Insperity Inc (NSP) 2022 Q3 法說會逐字稿

Welcome to this conference call. (Operator Instructions) At this time, I would like to introduce today's speakers. Joining us are Paul Sarvadi, Chairman of the Board and Chief Executive Officer; and Douglas Sharp, Executive Vice President of Finance, Chief Financial Officer and Treasurer.

At this time, I'd like to turn the call over to Douglas Sharp. Doug, please go ahead.

Paul will then comment on the key drivers behind our Q3 results and our plan over the remainder of the year. We will then end the call with a question-and-answer session. Now let's discuss our strong third-quarter results in which we achieved a 38% increase in adjusted EPS and a 33% increase in adjusted EBITDA over Q3 of 2021 on 18% growth in the average number of paid worksite employees.

Paid worksite employee growth was at the high end of our forecasted range and was driven by an improvement in both worksite employees paid from new client sales and client retention coming in improved also compared to Q3 of the prior year.

Net hiring in our client base continued, although as expected, at lower levels than the prior year, when many clients were rehiring employees as pandemic conditions improved. Third quarter gross profit increased 23% on the 18% growth in paid worksite employees and a 5% improvement in gross profit per worksite employee. This improvement was largely driven by lower-than-expected benefit costs. And while we began Q3 with COVID case counts at relatively high levels, hospitalizations related to recent variants remained low compared to the 2021 variants. We also did not experience any notable increase in health care utilization associated with higher acuity levels from deferred care. In addition to the upside in our benefits area, gross profit contributions from our workers' compensation program improved over the prior period.

Now as far as operating expenses, our third quarter spend reflects continued investment in our growth, including a 5% increase in higher BPAs and additional national marketing initiatives. We have increased our service capacity given the recent high levels of worksite employee growth. We have also continued to make targeted adjustments to the compensation levels of our corporate staff given the current labor market dynamics and the inflationary environment.

Our Q3 compensation costs also included a higher accrual for incentive compensation tied to our outperformance. We continue to invest in our technology, including the ongoing implementation of Salesforce. And lastly, we experienced an increase in travel costs on higher prices and higher volume when compared to the unusually low levels in the prior year.

Now it's important to note that with the high growth in worksite employees, we continue to expect operating leverage on a per-worksite employee basis for the full year 2022. Our financial position and liquidity remain strong as we continue to invest in our growth while providing returns to our shareholders. So far this year, we have repurchased 679,000 shares of stock at a cost of $63 million and paid out $57 million in cash dividends. We ended Q3 with $239 million of adjusted cash. This is up from $163 million at the end of 2021. And we continue to have $369 million of debt under our credit facility.

Now at this time, I'd like to turn the call over to Paul.

Thank you, Doug, and thank you all for joining our call. This morning, I'd like to cover 3 topics. First, I'll discuss the drivers of our excellent third-quarter results in both growth and profitability. Second, I'll cover our recently launched fall selling and retention campaign and the expected effect on our strong finish to the year and starting point for 2023. And I'll finish with some comments about our long-term view in the face of macroeconomic uncertainty.

Our outstanding Q3 performance was driven by solid sales and retention results and continued hiring in the client base; however, at a slower pace than the same period last year and the first half of this year. These drivers continue to be strong enough to generate an 18% increase in our year-over-year growth in our key metric of paid worksite employees.

In addition to the continuing exceptional unit growth, our profitability increased more than 30% over the same period last year and adjusted EBITDA and EPS due to the combination of effective direct cost, pricing and cost management and operating leverage in our business model.

This quarter, new booked workforce optimization sales increased 15% over 2021. This solid performance was accomplished by the combination of a 3% increase in trained BPAs and a greater than 11% improvement in sales efficiency. Mid-market sales of accounts with more than 150 worksite employees have been an excellent contributor this quarter and year-to-date. This is the third quarter in a row, book to mid-market sales came in approximately 120% of our initial target -- our internal target. This level of consistency reflects a strong relationship between our core sales team providing the lead flow and the mid-market sales team's effectiveness closing accounts.

The third important prong of our sales effort is the book sales of our traditional employment bundle Workforce Acceleration. This quarter, we continued to experience traction with this service offering with a 22% increase in opportunities to bid and a 38% increase in sales over the same period last year. So far this year, we've seen strong sales results across all 3 major sales initiatives. Workforce Optimization, core and mid-market book sales are above our internal target year-to-date, and Workforce Acceleration, book sales are slightly under our aggressive budget; however, they are 54% ahead of last year.

