DLH Holdings Corp. (DLHC) Q4 2019 Earnings Report, Transcript and Summary

Good morning and welcome to the DLH 2019 Fiscal Fourth Quarter Earnings Conference call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Chris Witty, the Investor Relations Adviser. Please go ahead.

Thank you, and good morning, everyone. On the call with me today is Zach Parker, President and Chief Executive Officer; and Kathryn JohnBull, Chief Financial Officer. The company's earnings release and PowerPoint presentation are available on our website under the Investor page. I would now like to provide a brief Safe Harbor statement, which is also shown on slide 2 of the presentation. This call may include forward-looking statements that relate to the company's outlook for fiscal 2020 and beyond. These forward-looking statements are subject to various risks and uncertainties that could cause actual results and events to differ materially from these statements. Please refer to the risk factors contained in the company's annual report on Form 10-K and in our other filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statements. On today's call, we will be referencing both GAAP and non-GAAP financial measures. A reconciliation of our non-GAAP results to our reported GAAP results is included in the earnings release and in the investor presentation on DLH's website. President and CEO, Zach Parker, will speak next, followed by CFO, Kathryn JohnBull, after which we'll open it up for questions. With that, I'd now like to turn the call over to Zach. Please go ahead, Zach.

Thanks, Chris, and good morning to everyone. Welcome to our fourth quarter conference call. Starting with slide 3, I'll begin by providing a high-level overview of our financial performance and some color around the outlook for fiscal 2020. As you can discern from our press release, we have delivered attractive fourth quarter results with revenue at $54.2 million for the quarter and operating income coming in at $3.4 million for the quarter, both reflecting the highest values since restructuring the business to a government contractor almost a decade ago, and for the year revenue rose to $160.4 million. Note, that this is our first report reflecting full quarter contribution from our recent acquisition. By the way, we have now enjoyed top line organic growth year-over-year for nine consecutive years since 2010. Not only did our newly acquired operations post strong performance, but the remainder of our business grew 6% organically as well. These results clearly demonstrate that we remain well aligned with our strategic growth objectives and continue to provide differentiating value to our customers in key mission-critical agencies of the Federal government. Operating income rose to $3.4 million for the quarter and $10.0 million for fiscal 2019. Our team has been phenomenal in growing the company into a diverse technology-enabled, high-value provider of healthcare solutions, and we'll continue to focus on appropriately scaling the business to support growth and better serve our clients and increase returns going forward. We continue to have excellent free cash flow. Our current plan is to deploy this capital to accelerate the reduction of our acquisition-related debt consistent with our past practice. Through 30 September, 13 weeks after the deal, we have reduced the debt down to $56 million. Kathryn will address this further in a moment. Slide 4 shows a snapshot of our growth and performance of the past seven years. We've significantly expanded the top line over this period, which includes the benefit of two strategic acquisitions, while also increasing EBITDA even faster. While these results are among the strongest in our space, I believe we are substantially better positioned to accelerate that growth rate and our results going forward, and that is our primary focus along with our accelerated debt reduction flow. Accordingly, we feel positive about the future given the outlook for our services and agencies that we serve. Please see slide 5. As you can see from this overview, the government services market is stable and growing. While procurement policies in general can be negatively affected by many factors such as continuing resolutions and the like, we have historically had minimal impact on the agencies that we serve. Across the board, customers are looking for more technology-enabled solution, greater use of data analytics, and seamless end-to-end solutions including migration to the cloud and Internet of Things, all of which are now strong components of our offerings. We are well placed across the healthcare space and the agencies we serve and have materially bolstered our position and market share within the public health and life sciences arena. Our recent IDIQ award with the Center for Disease Control will add to our growth prospects here. So, as we are carefully monitoring how the federal budget negotiations play out, we firmly believe that the Health and Human Services Agency, the Veteran Affairs Agency, and the Department of Defense, particularly the Defense Health Agency will continue to enjoy broad bipartisan support on the hill and steady increasing levels of funding going forward. Turning to slide six. I'd like to review our core competencies heading into fiscal 2020. Again, these have bolstered our capabilities from our heritage business and reflects some of the new capabilities from our recent acquisitions. You can see that our experience, skillsets, and credentials align well for the prior slide reviewing the budget priorities for fiscal 2020. We bring a unique approach to solving problems to federal government challenges, covering everything from case management to secure data analytics and complete system modernization. I'm proud of the expertise that we offer our clients across the board, which is helping us to bid on bigger and more complex contracts, as we turn the corner on 2019. Our leadership and management team have been excellent in developing detailed action plans with the joint objectives of growth and solid operating performance for those current customers going forward. We have a healthy new business pipeline of growth opportunities. It is just under $900 million and are optimistic about the prospects for new wins next year and beyond. Of course, this will require careful execution and continuous improvement of our business platform, and we currently utilize substantial KPIs or key performance indicators, dashboards, and progress monitoring with regard to our new business pipeline and business development activities. We look forward to those turning into successful growth -- successful wins and growth opportunities for the company. Everyone in the company plays a part in achieving our strategic objectives, which means we are constantly communicating with our employees, investing and training them as needed, and are aligning ourselves with some new strategic partners to help us accelerate this growth. After all, our staff are essential, our products are key, and it is critical that we're involved, excited, and inspired by leveraging those credentials to the task at hand. And so in closing, I'd like to say that DLH is never been better prepared for the future than we are today. Our business has the breadth, diversity, and unique differentiators to bring to new opportunities to the federal government. Our employees are highly credential, sharp, have demonstrated the ability to drive great quality assurance and excellent customer satisfaction with their expertise. With that, I'd like now to turn the call over to our Chief Financial Officer, Kathryn JohnBull. Kathryn?

