Earnings Call Transcript - GCMG Q1 2021

Operator, Operator

Good day, and thank you for standing by. Welcome to the GCM Grosvenor first quarter earnings webcast. Please be advised that this conference is being recorded. I would now like to hand the conference over to your speaker today, Stacie Selinger, Head of Investor Relations. Please go ahead.

Stacie Selinger, Head of Investor Relations

Thank you. Good morning, and welcome to GCM Grosvenor's First Quarter 2021 Earnings Call. Today, I'm joined by GCM Grosvenor's Chairman and Chief Executive Officer, Michael Sacks; President, Jon Levin; and Chief Financial Officer, Pam Bentley. Before we discuss this quarter's results, a reminder that all statements made on this call that do not relate to matters of historical fact should be considered forward-looking statements. This includes statements regarding our current expectations for the business and our financial performance. These statements are neither promises nor guarantees. They involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results. Factors discussed in the Risk Factors section of our 10-K/A filed with the SEC on May 10, 2021, and our other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements on this call. We'll also refer to non-GAAP measures that we view as important in assessing the performance of our business. A reconciliation of non-GAAP metrics to the nearest GAAP metric can be found in our earnings presentation and earnings supplement, both of which are available on the Public Shareholders section of our website. We may also reference our August 2020 merger presentation, which is again available on our website. Some brief housekeeping before we begin our call. As you know, based on SEC staff guidance issued on April 12, 2021, regarding the accounting treatment of certain warrants, on May 10, we filed our 2020 Form 10-K/A. We also expect to file a post-effective amendment to our Form S-1 shelf registration statement next week and will seek effectiveness as soon as the SEC staff gives us the go ahead. As you know, this restatement was in no way unique to GCM Grosvenor. The guidance issued by the SEC staff impacted numerous companies with warrants containing certain characteristics and resulted in many similar restatements. Importantly, while the liability treatment of the warrants will result in some volatility in GAAP earnings, our cash flow and key non-GAAP metrics such as fee-related revenue, fee-related earnings, adjusted EBITDA and adjusted net income will not be impacted. Pam will discuss this in more detail later on the call. Our goal is to continually improve how we communicate with our shareholders. In that spirit, we look forward to your feedback, and we'll endeavor to continually improve in this regard. Thank you again for joining us. And with that, I'll turn the call over to Michael.

