McKesson Corporation (MCK) Earnings Call Transcript & Summary

Okay. Yes. Good morning, everybody. Welcome to the McKesson session. My name is Bob Jones. I cover health care services here at Goldman. Very pleased to introduce McKesson, a global leader in health care logistics. I'm joined by Britt Vitalone, EVP and CFO, as well as Holly Weiss, Senior Vice President, IR. Thank you to both of you for participating today.

Thanks, Bob. Glad to be here.

So Britt, I thought maybe we would just jump right in. A lot of, obviously, very topical things out there, questions on investors' minds. I guess maybe just starting with drug volumes. Just some of the data that we and others have been tracking would suggest the broader market prescriptions have been trending maybe down in somewhere in the high single-digit range in recent weeks, at least. There's been some modest signs of improvement at least from the data that we've been tracking. I'm just curious if you would be willing to weigh in on kind of what you're seeing real time. Does that general level of declines and the idea that there's maybe a modest recovery starting to play out, does that kind of fit with the way McKesson sees the world today?

Yes. Thanks for that question. And maybe I'll just start by stepping back to some comments that I made on our earnings call, what we saw in March right after the WHO declared this COVID as a pandemic. Because what we saw is that there was a pull-forward of volumes across our business, really the U.S. Distribution business as well as our Medical-Surgical business and even in our European business. And that was followed pretty quickly really within a couple of weeks by some sharp declines in volume. And I talked about it, about $2 billion of revenue related to COVID-19 really being pulled forward into our Q4. As volume started to fall off related to as localities began to shelter in place, as some physician offices and surgery centers and clinics shut down temporarily, we saw those volumes fall off. And we've seen volumes begin to gradually improve across our business beginning in April, mid-April, all the way through our earnings calls, as we talked about. And so we're encouraged that the volumes have begun to improve and return. We do expect that there's going to be a more severe impact on our business in Q1, that volumes will continue to improve throughout the second quarter. And as we get to the back half of the year, we would expect to see growth on a year-over-year basis in the second half across our businesses. So while we're certainly seeing volumes improve, they still remain below the pre-COVID levels and certainly more impacted in the physician sites, surgery centers, primary care sites in clinics. So volumes have begun to improve. I don't know that I would cite any particular number, and the volumes are improving in line with the way that we laid out the shape of the recovery in our guidance.

No, that's really helpful. I mean I guess maybe if we think about the recovery, maybe any perspective you could share by channel? I know, obviously, mix matters. And so as you think about just kind of traditional retail pharmacy versus maybe what you're seeing in the hospital setting versus obviously, Specialty being a very important part of McKesson's mix. And just any kind of high-level thoughts on what you're seeing by channel as far as the drop-off and then the recovery would be helpful.

Yes. We haven't really called out anything specific on a channel basis. We're certainly seeing all channels being impacted. We are starting -- as I mentioned, we are starting to see some improvement across all channels and prescription volumes, albeit, again, still below pre-COVID levels. So I don't know that there's any one channel that we've seen had a more material impact than another. All channels have been impacted. As you think about our Specialty provider business, which is more the clinic setting, this is where we've seen more severe impacts because certain facilities have either temporarily shut down or patients who have been in a shelter-in-place perspective have -- certainly are having fewer interactions with their physicians. They are deferring procedures and deferring elective procedures. So as you think about specialties like ophthalmology or dermatology, those have been more impacted. We would expect those to be more severely impacted in Q1. But again, as the economy begins to reopen, volumes are beginning to improve across and we would expect that gradual improvement to continue across the balance of the year.

I guess maybe just on the pricing side, Britt, we've seen some data that we've been tracking, again, directionally has showed generic pricing improved slightly in recent months. And I know you mentioned seeing some moderation in deflation on the most recent earnings call. Can you give us any context just on how that's trended? How meaningful the moderation has been? And could this or has this had any noticeable impact on results so far?

