New Oriental Education & Technology Group Inc. (EDU) Q2 2023 Earnings Report, Transcript and Summary

Good evening and thank you for standing by for New Oriental's Fiscal Year 2023 Second Quarter Results Earnings Conference Call. [Operator Instructions]. Today's conference is being recorded. I would now like to turn the meeting over to your host for today's conference, Ms. Sisi Zhao.

Thank you. Hello, everyone and welcome to New Oriental's second fiscal quarter 2023 earnings conference call. Our financial results for the period were released earlier today and are available on the company's website as well as on Newswire services. Today, Stephen Yang, Executive President and Chief Financial Officer and I will share New Oriental's latest earnings results and business updates in detail with you. After that, Stephen and I will be available to answer your questions. Before we continue, please note that the discussion today will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC. New Oriental does not undertake any obligation to update any forward-looking statements, except as required under applicable law. As a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on New Oriental's Investor Relations website at investor.neworiental.org. I'll now first turn the call over to Mr. Yang Stephen. Please go ahead.

Thank you, Sisi. Hello, everyone and thank you for joining us on the call. This second quarter is a successful phase of manifestation as we have turned over a new leaf in our business and embarked on innovative journey for rich business opportunities since the beginning of fiscal year 2023. Before going into details of our financial performance for this quarter, I would like to take this opportunity to extend our gratitude to those who have been delivering and supporting New Oriental along the way. I'm delighted to share with you that after a year of restructuring process, New Oriental has successfully generated fruitful yields from our new business ventures, combined with our existing business and innovative business opportunity. Despite the seasonality of some of our major businesses which has historically resulted in a slower period for every second quarter, it's immensely encouraging to see that we have achieved a meaningful profitability and a better-than-expected margins in the second quarter. We have achieved a non-GAAP operating margin of 2.6% for this quarter as compared to negative 112.0% in the same period of prior fiscal year which was characterized by the several significant one-off expenses incurred from class cancellations, school closures and employee layoffs. Our key remaining business have continued to demonstrate remarkable resilience. In particular, overseas test prep business and overseas study consulting business have recorded remarkable year-over-year revenue increase as global COVID restriction eases and overseas study market is recovering. Our solid profitability, strong performing remaining business lines and then emerging new business initiatives in this quarter have again strengthened our confidence in preferring innovative endeavors and profitable growth through the rest of the year. Now I would like to spend some time to talk about the quarter's performance across our remaining business lines and new initiatives to you in detail. Our key remaining business have achieved promising trends, while our new initiatives have shown a positive momentum. Breaking it down, the overseas test prep business recorded a revenue increase of 17% in dollar terms, or 30% in RMB terms year-over-year for the second quarter. The overseas study consulting business recorded revenue increase of about 14% in dollar terms or 27% in RMB terms year-over-year for the second quarter. The adults and university students business recorded a revenue decrease of 9% in dollar terms or 2% increase in RMB terms year-over-year for the second-quarter. As for our new business initiatives, as mentioned in the past quarter, we have launched several new initiatives which mostly revolves around facilitating students all-round development. I'm glad to share with you that these new initiatives have further exceeded our expectations by sustaining a positive momentum and generating meaningful profits to the company. Firstly, the non-academic tutoring business which we have rolled out in over 60 cities, focused on cultivating students' innovative ability and comprehensive quality. We're happy to see increased market penetration in both markets we have tapped into, especially higher-tier cities with a total of 477,000 enrollments recorded in this quarter. The top 10 cities in China have contributed about 60% of revenue of this business. Secondly, intelligence learning system and device business, is a service designed to provide a tailored digital learning experience for students. It'll utilize our path to teaching experience, data and technology to provide a personalized targeted learning and exercise content. Our continuous investments in technology has fueled our comparative edge which drives our navigation amidst the chain of challenges from the last year. Together with our teachers monitoring and accessing the learning curve for students at the back-end system, this new innovative education service not only greatly improves students learning efficiency but also cultivates students proactive learning habits. We have tested its adoption in over 60 cities with 