Good day, and welcome to the Quest Resource Holding Corporation Fourth Quarter and Year-End 2021 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Joe Noyons, Investor Relations. Please go ahead, sir.

Thank you, Cody, and thank you, everyone, for joining us on today's call. Before we begin, I'd like to remind everyone that this conference call may contain predictions, estimates and other forward-looking statements regarding future events or future performance requests. Use of words like anticipate, project, estimate, expect, intend, believe and other similar expressions are intended to identify those forward-looking statements. Such forward-looking statements are based on Quest's current expectations, estimates, projections, beliefs and assumptions and involve significant risks and uncertainties. Actual events of Quest's results could differ materially from those discussed in the forward-looking statements as a result of various factors, which are discussed in greater detail in Quest's filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on such statements and to consult our SEC filings for additional risks and uncertainties. Quest forward-looking statements are presented as of the date made, and we disclaim any duty to update such statements unless required by law to do so. In addition, in this call, we may include industry and market data and other statistical information as well as Quest's observation and views about industry conditions and developments. The data and information are based on Quest's estimates, independent publications, government publications and reports by market research firms and other sources. Although Quest believes these sources are reliable and the data and other information are accurate, we caution that Quest has not independently verified the reliability of the sources or the accuracy of the information. Certain non-GAAP financial measures will be discussed during this call. These non-GAAP measures are used by management to make strategic decisions, forecast future results and evaluate the company's current performance. Management believes the presentation of these non-GAAP financial measures is useful to investors' understanding and assessment of the company's ongoing core operations and prospects for the future. Unless it is otherwise stated, it should be assumed that any financials discussed in this call will be on a non-GAAP basis. Full reconciliations of non-GAAP to GAAP financial measures are included in today's earnings release. With all that said, I'll now turn the call over to Ray Hatch, President and CEO. Ray?

Thank you, Joe, and thanks, everyone, for your interest in Quest. We had a great fourth quarter and a strong finish to the year. For the year, we reached a milestone in profitability for the company. We had an adjusted EBITDA above $10 million for the first time. During 2021, we also delivered accelerated organic growth. Overall, we grew gross profit dollars by more than 50%. The growth in gross profit and EBITDA was driven by strength across our business, from existing customers through new customers and via acquisitions. Our growth would split 60-40 between organic and acquisitions, with organic being the larger of the two drivers. Over the last few years, our strength has been in our client relationships, and we see that as our core strength. We have continued to grow with our existing clients, adding services, geographies and also waste streams to help them address their diversion issues. And at the end of 2020 and during 2021, we saw a significant incremental contribution from new clients. The step-up change in adding new clients is a very positive development for our company and should provide future growth opportunities for us in the years to come as we further penetrate these accounts. We had a lot of activity in the recent quarters, and I'm excited to give you an update on the progress. But before I go into that, I'm going to turn the call over to Laurie Latham, our Chief Financial Officer, to review the financials. Laurie?

Thank you, Ray, and good afternoon to everyone. We had strong top line performance. Revenue increased 68% for the fourth quarter and increased 58% for the year. As we have said on previous calls, gross profit dollars is a key metric we use to measure these success of our initiatives. For the fourth quarter, gross profit dollars increased 56% to $8.7 million. For the year, gross profit dollars increased 51% to $28.8 million. For both periods, organic growth represented more than half of the increase in gross profit dollars with contribution from both new and existing customers. The remaining portion of the increase in gross profit dollars came from acquisitions. Gross margin was 18.8% for the fourth quarter and 18.5% for the year. This was 140 basis points and 80 basis points below the previous year periods, respectively, but within our target range. The year-over-year decrease in gross margin was primarily related to the service mix, which will fluctuate from quarter-to-quarter and year-to-year. Gross margin is also affected by the amount of new business in our mix. In many cases, gross margin tends to be temporarily lower as we bring on new business. This will likely continue to be a factor with the growth we anticipate for 2022. As these accounts mature, margins from new business trends do improve over time as we optimize service level. SG&A expenses were $7.1 million during the fourth quarter compared to $4.5 million during the same period last year. Of the $2.6 million year-over-year increase, approximately $1.1 million was related to incremental overhead costs from the business operations acquired during the fourth quarter of 2021. Approximately $1 million was related to incremental acquisition, integration and related costs and the rest was related to incremental IT-related professional fees and increased business activity levels and other…

