Pennant Group, Inc. Q2 FY2021 Earnings Call

Good day and thank you for standing by. Welcome to The Pennant Group Second Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today Derek Bunker. Please go ahead.

Thank you, Adrian. Welcome everyone and thank you for joining us today. Here with me today I have Danny Walker, our CEO; Brent Guerisoli, our President; and Jen Freeman, our CFO. Before we begin, I have a few housekeeping matters. We filed our earnings press release and 10-Q yesterday. This announcement is available on the Investor Relations section of our website at www.pennantgroup.com. A replay of this call will also be available on our website until 5:00 PM Mountain Time on Friday September 9, 2021. We want to remind anyone that may be listening to a replay of this call, that all statements are made as of today, August 10, 2021, and these statements have not been, nor will they be updated subsequent to today's call. Also any forward-looking statements made today are based on management's current expectations, assumptions and beliefs about our business and the environment in which we operate. These statements are subject to risks and uncertainties that could cause our actual results to materially differ from those expressed or implied on today's call. Listeners should not place undue reliance on forward-looking statements and are encouraged to review our SEC filings for a more complete discussion of factors that could impact our results. Except as required by federal securities laws, Pennant and its affiliates do not undertake to publicly update or revise any forward-looking statements or changes arise as a result of new information, future events, changing circumstances or for any other reason. In addition, the Pennant Group Inc. is a holding company with no direct operating assets, employees or revenues. Certain of our independent subsidiaries collectively referred to as the Service Center, provide accounting, payroll, human resources, information technology, legal, risk management and other services to the other operating subsidiaries through contractual relationships with such subsidiaries. The words Pennant, company, we, our and us refer to the Pennant Group Inc. and its consolidated subsidiaries. All of our operating subsidiaries and the Service Center are operated by separate independent companies that have their own management, employees and assets. References herein to the consolidated company and its assets and activities as well as the use of the terms we, us and our and similar terms used today, are not meant to imply, nor should it be construed as meaning that The Pennant Group Inc. has direct operating assets, employees or revenue or that any of the subsidiaries are operated by The Pennant Group. Also, we supplement our GAAP reporting with non-GAAP metrics. When viewed together with our GAAP results, we believe that these measures can provide a more complete understanding of our business, but they should not be relied upon to the exclusion of GAAP reports. A GAAP to non-GAAP reconciliation is available in yesterday's press release and in our 10-Q. With that, I'll turn the call over to Danny Walker, our CEO. Danny?

