H&R Block, Inc. (HRB) Q2 2020 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. And welcome to the H&R Block Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your host, Colby Brown, Vice President, Finance and Investor Relations. Sir, please go ahead.

Thank you, Lateef. Good afternoon, everyone. And thank you for joining us to discuss our fiscal 2020 second quarter results. On the call today are Jeff Jones, our President and CEO, and Tony Bowen, our CFO. We’ve posted today’s press release on the Investor Relations website at hrblock.com. Also on the website, you will find a link to the webcast containing today's presentation, which will be posted after this call. Some of the figures that we'll discuss today are presented on a non-GAAP basis. We’ve reconciled the comparable GAAP and non-GAAP figures in the schedules attached to our press release. Before we begin our prepared remarks, I’ll remind everyone that this call will include forward-looking statements as defined under the securities laws. Such statements are based on current information and management’s expectations as of this date and are not guarantees of future performance. Forward-looking statements involve certain risks, uncertainties and assumptions that are difficult to predict. As such, our actual outcomes and results could differ materially. You can learn more about these risks in our Form 10-K for fiscal 2019 and our other SEC filings. H&R Block undertakes no obligation to publicly update these risk factors or forward-looking statements. At the conclusion of our prepared remarks, we’ll have a Q&A session. During Q&A, we ask that participants limit themselves to one question with a follow-up after which they may choose to jump back into the queue. With that, I’ll now turn the call over to Jeff.

Thank you, Colby. Good afternoon, everyone, and thanks for joining us. We have a lot of exciting update to cover on today’s call. I’ll start by recapping our progress against the strategic framework we introduced you last year. Then I’ll talk about our plans for fiscal '20 in both tax and small business. This will include details about the significant progress we have made to digitally enable all facets of H&R Block. This work is essential to our success in both fiscal '20 and the long-term as we launch innovative new products, modernize how we deliver expertise in care, and ensure the best trained tax professionals in the industry can help clients in better and easier ways. Finally, Tony will discuss a non-GAAP financial reporting change, second quarter results including share repurchases and dividends and our fiscal '20 outlook. Fiscal '19 represented the first steps to modernize H&R Block and to position ourselves to deliver sustainable growth. We made improvements to our business and excellent progress against our enterprise growth strategy. We brought transparency to pricing in all our channels and we lowered prices for millions of consumers. We leveraged AI and machine learning to make the DIY experience faster, easier and more personalized. We introduced more new digital products than ever before which attracted consumers to our brand and we made tremendous progress on our technology roadmap. These combined efforts enabled us to deliver at the top end of our financial outlook, make record increases in our client satisfaction scores, and grow overall clients and share. This positive momentum has carried into the first half of the fiscal year. In addition to closing the Wave acquisition, which will help us accelerate our efforts in serving small business owners, we’re seeing positive results in our tax business. We achieved return growth and share gains during the extension season, which just ended in October. And having recently spent time at our National Retail meeting, I’m certain that our associates and franchisees are ready to extend this momentum into the upcoming tax season. So as we look ahead, I’d like to talk about our plans for the year and how we’re combining technology and our human advantage to deliver expertise in care in new and compelling ways. In our offices, teams remain focused on operational excellence to improve the quality and consistency of the experience. A key element of this improved experience is upfront transparent pricing, which will remain a top priority. We’re also building on last year by enhancing our standard operating procedures, and we’ll continue to leverage our competitive Refund Advance product to drive consumers