Rollins, Inc. (ROL) Earnings Call Transcript & Summary

All right, good morning again. Let's keep this rolling before lunch. For those of you who just walked in: My name is Manav Patnaik. I cover business and information services for Barclays, yes. And we're pleased to have today with us Ken Krause, who's the CFO of Rollins; first appearance for Rollins here at Americas Select. So thank you for being here. Appreciate it. Since it is your first, Ken, I figured we'd just start a little bit high level just for the benefit of the audience, how you would describe kind of the Rollins business mix and the overall just strategy.

Sure. No, thank you. Thanks for having me and having Rollins here. It's great to be here and to represent such a great business. It continues to perform. We continue to see great demand for our services. We're focused in one specific area. We're focused on pest control. 93% of our business is in the U.S. 7% of our business is outside the borders of the U.S., notably Canada, the U.K., Singapore and Australia, but we continue to operate a very successful business. Some call it a defensive business, but it's hard to find defensive businesses that are growing at 10%. And so we continue to compound revenue, earnings and cash flow at double-digit rates. And we see an opportunity to continue to execute upon that and deliver solid results as we think about the future. It's interesting. There's a lot of challenges on the macro, in the macro economy today. We feel very well positioned, as many others navigated very -- a highly uncertain environment. And so we feel good about where we are. We feel good about how we're executing and we're excited for the future.

And just to the point on the macro, I guess, just talk there. I think on the call -- you aren't seeing any impacts really at the moment. Is that correct?

Right, right. It's a fair question. When we look at the macro -- I work with our Board and others, and I look at it through 6 or 7 different lenses. And so 1 lens that I look at it through is what's the impact on liquidity for us to grow our business. We were really successful back in February with our inaugural bond offering, very tight spread, investment-grade bonds. We've got adequate liquidity to grow our business. The second area is tariffs. Everybody is talking about tariffs. We don't see major issue with tariffs. When we look at the cost structure of our business, we've got people, which is our largest -- by far, largest category. That's not impacted by tariffs. When we look at fleet and material, not as big of an issue either. It's roughly 3% of sales on fleet and 3% of sales on our material area, so not an overall big impact from a tariffs perspective. And in fact, materials: A lot of the materials we're using are procured in the U.S. and so we're not seeing and we're not reliant upon a lot of other regions to supply us with the chemicals. We're buying those chemicals and sourcing those locally. Material availability. Again, we're not seeing issues with material availability; no supply chain challenges. Labor markets are healthy and labor availability continues to be healthy. The FX environment: We had about a 40 basis point headwind on FX in the first quarter. We think that dissipates as we go throughout the year, but again, with 7% of your business outside the borders of the U.S., you'd have to see a major change in FX to have a significant impact on us. And then inflation and M&A, continue to be positioned well. Pricing is healthy, CPI plus pricing. And our M&A pipeline is very strong.

Got it. And just for some historical context. For most companies, this is not a softball question, but for you it is. Like, how has Rollins performed in prior recessions?

Well, I love softball questions like that, but no. That -- it's been -- we've been very successful. There's a chart in our investor material from the quarter that shows our business over 20-plus years. And over 20-plus years, we're compounding revenues at a very attractive pace. Not only in strong cycles, but during the great financial crisis, I want to say, we grew it 6%; and industrial recession, similarly; and then COVID. We grew through all three of those. And we continue to grow through what we're dealing with now. We're forecasting 7% to 8% growth this year on organic; 3% to 4% M&A, which is up from 2% to 3%, in terms of our longer-term guides. And so we feel good. And we've -- our track record, I think, is just an example and reflective of how good the market is that we operate but also how good the execution has been with the company.

And that chart obviously showed the residency over the years, but also Rollins has been around for a long time. But there have been some changes over the last 3 to 4 years. So maybe we can start with the CEO change and perhaps what -- some of the changes from that level that have happened, so far.

