AdaptHealth Corp. (AHCO) Earnings Call Transcript & Summary

Good afternoon, everyone. This is Joanna Gajuk. I'm a health care analyst at the Bank of America Research. I have lead coverage of home health base and also broader home care names for the bank here. So welcome to our second Annual Home Care Conference. And now it's my pleasure to host this session with AdaptHealth, and they're one of the largest suppliers of durable medical equipment in home and includes variety of different devices you can think of, like CGMs in the diabetes space, CPAP for acne and oxygen equipment. And we have almost entire team here with us. So very happy to have Steve Griggs, who's the Chief Executive Officer; also Josh Parnes, the President; Jason Clemens, who's the CFO; and also Anton Hie, who is heading the Investor Relations. And also before we start, I want to make a note to the audience that we just will go right into Q&A, so please use the Ask Question window next to the webcast panel and send me any questions you have for the management team and I will be more than happy to pose those questions on your behalf.

So I guess, first, I was thinking just to start big picture since the company hosted first Investor Day. It was like not so long ago, but maybe now it's already been 2 months ago, but nevertheless, it's very recent. And at that conference you talked about your 2025 targets, right? So can you talk about how you think about the organic versus inorganic growth by business line? And also, what are the main drivers to get you to your targeted 25% margin?

Sure. Maybe I'll start on some of the numbers side. We'll ask Steve and Josh to weigh in on how we're actually going to get there. And before I start, we're just going to call Anton publicly here, who come from the sell side a year ago and to put on a first ever Capital Markets Day, we were thrilled with it. They did a great job, helping us all be successful that day. So regarding the targets, Joanna, we were purposely vague on specific product categories and how we will get to the $4 billion of revenue. Now if you just take our $3 billion run rate as we're exiting here in '22, and you compound that 8%, which historically ex -- a CPAP recall or anything else, just unusual in nature. The 8% is what we believe is what the product portfolio should perform at under normal circumstances. So that 8% compounded will get you to just about $4 billion revenue, maybe a little bit shy of that. So we do assume a small amount of acquisition activity to get there. The reason we are purposely vague is we think some products will do better, some products will do a little bit of worse such as part of running a portfolio. I think we've clearly demonstrated our ability to qualify great acquisitions and to get them done and integrate them, as the pipeline repairs, which will coincide with the overall CPAP market repair, we do trust that there will be significantly more opportunities available to us from an acquisition standpoint as we start '23 and between there and 25%. So as a reminder, before I pass it off to the guys to talk about operational specifics, I'd say diabetes, we had pegged for '22 at 18%. As messaged at Capital Markets Day, we do believe that product line will glide down over the coming years. We don't know if it's 3 years or 5 years, but we think that product category glides down to a mid- to high single-digit nonacquired growth rate. So I will be taking a couple of points off a year until we get to 25%. Respiratory should be very steady, 4% to 5%. It's been that way. I think Steve will tell you for 30 years. That has prepared. If you look in our last quarter, we were up a couple of million sequentially and that's how that product performs. It is a sequential compounding product line. DME is a little soft right now, but we don't think there's anything to disrupt a natural 3% to 4% growth rate, really fueled by folks turning Medicare, age and utilization of DME that can come with that. Sleep is a bit of a wildcard across the portfolio. We suspect sleep will be bigger grower than normal next year. We will give specifics on '23 prior to formally guiding. But the typical 7% to 9% market growth and nonacquired growth that we'd expect in sleep will likely be a bit outpaced in '23, some due to just easier comp in the first half, some due to the vast amount of PAPs that are coming online. But all in all, we think over a 3-year period, we're about 8%, it is a good way to think about revenue. Steve, Josh, anything to add there?

Well, certainly, I think our confidence in the $4 billion and the $1 billion in EBITDA, $4 billion in revenue is the market is returning to pre-pandemic normality for the most part. So we expect consistent growth. And with that growth, we expect margin expansion. So I think you could see our margin returning to pre-pandemic levels and then growing from there. And I think that's how you get to all those numbers. And so I think it's business as usual. We're all operators by nature. So we should get back into a more operating environment that we don't have constraints from supply. I think those are pretty much all gone. I mean there'll be a handful of products as there are always, but I don't think you'll have the ramp at supply chain issues anymore. Again, absent of some new things happening, but just consistently getting better and better. I think the labor markets stabilize at least for us. So we feel like we have some predictability in that. And so we have some predictability. I think we're assuming that the inflation that's happened will stay there. We don't expect prices to decline, but we don't expect rampant increases in those prices either. So we feel like we're in a fairly stable operating environment, a fairly stable historical growth environment, and that should lead us to those numbers for 2025.

