Automatic Data Processing, Inc. (ADP) Earnings Call Transcript & Summary

Thanks, everyone, for joining. My name is Tien-Tsin Huang. I'm the payments processors and IT services analyst at JPMorgan. I'm so pleased to have Carlos Rodriguez, the President and CEO of Automatic Data Processing, with us. A man that I have respected for many, many years and always enjoyed chatting with him. So Carlos, welcome to our first virtual session, I think. What do you think?

Yes. Sounds great so far. Thanks for having me. You look good.

Yes. Let's keep our fingers crossed that the WiFi stays on. So again, thanks for the time. I -- from the format standpoint, we're going to do Q&A. I've gathered a lot of questions from investors to hit you with. We'll also have a chance for the audience to submit questions through the Q&A button. So I'll be checking through that as we go through it. But hopefully, the questions that we have prepared here will cover most of the subjects.

So, Carlos, just dig right into it, if you don't mind. You have a great view on the macroeconomy from where you sit, especially in the U.S. from small to large enterprise. So maybe just tell us what you're seeing on the ground, catch us up for those that maybe didn't catch the earnings call with the state of the union on the economy.

Well, I think the catch word that we used on the earnings call have described what we're seeing in our metrics, and, obviously, it spills over into the economy, is really the abruptness of the downturn. This obviously isn't the first time we've had a recession, but it's obviously the first time we had were triggered by the health crisis and by the magnitude of the shutdown of the economy globally. Because as you know, we're also a global company. So we have a little bit of an insight into other parts of the world. But in particular here, in the U.S., we've never seen, obviously, this kind of downturn in employment, and it's kind of rippling through our metrics. We're such a large part of -- we cover so many employers and so many employees that get paid in the U.S. And we have a pretty good window on what's happening. And what we saw obviously is a precipitous decline at the end of March, kind of a continuation into April, and you see it in the initial unemployment claims and some of the other metrics that are now coming out. And the difference for us is, for better or for worse, we have information that's a little bit more timely, whereas some of the government statistics tend to be a little bit more delayed. And BLS is once a month. We have an initial employee engagement once a week, but we have weekly data around a lot of different metrics. And it's not great news. We talked about it on the earnings call. There's no way to put a silver lining around it. We saw some very steep declines in pace per control growth, what we call same-store pace per control, which is kind of a measure of employees at our client sites year-over-year on a comparable basis. We also saw the balances -- our client balances dropped pretty significantly as well. And I think what we talked about on the call is we're anticipating somewhere around low double digits for the balance of declines and somewhere around the teens for pace per control decline, which is unprecedented for us. So to put it in perspective, during the last downturn, we saw about a 2% to 3% decline in pace per control in each of the 2 years of the so-called Great Recession. But that obviously took a long time. So that was 18 to 24 months to play itself out, and this was really over the course of a couple of weeks. The one interesting thing that we have seen is even though we don't have incredibly reliable data around furloughs versus layoffs, we have some ways of getting around that by seeing which clients are remaining active rather than inactive, but not paying anyone. And what we saw is a fairly encouraging sign that there were a lot of companies that are obviously either hoping or planning to hire again or to come back again rather than just kind of shutting down and folding the tent or going a bankruptcy or whatever a company might do. Small companies tend to just go out of business. Still slightly larger companies will do something more formal. But we have some metrics through our systems that kind of keep track of this stuff. But it's not incredibly reliable because all we really measure is that people get paid or the people not get paid. But we have other insights that tell us that there might be some companies that are planning to hiring in. The other thing we saw, and that we said on the earnings call, is our HR systems, which sit, obviously, in front of our payroll systems, have other metrics that can be tracked like job postings. So in other words, are people hiring or looking to hire our people. And that's a number that we saw kind of towards the end of April start to stabilize and actually turned up slightly. So it might be a sign of people anticipating maybe potential openings like we've seen now in some states or a gradual comeback in terms of needing to hire people again. So that's a big difference between job postings and actual job hirings to be completely clear, but it's at least some sign of some potential hiring activity out there in the -- hopefully in the near future.

Good. No, it's good to get some positive data points out there as well. So you mentioned what happened in '08, '09. I lived through that, have company here for 20 years here. So maybe if we compare and contrast a little bit. I know nothing is the same. This is more severe and more sharp, like you said, but how is the model holding up? What do you think you'll do the same or differently here in the world of potentially 20% unemployment, Carlos?