Thank you, Derek, and welcome everyone to our second quarter 2021 earnings call. Yesterday, we reported our financial results for the second quarter. We are pleased with the progress made financially, clinically and culturally, while acting urgently to accelerate that progress in the second half of the year and position us well for 2022 and beyond. Before I get into more detailed remarks, I want to express gratitude to the many members of our team, employees, our shareholders, stakeholders, partners in the community as we continue to navigate the challenges that are presented by this global pandemic. We're making good progress and there's a lot more improvement to come. Our Home Health and Hospice segment continues to produce record results, driven by strong adherence to our operating principles. We're pleased to report strong top and bottom line financial growth, with segment adjusted revenue increasing 27.4% and segment adjusted EBITDAR from operations increasing 32.8%, each over the prior year quarter. Excluding agencies acquired in the previous 12 months, our Home Health Medicare admissions grew 41.2%, while our total Home Health admissions grew 39.6%, both over the prior year quarter. Our hospice admissions and average daily census were up 4.8% and 16% respectively over the prior year quarter. Our clinical quality measures continue to improve. As a reminder, while CMS has stated that they are not updating their home health or hospice compare tools in 2021, third-party real-time analytics reveal positive trends in our home health star ratings, with the number of agencies with four stars or higher improving to 93% on a real-time basis and hospice quality composite trends improving to 97% on a real-time basis or 8% over the industry average. We are confident that as we continue to produce quality care outcomes, we will better address the needs of our complex patient population and expand our growth opportunities at the local level. These clinical and financial achievements in our Home Health and Hospice segment are particularly impressive as they came in the midst of a challenging labor environment and a record number of acquisitions in various stages of transition. Over the past 18 months, notwithstanding the spinoff-related distractions, system integrations and global pandemic, our local operators have acquired or started 23 operations across the segment. While this record number of transactions contributed to some choppiness to our quarterly results, they also provide compelling long-term growth opportunities across virtually every market in which we operate. As we methodically continue to integrate these new Pennant-affiliated agencies and build the cultural clinical and financial foundation for sustained success, we are well positioned to produce strong results in the second half of the year and into 2022. In our Senior Living segment, we achieved a step forward in many areas of the business, resulting in increased segment revenue of $0.7 million and segment adjusted EBITDAR of $1 million, each over the first quarter of 2021, which represented the pandemic-driven low point in our results. Our quarterly occupancy of 72.7% was 60 basis points higher than our first quarter occupancy. We are making progress on our ongoing efforts to deepen the leadership in our senior living communities, strengthen our cluster-centered operating model across the segment and build out marketing resident care and labor management systems and tools, that will accelerate our ability of our local teams to drive further census growth and margin expansion. The process of becoming the senior living of choice in each local market will take time to fully actualize, yet we are confident it will build a solid foundation for which we can generate substantial value for our long-term stakeholders. While we knew the second quarter would have some lingering challenges from the sharp second wave of COVID-19 that impacted our first quarter results, both segments have tremendous inherent value that we know we can unlock. As we guided last quarter, while some of these pressures will persist in the second half of 2021, we expect the momentum we started to see in the second quarter to build and lay the foundation for an improved second half and even stronger 2022. As a reminder, we are not quite two years removed from our spin-off from the Ensign Group, during which time we have built teams and infrastructure to support our public company functions, transitioned nearly every major IT, accounting, HR and payroll system onto our own platform, successfully navigated the dynamics of PDGM, improved our home health and hospice clinical quality scores and added roughly two dozen agencies, all in the face of an unprecedented global pandemic. While we have been able to accomplish this through adherence to our core values and best practices that underpin our historical success and the success that we've watched our mentor and business partner Ensign achieve over many years. We are far ahead of where we were two years ago. Today, we have stronger leaders and clusters, a deeper leadership pipeline, better quality measures, more robust IT solutions, a stronger balance sheet, greater dry powder and more favorable debt terms. And importantly, as we continue to integrate these recent acquisitions and acquire more operations, we're compounding the dozens of compelling upside opportunities inherent throughout The Pennant Group. All that said, we're not satisfied with where we're at currently and we are acting with urgency to continue to recover from the pandemic effects in our Senior Living business and deliver on a stronger second half of the year and position ourselves to achieve even stronger results in 2022 and beyond, without many of the distractions that have weighed on and occupied our time over the past two years. With that, I'll ask Derek to provide an update on our recent investment activity. Derek?

Thanks Danny. During the second quarter and since we've welcomed into The Pennant family, two home health and two home care agencies in Southwest Colorado, one home health agency in Fort Worth, Texas and a hospice agency in Sacramento, California. These acquisitions have strong reputations in their local communities and represent key growth opportunities for these markets. We are thrilled to continue and amplify the legacies of the caregivers, clinicians and staff that have provided quality care to these communities. As Danny mentioned, we've acquired and onboarded nearly two dozen operations since the beginning of 2020, representing approximately a quarter of our current home health and hospice agency count. The short-term noise in our results that sometimes occurs when we have periods of robust strategic growth is a consequence of our unique acquisition model. We don't have a typical corporate development team that runs a deal process from source to close to hand off. Instead, our acquisition and transition processes are ultimately led by the field leaders within an impacted market with the support of partners and resources from sister operations and our service center. There are significant advantages to this locally-led investment model, including a broader deal pipeline as our leaders cultivate their own network of off-market opportunities, more thorough due diligence and a smoother onboarding and transition process, because of an embedded familiarity with the local health care community dynamics. The process also functions to develop more capable business leaders across the organization. While this process can be a drag on results, as field leaders temporarily direct some resources from existing to newly acquired operations, it's important to emphasize that each agency we acquire multiplies our short and long-term growth opportunities. Our culture and operating model attract talented leaders that seek the entrepreneurial experience to build and lead teams that impact the lives of their staff, patients, residents, families and community members. Throughout our history as local teams drive each operation forward to the resources and support unique operating model they've been able to create significant organic growth year after year after year. We are excited about these and all of our acquisitions not just for what they contribute to our results in the first year or two post closing, but to the inherent value that we believe will be realized over the next 10 or 20 years just, as we continue to experience double-digit growth in most of our existing operations even our most mature ones. Overall, the pipeline for home health and hospice acquisitions remains strong and we are confident as we work through the process of welcoming these recently acquired operations into our organization and empowering their local teams we will have the capacity for even more growth opportunities in the future. With that, I'll hand it over to Jennifer for a review of the financials. Jen?