And I guess with Q3, it was maybe a tiny bit weaker versus . But I guess when it comes to those targets, it sounds like still confident in those, but I just want to kind of hear what gives you confidence, right, in these targets that you will get to?

Well, I don't think the growth rates that we are looking for are out of the norm. And so I think they just go back to historical growth rates. So we should have some market size advantages that could make those a little bit more. We'll have some market size and mix challenges that could cause them to be a little less. So when we frame those, that Jason said to that 8%, could it be a little bit more, it could be a little less, but I think that's a year-to-year thing. And I think we're going to get pretty darn close. And I think we think that the acquisition market is enough to get us to that $4 billion revenue target. So with the combination of just the return to normality, I mean just the growth in the marketplace that returns back to where it was. We're already seeing that. I think everybody else is seeing that, too. So it's not just something that we're independently seeing. I think everybody has that same anticipation for growth in the health care sector. And then certainly, the acquisitions will be more viable for us as we have predictability of our supply, so we can actually predict what we can do with an acquisition as opposed to waiting for a major supplier to come back to the market.

Joanna, I'd add to that, if you're interested in kind of bridging it out more formally. The midpoint of guide that we've suggested for 2022, we said early in the year that we had estimated $65 million of adjusted EBITDA to be either just delayed or lost forever as part of the Respironics recall and just lack of PAPs on the market to meet the patient demand that just continues to be strong and growing. So if you add that into our implied guidance, you're looking at just a shy under 23% adjusted EBITDA margin, I mean prior year Q2 and Q3. I mean, we were almost 24% in 2021. And so I think just those data points as you think about the repair can get you to what is a more usual or normalized run rate. And from there, we're confident that the technology we talked about at Capital Markets Day and the levers that we have to pull within the other P&L lines, we feel very comfortable and confident getting to 25% in 2025.

And I guess I want to follow up on the deal commentary there. So you clearly assume that you will continue to do some acquisitions. So I guess 2 questions or the 2 parts here. So one is are you able to self-fund this growth? And second, in terms of multiples, any changes you expect in the multiples that you're willing to pay for these assets?

Well, we definitely feel like we can self-fund. I mean, we feel like our cash flow, the anomalies that we've had past, last couple of years are going to be there. So our cash flow will be a very nice in '23 and beyond and continue to grow. So we ought to be able to factor in what we utilize that cash flow. That will be a significant amount of acquisitions. I think the pricing of them is probably similar to they were back to pre-pandemic levels or even during the pandemic and not the pre-recall levels probably is a better statement. So we expect to see that similarity. Jason can give you the details on what we saw back then and what we're expecting.

Yes. As a reminder, we've said for some time now that we -- our goal is to acquire and our discipline is to acquire 6x or less trailing adjusted EBITDA margins. We get a turn of that out day 1. I mean that's through purchasing synergy. There's a little bit of back office activity that will come day 1, and the rest will come over that first year. So we get to 5x or less on deals. So we feel that everything we bring in with the exception of something like an AeroCare, that obviously trades at a premium. We're very confident that we're driving value through each acquisition. The top line synergy, which we're cautious to talk a lot about specific numbers externally, but just an anecdote is our Nashville resupply operations. Hundreds of people, great technology, best-in-class workflows. The amount of patients that we will resupply in a year, given the kind of the potential that's governed by managed care contracts, compare that against the target of a $5 million, $10 million, $20 million DME company, typically someone at the location, maybe a cubical order of back office, making calls without everything that we bring in terms of value, I mean, you can see quickly how first year revenue synergy, especially on smaller deals, is also very, very good.

All right. So I guess there's more to come. And I guess we can look out for these transactions. In terms of just operations, right, so you mentioned the sleep business. right, when you think about next year, as you work through the backlog of these patients, the potential that growth will be above the kind of long-term growth you expect for that business? So how long should we expect this to last? You think you're going to work through this in a matter of 4 quarters or longer? And I guess to that end, could you see this double-digit growth? Or there's some limitations, say to your ability to really -- this new patient -- through enough of the new patient setups right, during a certain period of time?

