Q2 2024 UniFirst Corp Earnings Call
Participants
Steven Sintros; President & CEO; UniFirst Corporation
Shane O’Connor; EVP & CFO; UniFirst Corporation
Ronan Kennedy; Analyst; Barclays Investment Bank
Kartik Mehta; Analyst; Northcoast Research Partners, LLC
Luke McFadden; Analyst; William Blair & Company L.L.C.
Andrew Steinerman; Analyst; JPMorgan Chase & Co
Andy Wittmann; Analyst; Robert W. Baird & Co. Incorporated
Josh Chan; Analyst; UBS Investment Bank
Presentation
Operator
Hello, and thank you for standing by. Welcome to UniFirst Second Quarter 2024 earnings conference call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session to ask a question. During this session you will need to press star one one on your telephone. You would then your automated message advising your hand is raised. To withdraw your question, please press star one one. Again. I would now like to hand the conference over to Steven Sintros, UniFirst's President and CEO. Sir, you may begin.
Steven Sintros
Thank you and good morning. I'm Steven Sintros, UniFirst's President and Chief Executive Officer. Joining me is Shane O'Connor, Executive Vice President and Chief Financial Officer. We would like to welcome you to UniFirst Corporation's conference call to review our second quarter results for fiscal year 2024 this call will be on a listen-only mode until we complete our prepared remarks, but first, a brief disclaimer. This conference call may contain forward-looking statements that reflect the Company's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties. The words anticipate, optimistic, believe, estimate, expect, intend and similar expressions that indicate future events and trends identify forward-looking statements. Actual future results may differ materially from those anticipated depending on a variety of risk factors. For more information, please refer to our discussion of these risk factors in our most recent Form 10-K and 10-Q filings with the Securities and Exchange Commission. We are pleased with the results from our second quarter with Met, which met our internal expectations. I want to sincerely thank our team partners who continue to always deliver for each other and our customers as we strive toward our vision of being universally recognized as the best service provider in the industry. All while living our mission of serving the people who do the hard work, people who do the hard work of the workforce that keeps our communities up and running. So many of them are our existing and prospective customers as well as our own UniFirst team partners. Our mission is to support those employees by providing the right products and services, enabling them to do their job successfully and safely safely, whether that means providing uniforms, workwear, facility services, First Aid and Safety, clean room or other products and services. Our goal is to partner with our customers to ensure that we structure the right program products and services for their business and their team, all while providing an enhanced customer service experience.
Overall revenues in our second quarter were up 8.8% compared to the second quarter of fiscal 2023. Current quarter benefited from the acquisition of clean uniform, which just passed its one-year anniversary anniversary of becoming part of UniFirst this month. We continue to be pleased with the overall performance of clean as we have been able to retain its customers and continue to move its top line positively over the last year.
Core Laundry Operations organic growth totaled 4.8% in the quarter. Net income and EBITDA increased 14.9% and 23.8%, respectively in the quarter compared to a year ago, benefiting from growth in our top line and lower cost expended during the quarter related to key initiatives. Excluding the impact of the key initiatives. We still experienced solid EBITDA growth in the first six months of the year. We are also pleased with the significant improvement in cash flows from our operating activities compared to 2023, as well as some positive trends in certain key areas such as merchandise costs. As a reminder, we have been expending costs over the last couple of years related to our technology transformation. As expected, these costs are declining due to activity surrounding the deployment of our CRM largely winding down. We continue to expend dollars related to our ERP project. However, as we enter implementation phases of the project, more costs are being capitalized.
During the quarter, we saw continued strong performance from our sales organization, delivering a 10% increase in new account installations compared to the prior year. We continue to sell from prospects and the value that UniFirst can bring to their businesses. Our approach is a constant state of one where, as I mentioned, we focused on creating the right programs with the right garments and products for our customers. Overall, we are pleased with solid organic growth for the quarter despite a somewhat more challenging pricing environment. In addition, wearers versus reductions were flat in the quarter compared to a positive impact in wearer levels that we had a year ago.
As we look forward to the rest of 2024 and beyond, we will continue to focus on delivering profitable growth, fueled by strong execution from our sales organization. And our continuing efforts to drive superior service execution and customer satisfaction.
