Rollins, Inc. (ROL) Q2 2017 Earnings Report, Transcript and Summary

Please standby. Good day and welcome to the Rollins, Inc. Second Quarter 2017 Earnings Conference Call. Today’s conference is being recorded. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] I would now like to introduce your host for today’s call, Marilynn Meek. Ms. Meek, you may begin.

Thank you. By now, you should have all received a copy of the press release. However, if anyone is missing a copy and would like to receive one, please contact our office at 212-827-3746 and we will send you a release and make sure you are on the Company’s distribution list. There will be a replay of the call which will begin one hour after the call and run for one week. The replay can be accessed by dialing 1-888-203-1112, with the passcode 4118006. Additionally, the call is being webcast at www.viavid.com and a replay will be available for 90 days. On the line with me today and presenting are Gary Rollins, Rollins’ Vice Chairman and Chief Executive Officer; John Wilson, Rollins’ President and Chief Operating Officer; and Eddie Northen, Vice President and Chief Financial Officer and Treasurer. Management will make some opening remarks and then we’ll open up the line for your questions. Gary, would you like to begin?

Yes. Thank you, Marilynn and good morning. We appreciate all of you joining us for our second quarter 2017 conference call. Eddie will read our forward-looking statement and disclaimer, and then we’ll begin.

Our earnings release discusses our business outlook and contains certain forward-looking statements. These particular forward-looking statements and all other statements that have been made on this call, excluding historical facts are subject to a number of risks and uncertainties, and actual risks may differ materially from any statements we make today. Please refer to today’s press release and our SEC filings, including the Risk Factors section of our Form 10-K for the year ended December 31, 2016 for more information and the risk factors that could cause actual results to differ.

Thank you, Eddie. We were pleased to have posted record results for the quarter as well as our 45th consecutive quarter of improved revenues and profits. For the quarter revenues grew 5.5% to $433.6 million, compared to $411.1 million for the same period last year. Net income before taxes rose 11.9% to $86.1 million, compared to $77 million for the second quarter of 2016. Net income rose 12.4% to $53.7 million or $0.25 per diluted share, compared to $47.8 million or $0.22 per diluted share for the same quarter last year. In the second quarter all of our business lines experienced good growth with residential of 5.9%, commercial pest control grew 5.1% and termite and ancillary rose 6.1%. Revenues for the first six months grew 5.9% to $808 million, compared to $763.9 million for the same period last year. Net income increased 17.9% to $93.9 million. EPS of $0.43 per diluted share, compared to $79.7 million or $0.36 per diluted share. John and Eddie will provide greater detail in a moment. I want to personally express how pleased we were to have announced yesterday our acquisition of Northwest Exterminating, Inc. We have all admired Northwest, their management team and accomplishments and believe they will be an exceptional addition to Rollins. Founded by the Phillips family in 1951 and headquartered on the outskirts of Atlanta and Marietta, Georgia. Northwest has been servicing the Southeast Georgia, Tennessee, Alabama, North Carolina and South Carolina for over 65 years. We look forward to working with the Phillips family and the Northwest Inc. During the quarter, we were also pleased to have expanded Orkin’s presence internationally by adding six new franchises in Central America, South America and Southeast Asia. These franchises are located in Nicaragua, Lima, Peru, Sao Paulo and Rio de Janeiro, Brazil and in Jakarta, Indonesia. We now have 76 franchises located around the world, building our Orkin brand. The new franchises will offer commercial and residential pest control as well as termite services where appropriate. The franchisees will receive their initial training at our award winning training center here in Atlanta, and they will receive ongoing training at their home location. As a people business, we believe the ability to advance and poise within our organization is important for the continued success of our company. In early May, we were therefore pleased to announce that Beth Chandler, Vice President and General Counsel has now assumed oversight for the Rollins Internal Audit department. One side with this Beth will also be serving on our Executive Steering Committee. Beth joined Rollins in 2013 as General Counsel and her role was later expanded to include the Risk Management group. And as I mentioned, we’re now adding the Internal Audit group to her responsibilities. This alignment provides stronger coordination between risk, legal and audit all with the focus of improving our fiduciary compliance. Congratulations are in order for Beth and we look forward to her future contributions. I’ll now turn the call over to John.

