The Ensign Group, Inc. (ENSG) Q2 2017 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the Ensign Group, Inc. Second Quarter Fiscal Year ‘17 Earnings Conference Call. [Operator Instructions] And as a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Mr. Chad Keetch, Executive Vice President. Sir, you may begin.

Thank you, Sandra. Welcome, everyone. We filed our earnings press release yesterday and it can be found on the Investor Relations section of our website at www.ensigngroup.net. A replay of this call will also be available on our website until 5:00 p.m. Pacific on Friday, September 1, 2017. Before we begin, I have a few housekeeping matters. First, any forward-looking statements made today are based on management’s current expectations, assumptions and beliefs about our business and the environment in which we operate. These statements are subject to risks and uncertainties that could cause our actual results to materially differ from those expressed or implied on today’s call. Listeners should not place undue reliance on forward-looking statements and are encouraged to review our SEC filings for a more complete discussion of factors that could impact our results. Except as required by federal securities laws, Ensign and its affiliates do not undertake to publicly update or revise any forward-looking statements where changes arise as a result of new information, future events, changing circumstances or for any other reason. In addition, The Ensign Group, Inc. is a holding company with no direct operating assets, employees or revenues. In addition, certain of our wholly owned independent subsidiaries, collectively referred to as the Service Center, provide centralized accounting, payroll, human resources, information technology, legal, risk management and other centralized services to the other operating subsidiaries through contractual relationships with such subsidiaries. In addition, our wholly owned captive insurance subsidiary, which we refer to as the captive, provides some claims-made coverages to our operating subsidiaries for general and professional liability as well as for certain workers’ compensation insurance liabilities. The words Ensign, company, we, our and us refer to the Ensign Group and its consolidated subsidiaries. All of our operating subsidiaries, the Service Center and our wholly owned captive insurance subsidiary, are operated by separate, wholly owned independent companies that have their own management, employees and assets. References herein to the consolidated company and its assets and activities, as well as the terms we, us, our and similar terms used today, are not meant to imply, nor should it be construed as meaning that The Ensign Group has direct operating assets, employees or revenue or that any of the subsidiaries are operated by The Ensign Group. Also, we supplement our GAAP reporting with non-GAAP metrics. When viewed together with our GAAP results, we believe that these measures can provide a more complete understanding of our business, but they should not be relied upon to the exclusion of GAAP reports. A GAAP to non-GAAP reconciliation is available in yesterday’s press release and is available on our Form 10-Q. And with that, I’ll turn the call over to Christopher Christensen, our President and CEO. Christopher?