In addition to executing our growth model, we continue to focus on opportunities to improve our efficiency and profitability. Our team continues to become more proficient, utilizing and optimizing the capabilities of our new CRM, including leveraging some of clean's proprietary technology across universe with all efforts focused on deploying standard processes and driving productivity in additional areas such as strategic pricing and account profitability as well as strategic manufacturing and sourcing represents significant margin enhancement opportunities. Although some of these benefits going forward will be more significantly enabled through the implementation of our ERP. We continue to continue to focus on these areas and others that we feel can move the needle in the near to midterm, we continue to believe strongly in the bright future of our first aid and safety division. During the quarter, we continued to deliver strong growth in our van operations, which was partially offset by a decline in our wholesale operations. We continue to make investments in the sales and service infrastructure of the van business to expand our footprint and ensure we can reach existing UniFirst customers as well as new prospects in the market that have a strong need for these products and services as we progress increasing route density.
In addition to penetrating customers with the full breadth of services that we provide will be critical steps and build that building the profitability of this segment.
With that, I'll turn the call over to Shane, who will provide more details on our second quarter as well as the outlook for the remainder of fiscal '24.
Shane O’Connor
Thanks, Steve. In our second quarter of 2024 consolidated revenues were $590.7 million, up 8.8% from $542.7 million a year ago. And consolidated operating income increased to $27.9 million from $20.7 million or 34.9%. Net income for the quarter increased to $20.5 million or [$1.9] per diluted share from $17.8 million or $0.95 per diluted share. Consolidated EBITDA increased to $62.5 million compared to $50.5 million in the prior year or 23.8%.
Our financial results in the second quarter of fiscal 2024 and 2023 included approximately $3.2 million and $9.1 million, respectively, of costs directly attributable to our key initiatives. In addition, we incurred costs of approximately $2 million in our second quarter of fiscal 2023 related to the acquisition of clean uniform. The effect of these items on the second quarter of fiscal 2024 and 2023, combined to decrease both operating income and EBITDA by $3.2 million and $11.1 million, respectively, net income by $2.5 million and $8.3 million respectively, and EPS by $0.13 and $0.44, respectively, year over year. Net income and EPS comparisons were also unfavorably impacted by lower interest income in our second quarter of 2024 due to lower cash reserves subsequent to the acquisition of clean in our third quarter of fiscal 2023.
Our Core Laundry Operations revenues for the quarter were $522.4 million, up 9.5% from the second quarter of 2023. Core Laundry organic growth, which adjusts for the estimated effect of acquisitions as well as fluctuations in the Canadian dollar was 4.8%. The solid organic growth rate was primarily the result of solid new account sales and improved pricing with our customers for laundry operating margin increased to 3.6% for the quarter were $19 million from 2.9% in prior year fourth quarter, $13.6 million, and the segment's EBITDA margin increased to 9.9% from 8.7% costs we incurred related to our key initiatives were recorded to the Core Laundry Operations segment and combined to decrease both the core laundry operating and EBITDA margins for the second quarter of fiscal 2024 and 2023 by 0.6% and 2.3%, respectively. Excluding these items the segment's operating and EBITDA margins were also impacted by additional reserves we recorded related to our legacy environmental sites and higher costs we incurred related to investments we have made in building our corporate capabilities over the last year. These items were partially offset by lower energy costs during the quarter, which decreased to 4.4% of revenues, down from 4.8% in 2023. Revenues from our Specialty Garments segment, which delivers specialized nuclear decontamination and cleanroom products and services increased slightly to $43.5 million from $42.1 million in prior year or 3.2%. This increase was primarily due to growth in our clean-room operations. Segment's operating margin increased to 22.8% from 19.1%, primarily the result of lower merchandise expenses in our clean room operations. As we've mentioned in the past that the segment's results can vary significantly from period to period due to seasonality as well as the timing and profitability of nuclear reactor outages and projects.