Thank you, Zach, and good morning everyone. We're pleased to report a great end to fiscal 2019. As Zach mentioned before, slide 7 recaps for us the -- our ability to successfully manage our acquisition debt. Since the acquisition of S3 in June, we've paid down $14 million on our term loan and at quarter end had nothing drawn on our $25 million revolver. Similar to our acquisition of Danya in 2016 where we paid off our debt two years early, we are rapidly using operating cash flow to reduce debt, and we'll continue delevering the company to strengthen our balance sheet going forward. As the chart on the right shows of slide 7, we've already taken care of all required principle payments through a portion of fiscal 2022 and our improved leverage ratio has led to a 50 basis point reduction in credit spreads for our interest rate beginning in fiscal 2020. In addition, we recently entered into a fixed-to-floating rate swap on $36 million of debt, reducing our interest rate fluctuation exposure. We're doing everything possible to once again shore up our balance sheet and reduce interest expense as rapidly as we can. Turning to slide 8. We posted revenue for the three months ended September 30, 2019 of $54.2 million versus $32.5 million in the prior year fourth quarter. The revenue variance year-over-year reflects the impact of course of our acquisition of S3 approximately $19.8 million and roughly 6% organic growth across our other operations as Zach mentioned. We're pleased with the tremendous impact from s3 as well as solid growth across the organization as a whole. Turning to slide 9. Income from operations rose to $3.4 million for fiscal 2019 fourth quarter versus $2.8 million last year, reflecting operating margins of 6.3% and 8.7% respectively. The lower margin in 2019 was due principally to increased depreciation and amortization expense including $1 million amortization of acquired intangibles from the S3 transaction and higher G&A. G&A rose to $7.1 million in 2019 from $4.4 million last year, reflecting the addition of S3, some integration expense and business development expense. We continue to integrate the business to manage our SG&A expenses and to scale the business appropriately. We reported net income of approximately $1.6 million or $0.12 per diluted share versus $1.8 million or $0.14 a share last year. The company recorded $8.6 million in provision for tax expense this fiscal first -- fourth quarter pardon me versus $0.7 million in fiscal 2018 and interest expense was $1.2 million in 2019 versus $0.3 million last year. And obviously the year-over-year interest expense, year-over-year increase was due largely to higher outstanding debt balances from the S3 acquisition. We've laid out in the press release just for your help in looking at the prospective trends for 2020 what we expect for interest expense in that year given the proactive actions we've taken to reduce debt and reduce the interest expense. Turning to slide 10. EBITDA for the three months ended September 30, 2019 was $5.3 million versus $3.4 million in the prior year period. Year-over-year EBITDA growth was largely due to the S3 transaction. A reconciliation of GAAP net income to EBITDA is in our earnings statement and at the back of the presentation. This concludes my discussion of the financial statements. And with that, I would now like to turn the call over to our operator to open it for questions.