108,000 active paid users in this quarter and are delighted to see improved customer retention and scalability of this new business. The revenue contribution from top 10 cities in China is around 60%. Last but not least, our smart education business which comprises smart teaching, smart hardware, science, technology and innovation education and other service serves local governments, education authorities, schools and kindergartens. Our educational material utilizes the smart study solutions, the self-learning system which leverages advanced technology, enables students to have complete control over the pace and the flexibility of the learning age where remote learning becomes increasingly mainstream. We also offer exam prep courses designed for students with junior college diplomas to obtain bachelor's degrees. The above-mentioned business has been gaining wide traction and contributes the overall growth of the company and has attained instrumental profit since the last quarter. Coming to our OMO system. We continuously invest in developing and revamping our OMO teaching platform and have leveraged our educational infrastructure and technology strength over the remaining business and new initiatives to provide more advanced and diversified education service to our customers for all ages. Our OMO system has been a core support to our business, especially with some of the strict social control measures were implemented in the past months. We have invested a total of $21 million in the quarter on our OMO teaching platform which provide us the flexibility to continue to offering high-quality service to students during the pandemic. Now I would like to give you all an update on Koolearn's latest performance. In the first half of this fiscal year, Koolearn has achieved incremental breakthroughs in both business operations and financial performance. This significant progress was made as a result of Koolearn's strategic transformation from focusing on online education to livestreaming e-commerce. In 2021, Koolearn expanded its livestreaming e-commerce business and established Dongfang Zhenxuan which has since become a well-known platform for promoting healthy, top-quality and cost-effective products to the public. The platform has formed a part of the tight supply chain management and after-sales service system which strictly abide by a set of relevant laws and regulations. Leveraging our deep understanding of customer needs, Dongfang Zhenxuan continues to expand its product selection and SKUs through proactive cooperation with third parties, coupled with the development of our Dongfang Zhenxuan private labeled products. The platform's business developments has gratefully benefited from the maturity of China social infrastructure and the contributions and support from the community. To summarize, the Koolearn food bearing growth and profitability with our financial performance, for the first 6 months of this fiscal year, Koolearn recorded the revenue of plus nearly RMB2,080.1 million which represents a 590.2% increase from revenues from continuing operations of RMB301.4 million in the same-period of last prior fiscal year. Koolearn recorded RMB585.3 million of net profits, a 638.5% increase from the net loss from the continuing operation of RMB108.7 million in the same-period of prior fiscal year. In the first 6 months of fiscal year, the gross profit of Koolearn reached around RMB982.5 million, accounting for 47.2% in terms of the GP margin. As we continuously map the platform's strategic transformation, the fast-growing Dongfang Zhenxuan is also committed to give back to customers and the community. Since its launch, Dongfang Zhenxuan has stood firm to not charge commissions from customers or any fees. And have always taken close reference to industry standards, focusing on its partnerships, the mostly beneficial long-term collaboration with various parties, so as to maximize benefits to customers. Dongfang Zhenxuan also ensures to attain the cost-effective performance as one of its development principal. On one hand, Dongfang Zhenxuan focuses on enhancing product capability. We're continuing to establish its cultural content. On the other hand, Dongfang Zhenxuan has also organized to diversify -- diverse outdoor livestreaming activities to promote special agriculture products and contribute to the cultural tourism. Through its unyielding aspiration to create value in related industries which have also attracted and retained a larger pool of talents, cooperators as well as followers and members, Dongfang Zhenxuan has successfully received in return meaningful revenues and a loyal customer base during the reporting period. With regard to the company's latest financial position, I'm confident to share with you that the company is in a healthy financial status with cash and cash equivalents, term deposits and short-term investments totaling approximately $4.2 billion. On July 26, 2022, the company and the Board of Directors authorized a share repurchase of up to $400 million of the company ADS or common shares during the period from July 28, 2022 through May 31, 2023. As of January 16, 2023, the company repurchased aggregate of approximately 3.1 million ADS for approximately $79 million from the open market under the share repurchase program. Now I'll turn the call over to Sisi to share with you about the key financials. Sisi, please go ahead.

