Hirequest Inc (HQI) 2021 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the HireQuest Inc. Fourth Quarter and Year-end 2021 Earnings Call. (Operator Instructions) It is now my pleasure to turn the floor over to your host, Jenn Belodeau. The floor is yours.

Thank you, operator. I would like to welcome everybody to the call. Hosting the call today are HireQuest's CEO, Rick Hermanns, and CFO, David S. Burnett. I would like to take a moment to read the safe harbor statement. This conference call contains forward-looking statements as defined within Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended.

These forward-looking statements and terms such as anticipate, expect, intend, may, will, should or other comparable terms involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Those statements include statements regarding the intent, belief or current expectations of HireQuest and member of its management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those described in HireQuest's periodic reports filed with the SEC and that actual results may differ materially from those contemplated by such forward-looking statements, except as required by federal securities law, HireQuest undertakes no obligation to update or revise forward-looking statements to reflect changed conditions.

I would now like to turn the call over to the CEO of HireQuest, Rick Hermanns. Go ahead, Rick.

First, I'd like to thank everyone for joining us for today's call, especially our shareholders. We appreciate your continued support and your continued belief in the HireQuest model. To begin, I will provide financial and strategic highlights for the full year, and then David will share details on our fourth quarter results.

In Q4, we continued the momentum that we saw in Q3 and exceeded Q4 2019 pre-pandemic comparable revenues while simultaneously generating strong margins and profitability across the board. Franchise royalties grew 88% and total revenue 99% in Q4 with net income increasing 62% to $2.2 million or $0.16 per diluted share. For the full year, franchise royalties grew 67% and total revenue grew 64% with net income increasing 121%, reaching $11.8 million or $0.87 per diluted share.

Adjusted EBITDA for the full year was up 54% to $14,700,000. Our fourth quarter results included annual comp -- I'm sorry, our Q4 results included annual incentive compensation, which we have historically recognized in Q1. This change in accounting methodology results in 2 years' worth of incentive compensation running through our P&L in 2021. This strong growth was both organic and acquisition driven. Organic franchise royalties growth in Q4 and the full year was 47% and 30%, respectively.

During the year, we opened 14 new offices, a net increase of 13 new offices, up from 5 and a net -- 5 new offices in 2020 with a net decrease of 8 offices in 2020. Our franchisees are incentivized to open new offices given the attractive economics that our model provides them and the fact we support them with working capital financing, technology and back office support amongst other things. Moreover, we support organic growth by helping our existing franchisees with part of the costs to open in new markets. We are unaware any other franchisor that does such a thing.

In addition to new offices, our organic growth was positively impacted by improved sales at the existing offices as they benefited from the pandemic subsiding. We also completed 4 acquisitions during the year, expanding our market verticals and enhancing our proprietary technology platform. A defining characteristic of 2021 was the strategic transformation of our end markets from almost entirely on-demand light industrial to a healthy mix of light industrial and commercial staffing opportunities. The Link and Snelling acquisitions early in the year provided immediate scale to our commercial vertical. Our success in quickly integrating both acquisitions is due in large part to our differentiated franchised model as well as a testament to our operations team and systems. The franchise model is also an important factor in the continued performance of these 2 businesses by maintaining local ownership through new and existing franchisees, customer relationships remain intact post-acquisition, enabling our franchisees to better retain pre-transaction revenues.

For HireQuest, the success of an acquisition isn't predicated on achieving certain levels of cost synergies through consolidating operations and reducing the expenses of the target as is often the case with a company-owned model. As a franchisor we can service new franchisees with minimal increases to our expense structure, providing predictable and repeatable operating leverage as we continue to layer on new organic and acquired business. In Q4, we acquired Dental Power Staffing, which gives us access to the dental market. This acquisition is unique in that it will remain a company-owned store in the near term, but we are utilizing the experience operating this business unit to build out a franchise offering for the dental market.

Finally, in Q4, we closed Recruit Media, a next-gen SaaS recruitment platform that streamlines workforce communications. This acquisition allows our franchisees to better serve their customers and the technology we acquired basically leapfrogged a lot of steps that we had planned in our internal technology road map. This momentum is kept up as we have entered into 2022. We have made 3 strategic acquisitions so far this year, which combined generated over $35 million in sales in 2021. Similar to the acquisitions during 2021, we continue to enhance our geographic footprint and grow in tangential staffing verticals. dmDickason adds 3 new Snelling offices in West Texas and New Mexico. dmDickason historically provided a reasonably significant amount of medical staffing from which we intend to build.

