Select Medical Holdings Corp (SEM) 2014 Q4 法說會逐字稿

Good morning, and thank you for joining us today for Select Medical Holdings Corporation's earnings conference call to discuss the fourth-quarter and full-year 2014 results and the Company's business outlook. Speaking today are the Company's Executive Chairman and Co-Founder, Robert Ortenzio, and the Company's Executive Vice President and Chief Financial Officer, Martin Jackson. Management will give you an overview the quarters highlights and then open the call for questions.

Before we get started, we would like to remind you that this conference call may contain forward-looking statements regarding future events or the future financial performance of the Company, including, without limitation, statements regarding operating results, growth opportunities, and other statements that refer to Select Medical's plans, expectations, strategies, intentions, and beliefs. These forward-looking statements are based on the information available to management of Select Medical today, and the Company assumes no obligation to update these statements as circumstances change.

At this time, I will turn the conference call over to Mr. Robert Ortenzio.

Good morning, everyone. Thank you for joining us for Select Medical's fourth-quarter and full-year earnings conference call or 2014.

For our prepared remarks, I'll provide some overall highlights for the Company and our operating divisions. And then, ask our Chief Financial Officer, Marty Jackson, to provide some additional financial details before opening the call up for questions.

Net revenue for the fourth quarter was $771.6 million, compared to $746.2 million the same quarter last year. Net revenue for the full year was $3.07 billion, compared to $2.98 billion last year.

During the year, we generated approximately 73% of our revenues from our specialty hospital segment, which includes both our long-term acute care and inpatient rehab hospitals, and 27% from our outpatient rehab segment, which includes both our outpatient rehab clinics and our contract services. Our results for both the fourth quarter this year and last year reflect the impact of both the sequestration and MPPR reductions that became effective on April 1, 2013.

Sequestration reduced our net revenue by $30 million for the year, compared to $23.9 million last year. MPPR reduced our net revenues by $9.2 million this year, compared to $5.7 million last year. Net revenue in our specialty hospitals for the fourth quarter increased 3.2% to $566.1 million, compared to $548.4 million in the same quarter last year.

Our overall patient days and admissions were relatively flat in the fourth quarter with over 336,000 patient days and 14,000 admissions in the quarter. Our net revenue per day increased to $1,546 per day in the fourth quarter, compared to $1,509 per patient day in the same quarter last year, and was driven by an increase in our Medicare revenue per patient day.

For the full year, net revenue of our specialty hospitals increased 2.1% to $2.24 billion compared to last year. Sequestration reduced our specialty hospital net revenue by $28.2 million for the year, compared to $22.8 million last year.

Overall patient days declined 1% for the year to 1.34 million days compared to last year, and admissions were relatively flat with over 55,000 admissions for the year. Our net revenue per patient day increased to $1,546 per day for the year, compared to $1,514 per patient day last year. The increase was primarily driven by an increase in our Medicare revenue per patient day.

We generated approximately 82% of our specialty hospital revenue from our long-term acute care hospitals and 18% in our inpatient rehabilitation operations during the year.

Net revenue in our outpatient rehab segment for the fourth quarter increased 3.7% to $205 million, compared to $197.8 million in the same quarter last year. The increase was primarily the result of growth in patient visits in our outpatient clinics.

Net revenue in our outpatient clinic-based business increased to $159.3 million, compared to $150.4 million in the same quarter last year. For our own clinics, patient visits increased 5.2% to over 1.26 million visits compared to the same quarter last year. Our net revenue per visit was $103 in the fourth quarter, compared to $104 in the same quarter last year.

Net revenue in our contract therapy business in the fourth quarter decreased slightly to $45.7 million, compared to $47.4 million in the same quarter last year. For the year, net revenue in our outpatient rehabilitation segment increased 5.4% to $819.4 million, compared to $777.2 million last year. The increase in outpatient net revenue was primarily the result of the growth in patient visits and the expansion of contracted management services in our outpatient rehab clinic business and growth in our contract therapy business. Sequestration and MPPR reduced our outpatient net revenues by a total of $11 million this year, compared to $6.8 million last year.

Net revenue in our outpatient clinic-based business increased to $623.2 million, compared to $593.7 million last year. For our owned clinics, patient visits increased 4% to over 4.97 million visits compared to last year. Our net revenue per visit was $103 this year, compared to $104 last year.

