LHC Group Inc (LHCG) 2011 Q3 法說會逐字稿

Good day, ladies and gentlemen and welcome to the LHC Group Q3 2011 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your Touch-Tone telephone. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Eric Elliott of investor relations.

Thank you, Javon and welcome everyone to LHC Group's Earnings Conference Call for the third quarter and nine months ended September 30, 2011. Hopefully, everyone has received a copy of our earnings release. If not, you may obtain a copy along with other key information about LHC Group and the industry on our Web site at lhcgroup.com. In a moment we'll hear from Keith Meyers, Chief Executive Officer; Don Stelly, President and Chief Operating Officer and Pete Roman, Chief Financial Officer of LHC Group. Before that, I would like to remind everyone that statements included in the conference call and in our press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements include, but are not limited to comments regarding our financial results for 2011 and beyond. Actual results could differ materially from those projected and forward-looking statements because of a number of risk factors and uncertainties which are discussed in our annual and quarterly SEC filings. LHC Group shall have no obligation to update the information provided on this call to reflect subsequent events. Now, I am pleased to introduce the CEO of LHC Group, Keith Myers.

Thank you, Eric and good morning everyone. The third quarter of 2011 presented LHC Group with many short term challenges. I commend our experienced leaders throughout the organization and the dedicated hard working employees of LHC Group for their long term commitment to quality patient care and their ability to remain focused on the fundamentals of our business when challenges come our way.

In a few minutes, I'll turn over the call to Don and Pete to share an overview of the quarter, but first I want to briefly focus on the long term view of our experienced leadership team with regards to the future of home health and the positioning of LHC to capitalize on the long term growth ahead in our sector.

I'll begin by sharing our views on potential reimbursement challenges affecting the Medicare home health benefit as a result of Congress' Joint Select Committee on Deficit Reduction. It's very clear that the Joint Selection Committee on Deficit Reduction is considering further cuts to Medicare and Medicaid as they seek to identify $1.2 trillion in savings. This means that every healthcare sector is at risk. As I mentioned in our earnings call for the second quarter, LCH Group and other leaders in the home health community founded the Partnership for Quality Home Healthcare, a coalition that includes some of the nations leading home health providers as well as the National Association for Home Care and Hospice. The mission of the partnership is to advance solutions that strengthen the Medicare program, secure access to beneficiaries and achieves stability for the delivery system on which seniors depend. The partnership is represented by strong and diverse team, including former Congressman Billy Tauzin, former Senator John Breaux, the Podesta Group, Patton and Boggs, Alston and Bird, Liberty Partners Group, Stanton Park Group and Phil Clark. In addition, Eric Burger, a Capitol Hill veteran who has led several initiatives for the dialysis and oncology communities, serves as our CEO. As part of these comprehensive efforts, the partnership has commissioned a number of detailed analysis from Avalere Health, Dobson and Davonso Associates and Douglas Holz-Eakin, former Director of the Congressional Budget Office. Collectively, over 60 professionals now represent the home health community in Washington. As a result, we believe that the partnership is well suited to address the risk and opportunities that face the home health community in Washington, D.C. today.

Let me first address the risks. Earlier this week, CMS finalized its proposed regulation that significantly reduces Medicare reimbursement for home health services effective January 1, 2012. The final rule provides for a case mix adjustment of negative 3.79% in 2012 and negative 1.32% in 2013 instead of the negative 5.06% adjustment in the proposed rule. The final rate reduction from the 2011 rate is approximately 2.4% compared to the proposed 3.5%. Elimination of codes for two types of hypertension n the case mix formula, reduction of case weights for high frequency therapy visits, 5% reduction on 14 plus visits episodes and 10% reduction on 20 plus visit episodes and increasing case weights on [seal over] six therapy visit and non-therapy episodes.

CMS claims it's adjustments to the case weights were made in a budge-neutral manner. Minor relief from the face-to-face encounter requirements and that any physician in the hospital setting can now perform the face-to-face encounter and report the findings to the certifying physician. We believe the Select Committee is considering further home health reimbursement cuts and/or home health co-payment or co-insurance if the proposal it is charged with issuing by November 23rd in the proposal. Finally, the across-the-board cuts that the debt limit deal requires at the Select Committee's recommendation do not save enough money or are not enacted into law could reduce reimbursement to home healthcare providers by 2% for the next several years.