The Dubin Group and Dubin Workforce Solutions bring us to Philadelphia and provide executive placement, professional staffing services and commercial staffing services, respectively, and Northbound Executive Search adds an office in New York City and provides executive placement and short-term consultant services for blue-chip clients in the financial services industry. With the exception of the Dubin Group, each of these acquisitions have already been converted to franchisees. The transaction costs related to these acquisitions and the costs related to their subsequent conversion to franchises will be reflected in Q1.

So as you can see, we've been quite busy on the acquisition front. As I mentioned earlier, a key and differentiated aspect of our asset-light franchise model is that we are able to integrate acquired businesses quickly and with comparatively less operational effort. Because of this, we are able to remain active and opportunistic on the M&A side of things. So a lot of great things. So there are a lot of great things going on in the business. Our model is truly unique in the sector. And the fourth quarter highlighted the progress we are making scaling this business and driving increased profitability for our shareholders.

With that, I'll pass you along to our new CFO, David S. Bennett, for a deeper dive into the results. David joined us in December and brings over 30 years of diverse financial experience to HireQuest, most recently with Ivy Asset Group and before that with BKF Capital Group. David has quickly become an important member of our senior management as we grow the business, and it is great to have him aboard. David?

Thank you, Rick, and good afternoon, everybody. Thank you for joining us today. We had another solid quarter. Total revenue for the fourth quarter of 2021 was $6.8 million compared to $3.4 million for the same quarter last year, an increase of 98.8%. Our total revenue is comprised of 3 components: franchise royalties, which is our primary source of revenue and typically accounts for over 90% of our total revenue; service revenue, which is generated from interest charge to our franchisees on overdue accounts receivable and fees for various operation -- optional services; and third is staffing revenue from owned locations. Franchise royalties and service revenue are derived from our franchise base. From time to time, we may have owned location revenue as a result of acquired businesses that are not converted to franchises or held for sale.

In 2021, the only owned location is the dental staffing location that we acquired late in the year. Franchise royalties for the quarter were $6.1 million compared to $3.2 million last year, an increase of 87.9%. While the addition of the acquired Snelling and Link locations contributed to this growth, we experienced organic growth of 47.1% during the fourth quarter. System-wide sales for the quarter were $106.8 million compared to $54.8 million for the same period in 2020, an increase of 95%. System-wide sales include sales in all offices, whether owned and operated by us or our franchisees. During the quarter, our system-wide revenue surpassed pre-pandemic levels even when the effects of the Snelling and Link acquisitions are removed.

Selling, general and administrative expenses for the quarter were $4.4 million compared to $2.2 million last year. The increase in SG&A was primarily driven by increased incentive compensation expense. We have historically recognized discretionary bonuses in Q1 of the following year. However, as Rick noted, we changed our methodology resulting in an acceleration of the expense in Q4. Core operating expenses remained relatively flat, reflecting the leverage in our business model with incremental revenue. The bottom line is we have not added considerable corporate overhead to support our rapid growth.

Net income for the quarter was $2.2 million or $0.16 per diluted share compared to net income of $1.4 million or $0.10 per diluted share in the fourth quarter last year. Adjusted EBITDA in the fourth quarter of 2021 was $3.5 million compared to $1.9 million in the fourth quarter of last year. We believe adjusted EBITDA is a relevant metric for us due to the size of noncash operating expenses running through our P&L. A detailed reconciliation of adjusted EBITDA to net income is provided in our 10-K.

Moving on now to the balance sheet and cash flow. Our current assets at December 31, 2021, were $42 million, compared to $39 million at December 31, 2020. Current assets at December 31 included $1.3 million of cash and $38.2 million of accounts receivable while current assets at December 31, 2020, included $13.7 million of cash and $21.3 million of accounts receivable. The lower cash position was primarily due to acquisitions made during the year. We often provide financing to our franchisees for expansion or initial capital needs. Our notes receivable balance, net of reserves as of December 31, 2021, was $4.2 million compared to $8.1 million at December 31, 2020.

