The Ensign Group, Inc. (ENSG) Q3 2019 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by and welcome to The Ensign Group Inc Q3 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I'd now like to hand the conference over to your speaker today Chad Keetch, Chief Investment Officer. Sir, you may go ahead.

Thank you. Welcome, everyone, and thank you for joining us today. As always, before we begin, I have just a few housekeeping matters. We filed our earnings press release and 10-Q yesterday. This announcement is available 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 PM Pacific on Friday, December 6th, 2019. We want to remind anyone that may be listening to a replay of this call that all the statements made are as of today October 31st, 2019, and the statements have not been nor will be updated subsequent to today's call. Also, 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. Certain of our wholly owned independent subsidiaries collectively referred to as the service center, provide accounting payroll, human resources, information technology, legal, risk management and other services to our other operating companies through contractual relationships with such subsidiaries. In addition, our wholly owned captive insurance subsidiary, which we refer to as the Captive, provides certain claims-made coverage to our operating subsidiaries for general and professional liability as well as for workers' compensation and insurance liabilities. The words Ensign, company, we, our, and us refer to The Ensign Group, Inc., and its consolidated subsidiaries. All of our operating subsidiaries, the Service Center, and the Captive, 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 use of 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, Inc. 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 in our 10-Q. And with that, I'll turn the call over to Barry Port, our CEO. Barry?