We will now begin the question-and-answer session. [Operator Instructions] And our first question will come from Ken Herbert of Canaccord. Please go ahead.

Hi, good morning Zach and Kathryn.

Good morning, Ken.

Good morning, Ken.

Hey, nice quarter. I just wanted to first start off with a question on S3. I mean, you’ve identified that it contributed about $20 million in revenues in the quarter. Is that a good run rate we should assume for fiscal 2020 or are there any specific contracts either positively or negatively that would influence the expected 2020 contribution from S3?

Good question, Ken. And again thank you for your support. We think it's a pretty good run rate. There are factors that will have the potential for increasing and maybe even throttling a bit that S3 run rate for the quarter, but I think by and large that's a pretty good news. On the upside, we've got some pending decisions on some awards, on some task orders from some customers. And of course, the timing of those will determine their applicability to FY 2020. And there's -- we've got a small degree of recompete risk that we’re going to continue to manage there as well. But I think that by and large that's a good estimate contribution. Kathryn, do you want to add any color to it?

I think that's right. There's a little bit of typical government fiscal year-end lift in the quarter, but not materially so.

Okay. Thank you. And as I look at -- you had some onetime charges around -- you called out the $1 million for amortization, and it sounds like higher D&A and some higher SG&A in the quarter. Can you comment in 2020 on where you see gross margins? I mean, it looks like you've got a few higher costs heading into the fiscal year. You obviously had a really nice ramp as you went through fiscal 2019 in terms of gross margin. How should we think about that and maybe frame up some of the incremental costs associated with M3 -- they're going to -- S3 they're going to run through the model this year relative to your longer-term target -- longer-term margin opportunities?

Yeah. I think Q4 is pretty indicative of where we expect to be in the short run. And let me just remind for -- since the 10-K is fairly recently filed, and I'm sure everybody hasn't had a chance to completely shred it, but we did do a bit of a re-classing of some of our costs that we have previously disclosed as indirect costs below the gross margin line. To the extent that those indirect costs relate to really a specific portfolio of contracts and are essentially client facing though they be indirect, we have re-classed those up above as contract costs. And so, really what's left now in SG&A is those costs that are related to the general operation of the company as a whole and preparing the company for growth. And so, I think that takes away the differences in a way the operational models of the different operating units in the company really represent for your modeling purposes contract costs and the resultant gross margin on a pretty consistent basis. And so with that, I would say that's what's left in SG&A. Of course, we are working and I think we just looked at our status on integration. Just had an interim update yesterday, and really prepared as we expect to declare victory at the end of December, all the changes that really implement change on integration are accomplished, and some of those things will take -- just have to play out under contractual relationships and before they can be fully implemented. So, we're going to continue to work to integrate the business and prove our ability to leverage our SG&A structure, but I think Q4 represents a pretty good indicator of the kinds of margins you should expect on the business in the near-term quarters.

Great. Thank you. And if I could just one final question on the VA and the contract status. I mean, it looks like with the extensions that we shouldn't -- or you're likely not going to see much change in fiscal 2020, but maybe just an update Zach on where you stand with these opportunities and the risk in the back half of the year and maybe how you see this playing out from 2020 into 2021? Thank you.

Yes. Good question there Ken and you're absolutely on point. We currently have seen as we've disclosed, the customer is still requiring additional time to navigate the strategy on the go-forward of this -- of the VA business and we're referring primarily to our recompetes that we refer to as CMOP, the mail order pharmacy work for the Veteran Affairs. They continue to exhibit the standard approach of extensions of our current contracts. To date, we feel with a high degree of confidence that the extensions that they have given us through the majority of next fiscal year are going to hold solid. So yes, we do see that negligible impact of that VA business for the duration of 2020. And of course, we remain optimistic of that and hopeful that we'll continue to be in that space beyond 2020. Was there a second part of your question I missed, Ken?

No. It was really just sort of your thoughts Zach around handicapping 2021, and I know it's a ways out, but these contracts and sort of where you see it today and sentiment from the customer may be relative to three or six months ago?