Our First Aid segment's revenues increased to $24.8 million from $23.5 million in prior year or 5.6%. As Steve discussed, this increase was fueled by strong growth in our van operations, partially offset by a decline in our wholesale operations segment had an operating loss of $1 million during the quarter as the segment's results continue to reflect the investments we are making in our First Aid van business at the end of our second fiscal quarter, we continued to reflect a solid balance sheet and financial position with no long-term debt and cash, cash equivalents and short-term investments totaling $101.9 million. Cash flows from operating activities in fiscal 2024 have increased to $106.7 million compared to $64.2 million in prior year or 66.3%, primarily due to improved profitability and lower working capital needs of the business during the first half of the year. We continue to invest in our future with capital expenditures of $72.9 million, and we repurchased 46,750 shares of common stock for $8.1 million. I'd like to take this opportunity to provide an update on our outlook. We now expect our revenues for fiscal 2024 to be between $2.415 billion and $2.425 billion. In line with the message at the end of our last fiscal quarter, we further expect that our diluted earnings per share will be between $6.80 and $7.16. Our guidance for fiscal 2024 continues to include one extra week of operations compared to fiscal 2023 due to the timing of our fiscal quarter and assumes core laundry operations, operating and EBITDA margin at the midpoint of the range of 6.5% and 12.6%, respectively. We now estimate that the cost directly attributable to our key initiatives that will be expensed in fiscal 2024 will be $12 million and will reduce both core laundry operations, operating and EBITDA margins by 0.6%. We fully expect the full year effective tax rate will be 25% and our guidance assumes no future share buybacks or unexpected significantly adverse economic developments.
This concludes our prepared remarks, and we would now be happy to answer any questions that you may have.
Question and Answer Session
Operator
Thank you. Ladies and gentlemen, as a reminder to ask a question, please press star one one on your telephone and wait to hear your name announced To withdraw your question. Please press star one one. Again, please stand by while we compile the Q&A roster.
Yes.
Our first question comes from the line of Manav Patnaik with Barclays. Your line is open.
Ronan Kennedy
Hi, good morning.
This is Ronan Kennedy on from Manav, and I'll thank you for taking my questions. The first one, if I may. Just to look to unpack, I know you historically don't disaggregate or break out the organic growth algo, but you did comment on our strong performance with a 10% increase in new account installations. Just wondering if you could unpack that a bit further with some further detail as to the drivers there, who you're winning from some some further detail, please?
Steven Sintros
Sure. From a sales perspective, I think if you look at it as we've talked about in the past, about 60% of our new account sales come from competition, and that's sort of a wide range of competition. And the other 40% are no programmers. So those are either people that had a different type of program, maybe a direct purchase program or no program at all or opening a new business. And so on from an industry perspective, I think it's pretty pretty widespread. We haven't seen any significant shift in the type of business that we're winning. We're still winning a healthy amount of uniform business, which did run a little bit higher this year at least year to date compared to a year ago. And so I would say the wins are pretty broad-based.
Ronan Kennedy
That's helpful. Thank you.
And then as a follow-up, also on the organic growth, I think you had referenced a somewhat more challenging pricing environment, which you had also previously spoken of seeing price sensitivity, I think it was relative to initial expectations and also a function of moderating costs. But can you just talk about how pricing is trending and whether you're seeing some continuing to see what was previously some strategic losses? And then also just any comments on attrition and how that is trending, please?
Steven Sintros
Sure. With respect to pricing, I think, Mike, my comments probably held from last quarter as well. It is a little bit more sensitive out there from I think you just look at the cycle that we've gone through from an inflationary perspective. And although costs are not going backwards, some of the cost trends just out in the marketplace have moderated. And I think a lot of companies are starting to look at their cost and maybe putting programs out to bid a little bit more than they did certainly during the pandemic. I think this is a lot of this is in the context of comparing to the pandemic where retention for a lot of service companies was better. Price sensitivity wasn't as strong, especially with the inflation that was being experienced across the market. So I wouldn't say during the quarter we had any further change in that environment. It continues to be on balance a little more challenging in that area compared to say a year ago from an attrition perspective, I know we had talked about it ticking up a bit over the last couple of quarters. I would say no real change there, although compared to maybe the second half of last year, maybe some recent recent improvement in a little bit. So and nothing really significantly different in the environment.
Ronan Kennedy
Thank you. Appreciate it.
Steven Sintros
Thank you.
Operator
Please standby for our next question.
Our next question comes from the line of Kartik Mehta with Northcoast Research. Your line is open.
Kartik Mehta
Steve, just to understand pricing a little bit more from a sensitivity standpoint, are you at a point where you're year-over-year starting to have to go negative pricing or decreased pricing, or are you still able to get a little bit of a price increase, but maybe just not as much as you were getting during the pandemic time?