Clearly, these are very significant issues that are being addressed in a very serious manner by the home healthcare community. As we do so, however, we're mindful of four important factors. First neither accelerated hone health re-basing nor home health co-payments was enacted as part of the Budget Control Act. We believe this is noteworthy as both were recommended by MedPAC and the Simpson Bowles Deficit Commission and they were closely considered by the Biden Working Group.

Second, we continue to have reason to believe there are officials in the Administration and Congress are concerned about the impact these provisions could have on beneficiaries. Remember, the Budget Control Act establishes a few restrictions on the sequestration process, and one of them is the specific prohibition on provisions that would directly impact beneficiaries. As a result, even if sequestration is triggered, a home health co-payment can not be established.

Third we have been gratified by the attention that has been paid by the White House and Congress to the reforms that the partnership itself has proposed in its Skilled Home Healthcare and Integrity and Program Savings proposal. This proposal, which we call SHIPS for short, focuses on program integrity, payment reform and quality improvements in order to achieve sustainable savings, protect beneficiaries and achieve operational stability. Due to its substance and potential savings, our proposal has been supported by governors and members of Congress alike as a preferred alternative to cuts and co-pays.

Fourth, last month the partnership in conjunction with the AARP, Easter Seals and many other valued stakeholders lost the fight for our first advocacy campaign in an effort to convince the Select Committee to capture savings from anti-fraud and abuse efforts before considering further cuts to benefits and providers. In conjunction with this initiative, the partnership has endorsed the Medicare and Medicaid Fighting Fraud and Abuse to Save Taxpayers Dollars Act, which was introduced by Senator Carper and Senator Coleman and which has 28 bipartisan co-sponsors in the Senate. The Fast Act also targets fraud, waste and abuse to further strengthen the Medicare and Medicaid programs.

So where does all this leave us? The Select Committee is working behind closed doors as frankly it should be. Theirs is a daunting task and it needs to be done with total focus. Nevertheless, there are a few things we do know with a high degree of certainty. First, as I mentioned earlier, there are substantial risks to all healthcare providers as the Select Committee concludes its deliberations. The Administration and Congress are considering significant savings, spending cuts that will be politically challenging. Second, the Select Committee is actively looking for ways to reduce spending without impacting patients or providers. After all, they are striving to save at least $1.2 trillion in the least damaging way. Third, those sectors that can deliver savings without inflicting harm to seniors could therefore achieve positive outcomes. Home health is in a potentially unique position to do so given the clinical and fiscal benefits of serving more patients in their homes. And finally, while it is premature to come to any conclusion, we are consistently hearing from members and key staff that they now understand that skilled home health services are a high quality and lower cost alternative to facility based care. As a result of these factors, our SHIPS proposal has been given very close consideration by key decision makers on the Select Committee and Congressional leadership and in authorizing committees.

Our continuing focus is to ensure that this process leads to an outcome that helps secure the Medicare program's fiscal future by achieving savings through program integrity rather than cost sharing and cuts that would impact the vulnerable seniors and disabled Americans who depend every day on quality home healthcare. According to the U.S. census Bureau, the 65 and older population in the United States will more than double over the next 30 years. With this rapid growth in the aging population, the healthcare industry including providers and payers will have no choice but to seek out long term solutions to lowering costs. There is no question that home health will be a primary solution to lowering costs given the many research reports that have been conducted will show that home health is more cost effective than unnecessary institutional care.

Remember Avalere Health showed that home health saved the Medicare program $1.7 billion over two years, much of which was attributable to home health serving to avoid 20,000 unnecessary re-hospitalizations. Not to oversimplify the long term value proposition for home health, but with the rapidly expanding elderly population combined with the necessity to seek out the lowest cost care delivery system, we are more confident than ever that over the long run, the home health industry and LHC Group has unlimited opportunities for growth.

At LHC Group we understand this and this is why over the past three years we've stayed the course through challenging times and continued to make long term investments in people, quality and technology. As a result, today LHC is well positioned to be at the forefront of the impending consolidation in the home health industry and long term growth opportunities ahead for high quality, efficient, post-acute providers. This is why we made the decision to invest in Joint Commission Accreditation. It's why we invested in new technologies such as home care Hone Based, [loss] in payroll, financial reporting and our compliance 360 software that supports the robust compliance program we operate today. This is why we have continued to add depth and experience to our management team and to work extremely hard to retain and provide leadership training to our existing talent.