Okay. Now I'd like to walk you through the other key financial details for this quarter. Operating cost and expenses for the quarter were $640.7 million, representing a 55.1% decrease year-over-year. Non-GAAP operating costs and expenses for the quarter which excludes share-based compensation expenses, were $621.9 million, representing a 55.4% decrease year-over-year. The decrease was primarily due to the reduction of facilities and number of staff as a result of the downsizing in the fiscal year 2022. Cost of revenue decreased by 31.6% year-over-year to $336.2 million. Selling and marketing expenses decreased by 15% year-over-year to $95.5 million. G&A expenses for the quarter decreased by 74.6% year-over-year to $209 million. Non-GAAP G&A expenses which excludes share-based compensation expenses, were at $190.9 million, representing a 75.7% decrease year-over-year. Total share-based compensation expenses which were allocated to related operating costs and expenses decreased by 39.5% to $18.8 million in the second fiscal quarter of 2023. Operating loss was $2.5 million compared to a loss of $768.1 million in the same period of prior fiscal year. Non-GAAP income from operations for the quarter was $16.3 million compared to a loss of $737.1 million in the same period of prior fiscal year. Net income attributable to New Oriental for the quarter was $0.7 million compared to the loss of $936.5 million in the same period of last fiscal year. Basic and diluted net income per ADS attributable to New Oriental were $0 and $0 respectively. Non-GAAP net income attributable to New Oriental for the quarter was $17.8 million compared to the loss of $901.6 million in the same period of last year. Non-GAAP basic and diluted net loss per ADS attributable to New Oriental was $0.11 and $0.10 respectively. Net cash-flow generated from operation for the second fiscal quarter of 2023 was approximately $173.7 million and capital expenditure for the quarter were $11.4 million. Turning to the balance sheet. As of November 30, 2022, New Oriental had cash and cash equivalents of $1,029.9 million. In addition, the company has $1,033.2 million in term deposits and $2,145.7 million in short-term investments. New Oriental's deferred revenue balance which is cash collected from registered students for courses and recognized proportionally as revenue as the instructions were delivered at the end of the second quarter of fiscal year 2023 was $1,139.1 million, an increase of 6.9% as compared to $1,065.8 million at the end-of-the second-quarter of fiscal year 2022. Now, I'll hand over to Stephen again to go through our outlook and guidance with you.

Thank you, Sisi. Looking ahead into the rest of fiscal year 2023 with the restructuring process largely completed and our new business in their early stage, we expect our school network and geographic coverage to stabilize. The company remains tireless in seeking new opportunities with greater flexibility and strong cash flows. We're confident in the sustainable profitability of all our remaining key businesses, as well as the growth and the prospects of our new initiatives. For our new business, as we observed in the first-half of this fiscal year, the encouraging performance that these businesses have achieved proves that we are heading towards the right direction and we firmly believe that business will be able to maintain a upward growth trajectory and generates meaningful profits to the company in fiscal year 2023. As for evolving pandemic development in China, since late November 2022 many cities are experiencing certain level of disruption on business operations. Although we're expecting a negative impact, our financials in the coming 1 or 2 quarters, we remain confident and optimistic that the overall impact will be temporary and manageable. Hence, we expect total net revenue in the third-quarter of the fiscal year 2023 to be in the range of $702.8 million to $719.8 million, representing a year-over-year increase in the range of 14% to 17%. The projects of the increase of revenue in our assumptions of the currency RMB is expected to be in the range of 24% to 27%. As the profitability we recorded in this fiscal quarter has reaffirmed our success and dedication in turning a new page and generating profits for the rest of the year, bottom-line wise, we're confident in achieving greater operating profit in the full year of fiscal year 2023. To conclude, we're now taking multipronged operational actions to promote our key remaining businesses while we're cautiously investing in new initiatives which will remain new growth engines that accelerates our recovery and the pursuit of profitable growth. At the same time, we will continue to seek guidance from and cooperate with government authorities in various provinces in China, in alignment with the efforts to comply with the relevant policies and regulations as well as to further adjust our business operations as required. I must say that these expectations and forecast reflect our considerations of the latest regulatory measure, as well as our current and the preliminary view which is subject to change. This is the end of our fiscal year 2023 Q2 summary. At this point, I would like to open the floor for questions. Operator, please open the call for this.

[Operator Instructions] Our first question comes from the line of Felix Liu from UBS.

Congratulations on the on the topline as well as the guidance. My question is on the COVID impact. I know that COVID has come pretty viciously in December but now we're past the peak. So I'm just wondering how has COVID impacted our February quarter. If there is any quantifiable metric that will be very helpful. And my second question is, what's the expectation of our various businesses from here? If you were to rank the fastest to more stable business, how would you rank your various business segments?