Sure. So Jerry Gahlhoff assumed the CEO position January 1, 2023, from Gary Rollins. And Gary Rollins: His father founded the company, bought out Orkin back in 1963. And him and Randall ran the company for years. Randall passed, unfortunately, back in 2020. Gary is 81 years old, I want to say, and so he's transitioned out of the business. And he's now our Chairman Emeritus. He turned over the Chairman role to John Wilson recently, but Jerry is as much pest control is Gary Rollins is. And he knows the business. He's been around the business. He's -- grew up in the business. His dad worked for Orkin, so he's been in a Rollins-oriented business for his entire life, but he's making changes. He's open to changes. He hired -- I came to the company in '22, and he hired me in from MSA Safety. We had a great track record and a run -- a great run at MSA Safety, but he attracted me. He hired me and recruited me, and I think we have a great partnership. It's a unique partnership. I'm learning about pest control. He's well attuned to pest control. I'm bringing new ideas, new modernization efforts, whether it be the dividend strategy, the bond deal, the secondary offering, auditors, the -- I can go through a number of different things that we've executed. And I think it's been successful over the last 2.5 years, and we're excited for the future. It's not a business that's broke. It's a business that we're trying to just make better.

And maybe just from our perspective. Through all the things that you've done, you mentioned, maybe just elaborate a little bit on that more, but for background: What was it that the company finally realized that needed to change from the CFO and IR perspective?

It's interesting. I think that, coming in, I tried to just paint a vision of what the business could do. And with a roughly -- at that point, a $15 billion to $20 billion market cap, with such strong financials, there was a great opportunity to tell the story. And so I was able to hire Lyndsey from -- and bring her on, in addition to a number of other folks on my team. And we've completely changed the team. My team is completely different from where it was on September 1, 2022. And so I think the company was just -- I think it was just at the point in history -- and that's what I saw. It was very similar to where I came from. This company was at a point in its history where it was open to making the change. If it wasn't open to making the change, I probably wouldn't be sitting here, but they were. And so we've begun this evolution where we brought in more sell-side analysts like yourself. And it's great to have Barclays following us. We went through a sell-down with the family, and our liquidity and our volume has increased significantly. The shareholder base has evolved. There's a lot of shareholders that have been there for a very long time. It's a hard stock to sell once you see the performance, but there's also, nice to see, new investors coming in that are hearing the story for the first time, going to our Investor Day last May, hearing about how we're looking at the business through a new lens. It's an exciting time. It really is.

So just to follow up on a couple of the things. So the secondary that you talked about: How much does the family still own? And what should we think about that ownership plan going forward?

Sure. So the family owns roughly 40% today. It's -- I have no idea what their investment horizon looks like. It's just like I wouldn't have any idea what your investment horizon looks like, but what I can tell you is we have a very healthy relationship with the family office and the head of the family office. And we worked with the family office as we put in place the shelf filing back in June of 2023 and going through the secondary. When I joined the company, the family was selling-down through block trades and 144s, and at that point, they owned over 50% of the company. And so you can imagine the challenges that you have when you have a shareholder of that size selling into the market through blocks and 144s. That's challenging, so we decided to work with the family to put in place the shelf and then to do the secondary and then for us to use our balance sheet because we saw a very attractive valuation. And then they locked up their shares for a full 365 days. So I think we've got a great relationship. I have -- like I say as I started with this, I have no idea what their investment horizon looks like, but I think they're very much like you. As the stock continues to perform, they want to hold onto it.

And another big milestone was, I think, for you at least, was in February, the IG ratings from S&P and Fitch, yes. Can you just help us appreciate why that was so important?

Certainly. It's interesting, when we look at the journey in the last 3 years. It started -- I joined the company in '22. And they had a 2-bank revolver, for a $16 billion company, and didn't have any leverage. In fact, I think they were in a net cash position, and -- but at that point, I've decided that we as a company had the opportunity to use our balance sheet more effectively -- and more efficiently, probably better said. And so we put a $1 billion revolver in place. That was in January of 2023. And then we went through and we did that shelf filing that we talk about and we did the secondary sell-down. After that, we decided -- on my horizon, I wanted to modernize the capital structure. And so there was an opportunity, after the sell-down, to put together a time line where we could get an investment-grade rating -- hopefully, get an investment-grade rating. At $3 billion to $4 billion, that's not always a sure thing, but when you look at the business and you look at the markets that we're in and you look at our performance, we were able to secure that investment-grade rating and then do that bond deal. And in addition to doing the bond deal and getting a very attractive spread of 90 basis points above the 10-year at that point, which was the tightest, going back a number of years, in the industrial space, we also put in a commercial paper program. And so no longer are we using the revolver. We're using the commercial paper program that's saving us real dollars from an interest cost perspective and then also using the bond market to term out some of our longer-term debt. So I think we've completely transitioned the capital structure to something that looks more like a modernized structure and allows us and then affords us the opportunities to continue to be acquisitive and grow the business as we think about the future.