Good morning, everyone. As we celebrate the completion of the spin-off of the Pennant Group, we are very pleased to announce one of our largest third quarter improvements in our history with GAAP earnings per share for the quarter of $0.48, an increase of 26.3% over the prior year quarter and adjusted earnings per share of $0.55, up 19.6% over the prior year quarter. These extraordinary results are a testament to the quality outcomes that are being achieved by our local leaders and caregivers as they continue to drive impressive increases in occupancy and are even more noteworthy given that in the third quarter of 2018 we had the largest quarter-over-quarter improvements in our history. These results also demonstrate the enormous potential inherent within our growing portfolio. Much of the improvement has come from strong increases in occupancy and skilled mix across all operations, including same-store, transitioning and newly acquired operations. Our same-store skilled services occupancy was 80%, an increase of 210 basis points over the prior year quarter and our transitioning skilled services occupancy was 77.9%, an increase of 240 basis points over the prior year quarter. We are excited about the momentum we continue to see an occupancy as this is the second quarter in a row where we have experienced an increase of over 200 basis points in both same-store and transitioning operations. We believe that these results also demonstrate that even in a period where occupancies across the industry may be down and what is historically one of our slowest quarters, we are able to consistently drive results across all payor types, including Medicaid, Medicare managed care and private pay. We are especially grateful to our service center partners who worked tirelessly to prepare for and complete our recent spin-off, while simultaneously providing support to our local leaders. While it would have been easy to allow the spin-off to become a distraction, our unique operating model of local leadership, combined with the support of a world-class service center has been proven once more. The results also show yet again that our local approach to healthcare scalable, even in the midst of a transformational spin and continued acquisitions. Throughout our history, we have primarily focused our acquisitions on distressed healthcare operations that require significant clinical financial and cultural turnaround so because most of these operations are losing money at the time we acquired them, the value and growth we experienced is all organic. When we talk about organic growth, we're speaking about the turnaround that has to occur in nearly all of our acquisitions before they contribute to the bottom line. Remember, it often takes several years to truly transition a healthcare operation as the clinical reputational and cultural transformations take time to have a meaningful impact. Of course some transitions are quicker than others but over the period of 20 years and 260 acquisitions, we've established a track record of both top and bottom line organic growth. So we often experience significant improvements in performance in the first quarter after we take ownership. It's difficult to make a true pre and post-acquisition comparison due to the varying standards and bookkeeping maintained by sellers. However, we can highlight our operational improvements that occur after we take over our operations, more specifically across all our skilled nursing acquisitions, our improvement between our first quarter of ownership and our fifth quarter in occupancy, skilled mixed revenue and EBITDA margin is approximately 390, 440 and 80 basis points respectively. Over a broader timeframe, our improvement in the same measures between the first quarter and the 45th quarter is approximately 1,300, 1,400 and 470 basis points respectively, which demonstrates the dramatic organic improvement continues for many years following the initial transition period. Let me provide some examples of this ongoing improvement. We continue to see success in secondary markets as our local leaders innovate to meet the needs of their communities. In 2011, we acquired Wayne Continuing Care and Rehabilitation in Wayne, Nebraska. Our Executive Director, Cheri Wingert, and Director of Nursing, Jordan Gilfrey, have led their exceptional team to outstanding clinical, cultural and financial performance in 2019. Both Cheri and Jordan are homegrown leaders in our organization, with Cheri completing an administrator and training program and Jordan having worked as a Charge Nurse and Assistant Director of Nursing prior to becoming leaders at Wayne. The facility grew occupancy by 14.5% and revenues by 41% over third quarter of 2018. At the same time, the facility has also continued to strengthen its clinical reputation as evidenced by their continued Five Star CMS rating and successful survey results, all while working hard to serve an increasingly acute resident population and meet the needs of their unique community. We've also seen continued improvement in some of our strategic urban markets. Mission Hills Post Acute Care acquired in 2014 is a 75-bed facility just north of downtown San Diego. Once an obscure third or fourth choice in their market, Executive Director Matthew Scott and Director of Nursing Enrique Gonzalez have transformed Mission Health into a post-acute powerhouse. With a culture promoting from within, several of their key leaders have come from other internal positions. Matthew, a former Chief Therapy Officer from another Ensign-affiliated operation himself, has leveraged his expertise and helped Mission become known for their amazing patient outcomes and successful transitions back to home. Matt and Enrique are always looking for new opportunities to expand their service operations up the acuity chain to better serve their local healthcare markets' needs. In spite of continuous improvement since acquisition, over this last year, they have managed to grow occupancy by 4.3%, revenues by 21.6% and earnings by over 3.6 times. They have an impressive four-star CMS rating and are truly a facility-of-choice in San Diego with much more runway to improve as they continue to innovate. All of these examples demonstrate that even in an ever-changing environment, through the right partnerships and superior outcomes, we're able to drive significant organic improvements in all of our operations. We are excited about the progress some of our underperforming operations continue to make, but we want to emphasize the tremendous potential there remains within our existing portfolio, not to mention the enormous opportunities for future disciplined acquisitions. For the second time this year, we increased our 2019 annual earnings guidance to between $2.24 and $2.31 per diluted share and annual revenue of between $2.35 billion and $2.4 billion. Overall, the midpoint of this guidance represents an increase of 21.2% over Ensign's 2018 annual earnings. When adjusting for only the fourth quarter impact of the Pennant spin-off, this newly increased 2019 guidance translates to between $2.15 and $2.21 per diluted share, an annual revenue of between $2.27 billion and $2.3 billion. We are very pleased with our performance so far this year and are confident that our local leaders will continue to adjust to local market conditions that we will continue to carry this momentum into the fourth quarter and beyond. We are also very excited to give you our 2020 annual earnings guidance of between $2.22 and $2.30 per diluted share and annual revenue guidance of between $2.3 billion and $2.35 billion, which does not include any of the results from the spun out Pennant businesses. We are very optimistic that with the continued upside that is inherent in our portfolio and attractive acquisitions on the horizon that we will be able to continue to meet or exceed our pre-spin growth rates. To underline this confidence, the midpoint of our 2020 guidance represents an increase of 18.3% over the midpoint of our 2019 full year spin-adjusted earnings guidance, which is between $1.88 and $1.94 per diluted share. As we said in the recent past, the primary drivers of our strong results are exceptional local leadership, high quality healthcare outcomes, strong regulatory results, healthy occupancy and consistent collection efforts. As we have focused in these areas, our local leaders are more and more successful in driving strong relationships with the acute and managed care partners, which continues to be an ongoing advantage. Our focus isn't just on skilled occupancy. It's developing an appropriate mix across all payer types that fit the unique needs of the markets we serve. Thanks to our distinctive local leadership model and our disciplined real estate investments and acquisitions, we are confident that this performance is sustainable over the long-term. We believe we are on a path to make up for all of Pennant's 2019 earnings by the end of 2020 and that we haven't even come close to reaching our full potential. To do so, it will take the relentless commitment to our culture and the repetitious adherence to sound fundamentals. And with that, I'll ask Chad to give us an update on our recent investment activity. Chad?