Yes. So let me maybe go back to some of the comments that I made on the earnings call, which are still applicable and valid today. I really didn't talk about any rates of inflation or deflation. I just don't think that, that's really a constructive way to guide. What we have seen is, again, we think about generics on a couple of different dimensions. Particularly in a COVID world, we think about that stability of supply as really being paramount. And our sourcing organization at ClarusONE has done a phenomenal job since we put it in place, which has been just a little over 4 years now and continue to have very strong relationships with a variety of manufacturers across all types of disease states. The stability of supply has been primary for us. We've seen good stability of supply because of the balance of the relationships that we have. Pricing on the sell-side has continued to be competitive and stable. So we take our strong sourcing organization, that good stability of supply to be able to get low cost, take it to the sell-side where we have a disciplined approach to pricing in a market that has been -- continued to be competitive and stable. And that's allowed us to continue to earn a spread very similar to what we talked about in terms of the dynamics in FY '20. So we view the market as competitive and stable. Again, our strong sourcing organization and our disciplined approach to pricing has really played well for us throughout FY '20. That's how we've guided FY '21 to continue to behave from an environment perspective. And that's what we're seeing thus far.

And I guess as it relates to COVID, Britt, we get a lot of questions around the supply chain globally. And so anything that you would call out, whether going all the way upstream to API, to any kind of disruption in finished dose? Just curious on if you've seen shortages, have you been able to maintain inventory levels? Anything around the updated thoughts on the generic supply chain would be helpful.

Yes, sure. It's -- certainly, it's an important topic, and we've been monitoring this very closely. Obviously, working very closely with all of our manufacturing partners and make sure that there's good availability, particularly as countries were shutting down their borders for a period of time. We certainly carry an adequate supply of working capital for the benefit of our customers, and we've been able to manage through this time period as effectively as we have in the past. We've not seen anything from a COVID pandemic result itself that is material. So there are shortages from time to time on a molecule-by-molecule basis, but there's nothing that we've seen in the environment here that is material or different than what we've seen over the last several years. We've assembled a leadership team within McKesson that is focused on this and maintaining that smooth stability of our procurement process. And again, we've been able to manage through this very effectively. We've not seen anything of a material nature that has impacted our supply, our ability to get strong stability of that supply to our customers.

I guess just one related to that, Britt, is we've gotten more questions around onshoring. The idea that maybe in a post-COVID world, you could see certain aspects of supply chain, whether it's health care or otherwise, be moved back domestically. Is that something that is on your radar? Or is that something you've been in discussions around? Or is that maybe not so relevant as you think about the future of the supply chain for generics?

Well, yes. I mean it's gotten more discussion publicly over the last several weeks, but it's something that we've always actively managed in our relationships with our suppliers. We don't manufacture ourselves, whether that's in pharmaceuticals or in medical supply. And we do some contract manufacturing, obviously, but manufacturing is not our business. But we've always focused on this and we're always focused on where our suppliers are obtaining the product from, whether that be all the way back to API or where they're manufacturing the product. So we've just continued our relationships and our discussions with the manufacturers on that. We really are neutral in terms of where the product is manufactured. As long as we can maintain the breadth and strength of the manufacturing relationships that we've been able to do over the last several years, as long as we can continue to have a strong, stable supply of the products, where it's manufactured is really not of paramount importance to us. I think manufacturers will make decisions based on a number of different factors. Certainly, economic incentives will be one of those. As long as we have those strong relationships and as long as we have a good stability of supply, we're neutral in terms of where our product is manufactured.

No, that makes sense. I guess just one more on pricing before we move on in the branded side. Not assuming this is as relevant as it maybe once was, but how are you thinking about branded inflation longer term? How important is it to underlying growth? And do you see any scenarios where maybe we get through the election, and you could potentially see branded manufacturers start to take a bit more price than they have for the last 2 years?

Yes. It's a great question. As we've talked about now for the last several quarters, we've seen more stability in the branded pricing environment. It has really stabilized in a mid-single-digit range in terms of the inflation on a year-over-year basis. We expect that and that's what we guided in our FY '21 guidance to the Street. We expect to see branded price inflation continue to settle in that mid-single-digit range. I would just remind you that over the last several years, the impact of branded inflation on our economics is lower than it's ever been. And it's -- certainly, it's still an important component to our business, but it's not a -- isn't material any longer. About 95% of our branded compensation with manufacturers now comes through fixed fee for supply. So there's still a contingent portion, but it's certainly not as material as it once was. And we've seen more stability in the branded price environment. So when you combine those 2 factors of really about 95% being more fixed fee-for-service and some stability in the mid-single-digit branded inflation rate over the last several quarters now, I think that gives us confidence in what we guided to the Street at the beginning of the year.

