Earnings Call Transcript - ABM Q1 2022

Operator, Operator

Good afternoon, and welcome to ABM's First Quarter Fiscal 2022 Earnings Call. At this time, all participants are in a listen-only mode. Please note that there will be a brief question-and-answer session following the ABM management team's formal remarks. As a reminder, this conference is being recorded. It is now my pleasure to introduce Paul Goldberg at ABM. Mr. Goldberg, you may begin.

Paul Goldberg, Senior Vice President of Investor Relations

Good afternoon, everyone, and welcome to our First Quarter 2022 Earnings Call. My name is Paul Goldberg, and I'm the Senior Vice President of Investor Relations at ABM. With me today are Scott Salmirs, our President and Chief Executive Officer; and Earl Ellis, our Executive Vice President and Chief Financial Officer. Please note that earlier this afternoon we issued our press release announcing our first quarter of fiscal 2022 financial results. A copy of this release and accompanying slide presentation can be found on our website abm.com. After Scott and Earl's prepared remarks, we will host a Q&A session. But before we begin, I would like to remind you that our call and presentation today contain predictions, estimates, and other forward-looking statements. Our use of the words estimate, expect, and similar expressions are intended to identify these statements. Statements represent our current judgment of what the future holds. While we believe them to be reasonable, these statements are subject to risks and uncertainties that could cause our actual results to differ materially. These factors are described in a slide that accompanies our presentation, as well as our filings with the SEC. During the course of this call, certain non-GAAP financial information will be presented. A reconciliation of historical non-GAAP numbers to GAAP financial measures is available at the end of the presentation and on our company's website under the Investor tab. And with that, I would like to now turn the call over to Scott.