Thank you Derek, and good morning everyone. Detailed financial results for the three months ended June 30, 2021 are contained in our 10-Q and press release filed yesterday. For the three months ended June 30, 2021, we reported total GAAP revenue of $110.3 million, an increase of $17.6 million, or 19% over the prior year quarter. GAAP diluted earnings per share of $0.09 and non-GAAP adjusted earnings per diluted share of $0.17, a 54% improvement sequentially over the first quarter of 2021. Please note that our non-GAAP adjusted earnings per share results for the three months ended June 30, 2021 include the effect of all COVID-related expenses and lost revenue, as well as the benefit of the Medicare sequestration holiday. Other key metrics include $43.8 million drawn on our revolving line of credit and $2.9 million cash on hand at quarter end. 1.1 times net debt to adjusted EBITDA and 1.98 times if Medicare Advance payments have been paid back as of the quarter end. Automatic recoupment of the advanced payments began in April 2021 on which we have repaid $9.4 million through August 9, 2021 and we expect to repay the remaining $18.6 million over time within the payback period. Cash flows provided from operations of $2.6 million, excluding the impact of the automatic recoupment of advanced payments and the impact of the final phase-out of the request for anticipated payment. Yesterday in our press release, we reiterated our full year 2021 revenue guidance of $430 million to $440 million and adjusted earnings per share guidance is $0.89 to $0.99 per diluted share. We are pleased with the momentum building in both segments that we believe will lead to a stronger second half of the year. We know the ramp to achieve our full year guidance is steeper than our performance in the first half. And despite the challenges we're facing on the labor front and in integrating our recent acquisitions inherent opportunities within our portfolio to realize significant value is as compelling as ever. We are proud of our local leaders and partners across the organization, for providing extraordinary care to our patients and residents, achieving quality clinical outcomes and finding ways to grow, during a challenging operating environment. And with that, I'll hand it over to Brent, to highlight a couple of our local leaders.

Thanks Jen. It's my pleasure to recognize a few leaders in our organization that are providing excellent care to their local communities, while driving strong financial and cultural outcomes. At Alpha Home Health and Hospice, in Everett, Washington, administrator Chris Boettcher, Director of Clinical Services, Landy Allman and Director of Business Development, George Gitungo are achieving exceptional results by building a culture focused on our core values, including customer second, ownership and intelligent risk-taking. This team first invested in the right individuals that would accelerate the agency's growth trajectory and then methodically focused on producing quality care outcomes and strategically investing and expanding the services offering available to the community. Late last year, the team was awarded a certificate of need to provide hospice care to broaden the continuum of care they provide, which has accelerated the results in both lines of business. Meanwhile, they continued to score well clinically as their home health star rating improved from four stars in the second quarter of 2020, to a projected five-star rating according to real-time data analytics. The investments in the right people, culture and providing quality clinical care have helped them achieve revenue growth of 141% and EBIT growth of 219%, both in the second quarter over the prior year quarter. The results of Alpha Home Health and Hospice are typical of what talented local leaders can achieve, through the application of best practices in our operating model. At Desert View Senior Living in Las Vegas Nevada, Executive Director, Mike Trail, Wellness Director, Joe Rank and Marketing Director, Charlie Wolf have successfully navigated the ups and downs of the pandemic, providing excellent care to the residents and families, in the face of a challenging operating environment. Mike and his team have established a culture within Desert View, focused on becoming the Senior Living Community of choice within their market. And their focus is evidenced in growth in occupancy, revenue and EBIT in the second quarter of 2021, over the prior year quarter, despite the potential impact of COVID-19. In addition, the team's influence extends beyond Desert View as they provide resources and support to their sister operations in the market and across our Senior Living Segment. We're grateful for the leadership of Mike, Joe and Charlie and many others like them throughout our organization that embody our core values and provide life-changing service to our residents and patients. With that, I'll turn it back to Danny.

Thank you, Brent and thank you Jen and Derek, for your input. With that, Adrian, can you please instruct the audience on the Q&A procedure?

The first question comes from the line of Scott Fidel with Stephens.