Thank you, Felix. Yes, as for the evolving pandemic development in China since the last December, yes, I know the peak in the past, right. And yes, in many cities, I think some of our business are effectively impacted. But as our current estimation, I think the net impact is small and so we remain confident and I'm optimistic that overall impact from the pandemic will be temporary and manageable. And yes, you look at our guidance for Q3 is very strong. And the different business lines, the revenue outlook for Q3, right -- can you repeat the second question? Yes.

Yes. So maybe for Q3 and for the whole year which are the business lines that you think will grow the fastest and which are the ones that are more stable?

I think that -- we have 2 kinds of business. The number one is the traditional business, the remaining business, the overseas related business including the overseas test prep and consulting business which contributes the 24%, 25% of the total revenue. What I'm saying is that for the whole year, 24% or 25% of the total revenue. I think we got suffered the impact from the last year. But this year, I think we're seeing the revenue growth is booming. Things are 2 quarters above. And the new business within the schools, we started the new business last year, the year before last year, right? November 2020, yes, last fiscal year. And the growth is, we just started the business 1 year ago. The growth is extremely high. So this isn't the -- ranks number 1, the revenue growth within all business lines and also we do have the Dongfang Zhenxuan. And Dongfang Zhenxuan, they reported, the management of Dongfang Zhenxuan reported the first-half year reports today and you saw the growth, you saw the numbers. And so we're excited for the exciting performance for Dongfang Zhenxuan. And so, yes, the new businesses within the EDU side, the K-12 schools and Dongfang Zhenxuan are the 2 top performers within the business lines, Felix.

Got it. Congratulations on the results again.

Our next question comes from the line of Kan Wang [ph] from CICC.

So congrats on the profitable status for this quarter. And my question is, since COVID restrictions have been lifted in China, do we expect higher-growth rates of our new business line in the next quarter and also in the next fiscal year? And is there any new opportunities within our new initiatives business?

Yes, for the new business, yes, as we saw in this quarter and last quarter, the encouraging performance proves that we are heading towards the right direction and we firmly believe that the new business will be -- we will be able to maintain upward growth in Q3 and Q4 and the next fiscal year, what I mean is fiscal year 2024. And we started the new business last year but I think we ramped up the new business very quickly. And as a good news for us is the merger for the new business in this quarter, it's already over 10%. So think about that. We started this business last year and took us to spend like 2 to 3 quarters to get to breakeven point and then we make it profitable. So it sounds very good. And I think we are on the good track and I think management of New Oriental will pay more efforts where it creates more opportunity, business opportunities to develop the new business as it is in Dongfang Zhenxuan and the new business in this year. And so we will do more -- to do more creative in future.

Yes. Actually the new pandemic situation with the gradual opening up after these recent developments of the new situation, I think, probably we can see more opportunities in some certain kind of new initiatives such as the study tours and research camping business that we mentioned, 1 to 2 quarters ago that as one of the new initiatives. But as the pandemic situation happened after 1 to 2 quarters, we did not have a very good chance to rollout business domestically. But with the new situation, we have confidence that there is more opportunity for this business to perform better.

[Operator Instructions]. Our next question comes from the line of Lucy Yu from Bank of America.

Congratulation on a profitable quarter. Could you please give us some color on the revenue breakdown this quarter and as well as the margin profile for different business lines? I know, Stephen, you already mentioned the new business is 10% OP margin. How about the rest?

Yes, for the reported quarter, the overseas related business including the overseas test prep and consulting contributed roughly about 21% of total revenue and the domestic test lab, the adults university students' business contributed roughly about 6% and the school business, including our remaining like high-school business and also the new initiatives for younger students together contributing roughly about over 40% of total revenue. And the rest are Koolearn and some other businesses. So that's the rough contribution, yes.

Lucy, I just want to share with you the margins by different business lines. The overseas related business, overseas test lab combined with the consulting business, the margin for the whole year, fiscal year 2023 will be around 10% to 15% margin. What I'm saying the margin is before the corporate overhead. And the adults and the university study business, I think the margin profile, I think the business will be breakeven in this year. And the school business, including the remaining business and new initiatives as Sisi said contributed 45% of total revenue. The margin should be somewhere around 20% to 25% or little bit higher. So the others, this is the big others, including the Koolearn, Dongfang Zhenxuan and others, I think, if you follow the numbers, the Koolearn, the first-half year report, I think you will see more color on the margin profile of the Koolearn and the others, Lucy.

