Good afternoon, and welcome to the AMN Healthcare First Quarter 2022 Earnings Call. My name is Brika, and I'll be today's event specialist. There will be a question-and-answer session. [Operator Instructions] Our host for today's call will be Randy Reece, Senior Director of Investor Relations. So, Randy, please go ahead when you're ready.

Good afternoon, everyone. Welcome to AMN Healthcare's first quarter 2022 earnings call. A replay of this webcast will be available at ir.amnhealthcare.com, following the conclusion of this call. Details for the audio replay of the conference call are in our earnings release issued this afternoon. Various remarks we make during this call about future expectations, projections, trends, plans, events, or circumstances constitute forward-looking statements. These statements reflect the company's current beliefs based upon information currently available to it. Our actual results may differ materially from those indicated by these forward-looking statements because of various factors and cautionary statements, including those identified in our most recently filed Forms 10-K and 10-Q, our earnings release and subsequent filings with the SEC. The company does not intend to update guidance or any forward-looking statements provided today prior to its next earnings release. This call contains certain non-GAAP financial information. Information regarding and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release and on our financial reports page at ir.amnhealthcare.com. On the call today are Susan Salka, Chief Executive Officer; Jeff Knudson, Chief Financial Officer; Kelly Rakowski, Group President and COO of Strategic Talent Solutions; Landry Seedig, Group President and COO of Nursing and Allied Solutions; and James Taylor, Group President and COO of Physician and Leadership Solutions. I will now turn the call over to Susan.

Thank you so much, Randy, and welcome, everyone. We're very grateful that you're here with us today and pleased to be able to share some good news. We are reporting strong results and a positive outlook, very consistent with what we discussed on our last earnings call. Over the last two years, the dedicated AMN team and our health care professionals enabled an all-out response to the pandemic and now we are seeing light at the end of the tunnel. However, the pandemic has taken a significant toll on the healthcare workforce and in particular, frontline clinicians, the extreme shortages of healthcare professionals have been accelerated and exacerbated in a way that we could not have foreseen. We are now in a situation that requires new methods of how the healthcare community approaches staffing and support of our workforce. A little over a decade ago, AMN identified the need and opportunity to bring workforce solutions into healthcare and create efficiencies for our clients, clinicians, and the industry. We and other innovative partners paved the way for technology enabled solutions. Our MSP relationships and the diversification of our revenue mix have reduced our risk exposure to market and economic fluctuations. All stakeholders benefited from these evolutionary leaps and with AMN as the leader in total talent solutions, our shareholders certainly experienced a significant benefit. I believe we are at the beginning of another evolutionary time in our industry. Healthcare job openings stand at an unprecedented 2.9 times the number of monthly hires. Clinicians are insisting on more flexibility and higher compensation, as well as faster, more digital seamless experience. Because of these factors, clients are reimagining their staffing paradigm. AMN is well-positioned to deliver what healthcare professionals and clients need and want in the coming years. Prior to the pandemic, AMN…

Thank you, Susan and good afternoon everyone. First quarter revenue of $1.553 billion was 3% above the high end of our guidance range, driven by outperformance from all three segments. Consolidated revenue increased 75% year-over-year and 14% sequentially. Excluding labor disruption revenue, consolidated revenue grew 22% sequentially. Gross margin for the quarter was 32%, 60 basis points lower than prior year and up 10 basis points sequentially. Year-over-year, the margin was lower from higher clinician compensation and nurse staffing and a revenue mix shift towards our lower margin staffing businesses. Consolidated SG&A expenses were $258 million or 16.6% of revenue compared with $161 million or 18.2% of revenue in the year ago quarter and $239 million or 17.5% of revenue in the previous quarter. SG&A expenses increased year-over-year and sequentially, primarily due to higher expenses for growing, rewarding, and supporting our team members. Adjusted SG&A excluding certain non-recurring expenses and stock-based compensation expense was $239 million this quarter, or 15.4% of revenue compared with $148 million or 16.8% of revenue in the year ago quarter. The improvement in SG&A margin came from operating leverage on the revenue growth, partially offset by higher growth related expenses. On a sequential basis, adjusted SG&A was higher by $27 million due to higher team member related expenses. In the first quarter, Nurse and Allied revenue was $1.228 billion, 87% higher than prior year and up 14% sequentially. Our travel nurse business grew revenue 95% over prior year and 27% sequentially. Travelers on assignment grew 42% year-over-year. Demand for travel nurses hit a record high level in January. As a result, travel nurse volume grew 20% sequentially. Allied revenue was $214 million, growing 64% from the prior year and up to 16% sequentially. Allied volume was up 41% over prior year. Nurse and Allied gross…

Thank you. We'll now begin the question-and-answer session. [Operator Instructions] The first question we have from the phone lines comes from Tobey Sommer of Truist Securities. Your line is open.

