GEE Group, Inc. (JOB) Q1 2024 Earnings Report, Transcript and Summary

Hello, and welcome to the GEE Group fiscal 2024 First Quarter Ended December 31, 2023 Earnings and Update Webcast Conference Call. I’m Derek Dewan, Chairman and Chief Executive Officer of GEE Group. I will be hosting today’s call. Joining me as a co-presenter is Kim Thorpe, our Senior Vice President and Chief Financial Officer. Thank you for joining us today. It is our pleasure to share with you GEE Group’s results for the fiscal 2024 first quarter ended December 31, 2023, and provide you with our outlook for the remainder of the 2024 fiscal year and the foreseeable future. Some comments Kim and I will make may be considered forward looking, including predictions, estimates, expectations and other statements about our future performance. These represent our current judgments of what the future holds and are subject to risks and uncertainties that actual results may differ materially from our forward-looking statements. These risks and uncertainties are described below under the caption, “Forward- Looking Statements Safe Harbor” and in Tuesday’s earnings press and our most recent Form 10-Q, 10-K and other SEC filings under the captions, “Cautionary Statement Regarding Forward Looking Statements” and, “Forward-Looking Statements” Safe Harbor. We assume no obligation to update statements made on today’s call. During this presentation, we also will talk about some non-GAAP financial measures. Reconciliations and explanations of the non-GAAP measures we will address today are included in the earnings press release. Our presentation of financial amounts, and related items including growth rates, margins and trend metrics, are rounded, or based upon rounded amounts, for purposes of this call and all amounts, percentages and related items presented are approximations, accordingly. For your convenience, our prepared remarks for today’s call are available in the Investor Center of our website, www.geegroup.com. We faced significant difficulties in the fiscal 2024 first quarter ended December 31, 2023 mainly stemming from economic and labor market instability and uncertainty. Economic and market conditions for us and our industry began to worsen earlier in calendar 2023 following a COVID-19 bounce in 2022, and it worsened even more in the second half of calendar 2023, leading to the significant decline in results from the comparable fiscal 2023 first quarter ended December 31, 2022. Consolidated revenues were $30.6 million for the fiscal 2024 first quarter. Gross profit and gross margin were $9.7 million and 31.8%, respectively, for the fiscal 2024 first quarter. Consolidated non-GAAP adjusted EBITDA was minus $200,000 and we reported a net loss of $1.6 million, or $0.01 per diluted share, for the fiscal 2024 first quarter. The prior fiscal 2023 first quarter results were above normal led by record high demand for direct hire placement services in 2022, driven by the post-COVID recovery bounce at that time. The pullback in demand for direct hire placement services, in particular, contributed to the significant shortfall in fiscal 2024 first quarter results relative to those of the first quarter of fiscal 2023. Our performance still compares and tracks consistently with our industry peers as we all are facing similar challenges. The challenges being faced by the US Staffing Industry, as a whole, including us, are expected to continue through at least the first half of calendar 2024. Before I turn it over to Kim, I would like to touch on some recent achievements. We concluded our share repurchase program on December 31, 2023 under which we purchased 6.1 million shares of JOB common stock, or just over 5% of our outstanding shares at the beginning of the program. In December 2023, our M&A Committee of the Board of Directors engaged the investment banking firm, DC Advisory, to assist the Company with the review of strategic alternatives, which includes capital allocation strategies, mergers, acquisitions, and others, including future share repurchases. We expect to receive DC Advisory’s initial findings to be presented to the M&A Committee as soon as this week or next. I want to assure everyone that our sole focus now and into the immediate future is to manage though this downturn with the objective of minimizing its negative impacts on our businesses and preparing for an eventual recovery. We have hardened our balance sheet with substantial liquidity in the form of cash and borrowing capacity and are very well prepared to successfully navigate our present poor economic conditions. We also continue to believe that our stock is undervalued and has substantial room to grow. And finally, before I turn it over to Kim, I want to once again thank our wonderful, dedicated employees and associates. They work extremely hard every day to ensure that our clients get the very best service. They are a key factor in our achievements and the most important driver of our Company’s future success. At this time, I’ll turn the call over to our Senior Vice President and Chief Financial Officer, Kim Thorpe, who will further elaborate on our fiscal 2024 first quarter results. Kim?