Another significant contributor to the sales effort was from our marketing and business development team. Discovery calls and booked worksite employees sold were up double digits in both the quarter and year-to-date. The most significant contributor to ending up at the high end of our forecasted worksite employee growth range was an excellent client retention rate that was approximately 20% better than our internal target. This continues to reflect excellent execution across our organization, supporting client needs for premium HR solutions. The final contributor to our growth beyond sales and retention is the net change in our client base from hiring and layoffs. Client net hiring continued at a solid pace, reflecting the demand for employees and a tight labor market; however, the rate slowed over 20% this quarter from the same period a year ago.

Now in order to have more insight into our clients' business performance, concerns and expectations, we completed a survey of our client base during the quarter and evaluated current activity. Our objective was to assess our clients' current views of 2022 performance compared to 2021 results and 2023 expectations.

First, when asked about 2022 performance, 40% of clients surveyed answered this year's performance has been better than expected. 40% as expected and only 20% worse than expected. When we ask them to compare 2022 full-year expectations, to 2021 results, over 60% expect better results than last year and only 15% anticipated down year. These questions provided a foundation to look ahead to next year from the point of view of these clients. Interestingly, 75% expect next year to be better than 2022 and only 5% expected down the year. This is despite the fact 48% expect a somewhat negative impact on their business within 3 to 6 months due to the economic climate. These results reaffirm the resiliency within the best of the small to medium-sized business community represented by our target client base. Their optimism is at a high level despite acknowledging concerns around inflation, economic and political uncertainty in the tight labor market.

Now we also monitor client actions taken from month-to-month beyond net hiring, including compensation changes over time worked and commissions paid to the sales staff of our clients. This quarter, average pay was up 5% over last year. Over time was 10% of regular pay and average commissions continued at a strong pace, up double digits. These numbers reflect clients continuing to press ahead with key business initiatives in the face of macroeconomic concerns. The client action that affects our growth the most, of course, is hiring. On this subject, 44% of clients expect to increase staff over the balance of the year. This is down from 53% in mid-2022. And this lines up to a degree with the slowdown of hiring we saw in the quarter and have incorporated into our outlook for the balance of the year.

So at this stage, we do not see our small to medium-sized business client base dramatically altering any behavior lowering expectations even though they have an air to the ground and are on alert to react to economic changes.

The biggest -- the 3 biggest factors driving our profitability this quarter beyond our impressive growth was our pricing strength, lower benefits cost and operating leverage of our model. Our pricing is on target for allocations and service fees, including appropriate inflation considerations on both new and renewing businesses. This effort, combined with lower benefits costs Doug discussed, provided a contribution to gross profit consistent with our beginning of the year strategy. This approach includes a conservative estimate and aggressive management of pricing and costs throughout the year.

The other important Q3 result is the operating leverage of the model. This occurred in the quarter while investing heavily in service capacity and ramping up the BPA team. We had an excellent quarter catching up on internal hiring in the tight labor market. We also made compensation adjustments to keep staff rewarded appropriately for exceptional performance in an inflationary environment. These investments reinforce our commitment to premium service capacity and meeting client needs. The investment in personnel included a ramp-up in total hired BPAs ending the quarter up 7% over the same period last year. This places us on track for reaching our target for the BPA team at the year-end to fuel future growth.

This quarter, we also had a very successful launch of our important fall selling and client retention campaign. This is critical for completing this year on a strong note and reaching a starting point in paid worksite employees to achieve double-digit growth next year. This fall campaign kickoff included an opportunity for all Insperity employees to attend events at any of the 14 locations across the country connected remotely to the corporate office. The event was successful in achieving alignment around the plans and effort necessary to achieve targeted levels of sales and client retention.

So as you can see from our Q3 results and our guidance for a solid Q4, we now expect worksite employee growth of 18% and adjusted EBITDA and adjusted EPS over 30% increase over 2021. Achieving these results would be an excellent start as year 1 of our current 5-year plan. Assuming we achieve a successful fall selling and retention campaign and end the year within the range of our guidance, we would reach a starting point in paid worksite employees that would position us well for double-digit growth next year.

As we look further ahead, the potential of a macroeconomic interruption in the form of a recession is certainly on the table. I'd like to provide some insight into our view of the effect on the small business community and on our business model.

