Conference Transcript - LMRI 2026-09-09

Operator

All right. Thanks everyone for joining us today. You know, we're very pleased to have Lumexa with us. So Lumexa is one of the largest providers of diagnostic imaging services in the United States. With us from the company are Caitlin Zula, CEO, and Tony Martin, CFO. Also have Sue Dooley here from Investor Relations. So thank you all very much for coming to the conference. Really appreciate it. You know, first want to give you an opportunity to make, you know, I guess first any introductory commentary if you want to. And then, you know, if not, happy to just jump right into Q&A as well.

Speaker 1

Sure. Very happy to be here. Thank you for having us, Stephen.

Operator

So you are a very recently new public company. I think it was in the last December, so some investors are still getting to know the story Maybe you could provide a quick summary, I guess, first, just the type of services you provide, maybe a quick overview of your JV strategy, which we'll certainly touch on more throughout the discussion, and any kind of differences versus maybe public market competitor strategies that people should be aware of.

Speaker 1

So Lumexa Imaging, we are the second largest scaled provider of outpatient imaging services. We provide our services in centers called IDTFs, Independent Diagnostic Testing Facilities. We have 190 centers located in strong MSAs that have above-average population growth. Think great markets like Dallas, Denver, Atlanta, and Charlotte. it. We have grown by both acquisitions and de novos over time. We've had a recent focus on our de novo strategy. You know, in last year, we opened up nine de novos, a record in company history, on track to do another eight to 10 this year and see that as a meaningful source of growth as we look to the future. As you referenced, we have a joint venture focus. About 50% of our sites are joint ventures with leading health systems. Think Baylor, Scott & White, Integris. We just announced Hospital for Special Surgery on our Q2 call, UPMC. Why we love working with health systems is that in any market, we're always looking for what is our enduring value proposition. And working with a health system allows us to think through our rate strategy, as well as utilization of our centers within their network. In terms of reference public company comps, we are honored to have RadNet as a public company comp, very much focused in the same space. They are admittedly a little further down the path than we are. We're early innings of our public company journey. We went public in December. Most meaningful differentiator is just how we approach technology, which I'm sure we'll talk about in a little bit. We have more of a partnership approach using best-to-breed partners while they have a build or buy strategy. Okay.

Operator

Yeah, fantastic. And then just we think about the underlying market that you participate in. I think in the past you've sized outpatient imaging as a $33 billion subset of the radiology market growing at 7%. I mean, what are the key factors that support that growth? And I guess when we think about the growth, how would you contrast the growth and what you would describe as a kind of routine imaging versus advanced image inside that?

Speaker 1

Yes. So imaging is an exciting industry to be in. Radiology writ large is $120 billion TAM growing at a 4% CAGR. And then, as you said, Stephen, outpatient imaging is a $33 billion TAM growing at a 7% CAGR. What is driving that? First, you have the overall drivers of healthcare utilization writ large. You have an aging population, and you have a migration to lower-cost sites of care. I referenced we provide our services in IDTFs, Independent Diagnostic Testing Facilities. They are outpatient entities that are reimbursed on the physician fee schedule, so we are not on the HOPD rates and about 60% lower costs. So that site-of-service trend you have to high-quality, lower-cost sites-of-service modalities, that is benefiting outpatient imaging. And then when you think about imaging itself, imaging contains both advanced imaging and routine. We focus on both. Advanced would be your MRI, your CT, your PET scan. Your routine would be more of your diagnostic and screening mammogram, ultrasound, X-ray. Advanced imaging is growing as a percentage of our total scans on our Q2 call. We mentioned that now we're up to 37.4% of our overall imaging volume through advanced. it's 111 basis point improvement year-over-year and what's driving that is increased screening mandates you have more chronic complex conditions and you have novel treatment paradigms you know things like your pet diagnostics your new radio farmer tracers and even you know future things like their agnostics all all driving and accelerating the growth of advanced and then when we think about why we focus on advanced advanced have about a three times revenue premium compared to routine and so certainly it's a significant driver of our overall revenue and margin growth okay got it then I guess how do we think

Operator

about you know the the company's aspirations for organic top-line growth I guess in contrast the market growing seven percent I guess you know do you aspire to grow in line with that do you think there's opportunities to do to do better over time and as you think about how that's going to show up in you know the P&L I guess how should we think about the you know the components between I mean, same store, volume growth, kind of same center, mix or rate. I guess how much is coming from really opening de novos on an annual basis?