So you were clearly not having any issues with doing acquisitions already, so that comment on IG rating acquisitive, does that mean we should anticipate bigger deals down the road? Or not necessarily.

I think -- today and for the foreseeable future, I think the focus is bolt-ons, incremental tuck-ins, Saela-like deals, Fox-like deals. We have a track record of, every 18 months or 2 years, doing a larger deal and then having smaller tuck-ins in between those, but I think -- as I think about 3 or 4 years down the road, I think the important thing to measure this is the pace of our modernization. Are we able to put the back-office technologies and processes and standardization in place? If we're able to do that, I think you could see us do larger, more impactful deals in the future, but again, we don't need to. We don't need to rush down that road just yet. I think what we want to do is be pragmatic and put the processes and the structure in place that will allow us to be a better acquirer of businesses as we think about the future and then, hopefully, afford us the opportunity to do that.

Got it. Shifting to another topic, pricing. I think that's also an area, I think, where you and Jerry have really focused in on. So again just for some perspective: What was historical pricing like? What's current pricing? What are some of the changes around there?

Historical pricing was in the range of 1% to 2%. And so over the last couple of years, we've taken a fresh look at the pricing structure. Pricing has always been an important part of the equation here. It's an essential service. It's a very low ticket for our customers and they value the service that they're getting. And so it's one of those things that -- as our performance indicates, it's one of those things that people struggle canceling even in an economic downturn because the last thing they want to do is live with pests. Whether it be protecting their health, protecting their property or just general standard of living, they just don't want to live with pests. And so they're not -- they just don't cancel those pest control services, so as a result, we've got pricing opportunities. So if we're charging roughly $500 for an annual contract, a 3% price increase is $15. It's less than $1.50 a month in terms of price increase on those services. As long as we're providing the service, as long as the customer is happy, we're showing up when we say we're going to show up, we have the right to charge. We feel like the -- we've earned the right to charge a CPI-plus rate of price increase. And when we think about the services and everything that goes into CPI, we think this is a valuable service, a very small ticket in terms of purchase price; and so as a result, we should be charging slightly ahead of what CPI is. So if CPI is at 2%, 3% to 4% is not unrealistic to think about when it comes to pricing our services.

And so of your 7% to 8% organic growth, 3%, 4% is pricing. How do you break out the other 3% to 4%?

Yes. The other 3% to 4% is just volume. When you look at the volume, it's inclusive of new services. We have a chart in our investor material that talks about all of the different opportunities with our customer base. And so if we had 9 or 10 opportunities, we're growing there. Our -- that's in our ancillary number, in our termite and ancillary. Seeing great demand, great growth there; continuing to see performance there. You're seeing market growth, maybe a 2% or 3% -- 2% market growth or so. And then you're seeing some more share gain. And we continue to outpace a number of our competitors and gain share. So it's inclusive of new services, a broader share of wallet, share gain and then underlying market growth.

And so maybe on that market growth. Maybe the first question would be, at Investor Day, you guys attempted to size the TAM.

Yes.

So maybe, just for the audience, if you can help with that TAM size and what that market should grow foreseeably.

Yes. It's -- globally it's a very large market $20-plus billion. And we see the opportunity for that to inflect significantly higher, multiples higher. The adoption rate of pest control in the U.S. is very low. Some estimate it to be roughly 15% of households. And so if you imagine that and you imagine that changing, the size of the pest control market has an opportunity to continue to expand significantly. You see secular tailwinds that are behind it; weather, warmer weather, certainly more favorable for pests. I've seen people move to more southern regions, very favorable for pests. And pest activities continue to evolve. You see new pests every year. It's -- and so you've got so many different secular tailwinds. You have a low adoption rate. You have the essential nature of the service. All those things make it interesting and provide me optimism for market growth just from the base of the business.

And you mentioned share gains as part of your growth vertical. Can you just talk about how fragmented or -- the market is and perhaps maybe where some concentrations are?