to our brand. We’re also strengthening the tools that enable our tax pros to provide best-in-class service for our clients. This includes digitizing how our tax pros work and communicate with clients through a tool called Work Center. This technology provides our tax pros a 360 degree view of the client, consolidating and simplifying routine task, and offering a portal to all the services we provide. This year, we’ll introduce a variety of enhancements, such as an improved dashboard to streamline how tax pros manage both in office and virtual returns, and document management that makes the process of gathering and sharing tax documents easier. By equipping our tax pros with the right technology, we’re increasing their efficiency, giving them more time to provide help and inspire confidence in their clients, which will be a key to retention. Next, Tax Pro Go represents an important product as we offer mobile first solutions that appeal to busy young consumers who know H&R Block, but haven’t yet tried our brand. This season marks the second year we’ve offered this fully assisted digital service nationwide. Based on client feedback, we’ve improved the product flow and simplified pricing. We’re also making it easier to connect with our tax pros, a key differentiator for H&R Block. No one can match their level of training, quality and tenure, with nearly half of our pros being members of the Block team for more than 10 years. In DIY, we've improved all aspects of our offerings, with a focus on ease, speed and personalization. We will maintain our challenger mindset by pricing competitively, making sure consumers know about our award winning product, and ensuring clients are never surprised by their price. We’re capturing client data earlier in the process and further leveraging AI and machine learning to remove questions and steps from the workflow. This year, you’ll hear us talk about how consumers can now switch in two clicks, making it even easier to move from a competitor. We’ve also improved our online assist product, formerly known as Ask a Tax Pro. This offering gives our DIY clients on demand access to a tax pro for help with any questions they may have. This year, we’re increasing the prominence of this product by highlighting our price advantage and offering it as a separate SKU on our website. Let me switch gears to talk about the digital tool for clients called My Block. Regardless of how a client engages with us, whether it’s in office, online or through Tax Pro Go, My Block is a digital hub of our clients experience with H&R Block. Through this platform, clients can upload and store their tax documents, access prior year returns, set appointments, manage their Emerald Card and use our tax estimator for help with planning. This year, My Block enable secure document upload, private messaging with the Tax Pro, and greater visibility into the status of the return, and we’ve re-designed the workflow and streamlined our digital signature experience for clients who choose to finish their return online. I am pleased with where My Block is today and the valuable role it will play in the future. Let me turn now to small business. We currently serve over 2 million small business clients in tax and are working to ensure that more small business owners understand the expertise we can provide through new tools and redesign tax prep experience. Through Wave, we continue to simplify the financial lives of small business owners. We’re excited to announce that we have opened our API to third-party developers to extend the functionality and reach of our tools. We’re also releasing new integrations to make it easier for small business - small businesses that track all of their transactions from various sources in a single system. These integrations dramatically simplify the accounting process, allowing small business owners to focus on what matters most. And I’m pleased to announce that we've partnered with Shopify for our first integration launch. This is a significant accomplishment as it represents the first direct accounting integration in the Shopify App Store. What I’ve just covered outlines our plans for the upcoming season and some of the ways in which we’re using technology to drive value for consumers and small business owners. By focusing on digital enabling every aspect of our business, we’re setting the company up for success for both this fiscal year and the long-term. With that, I’ll now hand the call over to Tony.