Tony Martin, CFO

Yeah, on an outpatient basis, which is 85 plus percent of what we do. We've been growing revenues, same site, about 6%. So 6% to 7% is a place we feel comfortable in as a baseline for for what this company can do. That's largely been achieved without much in the way of de novos the last few years, and that's really changed a lot as we started reemphasizing that in late 2024 and 2025. But that baseline, 67% revenue, is about two-thirds from volume and about one-third price. And when I say price, I mean a couple of things. About half of it is just an escalator in our commercial book, maybe 1% or 2%. And the other half is an increase in revenue per unit that we see based on the advanced imaging growing faster than the rest of our business, as Caitlin described. It reached a record high in Q2, and it continues to be a bigger piece of the pie. So that pulls up our revenue per unit. So that revenue growth drives about a 7% EBITDA margin plus in our current state, but there's opportunities to overdrive that with the de novos that we talked about, opening four in late 2024, and then nine and 25 on track for eight to 10 this year. as those mature those will we believe drive higher growth rates while they're ramping because that's a two or three year time span where they ramp toward maturity so with all that as our organic there's also a great M&A opportunity in this in this space because it's very fragmented reminds me a lot of the ASC space 10 or 15 years ago so you know the main reason we went public was to strengthen our balance sheet and improve our cash flows so that we could put some of that money to work selectively and strategically adding sites through M&A. So you'll feel really good about that overall long-term algorithm.

Operator

Okay, great. And then we think about the faster growth that we've seen in advanced imaging. I guess maybe talk about some of the factors in the background that you think make that durable, whether it's changes in how medicine in his practice, scientific advancement, like what gives you confidence in this being something that, you know, we're not going to see, you know, real moderation, and then there's just going to be continued, you know, sort of durable trends in that part of the algorithm?

Speaker 1

Yeah, you know, when I think about how do we continue to focus on advanced, you know, first, I mean, there are really exciting, exciting treatment advancements in advanced imaging, you know, again, I referenced PET, Lumexa has historically focused on MRI and CT, that's been our core, bread and butter. we have eight pet machines and you know throughout this year we've talked about the goal to add three three on a basis of eight significant growth rate we have already opened two as we shared in our Q2 call one in Arizona and then one in South Carolina on track to add the third and as part of that we're expanding the tracers that we're supporting you announced that we're now doing flora estridol for breast cancer estrogen receptive patients and so there's so much coming down the path around pet advancements radio tracers and then And again, you know, the next wave of Theranostics that we're in the early days of talking to our physician partners about. And then, you know, the other exciting part of this industry is, you know, the advancements in improving the capacity within our existing machines. So with an MRI, we've talked a bit about FASCAN, that truncates the amount of time it takes to do an exam for an ankle MRI and a Siemens machine, 22 minutes down to eight. So you get about 40% incremental capacity on a machine. And then there's also really exciting things around virtual MRI, how we're able to do run a machine without a tech on site, you know, working in a virtual cockpit, ensuring that if we have a tech who has a family issue or can't show up the day, we can still make sure that the machine's operational. So all of that is how we're driving the continued growth of advanced and, you know, just continue to be excited to see, you know, what else comes down. I think there's going to be further advancements in AI algorithms that improve access as well.

Operator

Great. That's really helpful. And then I guess as the company thinks about, for example, the pace of the pet rollout, what keeps that from, I guess, happening more quickly? I mean, when you see the progress you've made already, it almost seems like you could have one of these. In every center, I'm sure there's reasons why you don't. What are those reasons, and what do you think about the pace in that opportunity?

Speaker 1

Yeah. So when we think about pet, first is always we want to make sure that we've got the reimbursement structure. do it and to get paid appropriately the isotopes are expensive often more expensive than the technical component of the exam and so you know very simply when you're working with a commercial payers you want to make sure that the isotope is paid separately the other piece is it may sound silly but it's about space we are really purpose-built each of our centers is about 6,000 square feet you know really built out to have two MRIs CT and ultrasound and an x-ray where we have a second MRI room that's shelled out but not fully built with the machine yet, we'll look to see which would be more creative, adding the second MRI or adding the PET. Oftentimes, it's actually the second MRI because we can leverage the scale that already exists around the techs, the sales force in the market. And then, you know, so we want to make sure we've got space. And then, as always, we need to make sure we've got the appropriate connectivity to referrers in the market. As we're doing new de-novos, especially with our health system partners, we are absolutely bringing PET into the conversation much earlier so we can decide, okay, would this be a pet site? In every site that we open, you do not need a one-for-one MRI to pet. There is not that much demand in the market, but being very intentional around here's our strategy for the MSA, how many pets we should have, and where do we build them?

