Good day, and thank you for standing by. Welcome to the Owens & Minor First Quarter 2024 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker for today, Jackie Marcus, Investor Relations. Please go ahead.

Thank you, operator. Hello, everyone, and welcome to the Owens & Minor First Quarter 2024 Earnings Call. Our comments on the call will be focused on the financial results for the first quarter of 2024 as well as our outlook for 2024, both of which are included in today's press release. The press release along with the supplemental slides are posted on the Investor Relations section of our website. Please note that during this call, we will make forward-looking statements. The matters addressed in these statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied here today. Please refer to our SEC filings for a full description of these risks and uncertainties, including the Risk Factors section of our annual report on Form 10-K and quarterly reports on Form 10-Q. In our discussion today, we will reference certain non-GAAP financial measures, and information about these measures and reconciliations to the most comparable GAAP financial measures are included in our press release. Today, I'm joined by Ed Pesicka, President and Chief Executive Officer; and Alex Bruni, Executive Vice President and Chief Financial Officer. I will now turn the call over to Ed.

Thank you, Jackie. Good morning, everyone, and thank you for joining us on the call today. As I reflect on Q1, I am both pleased with our financial performance and encouraged by the continued progress we've made with our evolving operating model for the first 12 weeks of 2024. In addition, we were able to make investments related to our long-term strategic plan we introduced in December of 2023, and these investments are ahead of schedule. We are also making operational investments to bring higher levels of service to our customers and ultimately, the patients we serve. Finally, in Q1, we onboarded new customers in our Medical Distribution division, navigated the seasonality of our patient direct segments and overall met our internal expectations. While Alex will do a deeper dive into our financial performance and expectations for the remainder of 2024, let me review a few of our financial and operational achievements from the first quarter. First, our Products & Healthcare Services segment posted a 3% year-over-year improvement in revenue with our Medical Distribution division delivering mid-single-digit growth as a result of the onboarding of new customers in addition to attractive same-store sales. In our Global Products division, we saw growth in our U.S. proprietary product sales, driven by improvement in channel sales as a result of enhanced focus and new product launches. Overall, I'm pleased to see the flattening of the curve of our product sales with unit volumes continuing to increase as prices continue to settle back to pre-COVID levels. Our Patient Direct segment posted a 5% year-over-year improvement in revenue. We anticipated the first quarter growth to be in the mid-single digits as a result of very strong growth in Q1 of 2023 along with the adjustments to sales territories as we invested in additional commercial resources consistent with our long-term strategic plan. Additionally, we were not immune from the impact of the cyber incident at Change Health in late February, which did have some marginal topline impact to our business. However, we are currently working with Change to ensure we capture the associated revenue and receive full payment for all services and products rendered. And I'm also very proud of our responsiveness to this issue to mitigate the impact to our company. More importantly, I'm even more pleased with our ability to successfully limit the potential disruption of our customers' ability to receive life-saving products and supplies they need every day. At Owens & Minor, we believe life takes care, and we felt it was our responsibility regardless of the obstacles to continue to process orders and make the essential deliveries as quickly and efficiently as possible to provide continuity of care when it matters most. Turning back to our broader business. We entered the next phase of our operating model realignment at the beginning of the year, with an emphasis on identifying and capturing meaningful growth and profitability in our Patient Direct segment. This added focus in 2024 will enable us to make assessments and take actions related to improving our already well-run Patient Direct segment. We are utilizing the operating model realignment to implement transformational opportunities to improve our business reimbursement and collection model and to gain efficiencies and grow profitability in areas such as our sleep supply customers. At the same time, in our Product & Healthcare Services segment, we have embedded past initiatives into our daily activity while continuing to bring recently identified opportunities to fruition. Our segment leaders and I remain keenly focused on network rationalization and operational excellence, everything from optimizing our manufacturing footprint to our supply chain network. Throughout the company, these activities have taken meaningful investment and will continue to do so for the remainder of the year, but we believe they will result in greater profitable growth for years to come. Lastly, I'm encouraged by our year-over-year adjusted earnings improvement and many of our other key indicators. These improvements show the continued positive momentum and were in line with our expectations. Alex will discuss these financials in greater detail shortly. Our recent success demonstrates that we are on the right path and that our strategy is working. We all know there will be obstacles in the future, and we believe that our focus to constantly improve the business will assist us in mitigating many of these obstacles, even those that we can't see today. We will remain focused on our long-term strategy and our future as an organization built on excellence. At our Investor Day in December of 2023, we outlined the 5-year strategic plan, our vision for 2028, which is pillared by 3 key tenets: accelerating growth, optimizing our business to drive long-term profitability and investing in our business. While we are in the early innings, we are doing exactly what we said we would and we are seeing the results. I would now like to turn the call over to our Chief Financial Officer, Alex Bruni, to discuss our first quarter financial performance in more detail. Alex?