Thanks, Chad. Good morning, everyone. Thanks for joining us today. As indicated in yesterday’s press release, we’re on track with our previously announced expectations and we remain confident in our 2017 annual guidance. We’re reaffirming our projected revenues of $1.76 billion to $1.8 billion and annual earnings per share guidance of $1.46 to $1.53 per diluted share. We’re encouraged by the improvements in occupancy and skilled revenue in both same-store and transitioning operationseven though they’re still in the early stages of returning to our expected results. We’re pleased to report that we saw the tremendous organic growth potential that exists within our portfolio continuing to take shape, even during one of our historically more challenging quarters. We continue to have a few slower-than-expected transitions and a substantial spike in health care insurance costs that have created a short-term drag on our performance, but the progress we’ve made in almost every corner of the organization sets the stage for strong third and fourth quarter results. As we said last quarter, we expect our newly acquired and transitioning operations to continue their momentum, that each will make a meaningful contribution to our results in the second half of 2017 and beyond. As we’ve noted in the past, our business can be a bit lumpy from quarter-to-quarter, which is why we only provide annual earnings guidance. Operating results in the quarter were impacted by a number of nonoperational factors, including a $5 million increase in health care costs over the first quarter of this year, the drag created by several new acquisitions during the quarter and seasonal softness in occupancy and skilled revenue, all of which are already significantly improving in July. With respect to the health care insurance cost, we’re disappointed that this unexpected spike in the health care cost has diluted our operational improvements. We still have confidence that we’re using the right strategy on our health insurance, but have been working diligently with our insurance partners on several solutions to help normalize these expenses and to improve the predictability going forward. We want to be clear that we are not satisfied with the results achieved during the quarter, but we’re very encouraged with the improvements our local leaders have made, and we expect to see continued growth in the third and fourth quarter and beyond. We’re also very encouraged by the continued success of our new business ventures, including assisted living, home health, hospice, nonemergency medical transportation and other post- acute care services. The income growth each of these business ventures has achieved is further evidence of the organization’s agility and ability to apply its operating principles in several health care services. We’re grateful for these leaders as they strive to make their organizations the best providers in the markets they serve, which extends Ensign’s growing influence. It is through them and our other local leaders that we continue to realize our mission of bringing a new level of quality and dignity to post-acute care, doing it one operation at a time. We continue our relentless focus on quality outcomes across the organization. We believe that as the quality of our service offerings, our superior clinical outcomes and our local connections to our individual markets continue to strengthen, we’ll increasingly draw market share across the portfolio. With a focus on strengthening outcomes, lowering readmission rates and extending our capabilities to care for more complex patients across the post-acute continuum, we have continued to invest in the best care pathways and new clinical programs in post- acute care. As a result, we’re seeing significant improvements in key indicators related to outcomes and satisfaction, which helps drive occupancy and skilled mix. We’re also pleased to report, again, improvement in our 4- and 5-star ratings. In fact, 5 more of our skilled nursing operations achieved 4- and 5-star ratings during the quarter, and with those additions, 99 of our skilled nursing operations carry that designation at quarter-end. We continue to work very hard to improve the clinical performance of our newer operations, and we remind you that most of these were 1- and 2- star operations at the time that we acquired them. We also remind you that our performance is only made possible by the superior competency, leadership and hard work of our incredible local leaders and their teams. Our relentless effort to implement Ensign’s bottom-up first 2 then what leadership paradigm in all of our new operations is the key to achieving what we set out to become. We’ll continue to recruit, train and support the best local leaders in the business, and we’re confident that they will continue to deliver industry- leading performance and returns, both clinical and financial, for our patients, our communities and our shareholders. We believe that we have the cleanest balance sheet in the industry. Even after experiencing significant acquisition activity, our lease adjusted net debt-to- EBITDA ratio was 4.17x as of the end of the quarter. While this debt ratio is higher than our historical averages, the ratio has improved over the last few quarters even though we purchased approximately $190 million in new assets in just the last 9 months. As those that have followed our story for many years know, our acquisition strategy and business model causes the debt ratio to rise during periods with higher acquisition activity. We expect the ratio to return to historical levels as the new acquisitions add EBITDAR to consolidated operating results. We’ll continue to remain vigilant and responsive as changes occur around us. In the meantime, we remain financially sound with a solid cash position and very manageable real estate costs. We remain committed to keeping our cash flow strong and our debt relatively low, and we continue to commit capital to our ongoing acquisition and renovation programs as we look to the future. And with that, I’ll ask Chad to give us an update on our recent investment activity. Chad?