Hi. Thanks. Good afternoon everyone. First question just interested, if you could maybe give us a little bit of a real-time update in terms of what you're seeing with the Delta Variant and with the recent uptick in the COVID activity and how that's impacting. I guess, the two businesses that have just more broadly been impacted by COVID have been Senior Living and Hospice, when we think at the industry level. So particularly interested in terms of what you're seeing more recently around on Delta in those two businesses. And how that influences you are thinking around the ramp to achieve the full year EPS guidance that you reiterated today.

Yeah. Thanks Scott great question. So we're watching it very closely. It continues to affect mostly the unvaccinated population. We're really fortunate to have a high percentage of vaccination, within our senior living communities in particular. And we've seen widespread reception to that amongst our employees as well. Those efforts continue and we're pretty optimistic that we'll be able to navigate through that, even as it kind of affects the pockets of unvaccinated folks. On the hospice side the – we actually – sequentially, our census between Q1 and Q2 our ADC was down slightly. But our length of stay has increased ever so slightly. So we're in a good spot there. We've actually recovered on the hospice side through a variety of efforts by our local teams finding other avenues to support members of the community that need appropriate hospice care. So where we stand right now is, we're ahead of our all-time high back in January before pre-pandemic levels. So we're pleased with where we're at on the hospice front. There has been some disruption there, but our teams have been able to navigate through it quite well. As it relates to the overall sort of progress of the Delta variant, as it moves into the West and in other places where we're a little bit more directly affected. We feel like we're just better prepared to go through something like that. The systems, the processes, the PPE all of those kind of things are there and we're ready to navigate it. And then what we find is that, our teams that – our culture and our adherence to our core values has really helped on issues, like caregiver burnout, and things like that. So we're feeling quite good about our ability to move forward even with the Delta variant, kind of doing what it's doing and achieve strong results in the second half. More importantly, we feel really good about our positioning as we look to 2022 and how things are stacking up as we look to continue to execute on our long-term growth strategy that's been a part of how we've driven our results for many years. So. anything to add on that?

Yeah, I'd just say, we're kind of seeing a similar census uptick on the senior living side. We've sort of hit that – we bottomed out in the early part of the year, and we've gradually picked up. The return to our levels pre-pandemic, it's been a little slower than we'd hoped, but I think that's a function of we're continuing to deal with COVID, and we've got – we're seeing progress, right? And so at this point, as we follow our normal processes and the systems that we put into place over a year ago, we feel like we're in a good spot, but we're closely monitoring it. And every single operation is handling it at the local level.

Got it. And for the next question, I just wanted to follow-up on and get an update on the – some of the labor dynamics and you did call out a challenging labor environment, which basically everyone in health care is also experiencing. At the same time, it was encouraging to hear about the hospice ADC having recovered, so nicely already. So just interested, if maybe you can sort of drill into the labor dynamics a little bit more by the segment to sort of call out, where you're seeing the most pressure that's still on the SL side, and where you're – I guess seeing some of the green shoots in terms of what you're seeing around some labor initiatives as well.

Yeah. Brent, why don't you tackle this?

It's a great question, Scott. The information that's being reported aligns with our experiences. Our senior living communities have been the most affected. The challenge has primarily been replacing caregivers. On the Home Health and Hospice side, with our newer acquisitions, where we've introduced new leadership while trying to build our culture, it has been challenging to establish our reputation in the community, making it harder to recruit and retain talent. We are making progress in those areas, but they have seen significant impact. However, our stronger senior living providers have managed better than those undergoing leadership changes. We expect these challenges to persist for a while. Still, we are optimistic that by instilling our culture, building effective leadership teams, and offering attractive employment opportunities, we can overcome these difficulties. It's a real struggle for us at the moment, but we are progressing.

Got it. Just one more question and then I’ll return to the queue. Regarding the trends in home health, we are still witnessing particularly strong growth across both Medicare and non-Medicare segments. I wanted to ask specifically about the non-Medicare side, where we saw significant sequential revenue growth, approximately 15% sequentially. Could you remind us of the key factors driving the non-Medicare revenue growth in home health? Also, how much further growth do you anticipate, considering these rates have held up better than other areas of the business? Thank you.