Thank you, Ed. Good morning, everyone. I'll begin by providing an overview of our financial results and the primary factors that drove our performance in the first quarter of 2024. Our revenue for the quarter was $2.6 billion, up 4% compared to the prior year. We generated topline growth in both of our business segments on a year-over-year basis. Products & Healthcare Services grew 3%, with Medical Distribution growth in the mid-single digits. And in our Global Products division, we saw growth in our U.S. proprietary product sales. Patient Direct revenue was up 5%, which was partially impacted by the Change Healthcare cyber incident that slowed our ability to onboard new patients and renew eligibility for existing patients. Gross profit in the first quarter was $536 million or 20.5% of revenue, compared to $497 million or 19.7% of revenue in the first quarter of 2023. Our gross margin expansion of 79 basis points can be attributed to 3 things: First, the profitability expansion in the Products & Healthcare Services segment, driven by efficiency gains and the successful efforts of the operating model realignment program; second, improved collections of patient direct sales, and third, patient direct sales growth, which carries a higher gross margin than Products & Healthcare Services. Our distribution, selling and administrative expenses for the quarter were $478 million, making up 18% of revenue. The $29 million year-over-year increase reflects higher variable expenses to support the growth in both segments, an increase in our teammate benefits and our decision to make incremental investments throughout the company for future profitable growth. GAAP operating income for the quarter was $10 million, and adjusted operating income was $57 million. Adjusted operating income was up more than 20% year-over-year and was driven by the overall improvements in the Products and Healthcare Services segment. The Patient Direct segment was impacted by expected investments in its future growth, regulatory reimbursement changes and, to a lesser extent, the Change Healthcare cyber incident. Adjusted EBITDA was $116 million, up $8 million versus the first quarter of 2023. Interest expense for the first quarter was $36 million, a 16% decrease from the first quarter of last year, reflecting our prior work to reduce our total debt in 2023. Our GAAP effective tax rate was 19% and the adjusted effective tax rate was 29%. Our GAAP net loss for the quarter was $22 million or a loss of $0.29 per common share. Adjusted net income for the quarter amounted to $15 million or $0.19 per common share. The significant increase in adjusted net income was driven by the factors mentioned above. Shifting to our capital structure. And considering the investments we continue to make, as Ed outlined, cash flow generation and the change in debt levels reflected investments across the company, especially in inventory to support Medical Distribution, customer onboardings and to maintain high-quality service levels. As of March 31, our total debt was $2.2 billion, and net debt was $1.9 billion, up about 3% from last year-end. Through the remainder of 2024, we expect minimal net debt reduction as we make investments to drive long-term profitable growth. We remain committed to delivering our 2024 guidance. As a reminder, we expect revenue to be in the range of $10.5 billion to $10.9 billion, adjusted EBITDA to be in the range of $550 million to $590 million and adjusted EPS to be in the range of $1.40 to $1.70. Also, as a reminder, we expect seasonality to lead to a roughly 1/3, 2/3 split across the first and second halves of the year from the adjusted EPS perspective, and we'd expect to deliver improvement in each sequential quarter. With that, I'll turn the call over to the operator for the Q&A part of the call.

Our first question comes from Michael Cherny from Leerink Partners.

Maybe if I can jump in first on Patient Direct, the dynamics in the quarter. You talked about the Change outage, not a surprise to anyone. Can you give a little bit more color on some of the magnitude of that change outage and what you're seeing already in terms of visibility into improved payment rates and improved flows?

Sure. Yes, Mike, thanks for the question. On Change Health, I mean, first of all, I think you got to recognize what Q1 is. I mean Q1 is for Patient Direct, probably the most complicated, labor-intensive quarter of the year as so many of the patients are changing insurance or payers, they're adjusting. So there's a lot of work associated with that. It had really, I would say, minimal impact on the top line, but it did have an impact on our collections. I'll also want to make sure that's recognized this change has been an incredible partner. They have worked closely with us. We've worked through it. As we're coming through April, we're starting to see more and more of that work its way through the system. But it was a labor-intensive process. And I think that's the thing that's important from an operating expense standpoint, significant labor-intensive process to do things more manually that used to be done instantaneously from a system standpoint. So I think that had an impact this quarter on cash flow and has an impact on our receivables. But as we get through Q2, we expect most of that to work its way through the system.

