Lincoln Educational Services Corporation (LINC) Earnings Call Transcript & Summary

Thank you for joining us today. Our next speaker is Scott Shaw, CEO and President of Lincoln Educational Services Corporation that are known as Lincoln Tech. The stock trades on NASDAQ and the ticker symbol is L-I-N-C. Lincoln Tech is a leading provider of diversified career-oriented postsecondary education. Lincoln offers recent high school graduates and working adults degree and diploma programs in 5 principal areas of study: health sciences; automotive technology; skilled trades; hospitality services; and business and information technology. Lincoln has provided the nation's workforce, skill technicians since its inception in 1946 and currently operates 22 campuses in 14 states. Our speaker today is Scott Shaw. He is the Chief Executive Officer and President of Lincoln Tech. He has been part of the Lincoln Tech team since 2001, having served in various capacities at the company as Chief Operating Officer, Executive Vice President and Chief Administrative Officer, as well as Senior Vice President of Strategic Planning and Business Development. Prior to Lincoln Tech, Mr. Shaw had a long and distinguished career advising companies in corporate acquisition activities as well as serving as a consultant to Merrill Lynch Capital Partners from 1994 to 2000. Mr. Shaw holds an MBA from the Wharton School of Business and a BA from Duke University. With that, let me turn the call over to Scott Shaw, CEO and President of Lincoln Educational Services Corporation. Scott?