Thank you, Barry. During the quarter, we paid a quarterly cash dividend of $0.0475 per share. We've been a dividend paying company since 2002 and have increased our dividend every year for 16 years. Also, during the quarter and since, we announced the acquisition of one management arrangement for a hospital-based skilled nursing operation in California, one skilled nursing facility in Utah, one newly constructed facility in Arizona, one skilled nursing in Idaho and one independent living operation in Utah that is part of a healthcare campus we have been operating for several years. These additions bring our growing portfolio to 202 skilled nursing operations, 27 of which includes senior living operations across 14 states. Also, Ensign owns the real estate of 81 of our 260 healthcare facilities. Even though we had a solid year on the acquisition front so far, we expect several acquisitions that we have been working on for months to close in the fourth quarter or early in the first quarter of next year. Our pipeline remains very healthy, but we continue to be very selective in our keeping plenty of dry powder on hand for what we believe will be an increasingly more attractive buyer's market. We are very excited to grow within our existing geographical footprint, and we'll continue to do so as we see significant advantages to adding strength in markets that we know well, including some of our newer emerging markets as they continue to mature and prepare for growth. We continue to methodically add value to our real estate portfolio by improving the operating results in our owned operations and by acquiring additional real estate assets. Since we spun out 94 of our real estate assets to CareTrust REIT in 2014, we have added 198 operations and acquired 81 real estate assets. As we look to our past and what we have been able to accomplish with our real estate, we are very excited about the opportunities we have to unlock the value in our own real estate in the future. In the meantime, our focus is on continuing to build equity value in these assets, most of which were distressed at the time we acquired them and are still maturing into Ensign caliber Phonetic operations. Our unique entrepreneurial culture, which led to the spin-off of our home health, hospice and senior living businesses, remains alive and continues to thrive. As we have emphasized repeatedly over the last several quarters, our home health, hospice and senior living leaders have created significant value as they have embraced and applied Ensign's innovative leadership and operating model. As two distinct but very healthy enterprises both organizations are now poised to adapt to the ever changing needs of our patients, payers and providers within the continuum of care. The spin-off shines a light on the value that we have created and presents two very attractive investments to provide our partners and shareholders the opportunity to share in that value now and overtime. We have several other post-acute related new ventures we are growing and look forward to watching them follow a similar path as our Pennant Group partners. While these businesses are relatively small today, we are excited to support them in their growth as they apply proven Ensign leadership and operational principles to their respective businesses. And with that, I'll turn the time over to Suzanne to provide more detail on the Company's financial performance and our guidance. Suzanne?