During the year, we sold $5.3 million of notes receivable sold without recourse. We currently have approximately $17 million in availability under our credit facility, even after the 3 acquisitions completed in the first quarter of 2022. We believe that this facility, which we finalized in the second quarter, provides us with the flexibility and room for both organic growth and the capacity to capitalize on potential future acquisitions.

Beginning in the third quarter of 2020, our Board approved and the company paid its first quarterly dividend of $0.05 per common share. Since then, we have paid a regular quarterly dividend. And in June of 2021, our Board approved an increase from $0.05 to $0.06 per common share. We paid a $0.06 per common share dividend on March 15, today, to shareholders of record as of March 1, and we expect to continue to pay a dividend for each subsequent quarter in 2022 subject to the Board's discretion.

With that, I will turn the call back over to Rick for closing comments.

Thanks, David. HireQuest had a remarkable and transformational year. And I'm proud of our team and our many accomplishments as we execute our strategy and reinforced our conviction in HireQuest's ability to provide a truly differentiated staffing solution to our customers and to create value for our employees, franchisees and shareholders alike. Our journey is just beginning. I appreciate your support and welcome you to come along as there has never been a better time to be a part of HireQuest. Thank you for joining us this afternoon. We appreciate your interest in our company. Now I'll open the line to questions. Thank you.

(Operator Instructions) The first question is coming from Mike Baker from D.A. Davidson.

I appreciate the commentary and the great quarter. I just wanted to ask now that we're back above pre-pandemic levels, how do you think -- how should we think about 2022? Maybe a preview on how you see this year sort of playing out in terms of some of your franchisees opening new offices or growth in existing offices, what kind of growth we might get from the new acquisitions? And then also talk about if we should expect any kind of increases on your expense line.

Mike, thanks for the question. I would say a couple of points. One, as far as growth for this year as far as revenues, I would expect a fairly significant increase in revenues if only because you're comparing 2021 revenues to -- which were still at pandemic influenced amounts, particularly in the first 3 quarters to a full year with presumably without significant pandemic influences. So I do need to hedge myself on that is obviously, if another variant comes out that slows things down, that would change that. But as you can tell, our revenues were far -- we were typically running 15%, 20% below pre-pandemic levels for the first half of the year. We caught up in the third quarter and then surpassed it in the fourth. And so it would be my expectation. There's no reason for us to drop below pandemic -- pre-pandemic levels. And so that bodes well for our overall revenues for 2022.

As far as openings, obviously, the economy -- there's a lot of opportunities out there with, again, the subsiding of the pandemic. And so our franchisees were rightfully cautious to open new offices in 2020, of course. But even in 2021, there was still sort of a recovery from that. And so I would hope that we will see even more openings this year as the pandemic goes further behind us. And already a few offices have been opened or are plan to be opened. So that's a great thing.

Got it. Got it. Okay. And then more of a short-term question, but just wanted to ask you about you have a great pulse on the economy, just seeing the labor market in a number of different verticals. A lot of stuff going on here in the calendar first quarter between cycling stimulus and situation in Eastern Europe and rising gas prices, et cetera. What's your general view on the economy right now on -- obviously, labor market is very tight. How does that impact you guys? Just your sort of pulse on the economy would be helpful.

Sure. So one of the things that's kind of funny even in preparing for this call, I went in and I just looked at, for example, the penetration in Western Europe of temporary staffing as a percentage of total employment in Western Europe. And it typically is around 10%, whereas in the United States, it's somewhere in the 2% to 2.5% range. And so I think what we're experiencing here is with the way the economy is, I think that companies are becoming more and more attuned to keeping their labor cost down, number one, because of the shortage, but also just as wages have risen, and really, this was before the pandemic. Wages were rising in real terms strongly in 2019 already. And as they rise, obviously, companies need to look to -- in order to keep their margins in line, they need to look for ways to keep their costs in line. And so I believe and I believe it's borne out by our numbers is that -- that there's going to be a greater and greater demand for temporary staffing.

And even just the absolute lack of workers is going to increase that demand for temporary staffing as well, which, to me, goes back to beyond what's going on in Ukraine, beyond what is going on with the sort of post-pandemic sort of supply chain issues. The reality is there's a large demographic shift in this country as well. And as the labor force literally begins to shrink, it's going to create a keener and keener competition for workers and more and more of a requirement to be smart with your workforce. And I believe that as a temporary staffing company, we're -- and our franchisees are in a great position to capitalize on those demographic shifts.