Yes. And so I think we publicly stated that we'll get through our backlog early to mid-next year. So I think we're pretty consistent with that. Kind of that just depends on how fast we do that supply right now. The supply is pretty darn good from our main supplier and our secondary supplier. So we still feel very confident about that. So that will give us a little bit of bump from the traditional. Now how much does that stay up? There's a couple of factors that go into play with that. So we believe that we'll be out of our backlog faster than our competitors, so we should get some benefit of having available product in there to be able to take more patients than we normally would. So maybe that increased setups last another quarter or 2. Then I think there will be some enhanced excitement about ordering sleep. Now that people can order it, it gets back to the normal routine, you'll have that factor. And then you have people who have fallen off and didn't get set up timely that, we'll come back. The doctors will say, well, you don't have an excuse not to take your sleep study or get your PAP anymore. So I think the doctors do that. So you have a chance or we have a chance to AdaptHealth to have some better-than-average success for probably maybe 2, 3 quarters after our backlogs in there. We're not really budgeting that because it's -- you got to have to see how all the factors work together. But certainly, we're optimistic and that's our goal out there is to increase our market -- our percentage of the market share throughout all this process. We've made a lot of decisions to do that. But we'll have to see how that comes to fruition like we think it's going to or not. And probably mid next year, we can probably get better insight into what we see there.

And I guess staying on this topic, in terms of the supply of these machines rate improving clinic. So you kind of talk about the $65 million headwind and I guess you're making some assumptions or assuming there's some reasonable -- a reasonable way to think about what you could recoup of that amount into next year, right? But on the flip side, there's some offsets in terms of the sequestration, PHE, kind of going away next year. So kind of is that the base? And would you expect to see that a normalized growth from that adjusted base when we think about next year?

Joanna, I'd say I think about 23 in 2 buckets, kind of like you laid out there. The first is on PAP repair or recapturing the lost revenue or delayed revenue from 2022. And so publicly, we had put a number of $25 million to $40 million on that. So I think if you're searching for a jump-off point for '22 it's reasonable to add $25 million to $40 million to our midpoint as we're exiting '22. At the top of that, $25 million to $40 million, you got to believe that we are reclaiming share and that we will take on more backlog and the backlog of others. The bottom of that range of $25 million, essentially, it's more patients than expected that are in the backlog are not captured in terms of new volumes, whether that be patients have died or they've moved or they just continue to delay. I mean, there's various reasons why you may not get all of it. But that's the first bucket. The second one, your question on all the ins and outs of the PHE, sequestration, PayGo, the DMEPOS fee schedule increase that was announced last week, which is incredibly nuanced. We are running, obviously, the internal math on that, which still won't be ready for a couple of days because it's every HCPCS code, every MSA, rural versus non-rural. I mean it's a lot of data to push around to model it. But anyway, in the call, we had suggested that a good safe assumption for '23 is that all that is net neutral, but there's really no upside or downside. Now I think when you think through each of those buckets, you or the investment community can make your own assumptions on how likely or unlikely. But again, we -- our message was we feel net neutral is a conservative view of all the ins and outs. And certainly, we'll be specific when we guide here early in '23.

Right. Understood. And specifically, when you were talking about diabetes business and maybe slowing down that growth, but nevertheless, so pretty healthy growth in that business. But so far, you grew much faster than that. And I guess the CGM manufacturers also have been growing much faster. So why do you think this growth would decelerate over time?

Yes. I think long term -- sorry, Jason, you'll cover the numbers. I just kind of want to give a broader picture of when we talk about growth decelerating, we're talking in general, our volume growth, which is largely over time becoming more and more based on our resupply census of CGM patients that are on sensor resupply. So as that population grows and gets bigger, the comp that we have year-over-year to grow that at a high double-digit or even 20-plus percent becomes more challenging. I'd say that's number one. Number two, is, again, our numbers are based on also where our focus is and our focus is in the medical benefit focusing both on Abbott and Libre growth opportunities in terms of new starts. And a lot of that is not -- we're not baking in any assumptions around type 2 coverage or other coverages, which may or may not happen down the road. I think broader adoption is something that we're seeing now with type 1 insulin dependent, becoming more accessible to the therapy. So those are all positives and upside to the numbers that we put out. But we're thinking more kind of longer-term U.S.-based medical benefit, new starts as it relates to our overall diabetes population, that's where you'll see those numbers, be a little bit different if you compare apples to apples to what the CGM manufacturers is same.