Michael Sacks, Chairman & CEO

Thank you, Stacie, and thank you to all of you who are listening to this call. The first quarter of 2021 was a strong quarter, leaving us on track to achieve the 12% to 15% full year 2021 over 2020 fee-related revenue growth and the 15% to 20% fee-related earnings growth we highlighted on our last earnings call. On Slide 4 of our earnings presentation, you can see we enjoyed continued momentum across the business in the first quarter of 2021. I am pleased to report that for the first quarter of 2021, we raised a total of $2.5 billion as the environment for alternative investment strategies remained robust. Looking forward, activity levels remain high, and our pipeline continues to be encouraging. As of March 31, 2021, our fee-paying assets under management stood at $53 billion, an increase of 12% compared to March 31, 2020, and an increase of 3% compared to December 31, 2020. Our contracted not yet fee-paying AUM stood at $7.5 billion as of March 31, 2021, an increase of 38% as compared to the same time 1 year ago and an increase of 6% as compared to December 31, 2020. Our contracted not yet fee-paying AUM now represents embedded incremental annual management fees of $36 million, an increase of 33% from the $27 million at the end of the first quarter of 2020 and a 6% increase from the prior quarter. Moving to Slide 5. In the first quarter, we experienced net inflows of $205 million in our absolute return strategies vertical, marking a continuation of the improvement in the fund flows environment for that strategy. While pleased with this result, we continue to maintain our base case of flat flows for absolute return strategies for the full year 2021. It is worth noting that our fee rates across the firm in each of our verticals were stable, and any changes in fee level were largely a result of the mix of fundraising by vertical and whether fund flows related to primary, secondary co-investment or direct investment activities. Solid fundraising for specialized funds and for secondary co-invest and direct investment activities provide support for our current fee levels and opportunities going forward. During the first quarter, approximately 73% of our fundraising came from existing clients with 27% coming from new clients, a return to a more normal split inside of our typical 50% to 80% new funds from existing clients. This was expected as we move further away from the onset of the COVID pandemic. For the first quarter, we saw our fee-related revenue increase by 7% as compared to the same period last year and increase by 4% compared to the fourth quarter. Drilling down a bit, our private markets management fees grew by 11% and 5% over the last year and quarter, respectively. You can see this on Page 13 of our earnings presentation. Based on contracts that we have already won in 2021 and our base case assumptions regarding the timing of the turn on of fees from our contracted not yet fee-paying assets under management and distributions to clients, we believe that today, we have private markets fee-related revenue growth before any additional fundraising of at least 9% for the full year 2021. It goes without saying that we have more than half of the year remaining, and we'll continue to raise private market funds. For the quarter, our absolute return strategies management fees were up modestly over the prior year and quarter with gains of 2% and 3%, respectively. You can see this on Page 13 of our earnings presentation. We continue to believe that the market perception of the absolute return strategies vertical and its attendant market valuation are conservative. If you look at Slide 6, you see that our fee-related earnings increased by 43% over the same period a year ago. As expected and mentioned on our last call, our fee-related earnings were down compared to the fourth quarter of 2020 due significantly to the timing of certain expenses that Pam will elaborate on. It is worth noting that our fee-related earnings margin increased to 30% from 23% over the last year and that we expect continued margin improvement as we move through the rest of 2021. In the first quarter, we enjoyed an increase in incentive fees over the first quarter of 2020. Because the majority of our annual performance fees do not crystallize until December 31, comparisons of incentive fees between the first and fourth quarters are not relevant. We are pleased to report that as of March 31, in addition to the realized first quarter incentive fees, there were more than $18 million of embedded unrealized annual performance fees that are eligible to be realized in 2021. For the quarter, we saw growth in the firm's investments of 15% from the prior quarter and in the firm's share of unrealized carry at net asset value of 36%, bringing these numbers to $92 million and $181 million, respectively. These numbers represent the totality of the firm's share of investments and unrealized carried interest at net asset value before deducting the Mosaic-related noncontrolling interest. It is our intention to exercise our call option and acquire the Mosaic-related noncontrolling interest prior to the end of this calendar year. We believe that the exercise of that call option will be accretive to the firm. The earnings presentation contains information on Mosaic on Page 32. We continue to feel good about our investment activities in terms of recent performance and about the investment opportunity set. We remain confident in our ability to add value to our clients' portfolios across verticals. We also continue to feel good about having gone public late last year and continue to believe that it will help us deliver to all of our constituents. It is worth mentioning that we believe we meet the criteria to be added to the Russell 2000 index this June. Finally, we have made and continue to make investments in our team related to our public company status. And also, in particular, as Jon will discuss, have invested and intend to continue to invest in our business development team, which we expect will produce a good return on investment. And with that, I'll turn the call over to GCM Grosvenor President, Jon Levin. Jon?