Not only have we made the investments necessary to capitalize on the future, but through our joint venture strategy, we have positioned ourselves to be a leader in change as our existing and future hospital partners look to expand the role of home health in the healthcare delivery system. At LHC Group we understand the hospital is the primary delivery mechanism for healthcare in the communities we serve, but as the only national provider of home care with experience in home health joint ventures with hospitals, we are uniquely positioned to work with hospitals to expand the role of home health in order to avoid the penalties associated with unnecessary re-hospitalizations.

Our team is having conversations every day with our existing and future partners to develop new models that will decrease costs, improve patient outcomes and develop more efficient communications among providers throughout the care continuum. We are confident that this type of thinking and creativity will serve as the catalyst for long term growth for LHC and the home care industry.

Turning now to acquisitions, thus far in 2011 we have closed on seven acquisitions with approximately $18.5 million in annual revenue. With regard to our pipeline, we are currently in active negotiations with 12 acquisition candidates in eight states representing approximately $86 million in annual revenue. Ten of these are hospital based. With the clarity provide by the CMS final rule, and the completion of the work by the Joint Select Committee on Deficit Reduction anticipated before year end, we look for the pricing gap between buyers and sellers to narrow and for consolidation in the industry to accelerate as we move into 2012 and beyond.

I want to once again commend and thank all of our leaders throughout our company and all of the dedicated, hard working employees for their unwavering commitment to those we are privileged to serve in communities throughout the country. We have faced many short term challenges this year as an industry, but despite these challenges, our team continues to provide consistent high quality, cost effective care to the sick elderly population we serve. I am proud to be a part of the LHC Group team and I believe we have assembled a group of dedicated care givers, employees and leaders who through their hard work ingenuity and commitment to excellence have built a foundation for our company that will serve our patients and shareholders long into the future.

And now I'll turn it over to Pete for a review of our financial results. Pete?

Thank you, Keith. Good morning, everyone. For the third quarter of 2011 our consolidated net service revenue was $153.4 million. Our net loss attributable to LHC Group was $38 million, and the loss per share was $2.08. Included in the net loss is an after tax charge of $45 million or a loss per share of $2.46 associated with the previously announced settlement agreement with the government.

Other items included an unexpected increase in self insured employee healthcare costs during the third quarter of $2.3 million for a fully diluted EPS effective $0.08 after tax. And the positive impact of the pay for performance payments we received in the third quarter, which increased net income by $715,000 or fully diluted EPS of $0.04.

Hone Based segment revenue was $135 million in the third quarter, which consists of $130.3 million in organic revenue and $4.6 million in revenue from acquisitions. Total organic Hone Based revenue was 10% lower than the same quarter of last year and organic Medicare revenue was 11.7% lower. The primary cause for the decrease in organic revenue in the Hone Based segment was an 8.2% decrease in organic home health census in the third quarter compared to the third quarter of 2010, which Don will discuss further in a moment, and the CMS rule for 2011 which reduced home health Medicare rates by 5.2%.

Our revenue per episode on home health Medicare completed episodes decreased to $2,344 or 7% in the third quarter of 2011 compared to $2,531 in the third quarter of 2010. This reduction was offset by growth in the organic hospice revenue of 10.4% over Q3 in 2010. Our Home Based segment makes up 88% of total consolidated revenue in the third quarter. The Facility Based segment revenue was $18.5 million in the third quarter. Our consolidated gross margin was 42.8%, a decrease of 3.7% from last quarter and a decrease of 4.5% from the third quarter of last year. The decrease in gross margin compared to Q2 is due to lower patient census and lower revenue along with the increase in self insured employee healthcare costs that I've mentioned earlier. The decrease in gross margin compared to last year was also caused by the factors that I just mentioned along with the 5.2% reimbursement cut which went into effect on January 1st of this year.

G&A expense was 34.3% of revenue, an increase from 32.4% last quarter and from 30.8% in the third quarter of last year. The increase compared to last quarter is due primarily to $3.1 million in expense associated with the recently announced settlement that was recorded in G&A expense in Q3 in 2011. The increase compared to last year was also caused by the item that I just mentioned along with the 5.2% reimbursement cut which went into effect at the beginning of this year.