Operator

Okay, that's helpful. When we think about reimbursement in this part of the business, one of the things that's been notable is just that advanced imaging reimbursement, I believe, is around three times higher than routine imaging reimbursement. I guess just big picture, Like, how should we think about how reimbursement is determined in this market and what makes that level of reimbursement, like, durable in your perspective and in the eyes of the payers as well?

Speaker 1

Yes. So advanced imaging, as you said, is about three times the rate of reimbursement of routine. And that is structural. You know, it is intentional due to increased cost and complexity to do an advanced scan. It's not arbitrary. You know, things that add the cost or complexity would be, one, just the cost of the machine. often a multiple, more expensive. Two, you need space, as I was just talking about for pet. Three, you need more experienced technologists, you need oftentimes longer scanning protocols, and you often need contrast or pet isotopes, you know, supplies that have an increased cost. And so, you know, it really comes down to what is the structural nature. You know, when we think about payers, and happy to talk a little bit about the reimbursement landscape, you know, Payers have already really enacted strict utilization protocols in imaging. You know, they have authorization requirements, and, you know, so we're not in a place where there's overutilization. You know, I should have said, even as we think about the market, in many of our centers, we have backlogs. Many markets we walk into, they are without, that do not have an advanced imaging strategy yet. They're operating at a two- to three-week backlog from MRI or PET. But so it's not a place of overutilization, but the real savings opportunity comes from site of service moving from that higher cost hospital or outpatient department down to an IDTF, which, you know, we see kind of the initial stripes that when you look at the hospital outpatient proposed role.

Operator

Okay, fantastic. And then obviously I understand why all the, you know, a lot of the focus anyway is on the advanced imaging side of the business. I guess when we think about, you know, what you characterize more as the routine kind of part of the business, I guess, what are the key trends to be mindful of? Are you still generally looking to kind of grow and invest in this business despite, you know, the reimbursement being maybe less attractive in the advanced imaging side? And just generally, like, how you think about this business as part of the overall strategy?

Speaker 1

You know, as, you know, our whole strategy is we want to be referring providers one-stop shop. We want you to send us all of your imaging. We don't want you to have to pick or choose or think about it. And so we offer routine imaging, especially things like x-ray, because it serves the needs of referring providers. It is not something we intentionally incentivize our sales team to go get. We have over 120 sales reps in the market really focused on selling our value differential against other providers. Obviously, our amazing patient satisfaction scores, our lower price point, our quick patient access, and then our sub-specialized radiologists who provide exceptional reads at a good turnaround time. When we think about routine, you know, we are incredibly intentional about, you know, which markets do we need to add additional routine modalities as we're continuing to do our de novo growth. And so you will see us continue to grow routine, but it doesn't have that incremental incentive or focus. You know, the one thing I'll call out is maybe mammography. Mammography, we've got areas of focus where we have incredible women's health brands, thinking Charlotte, South Jersey, Arizona, up in Buffalo. And there, we'll always make sure that we're continuing to grow and serve our patients. We talked about in Q1, a little bit of delay in our mammal volume due to some of the weather. And so really excited to see the return of that in Q2.

Operator

Had a 2.6% quarter-over-quarter growth rate, about 6% sequential growth rate from Q1 to Q2 in our mammal volume. yeah that's good to hear and then we'd come back to the JV strategy a little bit I mean partnering with hospitals through these JVs is a core part of your strategy when you think about it from you know the hospital perspective I guess help us understand the hospital's thought process you start to engage in these conversations like what makes this an attractive proposition for them how do the economics of these partnerships work and how it kind of compares to or interacts with opening just kind of de novo clinics as an alternative to that in those markets if you don't have JV Partners?