Thank you, Derek, and good morning. As Derek mentioned, revenues for the fiscal 2024 first quarter were $30.6 million, down 26% as compared to the fiscal 2023 first quarter revenue of $41.1 million. Results for the fiscal 2024 first quarter declined in comparison to those of fiscal 2023's first quarter, due mainly to the significant worsening of economic conditions. We also achieved record performance in the 2022 calendar year, including the fiscal 2023 first quarter ended December 31, 2022, driven by what some in our industry refer to as Derek mentioned a minute ago is was a post-COVID-19 bounce in employment recovery trends. This gave way to returning concerns about uncertainties surrounding the economy that have negatively impacted labor markets throughout 2023, and worsened in the later portion of calendar 2023, leading to further decreases in orders and placements for our businesses through the first fiscal quarter of 2024. Professional and industrial contract staffing services revenues for the fiscal 2024 first quarter were $27.6 million, down 22% as compared to the fiscal 2023 first quarter. Professional contract services revenue, which represents 91% of all contract services revenue and 82% of total revenue, decreased $6.7 million, or 21%, quarter over quarter. Industrial contract services revenue, which represents 9% of all contract services revenue and 8% of all revenue, decreased $1.1 million, or 31%, quarter over quarter. Again, the economic and labor market factors previously discussed contributed to a decline in orders from clients, as well as temporary labor to fill those orders, leading to the decrease in contract revenues. Direct hire revenues for the fiscal 2024 first quarter were $3.1 million, down 47% as compared with fiscal 2023 first quarter direct hire revenues. As Derek and I mentioned earlier, the fiscal 2023 first quarter ended December 31, 2022, was part of and at the end of a record high calendar year for direct hire placements. Furthermore, direct hire placements versus temporary placements are usually the first to be negatively impacted in an economic downturn, such as that experience since 2022’s post-COVID-19 bounce, to the resurgence of economic and labor uncertainties in 2023. Gross profit for the fiscal 2024 first quarter was $9.7 million, down 32% as compared to the fiscal 2023 first quarter gross profit of $14.4 million. Our overall gross margins were 31.8% and 35% for the fiscal 2024 and 2023 first quarters, respectively. These decreases in gross profit and gross margin are mainly attributable to the decline in direct hire business for the fiscal 2024 first quarter -- I'm sorry, mainly attributable to the decline in direct hire business which has 100% gross margin. Our Professional Contract Services gross margin was 25% for the fiscal 2024 first quarter compared with 25.4% for the fiscal 2023 first quarter, a decline of only 40 basis points. Our Light Industrial Services gross margin was 16% for the fiscal 2024 first quarter, compared with 15.5% for the fiscal 2023 first quarter, which was an increase of 50 basis points. Despite lower quarter-over-quarter overall gross profit and gross margins, our current margins remain relatively high as compared with those of our competitors. Selling, general and administrative expenses, SG&A for the fiscal 2024 first quarter were $10.6 million, down 17% as compared with the fiscal 2023 first quarter. SG&A expenses were 34.6% of revenues for this fiscal 2024 first quarter, compared with 31.1% of the fiscal 2023 first quarter. The increase in SG&A relative to revenue is primarily attributable to fixed costs, including personnel-related expenses, occupancy costs, software subscriptions for applicant sourcing and tracking, and others, which increased proportionally relative to lower revenues, and to a lesser extent, certain other non-recurring expenses associated with core business operations. We reported a net loss for the fiscal 2024 first quarter of $1.6 million, or negative $0.01 per diluted share, down $2.3 million as compared with net income of $700,000, or $0.01 per diluted share for the fiscal 2023 first quarter. Adjusted net loss, which is a non-GAAP financial measure for the fiscal 2024 first quarter was a negative $900,000, or a negative $0.01 per diluted share, down $2 million as compared with $1.1 million, or $0.01 per diluted share for the fiscal 2023 first quarter. Our reported net losses for the fiscal 2024 first quarter again are mainly the result of the decreases in revenues and gross profit, and gross margin on lower direct hire placement business previously discussed. Adjusted EBITDA, which is a non-GAAP financial measure for the fiscal 2024 first quarter was a negative $200,000, down $2.2 million as compared with $2 million for the fiscal 2023 first quarter. Our current or working capital ratio as of December 31, 2023, was 4.2-to-1, up 60 basis points from 3.6-to-1, as of September 30, 2023. We reported negative cash flow from operating activities of $900,000 for the fiscal 2024 first quarter ended December 31, 2023. Our liquidity position remains very strong and we have no outstanding debt. Our net book value per share and net tangible book value per share were $0.93 and $0.33, respectively, as of December 31, 2023. To conclude, we’re disappointed with our fiscal 2024 first quarter results, and we remain cautious in our outlook for the remainder of fiscal 2024, considering current economic and labor market uncertainties. Importantly, however, we do remain optimistic for the long-term and have demonstrated we can produce earnings consistently under better economic conditions. Before I turn it back over to Derek, please note that reconciliations of GEE Group's non-GAAP financial measures discussed today, with their GAAP counterparts can be found in supplemental schedules included in our earnings press release. Now, I’ll turn the call back over to Derek.