Thank you, Gary. I too want to say how pleased we are to welcome Northwest Exterminating to the Rollins family of brand. The company has an excellent reputation and provides residential and commercial services including eco-friendly pest control and termite control solutions, Wildlife Services for animal control and removal and mosquito and bed bug services in each of the five states in which they operate. For their fiscal year ended 2016 Northwest recorded revenues of over $50 million. The company has 23 locations and 500 plus team members serving approximately 120,000 customers. Their revenue and customer base will significantly increase our market share in the Southeast. As Gary stated earlier Northwest is a company we have been attracted too for a long time. Their people, their culture and their commitment to quality service are all attributes that we value, when we look for the right company to add to our team. As we have successfully done in the past our plan is to support their impressive results by sharing best practices with one another. Northwest will be identifying areas of synergies that they can leverage are being part of Rollins. The addition of Northwest fits our strategic model and profile for acquiring leading regional pest control companies that will strengthen our company. We know that in the highly competitive service industry, a company’s positive culture helps create the environment for customer and employee retention. When you get the culture right, like Northwest obviously has, their team members drive customer loyalty and subsequently provides exceptional organic growth. Simply put a company like Northwest is an ideal fit for Rollins and aligns perfectly with our long-term business philosophy and strategy. As demonstrated in the past, Rollins has long distinguished itself acquisition wise by retaining key management, which helps us improve the overall business. Northwest Exterminating is no exception. The Phillips family with its third generations of family members, Steve – Stephen and Stanford Philips along with their impressive and highly tenure management team will continue to lead the Northwest operations. We are delighted to have them and all their employees as part of the Rollins group of leading pest control brand. People and people development are paramount to the future of our company. Rollins leadership is fully cognizant at this and we have stepped this as a top priority for our organization. Last quarter I talked about our employee on-boarding process. In future quarters I’m going to talk more about this as well as our employee development initiatives. We will be investing a lot of time and energy in these areas to ensure that we attract and retain the best employees possible across all areas of our business. I will now turn the call back over to Eddie.