Got it. Got it. I guess just on that guidance point, Britt, definitely don't envy you or the organization having to try to give guidance in this environment, especially the way your fiscal year falls. But obviously, you did. And so if we think about the range that you have put out there, could you maybe just touch on some of the biggest swing factors? I mean I know the range is wider than normal, I think, understandably. But how should we think about what's contemplated in that range as far as things like unemployment, the recovery that we talked about? Just any of the major pushes and pulls would be helpful.

Yes. I appreciate the question. And we certainly spent a lot of time internally discussing what or how we might guide. We thought it was really important to provide guidance. Clearly, this is a very uncertain environment in an uncertain time for health care, for the environment in general. And so we thought it was really important to provide as much transparency as we could into the environment that we're experiencing in our different businesses and how we expect the environment or how we foresee the environment to continue to play out. So that additional transparency, we thought, was important, at least into how we were assuming the environment to play out and how we were assuming that the recovery would play out. In terms of some of the important factors that we considered in our guidance, and we talked about it on our earnings call, I would just remind you that first of all, we're not assuming that a second wave of the virus returns at the same peak levels as it originally came at us. And when I talk about that, what we're saying is that we're not assuming that, that return precludes patients from procuring health care in the manner they historically have. The second thing that we talked about is we're not assuming that there is a systemic level of customer insolvency. So certainly, if there's a more systemic across customer bases or markets, that's not included in our guide. We have assumed or laid out for you a shape of the recovery that we anticipate is going to happen. As we talked about, our primary care sites within our medical business, our multispecialty provider business that is more clinic-based, we've seen a more dramatic -- a hit to, and we would expect that there will be a more severe impact in our first quarter. But there'd be a gradual improvement across the second quarter and into the back half of the year, where we expect to see growth in all of our business segments versus the prior year in the second half. In terms of unemployment, we do expect that unemployment will reach its peak during Q1 or in Q1 and then gradually begin to improve in the back half of the year. What we've seen, at this point, is that we've seen some modest improvements across our businesses. As the economy begins to reopen, as states and localities begin to reopen, patients are beginning to think about elective procedures that they had deferred. Certainly, patients are beginning to go back to the doctors' offices. They feel comfortable visiting with their physicians. So we're seeing that modest improvement begin. It's in line with the shape of the recovery that we had outlined and provided for in our guidance. So we're optimistic that things are improving, but they're improving along the lines that we had expected. Again, I'd just point out, I think it's really important that our Primary Care business within our medical business and our clinic business, that is a Specialty provider, were the most impacted, and we would expect that the impact to be the most severe in Q1.

Got it. Got it. I guess one last one on the drug side, Britt, would just be around your retail pharmacy customers, and in particular, the independents. I mean clearly, a lot of industries and businesses have been pretty deeply impacted from the crisis. How are that customer set holding up through this? Has there been any kind of insolvency problems? Have you seen a spike in those customers selling to larger retail pharmacies? Just wondering how that cohort has been holding up through all this.

Sure. I mean we have a very long track record of supporting independent community pharmacy. We think that it's important. Our Health Mart franchise and Health Mart outlets have been important to the independents, and they've grown very nicely over the last several years. Independents have faced reimbursement pressure in the past. We expect that reimbursement pressure will be a continuing part of the business. And we'll continue to support our independents through capabilities and services, whether that be reimbursement services or inventory management services, we'll continue to do that. At this point, we've not seen a material change in independent pharmacy. We've seen the impact of the volumes decreasing post the pandemic, just like we have in the other channels, but nothing that has been materially different in the independent space. File churn has existed in the independent space for years. We would expect file churn to continue. As many files are sold or pharmacists who decided to retire and close their shops down, we see new ones entering the space. And so the level of independents within our business that we service has remained relatively consistent. Again, there's not been anything that we've seen to this point that has materially changed that pattern. We stay very close to the independents. Obviously, as we've talked about, a very uncertain time frame. And so we're working very closely with our independents, helping them understand where funding is available for them. There's been no change to our view on -- from a solvency perspective at this point. But again, an uncertain time period, and we'll remain very close to our customers through this time period.

Got it. I guess transitioning right over to MedSurg, another area that obviously was impacted with the shelter-at-home restrictions. Yes, I guess maybe just for starters, any updated thoughts on how that's progressed as you've seen different parts of the country start to reopen?