Well, as you said, this is very different from the last downturn. The business model, unfortunately, remains the same. It is resilient on a relative basis. But even for us, as an example, this pace per control decline, when you have kind of a double-digit pace per control decline in some of our businesses, not all of it -- but in some of our businesses, we actually have, for example, in our downmarket small business, we have a fair amount of fees that are based on units. So kind of fees that are client-driven rather than pace-driven -- pace per control driven. But in most of our business in the mid-market and the upmarket, it's case-control driven. So a big drop in pace pert control is going to translate fairly quickly into a decline in revenue. And again, the difference between this time and the last time is that even though we experienced those declines in revenue, they were gradual over an extended period of time, whereas here they're coming in pretty -- in a pretty abrupt manner. But when you think about the way the dynamic of the business model works in really any recurring revenue model, when you have these high retention rates, and, obviously, the high retention rates could also be impacted by the downturn to the extent there might be companies that go out of business or bankruptcies get elevated. But in the last downturn, we saw, I think it was less than a couple of hundred basis point decline in retention. So let's assume that this time, it's the same or maybe even slightly worse, depending on how long this goes on for, you still have kind of high 80 percentage points of recurring revenue. That's a very resilient business model. And so we're not really starting with 0 revenues again each week or each month like a non-recurring model. So it's still the same business model, but with a much more -- steeper and faster decline. By the way, we're hopeful it's also a steeper and faster way on the way back up. Although there's no way obviously to know that, for sure. But that's the expectations that this is not a financial crisis, and there's really no kind of major financial disruption that if we can deal with the health crisis in an effective matter that the employer market can recover at some point in the near future. Now retention is one element of that resiliency, of that business model. The other one is bookings. One of the things we shared on our earnings call is also different from the last time, which is not good news, is the downturn in bookings and how fast that occurred. So in the last recession, we did have a decline in bookings in 1 year of the recession. And I think we were as low as in the high 20s negative 1 quarter. And I think on the earnings call, we said that we -- or we didn't say, but you can interpolate from our guidance that you would get to around half -- a 50% decline in bookings for the fourth quarter. So that's obviously unprecedented for us as well. That impacts the business model as well because it's a combination of the recurring revenue. It's a combination of holding on to clients and also adding new clients to the top of the funnel. So to the extent you're adding fewer clients to the top of the funnel, that obviously eventually has an impact on the overall revenue number. But again, if in 1 or 2 quarters we see a recovery in our bookings, which is what you would expect if there are reopenings, and the economy starts to pick up some steam again, then that top of the funnel will start to allow us to add more to the future revenue growth of the company. So bottom line is still the same business model, generally speaking, a little bit of a mix change. We have more downmarket business now than we had back in the last downturn. That, in some respects, was good news because it's been a really successful, good growth business for us with great margins. But that business tends to have, with smaller clients, more volatility on the retention number. So it's something that we're keeping an eye on. But it's generally speaking, we don't expect major changes other than the steepness and the abruptness of the change.

Got you. So thinking about the lost revenue, you mentioned it, right, it comes off at a pretty high contribution margin, Carlos. So what are you doing to align your expenses here in light of the new revenue and plus the potential for quick recovery? So I know it's a difficult thing to balance, but what are you doing on the expense side?