Thank you, John. Growing our business in the Rollins brand is always exciting for our company. When we look back over the acquisition through the years each time we have grown our top line revenue, customer count, net income and expanded our margin. We believe with Northwest that pattern will continue in a very positive way. I would also like to add my welcome for the team members at Northwest. When our family first moved to Atlanta four years ago, it was Northwest that knocked on our door and provided excellent pest control and termite services. The only sad thing for my family about my move to Rollins was having to part way with our Northwest test technicians. But as a side note, my wife does now love for Orkin technicians, so it worked out okay. I know first-hand that they are a quality company and how incredible their team members are at serving the customer. Well growing the business this way is exciting, our bread and butter is still our consistent recurring organic growth that John mentioned and it’s a great area that Northwest has done extremely well. For the quarter all of our service lines showed balance improvement and key to the quarter included strong organic growth, continued margin expansion tied to BOSS and virtual route management and an ongoing positive tax impact due to accounting standards update ASU 2016-09 related to our stock-based compensation. Looking at the numbers the company reported second quarter revenues of $433.6 million an increase of 5.5% over the prior year’s second quarter revenues of $411.1 million. For the quarter income before income taxes increased 11.9% to $86.1 million. Net income increased 12.4% to $53.7 million with earnings per share of 13.6% to $0.25 versus $0.22 per diluted share last year in the second quarter. Our revenue for the first six months was $808.8 million and that’s a 5.9% growth rate. That number is directly in line with our 2016 full year growth rate. Income before taxes was up $143.4 million up 11.9% and net income was $94 million an increase of 17.9%. As a reminder our Q1 net income was positively impacted by the stock-based compensation tax changes. Earnings per share were $0.43 compared to $0.36 last year up 19.4%. Operation has absorbed the increased summer demand extremely well. Let’s take a look to the revenue by service lines for the second quarter. Our total revenue increase of 5.5% included 6.1% from acquisition and the remaining 4.9% was organic growth. This organic growth rate is the best Q2 growth rate in five years. In total residential pest control, which made up 42% of our revenue was up 5.9%. Commercial pest control, which made up 39% of our revenue was up 5.1%. And termite and ancillary services, which made up approximately 19% of our revenue was up 6.1%. The lapping of Murray Pest Control in Australia had a slight impact on the overall growth rate. The total revenue less acquisition was up 4.9% from that residential was up 6%, commercial increased 3.6% and termite and ancillary improved by 6%. When you take a look at the quarter, taking out the impact of foreign exchange in total we grew 5.2%, residential grew 6.1%, commercial pest control was up 3.9% and termite improved 6.4%. Well our field team performed very well this quarter, our marketing group continues to do an outstanding job creating demand and it’s a key reason for our strong organic growth. This month our Chief Marketing and Strategy Officer Kevin Smith invited me to tag along for a meeting with Google in Silicon Valley to take a look at our current initiatives in the phase of digital marketing and learn about opportunities related to demand creation moving forward. We learned a lot of the visit and while we may not be adding fan volleyball courts or net pots to our Atlanta office anytime soon. We did get a chance for some other great takeaway as we assess the market while expanding our use of technology. A key takeaway was our ability to continue to enhance our digital footprint with a goal of improving access for our customers with special emphasis on enriched mobile format experience. This is a great example of the bold forward thinking by our marketing team that has sustained our growth over the past several years. As we assess these technology updates we will keep you updated. In total, gross margin improved to 52.8% for the second quarter compared to 52.3% in 2016. The margin for the quarter benefited from improved efficiencies in routing and scheduling in technology, which also helps us increase productivity and to lower payroll as a percent of revenue. The gains that we experienced were partially offset by higher fuel prices and leads to be eco-cost. While the cost per gallon increased the miles driven per vehicle were down a little over 4%. We believe this is in part the result of the improved efficiency from our enhanced routing and scheduling through the virtual route management system. We expect to continue to see these benefits overtime. Depreciation and amortization expenses for the second quarter increased $1.2 million to $13.5 million, an increase of 9.7%. This percent increase will continue to subside as we lap our 2016 rollout of the BOSS initiative. Depreciation was $6.7 million increasing $713,000 with most of that increase related to our BOSS software, iPhone and printer depreciation. Amortization was $6.9 million, which increased $484,000 with amortization of intangibles assets increasing due mostly to amortize contract – customer contract of the acquisition of Murray Pest Control, and Scientific Pest Control in Australia, as well as various Orkin acquisitions throughout the year. Sales, general and administrative expenses for the second quarter increased $3.1 million or 2.5% to 29.9% of revenues down 9.1 percentage point from 30.8% for the second quarter of last year. The decrease in the percent of revenue is due to lower administrative salaries as a percent of revenues, which continues to see incremental gains from the BOSS project. As planned the company experience increased sales salaries, sales promotion and advertising expenses directed towards increasing sales and revenue. As for our cash position for the six months ended June 30, 2017 we spent over $6 million on acquisition and $50 million on dividend, an increase of 14.7%. We had $11.2 million of capital expenditures, which was down 39.1% from 2016 primarily from the completion of the BOSS project. Rollins ended with $194.8 million in cash up 54.1% from last year. A large portion of our cash balance will be used for the Northwest acquisition, but by no means would this limit our ability or apatite to continue to pursue good quality pest control and wildlife companies like Northwest as we move forward. As you’re probably aware, we hold $175 million line of credit and a $75 million credit sub facility that we would be willing and ready to use for the right opportunity. For many years Rollins has been considered the acquirer of choice, for many family owned companies. We feel that we are in a great position to continue to deploy capital to get the best return for our shareholders. From 2004 through 2010 the majority of our acquisition opportunity was only in the U.S. with the purchases of Western IFC, HomeTeam, Crane, Waltham and Trutech all of which are still run as independent brand. By expanding our pool for M&A opportunity outside of U.S. Pest Control, we’ve been able to continue to add quality company to our portfolio services in Australia and the UK. Our entry into the wildlife industry here in the U.S. also has provided great expansion opportunities. Let’s circle back to get some further details on Northwest from a financial perspective. Northwest historic growth rate is above our overall Rollins historic growth rate and we see that continuing by increasing prices, expanding sales of general pest to existing termite customers, continuing to grow the commercial pest services business, continuing to grow the mosquito service offering and possible geographic expansion. As stated earlier, we will run Northwest as a standalone company in our specialty brand category. As we look to make margin improvement our guiding principle when assessing our cost saving synergy is to first and foremost consider what is best for our new team members and their customers. We always want to make sure we are making things better. With this in mind we will evaluate opportunities in our back office support, utilizing Rollins’ purchasing advantage on materials and supplies, and we’re appropriate using Rollins’ negotiated rates for vehicle and telephone just to name a few. As is the case in most pest control acquisition there were little intangible assets that will be acquired from Northwest. From an accounting perspective the majority of what we book, will be goodwill and customer contract. As a result, we will record an annual non-cash charge of approximately $5 million in amortization and interest expense. This will minimize our accretion in 2017, but we feel that it will add between $0.005 and $0.01 in 2018. Last night the Board of Directors declared a regular cash dividend of $0.115 per share that will be paid on September 11, 2017 to stockholders of record at the close of business August 10, 2017. The cash dividend is a 15% increase over the prior year. We are pacing to have the 15th consecutive year that the Board has increased our dividend by a minimum of 12%. Our continued organic growth coupled with our profit improvement and this excellent new partnership with Northwest have us well positioned for an excellent 2017. I’ll now turn the call back over to Gary.