Thanks, Joe. I appreciate the introduction, and I'm going to jump right into my slides. You can find these on our website under Investor Relations in the Presentations section, because I'm going to go through these slides quite quickly just because there's a lot of information here. So the second page that I turn to is just the safe harbor. You all can read that at your leisure, and I'm now on Slide #3, investment opportunity. Basically, what Lincoln does is we're helping to fill the skills gap, which is quite real out there. Lots of companies are coming to us as they just can't find technicians. We are a leader in this field. We've been doing it for almost 75 years, and we focus on 3 key sectors of the economy: transportation, skilled trades and healthcare. That's really the bulk of where our students are going. And the good news is, for us, prior to COVID, we were growing nice single digits. And typically, when the unemployment rates are dropping as they were pre-COVID, we tend not to do as well and the fact that we are doing well in such an environment speaks to this big dislocation and need for skilled trades workers, which I'll talk about later. Also, which is good news, is as we continue to grow our business, we do have a lot of good operating leverage, about $0.40 of every additional dollar drops to the bottom line. And today, our schools are only operating at around 45% capacity. So we have a lot of room for growth in operating efficiency improvement. At the end of last year, we did get an investment of some convertible preferred, which strengthened our balance sheet. So we're in good position going into 2020. But as we all know, COVID hit and our business was dislocated. But frankly, instead of putting us back, it's actually going to accelerate our progress. We're making changes to our business as we speak, moving more programs on to online and blended. And more importantly, whenever the unemployment rate increases, our enrollments tend to increase, and I'll talk more about that later as well. So on the next page, just to give you a little background, we did go through a lot of transition. And if you know anything about the proprietary school sector, you know that during the prior administration, there was a big shakeout. There were lots of new regulations. And we, like other schools, had to trim the number of campuses we have. So we went through this process of getting down to the core 22 campuses that we had today, and we knew we just couldn't keep cutting costs to become a better company. So at that point, I made some changes in our leadership team, around 2018, and to start to spend a lot more money, not a lot more, but we increased how much we were spending on our marketing to drive interest. And that started our 11 consecutive quarters of growth. And we had a good 2 years, and we turned back to profitability in 2019. So then now in 2020, we are set to continue to build on that legacy and get even more opportunity going forward. And then COVID hit, which as I said, I'll talk about just shortly. On the next page, these were what our priorities were pre-COVID. Basically, we were looking at driving low single-digit revenue growth that was going to drive good double-digit operating income growth because of the leverage that we have. We're going to continue to just enhance what we were doing. And since we did get some more money, we were looking to accelerate some of the expansion of some of our existing programs, setting our sights on also looking to open up some new campuses and/or acquire campuses. And we're going to do this all while continuing to maintain our high -- student outcomes of high graduation rates and placement rates. Next page, on Slide 6, then COVID came around. And so what did it do? So first of all, we had to quickly transition from 100% on ground to, in this case, 100% online for a while when we couldn't be in our campuses, then in -- starting in June and July, we were able to reopen our campuses. So now we have a blended program taking place. But it's a very challenging period for us, but our team really responded well. And because we responded so well, we really lost very few students. So we only had about maybe 6% of our students that we had previously enrolled dropped out because they just didn't want to do the online learning. But good news for us is that we were constantly growing our enrollment with new students. And so our average population at the end of June was actually about 7.5% ahead of the prior year. And that's a good thing as we continue to build our population that will build revenue and profitability. So we had to move everything to be online and from a distance, and that has actually made us a much better organization, and we're going to benefit and leverage these new techniques that we've learned and new processes as we go forward. And as I mentioned, whenever the unemployment rate increases, our enrollments tend to increase. And so I would expect to be seeing that at the end of this year going into next year. On the next page, we actually performed very well during this whole COVID situation, and many investors kind of asked us why did you guys do so well, maybe compared to some of our competitors? So we put this slide together. And I think that part of it is that we're diversified. We have 3 good solid segments, as I said, automotive, skilled trades and healthcare. There's a huge demand for healthcare, which certainly helped us. And all the news about COVID and whatnot has frankly fueled even more interest in the healthcare sector. So the strong growth there was certainly helpful to us. Also, though, what was helpful is we did have some prior experience with online and had software and systems in place already that we just had to really scale up at a quick rate. And because of that, as I said, we lost very few students. And so we're able to maintain our revenues and our profitability, and that's what's really enabled us to continue this positive momentum that we've been having over the last 11 quarters. So going to page -- Slide 8. This is a picture actually from the Chicago Tribune. The gentleman there in the front is actually one of our students. And this was an article that I was talking about, how there are these essential workers out there that are driving our economy. And I'm happy to say that 90% of the students that attend Lincoln Tech are pursuing careers that the Department of Homeland Security would consider essential critical infrastructure workers. And that's a good news for us, which also helps attract more students because while a lot of people might be unemployed at this time, many -- frankly, most of our students have remained employed. The next slide is just a company overview slide, and then I'm on Slide 10. The only thing new here is, I did mention, 2021, we will be celebrating our 75th anniversary. I highlight that because there are very few proprietary schools that have been around as long as Lincoln has. We've always been very focused on our students and always very focused on regulatory compliance, which is one reason why we're here. And we also are very different than a lot of other proprietary schools and that most of them, at least the bigger ones that you're probably aware of, are really online bachelor's or degree schools or higher. And we don't do that. We're doing the middle skills area, which are more than high school but less than the bachelor's degree. And that's really the largest segment of our economy, and I'll talk about that in a little bit. So going to Page 11. So Lincoln today, as I mentioned, we're down to our core schools. We were founded in Newark, New Jersey. Our headquarters is about 20 minutes away from Newark, in West Orange. We have 22 campuses in 14 states. And at the end of June, we had over 12,000 students. We have 2 segments