A great question. And let me add one more item that's on the not good news front that is also very high-margin revenue to us, which is client funds interest, which you know is an important part of our business model. It's ironically not nearly as big as it was during the last downturn. So the good news is it can't hurt us as much because it's not as big a number and as big a percent of our operating income. But again, the steepness of the decline of both the average client balances and interest rates is making that a fairly significant number. And I think you can see that in our earnings guidance and our outlook just how much of an impact that is having on us. And that's basically a 100% margin. So that's not helpful either. But on the question of kind of trying to align expenses with revenues. In the short term, what we shared with -- on the earnings call is that's -- this has been very difficult for us to make any adjustments on the cost side because our activities and our workflows have actually increased. And that is really the result of all of the government regulatory action, which we think are, frankly, good for the economy, good for workers and, I think, good for companies. And this is happening really globally, where companies are responding, not just with fiscal stimulus, but with a variety of programs to "keep people employed". And so you've heard of the Payroll Protection Program (sic) [ Paycheck Protection Program ]. And there's also an assortment of tax credits and the ability to defer social security taxes and other ways to basically try to provide cash and capital to companies on a short-term basis in order to get to through what is expected to be a short-term crisis. And so what that created is an enormous amount of activity. So we had 1 week almost doubling of our contacts or calls, if you will, of people requesting help. And the help is really with getting information to be able to apply for these loans or to get these tax credits, but it's also to get advice and to get help on what to do if I have to furlough employees or if I have to change my health plans, whatever the case might be depending on which business we handle for them. So that's one complication is that our volumes actually were elevated in the early stages of the health crisis and as a result of all the government action. Now as that abates somewhat, there would be an opportunity for us to adjust the amount of support that we have, if you will, for the size of the business. But again, there -- the caution there is that our costs are generally driven at the client level, not necessarily at the pace per control level. So unfortunately, there's a bit of a disconnect with this kind of high-margin revenue going away and the work not necessarily going away for 2 reasons. One is because the government activity, and second because work tends to be driven more at the client or unit level rather than at the employee level. So that's one complication. The second complication is that we're committed to our long-term investments. And there's 2 in particular that we're committed to. One is our R&D investments, and the other one is our sales capacity. And so we've -- I've observed, since I've been at ADP now for 20 years, a couple of ways of doing this. And I think I learned from my predecessors, and they actually taught me and told me to be very careful about cutting these critical investments on a short-term basis. And in the '08, '09 downturn, you probably will remember that we kind of held pretty steady in terms of our investments. It doesn't mean that we didn't trim here, trim there on kind of nonstrategic ones. But for the most part, we kept our sales and our R&D investments intact and really served us well coming out of the recession. And that was a much longer downturn and expect it to be a much longer down than this is. So you'd probably expect us -- at least right now, you never say never. But at least right now, our plan is to really focus on the long term and to maintain those investments, and, where we can, then adjust our short-term costs. So as an example, we have a number of "self-adjusting costs" like sales expense. So we're protecting our sales force and trying to hold on to head count, but there's some natural adjustment as a result of lower activity because there's lower variable expense, i.e., commissions, on the sales side. There's also lower activity around events and external trips and so forth in our sales organization. So that's, I think, a place where there's some self-adjusting costs. There's also a lot of self-adjusting costs around incentive plans like management bonuses, equity compensation. And there's a number of other kind of self-adjusting expenses as well. So when you combine that, back to your first question about the business model, when you have a recurring revenue model, we, like everyone else, have to act responsibly in a sense that we have to eventually match our costs to our revenues. But we really are not in a position where we're going to run out of cash or not have capital and that we feel like -- we don't feel like we have to be put in a position where we have to compromise the long term because our intention will be to hopefully come out stronger, vis-à-vis our competitors, kind of stronger out of this than them. And one way to do that is to remain committed to our long-term investments while, obviously, paying attention to the short-term costs wherever possible as well.

Yes. No, I respect that. That makes a ton of sense. So to build on what you -- everything you just said there, with all of the good work you're doing for your clients, the concept of building up some goodwill and being there to help with the outsourcing and manage the complexity of stimulus and everything else, do you think this change is sort of a -- you mentioned the secular view on outsourcing. And are you going to align your sales force to potentially go after that [ growth ]?

Well, I hope it has some impact in the sense that this is kind of highlighting the difference between a pure software model and a software model that also has served us. So we've been talking about this for years. And I think the last month, I think, has really highlighted that. And again, I'll say it again, there's nothing wrong with a software model, whether it's a SaaS software model or a kind of old school software model. It's still a different philosophy in the sense that you provide the software and other people provide support, whereas the ADP outsourcing model is really to provide that kind of help and expertise with not just the technology itself, but also, like in this case, it's really highlighted. What do you actually do to maximize, I think, the outcomes with your workforce, and in this case, maximize your financial outcomes in terms of taking advantage of some of these government programs? So I think it will, on the margin, I think, help us I'm hoping in our differentiation against some of our more pure software competitors. And again, not that there's anything -- no disparaging comments about them. That's a perfectly fine business model. But everything in business is really about differentiation, and this really presents an opportunity for us to be able to differentiate. And I think besides the goodwill and some of the things you described, part of our strategy about trying to stay the course is our strategy was working. When -- if you listen to our earnings call, you see that we really were exiting coming out of margin. Again, I know it's old news, and no one's going to really care, it's all about what you've done for me lately, but our NPS scores were at record highs. Our client retention was at record highs in many of our businesses and close to record highs. I think it was the second highest quarter retention for that same quarter on a comparable basis that we ever had in ADP. So clearly, our strategy was working of focusing over the last 2 or 3 years on product, but also on execution and making sure that our client satisfaction scores improve and that our retention rates improve. Because any improvement in retention is a huge help to the business model in normal times. Obviously, in these times, there are a lot of external factors that are making that not a big help at this moment. But the strategy was working, and our intention is to navigate our way through this just like ADP's navigated through 70 years of downturns. This one is obviously very different. So not trying to minimize it. But every time we've had a downturn, it's always been different, whether it was 9/11 or the Great Recession, the company's made it through all of those. We intend to continue to do that and continue to -- and hope to come out stronger and be in a better competitive position.