Got it. And if I could just ask one more on Patient Direct. A number of recent developments across the CPAP market in terms of the OSA surmount data from Lilly in terms of the Philips proposed and I think, accepted settlement or at least accrual relative to their CPAP devices. Anything you can provide us an update on how you see the development of your sleep franchise and all things CPAP against the backdrop of your multiyear targets and anything that's changed as we see some of these incremental data points on hopefully gaining this market back to both a normalization and potential for demand changes over time?

Yes. When we look at it, Philips has the issue that's out there publicly now. Their products have been really on hold for over a year. One of the things we've been able to do is continue to partner with others to bring the right amount of inventory in so we can meet customers' needs. So that hasn't had an impact on us because other manufacturers have stepped up and increased production. I think you'll continue to see that as we move forward. The demand for new starts in sleep continues to be strong for us. That category, along with diabetes, are still our two fastest-growing areas, growing faster than the overall segment. We anticipate that to continue. We also talked a bit about the work we're doing in the operating model realignment specifically around sleep. I think that's important to make sure we understand the sleep journey better so we can continue to drive strong growth in the future.

Our next question comes from Kevin Caliendo from UBS.

I want to continue a little bit on Patient Direct. The operating margins year-over-year fell about 35 to 36 basis points. I know you talked a little about investments and mentioned how difficult the quarter was. I guess what I'm wondering is whether there was any change in mix or anything specific to that. Is there any way to think about how the margin should progress, or were there any one-timers that would have prompted the margins to decline year-over-year? What do you expect for margins in the business and how should we think about the improvement? I know you expect sequential improvement every quarter in the overall business, but how should we think about margins in that business on a year-over-year basis?

I think we had a couple of different factors to consider. One is, as we outlined at Investor Day last year and even at the end of Q4, we are making investments in the Patient Direct segment with a significant addition of commercial resources. We talked about this back in December when we shared our 2028 strategy. We recognize two things happen when you do that. First, you create some level of disruption as you add territories and expand. Second, it takes about 12 months or so for those assets or investments to break even. We're actually ahead of schedule on adding those resources. We're trying to find the best assets to bring to market, or in our case the best teammates to add to the team, and we were able to find more of those at a quicker pace than expected, so we incurred a bit of extra expense. There were also processing costs and extra time required to ensure patients received the product and that it got shipped. Ultimately, looking long term, we remain extremely bullish on our Patient Direct segment given the market, our positioning, how well the business is run, and the investments we're making. One other thing to remember is that Q1 was always going to be a little tough: over the last two years Q1 for that business grew at double digits, so we're coming off strong growth. But we're adding resources to deliver on our long-term target, and we remain very excited about the space.

That's helpful. If I can ask a quick follow-up: on sleep, you are going to be lapping a tougher comp coming up. How should we think about the mix between sleep rental versus consumables growth as we progress through the year?

Yes, I think at a high level that's true. But we're still seeing our sleep starts, and we're not seeing a slowdown in those. Over time, you will have more and more consumables versus starts simply because it's the law of large numbers. That's the way you should think about it.

And just can you just remind me, how do we think about the impact as that progresses over time? Does that mean higher gross margin? Or like what is the impact on that? I apologize for my ignorance on...

I'm sorry, Kevin. The question is, what's the impact on gross margin? The difference between consumables and rentals?

As consumables start to grow faster and become a bigger part due to the law of large numbers, I just wanted to make sure I understand the impact on margins. How does the shift from rentals to consumables affect gross margin and operating margin?

Yes. Thank you for repeating that. The outsized growth in sleep supplies will be favorable to gross margin.

Our next question comes from Daniel Grosslight from Citi.

Just a couple on cash flow. First, on CapEx, you kept guidance at $220 million to $240 million for the full year. I just wanted to confirm if that's on a gross basis or net of sales? Because obviously, if it's net, you're basically flat this quarter, which implies a pretty significant step up for the remainder of the year? And then on your commentary around basically net debt staying effectively the same, is that implying that on a free cash flow basis, you're going to see kind of de minimis free cash flow as kind of rebuild inventory here?