As I mentioned, our client base of small to medium-sized businesses are zeroed in on monitoring economic developments. Historically, we have seen SMBs react quickly to revenue disruptions with layoffs suits and inability to endure significant losses. The effect on our business model from sudden layoffs creates an interruption to our growth rate similar to what we saw early in the pandemic-related shutdown. In that instance, we lost 6% of our worksite employees within a couple of months and then began to grow again.

Currently, there's an unusual dynamic in the labor market with a significant level of unfilled openings in a tight labor market, unlike any prerecession period we've seen. In our view, this dynamic may moderate the level or delay layoffs to some degree in the event of a recession in the near future. Historically, a recession has also affected our sales efforts somewhat with SMBs hesitating to make changes or investments in difficult economic times. This has had an effect on our sales efficiency in previous recessions. And we believe that we have enough experience with economic ups and downs and lessons learned. Now we can take steps designed to position us well to execute in the event of another downturn. For example, our sales and marketing messages can be quickly adjusted to emphasize different client needs in a recession. We also have determined our BPA hiring is best to continue through a down period, improving the likelihood of a stronger rebound.

Another significant effect on our business model from a recession is some effect on direct costs and gross profit. Although these effects take place throughout a recession, our intense focus and capability to align pricing cost put us in a strong position to react accordingly. The last area affected by a significant recession with continuing layoffs is matching operating expenses appropriately. And the service organization like ours, a strong culture and people strategy is extremely important. I'm confident in our team of leaders at Insperity and their capability to manage appropriately. One reason I have such confidence is the level of success through the pandemic.

Looking at the last 5 years with the pandemic hitting in the middle of it, is a good way to assess our capability and potential if and when another macroeconomic interruption occurs. Today, we posted an earnings presentation on our website with a chart tracking our 2 most important key metrics over the recent 5 years. This chart includes paid worksite employees following our growth and adjusted EBITDA tracking our profitability. This period with the pandemic hitting smack in the middle of it shows a compound annual growth rate of worksite employees and adjusted EBITDA of 10% and 14%, respectively. We believe this is an excellent example of resilience in the company and a strong business model.

We do not know if or when a macroeconomic interruption will occur, but based upon our history and experience, we believe we are well-positioned to adjust changing conditions and execute effectively in the marketplace. What we do know is we are on track for a very strong first year of our new 5-year plan we established at the beginning of the year. We are focused on the key success factors driving our performance and we look forward to continuing to produce strong results.

At this point, I'd like to pass the call back to Doug.

Thanks, Paul. Now let me update our guidance, in which we are once again raising our 2022 earnings expectations based upon our recent outperformance and an improvement in our profitability outlook over the remainder of the year. As for worksite employee growth, as Paul just mentioned, we continue to experience nice momentum in both our sales and client retention.

As for the third driver of growth, we continue to expect positive hiring in our client base, although as anticipated, at a lower level than the robust hiring in Q4 of 2021. We have also considered the possible drag on hiring given the current macroeconomic environment. This lower hiring in our base leads to a Q4 forecast of average paid worksite employee growth in the range of 14.5% to 15.5%. And when combined with our performance over the previous 3 quarters, we expect full-year growth of about 18%.

As for our earnings guidance, we now expect 2022 gross profit to be higher than that assumed in our prior forecast based upon our recent outperformance and positive trends in our pricing and direct costs. While we have recently experienced lower benefit costs associated with COVID-19, we continue to be somewhat cautious given the potential of further variance. We also continue to monitor utilization in our health plan given not only the possible impact of the pandemic, but also some recent macro variables. These variables include any change in participant behavior given the impact of the current economic environment and the possible inflationary impact on provider costs on our health care plan.

As for our operating costs, we remain focused on investing in our sales, service capacity and technology as we position ourselves for growth in 2023 and beyond. So when taking into account these factors, we have raised and narrowed our range of 2022 adjusted EBITDA from our previous guidance of $305 million to $335 million to our updated guidance of $335 million to $342 million.

As for full-year 2022 adjusted EPS, we are now forecasting a range of $5.23 to $5.37, up from our previous range of $4.68 to $5.25. As for Q4, we are forecasting adjusted EBITDA in the range of $62 million to $68 million and adjusted EPS from $0.87 to $0.98.