Yes. And maybe I'll just remind everybody a stat that I talked about on our earnings call. Again, trying to give a little bit more transparency into our business. Our medical business has grown very nicely over the last several years. We have also added some tuck-in acquisitions and capabilities around lab and pharmaceuticals and so forth that have bolstered that business. But about 60% of our medical business is primary care site-related, whether that be physician sites, whether that be ambulatory surgery centers or reference lab locations. And the Primary Care business, as I've talked about earlier, has been more impacted than other parts of our business. So we would expect there to be a more severe impact on the results of our medical business, particularly at the primary care site in Q1. We have seen some improvement as physicians have reopened. Again, some physicians and surgery centers shut down temporarily. But as the economy has begun to reopen and physicians have begun to see patients again, we've seen some gradual and modest improvements in those volumes. But it is along the lines of what we had anticipated and what we had called out in our earnings call. So we expect that demand will continue to return. We expect that demand will continue to improve over the balance of the first half of the year, such to the point as we get to the second half of the year, we would expect to see growth in our medical business in the second half on a year-over-year basis.

Yes. I guess to that point, Britt, it does look like the back half guidance in medical, I think, is framing somewhere in the 5% to 15% growth back half over back half. Is that representative of something closer to normal growth as we think about finally getting past the impacts from COVID? Is that closer to representative of how you think about growth in the MedSurg business longer term?

Yes. Look, we've seen really solid growth in our medical business for several years now. And again, we're optimistic that the shape of the curve that we've seen thus far and the improving utilization and so forth will allow our business to return to that growth in the second half. There's nothing that has fundamentally changed in our business. The foundation of our business remains intact. Certainly, as we think about it, it's not a matter of if utilization will return, it's just a matter of when. When we talked about this on our earnings call, we noted that the utilization had dropped off quite significantly in Primary Care. We are encouraged by the slow recovery that we're seeing. And I don't know that I would point to a normal earnings growth rate as we think about 5% to 15% growth rate in the second half of the year. That's really a function of the speed and the recovery and the pace of the recovery. But it isn't far out of line with the type of growth that we've seen in prior years.

Okay. Understood. I guess just transitioning again over to the EU business. Clearly, declines in the first half are pretty -- expected to be pretty drastic within that segment, certainly relative to even the declines in the U.S. Is there anything you could highlight for us? Just on maybe what's at play in the EU versus the U.S.? And then just any thoughts between the impact on pharmacy over there versus the wholesale business?

Yes. A couple of things I think are really important that are quite different than our U.S. business or even our Canadian business. As you think about our European business, I think what's really important and really plays itself out in this environment is that we're operating in 13 different countries. And each of those countries has and will make different decisions in terms of how they call for shelter in place or how they reopen their economies. And so I think that is one important factor is that the time line for each of the countries that we operate in is likely going to be different. We expected that the headwinds that we're seeing would occur very similar in terms of the shape on Primary Care and our wholesale business versus our retail business. But again, we're starting to see -- as the economies open, we're starting to see modest returns of volumes and we're encouraged by that. And again, the returns that we're seeing and the improvements that we're seeing are in line with the guidance that we had anticipated. Retail has been more challenged for us, particularly in the U.K. as we think about the reimbursement pressures from the NHS. We do have a -- really a 5-year visibility now into the total level of reimbursement funding in the U.K. as it relates to what the NHS intends to fund. That gives us more confidence and visibility, at least in terms of the total reimbursement over that time period. In terms of the quarter-by-quarter fluctuations, it has been frustrating for us in terms of being able to project when these reimbursement issues are going to happen. But we feel more confident now with this 5-year agreement, at least to the total level of funding. So in overall, our wholesale business has been solid for us. We've seen growth in many of the countries that we've operated in. We're beginning to see that modest return of volumes country-by-country. And we're starting to begin to see some modest returns on the retail side as well. And so we have -- we're very optimistic that, that will continue along that gradual shape of recovery throughout the year.

Yes. No, I guess just to follow-up on that. You pointed out the EU segment guidance for the back half does seem to point to a return to growth. You mentioned maybe better visibility on reimbursement. This has been a pretty volatile business, as you just pointed out, over the last few years. I mean is it the view now that once we can get into the back half and then beyond fiscal '21, that this business would return to growth and be a more stable grower for the organization?

