Earnings Call Transcript - VMD Q3 2023

Operator, Operator

Greetings, and welcome to Viemed's third quarter 2023 earnings call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Todd Zehnder, Chief Operating Officer. Thank you, Todd. You may begin.

Todd Zehnder, COO

Hi. Thank you. Good morning, everyone. Please note that our remarks in this conference call may include forward-looking statements under the U.S. Federal Securities Laws or forward-looking information under applicable Canadian Securities Legislation, which we collectively refer to as forward-looking statements. Such statements reflect the company's current views and intentions with respect to future results or events and are subject to certain risks and uncertainties, which could cause actual results or events to vary from those indicated in forward-looking statements. Examples of such risks and uncertainties are discussed in our disclosure documents filed with the SEC or the security regulatory authorities in certain provinces of Canada. Because of these risks and uncertainties, investors should not place undue reliance on forward-looking statements. The forward-looking statements made in this conference call are made as of today, and the company undertakes no obligation to update or revise any forward-looking statements, except as required by law. The third quarter financial news release including the related financial statements are available on the SEC's website. Now I'll turn it over to Casey to get things started.

Casey Hoyt, CEO

Okay. Thank you, Todd, and good morning, everyone. Welcome to our third quarter 2023 earnings call. Today, we'll explore the financial achievements, market trends and strategic insights that have contributed to our continued success. We will provide details on how Viemed is not only thriving but also actively shaping the landscape of at-home respiratory care. We are executing at a very high level on our strategic initiatives, driving growth to financial results and remarkable growth. Our seamless integration of the HMP acquisition has accelerated our expansion of the core complex respiratory business and is rapidly diversifying our respiratory offerings. This significant stride is a testament to our steadfast focus on reaching more patients, enhancing their lives and improving outcomes. Before we delve further into our results, I want to take a moment to thank our team for their hard work and dedication. Our success is built on the shoulders of an incredible team of dedicated healthcare professionals from our respiratory therapists and behavioral health specialists to our staffing professionals and administrative support staff; they are the driving force behind Viemed's exceptional results and continued record-setting growth. As of the end of the second quarter, our Viemed family has expanded to include 988 employees, each playing an important role in our collective success. Let me begin by commenting on our core organic business model. As a reminder, 58% of our business is generated by our complex respiratory service model, which is driven by ventilation. Our vent patients are typically on our care for a 17-month length of stay at the end of their life. In terms of payer demographics, 45% of our patients are covered by traditional Medicare and 12% are enrolled in some form of Medicare Advantage or Managed Medicaid program. It's worth emphasizing that historically, the Medicare patient population served by an industry as a whole constitutes just 6% of COPD patients eligible for noninvasive ventilation treatment. We estimate that the privately insured population reflects similar numbers. This ongoing underserved patient segment is a key driver of our persistent growth. Our governor to growth is not about finding available patients to treat, but more about finding clinicians and salespeople available to communicate our offering to the physicians and hospital case managers. Our staffing division, VHS, has played a pivotal role in developing recruitment protocols that rapidly identify and onboard talented individuals. As a result, we are continuing to expand our training and management structure to support the growth of our personnel. This relatively new ability to source salespeople efficiently will certainly be the driving force behind our future geographic expansion. Additionally, we've observed substantial growth in our oxygen services, which constitute approximately 10% of our product mix and treats earlier stages of COPD. Given the terminal nature of COPD, it's common for patients to progress to a point where they require our complex respiratory ventilation services in later stages of their journey. Notably, by the end of the quarter, approximately 18% of our oxygen patients also had ventilator usage. It's estimated that there are 12.5 million eligible oxygen patients in the country with only a 12% market penetration nationwide, representing yet another significantly underserved population in need of our help and opportunity for continued growth. With HMP, our most recent acquisition being a heavy sleep business, we've driven our sleep business up to 17% of our product mix. The highest margin segment within sleep is in the recurring mass tubing filter sector or as we call it, the resupply business. With the addition of HMP, our resupply business is now making up 47% of our overall sleep business. With an estimated 150 million people suffering from sleep apnea, only 30 million diagnosed and roughly 5% to 8% of the folks on service, we are once again taking care of an underserved population. Many healthcare companies are confronting speculation around the adoption of GLP-1 diabetes and weight loss drugs. Viemed's core complex respiratory business differentiates us from the other home medical equipment companies, making us less