Hey, good afternoon. This is Jasper Bib on for Tobey. I was just hoping you could speak to nursing gross margins. As we started to see the market normalize a bit, do you expect to recapture some of that, that bill pay spread? And how long do you think it would take to reprice the book and get to a kind of pre-COVID gross margin?

Yes, Jasper, this is Jeff. I would say with the demand that we saw in Q1, we did see some erosion and some of those assignments will spill over into Q2. Obviously, with bill rates coming down, we are seeing improvement, which we would expect to see more fully in the back half. On a consolidated basis, the improvement we are seeing in Q2 sequentially is impacted by the workers' comp adjustments in Q1 as we roll over those in the second quarter. But like I said, we would expect to see more improvements as we reprice into the back half.

Thanks. And then can you just quantify the expected decline in deliveries for the third quarter, I think you mentioned and any changes to how you're thinking about Nurse and Allied volumes over the balance of the year?

Yes, so we said we would expect low double-digit declines in the second quarter, and that we would expect the third quarter to be steeper than that. From a volume perspective, I'll let Landry give a little bit more color, but we would expect overall in the second quarter to be flattish to the first quarter. And then just some normal seasonality trends into the back half.

Yes, just some travel nursing specifically there, so the first of the second quarter, we're seeing a bit of a mix, change there and I'll explain that a little bit. So, our just our traditional travel nursing volume, which is that kind of typical 13-week to 26-week assignment, so that's growing nicely sequentially from Q1 to Q2. And then also the international business is growing nicely from Q1 to Q2. The offset to that would be some lower volume in the second quarter for our crisis placements. So, of course, the first quarter saw quite a bit of that. And those are not continuing into the second quarter. So, whenever you combine those, that's where we get to that Q1 to Q2, we're expecting pretty flat volumes sequentially.

Yes, that makes sense. Last question for me, I was just hoping you could update us on your tech investments. Are there any kind of updated metrics around the adoption of AMN Passport, they could quantify the progress you're making there?

Absolutely, continue to add more features and functionality which drives efficiencies, certainly for the clinicians using them, but then also for our team members. And we think that's certainly contributing to the productivity improvement that we're seeing across the board, both for recruiters and also for some of the support staff that now doesn't have to touch some of the transactions that used to be dealt with more manually. And we now have 125,000 users on passport. I think the last time we reported, it was around 100,000, so really great progress in that utilization and we expect to continue to see certainly more going forward. But we also continue to roll it out across our different business lines, as we continue to add more functionality.

Thanks for taking the questions.

Thank you, Jasper.

Your next question comes from A.J. Rice of Credit Suisse. Your line is now open.

Hi, everyone. Just wondering if you could give us an update on your fill the orders that you have? Are you seeing the ability to fill more orders today? Or do you still have about the same percent that are going unfilled as you did a quarter two ago?

Hi, A.J., it's Kelly Rakowski. Thanks for the question. As demand levels have started to come down, we are seeing increases in our fill rates. But we're still at demand levels that are elevated from pre-pandemic. So, we certainly striving to increase those fill rates for our clients continue to use our strong network of supplier partners as well, as we're filling those rates for the client. So, getting better, I think is the message -- there is still some room for improvement and we expect those to continue to improve as demand rates start to normalize.

And I think during the heat of the crunch, the last few quarters, you've talked about the fact that your MSP clients obviously have taken priority, and there's been some non-MSP customers that's traditionally support that you've had the couldn't prioritize, have you a been able to move to build more of those orders? Or are you seeing some of those people decide now that they need to go ahead and enter into an MSP? Are you seeing activity around MSP contracting pickup?

A.J. its Landry, I'll hit the first part of that, and then maybe Kelly will hit what we're hearing from customers about entering into a new MSP relationship. So yeah, you're right. So over the pandemic, whenever demand was so high, we had shifted most of our recruitment resources and account management resources to focus on our MSP customers. And we've changed that slightly, demand is still elevated. So, there's still plenty support needed at our MSP customers. But to your point, within the kind of direct and third party, there's quite a bit of demand there. So we've opened those up a little bit more. We never fully closed them. We did support, you know, those clients, where appropriate during the pandemic, but demand has still remained elevated and our MSP demand is elevated. So, we still need to make sure that we're focused on those most important customers.