Just one follow-up. Could you also talk about Y-o-Y growth for different business line in this quarter?

Year-over-year, I think the revenue contributions --

Yes, we talked about it in the prepared remarks. So for this quarter, like U.S. dollar terms, overseas test prep business increased by roughly 17%. Actually, for RMB term, you should add another 10%, 15% more. The university students' business is stable and in U.S. dollar term it is negative 8% but RMB term is positive. And the -- yes, the school business actually increased because of the new initiatives. And also Koolearn and other business increased a lot.

Our next question comes from the line of Candis Chan from Daiwa.

Congratulations on the very strong set of results and also on the strong guidance for next quarter. My first question is related to the third-quarter revenue guidance and also the profitability that we are aiming for. So firstly, can you give us a break, rough breakdown of revenue for the third quarter and also in terms of the operating margin, how should we look at it for the third quarter, given the strong revenue?

Okay. In the Q3 forecast, I think the number-one, the overseas related business, test lab and consulting business will contribute 24%, 25% of total revenue in Q3. And the second, the adults and university students business contribute 2% of the revenue because of the COVID. And the school business, including the traditional business and remaining business and the new initiatives will contribute 43%, 44% of total revenue. And the other 30% comes from the Koolearn, Dongfang Zhenxuan and the other business like the books or the other 2 businesses. And the margin profile, I think the margins -- let us start with the margin analysis from this quarter. In Q2, you saw our GP margin and OP margin increased a lot compared to last year. And I think this is mainly driven by volume of reasons. Number-1, in last year Q2, even before last year before year, the first 3 quarters, we had the considerable one-off cost related to the class cancellation, the learning center closures and the staff layoffs. In this quarter and even in this fiscal year, we have no one-off cost. Number 2, I think the downsizing learning center numbers led to the lower fixed cost. So it strives the margin up per learning center. Number 3, the new businesses, the margin is over 10% this year. I think it's good news for us and also the recovery of the remaining business, for example, like the overseas-related business, generally has the higher-margin than that of last year. And the last reason, number 4, the Dongfang Zhenxuan, the Koolearn, the last streaming e-commerce business enjoys higher margin. So it makes the margin, it drives the margin for the whole group. And going-forward, I think all of this is aligned. We are, will contribute even higher profit and drive the whole margin up year-over-year. So we are quite optimistic of the margin profile of the whole year, fiscal year 2023.

So my second question is related to the regulations, recently in late December that we saw, we saw that there's new document about the non-academic tutoring activities. So do we see impact on our business overall, like in terms of pricing and also the expansion?

Actually, since the government has issued the policy last year, I think we have the authority exploring the new business direction and follow all of the central and local governments authorities, the rules. And so, yes, you mentioned that the new rules in last October, in October last year, I think there will be no material impacts to our business.

We have a follow-up question from the line of Felix Liu from UBS.

Stephen, this is Felix. And my follow-up question is on your learning center network. I know that you opened 2 centers in this quarter. So I think that's a good step forward, although a small step. Could you share some color on your expansion outlook from here may be this year and next year?

Okay. I think in the rest of this fiscal year, I think we have no big plan to set-up new learning centers. I think the learning center number will be stabilized because we made a loss on the OMO system in last -- in past so many years and we moved a lot of cost from the offline to online. So it saves the cost from the areas. And also -- and we changed from the traditional business, classroom areas to the new businesses. So this is the internal change. And the next year we do hope we'll open more learning centers. But so-far, since it's too early to say how many learning centers we set up for the new year because we have not finished new year budget. I think I want to share with you the new learning center expansion plan next quarter earnings call.

[Operator Instructions] Our next question comes from the line of Lyanne Antoine [ph] from HDFC.

My question is about the ratio of teachers to students. Could you share some color on the teacher to student ratio on each learning service segments? And do you have more plans to recruit more teachers in the next 2 years?