Right. It makes sense. And also some other comments you were making previously about this business is around some potential pressure from just an inflationary environment for the consumer. So have you seen any of this? And in general, can you talk about durability of your business, broadly speaking, CGM during an economic downturn?

Yes. I think we mentioned that a little bit in kind of what we thought was a potential cause of Q2 being a little bit lighter in terms of our expectations of organic growth. We saw it rebound nicely in Q3. So we'll -- again, a lot of that primarily probably due to folks traveling post COVID and getting back to life to school to work as we got kind of later in the summer, back into September Q3 time frame. Nothing we're seeing off hand. Again, in general, our business in an inflationary environment from a consumer, I wouldn't say we're completely protected from that from those pressures. But generally, we're insulated against it, primarily because our payers are either commercial, government, only a small part of our business, about 15% is patient pay. Now again, on that patient pay, some of the more expensive therapies potentially could be impacted by inflation and an economic downturn where people may or may not want to choose therapy. That being said, the cost of a lot of the services that we're providing are very low cost compared to some of the other procedures that are out there. So $100 co-pays would be the maximum generally that people are dealing with. In many cases, it's significantly less. So again, when folks are arrayed with choices of staying at home, being able to take care of their health in their home, a co-pay therapy in that amount typically is going to go as one of the priorities of patients. But again, we're not completely immune to economic downturn pressures on patient pay.

So if I may, just 2, I guess, follow-ups still on that business. So the first one around the proposal from CMS, try to expand the reimbursement for CGMs to additional patient populations. And since that those patients are maybe less likely would need an insulin pump. But even with that, I guess, just talking about this expansion, if it's finalized, but what this could mean for your business, for your diabetes business?

Yes. I think in general, similar to what we saw on the HME side with the expansion of CMS' criteria, so what qualifies for an oxygen patient. It just makes it easier for more patients that are kind of borderline within those clinical criteria to qualify, makes us easier to document it for the physician to document the medical necessity for these patients. So I think if that gets finalized, again, we're hopeful that, that will lead to an additional TAM opportunity of additional patients that are now in our addressable market for CGM. Again, the technologies grade G7 is going to come out sometime next year, Libre's continuing to innovate. So those are all attractive to the consumer in terms of being able to manage their diabetes at home and get kind of the readings and stay on the therapy longer. So those are all positives into where this eventually goes to this type 2 eventually get included in that is anyone's guess. But again, I think in general, therapy adoption and consumer demand is going to continue to drive more payers paying for the therapy over time.

And you mentioned in terms of the diabetes business, you focus on the medical benefits, but since the manufacturers are pushing more of the reimbursement for CGMs to the pharmacy benefit from medical benefits. So what are the risks to AdaptHealth from this happening? Or has that already played out?

Yes. I think we've seen it play out over the last couple of years. Now again, the whole market is growing so significantly that you will have some subset of that going to pharmacy. Now to remind everybody, we have a 50-state pharmacy, we can provide product in that channel. We do provide product in that channel. We're somewhat agnostic to what brand. It's typically doctor referral on what brand is being driven. That being said, our margins are better in the medical benefit, and there's -- this particular advantages to both the patient and the payer in the medical benefit is that really we're doing extra checks upfront to make sure the patient really qualifies for the therapy and pharmacy typically don't need a prescription, and it's a lot easier for patients to qualify. Which is a little bit of a downside to a payer in terms of a utilization management function to be able to control their spend on that. That's some of the downside. The other downside is that the patient follow-up within the pharmacy channel is significantly less. The patient adherence long term to the therapy is significantly less. Typically, pharmacies don't have a robust kind of follow-up on the resupply coaching of how to use the product is typically more of a retail type of environment, which isn't conducive to really long-term adherence of the CGM therapy. So we've seen some payers definitely shift to pharmacy benefit over the last number of years. But again, that's somewhat of our growth numbers of what we're thinking in terms of what grows within the medical benefit is somewhat going to be a little bit different than the manufacturer's global numbers. But again, from -- we're looking at business that both can give better outcomes for the patients long term as well as margin long term and a lot of that growth that we're continuing to see in the medical benefit. And I think since we started this a number of years ago in the diabetes business, a little over 10% of our business has gone to pharmacy channel. And we're still putting up significant growth numbers even that withstanding. So it's not something that we're overly concerned with, although, again, we think it's going to play out in terms of the payers realizing that pharmacy benefit is not necessarily a cost savings or a benefit to the patient long term.