Thanks, Jeff. Good afternoon, everyone. Before I get into the details of our results, I’d like to discuss the key change to our non-GAAP financial reporting starting this quarter. We are now reporting an adjusted non-GAAP EPS, which excludes amortization of intangibles related to acquisitions. This adjustment removes amortization of intangibles related to Wave, franchise buybacks, and tax office acquisitions. For context, approximately one third of our historical D&A expense was related to acquisitions. We believe these adjusted results will be beneficial for investors when evaluating H&R Block's operating performance. To assist with modeling, we have included quarterly historical and adjusted EPS schedules in our earnings release. Turning to our results. As a reminder, we typically report a loss during the fiscal second quarter due to the seasonality of our tax business. Therefore, second quarter results are not representative of our full year performance. Starting with revenues, we saw a year-over-year growth of $12 million or 8% to $161 million. This increase was primarily due to Wave, which contributed $11 million. Additionally, in the tax business, extension season results in the US were strong, with volume and share growth in both Assisted and DIY. These results were partially offset by lower net average charge in Assisted, which reflects the investment in price taken at the beginning of last tax season. It does not indicate a change in our plans for the upcoming season as we continue to anticipate our net average charge to be flat to the prior year. I’ll discuss details around our revenue guidance in a few minutes. Turning to expense. Total operating expenses increased $39 million or 11% to $404 million. This was primarily due to Wave, as well as planned investments related to our technology roadmap and higher legal expenses, partially offset by lower occupancy cost. Interest expense was $21 million, which was relatively flat to the prior year. The changes in revenue and expenses resulted in an increase in pre-tax loss from continuing operations of $29 million. GAAP loss per share increased $0.10 to $0.93. Adjusted loss per share, which we will report going forward increased $0.07 to $0.85, driven by the increase in pre-tax loss and lower shares outstanding, partially offset by an increased tax benefit due to favorable discrete items. As a reminder, while beneficial on a full year basis, the lower share count negatively impact EPS in quarters in which we report a loss. In discontinued operations, there were no changes to accrued contingent liabilities related to Sand Canyon during the quarter. For additional information on Sand Canyon, please refer to disclosures in the company's reports on Forms 10-K and 10-Q and other SEC filings. Regarding capital, our priorities remain unchanged. At the top of the list, it’s maintaining adequate liquidity for our operational needs to account for our seasonality. We came into this year with a strong financial position after generating over $500 million of free cash flow in fiscal '19. We then make strategic investments back in to the business that we believe deliver value to our clients, ultimately benefiting our shareholders. Making prudent investments to drive sustainable growth remains a key element of our capital allocation. Last, we will deploy excess capital through quarterly dividends and share repurchases. With respect to dividends, the health of our business and our outlook for the future has allowed for dividend increases over the past 4 years. Over that time, our quarterly dividend has increased 30%. We will perform an annual review of the dividend after each fiscal year. Regarding share repurchases, we remain committed to at a minimum, repurchasing shares to offset dilution from equity grants. During the second quarter, we repurchased 5.7 million shares for $137 million at an average price of $23.94. Year-to-date, we have repurchased a total of 7.3 million shares for $181 million at an average price of $24.75. Going forward, we will continue to be opportunistic in our share repurchase approach. I’d now like to provide thoughts on our fiscal '20 outlook. Starting with the tax industry, we expect overall return growth of about 1%, with Assisted volume flat to slightly up and DIY growing 2% to 3%. This is consistent with the trends we’ve seen over the last several years. Regarding H&R Block, we expect to grow both clients and market share in fiscal '20, which was marked the third consecutive year of improvements. This will be driven by sustained growth in DIY and a continued improvement in our client trajectory in Assisted, as we anticipate holding market share in that category. With respect to pricing, following the year in which we reset prices in our Assisted business, we expect net average charge to remain consistent with last year. In DIY, we will continue to price competitively as we focus on driving return volume and share gains. DIY net average charge is expected to increase slightly due to favorable mix led by online assist. We expect these client growth and pricing expectations, along with the addition of Wave to result in revenue growth of 1.5% to 3.5%. This is consistent with the outlook provided during our last two quarterly calls. With respect to earnings, we anticipate total EBITDA dollars to be slightly higher than fiscal '19 as we return to revenue growth. While our EBITDA loss increased in the first half, we still expect EBITDA growth for the full fiscal year. The majority of our revenue increase and planned cost reductions that will offset Wave's operating losses will be achieved in the fourth quarter. We expect these changes to result in revenue growth outpacing EBITDA growth, which will impact our margin. Therefore, we continue to anticipate EBITDA margin of 24% to 26% in fiscal '20. We’re updating our tax rate outlook to 19% to 21%, an improvement from our original outlook of 23% to 25%, primarily due to favorable settlements with tax authorities during the second quarter. Moving on to the other items in our financial outlook, we expect total depreciation and amortization of $165 million to $175 million, of which $70 million to $80 million will be amortization of intangibles related to acquisitions. As I mentioned earlier, this amortization expense reflects both Wave and other acquisitions and will be excluded from EPS for non-GAAP reporting. We expect full year interest expense to be $90 million to $100 million. And finally, our business continues to be capital light, and we expect capital expenditures to be slightly lower than the prior year at $70 million to $80 million. I’m excited about the season ahead and look forward to updating you on our progress in March. With that, I will now turn the call back over to Jeff.