I can't share with you the teachers number. By the end of this quarter, we have 26,000 teachers in total. And because we started a new business, just I think the last year, so I think it's too early to like calculate the teachers to student ratio. I think maybe next quarter, we'll be in the new year, we'll disclose the ratio. And yes, I think we are hiring new teachers, because you know we started new businesses. And for some non-academic courses or the other new business, we do need to hire more features. But the key is, we don't hire more teachers. So we can't move above the elevation and the efficiency of the whole company, so I think we believe we will keep the higher utilization and the higher efficiency for the whole company in the future.

Our next question comes from the line of D.S. Kim from JPMorgan.

Congrats on a strong result. I actually just have 1 quick follow-up question on all your comments regarding margins. Can I ask how much of corporate overhead costs shall we expect at this stage, i.e., I remember, corporate overhead used to be like high single digit-ish revenue pre double reduction policy like 2 years back. So given much smaller or reasonably smaller revenue base now, I'm wondering how much about overhead we should model and expect for this year either as percentage of revenue or dollar term would be appreciated.

Yes, I think since the last year, we cut-off some fixed costs and expenses in the headquarters. So I think the headquarters expenses as a percentage of the total revenue will be stabilized and roughly at 6%, 7% of total revenue, this is the total expense from the headquarters.

That's very impressive and a greater margin guidance. If I may follow-up again on all your comment on the expansion plan, I don't want to ask too much about the number of learning centers but may I check for non-subject tutoring classes. Where do we see incremental demand opportunity say top tier cities, top 10 cities versus the rest of the nation by, like do you see stronger demand and where do you think we would open more stores and more centers in terms of the geographical exposure and that's all from me.

I think the new business developments in the top-tier cities is a little bit better than the low-tier cities. And this is -- we have seen in the past quarters. But I do believe even in some low-tier cities, I think they will catch-up because they start with the business, it's a little bit slower than the top-tier cities. And so, almost everywhere we're seeing the business opportunities for the non-academic courses, almost everywhere. And, yes, that's all. Capacity, as I said, now we don't have the capacity expansion plan and we just want to keep the same learning center numbers moving next quarter or even for the -- till the end of this fiscal year. And next year, maybe we'll expand, we will extend some new learning centers. But so far, we don't -- we haven't finished the next year budget. I will share with you the numbers next quarter.

Our next question comes from the line of Kan Wang [ph] from CICC.

Stephen, I have a follow-up questions. I noticed that there is a significant increase in non-academic tutoring enrollment in Q2. Would you like to specify the driver behind? And do we have any target for the enrollments during the whole year?

I think the markets always there. And we do have the famous brands and we do have the teachers. And yes, we started business just a year ago that you saw the numbers. And the exciting news for us is that the profitable of the new business is exciting. It's much better than we expected. And for the new business, I don't believe in the rest of this fiscal year, the new business, the revenue growth will be accelerated again. And even for the next new year, fiscal year 2024, I believe the revenue growth of the new business will be high, yes. So we're optimistic about the non-academic courses business.

Yes. And by the way, the non-academic tutoring business, according to our experience in the last several quarters, we think that its seasonality is not that apparent as some other test prep business. So every quarter, probably the enrollments will be relatively stable if we do the Q-on-Q comparison. And also as new business development in all the local cities, probably you can see strong momentum. As we have seen that Q2's growth or the enrollment trends are also similar or even better than Q1. Yes.

We have a follow-up question from the line of Lyanne Antoine [ph] from HDFC.

Just 1 more follow-up question. Do we have any color on the retention rate for each segment?

I think the retention rate is related to the traditional K-12 business. But we closed on the K-9, this is last year. And -- but for new businesses like non-academic courses, we just follow up -- we just trace the retention rate. The good news for us is we are seeing the retention rate is getting higher and higher. And for example, as for the non-academic courses, the retention rate now is between 65% to 70%. We just started the new business and the retention rate now is better than we expected. And we believe the retention rate will get higher going forward. And overseas test prep and the university students business?

One-off.

Yes, that's -- roughly, it's one-off.

We are now approaching the end of the conference call. I will now turn the call over to New Oriental's Executive President and CFO, Stephen Yang, for his closing remarks.

Again, thank you for joining us today. If you have any further questions, please do not hesitate to contact me or any of our Investor Relations representatives. Thank you.