Net revenue in our contract therapy business for the year increased to $196.2 million, compared to $183.5 million last year, and resulted from new contracts and expansion of services of existing contracts.

Our overall adjusted EBITDA for the fourth quarter was $78.9 million, compared to $86.4 million in the same quarter last year, with overall adjusted EBITDA margins at 10.2% for the fourth quarter, compared to 11.6% margin for the same quarter last year. Adjusted EBITDA for the full year was $363.9 million, compared to $372.9 million last year, with overall adjusted EBITDA margin at 11.9% this year, compared to 12.5% margin last year.

Specialty hospital adjusted EBITDA for the fourth quarter was $80 million, compared to $88.8 million in the same quarter last year. Adjusted EBITDA margin for the specialty hospital segment was 14.1%, compared to 16.2% in the same quarter last year. The decline in adjusted EBITDA and margin is primarily driven by incremental startup costs of $5.9 million, related to recently opened and specialty hospitals under development and an increase in our bad debt expense.

Specialty hospital adjusted EBITDA for the full year was $341.8 million, compared to $353.8 million last year. Adjusted EBITDA margin for the specialty hospital segment was 15.2%, compared to 16.1% last year.

The decline in adjusted EBITDA and margin is primarily related to incremental startup costs of $14.5 million, related to new and recently expanded hospitals, the full-year effect of sequestration and reduction, and an increase in bad debt expense. Excluding startup losses and the incremental impact of sequestration, adjusted EBITDA in our specialty hospitals would have increased $7.8 million.

Outpatient rehab adjusted EBITDA for the fourth quarter was $23.2 million, compared to $19.8 million in the same quarter last year. Adjusted EBITDA margin for the outpatient segment was 11.3% for the fourth quarter, compared to 10% in the same quarter last year.

For the outpatient clinic portion of our business, adjusted EBITDA was [19.3%] in the fourth quarter, compared to [$15.9 million] in the same quarter last year. For our contract services, adjusted EBITDA was $3.9 million for both the fourth quarter of this year and last year.

Outpatient rehabilitation adjusted EBITDA for the full year was $97.6 million, compared to $90.3 million last year. Adjusted EBITDA margin for the outpatient segment was 11.9% this year, compared to 11.6% last year.

For the outpatient clinic portion of our business, adjusted EBITDA was $82.9 million for the year, compared to $77.1 million last year. For contract services, adjusted EBITDA was $14.7 million for the year, compared to $13.2 million last year.

Our reported earnings per fully diluted share was $0.20 in the fourth quarter of this year, compared to $0.21 in the same quarter last year. Reported earnings for fully diluted share for the full year were $0.91, compared to $0.82 last year.

Our earnings per share for both this year and last year included nonrecurring losses on early retirement of debt. Excluding those losses and their related tax effects, adjusted earnings per share was $0.92 this year, compared to $0.90 last year.

Also want to provide a couple updates since our third-quarter earnings call in October. As most of you are aware, the Wall Street Journal published an article this week about Medicare reimbursement policies in the LTAC industry. Select Management tried to educate the Journal reporter about this complicated subject. Unfortunately, he did not accept all of our views, and we disagree with the thrust of what the wrote.

A lot is made in the article about the fact that clusters of patients are discharged from LTACs at or about the same time. What isn't sufficiently emphasized is that Medicare's DRG classification system is designed to work that way. Patients are grouped into DRGs, based on their clinical condition and expected resource utilization, such as their length of stay, so the clustering of the timing of discharge at [each] DRG is an expected and unsurprising result of the DRG classification system.

Further, Medicare annually updates as program, based on actual data to ensure that correlation. Additionally, several Medicare payment policies, such as 25-day length of stay requirement, are designed to ensure that only long-term patients are admitted to LTACs, which further contributes to this clustering.

I'd also like to provide an update on our rehab joint venture activities. In November, we finalized the agreement with TriHealth in Cincinnati, Ohio, to build a 60-bed rehab hospital, which we expect will open sometime in early 2016. We are currently managing TriHealth's two inpatient rehab units, which have a total of 46 beds, during the construction of the new hospital.

In early January, we closed on our joint venture with PinnacleHealth System in central Pennsylvania. The joint venture includes the 55-bed Helen Simpson Rehab Hospital and a total of 21 outpatient locations. We continue to feel good about our progress and optimistic about our rehabilitation joint venture pipeline.