Thank you, Scott. The growth in home health non-Medicare is largely due to our engagement across the entire post-acute care continuum. From the outset, we have worked closely with our skilled nursing partners, especially within the Ensign Group, to create effective transition of care programs. We ensure that there is coordination within the post-acute continuum from the payer perspective. The increase in non-Medicare payers in skilled nursing and other sectors motivates us to provide care for the same patients, ensuring continuity from their discharge from acute care until they are fully rehabilitated. This reflects the growth in our relationships and our ability to match the right patient with the appropriate care at the right time. We believe this growth is sustainable, and we are just beginning to explore opportunities in major markets like San Diego, Phoenix, and Dallas-Fort Worth. Much of our growth in Home Health and Hospice acquisitions aligns with these markets, as we respond to the demand for high-quality clinical delivery systems that interact effectively with various care settings. This facilitates a smooth transition for patients from acute care to skilled nursing for the optimal duration and cost before they move on to home settings for their recovery. When discussing our growth opportunities, it's worth noting that acquisitions made around four to seven years ago are still generating solid returns and organic growth because of our local-level building efforts. Our long-standing relationships continue to foster increased volume as we are responsive to our acute care partners, and we are developing transitional care systems that work well for non-Medicare payers in managed care.

All right. Okay. Thank you.

Thanks Scott.

The next question comes from the line of Frank Morgan with RBC Capital.

Good morning. I wanted to revisit the Hospice segment in the recent results. While admissions were down, the average daily census decreased not as significantly. Could you provide more details about what transpired during the quarter regarding length of stay, particularly in relation to the admission trends throughout the months? How did you conclude the quarter in Hospice in terms of both length of stay and admissions, and could you also include information on the median length of stay?

We're seeing an increase of about 4.3% in length of stay from the first quarter to the second quarter. In terms of admissions, when looking at the organic growth from Q2 of 2020 to Q2 of 2021, our admissions have risen about 23%. There was also an increase in admissions from the first quarter to the second quarter. For the average daily census (ADC), we experienced a slight decrease of about 0.5% quarter-over-quarter. Throughout the quarter, the ADC remained stable, starting at 23.08 in the first quarter and ending at 22.96 in the second quarter. While there was a small decline, it did not go lower than that. Importantly, our ADC is now significantly higher than it was in the first quarter. We have made a strong recovery in Hospice, exceeding our January numbers for the first quarter. Overall, we are very satisfied with the growth in census and the achievements of our operators in Hospice.

Got you. So if you're higher than Q1 that means you're higher in Q2. So your momentum coming out of the quarter looks really good.

Yes.

Any change in the growth in that improvement in the sense, is it more admissions, or is it continued length of stay growth? And are you seeing any differences in referral patterns?

I think it's mostly admissions with that Hospice growth. And then with average length of stay, look, I think we're pretty much steady where we were as of Q2.

The referral patterns have been interesting as hospitals have had to consider whether they can perform elective surgeries and how they need to manage bed availability. Over the last six to twelve months, there has been some fluctuation in that regard. This affects how residents in senior living and skilled nursing transition to hospice conversations. In our experience, there hasn't been a significant shift in referral patterns, but there has been a change in how patients reach the point of discussing hospice. Last year saw some disruption in senior housing, but we are beginning to notice a return to normalcy. On the hospital side, we see patients reaching critical decision points about their care. Our teams have been prepared and responsive to these changes. However, the overall census in the senior living industry has declined, resulting in fewer referrals due to headcount issues. The environment is dynamic, but I don't anticipate any permanent alterations in how these conversations progress. In cases where healthcare providers are facing emergencies, such as new COVID cases, some discussions might be delayed. Our strategy has been to respond effectively to these needs, and I believe our census and success reflect that approach.

Got you. Regarding the start-ups of the assets acquired over the past 18 months, can you provide more details about their revenue contribution and margin performance compared to your expectations? Also, are you noticing any structural differences between this group of assets and your more established ones?

Good question. Thank you for asking. Yes, generally, I don't know if Derek can provide more details, but each of these operations aligns well with our target acquisition opportunities. They are healthy but smaller businesses that require more resources, additional leadership, capacity, and other types of capital to aid their growth. They present excellent opportunities for us. Usually, from a margin perspective, in the year we acquire a business, they typically operate with low single-digit margins. However, within the first one to two years, as they integrate into our systems and benefit from our Data Analytics processes, along with support from other similar hospice or home health programs that can help share the load and sometimes share staff, we see margin expansion that moves quite quickly into the mid-teens. From there, margins continue to improve as they capture more volume and leverage their fixed overhead costs. Derek, what would you like to add?