Thank you, Laurie. Now I'm going to walk you through a review of our business strategies. With the work we've done over the recent years to transform our business, it's incredibly gratifying to see the significant improvement in financial performance. I want to thank our team for making that possible. We're starting this year with far greater scale, both in terms of revenue and in profitability. And we are well positioned to continue to deliver strong growth and returns for our shareholders. With this greater scale comes a significant benefit in multiple areas. First, we enhance our value proposition for our customers. With greater scale comes greater buying power. Clearly, we benefit from those cost savings, but we're also able to share some of those savings with our customers and improve our value to them. With greater scale, we also offer clients a broader service offering. This increases our value proposition in two ways. First, having Quest as a single vendor to manage multiple waste streams, simplifies billing, provides more uniform service delivery, allows internal resources to be reallocated to their core competencies and provides consistent data reporting that can be used to support sustainability reporting. In addition, having a broader service offering also improves our value proposition by expanding our capabilities to divert more waste streams from the landfill and further improving our clients' sustainability. With greater scale, we also increased the stability and the resilience of our business by diversifying our end markets and our customer mix. Regarding end market diversification. Several years ago, almost all of our revenue came from two end markets, retail and automotive. Today, we have multiple major end markets, including retail, automotive, grocery, industrial, restaurants, multifamily housing and commercial property. We learned firsthand during the pandemic that having a diversified end market mix…

We'll take our first question from Gerry Sweeney with ROTH Capital. Please go ahead.

Ray and Laurie, yes. That's all right. I blame my parents for that one. Ray, you sketched out some of the organic growth you're seeing or some of the reasons, but also was curious about maybe some other items. If the sales cycle was picking up or at least lessening a time that it takes to land customers and also if companies are becoming more and more comfortable with your service as they see more and more clients joining your roster. And then the final aspect just you've made some changes internal sales operations over the last couple of years. I'm just curious as to how much that may be?

Those all three questions are related to the sales process. I'll try to answer them. The first - give me the first one, again.

Sorry, I just look at sales cycle picking up.

Yes, the sales cycle, Gerry, I would say it's tightening a little. Customers move at customers' pace. And a lot of time, the larger ones are, well, naturally a little slower. But I will tell you, one of the things, and this goes back to some of the other parts of your question is the targeting, I guess, the sophistication level of our sales process is in who we're targeting to go after. The best targeting yield is a much higher close rate and probably accelerating the sales cycle as well. If you're talking to the right customer at the right time and you have the right service, they have a tendency to move more smoothly. And I want to credit the sales department for a significant improvement in that area. And as to your question about maybe the acceptance of our business model as a service, I think yes, and you and I have talked about this before. The Quest is a bit of a paradigm shift for many of these larger companies. Many of them have decentralized, manage on your own processes and turning it over to somebody like us is not maybe a natural first move. But we've been very successful. We have referenceable customers. And I would say that continues to become less of a vary over time. And I expect it to continue to - to eventually not be a barrier at all actually.

Got you. That's helpful. And then from a sales pipeline perspective, is there any way you can give us any quantitative qualitative view as to how this looks currently versus maybe a year ago?

I can give you - it's hard to give it a quantitative view in the sense that what are you comparing it to, right? Because pipelines have got a lot of stuff in it. And I've been in situations where we had really huge pipelines that really didn't matter because of the ability to close them. So I have - I think I would describe our pipeline, I think we would be more descriptive rather than numbers is the fact that I think it's - I think everything on there is viable and it continues to move left to right at an ever-increasing pace. The type of - I will say this, I think the type of customer that's been targeted and we're bringing on board or maybe larger than some of the ones we had in a pipeline that had more names on it. But I think I said this to you or somebody this weekend at your conference, I've never felt better about where we are from a customer pipeline standpoint than I do today, Gerry. I mean it's - there's not a single one on there that I think is questionable. They all look strong.

Got it. And sounded as though maybe some of those opportunities - opportunities are increasing as well as potential size of some of the opportunities. I'm not trying to put words in your mouth, but okay, got you.

Those are good.

On the technology side, obviously spending some more money on the software side. What - where do you see the technology side going in terms of service? What the spend on this year? This sounds like it's more on the IT side, but in the future, technology could obviously be a benefit as well. So just wanted to think about what's happening on that front.