Thank you, Chad, and good morning, everyone. Detailed financials for the quarter are contained in our 10-Q and press release filed yesterday. Some additional highlights for the quarter include consolidated GAAP net income for the quarter was 27.2 million, an increase of 30% and adjusted net income was 30.9 million, an increase of 24%. Consolidated EBITDA for the quarter was $52.6 million, an increase of 26% and adjusted EBITDA was $58.5 million, an increase of 21%. We also want to point out that we have made very few adjustments between GAAP and non-GAAP numbers and 80% of those adjustments relate to the renewal of costs associated with the spin-off transaction and share-based compensation. Other key metrics as at and for the period ended September 30 include cash and cash equivalents of $44 million and cash generated from operations of $137.6 million. We currently have $195 million of availability on our new $350 million revolving line of credit. Our lease adjusted net debt to EBITDA ratio decreased again in the quarter to 3.72 times. And as a reminder, this is even after we've invested $660 million in 198 acquisitions since we spun-off the REIT. On October 1st, 2019, CMS's payment reform for skilled nursing called Patient Driven Payment Model or PDPM went into effect. Our interdisciplinary teams which have always been relentlessly focused on the quality and efficient outcomes have been tirelessly working on implementing the new system. While we would expect that we would not be perfect in the onset, we believe that the long-term impact of this new system will accelerate our strategy of caring for more complex patients. As Barry mentioned, we've raised our 2019 annual guidance and translated the guidance to incorporate the fourth quarter impact of the Pennant spin-off to between $2.15 and $2.21 per diluted share and revenue between $2.27 billion and $2.3 billion. The increased 2019 guidance is based on a tax rate of approximately 25%, the inclusion of acquisitions to the end of the year, the implementation of the new Patient Driven Payment Model, PDPM, with the primary exclusions coming from spin-off transaction cost and stock-based compensation. We also provided guidance for 2020 with annual earnings guidance of $2.22 to $2.30 per diluted share and annual revenue guidance of $2.3 billion to $2.35 billion. The midpoint of this 2020 guidance represents an increase of 18.3% over the midpoint of Ensign's 2019 full-year-spin adjusted earnings guidance, which is between $1.88 and $1.94 per diluted share. The 2020 guidance is based on diluted weighted average common shares outstanding of approximately $57.6 million, a tax rate of approximately 25%, the inclusion of acquisitions expected to close in the first half of the year, the exclusion of losses associated with the start-up operations which are not yet stabilized, the inclusion of anticipated Medicare and Medicaid reimbursement rates net of provider tax with the primary exclusion coming from stock-based compensation. In order to provide adjusted guidance that removes Pennant from our results, we adjusted EPS by 16% and revenue by 13.8%. The following was used to determine the remaining Ensign contributions to resolve. Ensign's historical consolidated GAAP results for the six months ending June 2019, removing all direct Pennant operational results, adding an projected Pennant rental revenue, adding an additional general and administrative savings and then applying the non-GAAP adjustments for the remaining Ensign entities. Additional factors that could impact quarterly performance 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 censuses and staffing. The short term impact of our acquisition activities, variations in insurance accruals and other factors. And with that, I'll turn it back over to Barry. Barry?

We have always aspired to be a leadership company above all else. Developing outstanding entrepreneurial leaders is our most important priority. As we do so creating a pathway for each of these leaders so that they can experience what so many at Ensign have already experienced is a key strategy to help us attract and retain the best and the brightest. Our organization has created multiple pathways to achieve the success that so many outstanding leaders deserve, including the amazing opportunity that exist within our core business and the new business venture program. We are encouraged that so many are starting to truly understand what Ensign really is, and our story is continuously gaining traction. It's opportunities like our spin-out as well as the incredible shared upside with our local leaders that have and will continue to allow us to attract such amazing talent from all walks of life to post-acute care. Once again, we're enthusiastic about our guidance for the rest of 2019 and 2020. While we're constantly looking closely the areas that require improvement, we have tremendous confidence in what we can achieve as we make those needed adjustments and remain true to our principles and our model. We'll now turn to the Q&A portion of our call. Valerie, can you please instruct the audience on the Q&A procedure?

Thank you. [Operator Instructions]. Our first question comes from Chad Vanacore of Stifel. Your line is open.

Hey, good morning. This is Seth Canetto on for Chad.

Hey, Seth.

Hey, Seth.

My first question on the guidance for 2020, and just thinking about the acquisition pace, given that you guys have the spin behind you and you're able to do a decent number of acquisitions in the quarter, how should we think about the acquisitions going forward into 2020 and what's included in that 2020 guidance as far as acquisitions are concerned?

Yes. Thanks, Seth. So, as I said in the prepared portion of our remarks, we expect to have several deals that we've been working on for months close in the fourth quarter and maybe early next year. And then we also have some visibility into sort of deal flow following that. What's included in our guidance is deal flow and expecting closings through the first half of 2020.

Can you guys quantify that as in terms of like number of facilities and maybe EBITDA or EPS from some of those deals?

