Boyd Group Services Inc. (BGSI) Q1 2021 Earnings Report, Transcript and Summary

Good morning, everyone. Welcome to the Boyd Group Services Inc. First Quarter 2021 Results Conference Call. Listeners are reminded that certain matters discussed in today’s conference call or answers that may be given to questions asked could constitute forward-looking statements, that are subject to risks and uncertainties, related to Boyd’s future financial or business performance, actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are detailed in Boyd’s annual information form and other periodic filings and registration statements, and you can access these documents at SEDAR’s database found at sedar.com. I’d like to remind everyone that this conference call is being recorded today, Wednesday, May 12, 2021. I would now like to introduce Mr. Tim O’Day, President and Chief Executive Officer of Boyd Group Services Inc. Please go ahead, Mr. O’Day. Tim O’Day: Thank you, operator. Good morning everyone, and thank you for joining us for today’s call. On the call with me today are Pat Pathipati, our Executive Vice President and Chief Financial Officer and Brock Bulbuck, our Executive Chair. We released our 2021 first quarter results before markets opened today. You can access our news release as well as our complete financial statements and management discussion and analysis on our website at boydgroup.com. Our news release, financial statements and MD&A have also been filed on SEDAR this morning. On today’s call, we will discuss the financial results for the 3 month period ended March 31,2021, and provide a general business update. We will then open the call for questions. The first quarter of 2021 continue to be significantly impacted by the COVID-19 pandemic, as business and mobility restrictions continued to impact demand for collision repair services. We continue to focus on health and safety practices, such as contact-free customer drop off and pickup, enhanced vehicle and facility cleaning practices, social distancing and wearing personal protective equipment to keep our employees and customers safe, all of which has been very important given the significant surge in COVID infections that occurred during the quarter. We continue to follow [Technical Difficulty] that include deep cleaning facilities where an employee or potential or confirmed case of COVID-19 is identified as well as defined processes for quarantining and testing in situations of potential exposure to help prevent the spread of the virus. As was previously communicated, beginning in January 1, 2021, Boyd is reporting results in U.S. dollars. This change has been made in order to better reflect the company’s business activities given the significance of the U.S. denominated revenues. During the first quarter, we recorded sales of $421.6 million. Adjusted EBITDA of $52.7 million and net earnings of $7.7 million. Sales were $426.6 million, a 9.9% decrease when compared to the same period of 2020. This reflects a $19.4 million contribution from 56 new locations. Our same-store sales, excluding foreign exchange decreased by 14.2% in the first quarter. Same-store sales, excluding foreign exchange decreased by 12.6% on a days adjusted basis recognizing 1 less selling and production days in the U.S. and Canada in the first quarter of 2021 when compared to the same period of 2020. Same-store sales declines in Canada were much more significant than same-store sales declines in the U.S. and unfavorable when compared to the fourth quarter of 2020. The first quarter of 2021 was impacted by a significant surge in COVID-19 infections and the reinstatement of restrictions in many markets especially Canada. Production challenges including technician capacity constraints in select markets, weather events in southern states and supply chain disruptions compounded to demand challenges we faced. Gross margin was 46% in the first quarter of 2021 compared to 44.8% achieved in the same period of 2020. The gross margin percentage improved as a result of higher labor margins, including the recognition of the CEWS of approximately $1.5 million. The gross margin percentage was also positively impacted by higher retail glass sales margins partially offset by a higher mix of parts in relation to labor. Operating expenses for the first quarter of 2021 were $141.2 million or 33.5% of sales compared to 31.8% in the same period of 2020.When the pandemic was declared, Boyd took significant steps to manage expenses in relation to the decline in sales. While many operating expenses were managed in relation to decline in sales, certain expenses could not be reduced such as, property taxes and utility costs, which increased as a percentage of sales. Also, impacting the beginning of 2021, is the seasonality of certain operating expenses such as, employee payroll taxes, which are typically highest in the first quarter of the year. In addition, continued location growth has resulted in increased operating expenses as a percentage of COVID impacted sales. Adjusted EBITDA or EBITDA adjusted for fair value adjustments to financial instruments and costs related to acquisitions and transactions was $52.7 million, a decrease of 12.8% over the same period of 2020. The decrease was primarily due to operating expenses that could not be managed in relation to the reduction in sales and additional operating expenses incurred, along with continued location growth as well as costs incurred to begin rebuilding and supporting the workforce. In total, adjusted EBITDA in the first quarter benefited from the CEWS in the amount of 3.4 million and as is the objective of the program, Boyd continue to employ and incur cost for employees that would have been laid off or furloughed absent this wage subsidy. Net earnings for the first quarter of 2021 was $7.7 million compared to $17 