And I guess just a follow-up on the comment you were making or someone was making before around the CPI update for next year, right. So it sounds like it's going to be a very nice rate-up, which I guess already for this year was up 5% or so. So can you give us a ballpark what you think it's going to mean for next year? And then importantly, what I'm trying to ask also as it relates to commercial payers, do you expect the commercial payers to follow that CPI update that you're estimating for Medicare? And I guess, give us a ballpark of how you think it could potentially play out for on the commercial side of your business?

Well, there's 3 rates that are involved with us. It goes from 9.1%, 8.7% and 6.4%, I think those are the direct rates and then they get depending on which zone you're in, which products you're in and that kind of stuff. So we're basically making sure that all that math is exact and correct and we'll release that amount with the guidance that we expect to release here shortly for 2023. So I don't want to get ahead of us at all. As far as commercial, I mean, commercial plans are very, very difficult. They like to take meetings about a lot of things, but price increases is not one of them. So we squeeze those in every time. We talk about them. I think our success in 2022 with those plans has been able to create more flexible ways to work with them. And I suspect that will lead us in 2023, even more ways to work with them, more things that we can do with them in different manners that we've kind of talked about a little bit at both the Capital Markets Day and afterwards. So we're not projecting a significant amount of increases from commercial plans. If that happens, that obviously would be a great upside. So we wouldn't expect any decreases, but they're going to be tough to deal with as they always are. And we'll win a few here and there. But right now, we're not projecting any kind of significant amounts.

And another topic that was brought up with the Investor Day was around the next stage, right, for AdaptHealth and as you move more towards the value-based care type contracts. So can you talk about the ballpark size in terms of percentage of your revenues coming from these contracts now? And when do you -- and what do you think the percent could be, say, in 3 or 5 years?

Yes. So I think today, we have a little bit less than $100 million in value-based kind of different type of structured deals across the business. Again, that's evolving rapidly. And when we talk about value based, it's any one of a number of different type -- it could take form in various different types of formats. It could be capitation, it could be shared savings. It could be admin savings. It could be full risk, partial risk. So these are some of the models that are evolving technology and connection with payers as enabling. Again, this is something that is going to be part of our organic growth story in the next couple of years, both in terms of supplementing the actual product growth trajectories in both sleep, diabetes and respiratory. And so this is something that we feel in terms of being able to take market share, something that's going to enable -- our platform is going to enable that. So both with a full product line from everything from supplies to diabetes to respiratory aids to daily living and all types of medical supplies, that's going enable us to be kind of a one-stop shop with payers and then be able to ultimately drive outcomes in the home with diabetes, sleep apnea, CHF, COPD patients. This will enable kind of both different models and even more from very basic admin savings, getting rid of prior authorization, sharing the savings, you prescribe technology is going to enable a lot of that kind of admin efficiency, if you will, between a payer and us, being able to directly connect to the payers and offer a broader scope of product services is going to enable that. And really, like I think some of the things that we're thinking about today is what more can we do in the home for some payers. And again, it's not just payers at this point in time. You have value-based risk sharing physician groups that are growing in number. You have hospital at home that are growing in numbers. All these types of models in the home are going to need a company to deliver to connected devices and services that AdaptHealth provides. So again, what are some of the other things that we can sell or what are some of the things that those models are going to require to be able to provide an efficient stay at home for patients that are either recovering or long-term home care patients. So these are things that are going to be both value-based opportunities, core fee-for-service opportunities for us. And then ultimately, over time, outcomes-based opportunities where we start getting into some of the risk models, but that's -- we're in early innings for that.

Great. And can you maybe talk a little bit about the economics here for you in a contract? I know there's like a differentiator of these contracts, but also specifically, you highlighted 2 payer contracts with large providers. So I guess maybe this example, if you can or if it's better to talk about aggregates or ranges of things that you can achieve incremental margin or however you think about, what are the economics for AdaptHealth here? And also, as you talk about it, is it more a pool from the payers? Or is it just Adapt kind of pushing this idea on payers. So kind of the dynamics there in the marketplace, who's driving really that in your industry more? Is it the payers or is it the providers?