Scott Salmirs, President and CEO

Thanks, Paul. Good afternoon and thank you all for joining us today to discuss our first quarter results. ABM is off to a great start in 2022 as demonstrated by our results. I'm particularly pleased with our organic revenue growth of over 9%, which was broad-based and reflected not only a pandemic recovery, but also robust demand for services that enable healthy buildings, sustainability, and energy efficiency. Our service offerings closely align with these trends, and we were successful in winning new business with world-class clients, and this momentum is positioning ABM for strong growth in 2022. First quarter revenue grew nearly 30% to $1.9 billion, and adjusted EPS was $0.94, both above our expectation. Margin was solid at 6.6% in the quarter, reflecting the expected change in mix from a high volume of EnhancedClean and disinfection-related work orders to a more traditional mix of janitorial and other services. Due to our stronger than anticipated first quarter performance, we are raising guidance for adjusted EPS to $3.50 to $3.70, which is a 5% increase at the midpoint of the range. I'm pleased with the resilience our business has shown throughout the pandemic and excited about our future as we shift toward a more normal operating environment. While we still face labor challenges as things continue to ramp up, we are confident in how we are structurally positioned relative to labor cost inflation, and I'll explain why in a few minutes. First, let me comment on the demand environment. Beginning with B&I, office occupancy rates remain at low levels, but are gradually increasing. This trend is expected to continue throughout 2022. The East and West coasts are about 15% to 25% occupied, with the Midwest higher at about 30% to 40%. The Omicron variant delayed return to office plans, but we expect activity to pick up in April, assuming no further setbacks. Demand has greatly improved for special events such as concerts and sporting events as venues are operating at fuller capacity. Looking forward, as occupancy rates rise, we will benefit from increased volume, but we'll also see an easing in the labor efficiency we've experienced for the past several quarters. Moving onto Aviation, travel rebounded significantly from the prior year with U.S. passenger volumes now much closer to pre-pandemic levels, mostly driven by consumer travel. We believe travel demand will continue to trend higher, especially in the second half of the year, as both business and consumer travel is expected to pick up. We are pleased with the margin improvement for Aviation, which has been aided by our focus on optimizing our service mix. This is the first quarter we are reporting results for our new industry group, Manufacturing & Distribution. M&D is off to a great start, and the strategic logic of aligning these key verticals is already paying dividends as we are expanding with existing clients like Amazon and winning new business. Occupancy rates in M&D have remained high, largely driven by consumer demand for goods and services through both the e-commerce and retail channels. The growth in demand we are seeing is coming from the expansion of distribution facility square footage to meet the continued strong growth in e-commerce. Demand is also coming from larger clients who want to partner with a service provider with the resources and scale to support their growing footprint. ABM is clearly uniquely positioned to meet this need. In Education, K-12 and colleges and universities are operating with 100% in-person learning. We expect demand for our services to be relatively stable. The roll-off of free education accounts in the back half of fiscal year '21 resulted in Q1 revenue declining 1% year-over-year. However, on a sequential quarterly basis revenue, operating profit, and margin all improved. In fact, operating profit improved by $4.6 million, and margin increased over 200 basis points as we manage labor costs related to the ramp-up of in-person learning. It's important to note that Education operating margin is now over 100 basis points above pre-COVID levels, even after the return to in-person learning. Technical Solutions is seeing robust demand in the e-mobility market. E-mobility has grown from a small service line to the largest portion of ATS's backlog. We have programs with several auto OEMs to install EV charging stations in their dealer networks, and we are winning new business with municipalities and corporate fleets. We expect demand to rise as the funds dedicated to EV charging within the U.S. infrastructure bill begin to be allocated. The transition to electric vehicles is just getting started, and we aim to capitalize on our leading position to broaden our growth opportunity to include initial design and service and maintenance, complementing our EV installation services. Sustainability and energy efficiency will also drive long-term demand for our HVAC and bundled energy solutions where we guarantee our clients energy savings. This has been our core offering in ATS for many years. Overall, in addition to a constructive demand environment, we are distancing ABM from the competition as we integrate the Able acquisition and move forward with our Elevate initiative. The Able integration progressed well in the first quarter, and our teams will continue this work for the balance of the year. Our initial focus has been on combining team members, clients, and operations into a unified service delivery platform. As we undertake this process, client satisfaction remains paramount, and our customers have responded favorably. Our next step will be to onboard Able to our common shared service and IT infrastructure. Our team remains confident that we will achieve the synergy targets we laid out when we announced the acquisition. We also made good progress on core elements of our Elevate program. Last month, we launched a cloud-based tool that streamlines the candidate application process and provides hiring managers with more visibility into the hiring process. This investment is especially timely now and should improve the yield of our recruiting efforts. In addition, we are driving increased employee retention through more data-driven methods. We recently launched a tool that provides greater insight into labor trends at our job sites. This data helps our teams create an action plan to improve retention. We will continue to share the progress we're making on Elevate in the coming quarters. Before I turn it over to Earl to discuss the financials, I'll briefly discuss the labor environment. I know it’s top of mind with our investors as it is with our team. Let me start by stating the obvious. No company is immune to labor cost escalation or the tight labor market. That being said, the majority of ABM's wage inflation risk is mitigated by the makeup of our direct labor workforce. As a percentage of our contract revenue, roughly two-thirds of our direct labor is represented by collective bargaining agreements, where wage increases are fixed or they're part of a cost-plus arrangement or part of some other arrangement where wage rates are known. Within that two-thirds, the majority is unionized labor, and the annual increases are generally in the range of 3% to 4% and have now been locked in for the next two to three years and are transparent to our clients. Transparency makes capturing increases less difficult as clients know that our increases are a direct result of stated contractual wage increases. So that leaves about one-third of our labor costs that are not contractually protected. In these instances, we seek adjustments to cover cost escalations when appropriate. Our success in adjusting wage rates reflects the value our clients place in ABM and our ability to provide essential service even during the most challenging of times like we just saw during COVID. We have good success rates in recovering these costs. We would point to 2018 and 2019's labor prices as good validation. And in those instances where we can't come to an agreement with our client, we have the courage to let our services be rebid and repriced. On the topic of labor availability, like everyone else, we feel the effects of the labor shortage, and we are proactively responding through several initiatives, including greater use of data and analytics, enhancing our pre-employment onboarding process, and the initiation of a candidate care services team. These actions are helping to drive important short-term and long-term benefits to our recruiting and candidate retention programs. The data supports the progress we are making. July of 2021 marked the point where we had the highest number of job openings. Since then, we've been trending down, and since then, the number of job applications is up 14% and the number of applications per open job is up 25%. We believe that the number of people coming back to the workforce will only increase as inflation continues to take a toll and forces people back into the market. We remain confident in our ability to manage through today's challenging labor environment, just as we've done in the past. With that, let me now turn it over to Earl for the financials.