Yes. Well, I -- what I would point to is in FY '20, we did have growth year-over-year in our European business. And in particular, in the second half of the year, we saw more consistent performance. And we were really pleased with the growth that we were seeing in our European business in the second half of the year. So again, the fundamentals of the business are intact. We're coming off a year where we did show growth in that business. We have a little more visibility now in terms of the total reimbursement pool in our retail business, particularly in the U.K. So as we think about this, it's a function of how does the recovery take place over what time period? And when do those interactions begin to return to more normal levels? But the fundamentals of the business are solid and intact. And again, coming off a year where we did show growth in our European business with consistent performance over the back half of the year.

Got it. I guess just rounding out the segments in the Other bucket. Back half guidance for Other seems to be pointing to pretty healthy, maybe slightly less than 10% EBIT growth, ex Change. Could you maybe just give us the top couple things that would be driving the growth in that business? And any step-up in trends -- underlying trends within the segments captured in Other?

Yes. And I think it's important to start with how did our FY '20 performance -- how was that performance versus FY '19, excluding the impact of Change Healthcare? And we really saw solid performance last year, with 6% growth, excluding Change Healthcare in FY '20 versus FY '19. So again, a business that -- a couple of businesses there, our Canadian business and our MRxTS, or Technology Solutions business, where we've seen consistent and solid performance. We've continued to invest in certain products in our Technology Solutions -- our retail Technology Solutions business that we think are going to be supportive of the strategies in future growth in the Specialty area and the Manufacturer services. And we expect that, that continued level of investment, the foundation of growth that we had put in place, is going to allow us to continue to grow in the future. So we're excited about the good performance that we've seen in Canada. We're excited about the investments that we're making aligned to our strategy in our retail Technology Solutions business, and we're excited coming off the year of solid growth of 6% ex Change in FY '20.

All right. No, understood. I guess just a couple of other big topics, Britt, wanted to get to. One, I know it's a tricky one to answer, but it's important and obviously, top of mind for a lot of investors just around the opioid settlement. With this environment, it seems like a lot of trials have been pushed out. I'm just curious if maybe you could give us what the next kind of bellwether case is or things that we should be looking for as far as guidepost and any progression here. And then related to that, is there any sense that you've gotten in the wake of COVID and the negative impact it's had on states and local municipalities that there is any greater sense of urgency to potentially enter into that global framework that was out there?

Yes. I think as you pointed out, the environment, really driven by COVID, is going to continue to be fluid. So there's not a lot of information I can point to in terms of timing of certain trials that are upcoming. I think it's going to continue to be somewhat of a fluid environment. And I think the primary reason for that is we, as a company, are focused on the safety and health of our employees, the stability of supply for our customers and the stability of the supply chain. We think that the state and local municipalities are very focused on the COVID pandemic and return to work and return the economy back to some normalcy. So there's not a lot of additional information that I can really provide to you in terms of the status of the discussions or the settlement. We still think that a global settlement that ring-fences our risk is important. We think it's the right outcome for all the participants. And we continue to engage in discussions that will lead to that eventuality. But there's really not a lot of additional information that I can provide on that at this point.

Got it. Yes. I guess just moving on to another big area, which would be around capital deployment and another area that has been impacted from the COVID situation. You ended the year with a very strong balance sheet situation. Doesn't look like share count guidance would suggest that there will be as much buyback as there's been in recent years. So just any latest thoughts on deploying capital? Are there specific hurdles that you're monitoring or that you want to see kind of progress before McKesson would enter back into either buybacks or more seriously considering M&A?

I appreciate the question. And capital deployment, for us, starts with good, solid, consistent cash flow, and we've been able to demonstrate that over several years. We expect to continue to have strong cash flow generation in FY '21. Our capital deployment is very balanced and we approach it from a balanced perspective. We want to grow the company. We think that it's important to continue to invest in growth and for future cash flow generation, which, again, allows us to have more capital deployment options. And we're going to grow the company on our strategy, though. And I think this is really important as we've talked about now for the last year, 1.5 years, we've been very clear on what our strategy is, and it's focused on areas where we have clear differentiation, in areas of specialty, in particular, oncology and areas of manufacturing services capabilities. Those are the focus points for us, and that's where we're going to focus our growth investment, whether that be internal or M&A. But we're going to take a very balanced approach to this. Our dividend, while modest, has been -- we've been growing our dividend. And obviously, we think that it's important to have share repurchases as part of our capital deployment. So we'll continue to look at this in a balanced way. We do want to grow the company. If we can find assets that are on strategy that deliver superior returns to other opportunities that we have for that deployment of capital, we'll do M&A. But again, it has to be on strategy, it has to accelerate the areas that we've laid out in the areas that we have differentiation in. If we can't find those opportunities, we're going to continue to deploy capital back to our shareholders, and that will be through focusing on our dividend and focusing on share repurchases.