Speaker 1

So I said about half of our centers today are with joint venture partners, and we're having exciting conversations with a large number of systems, all in a different variety of stages. How the conversation usually starts is around access. They know that they are struggling to get patients quick access to imaging, and imaging is often the front door to downstream care, things like oncology or neurology or orthopedics and they're worried about patient leakage and once they leave to go somewhere else for the imaging they might not come for the rest of their care and you know there you also hear the stories of just it taking two to three weeks to get an MRI you know in some markets it's it's over a month to get a pet and so you know it starts with that patient care and access you know for us when we come in you know we talk through our joint venture strategy and the fact that you know we've got this best-of-breed operating model, you know, for better or worse, we're a focused factory. This is all we do. You know, we know how to open up a center for about $4 million in CapEx. Half of that is equipment leases. Our standard model is they have 51, so they can lead managed care contracting. We have 49. And, you know, we have our proof points of our joint venture partners that are happy to talk about the success they've had with us. I think, you know, Tony referenced, you know, coming from the ASC industry, we both have an ASC background. I was at SCA surgical care affiliates, SCI Health, Tony at USPI. And I also think health systems have seen the benefits of a proactive outpatient ancillary strategy, whether it's in ASCs or urgent cares. And we're able to say it's very much a similar playbook, just in outpatient imaging. So I think you also have that pattern recognition as well and, you know, nice economic returns.

Operator

Yeah, that's good to hear. And then, you know, you announced HSS recently as your most recent JV partner. And obviously it's an interesting one given their position in all the orthopedics rankings I think seems essentially the top provider in the US and I think often the world maybe talk about how that partnership came about obviously it's a little bit unique given the surgical focus of that provider and just how to think about I guess the scope of it and the timeline to when you know you might start seeing some of the development related to that actually impacting the financial results yes so HSS we are incredibly honored to have been selected by them to be their joint venture partner.

Speaker 1

This is our second JV partner in 12 months. The one we announced previously was UPMC. So we're, as I mentioned, we're having health system conversations in multiple different ways. HSS was looking for an answer to extend imaging closer to their patients' homes and not have to come to the west side of Manhattan for all their imaging care. We, through, again, Tony's in my background working in ASEs, we also are private equity sponsors Welsh Carson, long relationship working with health systems in productive joint ventures, and then we have a remarkable board of directors, including Brett Broadnax, former chief development officer of USPI, and I think maybe chairman today. So we have the reputation of being able to work successfully in joint ventures and creating true win-win structures. For HSS, it was a great discussion around the clinical quality, how we measure it, our care protocols, our intentional measurement around adverse events, things of that, that first got them comfortable in working with us, because obviously their clinical brand is paramount. And then as we think about growth, this will also be a de novo strategy, at least to start. we are working on sites in New York City metro outside of like the core island of New York City for obvious space reasons and you know in terms of contribution this will be a bit little bit longer of a burn mostly because New York has CON requirements that we need to make sure we're working through but team started moment the contracts and signed and excited really excited and honored to be able to work with them yeah that's that's great and then you You know, when you think about the pacing of de novos, I guess when you have these large JV partnerships that you've announced more recently, is how does that influence that?

Operator

Does that maybe, like, to some degree replace JVs that you might have done without these JV agreements in place? Are they additive so that the total number of JVs is higher than kind of the 8 to 10? Like, how do you think about that as impacting the de novo cadence?

Speaker 1

Yeah, maybe I'll start because a big picture and Tony will turn it about how we select joint ventures or how we select our de novos and where we choose to invest our capital. You know, when we think about Lumexa and what we promised the public market, you know, we know we can continue to grow our same site growth at, you know, 6% to 7% revenue growth. And we, you know, committed to opening 8% to 10% de novos. Joint ventures are part of creating that enduring value proposition in any market. You know, the business is pretty simple. We need rates and we need volume. We can certainly get that on our own. There's some markets like Georgia, you know, where we are very comfortable operating independently and have a strong value prop. And then, you know, there's certain markets like I wouldn't enter New York without a health system partner for obvious reasons. But, Tony, maybe I'll talk about how you think about capital allocation between the two.

Tony Martin, CFO

Sure, sure. Well, about half our sites are in these health system joint ventures. So we obviously have a lot of success and a lot invested in both types of model. And as Caitlin mentioned, we come from a background of knowing that these partnerships work very, very well over time. And they're a proven structure that we believe in very much. But it is a market-by-market analysis. Where do we need help on the contracting side or with additional referral sources over and above what our professional sales team can generate on their own? And that looks very different from market to market. So as we look at open 8 to 10 a year, that will continue to be a mix based on where we find the best projects. Signing health system partners like UPMC and HSS probably gets a bit of a tilt toward more of them being in joint ventures, but that'll take time to play in our financial results because it takes a year from when you decide you're going to open a site to get it open, and then it takes a year after that to break even, and then you're ramping pretty steeply for two or three years after that. So it is a bit of a slow burn in terms of signing a deal and having it turned into financial upside. But it's something we really believe in and the compounding power of over time.