Jonathan Levin, President

Thank you, Michael. Michael touched on the continued growth in the earnings power of the business. That momentum is a function of the environment generally, in combination with our platform's unique ability to offer investment solutions across the entirety of the alternative spectrum. The breadth and depth of our client value proposition enhances our ability to grow and evolve with our existing clients and begin relationships with new investors. Turning to Slide 7. We continue to benefit from a strong fundraising backdrop across private markets, in particular. We also benefit from our strength in customized separate accounts given the market's continued interest in heavily tailored programs. Of the $2.5 billion of capital raised in the first quarter of 2021, more than 80% of that capital was for customized separate accounts and 75% was for private markets strategies. More than 50 clients contributed capital, of which approximately a quarter were new clients. Michael already mentioned the positive net flows in absolute return strategies for the first quarter, which is a function of the more positive investor sentiment toward the strategy given the strong recent risk-adjusted returns. Regarding specialized funds, we are currently raising or anticipate raising capital across six specialized funds. In 2021, we are in the market with four of those funds: first, our advance fund which is focused on investing in and alongside minority and women-owned managers; second, our secondaries fund or GSF III; third, our diversified infrastructure fund or CIS III; and finally, our multi-asset class direct investment fund or MAC III. All four funds will be raising capital through the end of 2021. And of these four funds, only the advance fund will have its final close this year, which will be at the end of the year. We also expect all four funds to have multiple closings throughout the year. As a result, catch-up management fees should increase total management fees in the back half of the year, in particular. We believe this dynamic will persist into 2022. Our existing clients continue to be a significant source of fundraising. In this quarter, more than 70% of capital raised was from existing clients. More than 95% of our top 25 clients have added capital in the past three years, a significant endorsement of our value proposition and the strength of our relationships. We've intentionally structured our business model to evolve and grow with our clients. Oftentimes, relationships move into new strategies. We currently work with more than 45% of our top clients across multiple verticals, up from 36% just six months ago. We also believe there's significant white space and opportunity to attract capital from new clients and new channels. Therefore, this year, you will see us invest in our business development team to drive client connectivity in certain regions and certain channels that are historically underrepresented in our business. To this point, we recently announced that we will establish a new office in Toronto with two new hires. We believe we have significant opportunity for incremental growth in Canada and are excited by our new efforts there. With regards to investment activity, we are very active and continue to see compelling investment opportunities across every area of the business. In the first quarter, we invested approximately $3.4 billion of capital across more than 100 investments, making this a very active period. The power of our sourcing engine, which draws from every area of the alternatives universe in a highly open architecture fashion, contributes to our competitive edge. Importantly, we are generating competitive performance across each of the verticals. In absolute return strategies, our trailing 12-month performance was 21.5% net as of March 31. Within private market strategies, we saw a 25% increase in unrealized carry from year-end to March 31, which speaks to the significant appreciation in our investments during that period. One particular highlight within the business was the performance of the products managed by our Strategic Investments Group, which is a team that leverages the sourcing of our full platform to make direct and co-investments. The combined IRR of our multi-asset class funds, which are closed-end, private market-style funds, increased from 20% to 29% in the first quarter. Our special opportunities fund, which is a more liquid open-end vehicle, has a year-to-date return through March 31 of 18%, and the fund's return over the last 12 months is 65%. As Michael noted earlier, we remain excited about the investment opportunity set generally and our ability to generate attractive performance for our clients. Now I'll turn the call over to Pam to address our financial performance in more detail.