susceptible to competition from GLP-1 weight loss drugs. We have seen no measurable negative impact of these drugs being on the market, and perhaps the best way to prove this is to reflect on our third quarter numbers. Our organic Viemed business experienced 11% sequential sleep growth from Q2 and we've grown our sleep business every quarter for the past year and a half during the GLP-1 drugs while they've been on the market. Furthermore, our manufacturers of sleep equipment are also reporting zero findings of any decline related to GLP-1 drugs. We fully expect to realize growth in our sleep business for 2024 and beyond. The successful integration of HMP into the Viemed Healthcare family has marked a significant milestone in our strategic growth trajectory. We are delighted to report that our first full quarter with HMP was immediately accretive to our net income and earnings per share, demonstrating the soundness of our investment. What's equally crucial is that this acquisition hasn't hindered our organic growth. Instead, it is actively serving as a catalyst igniting new possibilities. Our commitment to enhancing our cost structure, while simultaneously setting the groundwork for revenue synergies has been at the heart of this integration. We've worked tirelessly to ensure a seamless transition, converting software and systems to align with our established processes and technology. Furthermore, HMP employees have undergone comprehensive training, not only to adapt to the new systems, but to fully embrace our technology, unique service offerings and the Viemed value proposition. One of the keys to our successful integration has been the remarkable cultural fit between Viemed and HMP. This alignment of values, mission and work ethic has fostered a cooperative and harmonious environment, where we can leverage the strength of both organizations effectively. Looking ahead, we consider this acquisition as a strategic springboard for our organic growth model in several respects. Geographically, we are expanding into new areas, capitalizing on strength and synergies brought by HMP to penetrate markets that were previously untapped. We are also growing complementary products and services that align with our core offerings, creating value for our patients and stakeholders. In addition, our broader network of payers is offering us exciting new avenues for growth, enabling us to maximize the reach and impact of our specialized home respiratory care. While our M&A pipeline is active, it's important to note that it remains supplemental to our primary growth driver, the organic engine. In a landscape where interest rates are rising and deal volumes are declining, we are fortunate to not be reliant on acquisitions to fuel our growth. We've consistently demonstrated that we are in a position to grow independently, leveraging our existing capabilities, infrastructure and expertise. Our steadfast focus on organic growth allows us to maintain a strong and sustainable trajectory, making strategic acquisitions a nice complement rather than a necessity to our business model. In the third quarter, we continue to allocate resources towards technology. Our proprietary Engage platform and data analytics play a pivotal role in our achievements. While harnessing data to predict patient needs and tailored treatment plans, we have not only improved patient outcomes but have differentiated ourselves from our peers in the eyes of our referral sources and payers. We recently introduced Version 2.0, which we call Engage Care Manager. The enhancements within this tool facilitate greater cross-functional integration with multiple equipment manufacturers, enabling a device-agnostic approach to patient care. The broader use of equipment on Engage Care Manager allows our manufacturing partners to have their devices be a part of driving improved compliance and patient adoption within their devices. Ultimately, these advancements further solidify our position as a relevant player in an evolving value-based care landscape, demonstrating our commitment to innovation and excellence in patient care. On the regulatory front, we are experiencing a notable degree of stability with little recent movement. There have been no indications of the return of competitive bidding and we anticipate further improvements in reimbursement due to Consumer Price Index, CPI, to be implemented soon. There's a national push from our industry association, AAHomecare, to support continued common sense measures undertaken during the pandemic, particularly the 75-25 blended rates for CPAP and oxygen. While these relief measures are crucial to ensure patients have necessary access to care, it's important to note that their financial impact on Viemed is relatively modest as a result of our unique product mix and concentration in rural markets. In the event that the blended rate relief expires at year's end, we estimate that our rates tied to the CMS fee schedule would still, on average, increase between 0.5% and 2% when we combine the CPI adjustment. This rule change, while not significantly impacting Viemed directly, may hold more significance for other competitors across the country. In addition, we are eagerly anticipating the implementation of the final rule for Medicare Advantage Plan set for 2024. This rule introduces additional health plan utilization management oversight to processes, including mandatory annual reviews of MA plans, clinical policies and coverage denial reviews. It's conducted by healthcare professionals with relevant expertise. This rule will ultimately improve access to care for life-saving devices such as ventilators for patients struggling with a terminal disease. Our view is that the accountability for Medicare will be a positive tailwind for Viemed in 2024 and beyond.