Thanks, Tony. I too am very excited about the progress we're making on our long-term objectives and our plans for the upcoming tax season. We’re building on the successes of fiscal '19 as we continue to develop products and tools that will allow consumers and small business owners to interact with H&R Block in new and exciting ways. I’d like to thank our associates, tax pros and franchisees for their continued focus on providing expertise in care to our clients, and all they are doing to prepare for the upcoming season. I look forward to sharing more next quarter. With that, we’ll now open the line for questions. Lateef?

[Operator Instructions] Our first question comes from the line of Jeff Goldstein of Morgan Stanley. Your question please.

Hey, good afternoon. You mentioned your view that your Assisted volumes can improve their trajectory this year, maybe you could just add a little bit more color around your confidence around that specifically given you reiterated again your plans to not increase price this year?

Hey, Jeff. It's Jeff Jones. Thanks for the question. As Tony mentioned in his prepared remarks, we’ve been on a trajectory year-over-year of improving our performance in the Assisted business. As you may know, last year, we made a conscious decision about eliminating Free EZ which we knew would cost this client, but step that aside, we know we kept pace with the industry. So when we take a step back and think about all the things we continue to do this year, year two of upfront transparent pricing, all the work we’re doing on operational excellence in standard operating procedures, continuing to build on the marketing effectiveness that we started last year and into this year. To be honest, the culture and excitement with the field and franchise organization, you know we think about retention, obviously, we already have a high retention market, about 73%, and I’m eager to see how our client satisfaction scores from last year might translate into retention this year. But you put all that together and we feel really good about the plans we have in place to continue on that trajectory. And as Tony said, our goal is ultimate growth, and this year we expect to maintain share in the category.

Okay. That was helpful. And then, expenses were a little bit higher than we were expecting this quarter and it seems to be centered on a step up in other wages line item. So is there anything one time to call out there or somewhere else, and is there any change to how you’re thinking about the expense page for the remainder of the year.

Yeah. Thanks, Jeff. This is Tony. Yeah, there was several items in other, I mean, a lot of the Wave expenses related to some of the variable cost, show up in other. We also have some legal expenses that occurred during the quarter that are showing up in other, there's a number of moving parts. But as I said in my opening comments, when you look at the full year, we expect a fair amount of benefit to occur during our fourth quarter, not only will - the vast majority of our revenue growth occurred during that quarter, where we have some identified expense roll off that will also hit that will allow us to grow EBITDA during that quarter, grow EBITDA for the full year and hit the overall guidance that I outlined.

Was there anything on the other wages line item specifically though?

Not the - Yeah, I mean, we've got build wages which obviously picks up the vast majority of our field network in the US, as well as some of our international businesses. Wave wages that we picked up during the quarter would be showing up in other wages that would probably be a significant portion of that increase, as well as the investments we’re making in their technology roadmap, and hiring additional IT professionals would also show up in that line item.

Okay. Thank you.

Thanks, Jeff.

Thank you. Our next question comes from Hamzah Mazari of Jefferies. Your line is open.

Yeah, hi. This is Ryan Gunning filling in for Hamzah. Just a quick question. Do you think there are any variables in the upcoming tax here that maybe the market isn’t considering that could impact returns positively or negatively? Thanks.

Yeah. Ryan, this is Jeff Jones. Last year was obviously a unique year with the government shutdown, the delayed season which turned into extensions. When we look back over history of growth rate, that’s why we see the industry this year kind of returning back to about 1%. There is nothing that we know of at this point that would impact that number. Obviously not trying to predict what the government may or may not do, but there is nothing that's on our radar at this point that we see impacting that growth for upcoming season.

Great. Thanks.

Thank you.

Thank you. Our next question comes from Kartik Mehta of Northcoast Research. Your line is open.

Hey, Jeff, and Tony. Jeff, I wanted to ask you a little bit about the marketing budget, especially as you have Wave now and maybe what the anticipation is, if you - if you're going to maintain kind of marketing budget, where it is and just - and take some and add it to Wave or you expect overall marketing budget to increase and increase both the tax side and for Wave?

Hey Kartik, let me pull the part a little bit. Overall, our marketing budget for the year is reflected in our guidance, and what we are absolutely focused on is spend effectiveness. That you may remember last year, I talked a lot about the changes we were making in performance marketing, etc., we saw great results there, that will continue. With respect to Wave, at the highest level, we think Wave has an incredible value proposition, and they have been able to grow effectively really through that three propositions relying primarily on SCO. They have started to experiment with SEM marketing, and are really at the beginning of learning that effectiveness added to their mix. We think there is a lot of opportunity to grow awareness, and you’ll see us take a few steps this year, you know things like Shopify integration help. We are now co-merchandising them on H&R Block's website. We are now emailing qualified H&R Block clients about Wave. We’ll be emailing qualified Wave clients about H&R Block. So inside the installed base, we think there is a lot of opportunity that doesn’t rely on a lot of incremental investment and that's where we're focused for fiscal '20.

And then just one last question, Jeff, maybe the growth in Wave customers and revenue?