Pamela Bentley, CFO

Thanks, Jon. Before we get into our performance this quarter, I want to briefly address the SEC statement on warrant accounting and its impacts on our GAAP fourth quarter results in the amended 10-K that was filed earlier this week. As a result of the SEC statement, we determined that based on the tender features of our warrants, they should be classified as liabilities and marked to market each reporting period. Based on the change in our warrant fair value, from the time of the public offering through the end of December, we recorded a nonoperating expense of $13 million in the fourth quarter. The fair value of the warrant subsequently declined in the first quarter, resulting in a more than offsetting $14 million of nonoperating income. These changes did not impact our non-GAAP financial measures or cash position, and they will not be impacted going forward. Turning to our performance in the quarter. I'll begin on Slide 8. As Michael noted, we are very pleased to see the investments we've made in recent years continue to come to fruition and benefit our assets under management and financial performance. On a year-over-year basis, our fee-related earnings, adjusted EBITDA and adjusted net income all increased, illustrating the continued positive momentum of our business. Fee-paying assets under management grew 12% over the prior year and grew 3% from the fourth quarter, which portends solid growth for the second quarter. Going one level deeper, fee-paying assets under management and management fees grew for both private markets and absolute return strategies. We also saw stable average fee rates across the business this quarter and expect this fee stability to continue. This quarter, our catch-up management fees related to our specialized fund fundraising included in our fee-related revenue were $1.5 million, which is approximately $1 million higher than last quarter. As we continue to raise our specialized funds, we will see ongoing catch-up management fees and expect them to be higher in the third and fourth quarters and continue into next year. Regarding incentive fees, as Michael noted, we received $6 million in annual performance fees in the quarter, related primarily to a specific program that crystallizes its fees on March 31 of each year. As you saw last quarter, the vast majority of our annual performance fees crystallized in the fourth quarter. And other than a few accounts, we expect that to continue to be the case. Turning to our operating expenses. As we have previously discussed, they increased in line with our expectations. I mentioned on our fourth quarter call that some of our compensation-related costs are seasonal in nature. During the first quarter, the combined impact of timing of our bonus payments, payroll taxes and 401(k) contributions drove $2.5 million of higher expenses over the fourth quarter. Headcount was relatively stable in the first quarter. We expect headcount and compensation to increase throughout the year as we continue to invest in public company-related personnel and make strategic investments in certain business development professionals. As also mentioned on last quarter's call, in March, we granted 4.8 million restricted stock units related to our public offering. This transaction-related grant saw 2 million shares left in March, with the remaining 2.8 million shares scheduled to vest over the next 2 years. This resulted in $27 million of GAAP compensation expense relating to the restricted stock units in the first quarter. Our general administrative expenses increased by $2 million in the first quarter, in line with our expectations and consistent with our fee-related earnings goals. As Michael mentioned, we are on track for our target fee-related revenue growth of 12% to 15% and fee-related earnings growth of 15% to 20% for 2021, with our growth accelerating through the remainder of the year. We continue to deploy capital and raise additional capital across the firm, including in our specialized funds. As illustrated on Slide 10, our embedded revenue from annual incentive fees, largely within our ARS vertical, continues to increase and provide significant opportunity for future revenue and earnings growth. The potential value from annual performance fees has nearly doubled over the last 4 years and is now above $41 million on a run rate basis. Our carried interest position has also continued to grow and diversify over time. We enjoy considerable carry dollars at work, which are not yet reflected in unrealized carry and will provide incentive fee earnings power for the future. At quarter end, we had $491 million in unrealized carried interest, which is a 29% increase over the first quarter of 2020. As a reminder, our carried interest pool is unique in its very high level of diversification. Our unrealized carry is spread amongst 121 programs and dozens of contributing investments. Today, the majority of aggregate unrealized carry has been contractually awarded to employees or transferred as a part of Mosaic, which was an opportunistic transaction completed early last year, where most of our balance sheet investments and our rights to carried interest were transferred to a third party in exchange for cash. As Michael discussed, given the significant value in its rights to future carry and investments, we intend to exercise our option to repurchase Mosaic by year-end. We anticipate the repurchase will be accretive. Turning to Slide 14. Our cash balance at quarter end was $156 million. Alongside the amendment and extension of our term loan and revolving credit facility in February, we used proceeds from going public to pay down an additional $50 million of debt and in the process, reduced our interest rate. As a result, our quarterly interest expense is expected to be closer to $3 million starting in the second quarter of this year compared to $4.5 million in the first quarter. We also generated over $20 million in cash from the exercise of 1.8 million warrants in the first quarter. In summary, our strong performance demonstrates the culmination of our platform expansion efforts as well as an exciting preview of our future growth. Given industry tailwinds, a robust fundraising pipeline and multiple avenues to grow our assets, combined with our scalable platform, we are excited about the future momentum of the business. We're now happy to take any questions.

Operator, Operator

Our first question comes from Ken Worthington with JPMorgan.

Samantha Trent, Analyst

This is Samantha Trent on behalf of Ken. The first question is just on the absolute returns business. So Grosvenor funds have been beating the hedge fund return indices in recent quarters and this quarter kind of looked a little bit below. So just wondering how did the events of the first quarter like the meme stocks and even the impact of Archegos impact the absolute returns business? And then looking at the bigger picture, how is January and to what extent were Grosvenor investments impacted by the meme stock phenomenon?

Michael Sacks, Chairman & CEO

Thank you for that. It's Michael Sacks. We believe that during times of extreme volatility, there is significant dispersion in the market that benefits our business. This underscores the value of our approach, which involves managing a comprehensive, holistic portfolio that is diversified, ensuring that no single strategy, manager, or market can unduly affect our results. The meme stocks, which certainly captured attention for a while in January, and Archegos did not have a major impact on our performance. In fact, we believe the value of our strategy is reinforced by these events. As we noted in our comments, demand, pipeline, and interest levels are quite high, and the sentiment in the absolute return space has significantly shifted since the third quarter of last year.

Samantha Trent, Analyst

And then just to move to expenses. In terms of G&A, where the numbers pretty clean this quarter? And is this a good base to look at for expenses in coming quarters? And then for core compensation costs, I think you already talked about this, but we are expecting these to grow through the rest of this year and then into next year?

Michael Sacks, Chairman & CEO

So I'll take a shot, and then Pam, if you want to add in, please, but we budget carefully. I'd like to think we budget conservatively, and we manage tightly with regard to our expenses and our headcount and our compensation. And I think that the expenses were in line with our expectations. They were consistent with comments that we made on our last earnings call with regard to the seasonality of certain expenses and are consistent with us achieving our 15% to 20% FRE goal this year, which we are standing by. Pam, I don't know if there's anything to add or not.