Thank you, Eddie. We’ll be happy to answer any questions that you might have at this time.

Thank you. [Operator Instructions] And our first question comes from Joe Box from KeyBanc Capital Markets. Please go ahead.

Hey, good morning, gentlemen.

Good morning, Joe.

So, thanks for giving some color on Northwest. I appreciate that. Obviously this was a sizable deal. I was hoping maybe you could put some additional parameters around the transaction maybe in terms of margin profile, multiple-paid and then I don’t know if you can give any color on what the breakdown would be between commercial, residential and termite. What is the comparison if it’s heavier or lighter relative to your current book of business?

Yes, Joe. So from a competitive perspective we’re not going to give a lot of details of the deal. This is a sizable acquisition. In the press release, we talked about their 2016 reported revenues of over $50 million. So this is our largest deal that we’ve done since HomeTeam. Their growth rate as I mentioned in my prepared remarks are better than our overall Rollins historic growth rate. Margins are going to help us overall. When you take a look at the business, the business is structured a lot like the HomeTeam business, they have – Northwest have an excellent relationships with a lot of builders, which has really enabled them to really have a foothold in the residential and the termite area of the business. So, I think from a structure perspective, you’re going to see a little bit more weights in those areas, which have been very positive for us from a HomeTeam perspective.

Got it. I guess with the business operating separately aside from just back office and probably some procurement savings that you guys could pick up. Can you just talk to maybe how you plan to leverage Northwest?

I think the fact that there are great brands in the Southeast, their growth rates again have been significantly better than our overall growth rates. So adding them to the Rollins brand of family, this is going to be an excellent – I mean excellent opportunity. From a tax perspective, it’s positive for us to structure the deal, within a very tax effective manner, which is going to enable us to amortize the intangibles over a period of time from a tax perspective. So for the financial side it’s going to be positive. And it’s another brand in the Rollins family of brand. This is going to continue to help us growth.

Last one from me, kind of changing gears. Just sort of dig into the 43% incremental EBIT margin in 2Q. Can you maybe just help us understand how much of that incremental margin tailwind came from your traditional price volume improvement that you saw in the quarter? Whereas how much of the benefit maybe came from the BOSS tailwinds?

Well, I think the BOSS tailwinds continue to improve. I think every quarter, we’re seeing improvements that are coming from the routing and scheduling, which is tag onto BOSS. We’re seeing improvements in the area of retention and certain pockets that have been on the longest, which of course is helping on the revenue side. So, pricing continues to be consistent, we are seeing good consistent pricing over the last now probably seven years. So I think that’s a help for us. But I think the BOSS project overall, as we had said, that we felt it will continue to pick up theme and we’ll continue to see the benefits from that.

I guess maybe just – I don’t want to hold it to something here, but I’m obviously at 80 basis points of margin expansion – actually I’m sorry, 120 basis points in margin expansion year-over-year. I mean was that 50% price volume, 50% BOSS?

I don’t know how to breakdown.

It would be 50% BOSS. Where you are going to see the benefit in BOSS is then you’re fleet and your payroll, and really the capacity. What they able to do is the service technician would be able to do take on more accounts across, you would be better organized. But it’s going to be a slow situation. It’s just a nature of our business, you’re not going to go in and have your productivity go up 25% in six months or anything like that. But we’re pleased with what we see and I think at this stage, you are about – more we expected to be at this point.

Understood. Thanks guys next quarter.

Thank you.

The next question comes from Joan Tong from Sidoti. Please go ahead.