Yes. Thank you for the questions. So on the CapEx, that is in fact gross CapEx, and we do expect increased spending as we head through the year. So again, reiterating that guidance range. And then on the net debt, we do expect that to stay relatively flat through the remainder of the year, reflecting our investments not only in commercial capabilities, but also in inventory as we've made to support onboarding new customers as well as driving service levels overall.

Got it. Okay. And as a follow-up, I had some more questions on the cadence of margin improvement. But on the Products & Healthcare Services segment, I know you've got a large client that's in the process of onboarding. So I was hoping to get an update on that? And then also investments across that segment, too. So would you be able to provide just a little more color on how you're thinking about those kind of big spend items this year and the cadence of P&HS improvement for the remainder of the year?

I'll take part of that and let Alex add some color. We're investing in Products & Healthcare Services across a few areas we outlined at Investor Day and are already executing on. One priority is expanding our proprietary product portfolio: we've added resources, which are operating expenses, to assess, onboard, and develop additional proprietary products, and we've already launched new wound care products. From a commercial standpoint we're making targeted investments to strengthen our external presence, get closer to customers, and provide more support. We're also investing in capital and operations through continuous improvement initiatives to optimize our manufacturing footprint and supply chain. That includes technology investments, such as vision-pick systems, to increase pick accuracy and warehouse efficiency; these carry capital costs and higher operating expenses during the learning curve. As these initiatives take hold this year and in future years, we expect them to drive margin improvement.

Yes. Thanks, Ed. So maybe just to add a little bit more color. Similar to Patient Direct, we've made investments in P&HS as outlined from an OpEx standpoint, we've invested in commercial capabilities, for instance, and so a lot of those are already factored into the run rate. And in parallel with that, we're driving a number of transformational efforts that we do expect to continue to drive margin as we move forward. And then again, we've got the normal seasonality where the increased top line and operating leverage, we'd expect to drive some margin improvement as we head into the back half of the year.

So let me put some a little bit more facts behind that, too, is if you think about our 79 basis points improvement this quarter in gross margin, if you think about what we talked about last year in the operating model realignment, one of the key things was sourcing. So we worked extremely hard to put together what I believe is a world-class sourcing organization that now internally is providing the ability to go out and find raw material at a lower price and continue to be competitive. So as product prices are coming back down at pre-pandemic levels, we have the ability to go out and drive additional sourcing to offset that, which is part of the reason why you saw the 79 basis points this quarter in margin expansion. And then on the other side of the house, some of the investments we're making on really, I'll call it the order to cash or cash collection cycle, continuing to work on that to drive margin expansion in our Patient Direct. So but I want to make sure everyone recognizes is that a lot of the work we did in the operating model realignment program is now embedded into the business. And a great example of that is sourcing and being able to see margin expansion. And then some of the transformational changes we anticipate this year in Patient Direct, around sleep and around order to cash or additional opportunities to drive margin expansion as the year progresses.

Our next question is coming from Eric Coldwell from Baird.

I wanted to ask: you mentioned a couple of times the order-to-cash process and the improvements in patient bad debt and collections. Could you give us some ratios for the bad debt or the improvement in patient collections?

Yes. I think at a high level, consider it right now in the, I would call it, the low to mid-90s, and there's an opportunity for us to continue to pick that up. And that's really what the focus is on. Q1 is a tough quarter. Obviously, there was a lot of complexity in Q1. But the anticipation is that we'll continue to get better as the year progresses.

And Ed, where was that, say, a year ago or a few years ago, how has that ratio changed?

I would say overall, Eric, it's relatively consistent, and it gets difficult, right? If you go back and look at it from a Byram standpoint, when it was a stand-alone division within the segment, we had really good collection. Bringing on Apria and integrating it, we have continued to drive many of the best practices across both divisions within the segment. And now, after having digested the acquisition two years later, we believe there's an opportunity to take those best practices across both, as well as reimagine things a little to drive several points of improvement from an availability standpoint.

On the call, when you were talking about some of the challenges in Q1 related to Patient Direct, you mentioned the tough year-over-year comparisons, a bit of Change Healthcare, and disruptions from the new sales territory and realignment. I also thought I heard a mention of regulatory changes in the prepared remarks affecting the segment. Could you clarify whether those regulatory changes relate to sales or to profitability, and can you dive into that?