Pamela Bentley, CFO

Samantha, yes, just to the second part of your question on is this an appropriate level. Yes, we think this is an appropriate level. We could see this tick up modestly if some of the pre-COVID-related travel expenses start to resume, but we wouldn't expect that in full. So again, as Michael said, this is embedded in our 15% to 20% FRE growth.

Michael Sacks, Chairman & CEO

I would like to highlight that our FRE margin has grown nicely from Q1 2020 to Q1 2021, and as Pam mentioned, we anticipate continued margin expansion for the rest of the year. We believe there is operating leverage in the business, which is also relevant to our discussion.

Samantha Trent, Analyst

And then just one more. Moving to private market assets. The distributions of around $900 million were a bit elevated relative to prior quarters and years. Just any color that you can share here and given the market conditions, in your analysis, if you have any color on the terms of the pace of distributions going forward, walking through to the end of the year?

Michael Sacks, Chairman & CEO

I believe we discussed this during our fourth quarter earnings call. We experienced a slowdown in activity, including deal-making last year due to COVID. We expected that activity would increase and become more vigorous, leading to more transactions and subsequently higher distributions. That is indeed what occurred. I think the current activity levels are strong, and we anticipate sustained high activity throughout the rest of the year. This outlook is reflected in our models, and you can observe it in the carry revenue to some extent as well.

Jonathan Levin, President

And Samantha, this is Jon. I would just add that in general, over cycles, there's a strong correlation between robust capital raising activity and being driven by elevated distributions or return of capital to clients. So when Michael talks about it being embedded, it's because the two are very much related. So clients are receiving capital back sooner and larger because of a healthy exit environment that would typically speed up the cycle by which they would make new commitments and potentially larger commitments. And so there's a healthy relationship between those two important metrics for the business.

Operator, Operator

Our next question comes from Adam Klauber with William Blair.

Adam Klauber, Analyst

You're having a lot of success, obviously, with this current round of new funds. As you know, we think about the business longer term. When we look at '22, '23, is it likely we'll see more specialized, more secondary funds? Those seem to be particularly successful. Just some general thoughts about what that next round or next tranche would potentially look like?

Michael Sacks, Chairman & CEO

Thank you, Adam. Thank you for the question. Of the funds that are in market now, as Jon mentioned, only the advanced fund will have a final close at the end of the year this year. So three of those funds will stay in market, including secondaries into next year, and we'll continue raising. And then we have other specialized funds that from a perspective of their cycles will come on and come into the market for the next fund. So I think Pam also touched on the fact that we see continued specialized fundraising through the end of the year, we see catch-up management fees for that. We see that continuing on into next year, and it's kind of part of the firmament of the firm that will continue and be present in '22 and in '23.

Adam Klauber, Analyst

Okay.

Michael Sacks, Chairman & CEO

And beyond.

Adam Klauber, Analyst

Okay. Regarding this quarter, raising $2.5 billion is a clear indication of a very strong performance. Was there anything unusual that contributed to such a strong quarter, or was it simply the result of a combination of various efforts that you've mentioned?

Michael Sacks, Chairman & CEO

So Jon talked about the breakout between custom separate accounts and specialized funds. We saw the flows and we see demand and we see pipeline across all of the verticals. So what was interesting and nice about the quarter was every vertical had growth and had net inflows. And the interest levels and activity levels across the entire firm are good.

Adam Klauber, Analyst

Okay. So it sounds relatively diverse, not some big onetime hits.

Michael Sacks, Chairman & CEO

I wouldn't characterize it as significant one-time events. Infrastructure received the most investment, but I don't believe these are just one-time occurrences. There is a sustained high demand for infrastructure, and we expect this growth to continue for some time. All sectors contributed, with infrastructure being the largest. This reflects strong demand and activity levels rather than any isolated event that we don't expect to replicate.

Jonathan Levin, President

Adam, this is Jon. I would say not only was it diverse, as Michael said, by investment vertical, but also the source of the capital was diverse. So we saw it across geographies. We saw it by different types of investors, different investor types, and so it was pretty well rounded in kind of all regards.