Good morning. Congratulations on signing Northwest into the Rollins family. And I do have a question regarding the brand specifically the Northwest brand. Can you just give us a little bit color? It seems like they are on the high-end side in terms of pricing, the brand identity and strength. Is it very similar to your Orkin brand?

Yes. I’ll let John kind of help with that easy. He’s really been directly involved with it. But I’d say, in the Southeast area here and as I mentioned with my personal story in the Southeast area here, they’re very strong. If you take a look at the Atlantic areas, North up here and then up in other states that we talked about Tennessee and Alabama and some into North Carolina. It’s a regional brand that is extremely well known, they’ve grown well overtime and continue to expand their footprint as they’ve gone through time.

Yes, Joan. Thank you for the questions. Northwest is a company we’ve admired a long time, I’ve known Philips, both Steve the father and then his two sons. They have an excellent reputation for great customer service, tremendous tenure in their staff. So they have a really, really good brand in the markets they operate. They are probably most similar to HomeTeam, and that they leverage relationships with builders. And the markets that they are in, they’re very good competitors with them. Maybe compete less though with Orkin. But good business, very solid great leadership, tremendous team but they have a more of a residential mix and termite mix than Orkin does.

Yes. And Joan just from a recognition perspective here, we have the Orkin diamond that this recognize, their recognize is from a pesky moth that is kind of their spokesperson, as far as their advertising and marketing concern, which has been extremely effective. I know in the areas here in the Southeast. So they are very well known from a recognition perspective. And I think that helped them with that and of course the quality of service that they provided has been an extraordinary…

Okay, got it, got it. And then historically you guys are very discipline with evaluation metrics when it comes to acquisition. So I know that for comparative purposes, you can’t really disclose a whole lot of information, but just want to make sure that if evaluation is within your sort of like historical discipline? The way, we think about it.

Yes, it is Joan. I mean we’re on the higher end, of course we work for a great quality company that we have here. But that we’re absolutely within, the areas that we would normally be, from an acquisition perspective.

Okay, got it, got it. And then, how about on the margin expansion side, and I have a question, regarding – seeing the margin expansion pretty nicely, showing up in your numbers. Obviously, better than last quarter, like it might have been by fuel cost is less of a drag. Can you just talk a little bit about like the puts and takes there and what is the fuel cost increase – negative impact in the quarter if there is any?

Yes, the fuel cost net impact the quarter it was less than Q1, I don’t have, Joan that number is in front of me, I can get that for you. Our miles that we’ve reduced improved in Q2 then comparing it to Q1, so I think we’re seeing – continuing to see those incremental benefits from BOSS and from the virtual route management team. We’re continued to see it on the salary side, the portion of our salaries that we see reducing in our overall function that continues to incrementally improve. And we know that a piece of that is from some of the technology that we’ve been able to put in place. We talked in previous quarters about being able to use the technology of BOSS on things like termite billing. Those types of things were being manually done in the past. And now they are being done using the technology through the BOSS system. And each time our IT team that’s been able to identify and our operations have been able to implement that. We’re getting those incremental benefits. And I think we’re just seeing the accumulation of that as we’re going through time. I mean, adding on these new items and then also seeing the accumulation of those, as we move in forwarded time. So miles, miles per gallon definitely help and then the payroll pieces it’s been a substantial help as well.

Good, good, good. And then finally, I’ll jump back in the queue. The additional marketing that you guys highlighted, during your prepared remarks. Any color, like what specifically you are looking at and maybe the timing to – maybe invest a little bit more. You guys have already been very proactive on that front. Just want to make sure that like at least talking about like the next six months. Or is it more like 2018 event, that you might have another step up, perhaps in the Northeast spending?

We’re actively evaluating everything from a customer experience perspective, both existing customers as well as customer acquisition. So before we get to a point, where we are ready to move forward any substantial dollars at all. We’ll absolutely share that information with you. But I feel confident, we’re down some good path, both with specifically the marketing side, taking a look at the mobile enriched format, as well as the items have to do with the strategy, and the customer experience in the technology that would go around that.

Okay. Thank you.

You’re welcome. Thank you.

[Operator Instructions] The next question comes from Jamie Clement from Macquarie. Please go ahead.

Gentlemen, good morning and thanks for taking my question.

Good morning, Jamie.

So with respect to Northwest, and as this relates to builders, I mean, obviously with HomeTeam, we often the tax system. But it’s risky as it’s sounds like there’s been a lot of success down there. In the PermaTreat business, is the PermaTreat business with builders, sufficiently geographically segmented, where Northwest has an advantage over somebody like HomeTeam in the Southeast is that part of the attractiveness here? How does that exactly work?