Steven Sintros
Yes, I think I think it's the latter. I think we still feel like we're securing some price. But as we as we all have talked about over the last couple of years on balance, there was more impact as we work through what had been sort of rapidly rising fuel prices and other inflationary areas. I think that that the ability to share in price was was on balance easier. But no, I would say we're still getting some benefit from pricing for sure in the current quarter and in the current environment.
Kartik Mehta
And then I know you talked a little bit about attrition, but as you look at your add-stops metric, how is that trending?
Steven Sintros
Yes, add-stops is it is very stable right now. I think I made the comment that a year ago, we were seeing a little bit more of a pull from positive adds and you just don't need to look much further than sort of the job numbers kind of month to month over the last couple of years to see that you can kind of make the connection that we were getting more pull over that period of time and less pull Now right now, I'd say it's stable we obviously look closely to see if there's any signals of industry sort of pulling back. And although we've seen select layoffs here and there broadly, it's been very stable overall.
Kartik Mehta
And Shane, just one last question. You know, for the year, what would you and just trying to understand adjusted EPS? I know you gave an EPS number. What kind of impact would you anticipate from your key initiatives? And I know the acquisition now know you're lapping it, but just for the year?
Shane O’Connor
Yes, I think the estimate for my key initiatives, it is $12 million for the year.
Kartik Mehta
Thank you very much.
Operator
Thank you. Please standby for our next question.
Our next question comes from the line of Tim Mulrooney with William Blair. Your line is open.
Luke McFadden
Hi, good morning. This is Luke McFadden on for Tim. Thanks for taking our questions today. So the last quarter, you had mentioned detecting more cautious posture from some clients as it pertains to business outlook, at least on the margin. But given that many of your clients have now likely gone through their own annual budgeting process, just curious to hear if you've noticed any shift in sentiment one way or another as it relates to the outlook for the balance of 2024?
Steven Sintros
Yes. So I wouldn't say there's really been any shift. And I think you sort of seeing that in the in the adds reductions, right. I think we're probably seeing people a little bit more cautious about growth outlook overall, which is causing maybe some some pullback in hiring. But again, I think it's sort of incrementally cautious, but I wouldn't say compared to a quarter ago that that's really changed a heck of a lot.
Luke McFadden
Understood. And then if I can pivoting to your ERP implementation, could you just provide any update on progress as it relates to that initiative to date? Just in terms of kind of where that's trended internally in terms of your internal expectations? And in light of that progress, is the $150 million number that you gave given in the past for CapEx for full year 2024, still the right way be thinking about that?
Shane O’Connor
Yes, our ERP project continues to progress on sort of in line with our expectations. Again, we're in the earlier implementation phases where we're focusing on maybe some more of the foundational items as we implement that system at this point in time. I would say largely it's progressing as expected on when you take a look or as it relates to your question around the CapEx for the year, the $150 million. I think through two quarters we spent, you know, a little over $72 million in CapEx, I think is the way things are trending that $150 million number still is a good number.
Luke McFadden
Great.
Thanks so much.
Operator
Thank you. Please standby for our next question.
Our next question comes from the line of Andrew Steinerman with JPMorgan.
Your line is open.
Andrew Steinerman
And could you talk a little bit about universe success in cross-selling like right now?
How much is cross-selling existing accounts helping the organic revenue growth now overall I know you talk about building out your Vans business and first first day, this is really kind of in, I would say, core laundry question, but are you getting more cross-sell of core of Core Laundry from your van customers and First Aid?
Steven Sintros
Yes, I'll take the second part of the question first. And certainly we are getting a lot of energy and cross-sell with our with our first state expansion. And that was sort of the the purpose of expanding that infrastructure to really take advantage of our UniFirst customer base. And I think that's that's being successful as far as from a core laundry perspective. And again, I know we don't always break down the components of that growth, but we're probably seeing a consistent amount of cross-sell going on right now in the in the in the core?
Yes, I hate to say I really don't want to break down the components of the 4.8, it gets a little messy with adds reductions and cross-sell and so on. But I think it's pretty consistent. I think there's more we can do there and some of our strategy over the next couple of years is to increase some investments in that area. I think without getting into some of the details about some of the products and other things that we're looking at, we think there's incremental opportunity there. So right now, it's probably been pretty steady based on what we've been doing, but we think there's opportunity to improve that area.