Yes. So let's talk about that. So I attended your Innovation Day, which was really helpful. And you were very clear to talk about leveraging technology and modernizing your platforms to be more competitive, and, again, balancing great software with great service. Lifion gets a lot of attention. And I know everyone's focusing on the pandemic, but maybe can you spend a minute and talk about Lifion and what you're trying to do there with HCM? Building up something from scratch I know isn't easy, but it could open up a lot of opportunities for ADP. So can you spend a minute talking about Lifion?

Well, there were a number of objectives with Lifion. And in simplistic terms, as you said, it was really kind of a next-generation HCM platform and really was intended to help people manage their workforce more effectively, better maximize the -- what they get in terms of engagement and also productivity out of their workforce. So that's kind of the short answer. But I think as you saw by listening to some of the things we've been doing is there's a lot of investment in the platform itself, which is really intended to be a global platform. So we think that this is a platform that we'll be able to build on, not just in our domestic markets, particularly in the upmarket, but really across multiple geographies and maybe even multi-nationally someday in the future. So some of that's still a few years away. But for sure, in the U.S., we have real clients that are live. And our plan was to continue that rollout and to leverage the platform, which was really intended to do a couple of things. One, most importantly, we are obviously in the business of trying to win market share. And so we wanted to become more competitive by providing a product that was more relevant and more useful and creating more value for our clients. So that's, obviously, step number one. But there are a number of other kind of benefits in terms of agility and speed, for example. So the speed with which we can develop, I think, what you probably saw we referred to as mini apps on top of this platform is really a real differentiator in terms of how fast we would be able to develop new solutions either for our clients or at the individual client level without protocol customizing the platform. So there were probably 4 or 5 major objectives that we had. It's a multiyear investment. It's a large investment. And the good news is, again, right, as we were heading into this health crisis is that we were gaining some traction we have sold. I think we've said between 40 and 50 new clients we have, call it, a handful that were actually live and already processing. And so we were excited about the trajectory that we were on.

Yes. So you have that, and then you're also modernizing some of your other platforms into the cloud, right? I think your payroll and your tax engines are also on tap to be upgraded. I'm curious, we've seen retention improve and sales improve in other platforms that you've upgraded, right, down market, mid-market. You're focusing on HCM now. With the last few pieces to do, if there's a timetable update, let me know. I know that it's further out, and you have other priorities with the pandemic, but what would the impact on sales and retention be, Carlos, once you move all of these platforms into the cloud?