Thank you, Christopher. During the quarter, we paid a cash dividend of $4 [ph] per share, which was an increase of 6.3% over the prior year. This is the 14th consecutive year we have increased our dividend. During the quarter and since, we announced the following acquisitions: on April 1, 2017, Rehabilitation Center of Des Moines, a 74-bed skilled nursing operation in Iowa; on May 1, 2017, Meadow View Nursing and Rehabilitation, a 112-bed skilled nursing facility in Nampa, Idaho; also on May 1, Voto Home Health, a Medicare-certified home health agency servicing King County, Washington; on June 1, 2017, Heritage Park Healthcare and Rehabilitation, a 115-bed skilled nursing facility in Roy, Utah; and Wide Horizons Intermediate Care Facility , an 83-bed intermediate care facility for individuals with intellectual disability in Ogden, Utah; on June 16th. We announced the acquisition of Meadowcreek Senior Living, a Senior Living, a 37-unit assisted living in Paris, Texas; Maple Meadows Assisted Living, a 37-unit assisted living in Paris, Texas; Maple Meadows Assisted Living, a 19-unit assisted living facility in Fond du Lac, Wisconsin; North Point Senior Living, a 19-unit assisted living facility in Kenosha, Wisconsin; and Lakepoint Villa Assisted Living, a 19-unit assisted living facility in Oshkosh, Wisconsin; on July 1st, The Villas at Sunny Acres, a post-acute care retirement community with 134 skilled nursing beds, 35 assisted living units and 109independent living units, all set on a 64-acre campus in Thornton, Colorado; and Medallion Post Acute Rehabilitation, a 60-bed skilled nursing operation; and Medallion Villas, a 44-unit assisted living and 64-unit independent living operation both set on a single health care campus in Colorado Springs, Colorado; and finally, on August 1st, Parkside Senior Living, a 20-unit assisted living facility in Neenah, Wisconsin. As we discussed last quarter, the company completed the sale and simultaneously lease of 2 skilled nursing facilities and one assisted living community to Mainstreet Health Investments, Inc. The triple-net master lease includes an initial 20-year term and CPI- based annual escalators. The properties are located within high-density neighborhoods of Los Angeles and Phoenix Metro markets and have been owned and operated by Ensign for many years. Simultaneously, MHI released – MHI, I mean, Mainstreet, released Ensign from its obligations on 3 transitional care facilities in Kansas and Texas. This leaves us with a total of 7 health care resorts that will be operated by an Ensign subsidiary, including 5 in Kansas, 1 in Texas and 1 in Colorado. We again want to emphasize the purpose in continuing to acquire real estate. Because almost all of our real estate assets we acquire are underperforming at the time we acquire them, each owned asset provides us with a significant opportunity to create value and use that value to help maintain a healthy balance sheet and to prepare for future growth opportunities. Our recent sale leaseback transaction is one of many ways we have to capture some of the value we’ve created in our real estate assets, while simultaneously strengthening our already healthy balance sheet and ensuring that we will continue serving each of these communities for decades to come. As of today, we now own the real estate of 61 of the 227 health care facilities within the portfolio, 58 of those are completely unlevered, with 20 hospice agencies, 18 home health agencies and 3 home care businesses in 14 states. As we’ve done in the past, we are also nearing the final stages of completing a HUD financing on 17 of our 61 owned assets. As with any HUD financing, the process is long and complex, but we expect to complete this HUD-based mortgage transaction during the third quarter. This will also allow us to pay down most of our revolving line of credit and to establish long-term fixed financing at very favorable rates. As we do so, we add to our liquidity and our ability to acquire well-performing and struggling skilled nursing operations, assisted living operations and startup or early-stage hospice and home health agencies as well as other post- acute care businesses. We are evaluating a collection of several smaller attractive acquisition opportunities and believe that more favorable pricing is on the horizon. As we’ve seen many times before, potential changes to reimbursement continue to generate a lot of buying opportunities at very attractive prices. We expect to acquire some of these operations later in the third and fourth quarter and continue to be very picky buyers and will remain true to our locally-driven approach to each and every acquisition we make. And with that, I’ll hand it back to Christopher.