Adam Klauber, Analyst

Okay. That's helpful. And that was actually my next question, I think. If I heard correctly, you said maybe 75% of the funds came from existing clients, 25% from newer clients. Could you, I guess, give us some idea of the mix of those newer clients? Are those new categories? Or just some flavor for who are some of the newer clients you're interacting with?

Michael Sacks, Chairman & CEO

Yes. I think...

Jonathan Levin, President

I would say that it would be a similar mix to the existing clients, but just new clients in those channels. So I wouldn't drive a particular conclusion around it's a certain type of client or a certain geography that's new. I think that in general, the ability to provide broad-based solutions in different implementation styles across the different alts verticals enables you to generate new client relationships. And I personally wouldn't pull, maybe Michael has a different comment, a particular theme around the types of clients. I would say it's just more of the diversified client base that we have today.

Michael Sacks, Chairman & CEO

Yes. If you're looking for a change in the market, it would relate to the shifts in the environment concerning absolute return strategies. The private market strategy is quite expansive, as Jon mentioned, covering multiple channels and geographies, both established and new. If you were to identify the most significant evolution or change from six months ago, it would be the heightened interest levels, inflows, and activity surrounding absolute return, which has seen substantial improvement.

Adam Klauber, Analyst

Okay. And more on the private market. Given the type of funds you are bringing in, should we expect the fee rate to be more stable, increase, or decrease? What’s your expectation in the private markets?

Michael Sacks, Chairman & CEO

Our fee rates have remained stable across the firm. As I mentioned earlier, the changes in fees are more influenced by the type of investments, such as whether they are primary, secondary, co-investments, or direct investments. Generally, secondary, co-investments, and direct investments have higher fee levels. We have observed, along with the industry, an increase in flows towards secondary and co-investments, which typically carry higher fees for solutions providers. This trend is positive for average fee rates over time.

Adam Klauber, Analyst

Okay, great. And then as far as the margin, again, a really nice pop in the adjusted EBITDA margin. And you've been talking about that for a little while, so it's great to see that come through. From a seasonal aspect, are there things we should look for in the second or third quarter, in particular that could move up or down the margin?

Michael Sacks, Chairman & CEO

The most important point to highlight is that when raising funds for specialized purposes, the presence of catch-up management fees and multiple closings throughout the year creates a gradual increase in revenue recognition, which tends to ramp up in the latter part of the year. We've previously discussed this, and it's crucial for everyone to keep this in mind. Pam mentioned this in her comments, and it is likely the key factor that we should all be aware of.

Operator, Operator

Our next question comes from Peter Kaloostian with Morgan Stanley.

Peter Kaloostian, Analyst

Just hoping you can elaborate on the Mosaic purchase and walking through the mechanics of how you'll exercise that and then just the potential impact to the P&L?

Michael Sacks, Chairman & CEO

Thank you, Peter. We plan to exercise our call option on Mosaic by the end of the year. We have been discussing the timing for this for a while now. The net purchase price is $88 million, and we have several funding options for this exercise. We believe it will be beneficial for us. As we approach the end of the year and commit to exercising the option, we will assess different capital costs to optimize for the firm. We are confident in this commitment due to both the size and positive nature of the investment.

Peter Kaloostian, Analyst

And just a follow-up. You spoke on increased investment and business development and specifically with the new Toronto office. Just hoping what opportunities do you see in Canada?

Michael Sacks, Chairman & CEO

We have the go-ahead.

Jonathan Levin, President

I would just say it's similar to the opportunity set that we see in geographies around the world. So we've talked in the past about areas where we have a very strong presence, particularly in the United States and U.K. and Switzerland, parts of Europe, very strong presence in Asia, and then some other areas where we feel like, given the breadth and depth of our capabilities and the endorsement of those capabilities with institutional investors globally, that we should be able to similarly service clients in the regions or the channels where we're underrepresented. And so I would say it's not necessarily different from the capabilities that we offer to clients in other parts of the world, but it's really just establishing a stronger presence there with an office with two individuals to help develop some deep relationships with investors in the region.

Operator, Operator

And I'm showing that, that's all the questions we have for today. I'd like to turn the call back to management for any closing remarks.

Michael Sacks, Chairman & CEO

Thank you all very much for joining the call, for listening, and we look forward to speaking with you again soon. Thank you very much.

Operator, Operator

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.