I think current and near future state and then this is - or much further out speaking in this context. Current and near future, our technology investment is much more IT related. But the reason - and - but this is how it manifests itself as far as business practice and what impacts the business. First, we're getting ahead of this growth that we have is wonderful, and we got to make sure that we continue ahead of that growth to expand our scalability and our capability to leverage the operating - the OpEx with increased technology and automation and all that fun stuff that enabled our growth, both of all types. And then secondly, by collecting better and cleaner, more accurate data in your data warehouse, as you work on that, you're able to give customers cleaner, more timely and accurate data as well. So we really feel our current technology differentiator is data. I mean - and the market seems to be accepting that. I mean the customers are looking for it. They're not just looking for a lot of our competitors, to putting out there given data, but it's a point in time, it's static. It's not a live document like our stuff is, and I don't think it is useful. And so our goal is to make sure that we're giving customers - our customers, our clients very useful information because they're reporting requirements are doing nothing but growing, as you know. And if we're able to give them better data to do that, longer state technology could involve a lot of things. I mean technology and monitoring of waste and dynamic routing and fund things like that. That's all out there in the future. But what our clients are looking for right now, I think, is usable, accurate, timely data. So that's where we are.

Got you. One final question, and I'll jump back in. Gross margins on acquisitions. You had a filing out on RWS and it looks as though those gross margins were above the corporate average. Is that a function of just how tight - some of these companies are rather small and they're running a pretty tight sort of G&A or SG&A program or will they be able to maintain some of that gross margin that they have once they're integrated? How do we look at that?

So Gerry, the RWS has - we mentioned it already on the call. They are a mixture of the industrial side, the services that we also typically do. And they also have a big presence in the real estate, particularly retail market. So there's going to be similar to us, I think, in margins. I think they also were going to vary quarter-to-quarter depending on their mix of services because they do have that commodity aspect, and then they do have sort of the steady state - a little bit steadier state with the retail side. So the way I could sort of help you think of it is they're going to be very similar to us but they will have fluctuations, but I think similar in the range that we have here in our core business.

We'll take our next question from Aaron Spychalla with Craig-Hallum.

First, on the competitive environment, seeing increasing M&A in the market from majors and then also increasing activity in the mid-market. Can you just kind of talk about any impact you're seeing on the business from that?

You're talking about M&A activity like in our space, how it's affecting our baseline?

I think maybe the vendor side, our deliverables.

Got you. One of the beautiful things about this business, it seems to be bottomless as far as the ability to find good quality companies that are looking to partner with someone like us to enhance their earnings. So we haven't seen - those consolidations haven't created these issues. And on the waste side, I've got a couple of questions on those there, and I think I may have discussed it. They're consolidated by a company that we already do business with in many cases. So we haven't seen any restriction or limitation from any of the services we perform from anybody through that aspect yet.

All right. And then maybe second, on kind of new markets, new waste streams. Can you just kind of give us an update there? Maybe talk a little bit about Proganics and just some of the kind of gating factors until we kind of see that maybe start to pick up? And just any thoughts on what contribution might look like?

Well, on Proganics, I'll go back to a question Gerry asked earlier about sales cycle. That's one that's a very long sales cycle because it involves a lot of change from the customer side to be able to take advantage of that. There's a lot of interest in it working on it. What we have now is growing, and we've really got a great pipeline of new customers to bring on. It's just that's a particularly slow sales cycle. Other new waste streams, we actually acquired a couple from our friends at RWS, waste streams that we weren't handling before for recycling types of waste streams. And so that's nice to add they've been doing well with that. And then the other acquisition that we made with actually just enhanced the scale of existing waste streams that we have. So it's beneficial on both sides. But yes, we've added a few and we definitely - as we had waste streams there and a lot of it's driven by customer need, right? They have a waste stream they're generating, and it's challenging and they come to us. Quest has always been a kind of a solution-based company even if we aren't doing it. Now, we'll find a way to take care of that issue for them. And it ultimately ends up yielding itself in a new waste streams for us. So as they come up, we'll continue to expand.

We'll hear next from Amit Dayal with H.C. Wainwright.