Certainly. The market is, remains incredibly fragmented. We looked at a statistic recently from the PCT Top 100 from 10 years ago. And that number of companies has expanded greatly from 2014 to 2024. And so even though there's been a lot of consolidation, you continue to see the fragmentation. You see new parties and new entrants every year, entrants that are here in '24 that weren't even in -- around in 2014 and are very significant players. And so we continue to see a very fragmented -- with thousands of competitors, opportunities. Not every one of them is an opportunity. That's the great thing about this business. With the fragmentation provides optionality for us as we think about acquisitions. We don't have to have any one opportunity. We can remain disciplined and take a pragmatic approach as it relates to the M&A environment.

Got it. And the concentration question where I was heading to is obviously, out here in the U.K. in particular, we get a lot of questions around Rentokil and the Terminix acquisition. Does a particular player like that not doing well directly show up [ in better numbers of yours ]? Or not necessarily.

I wouldn't say that we are -- our success is on the backs of our competitor. I don't envy the position they're in. They certainly have a lot going on, but I think, when I look at our performance, our performance has not been better just the last couple of years. But I think it's been better over a very long sustained period. And I think that outperformance relates to our brand strategies, with all of our various brands using different approaches to customer acquisition. Jerry likes to say we have a -- multiple bites at the apple. If you do business here and you don't like it or you're dissatisfied, we have this brand that can step in and provide a different level of service, maybe something that you're expecting. And so we've got all of that. And that's been built over a very long period of time, and during that time, we've consistently outperformed. And so we feel like we're positioned extremely well, as we think about the future, to continue on that outperformance trajectory.

Got it. You briefly referred to your multi-brand strategy, so if you could just elaborate on that. Because quite often, you're like, "Oh, that looks like a Rollins competitor." And the next you know, it's under your umbrella.

Yes, right.

So like, how did that develop? And it seems a little bit unique to some of the other larger-scale industrial services companies we cover.

It's more like a consumer services company. And so it's not really -- I know a lot of people compare us to an industrial services company, but we're really more of a consumer services company. And so when you look at some of the leading consumer services companies, I think our brand strategy looks more like them. We have a portfolio of brands, a house of brands. We're not a branded house. We're not just Rollins. If you're looking for pest control, you're not going to know about Rollins. You're going to know Orkin. You're going -- Northwest if you're in the southeast. Northwest was an acquisition we made in '17, $50 million of revenue back in '17. Today, it's approaching $200 million, continues to be performing well. And that growth is enabled through roll-ups. And so we're rolling up the southeast market and putting that into the Northwest business -- or Clark in California we bought in 2019, Fox out in Utah and Saela more recently. HomeTeam that we bought back in 2008, that's a homebuilder. Its -- it has a lot of relationships with homebuilders, especially in the Southeastern United States. And so it's a -- and they're all different. All their marketing strategies are very different from brand to brand, so they're reaching customers differently, opening up that opportunity and helping us build out that already very strong customer base of almost 3 million customers.

So when you look at your acquisition pipeline -- let's put the returns [ and stuff ] to the side for a second, but strategically, are you going after geographies? Is that the primary target that you're looking for? Or is there something more with some of these deals?

No. When we look at these deals, we're looking at it through a number of different lenses but, first and foremost, looking at the services. There are certain types of services we really like. There's other services that maybe aren't as attractive. And then geography is certainly an opportunity. The Saela deal gave us the Mountain West. It gave us the Pacific Northwest and Midwest, areas that we weren't as strong. And so it build out that. And then customer access is important, so every time we buy these businesses, we're trying to understand how they're accessing their customer base. Are they reliant on one form of marketing, or are they using multiple forms of marketing? And so that's important. So customer access and marketing access, geographic exposures and then general composition of services. Is it general pest control? Is it termite and ancillary? Does it have commercial in it? And so looking at it through those 3 broad lenses.

Got it. And maybe looking at your most recent acquisition, the Saela acquisition, can you just remind us of the size, contribution metrics? And maybe use that as an example of like the financial criteria you use, like the returns you need on investment. How many years does it need to be accretive? Those kinds of things.