million in the same period of 2020. Excluding fair value adjustments and acquisition and transaction costs, adjusted net earnings for the first quarter of 2021 was $8.3 million or $0.39 per share compared to adjusted net earnings of $15.2 million or $0.75 per share in the same period of the prior year. The decrease in adjusted net earnings per share is primarily attributed to the operating expenses and fixed costs, such as depreciation and amortization that could not be reduced in relation to the decline in sales due to the COVID-19 pandemic. Adjusted net earnings per share for the 3 months ended March 31,2021 include 1.265 million shares issued in the public offering, which was completed in May of 2020. At the end of the period, we had total debt net of cash of $539.9 million compared to $538.5 million at December 31,2020. We continue to have financial flexibility with our conservative balance sheet and more than $875 million in dry powder should take advantage of opportunities as they arise. During 2021, the company expects to make cash capital expenditures within the previously guided range of 1.6% to 1.8% of sales. This excludes those capital expenditures related to acquisition and development of new locations, the investment in environmental initiatives such as LED lighting, and the investment in the expansion of the Wow Operating Way practices through its corporate applications and process improvement efficiency project. During the first 3 quarters -- first 3 months of the year, the company has invested approximately $1.4 million in environmental initiatives of a planned $4 million investment during 2021. These investments will not only provide environmental and social benefits but also, achieve accretive returns on invested capital. Additionally, the company is expanding its Wow Operating Way practices towards corporate business processes. The related technology and process efficiency project will result in the total of $4 million to $5 million been invested before the end of the year, and will also be expected to streamline various processes as well as generate economic returns after the project is fully implemented. This initiative began in the third quarter of 2020.Early in the pandemic, the company moved quickly and decisively to take aggressive actions to both preserve liquidity and reduce expenses in preparation of the demand and revenue decline anticipated as a result of the pandemic. This included converting a large number of production facilities to skeleton staffed intake centers, in most cases staffed with a single employee. In late Q4 of 2020, Boyd made the decision to prepare for the higher post-pandemic demand levels expected in 2021. This was a major factor contributing to our lower adjusted EBITDA margin versus Q3 and Q4 of 2020.We’re excited and optimistic about our positioning for the future. We’ve converted all of our temporary intake centers in the U.S. back to full production facilities, and we’ve added back most of our indirect and support staffing resources in anticipation of a return to normal demand for our services. Although we are still in the process of the more difficult task of adding back technician capacity and reengaging in the initiatives that we’d undertaken pre-COVID to address technician capacity constraints, including but not limited to our technician development program. This may result in us experiencing technician capacity constraints in some markets in the near-term, notwithstanding the return, the continued improvement in demand in most of our U.S. markets. This combined with worsening demand in Canada, as restrictions either continue or are tightened has resulted in overall sales performance to date in Q2, that is only marginally higher than our Q1 sales. We continue to execute on our growth plans with 35 locations opened year-to-date, the majority being single shop growth. Our pipeline, including acquisitions as well as greenfield and brownfield locations is healthy, and we are confident in our ability to achieve our 5-year plan. As vaccination rates increase and as market demand returns to normal levels, we are well positioned for the future with our leadership position, our growth pipeline and many business initiatives, including our Wow Operating Way, scalable technician development program, scanning and calibration, OE certifications and intake center strategy to name a few. As always, operational excellence remains central to our business model. With an -- with ongoing investment in our Wow Operating Way, we continue to drive excellence in repair quality, customer satisfaction and repair cycle times to ensure the continued support of our insurance partners and vehicle owner customers. For me personally, and on behalf of the Board, I would also like to acknowledge Allan Davis’ retirement from the Board of Directors. Allan served on the Board since 2005 and is independent Chair since 2011. He’s help to guide our strategy for many years and I personally appreciate the support and guidance that Allan’s provided to me during my tenure as CEO, and I wish him well in his retirement. In summary and in closing, I continue to be incredibly proud of the steps that we’ve taken to adjust to this constantly changing environment and to position ourselves well for the future. We continue to believe there will be many opportunities that come from this crisis, both internal and external and we put ourselves in a good position to come out of this crisis as a stronger company. Our priorities remain taking care of the health and safety of our team members and customers, enhancing shareholder value through accretive acquisition growth, building our capacity as demand returns as well as preserving financial flexibility and preparing for the opportunities that lie ahead. With that, I would now like to open the call for questions. Operator?