Thanks, Chad. With a growing portfolio that extends across 14 states, numerous markets and several different business lines, Ensign is becoming increasingly diverse in its asset base and operations. While this breadth of diversity might challenge a traditional top-down organization, our unique locally focused business model lends itself well to performing across multiple, very different markets. This is because our individual facility and market leaders have the vision, the motivation, the ability and the empowerment to tailor their individual business plans to the markets and communities they serve. Each will face different problems and each will and come up with unique solutions. I’ll just mention three examples. As an example of the improvements we’ve made in our same- store Texas operations, Legacy Rehab and Living, located in Amarillo, Texas, has made significant strides to become the facility of choice. Under the leadership of CEO, Chris Cantrell, and Director of Nursing, Darice Carrie, Legacy has achieved outstanding clinical and financial performance. Despite the fact that there are other facilities in the market that have better locations and newer physical plants, in response to the demands in the local health care community, Legacy developed outstanding relationships with local health care providers and the Texas Tech University Medical School. By introducing a residency program within the walls of the facility, Legacy enjoys a consistent physician presence in the building and has led to better outcomes and significant improvements in quality. As a result, they’ve achieved a CMS 4-star rating, which is especially impressive given it was a 1-star operation when we acquired it just a few years ago. As a result of their efforts, Legacy increased its EBIT by 50.3%, with a 22.8% increase in census over the prior year quarter. Legacy attracts and retains amazing caregivers and has consistently grown its occupancy while other post-acute facilities have experienced a decline as a result of Legacy’s expanding market share. Harbor View Assisted Living, located in Manitowoc, Wisconsin, is an excellent example of the improvements we’re seeing in our assisted living operations. Under the leadership of Executive Director, Tammy Wagner and Wellness Director, Lindsay Holdorf, this operation has improved in almost every metric. Together, Tammy and Lindsay have immersed themselves into the community to overcome a challenging reputation we inherited at the time of acquisition to gain the trust of the health care community and the families in Manitowoc. By systematically improving culture, this operation has improved occupancy by 33.6%, resulting in an increase in EBIT of 253.5% over last year’s quarter. We’re also encouraged by the progress we’re making in our home health and hospice operations. Horizon Home Health and Hospice in Meridian, Idaho, is an example of the impact that the Ensign model has made on the home health and hospice industry. Led by Executive Director, Bridger Booras and clinical leaders, Sue Hepworth and Carrie Birch, Horizon just completed its best quarter since we acquired it in 2010. During the quarter, revenues increased 29% over the prior year quarter, and EBIT increased by 118% over that same period. Horizon’s average daily hospice census also increased by 40% and home health episodes increased by 16%, both over the prior year quarter. Growth is being fueled by the team’s commitment to best-in-class patient care as demonstrated by a 4-star rating. There are so many other stories like these across the organization. We’d also like to remind you that we have 111 recently acquired and transitioning operations as of August 1, 2017, representing nearly 50% of our total skilled nursing and assisted living operations. We can see the incredible opportunity we have within our organization, and we can see the progress in that opportunity. It’s because of that potential that we are so optimistic about our future, even after a quarter that doesn’t meet our own expectations. As our same-store operations have been strengthening, we expect our newly acquired and transitioning operations to follow the standards that our mature operations continue to set. Our history has proven this over and over again. With that, I’ll turn the time over to Suzanne to provide more detail on the company’s financial performance and our guidance, and then we’ll open it up for some questions. Suzanne?

Thank you, Christopher, and good morning, everyone. Detailed financials for the quarter are contained in our 10-Q and press release. Highlights for the quarter include: consolidated EBITDA increased 10.4% to $32.6 million and adjusted EBITDA increased 169 basis points to $38.1 million. Same-store managed care revenues increased 10.8%, with a growth of 5.5% in managed care days over the prior year quarter. Same-store skilled mix revenue increased 56 basis points to 51.6%. Transitioning revenue for – increased 8.2% to $77.8 million, with occupancy growth of 268 basis points to 73.9%. Transitioning Medicare and Medicaid skilled days increased 8.2% and 16.9%, respectively. Transitioning Medicare and Medicaid skilled days increased 2.9% and 27%, respectively. Bridgestone, our assisted and independent living subsidiary, grew its segment income by 12.1% to $3.7 million over the prior year quarter. And Cornerstone, our home health and hospice subsidiary, grew its segment income by 13.3% to $4.9 million and revenues by 21.5% to $34.6 million, all over the prior year quarter. Other key metrics included as of June 30 are: cash and cash equivalents of $33.5 million and $162 million of availability on our $350 million revolving line of credit. As Christopher mentioned, we are reaffirming our guidance for 2017. We are projecting revenues of $1.76 billion to $1.8 billion and adjusted earnings of $0.46 to $0.53 per diluted share. The guidance is based on diluted weighted average shares outstanding of 33.7 million; exclusion of acquisition-related cost and amortization cost related to patient base; exclusion of losses associated with the development of new acquisitions and start-up operations, which are not yet stabilized; the exclusion of legal costs and charges associated with the class-action lawsuit; exclusion of cost associated with closed operations; inclusion of anticipated Medicare and Medicaid reimbursement rates net of provider tax; tax rate of 35.5%; the exclusion of stock-based compensation; normalized health care cost; and the inclusion of acquisitions closed to date. Additionally, other factors contributing to our asymmetric quarter include: variations in reimbursement systems, delays and changes in state budgets, seasonality in occupancy and skilled mix, the influence of the general economy on our census and staffing, the short-term impact of our acquisition activities, variation in insurance accruals and other factors. As we indicated last quarter, we want to remind you that we anticipate the momentum to build over time and that we do not anticipate that our performance will be spread evenly between each quarter. As we’ve said before, we expect to return to our typical pattern of stronger performance in the latter half of 2017. Also, in anticipation of questions regarding the advanced notice of the proposed rulemaking, or pre-rule, we wanted to report that there are no material updates at this time. As we indicated last quarter, the pre-rule asks for comments and feedbacks on potential revisions to the SNF payment system. Our industry experts and network of health care associates have been and will continue to be very involved in commenting and shaping this pre-rule. And with that, I’ll turn it back over to Christopher.