Yeah. So at this stage we’re not really guiding on customers, but I will say that the top of the funnel remains very healthy for Wave. They grew revenue this quarter about 40%. As we said last quarter, for years now, they’ve been growing 40% plus on the revenue line, they did that again this quarter. It was a little softer than we would have like based on some mix of payment type. But overall, still feel very, very good about the health of the business, the way they're thinking about serving small business owners and the simplicity of their product, and the way they’re thinking about the product roadmap and what's to come.

Well, thank you very much. I appreciate it.

Thanks, Kartik.

Thank you. Our next question comes from Henry Chien of BMO. Your line is open.

Hey, good afternoon. Thanks for taking the question. I just wanted to ask about some of the operational excellence that even though I know you reiterated margins for next year. But just curious, excluding that cost impact from Wave, the underlying margin trend and sort of where you're targeting and achieving any potential through operating efficiencies that could impact margins going forward beyond the sort of impact with Wave? Thanks.

Yeah. As I shared in my opening comments, all of the Wave operating loss will be offset with other cost reductions, as well as revenue growth which will allow us to grow EBITDA dollars for the year. I also said that the revenue line will grow a little bit fast, and the EBITDA line, which will cause a slight contraction in EBITDA margin. We feel really good that EBITDA dollars are going to improve in a year that we did a really strategic acquisition for a company that is currently operating at loss, but we know over time, you know it will be accretive to H&R Block. When we talk about operational execution, it’s not only focusing on the P&L, but also in our offices and a number of the changes we’re making there and how we serve clients, how we staff our offices, all of the - all the way that we lead and manage our offices, all those changes that we really focus on to make sure that every client is getting the best experience possible, and that's been a lot of our focus over the last year. And frankly, it has resulted in an improvement in NPS scores and client satisfaction scores that Jeff mentioned should result in retention improvement over the long term.

Got it. Okay. And any sort of thoughts on the - the sort of fixed cost base, whether it's real estate or any other cost otherwise, how you are sort of thinking about that?

Yeah, I mean, we try to make a lot of those decisions on a year-by-year basis. I mean, we’ve been focused on growing. Obviously, the last couple of years, we did a number of changes last year and resetting our baseline resetting margin levels, optimizing our footprint, resetting price. And now we’re focused on how do we take that new base and grow both in the Assisted side, DIY, and now through Wave, which should result in improved EBITDA dollars over time. And as those EBITDA dollars improve, that’s really the main focus of what we’re focused on over the next few years.

Got it. Okay. Thank you so much.

Thank you.

Thanks. Our next question comes from Scott Schneeberger of Oppenheimer. Please go ahead.

Thanks very much. Jeff, could we start on the technology roadmap. It’s - clearly you have one, I’d love to get a progress update. On the outside we don’t really know the roadmap, you have that. And so could you just kind of summarize where you are along the path, what’s been accomplished, what’s yet to go and is it trending financially, I guess, now on the cost side as you would expect it and are you starting to see benefits?

Yeah. Hey, Scott. Great question. And I'm sorry that that feels opaque to you. So the technology roadmap that we talked about a year or so ago has a lot of different dimension. I think at the top is what we refer to as the omni-channel tax engine or a tax platform. That’s a major initiative to move from three engine to one engine, that is a multi-year effort. It’s an effort that the company had attempted in the past and we are on track with that initiative. The team has found some great breakthroughs and the omni-channel tax engine is on track. The second piece, a major piece of the roadmap is cloud migration. Obviously, this is a place where given the seasonality of our business and given resiliency, I think there is a lot of benefit of cloud, this too is a multi-year move from our data centers to the cloud, that roadmap is also on track. The other one speak more to things like Dayton architecture, information security, and those are less about a defined number of years and just to continue its focus on improving them, really nothing to report there. They are super important priorities, but they're less of a roadmap. So what I can report today is, our initiatives are on track. They are going to take several years to complete. When they are complete, we expect to see run rate benefit in the cost reduction and also greater ability to serve clients. So I feel really good about the intent of why we launched them, and I’m happy to say they are on track, but they do still have a couple of years to go.

Excellent. Thanks for the color there. From my follow-up, I would like to ask two questions if I could, just sneak them in there, they are somewhat separate. It looked like legal expenses was increased, you guys discussed a little bit. But curious is that Free File Alliance focused or other, just whatever you can elaborate? And then my other question, it's a quickie is, will you be providing volume updates throughout the tax season? You have a large competitor in the tax base who is not going to do it this year after they had been in the past. So just curious what your plan is for that? Thanks.