Thank you, Kim. At December 31, 2023, the company had $19.9 million in cash and another $9.3 million in availability under its bank ABL facility. Despite economic headwinds and staffing industry-specific challenges impacting demand for our services, we are aggressively managing and preparing our businesses for an inevitable recovery. We will continue to work hard for the benefit of our shareholders including consistently evaluating strategic uses of GEE group's capital to maximize shareholder returns. Before we pause to take your questions, I want to again say a special thank you to all of our wonderful employees for their professionalism, hard work and dedication without them we could not have accomplished all the good things we have shared with you today. Now Kim and I will be happy to answer your questions. Please just ask one question and rejoin the queue with a follow-up as needed. If there is time, we will come back to you for additional questions. Thank you.

So the first question is regarding the stock buyback and that expired by December 31, 2023 would we consider reinstating a buyback plan and the thought process? We are waiting for the findings from our investment bank DC advisory which is which we'll set forth strategic alternatives including maximum use of our capital which they will evaluate all the options we have with respect to utilization of our capital and we expect that settlement either the latter part of this or next week. We will communicate back also with you regarding the findings there. So we are well-positioned cash-wise and credit-wise. We have no debt. So we're very, very in good shape. And by that I mean long-term debt. Kim, would you like to add anything to that?

No. I mean I think we're you know I would like to point out. I know the quarter is disappointing, but we you know we're very well prepared for this. We've been we've done it before. We came out stronger after the pandemic than before the pandemic actually. So I wouldn't -- I don't have anything add.

Thank you. One of the questions -- the next question has to do with the strategic alternatives again. We are going to wait for our report to discuss those in further. How much did the company spend on DC advisory strategic review? I believe that that is on held confidential based on DC advisory agreement with us. So I really can't discuss that. I would say though we are very, very cost-conscious there and they were very, very – very, very good about working with us at a low rate and I felt very good about the process and we forward to their findings. So one question is what things with the strategic review produce? And as I mentioned the best use of our capital. We'll talk about M&A strategy and so forth. And when we get support we'll talk more about what we're doing there. On a long-term basis if you like your stock buyback, would you like to buy it at $0.37? I'd like to buy it at $1 quite frankly, but the stock buyback program was successful thus far. And I want to also comment on recessionary trends. The trend line for our business, you'll see a dip in 2000-2001, you'll see it in 2008 to 2009. And again that same dip is what we're facing now. The good thing is the recovery doesn't shows have a rapid rise in business volume. We are preparing for the rapid rise and the way we're preparing is hiring sales and recruiting personnel to meet the demand. Also we keep SG&A in check. SG&A dropped significantly almost $2 million for this quarter. It's up as a percentage of revenue because of the revenue drop but we have a few arrows in the quiver to work on SG&A bit. But you don't want to cut SG&A to the bone if your expectation is there will be a demand recovery at some point in the near future. In the near future can mean six months, it can be nine months, but we can see it in our back order log for job orders. So, we will keep you posted on that, but I can tell you I've been through it before I really enjoy the recovery period.

Hello. Derek, are you there? I think Derek has had some difficulty with his mic. So, I'll have to step in and take over a couple of these questions. The repurchase program expires December 23 with the new plant at these levels does it make sense to buy more stock. The DC advisory is definitely looking at that along with the other portions of the review. As Derek said the -- they intend to complete the review and have a report to us either this week or next week to our M&A committee. Our M&A committee is leading that project. It's comprised entirely of independent Directors. And so it's something that we take very seriously in the realm of governance. Does the strategic alternatives review include a serious look at selling the company? All pathways will be reviewed in the strategic alternatives review. Although there's another question here, would you consider selling the company under these conditions? My own personal opinion, I think I speak for Derek as well, I prefer to sell -- buy low and sell high rather than the opposite.