Ray, just to dig into the fourth quarter revenue strength, was this from new clients? Or was this contribution from acquisitions when you jump by almost $10 million sequentially. I'm just wondering what drove this. And going forward, are these the levels we should sort of be thinking of on a quarterly basis? Or could this be even stronger given some of the contributions from the December acquisitions?

Well, Amit, I'm - first of all, thanks, appreciate the questions. I'm really proud to say that 3-legged stool for lack of a better term that I've used as an analogy in the past is all contributing to that. But the strongest piece came from clients we already had and clients that we brought on here in the Quest base. I mean huge contributor. But we also, obviously, in December, we didn't have any - obviously, the benefit of any of that revenue from the acquired companies until December. So we really had a great representation of organic growth here. Laurie, you want to comment to that?

Sure. Absolutely. So when we were talking about fourth quarter, we had even a betterment over Q3 with our core business, but a substantial piece did come from those acquisitions in December. So I think that jump you saw was driven a lot by the acquisition, but it was also supported by a continued growth quarter-over-quarter sequentially. So going forward, we will have those acquisitions. They will be contributing towards every quarter, if that answers your question.

Yes, we'll have those new customers, and we'll have those. One of the nice things when we talked about before, when you penetrate an existing customer or new locations and new service lines, those typically are recurring and you get a chance for that wave of growth benefit as you move through the rest of the year - for the next year.

Understood. And then from a pricing perspective rate, do you have room in your contracts to raise prices? And also with relation to these acquisitions, are you tied in any way to contracts that may prevent you from sort of passing on any inflationary costs in the near term?

I will tell you that in general, Amit, we - of course, everybody is aware of inflation and the vendors that service are in the same spot as everybody else. And we, as a rule, have been very successful as a company in deferring a lot of that and not accepting those increases because remember, one of the things we have is a very flexible book of business where we can move volume and tonnage around, which may take the place of some of those other concessions. I want to take my hat off to our vendor relations sourcing team. They do a great job of that because we really haven't seen nearly the amount of inflationary costs that the market would say that there is. But there is some, of course, and those are going to happen because we want our suppliers to be profitable. And we have arrangements in our customer contracts that allow us to have conversations and CPI type things and kind of balance that out. It may not balance immediately, but ultimately, it will based on the - it's not an immediate thing. Like once something goes out - service goes up $1, the price to the customer goes up $1, it goes there's some lag in there, but we definitely have mechanisms in place to allow us to be relatively neutral through this process.

We'll take our next question from Nelson Obus with Wynnefield Capital.

Ray, I was curious about the onboarding process because it occurs to me that if you go to present to a new customer, you've got that all marked out what you're going to do. And I think you mentioned that it if I picked it up right on the call that it does take a period before you're on board. So I'm curious what exactly are the steps you need to do to integrate a new customer?

That's a great question, Nelson. And I will tell you the standard answer, of course, is it depends. But to give you a couple of buckets of onboarding examples, not too distant past, we onboarded a large QSR, quick service restaurant. Well, on one day, we didn't have it the next day we did. It was an entire over 1,000 locations, well over 1,000 that we - the onboarding took 24 hours because of the planning ahead of time, it's the nature of the business. But typically, you move through the organization. It's more - I would say, Nelson, the restriction is, it doesn't really do anything to do with Quest so much, as it does with the multi-unit multi-location customer absorbing those changes because we represent a big change like for manufacturer example that has 200 waste streams or a lot of complexity we represent a lot of change to their org at the location because they had multiple vendors, multiple suppliers. We have to train a little bit. There's training that's involved. So that's typically what we're looking at onboarding on these more complex customers. They're very rewarding, tremendous customers, but it's a little more effort to help them get on board with the program.

I got it. And then just a different follow-up question from a cash flow perspective, the integration and acquisition costs that were manifested in Q4. Is that a onetime - do you expect those - assuming you don't make any more acquisitions, will that trend down as we go through or be eliminated completely as we go through '22?

Yes. Nelson, the item that you're talking about, yes, has a trending down. It could be integration costs such as a consulting fee to a prior owner. It could be legal fees that occurred right at the transaction date. So they are sunsetted over a period of time.

Right. So by the time we get to, say, Q3 of '22, unless you make another acquisition, probably won't see that on the P&L, right? Fair enough.

Certainly at lower levels. Just any kind of integration costs that we still have ongoing from these December acquisitions.