As reported in our earnings release, the company is updated its previously stated guidance with respect to fiscal 2011 by adjusting its guidance for net service revenue to a range of $630 million to $640 million and a los per share to a range of $0.72 to $0.82. This guidance for fiscal year 2011 does not take into account the impact of any future acquisitions or share repurchases if made, de novo locations if opened, future legal and other expenses associated with the company's ongoing investigations or future reimbursement changes if any. Specifically, the guidance does not take into account the final 2012 rule which was issued on Monday by the Centers for Medicare and Medicaid Services and applies to episodes for patients on service at December 31, 2011. We estimate that the impact to the fourth quarter 2011 operating results from the final 2012 rule will be to decrease revenue approximately $1.2 million and impact fully diluted earnings per share by $0.04 after tax. The company's preliminary calculation estimates that the effect of the 2012 rule will be to reduce the 2012 Medicare home health reimbursement by 2% to 2.5% compared to 2011.

As I said, on Monday CMS issued the 2012 final rule. However, in the guidance section of yesterday's press release were incorrectly referred to it as the proposed 2012 rule. I don't want anyone to be confused, and we were referring to the final rule that was issued on Monday in that press release. And I certainly don't want to give anyone the idea that we expect or want another. One final rule a year is certainly sufficient for me. We can drill down on these results further in Q&A. Now, I'm very pleased to turn it over to Don Stelly.

Thank you, Pete and thanks to those joining in this morning. I'll begin my remarks by discussing our volume. In both of the last two calls, I've been clear as to the headwinds facing the home care side of our business, specifically, in regards to Medicare admissions and specifically because of regulatory changes. While these headwinds and challenges are still prevalent, we were able to generate a home health organic admissions growth rate of 5.1% inside of the third quarter while the total new home health admissions growth rate was 8.3% when compared to the third quarter of 2010. New home health Medicare admissions were 7.9% in Q3 as compared to the same period prior year, while organic growth for new home health Medicare admissions was 4.5%.

When you look at the year as a whole, we've been able to generate a home health organic admissions growth of 9.5%, which is on the top side of the range that I've continually reiterated. But repetitively, in the last call, I said that this is not an easy task within today's environment and that still holds true today. But we have key initiatives in regards to admissions growth and they include but are not limited to the following; a move to territory based versus agency based assignments, differing our urban market approaches, strategic platform use, specifically CRM and HMS data sets and finally, product differentiation where we're going to trademark as our T3 program.

Even though we're pleased with the execution of these and other initiatives, as we sit today we expect our home health organic admissions growth on an annual basis to still fall into that 5% to 7.5% range, but see that on the heels of this fourth quarter producing around a 3% rate.

Staying with volume, but turning to census now, we saw decline in census and widening of our census to admit gap. Some reasons include but are not limited to; first in the first quarter of this year please recall we generated an above expected admit number. So you combine and consider that with our episodic rate of 2.21 for the third quarter and 57% recert rate, we simply discharged a greater pace inside of a quarter, thereby creating a higher discharge to admit ratio, a difficult prediction because it's totally driven by patient assessment and their accomplishment of individual patient specific goals. So let me give you another component to explain census. Inside of the last 12 months especially, characteristics of our patient population are changing. When we looked at discharges from the third quarter and analyzed certain factors, there were certain ones that reflect the population which caused a shorter length of stay and a larger gap between census and admits than we've historically seen. So let me color in a few examples for that.

We had an increase in the percent of patients who were in a hospital in the 14 days prior to be admitted to home health. If you look at independent data, it shows clinically that patients that come out of the hospital tend to be more stable and thus, require skilled care for shorter periods. Another, we had an increase in the percent of patients who live alone. Sometimes this is counterintuitive because this is actually indicative of more independence and therefore the need for less skilled care and a shorter length of stay. Another, we had an increase in patients served in our Northwest sector of the country, where data clearly shows they have less chronicity, fewer chronic diseases and therefore, require shorter lengths of stay. And finally, we had a decrease in the percent of patients with the most severe initial clinical service levels and functional levels, specifically in the C3 and F3 domain of the PPS scoring methodology.