The next question is coming from Kevin Steinke from Barrington.

I just wanted to start out by just getting that small housekeeping numbers item on the way here. Just -- are you able to quantify the impact of that shift in the incentive compensation that you talked about into the fourth quarter from the first quarter?

Yes. So that -- moving the sort of incentive compensation from Q1 2022 as we had for the last, probably 18 years into Q4, cost us some pretax dollars, about $2,006,000 or a net effect of $1,740,000. So it was a significant impact.

Yes. Okay. No, that's very helpful. Yes. I mean excluding that, it really shows kind of the operating leverage you're able to drive there. But -- okay. So good. I wanted to ask too about the 3 acquisitions that you did in January, and those came together in pretty rapid succession. So maybe just any more color on how those came together, how long you were working on those and any more general comments on the M&A pipeline overall?

Sure. I think we started probably working -- we took them from -- each one was a little bit different. The dmDickason one went on for a bit longer of a period of time simply because they had other people looking at it. So that was a slower process, not necessarily because of us or because of them, but simply because of sort of the desires of the seller. But as a general rule, once both sides are determined to buy -- want to buy and want to sell, it really only takes us typically from LOI to close. It usually doesn't take us more than 2 to 3 months. So really, these only started cooking probably like in November, December. And we were able to close them in pretty rapid succession.

Again, that echoes back to our franchise model because when the people on the ground generally are the exact same on day 1 post close, it really simplifies what we need to do. And so we're really in a great position to do that. As far as the pipeline, we're always beating the bushes. And so the pipeline, frankly, could be as big as we wanted it to be except when I say that, it really won't be because we're pretty choosy on the parameters which will actually go towards an acquisition. In other words, we're not going to just -- we're not growing just -- and I've said this a bunch of times. We're not growing just for the sake of saying that we're at $400 million, now we're at $500 million, now we're at $600 million in system-wide sales. That's not -- we have no desire to just have that top line.

It needs to always be an acquisition that's going to be accretive for our shareholders. So that's all we're ever going to do. So that obviously requires more filtering of deals. But there's plenty of them. Again, there are plenty of them that are out there, in part because the pandemic kind of slowed it down. Obviously, nobody wanted to sell in 2020 unless they absolutely had to because their business declined so significantly and so nobody wanted to. But now that we're -- and you see it throughout the staffing industry. I know you follow some other staffing companies. I mean most companies have now sort of started to exceed pre-pandemic sales levels. And so I would expect us to be able to see even more deals now because people who have been putting off retirement are now ready to sell.

All right. That's helpful commentary. And I wanted to ask, too, about DriverQuest, which you launched in the summer of 2021 and just adoption of that offering among your franchisee base? And any -- just commentary on how that's progressing and helping to drive growth.

The -- it's a good -- it's a fair question. It's not been a large driver of growth at all. The reality is we, for 20 years, would get requests for drivers, and we wouldn't take it because of really the insurance risks are significant in trucking. And so we put together, obviously a special program in order for us to do it. And it has not -- while a fairly substantial amount of our franchisees have set themselves up so that they're able to offer drivers, I wouldn't say that a lot of them, and in fact, very few have really devoted a lot of time to developing it. And to be honest with you, part of that is logical and rational simply because with the shortage of, I'll call them, just vanilla workers, all of our offices are -- most of our offices are still have more jobs than they have people to fill them. And so to go into trucking, which is an even tighter market, has sort of a bit of masochism attached to doing that.

So I do believe that in the long run, it will be a good market for us. And it is helpful. It isn't nothing, but it isn't really what's driving our growth at all. We are getting significant growth. In fact, in -- we were running -- I think it was in the commentary, but I think 47% ahead of the fourth quarter of 2020. That's a really big number. And that's excluding -- that's just comparable sales. So I guess what I'm trying to say is that there's a lot of already business to be had without reaching into -- without reaching into trucking. But I do believe it will be adopted as time goes on and the sort of the market for workers reaches more of an equilibrium.

