Centene Corp (CNC) — Q2 2017 Earnings Call Transcript

Good morning, and thank you for joining Magellan Health's second quarter 2017 earnings call. With me today are Magellan's Chairman and CEO, Barry Smith; and our CFO, Jon Rubin. The press release announcing our second quarter earnings was distributed this morning. A replay of this call will be available shortly after the conclusion of the call through August 28th. The numbers to access the replay are in the earnings release. For those who listen to the rebroadcast of this presentation, we remind you that the remarks made herein are as of today, Friday, July 28, 2017 and have not been updated subsequent to the initial earnings call. During our call, we will make forward-looking statements including statements related to our growth prospects and our 2017 outlook. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations and we advise listeners to review the risks factors discussed in our press release this morning and documents we filed with or furnished to the SEC. In addition, please note that Magellan uses certain non-GAAP financial measures when describing our financial results. Specifically, we refer to segment profit, adjusted net income, and adjusted EPS, which are defined in our SEC filings and in today's press release. Segment profit is equal to net revenues less the sum of costs of care, cost of goods sold, direct service costs and other operating expenses, and includes income from unconsolidated subsidiaries but excludes segment profit from non-controlling interest held by other parties, stock compensation expense, special charges or benefits, as well as changes in the fair value of contingent consideration recorded in relation to acquisitions. Adjusted net income and adjusted EPS reflects certain adjustments made for acquisitions completed after January 1, 2013 to exclude non-cash stock compensation expense resulting from restricted stock purchase by sellers, changes in the fair value of contingent consideration, amortization of identified acquisition intangibles, as well as impairment of identified acquisition intangibles. Please refer to the tables included in this morning's press release which is available on our website for a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures.

Thank you, Joe. Good morning and thank you all for joining us today. In my comments this morning, I'll review the second quarter results, discuss the Senior Whole Health acquisition, touch on the current regulatory environment and provide some additional color on the second half of the year and our longer-term outlook. We reported second quarter net revenue of $1.4 billion, net income of $5.5 million and EPS of $0.23 per share. Our adjusted net income was $14.1 million or $0.59 per share and we achieved segment profit of $54.3 million. The results for the current quarter were negatively impacted by cost pressures in two of our commercial healthcare accounts, as well as adverse experience in our Part D plan. While we are confirming our 2017 guidance for the year, we now expect to be approximately at the lower end of our ranges. Jon will provide more details on the quarter results and guidance later in the call. Next let me share some highlights on the acquisitions of Senior Whole Health and how it aligns with our Magellan Complete Care business. We're very excited about this acquisition and the strategic capabilities and expertise it brings us. Senior Whole Health is a specialty managed care organization with a focus on complex high risk populations. They provide both Medicare and Medicaid dual eligible benefits and serve more than 22,000 members across Massachusetts and New York as of July 2017. Senior Whole Health helps to accelerate our Magellan Complete Care strategy. In Massachusetts, they serve more than 13,000 members as part of the senior care options program which offers members aged 65 or older quality healthcare that combines Medicare health services with Medicaid social support services. Senior Whole Health has participated in senior care options since the program's inception in 2004. In New York, Senior Whole Health offers Medicaid managed long-term care services to nearly 9,000 members combining Magellan’s New York program while Senior Whole Health will enhance our scale and capabilities. It's important to note that managed long-term services and supports programs represent a significant growth opportunity for Magellan Healthcare. Positioning Magellan as a leader