Well, Ken I can also add.

[indiscernible]. Sorry.

So, I've been on a little technical glitch for a second, but no I've listened on the questions. And one thing people need to remember that there are some ups and downs in the sector. It's a -- industry but it has cyclicality, so based on demand and the macro economic environment, so I've lived through multiple cycles and exited as well very successfully. So, the comment about that is you know as a public company you have to maximize shareholder value and at this point, we have to build our business back to at least where it was first and then get to the next level, all of which is very possible for sure because of what we're seeing. We're pretty hopeful that we flattened out on the lower demand and that will catch the upswing towards the latter part of 2024, but takes a little bit longer. That's fine. We're well-positioned to do it. We don't have to be rash about any decisions to do anything out of the ordinary, but we do have to be prudent in managing both the top and the bottom-line and keep driving the business forward. We have a great value proposition in terms of our verticals, our margins, by the way were either second or third in the peer group for the industry and gross margin even with the decline down from roughly 35 to 31.5, which is driven by perm placement our volume that influences it. But our contract gross margins are also holding very well and our pricing is also holding. Let me take another question.

And Derek, it's Kim, may I add some to that?

Yeah. Sure.

So to put this in perspective, I don't want folks to think that we don't take the loss this quarter seriously. We take it very seriously. But let me -- let me put this or attempt to put some more perspective around this. In the last 10 quarters, since we did our follow-on offering, we generated $500 million in revenue 100 and almost $180 million in gross profit. Our gross margin across all 10 quarters was 35.6% which is in the high-end of our industry. Our adjusted EBITDA over that period cumulative has been about just an over 6%. I mean, we obviously need to work on getting that higher. And we will. Our net income over that period has been $27 million or 5.5%. Our cumulative earnings per shares has the offering at $0.60 has been $0.27, 44% of the 60 share price that the follow-on offering went add on. And last but not least, we generated $16.5 million in free cash flow in 10 quarters. This is the first loss we've had since the fourth quarter of 2023, the first quarter of 2023 which was a small net loss of about $300,000. So I smile right now that we are managing this company for the long-term. And we believe that it's kind of a lot more juice. And we're anxious to get to the recovery.

Thank you, Kim. So one of the other questions and it was repeated a few times, in a slightly different format was how are your business verticals and what do you what do you think is going to happen going forward? So each business vertical had a decrease in demand, coupled with supply issues of getting a labor teed up to fill some of the orders. That is slowly changing. And as you know, there were big layoffs in the Information Technology sector and that halted some projects that were being done internally by our client companies, that is starting to warm up. So when will that take a real upward swing? And we can't predict which quarter that will happen. But we do know that it happens. And it's happened historically time-and-time again. And we're prepared for it. The vertical of accounting finance for example, also, was impacted. But that turns as well. So I can tell you that we will position our Company, for growth, and profitability, and have positioned it. And we'll continue to do so. And catch the upswing. And that will get the shareholders the value they need on price. Our strategic alternatives how we use our cash? What's pricing on acquisitions? Those questions have come up. Acquisition prices are somewhat muted now, because of the downturn. So are they five times EBITDA or six times. They are. But, with synergies and so forth you have to bring the multiple down to the three or four range with the deals if that becomes an option for us. But again, we will review all the strategic alternatives when the report comes in. And move forward judiciously with it. And we are well positioned in my prior life. I was well positioned in a way to capture the upswing and have done it the same with 2021. We had kind of a dot-com bust then. So the key for us is not to make rash decisions, but to be thoughtful in what we're doing with our strategic plan. And I can tell you there's active board participation including our largest shareholder. And we have the horsepower to succeed. We have the guidance to succeed. We have the expertise internally in management. And we have the oversight in place by the board to help us drive the business forward. I'm very, very bullish on long-term outlook and that can mean a couple of quarters but we should see indicators coming up and we will report to you about those indicators. We're not satisfied in the least with our performance, nor our stock price. But as the leader of the company, I have an obligation to gut check every aspect of our business and also position our business for the success that we anticipate coming and that is the most critical aspect of what I can deliver today. We are prepared, we will take advantage of growth and we will not make rash business decisions when you don't have to and we're well positioned to do that. I'm patiently waiting for. [Technical Difficulty]

We're going to give Derek a second to get back on….

I’m back on. I had a technical glitch there. But yes, we're good. But Kim do you want to take a shot at another question?