Earl Ellis, Executive Vice President and CFO

Thank you, Scott, and good afternoon, everyone. For those of you following along with our earnings presentation, please turn to slide 5. First quarter revenue increased 29.7% or $1.9 billion, primarily driven by a full quarter contribution from the Able acquisition, a continued recovery from the pandemic, most notably in Aviation, and solid demand for our janitorial and engineering services. Organic growth of 9.1% was supported across all industry groups with the exception of education, which had a slight year-over-year decline. Moving on to slide 6, net income in the first quarter was $76 million or $1.11 per diluted share compared to $74.6 million or $1.10 per diluted share in the same period last year. The increase in GAAP income reflects favorable operational earnings and a higher benefit associated with self-insurance adjustment related to prior years, largely offset by investments in our Elevate initiatives, Able integration costs, and higher corporate expenses. Adjusted net income for the first quarter decreased 6% to $64.4 million or $0.94 per diluted share compared to $68.3 million or $1.01 per diluted share in the first quarter of last year. The decrease primarily reflects higher corporate expenses and one additional workday compared to the prior year period, partially offset by higher segment earnings. Adjusted EBITDA for the first quarter was $123 million, compared to $123.7 million in the prior period. Adjusted EBITDA margin for the quarter was 6.6% versus 8.6% last year, primarily driven by the anticipated decline in higher margin disinfection services. Please note that our calculation for adjusted EBITDA margin has changed in order to provide a clear understanding of our operating margins. Specifically, we are revising our calculation for adjusted EBITDA margin for all periods presented to exclude parking management reimbursement revenue. This revenue and the associated costs, which net out to zero, are both recorded on a gross basis and generally have no associated margin. Prior to fiscal year 2022, parking management reimbursement revenue was included in the calculation of adjusted EBITDA margin. With the addition of Able, corporate expenses were $23.2 million higher compared to the prior period due to investments in our Elevate initiative, Able integration expenses, and costs related to hiring activities, which more than offset the benefit from self-insurance adjustments related to prior years. Now turning to our segment results, beginning on slide 7. B&I increased 49.2% year-over-year to over $1 billion, driven primarily by a full quarter of contribution from Able, increased year-over-year office occupancy, and growth in special events. Excluding the contribution from Able, B&I organic revenue increased 4.6% over the prior year period. Operating profit in B&I increased 14.6% to $83.3 million, driven by higher revenue. Operating margin of 8.1% reflects lower EnhancedClean and disinfection-related work orders. Aviation revenue increased 42% to $200.3 million, marking the third consecutive quarter of robust year-over-year revenue growth. This improvement was largely driven by increased holiday airline traffic, with U.S. passenger volumes now moving closer to their pre-pandemic levels. Aviation operating profit increased to $8.9 million compared to $3.1 million in last year's first quarter, driven by the significant rebound in revenue as well as our efforts to emphasize higher margin airport facility services. The year-over-year operating margin improvement of 220 basis points reflects greater economies of scale. Turning to slide 8, revenue within our Manufacturing & Distribution industry group grew 5.4% to $359.1 million. Strong organic growth in this segment was driven by new customer wins and expanded business with leading e-commerce clients. Operating profit increased 2.3% to $40.6 million on higher sales volume. Operating margin decreased 40 basis points to 11.3% due to low levels of EnhancedClean and disinfection related work orders. Education revenue declined 1.1% to $205.7 million, largely reflecting the roll-off of a couple of accounts. Looking forward, we are optimistic as several new bidding opportunities are opening up. Operating profit totaled $12.6 million, down from $21.7 million in last year's quarter. The decline in operating profit was largely due to the ramp-up in labor required to support 100% in-person learning versus 25% last year. Operating margin was 6.1% and in line with our expectations. Technical Solutions grew $25.9 million to $141.8 million driven by continued strong growth in our emerging e-mobility service offering. Operating income included a $7.7 million gain on the sale of selected healthcare-related customer contracts. Excluding the gain, operating profit improved 53% to $9.2 million, and operating margin increased 120 basis points to 6.5% as we benefited from operating leverage on higher revenue. Moving on to slide 9, we ended the first quarter with total debt of $1.2 billion, including $167 million in standby letters of credit, resulting in a total debt to pro forma adjusted EBITDA ratio of 2.1 times. At the end of Q1, we had available liquidity of $796 million, including cash and cash equivalents of $46.6 million. Turning to capital allocation, we initiated a share repurchase program during the first quarter, we repurchased approximately 300,000 shares at a total cost of $13.3 million. The repurchase program has continued into the second quarter. Lastly, we are proud to have paid our 223rd consecutive dividend in the first quarter. Now, I'll briefly discuss our updated guidance as shown on slide 10. As Scott mentioned earlier, we are increasing fiscal 2022 EPS guidance. Specifically, we now expect GAAP EPS to be in the range of $2.65 to $2.85. Also, our guidance for adjusted EPS is now expected to be in the range of $3.50 to $3.70 compared to $3.30 to $3.55 previously. The increase in our adjusted earnings forecast is due to our strong financial performance in Q1 fiscal 2022, as well as our favorable outlook for the balance of the year. The updated guidance represents a 5% increase at the midpoint of the range over the previous guidance. Also, due to the change in the calculation of adjusted EBITDA margin, we now expect fiscal 2022 EBITDA margin to be in the range of 6.4% to 6.8% compared to our prior guidance of 6.2% to 6.6%. This update is merely a reflection of the change in methodology of the calculation.

