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Operator: Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the DXP Enterprises Fourth Quarter 2024 Earnings Release Conference Call. [Operator Instructions] I would now like to turn the call over to Kent Yee, Chief Financial Officer. Please go ahead.

Kent Yee: Thank you, Eric, and thank you, everyone. This is Kate, and welcome to DXP’s Q4 2024 Conference Call to discuss our results for the fourth quarter and fiscal year ending December 31, 2024. Joining me today is our Chairman and CEO, David Little. Before we get started, I want to remind you that today’s call is being webcast and recorded and includes forward-looking statements. Actual results may differ materially from those contemplated by these forward-looking statements. A detailed discussion of the many risk factors that we believe may have a material effect on our business on an ongoing basis are contained in our SEC filings. However, DXP assumes no obligation to update that information because of new information or future events.

During this call, we may present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our earnings press release. The press release and an accompanying investor presentation are now available on our website at ir.dxpe.com. I will now turn the call over to David Little, our Chairman and CEO, to provide his thoughts and a summary of our fourth quarter and fiscal 2024 performance and financial results. David? SP1 Thanks, David.

David Little: And thanks to everyone on our 2024 fourth quarter and fiscal 2024 conference call. I am pleased to report another record year for our key financial metrics sales per business day, gross profit margins and adjusted EBITDA margin. These results demonstrate the power of our people, products and processes to serve the needs of our customers. They also highlight the benefits of our broad and diverse exposure to different end markets and regions and our disciplined capital allocation strategy. It is my privilege to share DXP’s fourth quarter and fiscal 2024 results with you on behalf of over 3,028 DXPeople. Congratulations to all our stakeholders and a special thanks to our DXPeople you can trust. Fiscal 2024 was another successful year for DXP, growing sales 7.4% to $1.8 billion.

We are excited to move into fiscal 2025 with the momentum and results of our 2 DXP had another year of winning at MAX margins and gross profit margins increased by 77 basis points to 30.9%. Fiscal 2024 was about winning and [indiscernible] margins while also operating efficiencies and investments. We accomplished this goal by either maintaining or increasing margins on our business segments and executing 7 acquisitions in fiscal ’24. Fiscal ’24 was a record year in terms of sales dollars achieving new high sales watermark for DXP while achieving the second fiscal year of 10% plus adjusted EBITDA margins. We continue to successfully execute on our end-market goals of diversification and scale. And at the end of fiscal ’24, oil and gas was 23% of our business, followed by water and wastewater and chemical at 10%, and food and beverage and manufacturing at 7% and general industry at 13%.

In our words, DXP has continued to deliver on balancing our risks from an end market perspective, and we have experienced that in the last 2 years and specifically in 2024. We look forward to the interplay of these markets in 2025. Thank you, DXPeople, sales and operational professionals for teaming up together and winning for our customers and stakeholders. Thank you to our corporate support team for their effort to support both internal and external customers and thank you DXPeople for an awesome year. Our future looks bright. In fiscal 2024, I mentioned we continue to soundly execute on diversifying our end markets with a focus on water and wastewater and other industrial markets continue to — continuing to execute on acquisitions, adding 7 great companies during the year, including Hennessy mechanical seal, [indiscernible], manufacturers Edge, Hardwell, [indiscernible] and [indiscernible].

We also continued executing on our share repurchase program. and refinanced our debt in the second half of 2024, positioning DXP for organic and inorganic growth in 2025. We continue to be excited about the future and delivering a different customer experience, creating an engaging winning culture for DXP and in investing in the business to strengthen our core buildings and drive long-term growth. For fiscal ’24, total DXP sales were up 7.4% and Operating income was up 4.8% compared to 23. Fiscal year 2024 sales and adjusted EBITDA were $1.8 billion and $191 million, respectively, and adjusted EBITDA margins of 10.62%. Our strategy has always been to combine physical strength, talent resources, technology and capabilities of a large company with the fast, flexibility, entrepreneurial capabilities of local businesses to deliver superior value to our customers and our suppliers while providing better growth opportunities for our DXPeople.

We continue to believe in this approach and look to renew our commitment to people, processes, resources and technology as we scale DXP and remain focused on doubling the size of our business over the next 3 to 5 years while making strategic investments that match the evolution of DXP. From a sales per business day standpoint, DXP experienced continued improvement throughout the year with Q1 averaging $6.55 million sales per business day, ending the Q4 averaging $7.595 million sales per business day. Total DXP sales for Q4 were $470.9 million or $7.595 million per business day. Our profits for the quarter were positively impacted by a sequential increase in gross margins as well as an increase in SG&A associated with continued investment in our business.