Now we typically do not provide formal guidance for the upcoming year at this time. We will consider any further developments in the macro environment and the outcome of our year-end selling and renewal season when finalized in our 2023 budget and providing guidance in our next earnings call. However, I will share some thoughts when it comes to framing the year.

As for worksite employee growth, we have recently experienced significant growth momentum, and we believe we are well-positioned to capitalize on the ongoing favorable market opportunity. As we look towards 2023, our growth rate will obviously be impacted by comparisons to the outperformance in the 2022 period, including significant hiring by our clients in the first half of the year.

The other important factor is the macro picture, including how our prospects and clients may be impacted by inflation and the possibility of an economic slowdown. However, we intend to remain focused on our long-term goal of achieving double-digit worksite employee growth. Our gross profit will be driven by the worksite employee growth and the effective pricing and the management of our direct cost programs. We currently expect the pandemic-related impact on our business to return to more of a normalized level in 2023, barring any new significant variance. However, as I mentioned a moment ago, other macro variables tied to the economy and labor market continue to exist and therefore, could continue to lead to a wider-than-normal range of potential outcomes. We plan to continue our strategy of matching price and cost trends over the long term, including consideration of these macro variables.

As for our operating costs, while we have not yet finalized our budget, there are a few things to keep in mind as we move into 2023. As for some specific areas of spend, our corporate personnel costs will likely include continued growth in BPAs and service personnel. Additionally, we plan to continue to invest in lead generation efforts given the favorable market opportunity and in our internal and client-facing technology. We will also consider the overall inflationary environment when budgeting our 2023 costs.

So in conclusion, we are working towards a successful 2022 year-end and a strong start to 2023. And we look forward to providing you with more details of our 2023 plan during next quarter's call.

Now at this time, I'd like to open up the call for questions.

(Operator Instructions) Your first question is coming from Andrew Nicholas of William Blair.

A bunch of really good color there in the prepared remarks. I appreciate that. I wanted to hone in a little bit on the middle market to the mid-market momentum, certainly seems like not only is that within your PEO business, but also workforce acceleration. Just wondering if there's anything that you're noticing that's changing structurally in terms of those clients and their willingness to outsource or if you would attribute more of that momentum to your own actions, your own sales motions and the like? Just trying to get a sense because it does certainly seem like that's picking up speed at a pretty good clip.

Absolutely. Thank you. I really would say that the answer is kind of a combination of those 2 things. I do believe that the mid-market as a result of going through the pandemic period, that class of business, size of company, has been an underserved part of the community and the need for sophisticated HR solutions in the environment that they went through was really dramatic and very painful.

And I also would say that it was obvious to those who are behind a lot of these mid-market companies, private equity firms, venture capitalists, Board members, et cetera. And I really do believe there's been an awareness raise at the importance of having a sophisticated HR function and making sure that you have a people strategy in place for a company that size. So that's kind of the market-based issue.

Now behind that, you have been our things, we're doing specifically addressing that market, we believe that we have in terms of our offerings, both in the workforce optimization and workforce synchronization offerings to mid-market and then also we call Workforce Acceleration, a traditional employment solution. We have great options for companies of this size to come on to stay as a customer for life. We also, of course, in mid-market, a lot of our clients grow into that space because we're sophisticated, helping companies grow. I mean if you look back at our history, a lot of companies, significant companies, started with us when they were small and left us eventually, but we were part of them growing from 20 or 30 employees to over 1,000 employees like Netflix and HelloFresh and others on the list that Buzzfeed and others.

So we have a history that of really understanding mid-market needs and how to help them grow as they hit the walls that you run into as you grow through that size. So it is a combination of the 2 things, the marketplace reaction post-pandemic and how we have really honed in and how we're serving those clients. Also, I would say, as I mentioned in my script, our core market of BPAs in the marketplace are doing a great job of targeting the right mid-market customers and bringing lead flow into our mid-market sales team, our business performance consultants, and it's a more complicated sale and takes longer. So those get passed off to our BPCs, and they're doing just a fantastic job of helping move these prospects through the process and evaluating how this will fit for them. And so the last 3 quarters having that consistent performance well above our budget is a good sign.

Great. That's really helpful. And then for my follow-up, I just wanted to ask about the competitiveness of the market broadly. Are you running into competitors more frequently today than you were a couple of years ago in terms of those sales conversations? Do you still feel like there's a good amount of white space for adding new clients? And if there's any comments you could make from a competitive perspective on pricing, that would be helpful as well.