Yes. I mean I hear it. Let's let me go to GDP grew by 4.9% in 3Q and 3.3% 4Q. Whereas the economic weakness you're referring to, GDP does not alone dictate how the economy is. There's no question, we have rising inflation, high interest rates. There's still a threat of inflation out there. The job figures keep getting adjusted downward. That's not the panacea that you see on television all the time. It's not the only indicator. The indication you can look at to verify. This is going to look at our peers including the Robert Haas, the Adecco's and others. And there we're all still being pinned down to some extent by at broader economic uncertainty than just a quarter to GDP. So that's the answer to that. What are the trends looking like here in 1Q, can you better do a job of setting expectations with analysts and Wall Street's? You know, we're trying to – we don't provide guidance as a policy because it's very expensive to maintain and create the systems you need to do. And it's – and then it's not always reliable but we have given as much directional guidance as we can. We talked about the turn in the trends from 2022 to 2023. The – if you look at other releases of other staffing firms that will bear out what we're saying on the staffing industry. Analysts are the largest trade associations. You can go online and read their publications. It will bear out what we're saying. Why were you so aggressive buying back at $0.58 and then nothing of stock was lower? We bought back – we bought back a lot of stock. We bought back steadily all the way from the time we implemented the program in 2023 to the time it ended as of December 31. Given the economy and the downturn that we're in the midst of that and the fact that we are about to get a report from an independent expert on strategic alternatives, we felt like it was prudent to pause for a few weeks. It doesn't mean that we'll abandon or all together, we'll see what our adviser has to say and how our Board feels about it. That is not necessarily better than we bought it back at all kinds of prices that 58% – or I'm sorry $0.58 or lower? Yes there is a lot – like I realize there are a lot of people upset about the stock price, we’re upset about it too. All I can tell you is our tangible net book value is $0.33 a share. The stock price selling at less than $0.40 a share means that you all are indicating, you are being I think a lot of speculators out there and people doing day trading and short-term are suggesting that our But yes, we could liquidate our company theoretically at $0.33 and then – and then the rest of our business, $150 million revenue business that has produced $165 million to over the last five years is only worth $4 million from us. We are confident that the stock is undervalued and we don't like taking this much more time either, but it’s going to come back up when the recovery hits. We've proven we can do that.