[Operator Instructions] We have our first question from the line of David Newman from Desjardins.

Couple of questions on the, I guess reopening teasing issues, I’ll call them, which we’re seeing across a number of companies. But with the supply chain disruptions, are you seeing any parts inflation as well, and I’m talking about the sort of steel, aluminum, and all the commodities, obviously all spiking. And does that change your dynamic of OE versus recycled, refurbished, or aftermarket parts at all? Tim O’Day: Lee -- the supply chain disruptions we mentioned were really not related to the pricing of components. And as we’ve talked before, from a pricing standpoint, we really pass through pricing for repair cost. As those components become more expensive though, it may provide more competitive alternatives, whether aftermarkets or used. So there could be some shift in that, although nothing that we’ve noted to date. We have seen some parts availability issues that have been a challenge from manufacturers related to, I suspect some of are related to just the ability to get parts through the system and from overseas.

Okay. And then on the technician issue, obviously through the pandemic, we’ve seen a real focused on ESG, as I’m sure you guys are aware EVs and ADAS and all that sort of thing. And how do you navigate going forward? And I would presume that this could actually accelerate consolidation. Just any thoughts on the near-term on training compensation and things that you’ve done so effectively in the past to secure technicians. And does that put you in kind of a really competitive advantage versus your peers and consolidate the market? Tim O’Day: I think our -- the investments that we’ve been making in training for the past several years and we have a fairly unique way of doing it, because we have a dedicated team of internal technical trainers, that actually build relationships with our technicians and help them not only improve their skills using training that’s available to the industry, they actually build a relationship with them and focus on improving their productivity as well. But we are very well prepared to continue to invest in our team members to make sure they have the technical skills to perform repairs as it become more complex, including issues related to ADAS calibration, matters such as that.

Very good. And last 1 if I can squeeze 1 more in guys. Just in terms of a lot of navel gazing, I guess through the pandemic and organization is really looking at their cost structures, et cetera. So I know we’re still kind of going through the machinations of it and all that. But post-pandemic and from an OpEx point of view, is there any permanent cost reductions, such that your margins could even improve as we get to a more normalized conditions?

David yes, we have taken several measures to address that specific area. So we have streamlined operations and also we have consolidated certain functions to permanently reduce some expenses and costs.

And any sort of sense on the magnitude, Pat?

No, we don’t want to offer any guidance on that. And also, David, another thing is also, the Wow Operating Way we’re expanding into strategic support services like finance, HR and procurement. Also those should yield improvement in productivity too.

Our next question is from Steve Hansen from Raymond James.

Just a couple of quick ones from me if I may. 1, Tim, is just on the acquisition pipeline and the multiples that are being paid. I know you stepped out recently into Hawaii for Dave’s suggesting here. Can you just give us a sense for what the cost is for entry-level small platforms and/or I’m really looking for the spread between 1 to 2 mid-sized deals relative to the larger mid-sized deals at this point and has that changed at all? Tim O’Day: We really don’t provide detailed information on MSO acquisitions. We have communicated for a long time that we underwrite single shop acquisitions to a 20% ROIC on post synergy EBITDA, and we’re still comfortable with that guidance. Obviously as you get to larger and larger businesses, the multiples become higher, and I think for that reason it’s important for us to have a good mix in our pipeline of greenfield, brownfield single shop and multi-shop opportunities. But we don’t have.

We shared in the past that the most we ever paid was 9.6x to Assured back in July of 2017. So you can imagine MSO somewhere falling in between 4 and 9.6. So yes, there is a higher for MSO typically, again, it depends on the strategic value, the quality of earnings, quality of management and things like that, but I think the charts are more attractive.

Let me may be ask you in that way because, I recognize you don’t provide specific guidance. I guess I’m just trying to get a sense for the trend in effect. I just -- there is another MSO acquisition announced this morning, as are probably aware, and some of these super regional groups are moving quite quickly right now. Just trying to get a sense for whether that’s going to price you out of the market to go after these mid-sized deals? Tim O’Day: I think we’ll be able to remain competitive and achieve our 5-year growth plan. I’m confident of that.