to our business. Transportation and Skilled Trades, which represents about 2/3 of our students, and that's evenly split between transportation and skilled trades. And then another 1/3 of our students are in healthcare and other professions. Some of the fields that we train for are automotive, diesel mechanics, HVAC, CNC machining, welding and electrical. And then on the healthcare side, the 2 big programs are licensed practical nurse and medical assistant. On the next page, Page 12, this is a map of the United States and shows you our campuses. The campuses in gold are our automotive and skilled trades campuses and the ones in blue are healthcare and other professions campuses. You can see we have a strong presence in the northeast since we were founded in New Jersey. We have schools basically from Baltimore up to Boston. But we're not in a lot of the rest of the country. And as we work with our industry partners, many of them are asking us to move into other parts of the country and also a lot of these other parts of the country where the population is growing. So as you can see, we're not in the northwest. We're not in California. We're not in the southwest. We only have one school in Dallas and Texas. Lots of room for opportunity there. We're not in Florida. We're not in the south. We're not in the Carolinas or Virginia. So kind of that smile of the outside perimeter of the United States is where we'll be looking to expand our footprint. And I think it's going to help us because one of our unique attributes is, is that we do have a common curriculum across multiple disciplines. And so employers like to come to us because, especially if you're a larger regional or national employer, it's a lot easier to deal with one Lincoln Tech, than, for example, deal with 12 different community colleges for those that are coming to us seeking people in the automotive field as an example. So on the next page, Slide 13, this is middle skills training, which I mentioned. So it's more than high school and less than the bachelor's. It really represents about 50% of the jobs that are out there. On this chart, when you look at low skills, that part of the population of our workforce is shrinking. That's basically a high school or less type of person and the part that's growing is the high skill, which is really bachelor's or above. But we're right there in the middle, represents about 50% of the workforce. So Page 14. This is kind of a key point and one that gives me great comfort because the success we were achieving pre-COVID is due to not only good execution and marketing on our part, but also just because of fundamentals that have been taking place, frankly, for the last 40 years. Back in the late 70's, we decided to put more emphasis on sending people to college. And as such, we have taken additional programs out of schools, and we've frankly, made a lot of vocational programs, second fiddle and second class in many respects. So because of that, there are just fewer people that are exposed to these trades out there and employers just can't find enough people even interested. And unfortunately, we've done a big disservice, with -- a lot of students don't even know if they have an aptitude for these areas. And at the same time, all the baby boomers are retiring. And with the baby boomers retiring, with industry growing and not enough people coming through the system to replace them, there's this gap that's formed. And a lot of people think it's just with the IT and technology, which it is, but it's also very much with basic skilled trades and mechanical tasks that we've taken for granted. And that's where we play, and that's where we have a really important role to play in helping Americas workforce find the talent that they need, and it's a great opportunity for Lincoln. On the next page, just kind of even highlights Lincoln's opportunity. This talks about significant opportunity for organic growth. And this is looking at statistics from the BLS of how many people -- new people each year need to be hired in each of the fields that we train for. And when you look at how many people need to be hired, you look at how many graduates we have, you can see that on the transportation and skill Trades, we have less than 1.5% market share. And on the healthcare side, it's even lower, it's at less than 0.5%. So it's a very fragmented market out there with schools, lots of opportunity for us to grow and expand. On the next page, really what sets us off and who we -- our major competitors are the community colleges. And we offer a very different program and opportunity than what a community college. First of all, you might be shocked to know here that community colleges, on average, have a graduation rate of 20% to 30%. Our graduation rate is 65% to 68%, significantly better. And we have about an 81% placement rate, and you really don't know what a community colleges placement rate is because their accreditors don't necessarily require them to track that. Another differentiator is that all of our programs are designed with the employer in mind. And so twice a year, we bring employers into our schools to review our programs and give us ideas of what we should add and what we should take out. So it's really giving students real skills that will make them successful. We've also made sure that our programs are centered around licensure and certifications, things that the industry will recognize. So again, our students have the right skills to get a job. Besides giving education, we also provide training. And part of that training is making sure our students look presentable. They all have to wear uniforms while they're on-campus, but a big part is also attendance. Employers, many of them will come to us and really just look at the attendance score, and we do have an attendance score. So we track attendance very diligently. And if a student doesn't show up any particular day, someone from our campus is calling that student to find out where are they, why are they not there. If there's some sort of issue that we can help with, we will try to help them. But tracking attendance and making students responsible to show up every day is kind of part of our work ethic, frankly. Moreover, if you go to our schools compared to community college, you'll find a much more robust learning environment. I kind of say that community colleges are kind of like a department store, and we're more like a specialty store. So we have a lot more training aids and equipment for students to touch, fix, break, and that's really what they're coming for and that's what they like. At the same time, we're constantly looking to figure out how do we innovate, how we're teaching and making it more engaging, and we've utilized laptops and lots of technology. And because we were using a lot of laptops out there, it made it very easy for us to transition from on ground to online because most of our students already had the technology and the capability. Further, unlike a traditional school, we have starts every month. So students want to come in and they want to come out and get out as quickly as possible. Our program takes place an accelerated rate. What we accomplish in 1 year would be equivalent to what a student typically does 2 years of college, because we don't have breaks, they're coming to us more hours in a week, and they're getting through the program as quickly as possible so they can get out to the workforce as quickly as possible. And moreover, we do have a lot of support for students because a lot of them need them. Our average age of our student is 25. So we have adult learners as well as recent high school grads, and a lot of these people haven't been in school for a while, so they might need additional support and all of our students, some form or another, need some guidance, and