Sure. We're -- we continue to see competition in most of the sales interactions that we have. But we also continue to see that when a customer fits our client profile, it's such a good fit and it's easiest for us to win those situations. And so customers that are really connected to the role that people play in the business and they have a definitive getting better agenda, and they're trying to take the company to the next level where that complete outsourced solution, a premium service offering that brings in a lot of capability for them to accomplish what they want to accomplish. So I'm actually glad that there's more awareness of what of the PEO industry at large, I think the demand and receptivity is higher than I've ever seen it out there, but there's still a tremendous amount of greenfield open space and the whole industry is still under 10% of the total marketplace. So we've got a long way to go, and we're in a great position in the competitive environment.

Your next question is coming from Mark Marcon of Robert W. Baird & Company.

Paul and Doug, congratulations on a strong quarter and obviously a strong year and multiple years. I'm wondering, can you talk a little bit about your expectations with regard to benefit cost trends? And what did you see this quarter both in terms of utilization of the health benefits and the inflation rate. And then how are you thinking about that for next year? What's UNH telling you?

Let me give a big picture, and I'll let Doug fill in there. But obviously, we're still in the post-COVID period or who knows exactly what phase we're in. And so we've been conservative in possibility of variants, et cetera. But we have seen the results were better. So we've seen a little less of a trend rate than what we had budgeted in a conservatively and appropriately.

But I also think as you look in the future, we still have to be conservative because the inflation will also run through the health care world as contracts are renewed by carriers when they renew contracts over the coming years. So we're -- again, as you may know, we keep track of the ongoing cost on a rolling 12-month basis every month, evaluating the trend, direction and all the pieces of it. So we keep very close track on it, and we also have a lot of communication with United and our other carriers and keep track of it. So we're happy that this year is working on a little better than expected. And we -- if you look back at our whole history now for, I don't know how many years we're still under 4% annual increase in our fees to clients in this area are allocations. And so that's really demonstrates the effectiveness of trying to keep an eye on this for clients and keeping it as shallow as possible and without a lot of volatility to it. And our teams have been able to do that to this point. Doug, do you have other comments?

Yes. I mean I think as I just mentioned in Q3, we saw a lower utilization, including COVID costs, particularly related to the prior year. As we move to Q4, we still, I think, are somewhat cautious relative to any further variance that may occur. But also, as I mentioned, in this type of macro environment where people are being pressured a little bit on their discretionary income, will they try to take care of things before in the fourth quarter before they hit deductibles going into next year. So -- we've also contemplated that occurring and increased costs and provider costs, although, as Paul mentioned, that those contracts come up for renewal, they're usually multiyear contracts. So we'll be looking at that going forward.

I think one thing to point out in our Q4 relative to Q4 of the prior year, Q4 of the prior year included fairly significant COVID costs because you had Delta winding off, which had more hospitalizations associated with it. You also hit Omicron coming on. You had more testing and vaccines during then. So fourth quarter had a very high level. And when you make your comparison to this year's fourth quarter, you would expect it to go down, although I would repeat, we still continue to be cautious.

One last thing I'd like to add is just the other thing we look at going forward always on our benefits programs is just any tweaking of the plan to -- and plan design changes. We always follow what's happening on the demographics in our organization and how that drives the trends. But we also have a very and announced earlier this year a new contract with UnitedHealthcare. And we're able to also gain some administrative efficiencies as we get larger and some lower costs. So with the solid growth we're having, that also plays into our outlook in the coming years.

That's fantastic. And can you just mention what percentage of the worksite employees are actually signing up and how that has trended? And then lastly, any differences from a regional perspective just in terms of the WSE growth? Are you seeing increased adoption of the PEO concept in some of the less developed markets?

So as far as the adoption, we're seeing strong demand across the board. And I think that's more about the backdrop of this realization of how you have to take care of your people to make sure your company is successful. And so we've seen good growth across. We have -- when we look at our different markets that we've established and again added a number of markets this year, we'll do that the same next year.

It's really the same model we put in place. We go after the same target customers. And so we haven't seen a lot of variation market by market. We did during the downturn, during the pandemic because of some places being shut down, some not and things of that nature. But just as the big picture, it really comes down to execution in every market and the great managers that we have get the job done and if you have the right BPAs, it all works well.