Eric. Yes, so we were referring there to the Medicare funding. Just as a reminder on that, we had incorporated for either scenario playing out within our internal operating plan as well as our guidance. So we have levers to offset that, but that's what we're talking about there.

And could you remind us on the magnitude? I think it was just a few million, right? But if you could remind us?

It was not material, but we did not quantify it exactly.

I think when you think about it, when you're running the business, you know you're going to potentially have these headwinds, which you continue to look at what contingency plans you have in place and I think opportunities like we talked about earlier on the order to cash opportunities on the sleep journey and other things, our availability and the speed with which we move in those can help mitigate those, which is why I think Alex's comments has been we've contemplated those and we have the ability to make sure that we're focused on that.

Last one for me. In Products and Healthcare Services, you've talked about the inventory step-up to handle onboarding new customers, so it's clear you have new large customers that need onboarding. At the same time, another public competitor said yesterday that future health system wins will come online later in their fiscal '25, so they will start onboarding over the next few quarters, and the other large competitor, which is private but has received a lot of press, is also talking about a steady stream of wins. So bottom line, the three largest players that make up the vast majority of the market are all talking about wins. Who's losing, and what is the net win/loss ratio in Products and Healthcare Services? Are you overall gaining traction? Do you have some future business leading? I'm curious what's really happening because I see all of the big players talking about wins.

Yes, I would say we're not winning right now. There is a bit of a time lag, I guess, but we are not net winning on this. And I think we're being disciplined too on both wins. And as we talked about a year ago, there was some business that we've separated from because of the financial profile of it. So that's, I think, the way we thought about it and the way we're going to continue to think about it as both discipline on both sides of it.

Next question comes from Stephanie Davis from Barclays.

I wanted to ask another one on the Patient Direct business just because you did mention that change had a minimal impact on that side of the world, but it did see a bit of deceleration. Should we think about a reacceleration of this as coming off of the tough comp? Or is it more going to be a function of a ramp-up of some of your sales investments that you've made, which may be a little bit more back half weighted?

I think really the latter is the better way to think about it. When we know the investments that we're making are going to pay off. We've done it in a much smaller scale over the last five years. We're adding a person or two here or there. This is a broader push. And so I think the latter is the way to think about this: that as they start to take traction, you'll see the lift going out in towards the back half of the year.

Understood. And then when I think about the priority of investments, you always had modernizing your back office IT systems as one of them. I imagine what happened with Change makes us much more top of mind? So is this something where we can maybe see heavier upfront investment spend in order to go and try to mitigate future risks like that?

Yes. Stephanie, you're absolutely right. We've discussed this and are already working on it, continuing to review our systems in the Patient Direct business. When we make an acquisition, one of our guiding principles is not to confuse the customer right out of the gate. We want to avoid disruption, and I think we did an exceptional job of that with Apria. Now, two years in, things are settled and we know which levers to pull. One priority is making sure our systems enable continued growth while providing a stronger, more stable foundation. That's one example of an investment that involves capital expenditures, but it's not all CapEx; there are operating expenses associated with it as well, which we expect this year and into next year. We'll go into more detail on the plan, but the expectation and the ongoing process is to review our systems to ensure they are solid, can be leveraged, and will help drive growth as we scale.

So putting that all together, I know you reiterated your guidance for the year. Could we see maybe a heavier weighting on investments and more of the growth towards the back half, given all these moving pieces?

Yes, I think that's a pretty fair assessment. They're similar to last year, too. I mean, very similar to last year also because you then have the seasonality in the business. Think about last year, we had seasonality. If you think about last year, we had investments we were making upfront to drive operational efficiency. We saw those carry towards the back half of the year. So I think it'll be relatively consistent.

Next question comes from Allen Lutz from Bank of America.

Ed, you talked a little bit about some of the sourcing and improved collections that drove the gross margin higher. I think that's now a few quarters in a row where you've seen a nice improvement in gross margin. I guess how should we think about sort of where we are in the timeline of those factors driving an improvement? And can you provide maybe a little bit more information on the progression of the gross margin line over the course of the year?