in the space makes sense both from a strategic and a financial perspective. Senior Whole Health has an outstanding management team and reputation, a strong track record of growth and extensive experience facilitating high quality, cost effective healthcare for its members. Combining the experience, capabilities and services of our two companies enhances our strategy of being a full service managed care company focused on complex populations such as managed long-term services and supports. We expect this transaction to close by the end of the first quarter of 2018 and to be accretive to earnings in the 12 months following. Jon will speak more to the financials later in the call. Upon closing this acquisition, Magellan will operate specialized managed care plans focused on complex populations in four states; Florida, New York, Virginia and Massachusetts with approximately $2.5 billion in annual revenue. This represents significant growth since 2013 when we launched the Magellan Complete Care strategy and set a goal of $2.5 billion revenue by 2018. Specific to our plan in Florida, the reprocurement, also known as the ITN, has been released and it was written largely as we expected. The responses are due in November and the state expects to make a decision in April of 2018. We feel very good about our current success in Florida, but of course, there are no guarantees with any reprocurement. In Virginia, implementation is on track with a go-live scheduled for the Tidewater region on August 1, as well as the Central region on September 1. As we alluded to during our Investor Day, we anticipate a $20 billion pipeline of Medicaid new business opportunities in seven to 10 states over the next five years. I am very proud of our success in Magellan Complete Care and look forward to capitalizing on the additional opportunities ahead. Now turning to the regulatory environment, there has been significant activity at the federal level, from last week's intense discussion on healthcare reform issues to the past few days’ incredible level of activity in the Senate. Meanwhile, Senate and House Committees remain focused on other healthcare matters including reauthorization of the CHIP program and the Medicare Advantage Special Needs Plan. The same is true in the state capitals. States continue to look for ways to improve the quality of care and reduce costs for their Medicaid populations. States are considering new waivers that include additional populations for managed care, mandatory enrollment in certain programs, and personal responsibility and member co-payments, developments we are close to tracking. The fluidity of the past few weeks is proof of what we shared last month during our Investor Day. Healthcare will continue to be a central part of federal and state policy debate for the foreseeable future and a focus of congressional and executive branch activity for the next few months. We will continue to remain engaged in these discussions and stand ready to provide our expertise and innovative solutions with the fastest growing most complex areas of healthcare. Magellan is well-positioned to succeed, regardless of what changes may occur at the federal level. Currently, we have limited exposure since less than 5% of our revenue is derived from the ACA. Managing complex populations will drive the most significant growth opportunities over the next several years. Addressing the needs of these populations requires our unique expertise. The changing healthcare environment requires companies who can respond quickly. Lastly, as the role of states grows, we have the longstanding relationships and expertise to provide input as they create new and innovative programs. For the balance of the year, we are focused on the successful implementation of our Virginia program and actions to improve results for our commercial healthcare business. Looking ahead, Magellan is well-positioned for growth beyond 2017. As we discussed at Investor Day, our long-term objectives include organic revenue growth of 10% to 15%, organic segment profit growth of approximately 10%, and adjusted earnings per share growth of 10% to 15% which includes the impact of capital deployment. Leading humanity to healthy vibrant lives is a pursuit that guides and inspires us. With our two growth engines, healthcare and pharmacy, Magellan is a repositioned company at an inflection point for sustained growth never losing sight of the customers we work with and the members that we serve.