Todd Zehnder, COO

All right. Thank you, Casey. In reviewing the financial results, all figures are in U.S. dollars and the full results have been made available on the SEC website as well as SEDAR. Our core business generated net revenue of $49.4 million during the third quarter of 2023 as compared to net revenues of $35.8 million in the third quarter of 2022, which equates to a 38% increase. Our sequential growth for the core business was 14% as we had HMP for the entire third quarter and our organic growth was once again strong. Without factoring in the acquisition, our growth rate over last year's third quarter was approximately 19% and approximately 4% sequentially. We continue to stay optimistic that we will be able to continue our high organic growth rates as well as continue our evaluation of inorganic opportunities. Our third quarter revenue from vents was approximately 58% of core revenue as compared to 67% in the third quarter of 2022. Our gross and EBITDA margin percentages are still strong and improving as we are focused on both margin and diversification. We've been very successful in managing our cost structure this year, and it is showing in both gross and EBITDA contributions. We continue to see our margin percentage be influenced by our product mix, but once again point out the rapid notional growth. Our gross and EBITDA margins during the quarter came in at 61.9% and 24.5%, respectively. Our third quarter gross and EBITDA amounts came in at $30.6 million and $12.1 million, respectively. A couple of highlights are that this is the highest gross margin percentage that we have posted in two years. And our third quarter 2023 EBITDA is approximately 73% higher than third quarter 2022 EBITDA, which is a result of the continued organic growth, aggressive cost management and the closing of the HMP acquisition during June. Our SG&A for the quarter totaled approximately $23.7 million as compared to $17.7 million in the third quarter of 2022. We have managed our G&A during the current year effectively, which is evidenced by our EBITDA margins expanding by a wider margin than our gross margin percentages. We are benefiting from some scaling of our operations around the country as well as our home office. We'll continue to invest in our patient and employee experiences and once again expect to grow revenues at a faster pace than expenses. For the quarter, we invested approximately $7.4 million on CapEx. And once again, the highest amounts have been spent on vents and oxygen equipment. The CapEx has been spent through a diversified supplier network, and we are seeing additional supplier networks that have come or will be coming to market. We funded all of our CapEx with discretionary cash flow during the quarter, and our core business had a record of free cash flow after CapEx. We are very proud of the pristine balance sheet we maintained where we ended the quarter with a cash balance of $10 million. Additionally, we ended the quarter with an overall working capital of $4 million. We have paid down $4 million on our revolver facility during the quarter and have lowered our long-term debt at September 30 to approximately $8 million. We will opportunistically pay down or use the revolver portion depending on needs of cash resulting from additional organic growth or future inorganic opportunities. When we step back and look at the ongoing financial performance of the business, our growth and diversification are really showing in the free cash flow that we are generating. We have grown the amount of revenue that is transactional over time, and therefore, it does not come with the same CapEx burden as our rental equipment growth. We are very confident in our ability to continue to grow our free cash flow even in light of our CapEx needs as we grow our active rental patients. This free cash flow generation will give us flexibility as we continue to monitor our capital allocation. As we review our capital allocation opportunities, we once again will reiterate that our organic growth is the highest priority. This quarter, we took the opportunity to pay down debt as we integrate the HMP transaction, and we will likely continue to do that until another acquisition opportunity arises. Lastly, we will actively monitor our share price and other factors to determine if another share buyback would make sense to be implemented. Moving on to the fourth quarter, we have provided net revenue guidance in the range of $49.8 million to $51 million related to our core business. The midpoint of our net revenue guidance is up 34% over the core revenue in the fourth quarter of 2022. Lastly, we remain active in our discussions with existing and potentially new investors. We participated in a couple of institutional investor conferences during the third quarter and plan on attending another one during this quarter. We remain excited about telling our story of growth and see the current market as an opportunity to attract new investors.