And also Steve, I think from a big picture perspective, the industry is highly fragmented, so there is ample opportunity to consolidate. So you may see some consolidation but still, it’s highly, highly fragmented.

Yes, no I recognize that, Pat, I appreciate that. Just maybe a follow-on and it’s just -- looking at the piece at which you’ve brought back some of the staff here, I understand, it’s not linear projection in terms of the activity levels returning. But do you get a sense that you brought people back too fast? Do you need to make adjustments at the current levels of activity that you’re seeing, or are you comfortable with where you’re at now in the trajectory that we’re seeing on vaccine rollout in others? I am just trying to get a sense of that expense base relative to activity Tim O’Day: Nobody has a perfect picture of exactly how things are going to unfold. So I think I’m comfortable with the approach that we’ve taken, and think because of it will be well positioned to service the business as it returns. So I don’t see a need to make any knee-jerk reactions to short-term variations in the market.

Our next question is from the line of Bret Jordan from Jefferies.

This is Mark Jordan on for Bret. Just thinking about the outlook you put out today, you said performance thus far during Q2 was only marginally higher than in Q1. I guess, is that on a dollar basis or is that a same-store sales percentage basis?

Dollar basis.

Dollar basis. Okay. And then if I’m looking correctly at what you restated last year for U.S. dollar terms, is it -- what we’re looking at in Q2 ‘20, was that about a 23% decline in same-store sales if I’m looking at that right? Tim O’Day: I think, Q2 was about -- Pat, I don’t know if you have that in front of you, I believe it was about 35%.

Yes, it’s in -- yes, it’s around 35%, Mark.

Okay. Yes, I think I might have been looking -- I was trying to figure out what the U.S. dollar points when it restated in the U.S. dollar but.

You’re talking -- okay -- yes, The number we just quoted, it was the stated in Canadian dollars and you obviously you have to exchange with U.S. dollar, yes.

Okay. Okay, all right. And then I guess, thinking about how demand trended throughout the quarters, can you talk about what you’re seeing maybe an early Q1 how it compared into later Q1 and maybe so far, quarter-to-date, just kind of how the pace of improvement changed? Tim O’Day: Well, I think -- I’m trying to think of what is it that we can specifically disclose. I mean we have looked at data from CCC and clearly we lapped the pandemic in the -- probably the second week of March. So we started to see year-over-year demand above what had happen when the pandemic began to impact claim counts. But the first quarter overall on the data that we’ve seen from CCC was still down about 20% from historical norms, if you compared it to the 2019 volume. But because the pandemic began to impact claim volumes in March of last year, we saw an uptick relative to prior year in the latter part of March.

Okay, great. And then just one last one. And I’m thinking about the mix between parts versus labor. Can you break out what you’re seeing there? And then I think in your report, you mentioned higher labor margins during the quarter, is that primarily from the wage subsidy? Is there something more structural there? Tim O’Day: I think a little bit of it is the wage subsidy, but there is also -- as we’ve -- we I’d say modified things last year, there was some near-term benefit related to that as well. For example, we had not really invested in the technician development program, which has a negative impact on labor margins in the early going, but we are increasing our investment in that area, and have been really building that since very early part of the year.

Okay, great, thank you very much for taking the questions.

Mark, one comment is, I think unless you focus on this same-store sales growth decline, I think 1 of the things I think you need to keep in mind is, we do have a good chunk of business, around 9% business coming from Canada and Canada is hit very hard. And you can go to the segment disclosure in the footnotes and you can do your own calculation, how hard it was hit. For example, in Q1 of last year, we had $56.49 million and in Q1 of this year it’s $37.27 million and we added several locations in Canada. So you can get a good ballpark same-store decline in Canada, so you have to bake that in when you do the calculation.

Our next question is from the line of Maggie MacDougall from Stifel.

In fact, there is a development that’s likely with this pipeline outage and reading about a number of sheets that are experiencing spikes in gas prices and pipelines related shortages. I’m wondering if you’re seeing any impact to your business from this sort of event, and if you can help us understand about that? And then some of the non-COVID related things that may have impacted your Q1, such as the weather in Southern U.S. Tim O’Day: Yes, I would say on the pipeline problem in the eastern part of the country, that’s really very, very new and we probably -- if it is having an impact, I’m not -- I doubt we would even see it yet. Although it clearly would have the potential to have an impact on miles driven for some period of time, I’m not sure how long but, I’d say too early to understand on that 1. The weather-related events that we were referring to, we’re really the -- we had some extreme weather in the Southern states in the U.S. during the winter. The obvious one that got most of the press is what happened in Texas, which was ice storms and then significant power outages for several days. But that same storm was hitting other Southern states. And as most people know, the Southern states are not well prepared to deal with that type of weather event. So rather than plowing the streets as would happen in Northern markets, they really just shut down driving and activity stops, and that’s really what we experienced in those states for a period of time during the winter.