So, I think when we look at it actually kind of look at what we've done so far this year. We think that Q4 is going to be a pretty strong quarter of acquisitions, and then into Q1. So I think that we're going to have a good amount of acquisitions in Q4 and then the rest of those flow into Q1. And I think we've really quantified the number, but that's just really included in that low end of the guidance is having those acquisitions come in.

And just as a reminder, Seth, most of what we buy right is the turnaround in nature and so it's more potentially an impact on revenue but not necessarily on EPS.

Understood. Thanks. And then, when we talked about PDPM last quarter, I understand we only have one month under our belt with the new payment model, but it seems like we were talking about this as having a net neutral impact on financials. And now that you guys have had a month of experience, has that changed at all or how should we be thinking about that new system?

Yes, the same way, Seth. I mean, yes, we have a month under our belt but it's not even a completed month. We do contemplate PDPM in our guidance, but we can tell you that the impact is a net neutral impact as far as how we see things into 2020. So, we're not giving ourselves a boost or any kind of negative impact from it as we look forward.

All right. Great. And then, just last question. Switching back to acquisitions, I understand that you're buying underperforming assets and turning them around in smaller markets. And as those markets improve, I mean, what's the timetable for when you guys kind of go into the new market and build size and scale and then start expanding in those markets?

Yes. It really varies Seth. It just depends on, I guess, the nature of what we're buying and the conditions in that market. I mean, there has been some that have happened within a year and some that have taken several years. Going into a new state and a new market in particular is difficult. And especially because we're buying these turnarounds, you're introducing yourself to a brand-new healthcare market and the continuum of partners is new. The managed care relationships are different. The state regulations and the state regulator relationships need to be built and developed. So, it can't take several years before we're comfortable expanding in some of these newer emerging markets. But that said, as I mentioned again earlier, I think we're getting to a point in some of our newer states that we're going to be prepared to grow and we're hoping we can do that in 2020 in some respects. To the extent we do, I'll just tell you, we don't anticipate doing in a big way, we'll continue to sort of follow our 1z, 2z approach as we do that and grow in a disciplined fashion. But excited about the progress we're making in some of our newer markets and newer states and look forward to building upon those in expanding our footprint.

And Seth, I'll just tell you. We're seeing an enormous amount of opportunities in some of our strong states. And because of that, we certainly give those states a priority where we're performing well and we can strategically infill and even add to our strength, those opportunities will continue to take priority of our expansion into new markets.

All right. Great. Thanks for that color. And then, just in terms of the assets you guys are buying, do you have any information you can share in terms of what you're paying maybe like price per bed for these skilled nursing facilities?

So, on average, for 2019, we've paid about $50,000 per bed. Obviously that ranges depending upon where the asset is at and what kind of condition the asset is in. Now, Seth, we're buying in California obviously the assets going to be a lot more expensive than that versus if we're buying in some other markets like Texas, the asset will be cheaper than on average.

Yes. And I'll just add to that, some of the assets we purchased so far this year are newer as well, which can also impact price per bed.

Okay. Great. And then what's driving this more attractive buyer's market. Is it just the complexity inherent with the new patient driven payment model and the small operators struggling or is it something else?

Yes, I think it's -- I mean, that's certainly one of many factors. This is a business that is becoming increasingly more difficult for the small operators, technology requirements and just the demand that our partners are making for information and gathering that information in a reliable way. There's a 100 different reasons we can go through, but I guess the other thing I'd point to is, we also are seeing a lot of deals out there that -- because of really aggressive rents and escalators, a lot of folks are not being able to cover those rents. And so, we're being presented with opportunities, many of which we're looking to close here in the next quarter or two where the outgoing operator is either in bankruptcy or on the verge of bankruptcy because the rents are just too aggressive. So, a lot of times it's just a real estate transaction that was, I guess, done in a way that didn't allow for long-term health of the operation.

Thank you. Next question comes from Frank Morgan, RBC Capital Markets. Your line is open.

Just to kind of tag on that last question. These opportunities that are coming up and you refer to the rent coverage being nonexistent, on those kind of assets, will you actually have the opportunity to buy those or will you just step in and assume a rent or a reset rent. Just curious about the acquisitions that are coming up, how much of those might be own versus just assuming the lease?