However, in the midst of continued change in growth, our year-over-year earnings showed improvement resilience, and we grew diluted earnings per share. Again, thank you to the 3,028 DXPeople for your hard work and dedication and finishing the year as strong as possible. It is always my pleasure to share our fourth quarter and year-end financial results on your behalf. In terms of cash flow and liquidity, we generated $77 million of free cash flow in the fiscal 2024, which reflects DXP’s focus on generating consistent cash flow while investing in related working capital as the business continues to grow. This, combined with a flexible capital structure, put us in a position where we could keep executing on our acquisition strategy as well as return capital to our shareholders via the opportunistic share repurchase.

As we discussed, acquisitions have continued to diversify our end market exposure and position us well through various economic cycles and we are excited about 2025 and the growth we are pushing to see both organically and through acquisitions as we continue to have a strong pipeline of opportunities. We are excited to have 7 new companies join us during the year of 2024, on top of the 3 we completed during fiscal 2023. All of our acquisitions have been great additions to DXP family. To all of our recent acquisitions, welcome to DXP, and we are excited to support your future growth as a part of DXP. DXPeople have continued to find ways to deliver financial results and position us well for our stakeholders in the face of extraordinary challenges.

This is evidenced by our sales growth, improved gross profit margins, acquisitions and the overall teamwork of the DXPeople. We continue to build our capabilities to provide complementary sets of products and services in all our markets, which makes DXP very unique in our industry and gives us more ways to help our customers win. We also are constantly looking at reviewing opportunities where we can grow market share. We complement our strategy with relentless drive for progress to — that includes business and operational initiatives we are — that we believe will allow us to steadily improve our performance for our stakeholders. As we go into 2025, we are excited about the opportunity ahead and the potential DXP has to continue to scale and grow within existing and new markets.

Total DXP sales for fiscal 2024 were up 7.4%, with Innovative Pumping Solutions leading the way, growing 47.7% year-over-year to $323 million, followed by Service Centers growth of 1.9% to $1.2 billion and then Supply Chain Services at $256.4 million. In terms of IPS, [ Innovative Pumping Solutions, ] as we discussed in more detail in Q3, we have 2 broad businesses tied to capital budgets and project work. DXP’s Heritage energy-related project work and DXP’s Water. For fiscal 2024 DXP’s Water is 44% of IPS sales last year. It was 32% last year, I’m sorry. Yes, DXP is — 44% of the DXP sales. And then last year, it was 32%. As we grow our DXP water platform, we have increased both margins and operating income margins for the segment and for DXP.

DXP Water backlog continues to grow, both organically and through acquisitions. In fiscal 2024. We added 4 acquisitions through the DXP Water, including Hennesy [indiscernible], Hartwell, environmental, [indiscernible]. Our energy-related bookings and backlog continued to show resilience and performance above our long-term averages sat at all-time highs. Our Q4 average energy backlog continues to stay ahead of DXP’s average going back to 2017. Additionally, our year-to-date average continues to exceed our long-term average IPS backlog going back to 2015, which we highlighted [indiscernible] for the first time in the second quarter of 2023 and continues as we move forward to fiscal year 2025. That — what this indicates is that we are continuing to get bookings and we feel good at this point in the cycle on energy and waste and noise water-related project work.

We look forward to seeing how this impacts our results and project revenue both in energy and water and wastewater as we move through 2025. As we maintained growth, our main focus within IPS will be managing to the demand levels we have, finding opportunities in all markets such as energy, biofuels, food and beverage, water and wastewater and pricing appropriately given the supply chain dynamics and ebbs and flows of inflation. In terms of Services Centers, the diversity of end markets, multiple product division approach, and our MRO nature within Services Centers allows us to continue to remain resilient and continue to experience top line year-over-year growth in fiscal 2024. From a regional perspective, regions that experienced year-over-year growth included North Central, South Rockies, Southwest, our Canadian rotating equipment business.

We continue to expect our end markets will remain constructive over the near term. We have also seen in our U.S. Safety Services division and metalworking product divisions, which is great to see. Supply Chain Services experienced a slight decrease year-over-year primarily due to some facility closures by our customers and small declines across our energy-related SCS sites. That said, SCS has also invested in customer care model, allowing customers to utilize DXP’s remote technology within the need for a full-time on-site presence. This model enables DXP to extend SCS’s technology to accounts with smaller sites and expand the business relationship. SCS remains committed to expanding our industrial customer base through enhanced marketing and lead generation tools.

And as we go into fiscal ’25, we believe demand for SCS services is increasing because of the proven technology and efficiency they perform for all of their industrial customers. DXP’s overall gross profit margins for the year were 30.9%, a 77 basis point improvement over 2023. This displayed constant gross margin performance within our different segments throughout the year and added accretive gross margins through — we added accretive gross profit margins through our acquisitions. That said, Service Centers had meaningful improved gross margins year-over-year, IPS sales contribution was 18% of total sales in 2024 and 13% of total sales in 2023. Overall, DXP produced adjusted EBITDA of $191.3 million or an increase of 9.8% year-over-year.