Scott Salmirs, President and CEO

Thanks, Earl. ABM continues to operate from a position of strength, supported by favorable secular growth trends like healthy buildings, sustainability, and energy efficiency, and solid cash flow. We have a world-class client base, the industry's best team, and the scale and product breadth to support our clients in a way our competitors just can't. And with the recent acquisition of Able, we significantly expanded our capabilities to comprehensively address our clients' evolving needs across the spectrum of facility services and engineering solutions. Our Elevate initiative will serve to further strengthen our market position and widen our competitive moat. With that, let's take some questions.

Operator, Operator

Thank you. We will now be conducting a question-and-answer session. Our first question comes from the line of Sean Eastman with KeyBanc Capital Markets. Please proceed with your question.

Sean Eastman, Analyst

Scott, Earl, good evening. Thanks for taking my questions. I just wanted to start on the guidance. Just so I understand what shifted around. Does the updated full year guidance just flow through the stronger than anticipated results in Q1 with sort of a status quo outlook over the balance of the year versus internal expectations? And then the midpoint of the updated guidance would imply that the first quarter represents quite a bit more of the full year outlook than normal. So just wondering why that would make sense.

Scott Salmirs, President and CEO

Sure. Let me take that. So yeah, I think a lot of it will flow through the first quarter, but we are optimistic and we think Q2 will start seeing a little bit of headwinds because return to work will have us lose some of that labor efficiency. But we are getting more benefit than we expected when we originally guided, right? Because people still aren't back to work, and they're just starting to head back now. So we do have that as a tailwind going into Q2 and Q3. But we have to remember we're still in the labor situation that we're in now. And even though we think we're handling it really well, we still have to be cautious as we think through the rest of the year.

Sean Eastman, Analyst

Okay. Fair enough, fair enough. And then, since there are a lot of moving parts, it’d just be great to level set on how the margins are expected to trend over the balance of the year, right? We have the labor efficiency element kind of abating, but then we've got some Able synergies maybe ramping up, and then, of course, Elevate benefits ramping up. So just trying to think through what a good expectation is over the balance of the year off of this first quarter result?

Scott Salmirs, President and CEO

Sure. We haven't changed our guidance on margins. We believe we will experience some positive trends in Q2 due to delays in returning to work, but we remain cautious about the labor environment. It's too early for us to determine if margins will increase at this point, and we're approaching this situation with caution.

Sean Eastman, Analyst

Okay, got it. I'll turn it over there. Thanks a lot, guys. And great start to the year.

Scott Salmirs, President and CEO

Thanks.

Earl Ellis, Executive Vice President and CFO

Thank you. I appreciate it.

Operator, Operator

Our next question comes from the line of Tim Mulrooney with William Blair. Please proceed with your question.

Tim Mulrooney, Analyst

Scott, Earl, good afternoon.

Scott Salmirs, President and CEO

Good afternoon.

Tim Mulrooney, Analyst

So I wanted to ask about the Manufacturing & Distribution segment. I think you used to be Manufacturing & Technology. So I mean, I guess, I'm curious how you're thinking about organic growth in this business for '22 as it's contemplated in your guidance? And how that would compare to what we would have seen relative to historical standards?

Scott Salmirs, President and CEO

Yeah, look, I mean we're still optimistic about this group, and the trends are with us, right, with e-commerce and logistics. So, we're pretty excited that we made this pivot proactively. And while we don't guide to organic growth per segment, this will be a higher growth rate. I think if you would ask me where this will land, where Technical Solutions is typically our highest growth rate in the high single digits, I'm not so sure that M&D is going to be far behind that. So we really feel like we got a winner here, and it's proving out already with what we've seen since we formed it.