Thanks, Barry, and good morning everyone. In my comments this morning, I’ll review second quarter results, discuss our outlook for the full-year, and share additional details on the recently announced acquisition of Senior Whole Health. For the quarter, revenue was $1.4 billion, which represents an increase of 22% over the same period in 2016. This increase was mainly driven by net new business growth and the annualization of revenue from prior year acquisitions. Net income was $5.5 million and EPS was $0.23. This compares to net income and EPS of $4 million and $0.16 for the second quarter of 2016. Adjusted net income was $14.1 million and adjusted EPS was $0.59. This compares to adjusted net income of $14.4 million and adjusted EPS of $0.58 for the second quarter of 2016. Segment profit was $54.3 million for the second quarter, compared to segment profit of $56.9 million in the second quarter of 2016. The current quarter results included approximately $3 million of unfavorable out-of-period items, primarily related to unfavorable care development in the Healthcare Segment. For our healthcare business, segment profit for the second quarter of 2017 was $30 million, which represents a decrease of 13% compared to the second quarter of 2016. This decrease is mainly due to the moratorium on the Health Insurer Fee, cost pressures in two of our commercial healthcare accounts, contract implementation costs and net unfavorable out-of-period items, partially offset by improved results in our government healthcare business and contributions from AFSC, which was acquired in July 2016. Relative to the cost pressures emerging in two of our commercial healthcare accounts, we're aggressively working on improvement actions including both care management initiatives and potential rate adjustments, and expect to see more favorable results in the second half of the year. Our pipeline continues to be robust with interest from both current and new health plan customers in our behavioral and specialty products. As we continue to work through these opportunities, we're seeing some delays in new sales and the timing of customer implementations. Turning to Pharmacy Management, we reported segment profit of $33.9 million for the quarter ended June 30, 2017, which was an increase of 5% from the second quarter of 2016. The increase was primarily due to net business growth and earnings from the Veridicus acquisition, partially offset by higher investments to support growth initiatives. In our Part D business, we've experienced approximately $9 million in losses through the first half of 2017. Based on our enrollment profile and claims experience through June 30, as well as normal benefit seasonality, we now expect the Part D result to be a loss of approximately $10 million for the full year, which is below our previous expectations of breakeven. Last month, we submitted our Part D bid to CMS for the 2018 plan year. In the bid, we made material changes to our formulary to better align with the PDP marketplace offerings and also increased our member premiums to correspond with emerging claims experience. While we expect this will result in lower membership and revenue in 2018, we believe that these actions will lead to improved member selection and financial results in 2018 and beyond. Regarding other financial results, corporate costs include the eliminations, but excluding stock compensation expense, totaled $9.6 million, which is roughly comparable to the $9.8 million in the second quarter of 2016. Total direct service and operating expenses, excluding stock compensation expense, changes in fair value of contingent consideration, and impairment of acquisition intangible, was 15.5% of revenue in the current quarter compared to 17.1% in the prior year quarter. This decrease is primarily due to the suspension of the Health Insurer Fee, business growth and mix partially offset by start-up costs in Virginia. Stock compensation expense for the current quarter was $11.4 million, an increase of $1.9 million from the prior year quarter. The change is related primarily to higher investing of employee stock awards and investing of restricted stock associated with the AFSC acquisition. The effective income tax rate for the six months ended June 30, 2017 was 43.8%. We continue to expect a full-year effective income tax rate of approximately 40%. Our cash flow from operations for the six months ended June 30, 2017 was $3.8 million. This compares to net cash used by operating activities of $119.2 million for the prior year period, which was impacted by several factors including the continued consideration payment related to the CDMI acquisition. The initial build-up of Part D receivables and the run-out of claims related to our former contract with the State of Iowa. As of June 30, 2017, the Company’s unrestricted cash and investments totaled $273.3 million versus $293.9 million at December 31, 2016. Approximately $116.6 million of the unrestricted cash and investments at June 30, 2017 related to excess capital and undistributed earnings held at regulated entities. Restricted cash and investments at June 30, 2017 was $316.9 million, similar to the balance at December 31, 2016. Year-to-date through July 21, 2017 we repurchased approximately 90,000 shares for $6.4 million. We have $68.4 million remaining in our share repurchase authorization program which our Board of Directors has extended for one year through October 26, 2018. We're planning to refinance our credit facility by the end of the third quarter in order to retire our existing bank debt and provide some additional capital flexibility. We expect the new facility will be a mix of bank revolver, bank term debt, and a public bond offering. We also plan a subsequent public bond offering to fund the Senior Whole Health acquisition. Upon completion of all of the anticipated financing activities, we expect our leverage ratio of net debt-to-EBITDA to remain below our target of 2.5 times. Now turning to our 2017 guidance. While we're confirming our guidance for 2017, we expect our results to be approximately at the low end of our ranges for the following reasons: Timing of sales and implementation of new business, isolated care pressures in two of our commercial healthcare accounts and adverse experience in our Part D plan. As a reminder our guidance ranges are as follows: revenue of $5.8 to $6.1 billion, net income of $90 million to $114 million. EPS in the range of $3.72 to $4.71, segment profit of $329 million to $349 million, adjusted net income of $123 million to $145 million, adjusted EPS in the range of $5.08 to $5.99 and cash flow from operations in the range of $150 million to $182 million. Compared to the first half of 2017, we expect an increase in segment profit run rate for the remainder of the year due to the following factors: The implementation of actions to improve results in commercial healthcare, business growth, rate increases, normal earnings seasonality in our Part D plan and the timing of customer settlements across our businesses. As Barry mentioned earlier in the call, we anticipate the acquisition of Senior Whole Health will close by the end of the first quarter of 2018 after we obtain the required regulatory approvals. Senior Whole Health has achieved impressive growth over the last few years and in 2017 is expected to have revenue of approximately $1 billion as well as segment profit of approximately $60 million. We expect the impact of this acquisition to be accretive in the 12 months following closing of approximately $0.60 for EPS and $1 for adjusted EPS. Beyond 2018, we’re also anticipating synergies of approximately $10 million annually as a result of savings from insourcing pharmacy and behavioral health services, as well as administrative expense efficiencies. In 2017, we expect acquisition and integration costs associated with the Senior Whole Health acquisition to be approximately $3 million to $5 million. In summary, as Barry noted, we will be focused on execution during the second half of the year to achieve solid segment profit growth and position us well to meet our long-term growth objectives.