Sure. No, I appreciate that. Yes, we actually are very, very strong and optimistic with regard to their impact. We have, as you might imagine, modeled multiple scenarios from a forecasting standpoint as what that would look like. What I'm most encouraged about as far as the health of -- the long-haul health of the company and with regard to our strategic growth objectives is that happens to be our thinnest margin-generating part of our business. So, in some of those scenarios where we may show some of the haircut potentials, we still see that we have a very, very strong balance sheet to continue to drive and deliver the value with the organic growth profiles going forward throughout that period. So we're really excited about first of all wanting to retain that business. But clearly, we feel that we're a strong -- financially strong operation given either of the scenarios that may occur.

Great. Really nice job on the leverage and thank you very much.

You bet.

Thank you, Ken.

Thank you.

Our next question comes from Joe Gomes of NOBLE Capital. Please go ahead.

Good morning, Joe.

Good morning and thanks for taking my questions. Good morning. We talked quickly on CMOP what about the other two major contracts, the other VA contracts and the head start contract that you're looking at potentially having some awards on the other VA this year and potentially an RFP on the Head Start? If you could just give us a little update on those contracts?

Yes, sir. Yes. So the other VA win we refer to it as our medical logistics piece that complement the heavy pharmaceutical one we see as carrying forward even in a stronger position for us than the other. Every indication is that the government will not really take action on the medical logistics one until they've gotten a solution on the first one, the primary pharmaceutical one. Always subject to change of course, but that's been both their historical position, that's been their stated position and it's been substantiated by the same degree approach for extensions as I described earlier on the pharmaceutical. And so we do see contract coverage clearly through FY 2020 and beyond on that one subject to any acquisition change and their strategy for the VA. So just as strong there. On the Head Start program, it is currently slated for recompete in FY -- in calendar 2020. As you might imagine, we're working very, very hard on our positioning for that recompete. We feel really good about the actions that Helene Fisher and Rowe [ph] and their team have been implementing over the recent six to nine months and we feel very, very, very confident in our ability to compete favorably in that recompete.

Okay. Great. Thanks for that. And maybe you could talk a little bit -- it was a nice quarter organic growth there. What was behind that? Or what was driving that? And do you see that continuing in the near-term net organic growth of that type of a 6% level?

We are. We're really focused around that. We think that some of the small wins that we've had over the course of the last year 1.5 years have been really contributing to that. We put a lot of work into on-contract growth from some of our existing IDIQ and task order contracts as well. And we've incentivized a number of our folks in our line operating groups around growth as well. So we feel we're getting some benefit of that. Of course, we've had to offset some erosion due to the government decisions or contract consolidations. Some of our work that had been small business set aside coming to conclusions. And so despite those pressures over the last couple of years, we've been offset that and still have a 6% growth. Those behaviors and that muscle memory we've created across our teams, we expect to continue to occur. And that allows us to have the setting also for hopefully the government making some of these decisions for some of the major larger organic contract wins. So, we feel real comfortable that the -- that which we have in place right now will continue to allow us to leverage our current contract base to expand the business.

Okay, great. And you talked in the last couple of quarters about the -- your go-to-market strategy and some of the cross-selling opportunities with the S3. Just wondering if you might be able to give us a little update on how that is progressing. Are there any examples of any successes yet on the cross-selling opportunities?

Yes, we've had some small quick wins in that regard. We talked the last time about some of the real, real credentials that we've been able to gain with the acquisition. A key part of those are in not only the research but on the analytics side. We're continuing to sharpen our position to establish a FedRAMP certified secure data center environment. We're making progress every month in that regard. We've been able to convince some customers to see that value on some of the current task orders and that's -- we'll have some positive impact on that we think early part of the calendar year. We've also recently been awarded an IDIQ which is the hunting license to compete for task orders over the next six to 12 months that have we not had the S3 qualifications in we would not be as anywhere near as well prepared to pursue in a major way several of the anticipated RFQs coming out in the next six to nine months. So, we're real excited about how the added qualifications increase our likelihood to drive some success through these IDIQs.

Okay. And just -- you mentioned it in some of your prepared remarks on the government continuing resolutions? I mean have you -- how has that impacted you guys if anything here in the last couple of months? And I guess assuming this continues to drag out, when does it start to really impact if it does your operations?