Casey Hoyt, CEO

Okay. Thank you, Todd. Our unwavering commitment to pioneering advancements in the home respiratory care industry is evident with the impressive results we've achieved this quarter. We couldn't be more proud of our management team and staff for their continued execution on every level. Reflecting on our business after the first three quarters, we are extremely bullish that our share price does not represent the value of our organization. We have grown every line of our business organically and are ahead of schedule on optimizing the HMP acquisition. The regulatory landscape is not only stable but favorable to our unique and specific business model. While we have a pipeline of acquisition targets ready, we have proven that we don't have to rely on buying companies when the conditions aren't right. Our view is that our company is reasonably recession-proof with the ever-increasing need to take care of an aging population yearning for more comfortable and quality care in the home. We are proud to highlight our historical results to investors, demonstrating Viemed's proven track record of execution. Viemed Healthcare's dedication to delivering high-quality specialized services and our relentless pursuit of innovative solutions continue to drive our success and set us apart as leaders in the field. As we move forward, we remain steadfast in our mission to provide the best care for our patients and to lead the industry through a commitment to excellence, innovation and unwavering dedication to improving patient outcomes. Our focus remains on treating the underserved population, and we are well-positioned to shape the home respiratory care industry for the better, ultimately benefiting our patients and stakeholders alike. This concludes our prepared remarks. Thank you and we'll now open up for further questions.

Operator, Operator

Our first question comes from Brooks O'Neil with Lake Street Capital.

Brooks O'Neil, Analyst

Good morning guys. Terrific quarter. You just keep executing, and it's fantastic. So let me ask you one or two quick questions. The first one is I know that sleep is a relatively small part of the business. But I've heard anecdotally that there has been some softness in the sleep market. Could you just comment on whether you're seeing that? And whether you think you can do something to offset softness in the business, in the industry or whether it's something that's going to be a headwind for a period of time?

Casey Hoyt, CEO

First off, we completely disagree that it would be a setback for our business. We are experiencing 11% sequential growth in the sleep market. We have not noticed any decline in adherence to tap equipment, whether in finding our patients or in resupply from those who haven't given up on therapy. I'm highlighting the market for a specific reason to illustrate how large the patient base is; we have 150 million patients in the country, and our market penetration is only 5% to 8%. There is much work to be done, but we have not seen any impact from these GLP-1 drugs. They have been present for about 1.5 to 2 years, and we have been growing sequentially in the sleep sector throughout this time. Moreover, if you look at some of our sleep manufacturers, they report similar trends and narratives. They also state that they are not experiencing any decline in adherence to sleep therapy or any hindrance to their growth. I understand the concerns and the need for scrutiny from investors. However, let me be clear: we are not facing any decline in sleep; we are only seeing growth, and we anticipate more of it in the future.

Brooks O'Neil, Analyst

Great. Let me ask you another question. I understand that one of your equipment suppliers, Philips, has encountered some issues with the government. Can you comment on whether this has affected you in any way? If so, how have you responded?

Casey Hoyt, CEO

Yes. I mean obviously, Brooks, this has been going on for a few years now. The recall affected the sleep apnea devices as well as the ventilators. The ventilators never were to be taken off of market because of the life-saving device component of it. As we understand the majority, if not all, of the sleep replacement devices have been taken care of, if it's not completed, it's very close. So we anticipate that they probably come back to market with sleep apnea devices at some point, call it, relatively soon, not sure when that happens. Obviously, there's others in the market that have filled that need. On the ventilator side, they are in the process of working with the government on some sort of remediation. Once again, that has not really impacted our business too much. There's operational logistic type things that we've dealt with. We've been dealing with those for three years, but we have no looming issue that we are aware of. Our anticipation is that, that remediation gets done at some point over the next few months. But until then, it's just business as usual.

Brooks O'Neil, Analyst

Let me ask one last question. I hear from some people who believe that Viemed is similar to other DME companies in the market. These other DME companies are often characterized by growth through acquisitions and a model that relies heavily on a fleet of trucks and personnel who simply deliver the equipment and move on. Could you provide a brief explanation of why this is not the case with Viemed and how your model presents significant opportunities in the marketplace?

Casey Hoyt, CEO

Yes. Our complex respiratory business, which constitutes 58% of our operations, is fundamental to our nationwide scaling. We don't aim to be a one-stop shop like some competitors; instead, we focus on training clinicians to embody our approach. We collaborate closely with pulmonologists within facilities and serve as an extension of their care, providing valuable support to hospital case managers who connect equipment providers with patients. Ultimately, we operate under two distinct business models. The reason for our spin-out in 2017 was due to the differing growth strategies and capital needs of our company compared to those acquiring companies for expansion. We focus on recruiting and developing personnel rather than acquisitions. This strategy remains central to our growth and distinguishes us from our competitors, each of whom has their own methods for success.