Sure. When I look at acquisitions and when we have Rollins look at acquisitions, we look at them through 5 lenses. One is growth. When we buy businesses, we want to make sure that it's going to help improve our organic growth as we get into year 2, 3 and 4. And so when you look at that: Fox was probably our most recent acquisition that's being measured in that manner. Fox is accretive. It's growing faster than our 7.4% growth in the first quarter, so it's adding to organic growth. The second area that I look at -- and we're hopeful that Saela will do the same. Saela, we bought in April, roughly $65 million of revenue, margins that are relatively neutral to our margins. We don't see a big headwind on margins or even a tailwind at this point, but I think, as we get into year 1, year 2; see more growth; help provide some support in a number of areas, we think those margins can accrete higher. So margins are the second area. Margins accretion within the first year is certainly important to us. Earnings accretion, EPS accretion. And we probably expect to see Saela accretive to the first year earnings, probably will be more as we get into the third or fourth quarter of that deal, of owning that deal, but we're hopeful to see that. And cash flow, making sure that we're not buying businesses that are going to dilute our cash flow. We're growing cash flow at 15% to 17%. And so we want to make sure that we're not buying businesses that are going to take a large amount of CapEx or working capital. And then return on capital within the first 3 years: We should see a return on capital that exceeds our cost of capital by the third year. And we've done that with Fox. Fox, we bought 13.4x, I want to say. And after year 1, it was trading at 9.7x, so you can see that we've made considerable progress with our return on capital hurdle when it comes to that acquisition. And we're hopeful that Saela will follow a consistent and a similar trend.

Got it. The Fox acquisition, can you remind me? Just a quick follow-up on pricing. The 3% to 4% is the company average, correct? Like, depending on the brand or the demographic, it's higher in different places.

Yes, certainly it is. And 3% to 4% is how it all shakes out, but it might be 8% or 10% here in this one area for whatever reason. And it might be lower in another region, and so -- but it will even out to that 3% to 4%. And then even just broadly, commercial versus residential, you're going to see, you're probably going to see a higher price increase than 3% to 4% on the commercial side. You might see a little bit lower on the residential side. Not much, but it could follow a trend [ in a ] composition similar to that.

Got it. Since you mentioned commercial, let's jump there. I mean, for the most part, I think we think residential when we think Rollins, but obviously it's been a greater focus for you guys. So maybe if you can just give us a sense of what mix commercial is today of the business and then the change in strategy, I guess.

Sure. Commercial is roughly 35% of our business today, and so it's meaningful. It's roughly 1/3 or so of our business, but it's a great market. We put together a strategy where we decided to pull out the commercial branches from the residential branches. The services are different. The customers are different, how you interact, what you're providing. It's just a different approach and so we decided to separate them too, not that we're building more bricks and mortar. We still have them in the same location, but the ownership and the responsibility for the commercial business falls under Scott Weaver, who runs that business for us and -- at Orkin. And it's really an Orkin-based business. When you're in a commercial setting, you want to have the power of the Orkin brand behind you. Not to say our other brands aren't strong. They are very strong, but the brand Orkin is widely recognized. And there's a quality associated with it. And then on the commercial side, there's 0 risk of failure -- or there's 0 tolerance for failure. And so they've got to rely on a strong brand like Orkin -- provide them the peace of mind that they need when it comes to pest control in the commercial area. And it continues to be a good business. Customers stay -- in the commercial side, you'll see customers stay for quite some time. Retention might be 90-plus percent. It's not unusual to see retention for commercial at 90-plus percent. So we like that business. We're investing in that business and we're excited for the future.

How about the growth and margin profile commercial versus residential?

Yes. The margin profile is a little bit higher in the commercial. It's not that much higher. If it were, I'd probably have to break it out and report it separately, but it's not. It's a similar margin profile to the margin profile that we have in the residential side. It's a little bit more attractive on the pricing, but it's not 400, 500 basis points. It's a -- much smaller than that in terms of pricing as well as the margins.

Got it. And then in terms of the competitive dynamics, fragmentation, TAM, anything to call out there versus the residential?

What I would say on the commercial business that -- is that it's more consolidated. There's less players to acquire. As I said earlier, normally you're wanting to do business, on the commercial side, with large well-known brands. And so as a result, you're seeing concentration with Rentokil, Ecolab, Rollins -- or Orkin. And so it's more consolidated. We do see it in regionals. I mean there are regionals out there and even brands that we have that do commercial pest control, but it's more heavily dominated or heavily related to some of the larger brands that we all know.

Got it. And so residential; commercial; and the other, ancillary. Can you just help us with what fits into the other stuff there?