Andrew Steinerman
Thank you very much.
Operator
Thank you. Please standby for our next question.
Our next question comes from the line of Justin Hott with Bear. Your line is open for.
Andy Wittmann
Good morning.
Hey, it's Andy Wittmann, Whitman. Sorry for the confusion there.
Steven Sintros
Morning.
Andy Wittmann
I just wanted to I wanted to ask Shane on the you talked about the environmental liability on some of your sites increased and impacted your margins. This question really two parts to this one. Like how much was the reserve this quarter and do you see that reserve being kind of an adjustment that is one-time, but do you think this is an ongoing ongoing level of greater cost that you'll be having it take in your P&L on a go-forward basis?
Shane O’Connor
Yes, yes.
So the first thing I'll say about those reserve adjustments is those relate to legacy sites and those environmental issues were probably from three or four decades ago. So those are reserves that we've carried on for a significant amount of time. The headwind that we saw during the quarter, our legal expenses were actually 50 basis points of headwind.
The vast majority of that was related to the environmental reserves that we recorded. Some that isn't in ongoing arm. You shouldn't expect that there's going to be ongoing reserve adjustments on a quarterly basis from time to time, we do have to adjust those one of the adjustments that we make to those reserves, our change in discount rates, and we've talked about that from time to time so on, we've had some variability go through our operating margins as a result of those types of changes. But they aren't normal operating expenses that are that are retained and consistent. So from every now and then we'll have to make some adjustments to those reserves come, but it's sporadic.
Steven Sintros
The only other thing I would add, Andy, is that some of these some of the progress related to these sites transpires over years. And so we'll be asked to do a little bit more work on assigning. We'll tried to estimate the impact of that. And then two years later, we'll have some more feedback about something. So as Shane mentioned, it was both that this quarter as well as somewhat of the interest rate adjustments that we made to those reserves as well.
Andy Wittmann
Yes.
Okay. That all makes perfect sense. And then I guess the other key thing that you mentioned here on your margins was related to merchandise costs. This has been a lingering headwind, but it sounds like this quarter where you saw a little positive benefit from there. Do you feel like that bottom is in place on the merchandise costs I thought was particularly interesting, given that new account installs were sounded like they're pretty good. You guys said positive things about that. So does that give a firmer base, do you think, Steve, on merchandise costs? And can you give us the quantum of the benefit you saw in the quarter on that one as well?
Steven Sintros
Yes, I think in the quarter compared to year over year, we're still sort of flat or maybe even up a 10th or something in merchandise. But compared to our expectations, we saw some some some benefits there and had to to answer your question, I think clearly now we feel like we are seeing that flattening, right? We've been we've been growing growing. We start to see some early signs of flattening, and we really are seeing that now. And just as a reminder, generally, and more than two thirds of the merchandise is just regular replacement merchandise for existing accounts and about a third is related new accounts. So even with new accounts higher, yes, we're seeing we're seeing some benefits in that area, which are great to great to see.
Shane O’Connor
Yes. The only thing I'll add to that is as we came into the year, we had sort of message that merchandise was starting to flatten on and we had indicated that maybe we were four or we were looking at a 10 basis point headwind during the year. And based on what we've seen through six, six months on We've obviously seen us some flattening in the additional adds to our merchandise and service. Again, the way that we account for our merchandise won't have as much of a meaningful impact on the current year because we amortize that over an extended life at this point in time. When I take a look at the year, I'm looking at merchandise being relatively flat or maybe a slight benefit of around 10 basis points. But again, because of the way that we account for that, that trend will aggregate over time.
Andy Wittmann
Okay. That's that's helpful. And I guess I'm just going to ask one question maybe on on the top line here because I'm hearing some puts and takes. I'm hearing 10% increase in new account installs which sounds like a really good performance year over year and would otherwise suggest that maybe potentially, I guess the question is, do you think can that lead to an inflection in your growth rate from here, just given that you installed a lot of new business in the quarter, and I guess previously you kind of sheet you were talking about the revenue being maybe on the lower end of guidance. And so does the sales performance change that commentary or does the ad stoppages are now more flat and sort of positive like you were getting a year ago. Does that evidence of affecting us ultimately just still like the low end of the revenue guidance? Or are you more positive this quarter given the factors that you saw play out?