Brooks O'Neil, Analyst

Absolutely. Thanks for that, Casey, and Todd, and thanks for all the good information. Have a nice day.

Operator, Operator

Our next question comes from the line of Doug Cooper with Beacon Securities.

Doug Cooper, Analyst

Can you hear me?

Casey Hoyt, CEO

Yup, I can hear you now.

Doug Cooper, Analyst

Okay. First of all, great quarter, but the market doesn't seem to be acknowledging the numbers. Let me revisit Brooks' comment regarding the GLP-1 drugs and the market's perception that respiratory illnesses and sleep apnea are diminishing. It's important to note that 17% of your business is related to sleep, meaning 83% is unaffected by the GLP-1 drugs. Can you comment on COPD in relation to these GLP drugs? I'm assuming there's no impact on that, but I would appreciate your confirmation.

Casey Hoyt, CEO

Yes, that's correct. The COPD patient is completely different from the sleep apnea patient. Complex respiratory, as we define it, includes percussion vest, oxygen, and ventilation. This business is really not influenced or affected by GLP-1 drugs. There are actually some studies suggesting that thinner COPD patients are more vulnerable to death in the later stages of their life. I'm glad you mentioned it because we want to clarify that while sleep apnea, which many view as a key area for GLP-1s, makes up only 17% of our business, the remaining portion is unaffected by these drugs.

Doug Cooper, Analyst

Let's focus on the 17% for a moment. When ResMed shared their results earlier this week, they mentioned during their conference call that they are closely monitoring a large group of patients using GLP-1 medications in conjunction with ResMed's PAP therapy. They are not observing any significant changes in PAP adherence or reduced participation in resupply programs compared to the control group. In their view, even if some patients are using the GLP drug, those individuals might belong to the obese or morbidly obese category and were already outside the mainstream healthcare system. Bringing them back into care could potentially boost their business since sleep apnea devices are closely linked to overall wellness. What are your thoughts on this?

Casey Hoyt, CEO

Yes, the main theme is that everyone is trying to understand the potential impacts on their business. It's notable that ResMed is conducting its own studies, which I find encouraging. There are individuals with a Body Mass Index of 32 or 35 who are not entering the primary care system, but in order to get a GLP-1 drug, they must see their doctor. While GLP-1 may play a role, I assure you that addressing sleep apnea will also be necessary. Their hypothesis is that increasing the number of patients visiting the doctor could boost the sleep apnea market, as we don’t view GLP-1 as a cure for sleep apnea. It may assist in the overall management of the patient experience, but it won’t resolve sleep apnea. It’s an intriguing perspective, but these are still just ideas from those trying to predict future business developments, and I support ResMed’s position on this.

Todd Zehnder, COO

I am just going to reiterate what we said in our prepared remarks and maybe what we apply the crux on is that, I think the GLP has been around for probably 1.5, 2 years in kind of wide mass. And we have grown our sleep business, not even including HMP. We have grown our sleep business every quarter from that point to now. And really, the growth, I'm not sure has ever been as high as it was 3Q over 2Q, which was 11%. So kind of at the height of the scare of the sleep business going away, our sleep business is growing as much as it ever has. So we're not exactly sure what ResMed is saying is that more people are going to the physician, and this is a potential treatment. But whatever is happening, we're not seeing a decline in this business. That is just a fact.

Doug Cooper, Analyst

Can I focus on the resupply business? Casey, you mentioned that sleep constitutes 17% of overall revenue, and resupply makes up 45% of that 17%. What can we expect from the resupply business as patient counts grow? I'm assuming this is a highly profitable area, as it has minimal general and administrative costs and generally maintains a high gross margin. Is this a factor in the increase of your EBITDA margin from 22% last quarter and 19% a year ago to 24.5% this quarter?