No. Yes, that makes sense. I mean it is obviously still very early on with that offering, and it sounds like adoption has been pretty good by the franchisees, and it's clearly a strong long-term play for you. So that makes total sense. Just as we're hopefully getting Omicron and COVID, hopefully in the rearview mirror here, knock on wood, I mean, did you detect any noticeable impact in the fourth quarter, early 2022 numbers from the surge in COVID cases? I mean, clearly, you still exceeded pre-pandemic levels, but I was wondering if you think that impacted demand at all.

It's a good question, and I'm not really sure of the answer. What I will tell you is that our demand in, let's say, from Thanksgiving until mid-January, sort of during the peak of Omicron was tremendous. We had really, really strong demand throughout that period. Now you could take that 1 of 2 ways. One is it's just a recovery from -- just from the pandemic, you just look at it as just normal or you could take the position that companies were short of workers because of Omicron and they were backfilling their warehouses and factories with temporary people. But I tend to think it's probably the former simply because our orders -- we didn't get like special orders from companies that we had never heard of before. It was just us being able to fill more and more of the existing demand. So it could be either answer. But I do -- I think it was the former, not the -- that it's just a recovery from pre-pandemic levels. But the numbers were really strong.

Right. Okay. And just lastly, can you touch on labor shortages? Have you seen any easing there? I know you said you started to see a bit of easing towards the end of the third quarter. But I mean, maybe Omicron, things tighten up a little bit? Or just how significantly are labor shortages impacting your ability to fill demand, I guess?

Yes. And as I said in our last earnings call back in -- I guess it had been in the middle of November, the ending of the $300 supplemental unemployment benefits really, really helped us. And our business really -- our fill rates really started taking off in the second half of September. That said, we're still short of workers. If we had -- in some places, the shortage is worse than others, but it's still really tight. It might be marginally better than what it was let's say, in October or November. But I would say, generally, we're still really short of workers, especially ones that have a defined skill. It's gotten a little bit better for, I would say, let's say, a general warehouse worker or a general construction worker, but when you start talking an electrician or a forklift driver, it's still every bit as tight as it was back in, let's say, October. Still better than July, but not -- I don't see it. I don't see it being any better than it was, let's say, in October or November.

Okay. That's good color. And nonetheless, you're still able to put up really strong growth in the quarter despite that. So yes, congratulations on the results.

(Operator Instructions) The next question is coming from Aaron Edelheit from Mindset Capital.

I wanted to look forward to this year and 1 model, you acquired companies last year, you've acquired companies this year. When I kind of -- I wanted to run by just kind of a model, assuming there's no new crazy pandemic or we continue the trend we're seeing. I'm kind of coming up with system-wide revenue of around $440 million. And when I use the model that you shared before that you generally get about 4% net, I'm coming up with EPS targets that are -- it comes up with about $1.30 in earnings. Is there -- I know your -- anyway, I'm just curious if am I thinking about things the right way in terms of system-wide revenue? Is there anything that would change the historic model or how you've viewed HireQuest?

So let me break apart the sort of the 2 things really that you suggested. As far as the system-wide sales, obviously, in 2019, if Command and HireQuest had been merged for the full year, our system-wide sales were, let's just say, $290 million. The annual sales purchased in the Link and Snelling transactions were like another $110 million. So that's $400 million. And we just bought $35 million worth of sales. So that's $400 million with 0 growth. So I think that if you're using that number, I would sit there and say, well, yes, that's just math.

As far as income is concerned, realizing our target is 3.5% to 4.5%. And frankly, with the amount of amortization that we have, 3.5% is a lot more realistic. As far as...

To amortization, I just want to confirm, that's because of your acquisitions. You're an asset-light business. So this is 1 request I wanted to make in the future, maybe you could also report a cash EPS number that's fully taxed without the amortization because it's really not reflective of your underlying cash flow, right?

Well, that's -- I mean, that part is true. And so we'll have to sort of look at your request there. Part of it, obviously, we're trying to model that with our adjusted EBITDA as well to get something close to that. But I would also caution one of the thing is, needless to say, there will be costs related to converting these offices that we just bought into franchises, the cost of doing the deals and converting them to franchises. So I just throw that out there as well. I don't want you to think that, hey, Rick Hermanns is forecasting...

No, for sure. But those will just be onetime costs, right?