Well, obviously, the hope is that the sales are higher in the potential step. That was the ultimate goal. And that the double, of course, is always in the detail in terms of the execution. And so our plan, for example, with our payroll and tax engines, as you described in them, which are -- those are big investments as well, which are fairly significant modernization efforts that will have a real impact on our cost structure, our agility and our -- the speed with which we can develop and make changes and create new feature functionality for clients. But in general, most of that is transparent to the clients. And so you won't see a kind of transition and disruption that you saw with RUN and with Workforce Now as we move those platforms into the cloud because there's really no change for those platforms. Those platforms are the front-end HCM platforms. Like RUN has its own payroll engine. So you have to set that aside for a minute. But in the case of Workforce Now, our new payroll engine is really behind the scenes behind Workforce Now. So there's really no replatforming or change at the client level. Now, of course, there's a lot of work for us in the background to make sure that, that happens in a seamless fashion, and it's transparent and that it's only better for the client and better for us in terms of cost and maintenance and speed. But that's the plan with those 2 platforms with the tax and the payroll platform that's really a back-office, kind of transparent change for our client base. So we would expect retention really to depend on other things to -- which are the things we've been working on that have been moving in the right direction. So we don't think there's really a negative impact there. In terms of Lifion, there is a need eventually to move clients onto our next-generation HCM platform off of some of our other platforms. But we have SaaS cloud platforms already in the upmarket. So it's kind of underappreciated, but we have pretty modern SaaS platforms as well. We obviously are building Lifion because we think it's next generation. It can provide additional functionality and features for certain segments of the market. But I think as you alluded to, we're not in a huge hurry to move those clients. And I think those clients are not in a huge hurry to move themselves. And I don't think it's only the pandemic. I think ex pandemic, before the pandemic, we were saying the same thing that this is not the same as RUN, not the same as Workforce Now. So our initial focus on Lifion is really going to be new sales and market share and hopefully growing our overall pie rather than focusing on just migrating clients. But clearly, at some point, there needs to be some discussion around an upgrade of some clients on their terms at the pace that they want to go at.

Understood. Understood. So let's transition, and I know we've got maybe 10 minutes here, and talk about PEO. I know this is something that's close to your heart. We get a lot of interest in the PEO. What happens in that market with the pandemic? There's a lot of dynamics right, Carlos, with health care utilization likely being lower, potentially pricing going up down the road. You could have severity of cases in some places with COVID-19. How should we think about that in the short term and the longer term with PEO?

Listen, it's a great question. And unfortunately, we're going to have you not stay close to that one and keep asking us, and we'll keep you updated, because it is probably an evolving situation. But as you alluded to, one of the kind of unexpected things that we saw, and we actually saw it with some of our competitors because we really don't have what we call loss-sensitive or risk-based health care programs. And so we're kind of 100% fully insured and pass the cost through to our clients. So we work with, you name the carriers, at United, Blue Cross, all the usual carriers, and we've provide those plans. We obviously try to provide great plans and very competitive prices with the right level of benefits to the clients, but we don't participate in the risk of those plans, whereas many of our competitors do. And in some cases, what that does, it creates some potential variability or volatility in costs or in earnings, which, in some cases, has been bad. In this case, it turns out -- it looks like it may be positive, in some cases, for some of our competitors because people are not going -- getting elective surgery and doing things that actually do -- even though there's some elevated costs as a result of COVID in the health care system, a lot of the costs to the health care system have actually come down because people are not going to the doctor. They're not going to have treatment that can be deferred. In theory, that will come back at some point in future periods, but it does create a little bit of a short-term distortion. We don't see that as much in our numbers because we were 100% fully insured on the health care side. It could impact our renewals next year in the sense that -- let's assume that there's a persistence of lower health care costs, then our renewals would come in lower. So I think both us and our competitors over long periods of time are basically in the same place in the sense that health care costs are health care costs. There's really no way around it, but whether you choose to fully insure or self-insure can create some short-term volatility or ups and downs in the costs. On the workers' compensation side, which is another part of the insurance cost, we've worked really hard so their kind of "reinsured" most of that risk as well. So we do have a small, very small kind of corridor of risk, but we use a combination of carriers to really treat the workers' comp the same way we treat health care, which is we really want to be in the business of providing HCM services and being a provider of the services and the solutions that we provide and not necessarily be a risk taker or an insurance company. So kind of our strategy always and all along has been to kind of minimize the amount of risk we take, but also the volatility in our earnings of that risk. And so at this point, should there be kind of outsized either increases or decreases in costs that you're going in a direction as a result of COVID from a workers' comp standpoint, we, to some extent, are somewhat insulated from that as a result of the reinsurance approach that we have taken. Now we can't escape that over the long term with the cost, if they go up, would filter through to our costs. And likewise, if the costs go down, we would expect those costs to filter down through our costs also to our clients. So we treat -- as you know, we treat these costs as what we call pass-through, right, which we -- our intention is really to make money and to build a business model in the administrative fees and on the services we offer, not on the insurance products.

Yes. Yes. Is it fair to assume that -- just to wrap that up, that you're still a priority -- PEO is still a priority for the firm? I mean it's the same dynamics I know with the insurance side, but maybe the outsourcing side picks up in the end.