we help provide that. On the next page, again, this is a map and just looking at how many people graduate from our schools -- from schools out there. And we can see that in the northeast, we're the largest provider of automotive and skilled trade graduates. In the other markets, we're second and third, and our objective is to be, frankly, #1 across the United States. The next page talks about our partnerships. This is an important part of our business. We enjoy working with these companies. They help validate the quality of our education. They also help us attract other students or new students because they want to work for these companies. But most importantly, these companies really give our students great job opportunities, and we work with them closely. And the nature of these partnerships vary from situations where that we provide specific industry training, for let's say, BMW or VW or Mazda to also at Johnson controls, we're starting to bring in some soft skills training that they've requested, specifically for the people going into their company. So we're trying to make a really holistic student that's strong in both soft skills and technical skills. This next page probably is the most important page, at least the one that gets most attention. And when we look at our 22 campuses and go back to 2010, which was the peak of Lincoln's performance after the last recession, you can see that these exact same 22 campuses that we have had almost 18,000 students, more than $400 million in revenue and generated more than $80 million in EBITDA. And last year, obviously, we only had 11,000 students and generated only $13 million of EBITDA. So we have a lot of room for growth and opportunity. Also, just to put a little more light on it, before the recession started, so in 2008, December of 2008, we only had 10,500 students. So within 2 years, we added over 7,000 students. I have no idea what this recession is going to do, but all I know is that it's going to increase from the 12,300 students that we have today. On the next page is something about our management team, and I've been at Lincoln a long time and a lot of my peers have been in Lincoln at a long time, which is great because it gives us a lot of stability and knowledge, and we're a highly regulated industry. So it's good to have that knowledge. But I did bring a new person into my senior team, Chad Nyce. He was a former COO at Strayer. He's come in -- he just joined us in February, lots of technology and ideas, and he's really been helping us, frankly, also just with this transition with going to blended learning. So he's been a nice complement. The next page is just a title page for a financial review. And then there are a bunch of pages here that are just financial in nature. And the good news is the arrows are all pointing in the right direction. Suffice it to say, our population is growing, which is driving our revenues and our profitability, and it's happening at both of our segments. And so these next pages are really ones that -- or just everything is pointing in the right direction. I'm not going to go through all of them. But I would like you to jump to slide, I believe, 29, increasing profitability. That's just showing you our 12-month trailing profitability now that we've achieved 2019 results. Everything is moving in the up direction, and we expect and anticipate that to continue. If you go to the next page, that's COVID-19 Cares Act. And what this one is just telling you, the government has given, like they have to a lot of different organizations, have given us some funds. Half of those funds, $13.7 million, are dollars that we had to allocate out to our students to help support them during the transition and the disruption that's taking place because of COVID. We've distributed about 90% of that. And frankly, by the end of this month, it all will be distributed. But they also gave us funds that we, as a company, could use to offset expenses. And through June, we used only about $1.3 million of those dollars. So that leaves us with potentially about $12.4 million, but I would anticipate that we'd only tap in to a fraction of that. The next page, again, shows you EBITDA and net income. Nice growth. You can see year-to-date, we've gone from a negative $8.5 million to a negative $1 million of EBITDA. So $7 million pickup in 1 year. And that's due to our seasonality. And I'd like to talk about that next -- on the next slide. And if you look at this slide, you can see the 4 quarters in the last 2 years, how -- what our EBITDA was per quarter. And you can see that we make all of our money and all of our cash in the last 2 quarters of the year. But I will highlight that in the first 2 quarters of this year, we're running about $7 million ahead of prior year. So if we even remain flat with Q3 and Q4, we're in a good position for the year. And this performance is a lot driven by the chart below it, which shows you our seasonality of our starts. While we -- our average age is 25, about 20% of our students are high school students. So they typically start right now in this quarter that just ended, Q3. So Q3 is our largest quarter where in the biggest influx. And since most of our programs are about a year in length, it's kind of in this period of October and November, whereby students from the prior year and from the new year overlap, our population is highest, and that drives the greatest profitability. Our population now will kind of slowly decrease until the next peak, next Q3. Next page just talks about liquidity. As I said, we did raise some funds last November, added to our balance sheet, added to our cash. And it also enabled us to double the size of our credit facility. So we basically are in a net cash position as a company, and we'll be generating, w anticipate free cash flow, certainly, operating cash flow this year, but next year, we should be completely adding to our cash reserves as we continue to grow. Next page is -- just talks about real estate. We do own 3 facilities that were appraised last year at $60 million, and we have a small facility in Suffield, Connecticut that we have up for sale for probably about -- probably net maybe $2 million, it's a tiny facility. And we will continue to revisit our existing facilities and downsize them if it makes sense. Next page is financial guidance, which is suffice it to say due to COVID, we've pulled all of our guidance just because there's kind of uncertainty around how everything is going. And certainly, if you listen in on November 11 for our third quarter earnings call, you'll get a good update of where we stand. So in summary, for the investment merit, we're a national leader in hands on training for transportation, skilled trades and health care. We've been growing organically nicely pre-COVID. And now with the high unemployment, we should grow even faster. And I believe that there is the skills gap that's out there that should provide good, solid growth regardless of the employment rate for the next 10 years, just given this dislocation with all the baby boomers retiring and no one going into vocational programs in high schools in large enough numbers. We have an opportunity to expand our footprint, to open up more campuses in a number of growth states, which will help us to grow. And we do have that great operating leverage, about $0.40 of every additional dollar dropping to the bottom line. And one last asset we have, because of all the restructuring we did previously, we have over $60 million of tax loss carryforwards. So as we anticipate getting future growth in our profitability, we'll be able to shelter a lot of that for the foreseeable future because of these tax loss. And we'll continue to focus on our students and our regulatory record. So that really kind of sums it up. I'll turn it back to you, Joe.