So in a nutshell, what does this mean? We were very pleased with our admit growth considering the (inaudible), but see those admits bringing in shorter length of stays for the company, a shorter recert rate as both compared historically. It's a trend that sitting here on November 3rd, I expect to continue inside of this fourth quarter and beyond.

Next, our follow up with our work with GT. Our recent efficiency review, which as I alluded to on the last call was assisted by [Glen Thorton] has identified key opportunities for us, some of which are short term in nature, others went out years. One immediate opportunity was to redesign select operational support functions and departments. Last week we finalized that project which will better align our 2012 strategic plan. It will also recognize $3.4 million in annualized savings as a result. I will keep you abreast of future efficiency moves and if applicable, will quantify the expense reductions as just done with this one.

My next update is in regards to home care Home Based. Also in the last call, I announced that we were very pleased with the improvements with our existing agencies utilizing this platform. So far we have converted 56 locations to point of care, and intend to convert eight additional locations by year end. Looking ahead to next year we expect that number to more than double because beginning in February we shall convert approximately 10 locations per months. I will update you on our progress and any changes in our plan and (inaudible).

Moving on, I'll touch on four points that demonstrate our continuous improvement in the company's overall quality program. Keith alluded earlier to the Joint Commission. Year to date, we have had the Joint Commission surveyors in 55 of our agencies, which now brings our portfolio to 256 fully accredited home care and hospice locations. Another quality, 39% or 89 locations have earned the distinction of Home Care League status, an independent rating of home health quality and performance, three of those locations in the top 100 and eight in the top 500 in the country. Thirdly, because of our participation in the CMS Home Health Pay for Performance project, we received $1.2 million inside of the third quarter. And lastly, within the last 12 months we have decreased our overall ACH rate by 17% down to 35% in the aggregate, and then split between rural and urban now line up with national and our regional averages. Additionally, we're two percentage points below the national 30 day readmit rate as we sit at 17%, with the national average at 19%.

Before addressing questions, let me close with these closing remarks. No doubt, the past months have brought numerous short term challenges, but we see them as just that, short term. We are and will continue to build a foundation for long term success that will serve our patients, our partners in healthcare and our shareholders well into the future. And to our employees, I sincerely thank you for working so hard in spite of so much noise. I may adequately convey on this call your unwavering support and commitment, but certainly can tell you how much we value and appreciate it. Thank you.

Javon, we're ready to answer questions.

Thank you. If you have a question at this time, please press star then one on your Touch-Tone telephone. If your question has been answered and you wish to remove yourself from the queue, please press the pound key. And our first question comes from Darren Lehrich with Deutsche Bank.

Thanks. Good morning, everybody. I guess I just wanted to hone into the volume commentary and thanks for all the details for the reasons for the census decline. Is there any way to maybe project or think a little differently about how census might grow? It sounds like you're expecting another decline in Q4, but over the medium term, what is the outlook and will it take a full year, in your view, to sort of anniversary some of these factors?

Again, this is Don. Actually, I don't expect a decline any further in census. If you look at the average period of Q3, we're about 1,200 patients sitting more to date than we averaged than that, and I don't see that coming down. What I was trying to say in my prepared remarks, and don't take this word don't as literally, but we don't see many more discharges than we normally do because of our really good Q1, and we kind of absorbed that hit. What I will expect in my prepared remarks said going forward is the same as the side rate. Let me be as candid as I can. Whether it's referral sources or others, the tremendous attention, whether it be centers, finance or industry news in general has people more conservative of using the benefit than ever, whether it's on admits or recerts and honestly, I'm hearing, Keith's hearing from referral sources that they're actually not using this at the [demise] and sometimes to the detriment of the patients not receiving services they need. So my point is this, I think that our recert rate, and which I said was 2.21 on that 12 month rolling at 57% can be baked in going forward. If we see these trends changing, then we'll let you know. So this only-- I don't see the census declining any more. As I said on November 3rd, that I would bake in the same episodic rate for us.

Okay. And then maybe just as it relates to the settlement, not that it's connected to this question in any way around volume, but I guess I just want to understand is there any other compliance apparatus that is in place now that's any different? Do you think there's any business practice changes that you've had to make as it relates to the recent settlement?