Thanks, Suzanne. We want to, again, thank you for joining us today and express our appreciation to our shareholders for your confidence and support. We also especially want to express our appreciation to our colleagues in the field and the Service Center for making us better every day. I’ll turn the time over to the – for the Q&A portion of our call. Sandra, can you please instruct the audience on what we do with Q&A?

[Operator Instructions] Our first question comes from the line of Frank Morgan with RBC Capital Markets. Your line is now open.

Thank you. I was hoping in light of maintaining the guidance here, maybe you could just sort of give us a little bit of color on the mechanics of things that you would expect in the second half of the year to kind of bridge us from here to year-end results. Are there any specific milestones that you would want us to lay out today that we should be paying attention to over the balance of the year as signs of progress towards achieving that guidance? And I know Suzanne, you made a lot of – you mentioned a lot of the factors going into the guidance, I just wanted to reiterate that the incremental acquisitions are not part of that guidance going forward because I think you did mention you’re expecting some acquisitions in the second half of the year.

That’s right. Yes, Frank, that’s a good comment, and that’s correct. That is only – that only includes what we already have in the portfolio. And I think – without going into too much detail, I think most of that improvement between the first and second quarter and the third and fourth quarter is going to come from our transition and new acquisitions bucket. We can see great momentum in those. And even though we only share a few data points with you, there has been enough improvements – and I think I mentioned this in my portion of the call, but there’s been enough improvement in our same-store now, as they’ve restored the same – I guess, sort of the same, gosh, what word am I looking for, the same trajectory that we’ve enjoyed for most of our history. We’re going to see that now happen with our transitional – transitioning and new acquisitions. And I think even though we don’t break it down by state or by business line, it will be across almost all states, but particularly in the same states I feel like we’ve been talking about endlessly, Texas and Utah and Washington. And then we’ll see the same improvement in home health, hospice and assisted living. But the vast majority of the improvement between the first half of the year and the second half of the year will come in the transitioning and new acquisition buckets.

Got you. And I guess just one more. I take it that the fact that you’re kind of signaling that you got more acquisitions coming in the second half, that perhaps that is some sign of confidence in your existing operations and you would not be assuming additional new opportunities if you weren’t comfortable. Is that a fair assessment? Thank you, very much.

That’s right, and that’s another good question, Frank. We – our focus in those acquisitions will be in our healthier markets where we don’t have a number of transitional and new acquisitions that are on the improvement track. So as you see us make these acquisitions, which we inevitably will, they will come in markets where we don’t have as significant of opportunity on the organic side.

And our next question comes from the line of Chad Vanacore with Stifel. Your line is now open.

Hi, good afternoon.

Hi, Chad.

So just thinking about those acquisition expectations. You’ve done a lot. I mean, Chad read off the whole list of acquisitions in the first half. No thoughts to actually pumping the brakes a little bit and integrating those? Are you – you’re going to barrel ahead? What are the strategic plans there?

Yes. If you listen to the specifics of those acquisitions, there weren’t as many. I mean, if you were to compare our acquisitions in ‘15 and ‘16 to ‘17, that’s a pretty short list. I know that it sounds like several acquisitions, but if you look at the total number of beds and you look at the markets that they’re in, Chad, it has been slower and our focus is on – it’s absolutely on our organic growth potential. But there are some compelling acquisitions in markets where we’re very strong, where we are – where we have tremendous momentum, where our transitioning and new acquisitions have already become healthy or we don’t have any. And in those markets, we will continue to grow because they aren’t distracting us from the opportunity that we have in some of the other states that I mentioned earlier, but it’s a good question because I think it could be a misunderstood concept as Chad reads off that list.

All right. When you think about new acquisitions, how long do you think about getting those properties to stabilization?