Yes, and A.J. I'll just add from what we're seeing in the market, we are seeing increase in our pipeline, particularly for our full MSP solutions. If you look back a year ago, and even a quarter ago, we are seeing more of a percentage of our new opportunities. Be vendor neutral and administered through our technology our three strong technology platforms. So, now we're seeing more clients interested in a full service MSP and our ability to add more, you know, the capacity to do that has improved as well. So, yes, we are seeing demand, we had Q1 was slightly ahead from a sales perspective, we're seeing even a stronger Q2 ahead of us.

Okay, maybe a last question on the M&A pipeline, I know, I think last quarter, you guys talked about potentially broadening the scope being open potentially to even status, staffing acquisitions. Again, any update on what you're seeing out there, whether there's likely to be opportunities over the near term, intermediate term?

Yes, A.J. I would say if you were to look back a year ago, the M&A pipeline is certainly more active than it was, from our perspective, probably a little distorted towards the staffing assets right now than those tech enabled solutions, but we're still seeing healthy activity there as well. And that's really what where we're focusing our efforts in the near-term.

Okay, thanks a lot.

Thank you. We now have Tim Mulrooney of William Blair. Please go ahead when you're ready.

Yes, good afternoon. Just a housekeeping question. First, I want to make sure I heard you correctly during the Q&A. Did you say for the Nurse and Allied segment, you expect volumes to be essentially flat sequentially from the first quarter to the second quarter?

Yes, and that is a combination of travel nurse being up our longer term 13 to 26-week assignments, international nursing being up some areas of allied being up and then offset by the shorter crisis assignments that are typically more kind of four to six weeks, maybe eight. And those are typically at the higher bill rate. So not surprisingly, we saw a lot of that disproportionately in the first quarter. So those on unwind, we're seeing a decrease in that volume. But the more long-term assignments are the ones that are growing into the second quarter. We did have a little bit of headwind with schools, which tend to fall off at the end of the second quarter as well. but that's pretty minor.

Got it. Got it. Thank you. So, then based on your guide for the back half of the year, that billion dollar run rate per quarter, I assume that means you'd then expect volumes to tick down somewhat more sequentially from the first half of the year into the second half of the year. Am I thinking about that correctly? Or is it mostly driven by bill rate?

Bill rate, Tim, is by far and away the largest driver of that decline in the revenue base in the back half of the year.

Okay, thank you. And then maybe one more, this is more of just a high level thing. But I wanted to hear your guys opinion on this. We've noticed an uptick in money being raised for tech startups for the per diem RM market, it seems like more and more smart money's being deployed in the space. But, you know, per diem is only a small piece of your business today. I'm just curious why AMN hasn't also made a bigger push in this area, given your strong relationships with healthcare systems across the country. They're a structural reason why you've kind of avoided getting bigger in this area of the market.

I mentioned earlier that you want to that clients are discussing with us is how do they better optimize that local labor force and talent pool not just the clinicians that are currently working for them, but the broader maybe regional talent pool that is available? And our there's a few interesting things going on already where either hospitals have created a kind of new version of a float pool where clinicians can actually float from facility to facility. It's something that we've helped clients to do in the past, even perhaps bringing in travelers that can be a part of that float pool. The discussion is, is more how do we help them manage that because they aren't structurally set up, nor have the technology and the expertise to be running an operation and like that. And so the technologies that we can bring to the table, both existing things that we have in place that could be utilized for management of a local, so called float pool of clinicians that perhaps traveled from system-to-system and facility-to-facility. That's more where we're working with them is on that technology workforce and management solution, as opposed to just providing the people. Now we can provide the people as well and augment what they have. But their first objective is really to optimize the talent pool that already exists within a region. So we think that's probably the more strategic partnership for us. We can grow our local staffing capability, and we will do it, if that's the best solution for them. But they're really thinking more of the tech enabled solutions and our expertise. So hopefully, that helps answer that.

It does. Thanks, Susan. Appreciate it.

Thank you, Tim.

Thank you, Tim. We now have Kevin Fischbeck of Bank of America. Please go ahead when you're ready, Kevin.