Yeah. So we’ll take them in the reverse order. On your second question, we absolutely believe that - that we should be and will be as transparent as possible with you in our business, in our transformation, in our initiatives, and we have no plans to change how we provide updates to you throughout the season that will continue.

Yeah, I’ll take the legal expenses Scott. I mean, FFA was a driver during the quarter. We also had some Wave expenses that hit. We provide a lot of detail in our 10-Q, which we’ll file later this week, that talks about all of our legal matters. As you know, we typically don't comment on the details of those pending matters.

Thanks, Tony. If I just - is it going to remain elevated or no on the legal front? Thank you for taking too many.

Yeah, I mean, obviously, when you see a quarter bump up, it’s probably not going to go to zero on a year-over-year basis the following quarter, but we did contemplate that in our EBITDA margin outlook that I provided earlier in the call.

Great. Thanks, guys.

Thanks, Scott.

Thanks, Scott.

Thank you. Our next question comes from George Tong of Goldman Sachs. Your line is open.

Hi, thanks. Good afternoon. I wanted to dive deeper into the cost reductions that you’re planning to make to help offset the Wave operating losses. Now that you’re further along into the year, can you just elaborate a little bit more on where these savings are coming from and if you’ve identified additional savings you didn’t have earlier in the year and what the potential impact of executing on those savings could be to save revenues and market share performance?

Yeah. Thanks, George. As I said, there is - most of those are going to occur during the fourth quarter. You will see in our release that we released before the call that our EBITDA loss is up slightly for the first six months, but for the full year we still expect EBITDA dollars to improve on a year-over-year basis, driven by really two factors. One, the growth in revenue, which as you know, over 75% of our annual revenue occurred during the fourth quarter. So it's all about that quarter, as well as some planned cost reductions that have already been identified. It's just a matter of those rolling off, which will occur during the fourth quarter. So there is some compensation efficiencies, there is some promotional expenses in the marketing budget that will roll off earlier - earlier in the year, we already had some one-time expenses related to our footprint consolidation that occurred last year that rolled off in the first half of this year. So those are probably the three biggest drivers. Your question on, what else have we identified, and it's obviously a fluid conversation as we think about how the results are coming in. We're off to a good start to the first half of the year. But we still feel like the ranges that we provided in both revenue and EBITDA margin are on point.

Got it. That’s helpful. And I know you've talked about pricing for Assisted at length, but now again you’re further into the year. What's the likelihood that you'll flex pricing as a lever or are you fully committed to sustaining flat pricing for this upcoming tax season? And then separately on DIY, it looks like pricing is coming lower, can you share some thoughts - just additional thoughts on how you plan to go to market from a pricing perspective in DIY?

Hey, George. We will tag [ph] team. On Assisted, we are fully committed to holding that flat for fiscal '20. When we reset pricing, we do not believe we need to reset pricing further. This is all about getting our pricing in line so clients can see and experience the value. We feel really good about how our clients judge that last year and the scores they gave us. And over time, once that value prop gets clearer and tighter, and we feel like we’re back on a path to growth, we expect and hope to be able to get back to inflationary level price increases in the Assisted business.

Yeah. Then as regards to DIY, you know George for the last couple of years we price competitively, which has really been a key to part of our growth, we want to grow awareness for building a great product. The pricing is a key element to it. I’m not sure if you caught in my opening remarks, but we actually expected net average charge in DIY to be up this year. So pricing will not be lower and we expect it to be flat and the positive mix led by online assist will actually lead to a higher overall net average charge in DIY.

That’s helpful. Just to follow-up quickly on that. So that the pricing increase is going to be driven more by mix, is that correct?

That’s right. I mean, it's dynamic. As you know, pricing changes throughout the season, whether it be first half or second half in by-product, but we don’t have any planned price reductions in DIY, and we believe that there is going to be positive mix led by online assist.

Got it. Thank you.

Thanks, George.

Thanks, George.

Thank you. At this time, I'd like to turn the call back over to Colby Brown for closing remarks. Sir?

Thanks again everyone for joining us. This concludes today’s call.

Ladies and gentlemen, this concludes the call. Thank you for participating. You may now disconnect.