Thanks. one more question and I appreciate, this may be a challenging 1 to answer, but it something I’ve been struggling to understand which is, in the states where you’ve seen let’s say driving, miles driven and gasoline consumption demand for services return to more like pre-pandemic levels. Have you noted, any change in driving pattern related to work from home or just people sort of generally, doing more online shopping versus going into stores, that could have an impact on demand for collision repair services? Tim O’Day: I think the main one, Maggie would be the measure of congestion, which really is the sort of the morning commute, and morning and evening commute and probably ties into the schools being open as well, which puts pressure on traffic. And while there has been improvement, if you will, there has been improvement in congestion, it’s gotten better for the collision repair industry. In most markets, it’s still not back to normal levels. But I think we’re still early on in many places for the recovery. Vaccination rates have increased significantly in the past few months and they’ll continue to. So I think we’ll just have to wait and see what happens in terms of the pressure on congestion with the normal commute.

Maggie, in the U.S., I think we don’t have large enough sample at this point in time, it’s too early, but if you look at other country China and Australia, where things have presumably gone back to normal levels, there I think the frequencies have gone back to a historical levels. So if you use that as a proxy, I think that might offer you some clues.

The next one is from Kate McShane from Goldman Sachs.

I was wondering if we could better understand the quarter-to-date comp composition, I know it’s only slightly better so far, compared to Q1. But could you talk at all to specifically how it’s being driven? If the U.S., is that much better and Canada stayed similar or has gotten worse? And then my second question was just, we heard a comment that you benefited from higher retail glass margins and I wondered what was driving that? Tim O’Day: Yes, I would say on the relative difference between Canada and the U.S., Canada, as many people know, Canada has been on an extraordinarily tight lockdown and that has absolutely impacted miles driven and claims in Canada. So we’re not seeing the reversal of that trend in Canada. In fact, as we communicated, we actually saw lower demand in Q1 than we saw in Q4 in Canada. So hopefully that addresses that question. On the glass, we’ve had good performance out of our auto glass business, our retail auto glass business, and it does have higher margins than our collision business. So the comment was really just positive performance out of our auto glass business with relatively higher margins.

Our next question is from the line of Jonathan Lamers from BMO Capital Markets.

To clarify, have you continued to reopen repair centers in the Q2? And if so, is that being done at a rate that makes the fixed OpEx go up faster than the marginal increase in sales? Tim O’Day: We really made the decision to reopen all U.S. centers late last year and that has now occurred. And because business is not yet at normal levels across all of our markets, it does increase fixed costs. So does that answer your question?

I think so. It sounds like everything was reopened at the end of Q4 so.

In the U.S. Jonathan. In the U.S. not in Canada, but in the USA we have converted all the production centers, when they were converted back to intake, they converted back to production in the U.S. but in Canada, we still have not done that completely.

Okay, thank you. And a sematic question. My understanding is that, 1 way that Gerber and Boyd add value to the insurers is by handling some of the claims processing work. I’m reading that the insurers are increasingly deploying AI-based software solutions for claims processing. So my question is, does that help or hurt your ability to add value to the claims process versus the average repair center, this AI-based claims processing? Tim O’Day: It’s a good question. I think the insurers are really trying to move toward more touchless claims, processing claims as seamlessly as they can. In a direct repair environment, we would be writing the estimate and submitted it to the insurer. And the insurers at a growing basis would use AI tools to evaluate whether our estimates appear to be reasonable. And then if they’re not, they may provide us feedback on that. We do have some, both staff and technology we use to evaluate our estimates, and we review those before they get to our reinsurer. So it should put us in a position of having fewer estimates either being reviewed or fewer issues found when they are reviewed. So I think we still have an advantage in that area.

The next one is from the line of Zachary Evershed from National Bank Financial.