Operator

That makes sense. And, yeah, I think you've spoken before to some of the ramp-up dynamics.

Tony Martin, CFO

I guess when you think about the return profile and maybe the time it takes to fully optimize financially, a JV de novo versus maybe just a wholly owned de novo like hypothetically in a market like Georgia I guess what does that look like like how different to those centers ultimately look like once they're mature yeah I'd say on on balance on average our joint venture centers have a bit higher margin part of that is that contracting can can be quite good in some markets compared to what we could get on our own but a lot of it is just that our joint venture structures are happen to be focused more on advanced modalities from the start. And so they have a bigger piece of their business coming from that, which really helps with reimbursement as well as margin. So we don't see necessarily any hard, fast rules on which one's ramp fastest. It really depends on the market, where the business is coming from. But, you know, as an example, UPMC has had three or four week backlogs to see patients, and that's not unusual for a health system partner. It can even happen without a partner, but when a hospital is unable to handle the demand for service, you can see quite a quick ramp as that business finds a home. So, you know, we have had very fast ramps in a wholly owned business, too. But, you know, that's an example of how it can work really well with a partner.

Operator

Got it. And then, you know, obviously the lower cost site of service, you know, is a natural, you know, advantage with, you know, at least commercial payers in particular. And then maybe more recently on the Medicare front, you know, we've seen some proposed policy that would impact imaging reimbursement for health systems, potentially strengthen the rationale for them to consider expanding or partnering on the freestanding capacity front. Because how do you think about, you know, what this rule could mean to the extent you've started to maybe like start to have conversations around more inbound interest coming out of this rule? I guess just broadly, how do you think this type of, you know, decision to finalize could impact the business over the next few years?

Speaker 1

Yes. So hospital outpatient proposed rule introduced the concept of site neutrality for non-contrast-based imaging, which is a lot of imaging. One, we are excited to see this. First, you referenced it before, we're credentialed as IDTFs who are under the physician fee schedule, not the hospital fee schedule. So it's not a risk to the business. And we think it's really validating of a lot of the conversations we're having with health systems. First, we said they need access. And increasingly building expensive facilities at assuming HOPD rates is becoming a harder decision calculus for a hospital. And so, you know, our model allows them to create access, make sure that they're retaining the patients in their network and participate in the economics. So that is, you know, obviously incredibly validating. When we think about our overall strategy, you know, we don't depend on site neutrality. You know, our value proposition was certainly resonating. And I think this amplifies, certainly amplifies the opportunity. You know, Stephen, as we think through what might happen uh you know i think this is something that it drives value uh to lumexa over years not not necessarily quarters i think hospitals have to process the final rule you know think through their strategy around imaging and you know um you know we're excited about the conversations we're already having okay great um maybe it's a good time to kind of come back to some of the the ai strategy points that we touched on earlier a little bit you mentioned your focus This is really more like best-of-breed partnerships.

Operator

I guess first, maybe talk a little bit about kind of how you came to that strategic perspective and what are some of the key things that you're using AI for inside the business today?

Speaker 1

Yes. So very intentionally, we have had a partnership approach. We want to use best-of-breed partners to drive our technology platform writ large and then certainly with AI, contrasting to maybe buying, building, and maintaining. Part of the reason why is that it allows us to preserve our balance sheet for what we do best. We know how to open facilities, buy facilities, and run facilities really well, and that's where we want to deploy our capital. The other part is the world is changing so incredibly fast, and it allows us to just be a lot more agile and nimble as new capabilities come. On our earnings call, we introduced the concept of Lumexa Connect. This is really how we connect all of the different applications we're using today, really focused on kind of the user workflow, the data integration, creation of our data lake, monetization, and then an analytics creation, and then, of course, AI. You know, where we're seeing kind of the AI focus in the company, it's really in three channels. You know, first is how do we improve the operations of our center? This is, you know, how do we, you know, serve more patients within our four walls? That's where things like Baskin or virtual MRI come in. You know, we certainly are also thinking about how do we take costs out of the business, you know, that's through working through whether it's automating coding or working with agendic call agents. And then on the clinical side, you know, we are thinking through how do we continue to support our radiologists and, you know, support their productivity. It was probably where there's been the most advancement. And it's been, you know, even in my tenure at the company, things that we thought only one vendor was doing in November of 2025. there are now 11 opportunities to work with. And so we're seeing a lot of democratization of the models, which is amazing because it allows us to continue to figure out how do we drive the most value for a radiologist and, of course, our patients.