Adjusted EBITDA as a percent of sales was 10.62% or an increase of 24 basis points compared to 2023. In summary, we are pleased with our overall performance in 2024. We look to continue to drive improvement in our organic sales and marketing strategies and drive further sales growth through acquisitions and anticipate fiscal 2025 to be focused on maintaining margins while driving and laying the groundwork for long-term operating efficiencies. Overall, through our strategic investments and initiatives, we will remain focused on providing world-class tools, processes, training and technology to deliver value to our customers and suppliers and help our DXPeople be more productive so they can better help our customers win. I would like to sincerely thank all our DXPeople who continue to show up to work with their passion, commitment, teamwork and selfless service.

We have a tremendous team, and it is an honor to deliver value for all our stakeholders. I am pleased with our performance in fiscal ’24. I’m proud of our efforts to continue to improve. We are growing sales in excess of market and expect into the — and expect the same in the near future. We expect to drive SG&A leverage, manage working capital, generate free cash flow. And if organic sales slow, then free cash flow will grow, and we will take advantage of the economy to grow profitability, both organically and through acquisitions. If inflation rears its head, DXP is not concerned. As a distributor, we pass on increases to our customers. DXP is experienced in navigating inflationary environment. We have grown sales on a compounded annual growth rate of over 15.7% since 2020.

We have achieved new highs in both sales and profitability and I would like to thank our stakeholders and especially our DXPeople. With that, I’ll now turn it back over to Kent Yee.

Kent Yee: Thank you, David, and thank you to everyone for joining us for our review of our fourth quarter and fiscal year 2024 financial results. Fiscal 2024 was another record year and new watermark in terms of sales and gross margins. Additionally, as our second fiscal year of 10% plus adjusted EBITDA margins. We are excited to report these results, and we look forward to moving into fiscal 2025. Specifically, fiscal year 2024 financial performance reflects our ability to continue to execute on key themes that we have been focused on over the past 3 to 5 years. Overall, DXP’s fiscal 2024 financial results reflect the following: Strong year-over-year sales growth driven by Innovative Pumping Solutions and acquisitions; continued gross margin strength and stability; consistent operating leverage leading to sustained adjusted EBITDA margins, more notably our second year of 10%-plus adjusted EBITDA margins; continued execution on our acquisition strategy, completing 7 acquisitions; and DXP Water crossing the $100 million-plus sales mark; successfully refinancing and repricing our term loan B, including raising an incremental $105 million and reducing interest costs by 100 basis points; and continued capital return to shareholders through our share repurchase program.

Total sales for the fourth quarter increased 15.7% year-over-year to $470.9 million. That said, this reflects improvement in sales per business day going from $7.39 million in Q3 with 64 business days to 62 days in Q4 or $7.595 million sales per day in Q4. Acquisitions that have been with DXP for less than a year contributed $34.8 million in sales during the quarter. Total sales for DXP for fiscal year 2024 were $1.8 billion, increasing 7.4% compared to fiscal 2023. For the full year, acquisitions contributed $98.5 million in sales. Average daily sales for the fourth quarter were $7.595 million per day, as previously mentioned, or up 2.8% compared to Q3 2024 and were up 13.8% versus Q4 of 2023 or our sales per business day of $6.67 million in Q4 of 2023.

Average daily sales for fiscal year 2024 were $7.123 million per day versus $6.61 million per day in fiscal 2023, a 7% increase. In terms of our business segments, Innovative Pumping Solutions grew 47.7% year-over-year. This was followed by Service Centers growing 1.9% year-over-year and Supply Chain Services slightly declining at 1.5% year-over-year. In terms of Innovative Pumping Solutions, we continue to experience increases in the energy and water-related backlog. Our Q4 energy-related average backlog grew 17.5% over our Q3 average backlog, which continues to be a notable uptick compared to Q1 of this year and continues to be ahead of our 2015, 2016 and 2017 average backlog. It is worth noting that our energy backlog includes a significant project win that is currently estimated to meaningfully impact our sales performance in Q1 or Q2 of 2025.

Adjusting for this project, our energy backlog grew 8.7% sequentially. That said, the conclusion continues to remain that we are trending meaningfully above all historical sales levels and we are moving towards 2014 sales levels based upon where our backlog stands today. We also see strength in our IPS Water backlog as it continues to grow due to a combination of organic and acquisition additions. In terms of our DXP Water backlog, as of Q4, we are up 108% compared to Q4 of last year. Adjusting for recent acquisitions, the DXP Water backlog is up 39.5% organically. We have been experiencing strong organic sales growth within IPS and expect that trend to continue in 2025. In terms of our Service Centers, regions within our Service Center business segment, which experienced notable sales growth year-over-year, include the South Rockies, North Central and the Southwest.