We'll take our next question from Gregg Kitt with Pinnacle Fund.

Ray and Laurie, thank you for your hard work and the good quarter.

Thanks, Gregg.

So we've been a shareholder for several years now. It just feels like you're in the right place at the right time as companies continue to focus on internally-mandated externally-regulated ESG goals and you announced the four material new logo wins. Last year, that could add $20 million of revenue annually once they're fully ramped. I think I heard you correctly in saying that more than half of your 2021 gross profit dollar growth was organic, which was exciting to me because that implied that gross profit dollar organic growth was more than 25% last year. And this is a little bit of a follow-up on what Gerry was asking. Can you help us understand or talk to the changes in the sales organization that have been a catalyst to this better qualification of your leads or better conversion of your funnel?

Yes, happy to. Actually, that's right. Gerry did ask that. I think I missed is a multiphase question. The sales structure is the same as far as - but the people that are staffing that we've had some changes over the last 1.5 years. And we've added some strength at the sales side. The sales professional in our space, Gregg, needs a deep Rolodex and frankly, a pretty extensive experience base. And you'll notice some of the success we've had in manufacturing and industrial. That takes an even deeper knowledge base. And so these folks have - it goes back to - I don't know if there are more accounts or less accounts on the phone because I care less about that. I care a lot more about the quality of those accounts fitting our profile that we've described and having a move to the right and have our closure rate be higher than it was before, and it definitively is. But there's a lot more than just hiring smart people to go do that. We have a process in place that's like client mapping, where we just do lots of research and work on knowing this client and understanding the multiphase of pricing, get them on board.

On the data and reporting, I would expect to see that there was a little bit more disclosure around your data and reporting in the 10-K because I've always thought about the your data and reporting to customers is really valuable and a differentiator because you allow your customers to divert FTEs to other tasks and you provide better visibility into their ESG goals. And - but I wanted to hear a little bit more what are those reports? What do your customers say those reports enable them to do?

Well, I can tell you in a general, first of all, I appreciate that recognition. We believe it's a big differentiator as well. This data allows customers to have visibility into waste streams and be able to meet the obligations they have not only reporting externally, but the commitments they have internally to diversion and other types of goals that fit into the overall ESG structure. So I think the thing that's most appreciated, Gregg, is the breadth of services that we track because we perform those. So they don't have to have 27 different types of documents from different companies to be able to have visibility into their waste stream performance. So I think the consolidation, the accuracy and the timeliness are all three differentiators that's helping them well, it's helping them in their goals, which, thankfully, they have those goals, that helps us.

Two more on - so now you're solidly in growth mode, which is great, considering where you were when you joined, Ray. Can you just talk about the quality and the size of the leadership team today and now that you are in growth mode, you need to be positioned to grow from your current organizational base? How do you feel about that? And yes, just generally, how do you feel about your team today versus a couple of years ago?

I appreciate the opportunity to speak to that because that's my favorite subject. We've got the same top management that you've known since you've been invested with Laurie and Dave, but as we've grown, there's only so much the cows going to do. We've really added a lot of strength around them in the organization. One of them on the - we added Will Reynolds, who's our Senior VP of Strategy and the focus is on systems, scalability, integration. Everything Will does, and he has a huge track record of being successful in this. He came on recently, I think, in December, maybe November, that he adds a tremendous amount of capacity for our growth, both external and internal, with those pieces. We've added, for example, and there's a lot - I'm not going to name them all, we've added quite a few. We added Jim Miley as our VP of Operations to help sustain that growth. There's a lot of things Dave watch were used to do that now Jim does, and Dave is able to expand what he does. All of that is about expanding what we think is already what I believe is already a really great core of folks and giving them more and more capacity to do more and more things along with our growth.

And then my last question, the one I always ask about is I've always liked that 50% of your incremental gross profit dollars can contribute to EBITDA and then EBITDA converts nicely to free cash flow. Do you foresee any specific investments or changes besides that $500,000 that you want to invest to be able to improve the platform scalability in integration. Is your business - is there anything in your business that could materially affect that ability to have that high conversion rate from gross profit dollars to EBITDA?