Yes, absolutely. That's right.

But on a normalized basis, if I just took -- basically taking 2019, as you said, of what HireQuest and Command Center did, adding in the Snelling and Link and then your new acquisitions, and then using your historic framework, whether it's 3.5%, which would be like $1.14 to 4%, which would be $1.30. And that assumes kind of no other acquisitions, that -- that's still a good framework to view HireQuest.

Yes, I would agree with you.

And then I'm curious if you're -- you've been looking at new verticals. Obviously, you've been expanding. You made acquisitions. And some of the bigger ones like security guards and others, how does the outlook look for kind of tapping into yet another vertical this year?

I would simply say there's no -- with the 3 deals already closed, we're -- I think my ops team and my finance team were getting bored. I think it's -- so I think it's time -- they're probably sitting there right now, probably screaming. But I do believe that we will -- there's nothing stopping us. So it really just comes down to availability and attractive acquisition target. Not -- there's nothing limiting us at this point.

Got you. And from the last 2 quarters, I've gotten a sense, and I've always appreciated your straight talk. The last 2 quarters I've gotten a sense that you're becoming -- from your comments that you're becoming a lot more optimistic about where HireQuest is than the quarters before. Am I reading too much into that as a long-term shareholder? Or -- I'm just curious if you could comment on that.

I'm not 100% sure. I'm generally an optimistic person, so I'm not generally certain I could say that I could validate what you're saying there. What I can say is clearly where there is probably more confidence is that -- and this is something we tried to even bear out in our -- sort of in our presentation is that what's crucial about the fourth quarter that we just experienced and by exceeding pre-pandemic levels, particularly including Command Center means that we are -- we've demonstrated now over, let's say, a 10-quarter period, that we were able to retain the business that we acquired. And the same is true with Snelling and with Link.

What that really means to me is that, we've done a really good job retaining what we acquire. And the real demon in service company acquisitions is retaining that business, right? Because it's service related. So when you lose people, you lose business. And with a lot of these acquisitions, people go out and then the top salesperson quits, the good managers quit because they don't like the new culture. Well, in our case, typically, the old -- the incumbent management team is the same people who are sticking around.

And so if I have more confidence, it would be simply because I do believe our model has been validated now over really 10 quarters. And so in that respect, I do -- I guess, maybe that's come out, it's not intentional. It's just -- I mean, I always believed it was going to happen. But of course, it's kind of funny when you look at the history of what happened with the company, if we went -- we did the acquisition or the merger had a bunch of costs the first 2 quarters. And literally, finally, it's like, yes, we got this stuff behind us and then the pandemic hit, like literally in the first quarter when we were like ready to hit good things.

And so it's kind of been a long journey that way. And I do feel that we're on -- a lot of things could happen. Oil could go to $150 a barrel, inflation could go to 12%, lots of different things that can happen that can mess things up. But overall, again, I do feel like our business model has been validated and which means there's no real limit to what we do.

That's great. And last question is on inflation is in a weird way you're somewhat insulated or might even benefit from inflation that flows through labor costs because your franchisees are getting a percentage of whatever the prevailing wage rate is and then you're getting a percentage of the franchise. So in a weird way, as labor costs increased, HireQuest tags along. Is that the right way to think about it?

That's very accurate. I would say there are a few cases where maybe we're locked into a sort of a fixed price for the year, fixed price might be $18 now or $17, whatever it is, that obviously can create a problem in a rapidly -- sort of in an inflationary environment. However, we have had far more pricing control than what we've ever had. I've been in this business for 31 years, and we never had pricing power. Right now, we have pricing power because -- not so much because we're just clamoring for it, but just simply the worker has the pricing power. It's just simply if somebody comes to us and says, we want a janitor for $14 an hour, it's like good luck. You're not going to find them. And so from that perspective, we are very much protected and that's a good thing.

This completes today's Q&A portion of the call. I'd like to turn the call back to management for closing remarks.

Well, again, thank you, everybody, for joining us on the call. I hope that you go away with a better understanding of how well the fourth quarter really did go for us and that 2021 is really hopefully just a harbinger for the future. Thank you again for your tuning in, and we look forward to a great 2022. Thanks a lot.

Thank you, ladies and gentlemen, this does conclude today's conference. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.