Right. Well it is -- the biggest impact has been its throttled our ability to have the -- work with the government on getting our material new contract awards in place. The government is always hesitant to issue new awards and to take new acquisition strategies until they can have longer term budgets. In some cases, we've seen some progress there where folks have been able to overcome those BCA caps and allow some agencies and particularly those where we're focused to be able to have some multiyear funding approval. So, that's been real positive for us despite the fact that some of our industry partners and peers are facing a little more challenges than us. We've also been as you may recall we lost -- we took about a $2.5 million annual haircut two -- a couple of years ago with budget reductions in the department of interior agriculture and the like from our legacy business. And the potential exists if we get out if we get to have some real budget certainty going forward that there could be some lift and some return of some of that business. So, we've not banked that into our pipeline. But those -- what happens on the hill does affect in some ways our prospects for growth.

Great. Thank you.

Thank you.

[Operator Instructions] And our next question will come from Mike Crawford of B. Riley FBR. Please go ahead

Thanks.

Good morning Mike.

Good morning. So, further regarding this $900 million business development pipeline. Can you talk about what efforts you've -- you're doing in S3 -- further business development there given that that was more of a research-oriented organization when you acquired it?

Yes absolutely. We're really excited about that. In fact, we have a session tomorrow morning. I'll be hopping on the plane today as we have really placed a shot in the arm in our new business pipeline around some low-hanging fruit and more -- but just as -- more importantly some major long-term opportunities that come with the added capabilities around research and analysis to support that research. We -- S3 in particular has been in the driver's seat for us in achieving the -- a milestone that we refer to as FedRAMP for having a secure data center environment in which to conduct analysis of healthcare projects. We've -- through S3, we've been able to do that very satisfactorily already for some customers. But our pipeline previously did not have many opportunities where those long-term research, longitudinal research if you will that depends on sustainable analytics and a sustainable cohort group was a critical component in the government's decision. We now have added those. We're evaluating. We've added three or four opportunities that two of which are very material to the company. We're evaluating our competitive position on those on a weekly basis. We've got a session again tomorrow that's going to look at how we're going to drive differentiators to try to grow that business. And we're hopeful that the government -- every indication is the government is going to continue with these types of projects in particular those that leverage the capabilities that we've combined. The best scenario for us is we've got an opportunity in which about 35% of the business that the government is looking to do is clearly within the crosshairs of what we do in S3. Prior to the acquisition, we were entertaining the prospects of having to find outside partners for us to be able to craft an approach to and a solution for the government's challenge. Now we have that capability in-house and we think we've elevated our win probability twofold with that acquisition. So we're optimistic. These are deals that we expect to be in the RFP mode sometime during this fiscal year. And if the moons are in alignment, we could even get awarded by the end of the fiscal year and have that revenue contributing to the business shortly there afterwards. So we're excited about what that's done to our pipeline. I can tell you, it was intentional for Kathryn and I during the diligence space to anticipate where we can find one plus one equals three, and we're in the process of leveraging that on -- with the new business pipeline as we speak. To have a new business pipeline and these are all new businesses when we say just under $900 million doesn't count our recompetes that -- and to have that at a level that's four times our run rate our revenue is roughly $200 million now is pretty strong, and further validated by the quality of our positioning on those deals. So, we're really optimistic and excited about having captured that value that we were anticipating during the diligence phase. So, thank you to Kathryn and the team she assembled for pulling that together.

Okay. Great. And then just switching gears. Would fiscal 2020 be too soon for a company to again be actively considering M&A?

No. Of course, we are -- as I mentioned, we are well through the integration activities and we will continue to delever. We are really through the S3 acquisition. We consciously put together a bank group that understood our growth strategy. So, we would not close the door on a further acquisition. We think it's not an or strategy. We intend to grow both organically and acquisitively. And for the right property, we're prepared to move forward.

And we do continue to get -- looks at opportunities on a monthly basis, and we'll continue to as Kathryn indicated to keep our eyes open for the deal. We have -- we're not going to make a decision for any gaps that we think we need to fill. We're not looking to just add scale. Our current -- our priority is organic growth right now, we think we have acquired the kind of capabilities that's going to accelerate that organic growth at the same time delever based upon the debt that we had to place on the company today to get us there. And you all have been partners exposed to that debt. And I think Kathryn has demonstrated both in her history before and so far on this deal that we're going to continue to clean up that aspect of the balance sheet going forward, but not at the expense of -- if the right opportunity presents itself, we'll take it to the Board and you all and see what it -- see how it will play out.