Hi there, good morning. Thanks for the questions. Let me start out with cost issues there with two healthcare customers. Can you guys just elaborate more on what the issue is when you discovered there was a cost problem? And then obviously, the remediation is medical management and potentially a rate hike I guess. How easy it is to – I'm assuming this would be a rate increase intra-year, intra-contract, how easy is it to do that? And then historically I know this issue sort of come up on ironically on the second quarter where you have a blip like this, investors become concerned. And then suddenly in the third quarter you've made some significant improvements. So is this similar to what has happened in history or how was this different?

Great. Dave, let me try to take all your questions. First, relative to the commercial accounts, I would emphasize these are isolated incidents and really there's two accounts. The first account, the long-term customer, where a portion of their program they experienced higher than usual turnover in membership and the net-cost members came on had higher costs in utilization. The second customer is actually a new customer this year. And the use of certain services, again isolated portions of the account were higher than the underwriting data had indicated, the data that we had used in underwriting. So given again the uniqueness of these situations and the fact that there were significant changes versus what would have been expected coming into the year, we are working with both customers to obtain appropriate rate adjustments and are also in the process of developing and implementing care management actions. Now, every situation is different, so it's a little bit hard to generalize, but I would say in general where there are changes in a calendar year, where there are significant population changes or new programs being introduced, second quarter does tend to be a time when you get a good run rate for the year. First quarter you get some indication. We did have some indication that there were some volatility in these customers, but first quarter is tough because you don't have complete claims at that point, so second quarter you have a much more complete run rate and we feel comfortable that we've got a good bead on it. And net-net, we still have some execution to do, but I'm confident based on where we are that we will make the improvements we need over the second half of the year. Most importantly, I don't believe either of these issues will persist beyond 2017, so in 2018 we should have things that are fully corrected. Hopefully that answers your questions, Dave.

Yes. That helps. With regard to – can you quantify how much this impacted the second quarter results and was this part of I think it was $3 million of unfavorable development or those – is that part of it as well?

Yes. The short answer is – and the second part of your question is yes, that's part of it. There's always an unfavorable development as well as in utilization within the quarter a lot of puts and takes. There's always going to be accounts that are positive and negative, so it's a little bit hard to isolate what part of the $3 million. But yes, that was definitely a part of it. In terms of impact in the quarter again, that's also a little hard to quantify because it depends on what your starting point is, but I would say that relative to where we were coming into the quarter. If you look at things at the end of the first quarter and even as we project for the full-year, I would say things got worse in sort of $5 million to $10 million range on those customers. But again, it depends on what your starting point is when you're measuring it.

Okay. So $5 million to $10 million plus $3 million of unfavorable, a chunk of that sort of a total impact for the quarter.

I mean roughly speaking, yes.

Okay. And then as far as tying that into your guidance, you're obviously pointing towards the lower end. What does that contemplate for fixing this or fixing these two customers? Is that assuming some improvement getting back to sort of a normalized earnings rate or no material improvement? Where does that lay in terms of squaring that up with the segment profit guidance?

Yes, again we do expect that we will see material improvement in these customers over the balance of the year. So we think without splitting hairs in terms of getting back to what the alternate run rate will be we think we will largely solve the problem over the second half of the year, based on where we are today and we've made good progress.

And Dave, it’s Barry here as well, we don't anticipate these issues following into 2018 either. So these are shorter-term client issues, we think we can resolve.

Okay, all right. That’s helpful. And then on the Part D, so the drag is more than you guys are expecting. What is the miss because I feel like this – I believe this happened last year where things trended a little bit worse than you initially expected. What are you learning and discovering for the process where the initial bogey comes up a little bit short?