I'd like to now turn it over to Martin Jackson to cover some additional financial highlights for the quarter and the year.

Thank you, Bob.

For the fourth quarter, our operating expenses, which include our cost of services, general and administrative expense, and bad debt expense increased 5.3% to $696.4 million compared to the same quarter last year. As a percentage of our net revenue, operating expenses for the fourth quarter increased to 90.3%, compared to 88.6% in the same quarter last year.

During the full year, our operating expenses increased 3.9% to $2.7 billion compared to last year. As a percentage of our net revenue, operating expenses for the year increased to 88.5%. This compares to 87.7% last year.

Cost of services increased 4.6% to $656.3 million for the fourth quarter compared to the same quarter last year. As a percent of net revenue, cost of services increased 100 basis points to 85.1% in the fourth quarter. This compares to 84.1% in the same quarter last year.

The primary reason for the increase in our cost of services as a percent of revenue it was the incremental startup costs associated with the new specialty hospitals and increases in contract management services provided to our joint ventures. Excluding these effects, costs of services would've only increased by 10 basis points.

For the year, cost of services increased 3.5% to $2.6 billion compared to last year. As a percent of net revenue, cost of services increased 40 basis points to 84.2% for the year, compared to 83.8% last year.

The primary reason for the increase in our cost of services as a percent of revenue was the incremental startup costs associated with our new specialty hospitals and increases in the contract management services provided to the JVs. Excluding these effects, cost of services would've declined 20 basis points.

G&A expense was $28 million in the fourth quarter, which, as a percent of net revenue, was 3.6%. This compares to $23.9 million or 3.2% of net revenue for the same quarter last year. The majority of the growth in G&A resulted from an increase in stock compensation expense of $1.6 million and healthcare costs of $2 million.

During the year, G&A expense was $85.2 million, which, as a percent of net revenue was 2.8%. This compares to $76.9 million or 2.6% of net revenue last year. The growth in G&A resulted primarily from the same activities -- stock compensation expense of $3.8 million and healthcare costs of $1.8 million.

Bad debt, as a percentage of net revenue, was 1.6% for the fourth quarter. This compares to 1.3% for the same quarter last year. The increase in bad debt expense was mainly attributable to our specialty hospitals.

For the year, bad debt, as a percent of net revenue, was 1.5%. This compares to 1.3% for last year. Again, the increase in the bad debt expense was mainly attributable to our specialties hospitals.

Total adjusted EBITDA was $78.9 million, and adjusted EBITDA margins were 10.2% for the quarter. This compares to adjusted EBITDA of $86.4 million and adjusted EBITDA margins of $11.6 million in the same quarter last year.

As we mentioned, our adjusted EBITDA in the quarter was adversely impacted by $5.9 million of startup losses in our new specialty hospitals. The startup losses in the quarter were close to $1 million higher than the expectation we provided in our last quarterly call. The incremental losses were primarily related to one of our startup hospitals.

The adjusted EBITDA miss for the quarter, as it relates to our guidance, was primarily the result of higher than expected employer healthcare expenses of $5.7 million. Total adjusted EBITDA for the year was $363.9 million, and adjusted EBITDA margins was 11.9%, compared to an adjusted EBITDA of $372.9 million and adjusted EBITDA margins of 12.5% last year. Our adjusted EBITDA for the year was adversely impacted by the $14.5 million of startup losses in our new and recently expanded hospitals and the impact of sequestration and MPPR reductions, which did not go into effect until Q2 of 2013.

Depreciation and amortization expense was $17.3 million in the fourth quarter, compared to $16.5 million in the same quarter last year. During the full-year, depreciation and amortization expense was $68.4 million. This compares to $64.4 million last year. The increase in depreciation resulted primarily from our increased capital expenditures, due to the new hospital development and expansion into our specialty hospital segment.

We generated $2.9 million in equity and earnings of unconsolidated subsidiaries during the fourth quarter, compared to $1 million in the same quarter last year. During the year, we generated $7 million compared to $2.5 million last year. These increases are mainly the result of contributions from our specialty hospital joint venture partnerships where we own a minority position.

Interest expense was $21.4 million in the fourth quarter. This compares to $20.8 million in the same quarter last year. The increase in interest expense in the quarter is a result of additional borrowings compared to the same quarter last year.