Good afternoon, actually, this is Joanna Gajuk filling in for Kevin today. So thanks for taking the question here. Because there's just a follow up on something that I guess, we were discussing last quarter. But in any update, I would like to hear now is, you mentioned this again, right, in terms of the nurses and other stuff in healthcare, people looking for flexibility where they find different jobs, the gig economy clearly is entering into the healthcare space as well. But at the same time, we hear from different types of providers that, you know, they expect at least some of those employees who left for these, so called travel assignments, because someone -- sometimes they don't really travel anywhere they stay in a local market, but they expect these, employees to come back, full time. So have you seen any of this already happening, where you kind of have, some of your nurses going back to permanent jobs?

So, I mean, it's hard to tell exactly where they go, I'll tell you, there's a couple of metrics that we watch, internally as it relates to, some of our turnover or retention metrics so the first one would be cancellations. On the cancellation front, we're seeing cancellations by our clinicians that would have been pre-pandemic levels, if not slightly below pre-pandemic levels. So certainly not seeing any clinicians cancel at a higher rate. And then another metric to call out is that we -- we've watched for many years, our rebook retention. So it's the retention of our clinicians as well as extensions of their current assignment. And if you took the first quarter, the first quarter was actually full 6% -- six percentage points above Q1 prior year for our retention. So, clinicians are staying with us at a faster rate or a higher rate than they were before. Q1 of last year was a little bit soft, but still Q1 of this year, if you compared it to all the historical numbers, it would have been the strongest Q1 average that we've seen. So we're certainly not seeing that, again, it's kind of hard to know where the clinicians are going whenever they're not taking an assignment from us. And that's, you mentioned that kind of younger demographic or gig economy. Our clinicians that that are working for us right now, we're seeing the biggest growth of clinicians that are under 35 years old, actually, 50% of our overall clinicians that are working for us are under 35. But whenever we were looking at those numbers, something else stood out, which is our largest decline, actually, the only bucket that declined is conditions that are 61 years old or greater. So we don't know -- they left the workforce, which aligns pretty well, but some of the public reports that we've seen,

I think at the other end of that kind of metric spectrum is how many people are applying with us and coming in to travel, nursing or allied and as we first quarter certainly was a very high point, a lot of interest in the crisis assignments. But even in April, we still have very high new application flow. In fact, it's above prior year and well above pre-pandemic levels. So, I think that's indicative that, there's still great interest in coming into the industry.

Yes, thank you. Thanks for this color. And thanks for sharing some of these metrics because it's the one of the questions everybody's trying to figure out you know, whether some of these, nurses going to come back. So thanks for sharing the call on with from me. Thank you

Your next question comes from Brian Tanquilut of Jefferies. Brian, your line is open.

Hi, thanks. Good afternoon. I guess, my first question Susan in your prepared remarks, you talked about the bill rates and the discussions you guys are having with the hospitals. So just curious what those conversations are like. I mean, do you think that the hospitals acknowledge that, we're going to exit the year at 35% lower than Q1? Is that that the right number, or is there a lot of pushback there? Just curious what that -- what those conversations are, like?

I'm going to ask my colleagues to join in here in a moment, but that at a high level to answer the question that the conversations are, don't stop filling the jobs that we have today, because we still have very elevated needs. And we don't see that changing anytime soon. And in fact, they acknowledged that the shortages are likely going to get worse. Now, for the next year, maybe not as extreme as going out into even future years, Jeff referenced the Conference Board Study that was just put out that calls out healthcare as the highest risk of worsening shortages across almost all categories. And that aligns to exactly what we hear from our clients. And so yes, they're very concerned about getting cost down. And bill rates are a part of that. But they're also very concerned about getting their current and future jobs filled, which is why there's so many conversations. Also around are multiple solutions, particularly I would say the longer term solutions, things like international nursing, which is at an all-time high in demand in even within our current placement businesses, our RPO business and how do they set up a more efficient, effective model? And how can they come to more of a single partner who can help them strategize, we're doing a lot more planning with our clients to help understand what their needs are not just today, but in the future. But then it translates to, okay, how can we navigate this year and part of that navigation is understanding their staffing needs which again, is very elevated, it's not going to go down likely to go up? And how do we get the bill rates down along with that. So with our most strategic clients, our team lays out a roadmap of where we think we're going that aligns with their demand needs. So it's going to be a little different from client to client. And we lay out what we think we can accomplish from a rate reduction standpoint. So I would say it's more of a collaborative discussion, because ultimately, they decide where the rates are. But it's more of a collaborative discussion on where is the staffing demand going to be for them and for hospitals across the country? And how does that translate into getting down to these numbers? And, yes, we have put these numbers in front of them. And at this point, this is how we're trying to triangulate where that that rate will come out.