Okay. Thank you, Scott. Appreciate that comprehensive overview of the company. As you mentioned, Lincoln Tech is currently in a quiet period, leading up to your next financial reporting event on November 11. So we will not delve into financials or projections in this discussion. So let me kick it off by asking it or by stating that there seems to be a growing disenchantment with the traditional 4-year college experience and the subsequent outcome for many students. Lincoln Tech is well positioned, particularly with your corporate partnerships, your graduates have somewhere to go and start a career. Can you talk to us about that?

Sure. Well, it's something that we've always felt and always believed, and it's now nice, frankly, to start hearing and reading more things in the paper or even hearing peers start talking about this fact that, boy, I spend all this money on my kids' education, and I'm not quite sure what I got from it because I think it is a common theme. And while, as I said, we've been pushing people to go to college, in the reality, first of all, only 60% of people graduate from college in 6 years. And we all know plenty of people that have graduated from college with degrees that really don't give them any kind of skill. So it's really probably less than 50% of the people that come out of college have something of value. And so I think people are looking for alternatives. And unfortunately, like one of the challenges has been, so many guidance counselors are kind of graded or marked on what percent of their students go to college versus what percent of their students are going into something that's going to be able to give them a better life and opportunity. And I think that, that conversation is slowly turning, and more people are realizing that maybe college isn't the best thing for everybody, and there are alternatives, such as, I'd say, a Lincoln Tech, which is a very short program, a lot less expensive, a lot less debt and you come out with a skill. And there's nothing to stop you in this day and age from going back to school after you get kind of established or you're moving up in your career and you need that degree, maybe to further advance. So I think that it is something that's happening out there. We're very proud of our students and the skills they get. And a lot of them, frankly, turn out to be extremely successful.