Interest expense for the year was $85.4 million, compared to $87.4 million last year. The decrease in interest expense was primarily related to lower interest rates on borrowings during the year, as it compares to last year. These lower interest rates were the result of a refinancing we completed in the early part of 2014.

The Company recorded income tax expense of $11.8 million in the fourth quarter. The effective tax rate for the quarter was 30%, compared to an effective tax rate of 35.9% in the fourth quarter of last year.

For the full year, the Company recorded income tax expense of $75.6 million and an effective tax rate of 37.1%, compared to 37.8% last year. The decrease in our effective tax rate for the year was related to a decrease in state effective tax rates and the favorable effect of an IRS settlement.

Net income attributable to Select Medical Holdings was $25.7 million in the fourth quarter. And fully diluted earnings per share was $0.20, compared to fully diluted earnings per share of $0.21 in the same quarter last year.

For the full year, net income attributable to Select Medical Holdings was $120.6 million. And fully diluted earnings per share of $0.91, compared to $0.82 for the prior period.

During both 2014 and 2013, we incurred losses on early retirement of debt related to refinancing activities. Excluding those losses and their related tax effects, adjusted net income per share was $0.92 for the full year of 2014, which compares to $0.90 for the full year of 2013.

We ended the year with $1.55 billion of debt outstanding and $3.4 million of cash in the balance sheet. Our debt balances at the end of the quarter included $776 million in term loans, which includes the original issued discounts; $711.5 million in the 6 3/8 senior notes, which includes issuance premium; $60 million from revolving loans; with a balance of $5.5 million consisting of other miscellaneous debt.

Operating activities provided $18.4 million of cash flow in the fourth quarter and $170.6 million for the year. The provision of operating cash flow for the year primarily resulted from cash income, which was offset, in part, by increases in our accounts receivable.

Day sales outstanding, or DSO, was 53 days at December 31, 2014, compared to 48 days at the end of last year. DSO has consistently run in the low- to mid-50 range -- day range and often varies based on timing of our periodic [interim] payments for Medicare. Year-end 2013, we had also experienced an accelerated cash collections, which is reflected in our DSO at the end of that last year.

Investing activities used $23.4 million of cash flow for the fourth quarter and $101.1 million for the full year, primarily for purchases of property and equipment. For the year, property improvements and equipment purchases were $95.2 million. We also incurred investments in businesses and acquisition payments totaling $5.8 million during the year.

Financing activities used $2.7 million of cash in the fourth quarter. The primary use of cash related to $13.1 million in dividend payments and $10 million for the purchase of non-controlling interest, offset by $20 million in net borrowings on our revolving credit facility.

Financing activities used $70.5 million of cash for the full year. The primary use of cash related to $130.7 million to repurchase stock, $53.4 million related to dividend payments, and $34 million prepayment of our term loans. This was offset by $111.7 million of proceeds from the senior unsecured note issuance and $40 million of net borrowings on our revolving credit facility during the year.

Additionally, I would like to reaffirm the financial guidance for calendar year 2015. This includes net revenue in the range of $3.1 billion to $3.2 billion, adjusted EBITDA in the range of $370 million to $385 million, and fully diluted earnings per share to be in the range of $0.84 to $0.90.

This concludes our prepared remarks. And at this time, we'd like to turn it back over to the operator to open the call up for questions.

(Operator Instructions)

Chris Rigg, Susquehanna Financial Group.

Good morning, guys.

I was hoping we could -- or you guys could flesh out a little more detail on the medical cost in the G&A. Maybe some of the trends in the quarter and then, maybe, for the year, more generally -- to get a better sense for some of the dynamics that's going on in that expense line. Thanks.

Sure, Chris.

The negative impact that we had on our medical expenses was all related to pharmacy costs. What had happened was, we saw a tick-up in the pharmacy cost in the first and second quarter.

Two components, predominantly. First component had to do with hepatitis C, where we had the [Sovaldi] drug. And again, that really happened in that first and second quarter.

And then, we also saw a substantial increase in our specialty compound drugs. That really occurred in the second and third quarter.

During those periods of time, we actually saw a very favorable variance to our medical expense. So the medical expense was basically covering the increased cost that we saw on the pharmaceutical side.