Yes, I would say a couple of things, Dave, and again this is similar instances where we talked earlier in the commercial side. Again second quarter is when we get really a good bead on Part D as well for the year. As you probably know from having watched us, we did see a pretty substantial increase in membership this year, and really looking at, if you looked at it over the past couple months, one, we do have a larger formulary than average in the market. We're probably more consistent with some of the richer enhanced plans out there. And as a result we believe that that has led to some adverse selection with higher utilizers as part of that significant membership growth we're seeing. Now again you do get higher rebates in some cases for those drugs, but we're not able to completely offset that higher utilization. Year-over-year though, although the loss is similar to $10 million loss, we do have – we are projecting roughly double the revenue this year. So we have made some improvement in the margins year-over-year, but obviously not getting all the way to where it’s fully corrected. Now the good news is for 2018, we were able to reflect the emerging experience into our bid. We made much more significant changes in the formulary. To the point now where, we believe we're going to be fully competitive with the market and also have relatively material member premium increases built in, especially in some of the geographies where they've been less profitable. So net-net again, 2018 is the first year we really take in aggressive action to get that formulary in line with the competition and again fully reflect the current run rate. And well as noted in the earlier, we do think we'll see some membership and revenue losses in 2018 as a result of that. We are confident and I'm confident that we'll see much stronger financial results.

Got it, okay. And then Virginia, I know we're not going live and so a couple more days from now, but can you quantify how much of the $15 million to $20 million start-up costs for the full-year numbers are in the 2Q results or can you give us a sense of what's going to be in 2Q? How much is going to be in 3Q? And to the extent that you guys can file guidance for a quarter, I think that would help if investors are better hang of have things, because your earnings are obviously very volatile quarter-to-quarter, you guys willing to give us a little bit more color on specific necessity around what the 3Q segment profit should look like?

Okay, a couple different questions in there. So Virginia, in this quarter was sort of in the $5 million to $6 million of readiness expenses and there was a little bit in first quarter, just to give us a sense for what's flowed through year-to-date. In terms of the third quarter, so we talked about in the script, the full-year versus the first half of the year and the items that are driving that obviously the improvement in Part D since we’ve lost $9 million to date as well as we talked with the commercial healthcare accounts and the actions we've got other rate increases business growth in the timing of customer settlements. Now, I’d say if you think about those items, the timing of customer settlements tends to be heavier in the fourth quarter, but the other items you know should be – the improvement we should start to see – we should see significant results in the third quarter. So I would expect the fourth quarter will be a little bit higher than the third if you think about getting to the lower end of the guidance, but the third quarter should be a material step up from where we are for the first six months on a prorated basis.

Got it. Thanks. I’ll step back for others.

Yes, thanks a lot. On the Part D if I remember correctly. They kind of started out this way and then it might have been improved or at least was stable into the third quarter and then the fourth quarter was a disappointment I believe from your perspective and I'm just trying to get a little bit of color on - obviously you're looking for improvement this year? Why you think it will play out differently than it did last year and certainly understand that last year was a first-year and you have more understanding of how it works and everything else?

Yes, well, I think this is future plan issues they play out. One is from a pattern standpoint we still expect, second half the year to be better than the first half because of the benefits seasonality quarter-to-quarter things can bounce around a little bit last year you're right, fourth quarter was a little bit higher. But we look at that really more an aberration than anything else. So I would just look at it as again second half for the year, we expect to be roughly breakeven given we're $9 million loss already in the year based on our actuarial projections and what both are internal projections and from our outside actuaries. So that's in terms of what's different as we go forward though again it really is going to be in 2018 the impact of restricting the formulary that we think will have a bigger impact as we go forward. Now we did a little bit of that last year's you might recall and that’s improved the margin to sort of cut the losses on a percentage of revenue basis and half this year. But in order for us to fully get to a profitable run rate we believe again we've got that formulary to be competitive with the market. As well as on a targeted basis getting rates aligned at a place where we can be profitable.

And what drove the aberration in the fourth quarter of last year? Just a little bit of color if you have that?

Yes, I wouldn't - nothing that would jump out I think as people are there's a lot of change in the market in the last month of the year sometimes people might utilize services because they're not sure what's going to be covered or in some cases we made formulary changes they might be getting drug. But and there was growth through the year as well last year membership growth. So you had some people that were coming on that hadn't used their benefits yet so the pattern was a little bit different in the fourth quarter. But I wouldn't look at it is material. I mean you are going to see some volatility from quarter-to-quarter in the program.

Okay and where is your membership that in the second quarter?

I think we're roughly a little bit over 100,000 in the second quarter and we were in the low-60s at year-end just giving you some sense for the growth this year.