Tim Mulrooney, Analyst

Now that's what I'm looking for, Scott. Just some directional help. That's really helpful. Thank you. And I wanted to ask about something you've mentioned in your prepared remarks about your Education segment. Your margins are 100 basis points above pre-COVID levels even though everyone's returned to school. So I mean, I assume that means pandemic-related labor efficiencies are now gone. But can you talk in a little bit more detail about why those margins remain so high relative to pre-pandemic levels? And how much of that you think is structural?

Scott Salmirs, President and CEO

I feel positive that we are achieving a stable rate and are very focused on profitability. The company culture has been shifting towards prioritizing margins alongside revenue growth. We are attracting higher quality clients, allowing us to re-staff more efficiently. This aligns with what we have discussed over the past couple of years regarding the improved efficiency in re-staffing jobs and retaining some of the labor efficiencies we gained. While it is still early to make definitive statements, our first quarter results showing a 100 basis points increase compared to pre-COVID levels should provide encouragement to everyone.

Tim Mulrooney, Analyst

I do recall you talking about holding on to some of that labor efficiency as you move beyond the pandemic. And it appears you are executing on that. So we will stay tuned. Congrats on a nice quarter.

Scott Salmirs, President and CEO

Great, thank you.

Operator, Operator

Our next question comes from the line of Andrew Wittmann with Robert W. Baird. Please proceed with your question.

Andrew Wittmann, Analyst

Thank you. Good evening, and I appreciate you taking my question. To start, I have a few questions. Earl, could you provide your outlook for CapEx and free cash flow for this year? Additionally, I want to clarify if the change in the margin calculation, which has a 20 basis points impact, was factored into your Analyst Day as part of your 7% target, or should we now expect your long-term target to be 7.2%?

Earl Ellis, Executive Vice President and CFO

Sure, thank you for the question. Let me start by addressing your last inquiry. Regarding the margin change related to parking, we did not include that in the guidance we provided back in December. We expect that this will have an annual impact of approximately 20 to 30 basis points, which will be added to our earlier guidance. As for your first question about the outlook for cash flow and capital expenditures, we still estimate our capital expenditures to be around $45 million for the year. Our underlying operating cash flows remain very strong, but this year, you will notice several one-time items that will offset that strength. Specifically, in the last quarter, we began repaying the deferred payroll taxes from the CARES Act, totaling about $66 million. Additionally, we anticipate a legal settlement that is likely to occur in the next quarter. With the $80 million allocated for Elevate, these items together amount to roughly $280 million. As a result, this will significantly offset the strong cash flow we are generating, leading us to expect that our cash flow will remain relatively flat when all of this is considered.

Scott Salmirs, President and CEO

And it keeps our leverage well still.

Earl Ellis, Executive Vice President and CFO

Absolutely.

Andrew Wittmann, Analyst

Sure. You seem confident enough to initiate a buyback as well. Regarding Technical Solutions, specifically about the e-mobility segment, it appears that much of it revolves around the installation of car charging stations. Can you elaborate on your expectations for the size of this business this year? Do you foresee the Technical Solutions business being more seasonal? Historically, this segment has involved summer projects in schools aimed at improving energy efficiency through various upgrades. However, it seems that the charging business and e-mobility are becoming quite substantial, especially since you've mentioned it as the largest part of your backlog. I'm curious if the quarterly revenue will become less seasonal and if you can provide insights into the overall size of this business today.

Scott Salmirs, President and CEO

Sure. I believe it will take a couple of years for us to feel the seasonality has diminished. This area is still new for us. Last year, we generated around $40 million from EV charging, and that could potentially triple or exceed that amount. We are focusing primarily on installations right now, which tend to have lower margins similar to our janitorial services, rather than our traditional Technical Solutions margins. However, installation serves as the cornerstone of the e-mobility ecosystem, and we have the opportunity to handle the design work before installations through our bundled energy solutions. We have solid evidence of our ability to engineer and design these solutions. After installation, we can provide maintenance, which creates a recurring revenue stream, and we are even exploring the possibility of procuring power. We might partner with others for some of these services, but the key takeaway is that this sector is poised for rapid growth, and it’s advantageous for us to start as the leading installer in the country. We expect to discuss e-mobility frequently, and we are optimistic about strong growth over the next 2 to 3 years. Additionally, as you mentioned, there should be less seasonality in ATS, which should continue to experience outsized growth.