So as you know, we had one challenge last year where it’s taken us much longer than it normally does, and I think I probably belabored that acquisition and talked about it extensively. But in a typical Ensign acquisition, we expect it to take us a couple of quarters. We generally – it’s obviously different with every acquisition, but the typical Ensign acquisition, we generally lose money in the first quarter and come close to breakeven in the second quarter and then find profitability in the third, fourth and – but never – we really don’t get them to a typical Ensign performing asset until year four or year five.

Okay. All right. And then just thinking about the difference between your stabilized portfolio and your newly acquired bucket, occupancy and skilled mix were better in stable, much worse in the newly acquired bucket. Can you give us some color around what’s going on there?

Yes. We had the – so again, it’s one of the challenges. I think it’s a good question and I hope I can answer it in a way that everybody can see more clearly what’s going on. We actually have some great things happening in our new acquisition and transitioning facilities. We had four assets where we had some challenges, and I can’t go into – there just isn’t time to go into enough detail, but those four, the four fell off enough that they wiped out the progress of about 40 other operations. And as those four return to where they ought to be and where we traditionally are with our acquisitions, you will see great strength and that’s one of the things that we see that it’s hard to convey on a call like this. But we feel confident that all 4 of those are on the path, and as they improve, it’ll be more obvious what’s happening with the rest of our transitioning and new acquisition buckets. Did that answer your question?

All right. Maybe just one more. It does. I got one question. Chad, you mentioned HUD financing. Did you say, refinancing 71 properties?

No. No, 17.

Okay. All right. I heard that wrong.

Thank you. And our next question comes from the line of Dana Hambly with Stephens. Your line is now open.

Yes, thanks for taking my question. Christopher, as you sit today and you compare where you were last year, where I think Legend was giving you pretty big headache and you had rolled out a new HR system and that proved to be disruptive. How do you feel today versus where we were a year ago?

It’s a good question, too. Great question. And I would say that all of those things are much better. The one thing that hasn’t improved as much as we’d like it to have improved is the Legend acquisition. So while it’s significantly better than it was then, we haven’t made the same progress there that we have on the 2 or 3 other challenges that we mentioned on that call. But we’re confident that it will get there. Again, I feel like I’ve talked about it too often, but I don’t want you to think that we’ve forgotten. There are some things that we wish we had done differently surrounding that acquisition, not that we wish we hadn’t acquired it. We still – we love those assets and we’re going to do fine with them, but there are things that I did that I should have done differently, and we’ll learn from that and not make the same mistake again.

Okay. And you mentioned the few slower markets, do you expect that those will start to ramp up into the second half of the year? And that’s what gives you more confidence in kind of achieving that steep ramp to REIT guidance?

They are already, and so we – I think that, that – I think evidence is always better than hope. And – my mom wouldn’t say that, but I think we can see that it’s already happening.

Okay. And that’s Texas, Utah and Washington. Are those the markets you’re talking about?

Those are big influencers, yes.

Okay, all right. And just last, how much is the HUD financing? Could you just give a few details on the terms of that debt?

So yes, it’s – the HUD structure these – each building has its own individual mortgage, but it will be approximately $120 million when we’re all done. And these are 30-plus-year amortized kind of mortgage loans in the mid-4.5% range.

But the interest rate is going to be very comparable to our current interest rate on the revolving line of credit, but it’s a fixed debt, which is obviously very different than what we have on the revolving line of credit, which is floating on LIBOR or prime.

Okay, all right. And you said you’ll pay down the revolver with those proceeds?

Correct.

Yes.

Okay, all right. Thanks very much.

Thank you. And this does conclude today’s Q&A session. I’d like to return the call to Mr. Christopher Christensen for any closing remarks.

Thanks, Sandra. I do want to – I don’t ever do this, but those questions were really good, and I hope one thing that was heard there is, it does take us several years to make these things what we make them, and that the size of the number of facilities in that 4- and 5-year, most of them being in the 1- and 2-year area of maturity, is more substantial than it’s ever been for us in terms of ratios and that’s why we see what we see. And we’re very excited about the future, even if the short term is a little bit frustrating for us and I’m sure for some other folks, but I just wanted to repeat that. And Sandra, thanks for hosting this, and I have to thank, again, the amazing people that are part of this organization that are helping us overcome our challenges and helping us make these operations as extraordinary as they make them. Thank you.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.