Right. Yeah. We're not filling a gap as we were with our prior two acquisitions where we had articulated a target market, and we really didn't have substantial footprint in a couple of our markets. So, we in that sense did an acquisition to really close the gap. That's -- Zach mentioned, we've covered the waterfront now, we've got a well-rounded set of capabilities and we think we've got the right a collection of competencies to really grow organically and focus on that as our priority. But however, but right? So, we've also got tremendous ability to generate cash flow. And we've got some very strong tax shields out there. We structured both of our prior acquisitions to generate substantial tax amortization deductions and we've got still some meaningful NOLs left. So, all those things really give us tremendous capacity for managing acquisitions, and we would never close the door on the right opportunity.

Great. Right. Well, thank you very much.

Thank you.

Our next question comes from Abigail Zimmerman of Lowell Capital. Please go ahead.

Good morning.

Good morning, Abigail.

Good morning, Abby. How are you?

Good. Good. How are you guys doing? Thanks for taking my call. I guess the first question I have, what do you think your run rate free cash flow generation is based on your current performance whatever you're able to say? And along with that how much can you get the debt down over the next year?

Well, we're – we certainly view our results in FY – fourth quarter from combined company as pretty representative of what we expect in the upcoming short-term quarter. So, I think that that's a pretty good basis for modeling what you – we expect in the – in fiscal 2020. And we do expect to continue to aggressively delever. So, I'm not sure I'm going to beat the payoff two years early like I did in Danya, but I always aim to outdo myself, right?

Okay. Okay. And another question, what do you think your maintenance CapEx are?

Yeah. We are a very light maintenance CapEx company. So we – we're a little more CapEx intensive slightly more now with the S3 acquisition as Zach mentioned and that's really where most of our technology capability resides. So my maintenance CapEx, I plan between $1.5 million to $2 million a year, pretty light for a company our size.

Okay. Okay. And then one final question. You may have addressed this so I apologize, but just to reiterate. Is there any seasonality in your profitability or cash flow generation? And what are the strongest quarters?

There usually is more so from our legacy and heritage business entering this year. A substantial portion of that has to do with the school year cycles associated with the Head Start program. And I'd say we've got enough history now with 2017 and 2018 to give you some indication of what that variance is. Each of those has had a little bit of a contract action impact it may have throttled a little bit. But I'd say, if you use the last two year history, it's pretty representative, right Kathryn?

Yes. Yes, quite right. So some of our large programs – and you've picked up that we have some anchor programs and as they go they can move things around quarter-to-quarter. And so it's best to think of us in a 12-year view. But for example, we have a particular customer who depending on if they pay by the 31st of the month or the second of the month, they're still paying well within 30-day terms. But you can appreciate that, if they slide past that cutoff it could meaningfully move our quarterly cash flow number. Though, we expect the annual cash flow numbers to look very typical – very much aligned with what you saw in Q4 on a run rate basis. So to answer your question about which of our quarters tends to be – if there is any seasonality Q1 for us tends to be a soft cash flow quarter simply because people are a little distracted about the holidays from the government side. We do our best to break our next and get those bills out there in front of them, so they can pay them before they run-off for their holidays at the end of the year. But whether they choose to do that or not is up to them. And so things tend to be just by historical our experience has been that they tend to be a little soft in Q1, but it balances out over the course of the year.

Thanks.

I'd also add Abby that as you probably already know we seem to have really from – by industry standards really, really good DSO. I think relative to a lot of our peer companies et cetera. We're blessed to have had been able to put in some measures and create some really great relationships with our customers and they're paying offices to where we really have relatively a industry-leading DSO, if you ask me.

Yeah. Yeah. Well, below 40 days.

Great. Thank you. That's helpful. Well, congrats on the strong results. And thank you guys for your time.

Thank you, Abby.

Take care.

At this time, there are no further questions in the queue. I would like to turn the conference back over to Mr. Zach Parker for any closing remarks.

Well, once again, I'd just like to thank everyone for your continued participation with us along this journey within DLH. The shareholder community has been very, very strong participating in everything that we have done. But we also look forward to opening up – having an opportunity to chat with many of you as we're going to have – during next quarter we'll have our Annual Meeting with the shareholders in New York. So thank you again for your participation today, and we look forward to seeing everyone. Have a fantastic holiday and be blessed. Bye for now.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.