Steven Sintros
Yes, we're probably right down the middle there, Andy. And I think that the guidance reflects that, Ryan. I think all we did on the top line guidance was sort of a narrow, narrow the range and shifted a bit to reflect the commentary we made last quarter. And I do think the impact of some of those things you're mentioning, whether it be the impact of solid new account sales, price adds reductions, all of those things kind of have us looking. I'm very much in the same place that we were a few months ago, I guess.
Andy Wittmann
Yes, I'll leave it there, guys. Have a good day.
Steven Sintros
Thank you.
Operator
Thank you.
As a reminder, ladies and gentlemen, that's star one to ask a question, please standby for our next question.
Our next question comes from the line of Josh Chan with UBS. Your line is open for.
Josh Chan
Good morning, Stephen and Shane.
Steven Sintros
Good morning.
Josh Chan
Good morning. on your core laundry margin. I guess even if you add back the 50 basis points of legal, it still seems that it's down versus last year. And kind of could you help us understand then what drives margin expansion in the second half? Because I think that's what you need to get to your year points?
Shane O’Connor
Yes, I can I can add some additional light there, but I'll start with saying that our second quarter from a profitability perspective is seasonally our lowest quarter because of certain items that annually land in that quarter. So if you take a look at our history, it usually is our lowest quarter. When you take a look at the year-over-year trend, some of the other things that are contributing to the that margin headwind would be the acquisition of clean, which accounts for about 20 basis points on. And we've made investments that we've talked about over the last year, primarily in the second half of 2023 in our corporate capabilities, which have contributed 20 to 30 basis points to that margin headwind. Energy was a benefit of 40 basis points. And then there were a number of other items on that. It happened within the second quarter, which contributed to some additional expenses, a lot of which were anticipated and originally provided for in our guidance. As an example, during this second quarter, we had two new facility openings and usually there's incremental expenses that we incur as we get those facilities up and running and stabilize.
There were certain selling incentives that landed during the quarter.
Nam that were previously or in past years were timed in different quarters. And then there were a number of other items and timing items that happened in our second quarter that contributed to that delta of 30 basis points to 40 basis points. Again, the seasonality as well as some of these items were largely provided for in our original guidance.
And as we look throughout the remainder of the year, we are expecting that that margin will trend northward of maybe our star 2Q on experience.
Josh Chan
That's really helpful color.
Yes. Thank you for breaking that down. And as my follow up, could you talk about your CRM now that you've had that for a while is in the in the US. Could you talk about the progress towards capturing any savings and what how you expect those to trend over the coming years?
Steven Sintros
Thank you.
Yes, I think certainly, I made the comments in my prepared remarks that when you change the system like we had, there's a lot of learning. There's a lot of change management. I think the the teams are becoming much more comfortable kind of optimizing the use of the new system. And we've always talked about that one of the areas and that we expect to benefit from with the CRM and sort of increased merchandise management with kind of a a more sophisticated barcode technology and some other controls. And and I think that's partially maybe what we're starting to see with the improvements in merchandise. I think over the last couple of years, as we were deploying the new system, there was probably incrementally some additional costs as we transitioned in rebar coated a lot of our garments, but we're through most of that now. And I think we expect that to start to smooth out. So I think that's one of the biggest areas. And I just think the efficiency in kind of the day-to-day plant operations, I mean, when you think about our cost structure merchandise is such a big part of it and then efficiency in the plants as well. And then we've always said kind of the service execution side of it with the automation we're giving our route drivers is a big part. And although there was change management, we have been happy with the adoption of the new technology by our frontline service workers and I think the more they continue to get comfortable with that. It's just going to provide for that enhanced customer experience, which will help our overall growth over time.
Josh Chan
Great, and thank you for the color and thank you both for your time.
Steven Sintros
Thank you.
Operator
Thank you. I'm showing no further questions in the queue. I would now like to turn the call back over to Steven for closing remarks, but thank you.
Steven Sintros
I'd like to thank everyone for joining us today to review our second quarter results. And we look forward to speaking with you again in June when we expect to be reporting our third quarter performance. Thank you and have a great day.
Operator
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