Got it. And then I guess my follow-up to that, as we think about supply. What are you seeing as bill rates go down in terms of nurses staying in the temp world versus going back to perm? And how are you driving supply growth or market share gains? If that's the case, as the theoretically the pool shrinks with that sort of dynamic?

Well, we don't think it's shrinking. I just mentioned that, we're getting even more applications in on a year-over-year basis. And it's true on the physician front as well, which is part of what's driving the fantastic results within our Locum and in an interim leadership, and as Landry mentioned earlier, our nurses and are actually staying with it. And so I don’t know if you want to recap a bit of what you shared us with any other color?

Yeah, Brian, our retention numbers are really big numbers or extension numbers are all still high. And in many cases above even pre-pandemic numbers, which were healthy. As you can imagine, some of these rates are happening mid contract. So we'd like to see it on new placements and we'd like to see it on extension, but some of them are happening mid contract. The team's doing a great job of working with the nurses to bring those rates down. It's of course, helping our clients out right now with their cost pressures that they're seeing within their health systems. And for the most part nursing -- nurses and allied professionals in those cases where we had to bring them down are very understanding. So they get it. They know that the environment today is a lot different than what it was in December or January, when the hospitals were full of very sick COVID patients.

Got you. Okay. And then last question for me, as I think about the $1 billion count run rate with a 15% margin, do you -- given the backdrop that you just gave in the CMS projections and growth rates? Do you still believe that that's probably the right baseline that we grow off of, like at a low double-digit rate going forward? Is that the right way you're thinking about the long-term view of the company?

Yes. When we think about growing off that Q4 run rate, so obviously, we think pricing volumes will stabilize in the fourth quarter of this year. As we move through the year, we also expect our internal capture rate on MSP orders to recover and we don't believe the shortage of clinicians will change dramatically between. So I think when you couple that with the CMS data, we think that's the right way for us to frame up 2023. And where we see that playing out off of that fourth quarter run rate.

All right. Got it. Thank you. Appreciate it.

We now have Bill Sutherland of The Benchmark Company. Please go ahead when you're ready.

Hey, thanks. Hello, everybody. I was thinking about this issue about the nurse practices as well. Obviously, top of mind. And Susan, I was curious if you guys have had a survey of some of your clinicians or using a third party that kind of ask them the reasons these would be new travelers, for instance, that they started to travel. And I guess maybe there's a certain type that started to travel because of the crisis rates. But have you seen anything that kind of rank orders, what's most important to them?

So, as Landry mentioned, we are seeing this younger demographic come in, which we think is not surprising, since the younger generation wants more flexibility, even outside of health care. And so that's a trend that we expect to continue. And if you're in a permanent job, you're not necessarily getting that flexibility. In fact, you might feel even more beholden to pick up the overtime and the extra shifts and do the things for your colleagues that you work with and will be with for years to come. So we think there is this generational preference that's pulling through, and will likely continue to see that grow over time. Other reasons why people come to travel is they want to get rejuvenated, they're burned out, they're frustrated where they are. They want to continue to learn and grow and enhance their skills and their career. But they are not feeling like they can do it in their current environment. And in fact, because they're understaffed in the current environment, that's just burning them out even more. So they want to go to a place where they feel that they can deliver great care learn, but also not quite have that burnout effect. And there's always other personal reasons, it's not always about the money in the career, sometimes there's just personal things that they want to change in their life. So those things haven't seemed to change a lot. I will say the generational preference aspect has probably been the more recent driver. And then those individuals that have been introduced to travel because of the pandemic that maybe thought before, it wasn't something they could or should do have now seen that it's a real possibility. I can't tell you how many nurses I've talked to who said,…

Yes, I get it. That's great color Susan. I think what we're all kind of reacting to is a couple of health systems didn't have great first quarters, and they -- in terms of their margins, and they put a lot of blame on the increase in the percentage of contract labor that they had in the quarter, and that they're vowing to get it back to whatever normal levels are. And then we wonder about the demand impact of that on your business. And I think what you just said reflects the fact that it's kind of an easy answer they can give right now for how they're going to fix things. But it's probably not the real answer, right? So the -- one other follow up, I had just I'm curious, in the quarter, first quarter, what percentage of the assignments were crisis if there's a way to define that?

We don't really provide and carve it out that way, externally. So I'd be a little hesitant to provide that level of detail.

Okay.

Maybe we'll try to figure out how we can give a little color going for, but I apologize. I don't think we've carved it out that way in the past.