Yes. I mean, the PEO, remember is it tends to be a down market business. People see it that way. But unlike our real down market business, where we have very small clients, there are 2 employees and 5 employees, the PEO, in general, tends to be slightly larger. So the average size client in the PEO is 45. It tends to be a stable -- more stable, solid business, performed really well during the last -- during the Great Recession, and we expect it to perform really well this time as well. And hopefully, it will be of a lot of interest, as you said, as we come out of the health crisis.

Okay. Great. I had a couple more, and then we'll let you go. Just on the bookings front, right, I think you were very transparent, could be down over 50%. I'm curious what you're watching or what you would encourage us to watch as leading indicators to think about that booking backed up. I guess, one side of it, which is small, I'm sure, is sales productivity, adjusting the work from home. And then the other side of it is demand coming back as we adjust to a new normal. But I don't know how to think about that business in relation to other priorities. That could be a -- the different small, midsize and enterprise as well. So help us think about that or characterize that, Carlos, that we have with you.

Yes. Yes. Although it's on a lower level, just to be clear, our sales force is still selling. So I think they just -- there's no way for them to escape. We don't believe there's a way to escape the demand downdraft, right? I think it's -- other people may have different views of that, but it's kind of hard to imagine if x number of companies are closed that somehow the opportunity is the same as it was before. So we just don't believe that that's true. And that, unfortunately, is somewhat of a waiting game. So the things that I would watch for -- because as an example, we have -- I don't know if you are aware of this, we have about 1/3 of our sales force was already an inside sales force. So we've been working on this for about 20 years where we've kind of built this very effective inside sales organization that sells at really every level of the company. It's not just for the down market, but in the mid-market and even in the up market and some of our ancillary products, we sell through these inside sales organizations, very large locations in 3 or 4 areas of the country. So we know how those people are working from home. If they're selling the way they were selling before, the rest of our sales force is also selling. Like I've been participating in sales -- virtual sales calls where they're doing like literally twice-a-day check-ins with their managers and still kind of maintaining the levels of activity. It's just that the demand is not out there, and there's really no way around that. So I would look at the same things that we're going to be looking at, which is recovery of GDP, number of openings in states. I think all of those -- the activity level, the general economic activity levels have tended. If you look back at our sales results, you're a student of ADP and you look back 20 years or more, you'll see a fairly good correlation with bookings and economic activity. And it's probably not a coincidence. It's a lot of data points. It's not enough to know 100% for sure that they're related. I'm pretty confident that general economic activity is a pretty good leading indicator of ADP's bookings. And so as you know, everyone is expecting now things to kind of gradually improve. So we would expect our bookings -- like we don't think that the mechanics of how we're selling is going to get in the way. Like we have the best sales force in the world. They're well equipped with the right tools that they need to sell remotely if they need to. And there probably has to be some impact on productivity, in particular, on very large transactions like multinational and maybe upmarket national accounts. But in general, for the most of the sales force, our sales force will continue to sell and bring home the business as long as the economic activity there.

Got it. No, I agree. Well, I was amazed. The correlation is very high. I know it's out of your control, the GDP, but I think that's probably the best place to start. We only have a minute left, Carlos, but I definitely want to ask about Wisely, I know I've been bugging you about it, just your opportunity to provide banking or debit cards to your clients, employees that might be in the gig economy or underserved. I always think of ADP as a sleeping giant, as a fintech provider. Your thoughts on that in 30 seconds.

Yes. Well, hopefully, we're not going to be sleeping too much longer. Like we hope to be a very awake giant in that business and in others as well. It's hard in a minute, but the bottom line is I think you're right. It's a huge opportunity for us. This event also highlights the need for those types of product, right, whether it's a physical card or it's a virtual account. So we have a huge effort underway to move the remaining. We still have millions of people, believe it or not, that get paper checks because they're under banked, underserved, as you described. And I think this is a really great opportunity to better serve them by giving them an opportunity to get paid in a way that doesn't require a physical check or going to a physical branch of a bank. So if there's any event that is highlighted, I think the need and I think the opportunity for Wisely, I think it's this, and we intend to take full advantage of it.

That's terrific. Carlos, I know how busy you are, so appreciate you spending a few minutes with us. And we'll definitely follow up with you on Wisely and everything else. So I appreciate the time.

Thank you. Stay healthy to everybody. Thanks.

You as well.