Yes. It's a great question, Frank. Yes, definitely in some cases we get to acquire the real estate. And but the ones we're looking at here in the near future, I'd say half or 60% of them were buying. And to the extent we're leasing, just to be clear, it's going to require a reset of the rent. If they're not covering, it's typically going to result in a reduction. But that said, if the least amount is attractive and we can see a pathway to healthy coverage, and maybe it's just sort of part of an overall negotiated deal with whoever the landlord might be, we do both.

And I think I heard you say that in terms of your acquisition activity, a lot of this is going to have a priority to your existing markets where you are already stronger, so I'm just curious when we think about the time to turn those assets. Would it be too much of a stretch to think that maybe you could do that a little faster since you're in a market where you already have strength then presumably you could lever some of your relationships with those payers in the narrow networks that you have, so am I thinking about that right or is that too -- is that a little too aggressive?

No, you're thinking about that right. That's precisely what factors in to us looking in an asset in a strong market that timeline to being an accretive asset for us. So, yes, your assumption is right and -- we've got some funny music in the background, sorry about that. I don't know what that was, but yes I know -- but nevertheless remember too, Frank, I mean even in our markets where we're strong, if it's a real turnaround though the path might be shorter it's still sometimes the real tough turnaround. So it's still it's not always out of the gate kind of phenomenon for us.

And maybe one for Suzanne. When you talk about those assumptions, just curious about on the rate side, obviously we know the rate on the Medicare side, but what do you -- what's embedded in your guidance in terms of average growth in Medicaid rates?

They're kind of consistent with what we've done in the prior years, Frank. We've kind of done that 1% to 3% increase on average across all the states. There are some states that we've been talking about lately have continued to implement additional supplemental revenue programs, and we're a big participant in those programs. So even though a particular state might not be getting a Medicaid rate increase payable to capturing out by having stronger clinical performance, and that's what we've built in.

Got you. And in terms of just the, I know you touched on the PDPM so far taken a neutral stance on that. But have you identified anything yet that might be in opportunities that would suggest that could be a positive, a positive impact over the longer term, and if so kind of in what areas. Any color there would be appreciated.

Yes, no, it's a good question, Frank. And I think the answer to that is evolving. The basic answer to the question is yes, right. I mean, we're able to capture better reimbursement on really complex patients. And as you know, that's kind of been our MO from the beginning is to make sure that we have the clinical capability to take on more and more acute patient type. So, look, our feeling is that there is definitely opportunity there as we roll forward and our success with being able to match up the reimbursement with the patient mix that we have is an opportunity for us, it's not necessarily one that we felt comfortable being aggressive in terms of adding some boost into our guidance because of that, but we definitely do see kind of anecdotal opportunity there.

Got you. Last one and I'll hop. Just curious, you referenced some of these new businesses that you're cultivating. Do you want to share any details on any of those what we may get to see down the road? Thanks.

Yes, look, they're real small, right. But we feel pretty excited about the businesses that we're working closely with that are still kind of in those nascent growth stages, our mobile diagnostics business is encouraging, our transportation business is encouraging and we have a couple of other real small ventures that we have a lot of confidence and it could be, they could have some good growth, but they're are all tracking along. As we would expect, there is usually some hiccups when they're really new and small, which we've gone through some of that, but each of these businesses on a, on a healthy path to being self-sustaining. And we have a lot of optimism about where those are headed. Yes, and always looking for additional opportunities there that are post-acute care related. And so, we've got a bunch of that happening as well, and it's a just such a ingrained part of our culture. That entrepreneurial spirit is a huge part of who we are and the leaders that we attract, and so we'll continue to do that and are excited to do that and are excited about it.

Thank you. I'm showing no further questions at this time. I'd like to turn the conference back over to Barry Port for any closing remarks.

Thank you, Valerie, and thank you everyone else for joining us today. We're grateful for the questions and the support. And with that, we'll end our call.

Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you for your participation and have a great day. You may all disconnect.