Yeah. Let me add a few things, Kim. So we are in a great position to catch the upswing. We don't have a great crystal ball as to which quarter the upswing will happen. It's usually a gradual process, and we are seeing some better job orders we believe we flattened at the bottom at this point absent some other calamity in the macro environment. And one of the questions was it looks like the macro environment is not so bad. Well, first of all our peer group has had reductions in comparable quarter revenue ranging from 12% to 50%, depending upon the geographic location and the vertical in which they operate whether they have volume accounts, whether they have retail accounts, whether they're on VMS, plated [ph] and MSP accounts and so forth. However, it's epidemic and I just got back from an industry CEO group and it's across the Board, and the economist predicted that the only jobs being filled today are government, lower-end hospitality and some healthcare because of cuts in healthcare, and I'll give you a great example, healthcare has had great demand during COVID and a bit post-COVID and then there were some layoffs. AMN Healthcare, which is the giant healthcare staffing firm nursing, physicians and so forth has been down 30% to 40% in top-line. And if you go to Robert Half, their perm business is actually down similar to ours. Their revenue was down and some of the buffers by the way for the larger staffing companies came from the European business not from the US business. The US side was down, for example, manpower but now their French business is catching it too. So this is not unusual from an industry standpoint in the macroeconomics broken down at the meeting that I went to by economists two different ones point to exactly what we've been saying. They also point to an anticipated recovery and we may be bumpy for a while, but they do believe there will be one. And we also have to realize that there was a hiring boom in 2022, we call it the post-COVID bounce. And so adjusting the labor force market in 2023 towards the latter part started. It's not finished, but we think it's leveled off and then there'll be the upswing, projects will start, now interest rates went up that put a little damp around project business, for corporate America and so forth. Inflationary trends in wages, our margins have held, one of the questions was it your spreads and your gross profits and your pricing holding? The answer is yes. The influence on gross margin was perm related. Perm is at 100% gross profit. So you have less perm impacts the gross margin in the aggregate, but I can state that they we're well-positioned to move forward. We will take the actions necessary to restore profitability and get top line humming again, and that's what we're focused on. And we appreciate you shareholders and interested parties being on the team and we ask you for some patience, but we don't have -- we're not satisfied and the least with the performance at this level, but we are optimistic that we will get out of here at this level and start moving in a great direction that we need to be. Now I will tell you, we have signs at different regions of the country and different verticals ticking upward. They're somewhat mitigated by those that are still flat, but that should come around and we're very optimistic in the longer term outlook. So I can safely say that we're well-positioned balance sheet wise. I have to say that I predicted this was happening or would happen. We saw the same type of thing in 2005 and 2006 when perm hit a bubble a peak similar to what it did in 2022. And then there was a decline in staffing and what happens when there's a cut in employment, usually the contract labor and permanent placement business get hit first before full-time staff get let go. One thing companies have been doing is holding on, I think this is a key point that was made by the economists. The reason the layoffs aren't more significant on the core employees of a client company is because they're retaining those employees, even if the business didn't warrant because they don't want to lay them off because it's difficult to get them back. So that trend has been going on. Sooner or later, activity is good for our business. So if there's a bunch of layoffs, we'll benefit from the recovery, because they'll initially hire contract and then they'll hire perm again. So that's the cycle and it's borne out historically and the economists have predicted this. They're showing why total employment was not bad in the aggregate, but then they dissected it in why temp labor and permanent hires from staffing companies are down, and it was across the board. I will say the optimism index of all the C-suite executives that were at the meeting that I went to is high. They don't know when that breakout will start occurring. It's starting to, as I said, first, where have you leveled off, we believe we have leveled off. And then are we catching an upswing? And will that be in 2024? The resounding answer was yes, it is, but it should be the latter part of 2024. Nonetheless, we're well positioned. We will take aggressive action on both top and bottom line. We have great talent internally, great talent, and we're adding great talent and people are coming to us for jobs because they think it's a great place to be coming from competitors. So we feel good about that and we only are hiring production personnel, recruiters, account managers and salespeople at this point, because they will deliver the results we need to propel revenue forward and get net income and EBITDA back on the right track. Kim, do you want to add anything? I'm trying to give some global answers to similar questions.

Yeah. Derek, there's been a question or two on AI, and I know it's not directly...

Yeah, I covered -- let me cover that. So we covered AI at the recent meeting. The top 10 trends for staffing were discussed. AI for sure, was a critical element of that. Would we anticipate doing with AI and how will it benefit our business and also internally and also benefit us from placing AI expertise at our customer's. In the IT sector, we're focused on growing the AI and cybersecurity capability or placements of those IT personnel at client companies. We're doing that through what I call very, very sophisticated recruiting, and we will also have the AI integrated into our recruiting. I have various individuals in the company right now, studying the different tools to bring in for AI and also on the vertical leadership side, our IT leaders -- are job orders, which we're getting for the positions. And I think what's important on the tech side, is that technology is driving business period across the spectrum, and we have a significant practice and we're adding to it. That's a huge growth area for us. But one of the questions was, how are you dealing with it? And my response is, very aggressively both for internal use and for placement of AI. professionals. Cyber is intertwined and as well into both of those areas. Kim you want to add anything to that?

No, I think -- you have again a lot of these areas are going to be covered I think and be part of the conversation around strategic alternatives. There are some good questions here. But no. I don't have anything else at this point Derek.

Okay. Look, we're always available for follow-up as necessary. And the one thing I ask is, that I believe that we are doing and we'll do everything that we can to get back to profitability, growth track that we need to be on and we will move forward aggressively, strategically and take advantage of opportunities, which it's out there. We will also be judicious in, how we spend our money and have it. So we will be very, very prudent, and we are optimistic on the longer-term aspects of where this company will be. We will report back, at some point on the strategic alternatives, after we've had a chance to look at those. And I anticipate, that we'll have a broad plan to grow shareholder value, which is key to what we're doing. We also have a great team. Our employees are optimistic. They get paid on growth, so they are driven and we all are connected to that. So, we're excited about future prospects. And the key now is to just buckled down and block and tackle and deliver the best we can for macro environment that's choppy, high interest rates, some inflation, very specific employment statistics that you have to look at very, very deceptive. And that's what these economists have done to prove out, what's actually happening in the industry. So that concludes our call for now and we'll be in touch. We appreciate you joining us today, and we look forward some good things. Thank you very much.

Thank you, folks.