Casey Hoyt, CEO

I'm going to break down that information for you, Doug. Currently, 47% of our sleep revenue for this quarter comes from resupply, and our margins in this segment are around the mid-40s. As you may recall, during our national rollout of sleep services in recent years, this is the part of the business where you want to focus on rentals. It can be profitable, but compliance from patients is essential to ensure resupply orders come in, allowing it to evolve into a more predictable revenue stream with lower general and administrative costs, relying more on technology and drop shipping. Each month, as we add more active patients using Positive Airway Pressure (PAP) devices, we expect the future resupply market to grow. Consequently, unless we see a significant increase in rental patients, the revenue from resupply should continue to rise each quarter. There are several factors contributing to this expansion, including our effective cost management across the country and the scaling of our business. The integration of HMP has also improved our margins as we have centralized some processes and achieved economies of scale within Viemed. This has positively influenced their EBITDA margin as well. Overall, our dedication to resupply in the sleep sector, along with the integration of HMP's resupply service, has greatly benefited our bottom line.

Doug Cooper, Analyst

Excellent. I have one last question about the core vent business, which showed a solid 12% year-over-year growth in patient count. However, considering you are a significant player in the U.S. and among the top five, the market seems to be growing more slowly than we might expect given the therapy's effectiveness. What do you think is causing the hesitation among physicians to prescribe this therapy?

Casey Hoyt, CEO

Yes. I don't think it's not an issue, and I want to emphasize that it comes back to research and data, which has always been my focus, Doug. It's impressive how, when we enter new markets, we still need to inform pulmonologists about the availability of this ventilation service for patients at home. This underscores the necessity for us to leverage the research and studies we have shared. Another key point is that we view Medicare Advantage as a significant opportunity since it is on the rise. While they currently represent only about 12% of our payer mix, they account for 50% of Medicare. Our frustration with the 2024 rule is due to their tendency to deny costly care without proper clinical justification. For instance, we have faced denials for ALS patients on ventilators who are in critical condition. This is disheartening, but it represents both a challenge and an opportunity for us to expand in the years ahead. Starting in 2024, Medicare Advantage must adhere to Medicare's clinical guidelines. If they fail to do so, we will have a platform to highlight those that are refusing essential care. I am being very candid about these daily struggles, but they also present significant growth potential for us once we align those entities with our goals. I believe that alignment will occur.

Operator, Operator

Our next question comes from the line of Michael Freeman with Raymond James.

Michael Freeman, Analyst

Hey Casey and Todd. Congratulations on the quarter and the smooth integration of HMP. I have just one quick question today that follows nicely from the last one. I'm looking at your diverse payer base, which is impressive on its own. I'm curious about how you might optimize this payer mix moving forward. Which of these payers is most beneficial to Viemed, and how do you foresee this evolving in the future?

Casey Hoyt, CEO

You've heard me discuss Humana and United before, Michael. They are not part of our network. Some of that is our decision; with United, it's driven by rates that don't make sense for us to accept. Humana has chosen to work with a national sole provider, Rotech and Apria. We are optimistic, but we need to see how well that supports the Humana network. We expect there will be issues with patient access to care, but we will have to wait and see. These are the two major payers we would like to have in our network, and we want to serve those patients. However, historically, we have never been in network with them, so this isn't reflected as a loss in our financials; it's been an ongoing struggle. It represents a challenge for us, but also a significant opportunity to address in the future. When we provide noninvasive ventilation equipment to patients at the right time, we can save more money once they stabilize. It's beneficial for everyone involved. We will reach that point eventually; it's just taking time.

Michael Freeman, Analyst

That's super helpful. I guess going one level up and looking at the different segments of payers, for instance, on your pie chart, your Medicare Medicaid commercial Medicare Advantage in private. What slices of that pie would Viemed be looking to expand and would be most accretive going forward?

Todd Zehnder, COO

I believe we are aiming to expand all of our products because there is an underserved population across all of our payers. From a percentage growth perspective, it seems that Medicare Advantage is likely to grow the most since more patients are enrolling in that program, which has historically represented a smaller portion of our payer base. Ultimately, we do not accept poor business practices, and any revenue that contributes to our overall growth will positively impact our bottom line. Therefore, we do not have a specific strategic goal focused on growing just one segment.

Michael Freeman, Analyst

Okay. All right. That's really helpful. Congrats on the quarter, and let's help the market catches up.

Operator, Operator

There are no further questions at this time. I would now like to turn the floor back over to management for closing remarks.

Casey Hoyt, CEO

Yes. We just want to thank everybody for their time today. Follow up with us if you have any questions. And thanks again to all of our employees out there producing these wonderful results that we're happy to share with the market. Thank you.

Operator, Operator

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.