Andrew Wittmann, Analyst

Great. Thank you very much.

Scott Salmirs, President and CEO

Thanks.

Operator, Operator

Our next question comes from the line of Marc Riddick with Sidoti. Please proceed with your question.

Marc Riddick, Analyst

Hey, good afternoon, gentlemen.

Scott Salmirs, President and CEO

Hey, Mark.

Marc Riddick, Analyst

I wanted to discuss a couple of points, particularly regarding the comments about education being fully back and enjoying a margin advantage. I'm interested in understanding what role visibility plays in education compared to other sectors, where the start of the school year is well-known. Could you share your thoughts on any insights gained from the education sector? Additionally, how do these insights translate to other sectors, especially with respect to pricing labor and the importance of visibility in that context?

Scott Salmirs, President and CEO

I'm glad to discuss that. It was a valuable experience for us. We're actually happy that we didn’t have everything return simultaneously, which helped with our labor ramp-up. We gained significant insights on how to efficiently restaff positions and attract workers in this market, which varies from one area to another. Each geographic market presents unique challenges. This served as a good test case and pilot for us. As our different industry groups continue to ramp up, we are pleased with our performance, consistently exceeding pre-COVID levels by 100 basis points. We'll see if this success is mirrored in other industry groups, but we learned a lot from the education sector.

Earl Ellis, Executive Vice President and CFO

I would like to add that, based on what we've learned about labor deployment, the Education Industry Group has a higher share of non-unionized labor. As a result, we have refined our ability to effectively manage price increases in relation to wage hikes. We plan to apply these insights to our other industry groups.

Scott Salmirs, President and CEO

It’s a great point.

Marc Riddick, Analyst

Great. My follow-up question is about the timing for the ramp-up of employees returning to office work, especially within B&I. What would the ideal scenario look like for that process? We're noticing many companies announcing plans to bring back employees after Omicron, so in a perfect world, what would you prefer to see that you believe would help manage this process effectively?

Scott Salmirs, President and CEO

We take pride in our agility and adaptability, which was evident during COVID. Regardless of how the situation unfolds, we are confident in our ability to perform well. However, a slower return to the office would actually benefit us, as it would allow more time for hiring and re-staffing. It seems that's how things are developing. There’s no expectation that April 1 will mark a sudden return to the office. We appreciate the way this is unfolding, Marc.

Marc Riddick, Analyst

Excellent. Thank you very much.

Scott Salmirs, President and CEO

Thanks.

Earl Ellis, Executive Vice President and CFO

Thanks, Marc.

Operator, Operator

Your next question comes from the line of Tate Sullivan with Maxim Group. Please proceed with your question.

Tate Sullivan, Analyst

Thank you, Scott. I apologize if you covered this earlier, but you mentioned Amazon in your prepared remarks. Could you elaborate a bit more on the EV charging opportunity with your current customers? Is the focus primarily on educating parking customers, and can this opportunity expand to include more companies like Amazon, or is it distributed across your various end-markets?

Scott Salmirs, President and CEO

That's a great question. We believe there will be a significant demand for EV charging in various facilities, whether they are schools, office buildings, or airports. We see a strong opportunity for cross-selling, and we need to begin those discussions. Recently, we launched our Smart Parking New, which incorporates artificial intelligence into parking solutions. This initiative, which we introduced in LA, combines EV charging with revenue dynamics into one cohesive offering. We think that the synergy of our presence in the EV charging and e-mobility sectors, along with our diverse end-markets and parking assets, will greatly benefit us moving forward.

Tate Sullivan, Analyst

Great. I'm sure you can quantify that cross-selling as well too. Well, thank you for all the detail and the opportunity.

Scott Salmirs, President and CEO

Thanks for the question.

Operator, Operator

There are no further questions at this time. I'd like to hand the call back over to Scott Salmirs for closing remarks.

Scott Salmirs, President and CEO

I just want to thank everyone for joining tonight. And we're looking forward to getting back to you next quarter. But as you can tell, we're really optimistic about the future, and clearly super proud of the results that we just posted. So more to come. Thanks, everybody. Have a great night.

Earl Ellis, Executive Vice President and CFO

Good night.

Operator, Operator

Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.