guys thinking about that in terms of just preparation? I know those things can kind of be disruptive when recovery audit contractors come in. But just kind of walk us through you all's prep for that at some point next year.

Well, Toby, we haven't seen any approved workplan for -- put up by CMS for RAC audits related to hospice, have you?

No. The RFPs go out November the 1st.

You know, we've been having focused medical reviews that come in on a regular basis. We do very, very well with those. It's hard to comment on what they might do in the future. The key is going to be what work plan is approved and what are the -- what's the direction RACs are given. But today hospice is actually -- it hasn't been a factor to date.

And let me say as Dave said, this year we are focused on a couple of years. That's like a RAC audit done by people who know something about the field. And to the extent that you say, well, what happens when you just turn loose a bunch of know-nothing third-party people that are just going to deny everything that isn't nailed down? Well, okay, that opens up a whole new can of worms. But generally, the hospice industry regularly faces outside review by fairly knowledgeable sources.

Tim is close. Have you heard any rumblings?

No. I don't see anything happening in that regard. But of course, we expect it to happen at sometime in the future and for several years. And since the Company was founded, what we've always tried to do is be 100% compliant with every issue. And we've seen over the years that VITAS does a very good job with it. So we are preparing, we are redoubling, re-tripling every effort on all compliance matters. And I think that will leave us in a very strong position when those begin.

Okay, thanks for your time, guys. I appreciate it and congrats on the quarter.

At this time, we have no further questions. I would now like to turn the conference over to Mr. Kevin McNamara for closing remarks.

No. My remarks are limited to thank everybody for listening. And again, we have one quarter left, and we'll have our report at that point and give guidance for the following year in that call. So, thank everyone -- thanks, everyone, for their kind attention.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. You all have a great day.