Okay. And last one, I -- actually one more in the second half. So the takeaway and Nursing and Allied is that would the rate still obviously trending down to more normal levels? The volumes you think are apart from seasonality volumes are fairly stable quarter-over-quarter for the rest of the year?

Apart from seasonality, that's correct, Bill.

Okay. Thanks, everybody. Have a good evening.

Thank you, Bill.

Thank you. We now have Andre Childress from Baird. Sir, please go ahead when you're ready.

This is Andre Childress on for Mark Marcon. Yes, thank you for taking our question. So you've been pretty successful over the past few years, cross selling adding different solutions and cross selling it to your client base, you know that your top 30 clients now use eight different solutions? Could you somehow break out how that was or what that was a couple of years ago and how that's trended? What opportunities are you most excited for in terms of cross selling back into the base, what's your strategy, their go to market strategy? And what your targets, you know, a couple of years down the road in terms of how many solutions you think the top clients would be using?

Yes, great question. And thank you for picking up on that. And it's certainly been a part of our strategy not only for, for us as an opportunity for growth and extending our business across our, our top clients, but also for our clients as they seek more comprehensive strategies, as we've been talking about the complexity of the challenges, certainly require them to look at many different levers around not only their contingent staff utilization, how to effectively build that into their workforce plans, but also to help them have a permanent side across all of their workforce capabilities. So that increase up to eight, you know, and that's an average some of our clients use nearly all of our solutions, on an annual basis. So, what we've been seeing from a trend perspective is, number one, as they look for more cost containment strategies, bringing more service lines, like our non-clinical services, like our locums, like our interim leadership, where they see those as better and more effective ways to bring them the quality staff they needed. And under a managed program, we've seen a real appetite and increase lately, particularly with our renewals as well and adding more of those service lines. And then beyond that, as they look for workforce optimization and planning that Susan talked about, how can they have, you know, better internal utilization of flexible programs, helping them with more predictive modeling and staffing around that. We're strategizing with them on a long term basis around where we can innovate and help them bring those solutions to them, so that they can meet those total needs. I think one of the areas we are seeing some, some increases, particularly around our physician services. And James, maybe you can talk a little bit about our locums strategies around adding those to our MSPs and what we're seeing there?

Thank you, Kelly. Andre, I think Kelly is spot on in a sense of our clients are looking for the total workforce solution and optimization, which is out of their portfolio. Some of the some metrics that sit behind that we estimate this with inside of the pls business, that we've captured a third of our plan for 2022. Already in the first quarter centered on really building on MSP activity, we have had 100% retention from both our local clients and our interim client in 2021. And that's given us some tailwind as well as we think about total workforce solution. And then also at the end of the day are we are new into the journey from a PLS standpoint, in the sense of building MSP our goal is to drive a percentage of where it is today and double it within the next two to three years. And I think that by doing that it will offer both to the client and provider a better experience and more solutions.

Great, thank you. And just one more for me, so you had really strong cash flow in the quarter, you've got accounts receivables of nearly $1.3 billion, which you're going to harvest over the next 12 to 24 months, you clearly bought back over $20 million of shares in a quarter and you emphasize what your capital allocation strategy is? But could you provide a little bit more detail about what your thought process went into the buybacks and how you would think about that going forward, obviously, understanding that the emphasis is on, you know, investing internally in organic growth as well as potentially M&A, but just some thoughts there would be great? Thank you.

Yes, Andre, thanks. So first and foremost, we want to make sure that we're investing in the business from a CapEx standpoint. So we're continually focusing on our digital offering, looking to drive efficiencies and productivity there, we think, you know, at the $70 million to $75 million annual range that that's the right level of CapEx, for the business today. And so, after we do that, we are going to look to grow the business in organically through M&A and absent any compelling opportunities there. We will opportunistically repurchase shares, obviously $200 million of cash flow in the quarter is an extraordinary cashflow quarter for us, but we're also set up you know, given our receivable profiles you mentioned to have an incredibly strong, free cash flow year in 2022. And so we'll be active on the M&A front, but we'll also you know, continue to look at share repurchases in the absence of any M&A transactions.

Great. Thank you so much.

We have no further questions at this time. So, I'd like to hand it back to Susan Salka some closing remarks.

Wonderful. Thank you, Brika and thank you everyone for joining us for a great discussion. And we look forward to updating you on our progress on our next earnings call.

Thank you for joining this does conclude today's call. You may now disconnect your lines and enjoy the rest of your day.