Yes. We’re not going to a lot of specific. I think your assessment of this is pretty well done. Northwest has been in this geographic area for 65 years and made developed relationships with builders over that period of time. And they provided great quality of service. So they’ve had a foothold with a lot of the builders in the Southeast area for a long period of time. Even when HomeTeam goes to compete against those types of relationships, honestly it’s been difficult for HomeTeam, to compete in some of the markets, where Northwest has had a long-term relationship. And that’s part of the attractiveness to this deal into this company, because there’s longevity, the quality of service they provide, and longevity with those relationships.

Okay.

Yes. Jamie let me – I may add, HomeTeam is relatively new company in our industry 20 years, anniversary last year. And so, Northwest has been in business for some 60 years. So HomeTeam has the Tubes in the Wall and they have good relationships with builders. Northwest has great people and great relationships with their builders. And while HomeTeam maybe have all the customers, we’ll have Northwest take the rest. How about that?

Sure, sure, absolutely. And different line of question, it didn’t really come up much in your prepared remarks. I think you’ve mentioned it once or twice, but can you talk a little bit about the mosquito business, you now that we’re in the mid of the summer. It seems like, five or 10 years ago maybe customers weren’t necessarily convince that the efficacy of mosquito offering was out of your industry. It seems like now you all demonstrated the customers that these services actually work. So expecting another summer of growth there?

Yes, for sure, we are and Jamie, this is an area that has always been kind of one of those add-on that we’ve had in the operation and we kind of sold it, when there was time to sell it. Marketing and the operations group maybe two years ago, really decided, we need to really put some more focus around it. Unfortunately we were squaring the time of the concerns on the Zika virus. So it was not something we were going to be proactive, and go out and try to market itself with the public fears that were out there.

Right.

Customers, as customers reached out to us, and if it makes sense at that point in time, we would talk to our customers about it. But the fears of Zika, kind of subsiding sound at least in the U.S., we actually run our first ever national TV commercial, which was taking back to yard…

Yes. I noticed, I noticed.

Yes, yes so that’s the first time, we done a national commercial, we’ve absolutely seen a positive impact from that and a lot of our operations are squarely, squarely focused in on this opportunity. Now, it’s just been a matter of us being able to help educate and prepare our technician to make the act is really what it has been. Those pockets where they have been able to do that effectively, they’ve been able to see some good results. I was visiting in the St. Louis area with our South Central division President, Commissioner and they had things up on the wall, number of days in a row if that they have change to sell a mosquito lead. They had dollar amounts up there. So making it fun, making it interesting and making it something that’s kind of friend of mine. The sell of the product is an easy sell, if there is a need there, the product itself is an excellent, excellent product. 95% retention rate for our mosquito customers, so once people have a need and they see the service, it’s a service that they really appreciate it and they want to hold on too. That’s kind of where we are with that and we’ve had good rates with that. We’ve had low-teens to mid-teens for our growth rate, low base, obviously a low base it is not something that we concentrated all in the past. But we feel this is an opportunity for us, there is a little bit in forwarding time.

Okay, great and last one if I may for Gary, you had Western Pest predominantly operating in the East. Now you got Northwest predominantly operating in the Southeast, what’s the background of the Northwest Pest Control operating in the Southeast, any amusing story there?

Yes, okay John insist, I assume this.

That just happened to know it was named Northwest, way back in the 50, when they opened it on the Northwest side or section of Atlanta.

Oh, okay.

Up in Marietta.

All right.

Marietta is Top County based primarily.

And that’s very similar to the Western, because the way they got their name was, they were in Western New Jersey. So but anyhow they have done an excellent job with their advertising. As they said they have a concept, they have a mouse very colorful drawings and artwork. They do a lot of outdoor advertising with outdoor. And they’ve done a very good job promoting their brand.

Okay, terrific. Thanks so much for your time, as always.

Thank you, Jamie.

[Operator Instructions]

Okay. No further questions. So I’d like to thank you all for participating and being here today. We look forward to sharing our next quarter’s performance with you. And we’ll be working diligently on the programs and really creating – beginning of a good working relationship with the Northwest people. Thank you.

And that does conclude our conference for today. Thank you for your participation. You may disconnect.