As it relates to the segment of the market that you're working in, you called it the middle skills area. Obviously, we've known for many years that companies just cannot find enough employees, probably right in that middle skills jobs area. How desperate are these companies? How many of these middle skilled jobs are available that you're aware of out side of the chart that you showed us earlier?

Well, I can -- I'd say, Johnson Controls is one of the companies that we work with. And we, today, provide them with maybe 100 to 150 students a year. And they're coming to us saying, we need 500. And they're saying, they can't even find people kind of interested or knowledgeable. And they've actually joined us for some of our high school recruiting efforts because we have high school reps that go around to schools, explain to students what the opportunities are. And we've had sometimes Johnson Controls people just come around, just so they can talk about their industry, just to give people more exposure. I mean, as a country, we just haven't done a great job in telling students what career paths exist. And people just get fixated on becoming a doctor or a lawyer or an engineer, some of these very, very specific broad areas that you need a college degree for. But there's thousands of opportunities out there and at the different levels. And we just don't do a good enough job out there. And these companies, I'll say, have probably been too stingy and having done a good job investing and training their own people. And as I said, with all these baby boomers retiring, they really do find themselves in a bind.

Interesting. So are you partnering with some of these corporations to actually train their personnel? Or are you strictly training people to go into those positions?

Right now, we're training people to go into those positions. But as I look to the future, I would anticipate that as these larger companies become more and more comfortable with who we are and understand our capabilities, there's no reason why we can't train their existing people. We already do that for Bridgestone Firestone, whereby they send some of their existing techs to our Denver campus 4 times a year to get enhanced skills, but it's a tiny -- we're talking several hundred thousand dollars. So it's nothing of our business yet, but I think it's a great opportunity for us.

We all talk in the business sector about innovation and how we bring something fresh to whatever it is that we're doing. How does innovation manifest itself at Lincoln Tech?

Well, I think that education itself is like one of the last major areas that really hasn't innovated enough. And so I think that when I look at innovation, there's kind of 2 different things. One is, obviously, there's technology to hopefully make the education more engaging and easier to access. We're actually working with a European company that's one of the leaders in this field of gamification for coming up with, frankly, a new automotive curriculum that hopefully, frankly, relates better to today's students and learners and will be more engaging, which hopefully should give greater outcomes. But there's also innovation around, I'll just say, the education model. Everyone gets set on thinking that it's September to May activity. We've already broken that model a little bit and that we are a year-round activity, and we're accelerating in the students coming through. But I think that we can also change and we see opportunity in creating even shorter programs than the ones we have today because there is such -- there's such a big demand that sometimes employers don't want to wait the 9 to 12 months we take to train someone. They want to get someone sooner. So we're looking at some shorter bite-sized programs that might be, let's say, 3 months in length that could open up new markets to us.

Sure. Let's talk about COVID. Obviously, it's out there, it's affected everybody, even the President and his wife have come down with it. How has this impacted your business? You spoke about a blended set of programs, on-campus, online. Tell us how that's come together and what the future look is here as we look out into the next year or 2?

Sure. So yes, so we had to go 100% online when we weren't into our campuses. And frankly, that's quite limiting because as a hands-on school, there's only so much online we can give. Our typical program is maybe 50% lecture, 50% hands-on. It's a little bit -- actually, a lot more hands-on in the welding. Obviously, there's a lot less lecture in welding. It's probably about 80% hands-on. So if we were just trying to operate in a fully online world, we'd run out of things for our students to do. So we will have a blended model going forward. And what we have found is that students are receptive to doing things that are lecture-based online. They don't want to do all of it online, but they certainly will do some of it. And so our design, as we look at our curriculum going forward, is to basically have 25% online and then 75% will become on-campus to do some lecture, but then also do all the robust hands-on training. And what that does is it gives students an extra day or more flexibility. So for example, today, students are either coming to our campuses 4 or 5 days a week. In a blended model, they'd only come 3 to 4 days a week, and that gives them an extra day of possibly where they could work or 1 less day of child care, if they're a single parent, at least going back to let's say, get their nursing degree. And it's also 1 less day of commuting expense. And so we think -- we not think, we know our students are responding very positively to that. And we think that will be a much more productive way of teaching students. And frankly, it also automatically increases the capacity of what our facilities could be. So as I said earlier, we're looking to open up some new facilities, but now with this new blended model, we're having to revise our plan because as we look to our new campus, we can actually build now a smaller new campus than we have today and still get the same throughput. So those are some of the opportunities that we've discovered through this COVID. It's affecting us, though, right now, like one of the reasons why we had to pull our guidance is, if things are very fluid, I'll say, we didn't know when we could reopen our campuses. Different states and different locales have different restrictions. So let's say in Texas, we're almost operating as if it's business as usual. But I'd say, up here in New Jersey and New York, where we can only have 9 students for every faculty member. That's a little more constraining. We have to have students come in at different times. We're doing a lot more of social distancing. It's making things a little more challenging for our students and for our faculty members, but we're getting through it, and it's working. And I'm hoping or looking forward to the day that we don't have to do the social distancing because it is a lot more effort on everyone's part. But overall, the COVID situation, I think, has opened Lincoln's eyes to many new opportunities.

Okay. I think that wraps up our time for today. Scott, I want to thank you for being generous with your time and really giving us a good overview of the company. For all of you out there participating and listening on our program today, we appreciate your interest in Lincoln Educational Service Corporation, and please be sure to participate in the company's upcoming financial reporting event on November 11. Again, we thank you for your time today. Have a great rest of your day.