Great questions so far, so we’ll go a bit more out there and feel free to punch on the question if you don’t feel like answering. But would you care to comment on legislation in a few states now, that’s looking to acquire OEM repair procedures and how that might affect Boyd? Tim O’Day: Sure. We follow OEM repair procedures today and all of our locations have access to OEM repair data, and repair research is a key part of any repair, and as is following OE repair requirements. So it should have no impact on us. And so the legislation really doesn’t change what we would do.

And if the like kind or quality clause ends up being a Trojan horse for OEM part sales. Since you guys are a pass-through on parts cost for repairs that should have no impact either? Tim O’Day: Well, yes, I think -- and you’re really referring to OE position statements where they say, you need to use an OE part. Is that what you’re referring to?

Or like kind of quality, yes. Tim O’Day: Yes, I mean some of the OEs or even taking more aggressive position on used parts, that’s not been appropriate for the repair. But I think the aftermarket is protected and I think in order to keep repair costs down, we need to continue to evaluate news, cost effective quality alternative parts where it makes sense. So I think that’s -- those are usually position the statements by the OEs rather than mandates, and I think the mandates will be a little bit more difficult. So if we were forced to only use OE parts then I think the risk is that it could increase repair cost and potentially impact total loss rates. But I think there will be fair amount of market pressure to continue to have a healthy alternative part market.

We have a follow-up question from Steve Hansen from Raymond James.

Just a follow-up on some of the -- I guess views to changes to capital gains taxes that’s coming down the pipe in the U.S. Are there -- is that entered any of your discussions thus far? I guess, ultimately trying to figure out here, are there more sellers that are willing to contemplate getting off their facilities in the shorter-term because of some potential changes in capital gains, taxes and does that increase your pipeline at all or is it just a mid-point? Thanks.

Steve it should. And again, obviously, sellers won’t come and outright to say that, but I think it should. And as you know that legislation is still in the proposal stage and if it comes to path, I think certainly it should have an impact. We’ll have more motivated sellers in the shorter-term.

Okay. But it’s not really entered into any discussions as far. I guess you’re not seeing any discernible change in your interest in selling thus far some more steady course?

No, we don’t talk specific details, but our pipeline is very robust. So we can tell you that but beyond that, we don’t know what is motivating the sellers. We have a number of conversations, but we don’t get into that level of disclosure.

Another question from Daryl Young from TD Securities.

Just one quick one from me. With regards to the technician shortage, has there been a net outflow of technicians during the pandemic from the industry, just individuals that may have been laid off in the early days and shifted into a new career path? And then I guess, second to that, has the rate of poaching between large MSOs of technicians changed at all during the pandemic? Tim O’Day: On the first question on the net outflow, I haven’t seen any data on that. I do know and most people have read about this, but the participation rate in the workforce is pretty low right now and there are lot of enhanced unemployment benefits, and many states that don’t even require that you’re actively looking for employment to continue to collect unemployment. So I think that’s making it difficult for employers to step up. In the U.S., those benefits are scheduled, at least the federal portion of those benefits are scheduled to end in October. So that will probably help improve the participation rate in the workforce. Again, I just don’t have any data on outflow from the industry. On the other question, I probably wouldn’t comment on specific activities that happen amongst larger players, it’s always been a very competitive environment for technicians, but I probably can’t comment on that further.

Your next question is from the line of Krista Friesen from CIBC.

Just a follow-up on some of the previous questions. So I understand that you’ve reopened all of your U.S. shops. So at this point, are all the Canadian ones reopened as well? Tim O’Day: No, no, as I mentioned the business in Canada remains at relatively low levels, and it has not yet made sense to reopen all the facilities for full production.

Okay. And then, just another question. Obviously Canada has been underperforming due to some of the lockdowns, but in the states where those states have fully reopened, have you seen some shops return to pre-pandemic levels or is that still taking some time? Tim O’Day: I would say if you look at individual shops, we would see that, and there may even be markets that are nearing pre-pandemic levels. And then there are others where it maybe restrictions or remain more significant or infection rates are high, that could be impacted more than others. But hopefully over the coming months as vaccination rates continue to increase and infection rates decrease, that will balance out.

We don’t have any further questions at this time. Presenters, please continue. Tim O’Day: Okay. Well, thank you, operator and thank you all once again for joining our call today, and we look forward to reporting our second quarter results to you in August. Thanks and have a great day.

Thanks everyone. Tim O’Day: Bye-bye.

Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect. Have a great day.