Sure. Yes. So I think definitely some of the discussions that we've had up until now are being initiated at the payer level where we're doing a large fee-for-service business with them today, and there is appetite, both from the payer and from the other providers that I mentioned, ACOs, hospital systems. Folks are looking, HME and supplies is not typically a large portion of total health care spend today. But that being said, with Home Care growing and more of people looking to get better outcomes at home and people are taking risk of full patient life cycle in the home, that appetite is becoming more and more kind of realize. And I think we're having those discussions and also payers are having those discussions. As far as the 2 models that we have out there that we spoke about publicly, one of them is an admin savings model where will typically create efficiencies in the way the payer and the provider interact at the transparency of the order around when the patient got set up, reducing the prior authorization burden, both from the payer and us, reducing the claims burden from the payer and us. And that savings in this model went partially to the payer, partially -- so that help. So that's kind of the economics there. On the other one, it's a value-based kind of capitation, full price per patient per month, so a PMPM model, where we're responsible to manage the patient's utilization, provide product as much as it's needed within certain guidelines and then also us to be able to service the patient efficiently and keep up with both demand and managing utilization at the same time. So we're somewhat at risk in that model. And those models, again, if we do a good job and we're efficient with it, and we're confident we can be with a lot of the technology that we have to interact with the patient today on both resupply servicing their patient, connecting with us digitally, that we have an opportunity to create those efficiencies and that, all those wins will go to AdaptHealth in that model. But again, a lot of these models are different by payer by region. But the way we're thinking about it is that this is not a business that Adapt necessarily has today. There's a lot of business from the payer side, where payers are saying, hey, we have a broad network of 100, 200 HME providers. We're looking to narrow that down to more of a 3 to 4 provider model, give more business to the larger providers and create efficiencies within the model where everybody wins in terms of cost savings. And ultimately, over time, better outcomes. And the outcomes piece is something that I think is going to get significant traction in the next 12 to 24 months about typically disease state patients, such as diabetes, sleep apnea, COPD, CHF. A lot of them have comorbidities, and there's opportunity for us not just to be the provider that's dropping off a connected device into the home, but it's also like what can you show me or what can your data point to, to show me that these patients that we're giving you are staying home longer and they're healthier at a lower cost. And that's squarely what we're focused on, particularly as we come into 2023, about proving those models out, both on the payer level and starting to get more patients into that type of model. We can start marketing that to a broader group of constituents.

Okay. So these are more kind of contracts still in the works where you would be proving the value of being able to lower the total cost of care. So that's more kind of coming into the future. So yes, that's one of the big topics of care. But another one, obviously, that's very big in health care services is labor. So can you give us your latest thoughts in terms of the outlook for labor in terms of wages? Are you expecting a deceleration in the wages growth into next year and kind of where you think the range will set it off and also on the shortages, whether there's any shortages impacting the ability to take more patients on your side?

Yes. I mean I'll jump out, Steve, you could add some thoughts on labor. Generally, I think we had some labor pressure this year as I'd say, towards the earlier part of this year where labor increased, particularly around general inflation, general labor inflation. Again, that was countered to a certain extent by a lot of the efficiencies we're putting into place with technology to drive cost savings on the labor side, get more efficient systems in place. I think generally, like there's been a lot of investors and a lot of investments that I don't necessarily know that it's as public in terms of investor visibility, but a lot of investments in infrastructure around Oracle, around an ERP, around converting all our acquisitions to a common platform, around getting technology around more deliveries, and more of our infrastructure on the logistics side of the business, around our sales side of the business. All these things are really serving the reason we talk about them is because they serve a purpose of really controlling our labor spend and controlling our OpEx. And I think where we stand today, we generally feel pretty good and cautiously optimistic that we have that labor spend under control inflation. Generally, we feel is on the labor side is not continuing to uptick at least worse where than it has earlier this year. So we feel like going into next year, labor is going to be a nice number for us in terms of being able to hold steady, if not go down as a percentage of revenue.

So I guess compared to some other home care settings. For you guys, it seems like you manage better on the labor front. So glad to hear that you have an optimistic view there because definitely there's a lot of questions around where it's headed in terms of labor. But that's, unfortunately all the time we have for questions. So really, thanks for the time, thanks for all the participants for joining us for the conference and hope you enjoy the rest of your day. Thank you.