Yes. I think your other question was on the participation of our benefit participants as a percentage of the worksite employees. If you compare to where we were in 2021, it's just a couple of percent down from that. A lot of it has to do with client mix and how many seasonal health do we have at a particular time or part-time help this at a particular time, which influences that participation on benefits. But -- it's come down some, but I wouldn't say by any material amount.

Your next question is coming from Tobey Sommer of Truist Securities.

One of the benefits of your business model and focused customer, the dynamism in the small business means you get a direct benefit through the model as they add employees. Could you speak to sort of the range of contribution to worksite employee growth that you've gotten from your customers' job growth? And maybe I'm assuming that the first half of this year would have been towards some sort of high end of the historic range, at least in recent memory. And how does that compare to what you assume in the fourth quarter? And if I'm right, like in the early part of the pandemic, you said down 6% in a couple of months. If you could kind of frame that for us, that would be helpful.

Yes, that's great. If you think about kind of a net effect from client hiring in a normal year, we would look at around 4%, 5%, maybe 6% -- 4% to 6% depending on the economic climate. What you had in the shutdown from the pandemic and then the rehiring effect, we had to go all the way up to 10% in periods.

Now what we're looking at as things have slowed down or more normalized more, you've had the tight labor market that also kind of is somewhat of a drag, but that's actually an advantage for our clients because when you have sophisticated HR functions you're able to recruit more effectively. So we've been able to support our clients in that way. But we're looking at that slowdown at this point to where the fourth quarter will be about half of what it was, say, the fourth quarter last year when you had the rapid growth from both kind of coming out of the pandemic and the rehiring that was going on. So hopefully, that gives you a little bit more flavor.

Your next question is coming from Jeff Martin of ROTH Capital.

Wanted to get a sense in terms of gross profit per worksite employee next year? What are some of the things that could impact whether that's up or down relative to this year? I know State unemployment taxes was a tailwind this year. You've got health care that probably was a bit of a tailwind as well as workers' comp. But just if you could give us some high-level year-over-year comparison, things to consider when we're modeling out that for next year?

Yes. Let me just give -- generally speaking, kind of how we look at it. I don't think we're ready to give any detailed discussion about that. But we always start the year out more conservatively because a lot of what we have developed over the course of the year, like I mentioned in my script, this year, when you manage the cost throughout the year, for example, in the workers' comp area, we're closing claims and that turns into positive adjustments in our financial picture.

And the other things that we do to manage the cost even on the unemployment side and even on the benefit side. So I would say, as I sit here today, we will be conservative as the year begins. But we have things kind of go in both directions for next year. I mentioned that we've grown a lot. So we'll have some positives on the benefit side from the administrative cost side. We've been doing a good job of our pricing on all of the allocations to stay in touch with what we've seen out there as the inflation rate. So I would say we have -- we're comfortable, but we always start out conservatively, I don't know over a year where we budgeted a number that was where we ended up the prior year. It's always lower because that's the appropriate way to do it in this business.

Great. And then my second question is on lead generation. It sounds like you're getting the effectiveness out of your advertising spend. I was curious if you could elaborate on the decision to continue to invest there over the near future.

We did invest a considerable amount this year more than we originally budgeted as the year progressed. We invested heavily in the spring, and we were so successful there in producing leads for the BPAs that we decided to pile on again in the fall. And that has gone well.

We're seeing double-digit growth in both discovery calls coming out of the marketing and our business promotion efforts. And we also have seen double-digit growth in the closed worksite employees from that bill. We also see the closing rate is significantly better. And so when a customer has raised their hand with interest, that makes sense that it's more likely they're going to close. So we will continue at these rates. It makes sense because you're basically fueling the growth through providing enough leads to BPAs. We know that the BPA's best time use is in front of a client, not sitting there, trying to get an appointment. So the more we can get for them, the better, they still have to do some of that on their own, of course, but the more we can do the better.

We appear to have no further questions in the queue. I will now hand back over to Paul Sarvadi for any closing remarks.

Very good. Well, thank you all for participating in our call today. We really appreciate it. We're in a great position right now to look at finishing the year strong and getting in a position for double-digit growth next year. That's our focus in our fall selling and retention campaign, and we look forward to continuing to produce solid results for our stakeholders and, of course, our shareholders. So thank you all once again, and we'll talk to you next time.

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