Operator

Yeah, that's a good segue. I mean, how do you see, I guess, the radiology function that you need inside your centers as evolving? Like, how does this impact, you know, maybe the amount of labor that you need? Does all your labor need to be in the center the way that maybe it's been in the past?

Speaker 1

I guess how do you think about how this is changing yeah on the radiologist front you again the core of our business is outpatient imaging and that means the radiologist reads can be done through teleradiology very often they don't need to be on-site they can do their work remotely living at home typically nights and we are not nights and weekends we're not doing stat 3 a.m. CT seats that obviously require a different model you know once we think through radiologist capacity we want to make sure we're continuing to support them. We bill globally for the technical and the professional side of the scan and then we contract with radiologists to do the read and we'll work with radiologists in one of three ways. We have our own teleradiology group called Connexia. We work with physicians in our affiliated MSO model and then we work with third party radiologists.

Operator

Our whole goal is to make sure that they enjoy working with us and you know a big part of that is the seamlessness of our technology platform that's great and then maybe one for tony just on the the guidance you know i think you know coming out of the first half you know you had a bit of a flatter year-over-year ebitda performance and the the second half of the year you're implied to have about a four percent year-over-year ebitda growth so you're seeing a bit of a steeper required ebitda growth throughout the balance of the year than what you saw last year as we think about you know the factors that might be influencing that I mean a few things that stand out you know might be the pace of de novo ramping as you have more de novos in the P&L this year and I mean

Tony Martin, CFO

maybe there's some seasonality and calendar considerations but maybe just walk us through the thought process on guidance and what gives you comfort getting to the guidance range you've provided sure sure yeah and you know as we discussed on our Q2 call for anybody who missed it or would like a you know kind of a reminder um you know we narrowed the range of guidance for the year uh you know same midpoint but narrowed the range which you know good part of the way into the year more confidence in in the numbers you know and in carrying out uh the plan um and in you know being on target for other goals we've had like opening the eights ten de novos you know these these are things you know we discussed on the call and then i think we also discussed kind of the natural seasonality of the business. I think this year's ramp is perhaps slightly more in the back half than usual maybe a hundred dips or something but you know nothing nothing major that's different but that you know that will be driven by the natural seasonality of the business the ramping of the de novos in the second half of the year and you know continued strong momentum in the advanced modalities you that have a better margin. Particularly with the de novos, those are reaching a point of anniversary in many cases. And so the best is yet to come in terms of what they mean to us economically.

Operator

Okay, great. And then just as we think about cashflow generation over the next couple of years and sort of the ways that you'll look to deploy capital, I guess help us think about where you wanna see leverage over the next few years. And it seems pretty obvious where you're going to want to put the rest of your capital to work, but just thinking about how far you need to delever before you sort of have wholesome, available cash flow to use.

Tony Martin, CFO

Sure, sure. Yeah, during our IPO process, we talked about maybe something in a two-handle, because the IPO brought us down two turns to about three and a half. And we expect to gradually decrease that by growing EBITDA rather than paying down debt, because we really want to deploy the added cash flow we got from from the debt reduction you know to growth and this is a great moment in time for this this industry and so we will focus you know on being disciplined and what opportunities we take but not be hesitant to put some money out there to do it and you know we'll deal ever gradually over time but not we don't want to hem ourselves in with a specific date or anything just because doing so would disadvantage the growth prospects and value creation opportunities for the company.

Operator

And then just in terms of, you know, the opportunity for M&A, and obviously there's some tucking opportunities that are going to be out there. I guess, like, what is an attractive use of capital for the company from an M&A point of view and what kind of assets make sense and have been the most fruitful in the past?

Speaker 1

Yeah, so excited to have revved up our M&A engine this year. We have a new chief growth officer that we announced on our Q1 call, Kyle Lynch. We have done two tuck-ins already this year. The company hasn't really done acquisitions since 2023 or maybe even before. So nice to see kind of the engine start. And as we look through acquisitions, there's opportunity for both tuck-ins in our existing markets where we have a clear value prop, existing rates, existing management chassis, sales team, and market. and then we're also thinking through how do we open up new markets and so you know there's some interesting multi sites out there that open up markets we either don't work in today or markets we might work in but creates an opportunity to bring in a joint venture partner as well okay well fantastic I think that's about all we have time for today so thanks so much for being here and appreciate the discussion yeah thank you so much Stephen yeah thank you Thanks for having us.