Yes, termite and ancillary. So it's termite -- Sentricon and other sorts of baiting that we use for termites, protecting the house. In a lot of regions of the country you -- in the U.S., you have to have a termite bond to close on your house. And so we certainly have that business, but we have a very exciting business in there. It's called our ancillary business, and that ancillary business is additional cross-sell on a lot of the residential area. And so when you look at that, it's insulation in the attic. It's exclusion work. So what you're trying to do is treat for the damage the pests made on the house. And you're also trying to restrict access of the pests from the house because oftentimes -- you can treat the pests. You can take care of the issue, but you need to take care of the long-term issue associated with it. So the ancillary business is growing. I mean we're adding resources. Every time we have a new customer come in, we have an opportunity to expand the ancillary service offering with our customers. It's a great business growing at a very healthy rate, with what we feel like is a lot of potential ahead.

Got it. I wanted to shift to margins. Obviously, with the top line growing 8-plus percent, that helps give you a lot of leverage to show margins, but what is the new kind of incremental margin target or margin targets? And how did that compare to before?

Yes. No, it's -- this business should be a 30% incremental margin business. 25% to 30% should be very realistic. I mean, if gross margins are where they are currently, if you're seeing an incremental gross margin of 55% to 60% and then you look at our SG&A spend at roughly 30% -- 29% to 30% of sales, you should be -- and then you consider that, out of that 30%, you've got fixed costs that you can leverage. You should certainly see a incremental margin that would be a -- nearing or approaching or around 30%. And we've seen it. You're not going to see it every quarter. We're going to have timing things, investments that we make. We don't look at this business through a quarterly lens. We look at it through a long-term lens. Investing in these customers is a long-term investment. And so we're looking at it through that lens, but what you saw in the first quarter was 8% roughly, 7.4% organic growth. And you saw roughly a 15% incremental. Now what you may not have seen is in that 15% incremental we had a significant investment in selling and marketing. And we also had a significant investment in what we call advertising. There were 2 aspects to the advertising. One was we were shooting new television advertisements that we do every 2 years, and that was a period expense. The other half is in just general advertising pull forward. And so we were pulling some of that forward into March as we saw demand continue to be strong. So investments will be there. If you set those investments aside, though, you had an incremental margin that was approaching 30%. So it is certainly a 30% business. We're excited about it. We think there's opportunity to improve that going forward.

And what are some of those opportunities to improve that going forward? I mean obviously you have the scale. You have the route density. Is it technology? What is the extra juice there?

I think the extra juice is the extension of the modernization journey, where we look at our back office. So right now we've got a lot of -- it's very decentralized. And I would not say -- I'd be remiss if I said to you that everything needs to be centralized. That's not the case. There's a lot of things that need to be in the field, that need to be with our operators, but there are other things like fleet and other types of services that we can centralize. If we can become a better support function for finance, accounting, HR, IT, legal, I think we'll be a better acquirer of businesses. We'll take some cost out and improve the margin profile. I think that's what we're seeing. If you look at our earnings presentations each quarter: We have a waterfall in there. And you can see, for every quarter for quite some time, administrative costs are coming down. And so our focus is how do we continue to accelerate that. We've hired so much new talent in the business, completely different business today than it was in '22. And we're excited about what that new talent is doing to bring new technologies, new ideas, process simplification, standardization in the business, so it's an exciting time to be at Rollins.

Got it. Maybe let's just end with a broader capital allocation question. We've talked a lot about M&A, but help us with how you guys see your priorities with organic, [ sort of ] buybacks, dividends, those kinds of things.

Growth, growth, growth is how I would start it. And so we want to invest in growth. Our capital allocation starts with investing in our business and growing our business and whether it be organic, which is an incredibly attractive growth, or through M&A. This year, we've raised our guidance on M&A from 2% to 3%, to 3% to 4% because of our Saela acquisition, but the growth is paramount. And secondly, when we look at the business, when we create growth, when we invest in growth and we realize the investments, we then share that increase in cash flow through the use of the dividend. And so I joined in '22. We raised the dividend, I think, over 60% between then and now. We essentially priced in a special dividend. We've got a very sustainable dividend, growing it as we continue to grow the business, and then share buybacks. And we bought shares back in that secondary offering I referred to earlier. And I think we invested roughly $300 million in '23 in share buyback. We'll do that from time to time, but our priority is growth, followed by the dividend and then share repurchase.

Got it. All right, Ken, well, let's leave it there. Thank you so much [ for your time ], appreciate it. Thank you, everybody.

All right, thank you, [ appreciate it ]. Thank you.

All right, thanks a lot.

Thanks, yes.