Maybe I can start with some qualitative remarks and Alex can bring a little more quantitative. The anticipation is that we will continue to drive margin expansion throughout the year. The sourcing and some other initiatives are already embedded in the business, and some of those were embedded at the end of last year. For example, by the time we got to Q4 of last year, some of that sourcing was already in place and helped drive the back-half margin expansion. So again, we're getting ready to start to overlap that. Other projects, like the order-to-cash process, are another example of where we will be able to drive improvements and we should anticipate some margin expansion. Continuing to get that overlap effect on sourcing is another way we can drive margin expansion. On the other side of the equation, within products, we're continuing to see prices come back down closer to pre-pandemic levels, but as we drive costs out, we're able to neutralize and mitigate that. We continue to work with our customers to help provide savings to them, as many of our customers are continuing to look for that. As we think about it, we had a 79 basis point year-over-year improvement in this quarter, and we would anticipate that we will continue to drive some level of improvement in the back half or the back three quarters of the year. Alex, maybe you can add a little more comments?

Yes. Thanks, Ed. Yes. So on gross margin, as Ed mentioned, we do expect that to continue to improve throughout the year. There are the three key drivers here on Products & Healthcare Services side. The main driver is the sourcing savings that's driving improvement within our cost of goods sold. And then on Patient Direct, there's the two drivers. One, just margin expansion driven by the improvement in collections that we've talked about in our investments in revenue cycle in general. And then we've got favorable mix essentially between Patient Direct and Products & Healthcare Services. So insofar as Patient Direct is growing faster than Products & Healthcare Services that will drive gross margin expansion overall for the company. And so if you look at just the normal seasonality of the business in both segments as we get into the back half of the year, with topline growth and operating leverage, that will also aid with margin expansion as we get towards the end of the year.

Great. And then just a quick model question. I see a $50 million gain on a sale. Can you just provide some commentary on what that was?

Yes, but it was a total of $50 million but I'll clarify...

Yes. We did have a gain of $7.4 million on the sale of our home office here in Mechanicsville, Virginia. And that hit E&R.

Our next question comes from Michael Cherny from Leerink Partners.

Is there any way you can give us some directional color given you don't formally guide on cash flow? And the reason I ask is you mentioned the dynamic of net debt staying steady over the course of the year. I know the CapEx investments are spelled out. I just would have thought would be a little bit more of a cash build given the reiterated EBITDA. So just curious if there's any moving pieces in the middle of that conversion, you can give us some color on?

I'll start with some directional comments. At a high level, we're investing in inventory to onboard new customers and sustain service, and there is opportunity to improve that as the year progresses. When you bring on a large new customer, you tend to add a significant amount of inventory to ensure dependable service from day one, and as we and the customer learn each other, there's an opportunity to reduce that a bit. From a receivables standpoint, as we continue to improve our order-to-cash process, there may be opportunities to optimize, but we want to be disciplined in our assessment, and the timing for making those tweaks may be sooner rather than later. On CapEx, as we see growth in areas like sleep, we'll need additional capital expenditures and will invest in automation and other technology to drive efficiency. That's a qualitative view of how we're thinking about potential levers and opportunities as the year progresses.

Okay. So I assume free cash flow will be positive for the year though? Is there any framework we can use relative to history, even if it's less based on the inventory build?

Thanks, Mike. So I'll just add a little bit more color here. So we expect fairly minimal free cash flows for the remainder of the year. We expect net debt to remain pretty much where it is. And this obviously reflects our investments that we're making from an OpEx standpoint as well as CapEx as well as some of our transformation efforts that are hitting exit and realignment. So our expectation is that where our net debt is right now is roughly where we would exit the year and then obviously, leverage is a function of our adjusted EBITDA guidance at the end of the year.

As of right now, we don't have any questions. I'd now like to hand back over to Ed Pesicka for final remarks.

Thank you, and thank you, everyone, for joining on the call. Before I make some closing business comments, I'll make a personal comment: I want to shout out Sentara Health. Less than two days ago, our daughter and son-in-law delivered their first daughter and brought her into the world and our first grandchild. So Sentara Health, Sentara, everybody there. The experience was exceptional, so to the clinicians and all the support staff, thank you. With that, as you heard today on the call, the team and I, we are extremely excited about 2024, a year where we're going to continue to make investments to drive long-term growth. I also want to thank our teammates across the globe. I want to thank our customers, our partners and, of course, our shareholders. We are going to, as a leadership and an organization, continue to execute on our strategy. I really look forward to sharing the progress with you over the summer in our next earnings call. So thank you, everyone.

Thank you for attending today's conference call. We hope you have a wonderful day. You may now all disconnect from the call.