And then what happened in the third quarter in -- it was actually late in the -- and then what happened in the fourth quarter and was actually pretty late in the fourth quarter, we saw spike up in the medical costs. Medical costs was actually right on trend for what we were expecting. But when that came up -- when that increased, that actually, as I talked about, that increase was actually covering the negative variance that we had in the pharmaceutical side. We actually had -- we, in essence, had to take a hit on the pharmaceutical side.

Right.

And then, relative to your quarterly guidance of $85 million to $90 million, would you say that was a majority of the delta?

Yes, it absolutely was. If you take a look at that, it was close to $6 million. And that makes up, by far, the predominant amount of the hit. (multiple speakers)

The other thing, let me point out, Chris, is that the two components in the pharmacy costs that we talked about, which was the hepatitis C, we think that was really more of a one-time. When the new drug came out, we saw a number of our employees or dependents use that drug. And then we saw it drop off substantially in the third and the fourth quarter.

And then, with regard to the specialty compounds, we have actually tightened the program. And most of the specialty compounds now require precertification. And that occurred in September. We saw significant drop-off at the end of the fourth quarter.

Okay.

And then, just to change gears on the revenue and the facility -- I know there's been some churn in the specialty hospital segment. You've closed some facilities in the last quarter or so, and you've brought some new facilities on.

At this point, at least in the fourth quarter, were there any facilities that, essentially, you were unable to unable to recognize revenue or that are running ADC way below normal run rate?

You're talking about the new starts?

Yes. I'm trying to get a sense for, when I look at the facility count, I believe you'd closed an LTAC in the third quarter and maybe two in the third quarter. And I'm just trying to get it -- but the facility counts stayed the same.

I'm trying to figure out if there are any facilities in the fourth quarter where because of start ups or whatever. There's effectively very little revenue there. I'm just trying to get a sense for the admissions drag or overall admissions drag from the those facilities -- really, on the top line.

Yes. That's right, Chris. We opened one and closed one in the fourth quarter. So in essence, if you're doing a year-over-year comparison, you would have seen substantially more revenue in the one that we closed and very little revenue in the Q4 2014.

You have any ballpark what that did to admissions?

No. Not right now. I mean, I can get you the number.

Okay. All right, great. Thanks a lot.

Thanks.

Frank Morgan, RBC Capital Markets.

Good morning.

To go back to the healthcare cost again, you talked about the spike in medical utilization late in the year. Are there any changes or any mitigation strategies or any benefit design plans that will come into place in 2015 that should help that? Or was that caused by some forthcoming change?

Frank, the healthcare cost in the fourth quarter, as we said, it was a spike. But at the end of the day, I mean, if you take a look, that's what we were projecting total annual medical spend to occur. So from that perspective, we continued to have that spend going into a little bit of an increase going into 2015.

So we feel pretty comfortable with that. The real issue, for us, was really the pharmacy cost. And as we said, the two issues, with regard to hep C and the specialty compounds, we think we have under control now.

Okay.

I think you also called out a little bit of a spike in bad debt. I think you called it out in the specialty hospital division. Can you talk about, maybe, what was the source of that, and does that normalize going into 2015?

Yes. I mean, we've always said we anticipate that the bad debt should be in that 1.3% to 1.5% range. We saw a little bit of an uptick here.

That was predominantly the result of two things. We had a small health insurance company go bankrupt in the Florida marketplace, where we've written off all of the receivables that we had associated with that company. And number two is, we've actually reserved for some of the [frac audits] that we're currently going through.

I got you.

And then, maybe looking ahead, I think in the third quarter, you called out some of the tweaks and changes you were making in your marketing process ahead of patient criteria. I was just curious if you could give us an update on any of your initiatives there.

And then, maybe talk about any of the dialogue you're having, specifically, with some of the hospitals in your market. And are they focused on criteria? And just give us an update there. Thanks.

Yes. Frank, this is Bob.

Not too much of an update. As you as I know you probably know, we have 17 hospitals that will come under the new criteria in Q4. So that's, obviously, the first batch. And we're focused on those and working in those local markets.

So for those, we're beginning to have the dialogue that's necessary for our referral sources and our marketing teams to be ready for the new patients. And part of that is not just the marketing. It's also tweaking our programs to make sure that we have the programs in place and the staffing -- the clinical staffing -- to take care of the patients that we will -- more of the patients that we'll have to replace.

So really, characterize that more as ongoing. And there's really nothing that I can give you that is a bright line of something that we did, at least at this point.