Yes. You ask me, I'll take the front end and I'll let-- want Don to elaborate a little. I mean, the short answer is no. We get our compliance, lack of a better term, let's call it upgrade with the like 2009 when we put the program we have in place now in place. And there was no change for that or our operational model as a result of the settlement. Don, do you want to?

Yes, I think I'll expand by saying, certainly Keith is right. We've had, whether it's [pre-go] audits or we call it end of episode, EOER that's in place during that time span that you're speaking of. We have what we call a 181 day or greater length of stay review. Because statistically, I just said, we have a two episodic rate, which would lead you to about a 120 or less length of stay. So we just want to make sure if those patients, while totally appropriate, are extended into those latter episodes there is a secondary review. That's been in place. And then finally I really want to get out in front to this so then we can go ahead and talk about the future, and I really do appreciate the question. But we didn't learn about Senate Finance until May of 2010 and I performed, when I became COO of the company, a weekly what we call hot topics calls. And on July 23rd at one p.m. I specifically told them and I'm going to quote, "We want to be 100% certain that every patient that is admitted to services provided by LHC Group is 100% appropriate for those services. These patients are and will be home bound, have medical necessity and a skilled service need intermittent in nature." So the point that I wanted share for that is it didn't change back in July 23rd when we didn't know about Senate Finance and it hasn't changed post facto as well.

Thanks a lot for that. I appreciate it.

Our next question comes from the line of Ralph Giacobbe with Credit Suisse.

Thanks. Morning, guys. Can you maybe give us a sense of what the volume trends were, splitting them up between sort of volumes coming from an acute or post acute setting compared to maybe volumes coming directly from the physician office?

Yes, we've been hovering around a 51% range. We saw that about two percentage points greater. It doesn't sound like a big delta, but it really was considering that we have 67 hospital partners.

Two percentage points greater from an acute or post acute?

That is correct. That's absolutely.

I'm sorry, and that number now you said it's 51% of referrals?

It was last quarter, if I look back on my comments on the question last time, it's about 53% as we said quarter to date Q4.

Okay. And then appreciate all the date in terms of some of the changing patient characteristics, certainly interesting. I guess I struggle a little bit to kind of understand drastic changes kind of on a quarter-to-quarter basis as some of the things you mentioned seemed to suggest more kind of structural changes that take time to develop. So I guess I'm just trying to sort of reconcile some of those changes from a structural standpoint as opposed to sort of a quarter-to-quarter standpoint.

Well, I may not have done a real good job of being clear, so let me try to do an expanded view. The change in characteristics of our patient population has not been a quarter-to-quarter trigger. And in my comments, I actually said in the last 12 months was the data that I analyzed. What that is characterizing is a shorter length of stay and a shorter episodic rate, which I do believe is the new norm. The point of why the gap between census and admits were so drastic in the third quarter specifically had to do with the combination of extremely, for us, high admits in Q1 multiplied by that episodic rate. So just to make sure I'm as clear as I possibly can, let me explain. We had on a run rate about 1,200 more admits in Q1 than honestly I even projected. We had a good one. The majority came in March. So if you've got two episodes per admit on average, think about it. You've got April and May that encompass the first episode, June and July that take up the second episode or the recertification episode, which then put those discharges coming in the majority of mid-August to late September. And one will say well, could you have not have seen that. If you'll recall, our last call was on August 4th and I did not see that because they weren't discharged yet, and they're all over the country. So if I can summarize again, the characteristics of the population are really what I'm trying to explain as a result of our episodic rate going forward, but the real reason that we saw the gap widen so much was the combination of that rate with the discharges from Q1 admits. Did that help?

Yes, no that's helpful. That's helpful. I appreciate that. And then just the last thing I had and I may have missed it and you may have commented on it. Did you guys give the case mix number?

No, but I can. 1.23 for the period ending 9/30/2011 and that was the average of initial first episodes and subsequent.

And then the year ago?

1.269.

Okay. All right. Thank you.

And that was quarter-to-quarter comparison.

Thanks.

And at this time, I would like to turn it over to our speakers for any closing remark.

Okay, no questions? All right, well thanks everyone for participating in the call this morning and as always, we're available for any questions that may come up after the call or between the quarterly calls. Thank you very much. We look forward to seeing you next quarter.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may all disconnect. Everyone have a great day.