That's helpful. And then I wanted to get a little bit more color on delay and sales decisions and customer implementation to try and get a better understanding of some of those underlying drivers?

Michael, we had a very robust pipeline and we still have a robust pipeline. I think sometimes the customers might be able a bit slower to decide and there might have been some customers who were in this particular case this year who actually agreed to go with us, which we were thrilled about, but that decision came a little later or their limitations were later. So we're not just lead to big center to go with us. But the implementations are happening in a couple of cases it will be in 2018 versus 2017. It bodes well for 2018 but that's typically the case it's not that the pipeline is any smaller or a success rate is any less in fact it's quite the opposite we've been very successful at the marketplace and we anticipate future success as well.

Okay and Barry just as a follow-up to that can you give a sense of - you'd indicated that the pipeline was robust a little bit of flavor or color around the types of services that are being requested and demanded. I know you kind of have more broadly kind of brought it all together to say behavioral and specialty. Can you kind of order some of those just roughly on what seems to be kind of top of mind to customers? And then on the specialty side just a little bit of detail on particular which some of those might be?

You bet. The clients today, our customers today are looking for new solutions because they felt the financial pressure largely from the exchange challenges they have had last year and this year. They've also been much more open to new products and new services just trying to find ways to be more efficient about delivering those services and optimize the quality. So we see an increase in behavioral health, but importantly the clients today, very dissimilar to two or three years ago, are looking for more of an integrated approach. So while though by BH or have historically been a BH client that looking for add-on services. These are clients where we have great relationships. They've been appreciated with the level of service and the outcomes they've had with us, and so now they're willing to consider other options such as MSK, enhanced RBM converting from fee-for-service to risk product with RBM. So we have a host of these new add-on services that are very successful for us. For example, I've not seen over the last two years, it's gone from basically a product introduction to 7 million covered lives for us. So these are real opportunities we see to develop add-on products and services. Again, the difference is historically used to be a kind of one-dimensional by BH, but today we're seeing more of that. We're also seeing clients’ add-on services. We have many of our clients that are utilizing not just one service, but two, three, four, and five of our services and more. The other thing is a little bit different is that we've had add-on clients that have crossed over from medical services to pharmaceutical services. And this is particularly true with the medical specialty area where they see a real challenge with controlling their specialty drug costs being the largest single component of their increase. And so they have a good experience with us on the RBM side, MSK or BH side. There is more life to look at us also and engage on the Rx side in medical specialty particularly.

The other thing just quickly I'd add to Barry’s comments which are right on is that, few things that we're seeing that have clearly picked up over the last year or so, Michael, are one; behavioral health where that had been slow for a number of years, I think because of some of the complex populations that health insurers are taking on vis-à-vis the exchanges, Medicaid expansion. There's more demand for our services in behavioral health that we've seen in some time. In some of that, I think the capabilities and the talent that we've built up internally. Second thing is in it probably for similar reasons as we are seeing more interest in risk coverage which has been in our sweet spot historically, where both from new customers, but also ASO customers that we're able to convert to risk. So those areas have picked up which obviously is a good thing for us.

The only thing I’d say to Michael, I would just reflecting upon two, three, four years ago versus today. We’ve spent a lot of resources both financially as well as our personnel in modernizing our product, and that’s true, the BH is also true of RBM and Musculoskeletal is the good example of that. So we're able to bring new services and very innovative services to the marketplace that really didn't exist before Cobalt for example, computerized cognitive behavioral therapy. Again, a new product introduction and nothing else like in the industry. We see out in the commercial space, particularly we have a great success, a great pipeline that we've got more than a $20 billion pipeline on the public sector side with the integrated approach there. But on the commercial side, we are being very successful at the close rate much more settled in three or four years ago. I think it has to do with the need of the client; it has to do with the level of new product introduction and innovation, and also the competitive landscape. We've been very successful out there being more to get innovative and be perceived as being the player that can really be more efficient at delivery care and at a time where our clients really have a dramatic need.

Thanks for all the color and the detail. I appreciate it.

Great. Well, we appreciate you joining us here for our second quarter earnings call and look forward to being with you again at our next quarter call. Thanks very much. Good day.

Great. Well, we appreciate you joining us here for our second quarter earnings call and look forward to being with you again at our next quarter call. Thanks very much. Good day.