So we're in the first quarter, and we know we have 17 hospitals in Q4. So those are our first. And then, what follows from them in the first quarter of 2016 is another 40 hospitals that come on.

So for each hospital, it's a little different. We have some hospitals that will require very little modification of census development, and we have others that are a little bit more significant.

Okay, thanks.

Kevin Fischbeck, BofA.

Great, thanks.

Just want to go back to the healthcare costs for a second. I think you said, in the remarks, that healthcare costs were up $2 million year-over-year, but it was $5.7 million higher than your guidance. You expected healthcare cost to be down, and yet they were up $2 million. Is that the way to think about it?

When you take a look at year-over-year, we had an increase. Our healthcare costs were up in Q4 of 2013, so we are comparing the healthcare costs up in 2013 to 2014. When were talking about the $5 million, we're talking about our expectations, our guidance.

Yes. So you expected the number to come down, but it was higher.

Yes.

Okay. And you feel like the issues were one-time, as they don't impact your run rate view on healthcare cost into 2015?

Yes.

Kevin, as we were saying, we had -- going into the fourth quarter of 2014, we had a very favorable variance on the medical expense. And it ended up where the medical expense, actually, came in exactly where we're projecting at the beginning of 2014.

What was -- where we had the negative variance was on the pharmacy side. And those two items that we talked about, we think, that they're much more one-time in nature.

As you probably know, the [Sovaldi] was a substantial dollar amount for us. It was running around $81,000 a script for a 90-day supply of pills, but it has a 95% cure rate.

So when the drug came out, we think a lot of people used it. We anticipate that most of them were -- the issue was resolved and, consequently, won't be using that again.

Okay.

And then, just going back to the previous question on the new criteria. Do you have the breakout of the (inaudible) facilities and how they transition over to the criteria? You said 17, and then I think you said 40 in Q1. What's the rest of the transition?

So it 17 in Q4 this year, 40 in Q1 of 2016, 19 in Q2, and 36 in Q3.

You mentioned, obviously, that sometimes the -- some facilities don't require much change, and some facilities do. When we think about the potential headwinds to the business, is it right to think about it, insofar as just a number of hospitals being representative of how much of a headwind it is? Or is there a certain slug where you say -- yes, actually, it's the Q3 of next year where it's the facilities that are farthest away from the criteria?

No. I would say that these are random to when they are. Their cost reports are. So you can -- and I haven't looked at it -- but I think you can assume that it's probably a mixed bag and probably similar in each of the quarters because the hospitals that are contained in those corridors are totally random. So think about them as some level of bell curve in each quarter.

Okay.

And when I think about the specialty hospital margin, I guess it was down about 210 basis points year-over-year. And I guess, if you take out the $5.9 million of startup costs, I have margins would've been down like 100 basis points year-over-year.

You said higher bad debt -- I guess, maybe, 20 or 30 basis points -- being the issue. What would be the other headwind?

Are you allocating health expense down to the facility -- to the segment level? Or is there something else in specialty hospital that caused the margins down year-over-year?

The majority of it, Kevin, has to do with the start up expense. I think, when we talked about the cost of services, the percentage was right in-line. So--

Okay. So that's right. I guess, the cost of services you highlighted -- JV expenses -- all the JV expenses would be in the specialty hospital business. (multiple speakers)

That's correct. Yes.

Okay. So that's probably the Delta, then.

Yes.

Okay. All right, thanks.

Yes.

Henry Reukauf, Deutsche Bank.

Good morning. Just a couple questions.

One, you haven't done any share repurchase in the last couple of quarters. I'm just curious, is that just -- don't like where the stock price is now? Or is that just -- should we read anything into that about the -- a little caution going into patient criteria?

Yes, Henry. It's really a function of use of cash. And given the substantial amount of activity we have on the JV, that's where we're spending a lot of money, right now.

Okay.

I don't know if you have it, or I can follow-up -- do you have the RP basket on the 6 3/8% note, by any chance?

Yes. Hold on, just for a second. Yes. It's about -- on the 6 3/8% notes, it's about $30 million.

Thanks again.

Sure.

You have no more questions at this time. I'd now like to turn the call over to Robert Ortenzio for closing remarks.

Appreciate you joining us for the update, and we look forward to updating you after our first quarter. Thank you, operator.

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