Britt, I know that it's always a balanced approach to capital deployment, but listening to you here and even on the previous earnings call, it does kind of sound like M&A is maybe at the top of the list right now relative to buybacks or other means of deployment. So I guess, A, is that a fair characterization? And then within that, you mentioned things like specialty, but any other areas, both geographically and from a business standpoint, that you would highlight as being more top priority from an M&A standpoint?

Well, I would just say that the current environment doesn't preclude us from considering M&A, and we think that growing the company is important. So what you're hearing from me is that we have very clear focus on what our strategy is, where we have the differentiation in specialty oncology and Manufacturer services. We want to grow the company. But if we can't find the opportunities on strategy that deliver really solid returns for us, we will continue to return capital back to our shareholders. In any one particular year, we may be tilted more towards returning capital to shareholders or investing in growth. It really is going to depend on what those opportunities are, and it's going to depend on what the returns for those opportunities are. Acquisitions take a willing buyer and a willing seller. We're certainly open to acquiring on strategy. But if those opportunities are not there, then we'll just continue to deploy capital where it makes the most sense. And last year is a good example. We felt it made most sense to return it back in the form of share repurchases. So as we enter any particular year, we want to think about it as a balance, but that will really be dependent on what the opportunities are within that year or in that time period.

Yes. No, I think that makes sense. I guess just in the few minutes we have left, Britt. One question that we've gotten kind of across our coverage is around trying to think about any longer-term impacts that might stay beyond COVID-19 that obviously maybe came about in this time period. Is there any major things you think about from an industry level or even more specifically, McKesson, that you think might play out differently in not only the months, but years to come, that could be more permanently changed because of the situation that we're going through?

Yes. I think it's still a little early in the development of this and how our channels and partners and customers are recovering. But I think there's a lot of discussion around whether it's sourcing domestically and diversifying out further that way, changes to how customers interact, whether that be more from a telehealth perspective. And certainly, our customers are capable, and we're helping them be capable from a telehealth perspective. Again, helping our customers diversify how they interact with their patients. How we operate internally, whether it's more of a remote workforce and how we help our employees and the distribution centers be more ready for a safe working environment. I think there's a lot of those. I think it's early to say what impacts might come out from a public policy perspective. It's pretty quiet right now. But I think just generally speaking, there's going to be a lot of discussion over the next several quarters around diversification of the supply channel, how patients interact, whether that be more telehealth or so forth. But our assets and our relationships and partnerships are very broad, and we're very prepared to help our partners and customers through some of these changes that might come. I think these changes will probably happen gradually, though. I'm not anticipating anything to happen in the near term. But we're certainly prepared for that as these changes come about.

No, that's great. And then I guess just the last one, Britt, you started to touch on this, but -- and I know it's a very difficult thing to play out given where we are in the election cycle, and there's obviously a lot of unknowns on how that will play out. But anything that you would flag from a regulatory or legislative perspective that is high on the radar for the organization? I know there was like, for an example, there was a proposed rule from CMS to implement a second specialty tier for placement and preferred specialty drugs. Just things like that, that either out of CMS or potential legislative actions that you would want investors to have on their radar?

Yes. It's certainly been a little quieter as we think that the government is very focused on how to help the economy return to normal and how we can help the economy and participants of the economy return to health, if you will. So we're very -- we remain very actively engaged with policymakers. We're very attuned to some of the different issues that are being brought up. I think there's a lot of discussion right now. There's not a lot of forward movement on any particular policy, probably a little early to speculate whether any of these discussions will come to any fruition. We're not anticipating anything in the near term, but we'll continue to remain active and close to policymakers as the coming weeks and months advance.

Got it. That's great. And I think we're just up on time. So I did want to thank Britt and Holly for participating today, and I want to thank everybody who is on the line dialed in. Thanks a lot and have a good day.

Thank you. Appreciate it.

Thanks, Britt.