I would just add a couple of things. I think to the revenue question Frank, I think like I mentioned the number of operations is about a quarter of our overall count. I think the revenue contribution is probably proportionately a little bit less than that just given the dynamics there of some of them being start-ups. Our typical acquisition being sometimes a smaller agency that just has a great clinical or a reputation within the community and a team in place and we're able to take the legacy that they've built and apply the resources and really elevate those local leadership teams and free them up to run. The other kind of point I would just emphasize and I kind of said this in our prepared remarks is just because of the dynamics of the type of acquisitions that we typically do namely the size so much of our growth occurs not just in the first year two or three years. We do like to see it right out of the gate. Of course, we see typically a pretty dramatic improvement in the first two years. But even in years three and beyond, even with some of our acquisitions that we had previous to 2014, are still growing at double-digit rates partly because of the types of acquisitions that we've targeted but more importantly because of our operating model because of the opportunity for local leaders to drive the business forward to find ways to grow, to expand their services, to recruit new talent, to be creative in creating those opportunities for others. And so that's what's so exciting about this recent acquisition is not just what they've been contributing so far. But as you look at it and you kind of compare it to our track record of all of our acquisitions over the past 10 or so years modeling these 23 out it's pretty exciting stuff.

Yes, margin compression is significant with the current volume. We see this as a pure investment, following the approach that has shaped our story over the years. We're genuinely excited about the additional potential that our natural processes will create with such a large number of operations for our long-term investors.

Got you. And I know you called out on labor. The hardest place to find labor right now is in the senior housing area, the caregiver level there. But, I think you also called out that you're getting the right people in some of these recent Home Health care, and Hospice acquisitions. So what is that process like? I mean what is it that you're looking for that you don't have when you buy these? And just any color there and I'll hop. Thanks.

Great question, Frank. We have an established team that embodies our culture and core values, understands the cluster model, and employs a field-driven decision-making approach to the local health care market. This creates an attractive environment for talented individuals, including marketing professionals, clinical leaders, business operators, and experts in billing and collections, as well as those specializing in intake and transitional care. We also rely on physical therapists, speech therapists, occupational therapists, and RNs among our supporting staff. Typically, these professionals are spread out across the market when we enter it. However, once they realize that there is a unique opportunity to work at a place with the resources of a large corporate entity while enjoying the flexibility typically found in smaller organizations, they are drawn to us. Each new acquisition we approach has a mixture of these skilled positions, driven by factors that contributed to their success. We often add one, two, three, or four of these roles during the process. Starting with the right team allows us to bring in additional key professionals from the marketplace, which in turn leads to further growth. Although the current labor environment has caused some delays, we are not significantly hampered by this; there has been some hesitation in the market as people wait to see how things unfold. We believe we have moved past most of that with our new acquisitions. The core of our business model remains intact, and we are very enthusiastic about how these developments are progressing for us. Brent, do you have anything to add?

Yes. I think another factor is the influence of market partners, cluster partners, and external leadership teams that can provide support. Given our current environment, accessing new acquisitions has been somewhat challenging. However, we believe we have overcome much of that. We are now able to celebrate our culture and engage in one-on-one interactions with partners who have experience in building strong teams. These interactions with our newer acquisitions have been somewhat slower over the past year, but as we return to a sense of normalcy, we are beginning to see an improved response from these new acquisitions.

Yes. Our usual approach involves taking in a new acquisition, like one in Sacramento. The team there is clinically strong and has a great reputation, but they've faced some natural constraints due to the balance sheet and the previous operator's focus. We typically bring in adjacent operations that have previously gone through acquisitions with us. They understand our culture, and we can connect them to our narratives to help them adjust. Due to caution, some of this was done remotely, which contributed to the disruption we mentioned. However, we have moved past that and are eager to empower these teams and see what they will accomplish in the coming years.

Thank you.

I would now turn the call back over to the speakers for closing remarks.

Thank you, Adrian. And we just wanted to thank everybody again for joining us today. Thank you to Scott and Frank for your thoughtful questions. And again thank you to all of our stakeholders. We understand that we're operating through a dynamic environment and we appreciate the trust that you've placed in us. And we look forward to honoring that trust as we continue to improve in the second quarter, and we set the organization up for a very healthy 2022. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.