So there are going to be additional capital expenditures off on the technology side. We have been - our expenditures in that area have been small. So they could be equivalent to another, say, $0.5 million to $1 million, just depends on the timing of the projects. But those would be capitalized type cost. So I just want to point that out. So those really don't affect your P&L, except over a period of time. The other thing, as we are learning more and more about the companies we acquired, some of them have a different operating model than, of course, our Quest core business. And so Gregg, as you're asking about, is there anything that could affect that leverage, we definitely see leverage continuing. But is it through the exact same formula that it was before. I think there could be some things that are a little different the business at RWS. It's a real estate business is a different model than the Quest core business. And so we'll be examining that and making sure we integrate and make the changes as best we can - but we - I can't give you a clear direction on exactly the amount of leverage that we get through. But it will continue. It will continue at a very healthy pace.

And we'll hear a follow-up from Nelson Obus with Wynnefield.

Just a quick. In a growth mode, I would imagine that your vendor turnover could increase. Is that right? Or is that even a metric that you follow?

Enter turnover meaning losing them and gaining some, is that what you're saying?

Yes. I mean there may be a customer.

Like employee turnover on the vendor side?

Or a vendor can't - can accommodate a new customer because the waste streams are too complicated. So you have to reach out to someone else or vendor doesn't retrospect? I don't - I mean I don't know if you track that, but just a little color on that.

Sure. Look, I think I know exactly what you're saying is we've added new lines and added new customers with greater needs and grow and more expansion, geographical lend to put more and more, I guess, pressure for lack of a better term on our vendors. If you're a vendor for us performing well with your particular waste stream, you'll get to continue to do that. We'll - we will build around you with new vendors outside of your capabilities. And we've been expanding that roster for quite a while now, Nelson. So we're in a much better position today. I believe, to handle this growth through our vendor base than we were before. But we're really not having to turn them over. They're able to stay - that's one of the great things about our model if we're serving somebody with 100 locations, we can utilize as many vendors as we think is the right amount to get the job done. So we just add rather than turnover. Does that answer your question?

Yes. You can upgrade a vendor. Yes. Got it.

We'll take a follow-up question from George Melas with MKH Management.

Ray, you talked about a few years ago, you were primarily retail and auto. Now you're sort of a lot more diversified. Can you talk a little bit about where you see the fastest growth? Where do you - what do you have minor pipeline? And it seems like industrial you didn't really have a lot of references two or three years ago, now you do, and those are fairly large customers? And is that a meaningful part of the growth that you're seeing?

I think it's a very meaningful part, George. And there's numerous reasons why. I think, first and foremost, what heavy industrial customers need, it's a complex business relative to their waste streams they generate. - plus they also have - all of them have big goals relative to sustainability. And they also have a lot of regulatory risk in many cases, right? All those things kind of ring our bell and our ability to consolidate and give them the data they need across numerous plants for their reporting and operations, I think, is another distinctor. All that adds up to the fact that I think our team has done great across all of our end markets, but industrial has represented significant growth. And I really think what we're doing today, what the team is able to do for those folks is going to continue to feed that growth in the future.

Okay. And just from a competitive perspective, do you see sort of new competitors entering the market? Or is it - or are you sort of further differentiating yourself from existing competitors?

I think we're further differentiating ourselves through. I may have a biased opinion, but I really haven't seen new ones come in. I've seen some try to expand beyond their previous limits as far as what they serve. And the good news for Quest is we've never really had any limits as far as what we do. It's what our customers want. And so I think we are doing a much better job of further differentiating ourselves. And - and I will say this, I think we're doing a better job of telling the story of the differentiation we already had. I think that's a part of it too, George. The team is doing a great job.

And that does conclude today's question-and-answer session. I'd like to turn the conference back over to Mr. Hatch for any additional closing remarks.

Thank you, operator. Thank you very much. I just want to thank all of you again for your interest in Quest. I've got the best job in the world. I get a chance to represent all the hard work this team does, and I'm very thankful for them. Their ongoing efforts, bringing value to our customers and also to you, the shareholders. All of our initiatives are working very well, and we've gained a lot of momentum in recent quarters. I feel we are still in the early stages of our growth efforts. And we have a long road of profitable growth ahead. And that's a great place to be. We look forward to keeping you up-to-date on all the quarters to come. And once again, thanks for your support of Quest. We appreciate it.

Thank you. And that does conclude today's conference. We thank you all for your participation, and you may now disconnect.