Additionally, we saw notable strength year-over-year in our Canadian rotating equipment and U.S. safety services businesses. Key products and end markets continue to drive sales performance also include rotating equipment, water and wastewater, food and beverage and energy. Supply Chain Services performance reflects the impact of some facility closures with our customers and declines across our energy-related SCS customers as well as the streamlining and efficiencies we brought to our new customers that we have added over the last couple of years. As we move into fiscal 2025, we will look for new customer additions and a return to sales growth. Turning to our gross margins. DXP’s total gross margins were 30.87%, a 77 basis point improvement over fiscal year 2023.

This improvement was driven by strength in our Service Center business segment, showing the greatest improvement in margins improving 83 basis points on a year-over-year comparative basis. This was followed by a 114 basis point improvement from Supply Chain Services. That said, from a segment mix sales contribution, Service Centers contributed 67.9%; Innovative Pumping Solutions, 17.9%; and Supply Chain Services was 14.2%. Compared to last year, IPS mix contribution was higher at 17.9% in 2024, which impacted margins positively versus 2023. In terms of operating income, combined all 3 business segments, increased 27 basis points in year-over-year business segment operating income margins or $18.8 million versus fiscal 2023. This was primarily driven by improvements in operating income margins across Innovative Pumping Solutions and Supply Chain Services business segments.

IPS operating income margins improved 57 basis points driven by the addition of Water and Wastewater acquisitions and overall improvement within the energy-related IPS business. Supply Chain Services operating income margins improved 21 basis points on a year-over-year comparative basis. Total DXP operating income increased $6.7 million versus fiscal 2023 to $145.4 million. Our SG&A for the full year increased $44.3 million from fiscal 2023 to $410.9 million. The increase reflects the growth in the business, including acquisitions and associated incentive compensation as well as DXP investing in its people through merit and pay raises as well as the addition of new personnel. SG&A as a percentage of sales increased slightly to 22.8% versus 21.8% of sales in fiscal 2023.

We still anticipate that DXP will benefit from the leverage inherent in the business despite increased operating dollars supporting our growth and the impacts of acquisitions. Turning to EBITDA. Fiscal 2024 adjusted EBITDA was $191.3 million. Adjusted EBITDA margins were [ 10.6%. ] This is our second fiscal year with adjusted EBITDA margins in excess of 10%, and we will look for this to continue in fiscal 2025. Year-over-year adjusted EBITDA margins increased 24 basis points or $17 million. This reflects the fixed cost SG&A leverage we experienced as we grow sales. This translated into 1.3x operating leverage. In terms of EPS, our net income for fiscal 2024 was $70.5 million. Our earnings per diluted share for fiscal 2024 was $4.22 per share versus $3.89 per share last year.

Adjusting for onetime or noncash items associated with our $650 million refinancing during Q4 and other items, our earnings per diluted share for fiscal 2024 was $4.51 per share. Our adjusted diluted EPS in Q4 was $1.38 per share. Turning to the balance sheet and cash flow. In terms of working capital, our working capital increased $20.9 million from December of 2023 to $296.3 million. As a percentage of sales, this amounted to 16.4%, which is in the lower half of our targeted range of 15% to 20% of sales. At this point, we have moved in line with our historical averages or ranges in terms of investing in working capital and we have moved off our Q3 2022 high point of 19.9% of LTM sales. We do anticipate further acquisitions as we move into fiscal 2025.

This could cause us to move upwards, albeit we are focused on managing working capital as efficiently as possible as we scale and grow. In terms of cash, we had $148.3 million in cash on the balance sheet as of December 31. This is a decrease of $24.8 million compared to the end of Q4 2023 and an increase of $113.3 million since September. This reflects the refinancing of our existing term loan B in the fourth quarter and the strong cash flow generation we experienced during the fourth quarter, which we will touch upon later in my comments. As it pertains to our Term Loan B, as a reminder, during the fourth quarter, we announced that we refinanced and repriced our Term Loan B, which maintains our maturity at October 2030. We successfully repriced the new Term Loan B, reducing our borrowing cost by 100 basis points to SOFR plus [ 3 75 ] versus SOFR plus [ 4 75 ] while also raising the incremental $105 million in capital to support our acquisition and investments program over the next 9 to 12 months.

In terms of CapEx, CapEx for fiscal 2024 was $25.1 million versus $12.3 million in fiscal 2023. This increase reflects reinvestment in some of our facilities and equipment, software and related investments to drive improvement and efficiencies on behalf of our employees. As we move forward, we will continue to invest in the business as we focus on growth. Turning to free cash flow. We generated solid operating cash flow during the fourth quarter as we did during the first and third quarter. During Q4 and for fiscal 2024, we had cash flow from operations of $32.1 million and $106.2 million, respectively. For fiscal 2024, this translated into $77.1 million in free cash flow. While we continue to make improvements in our free cash flow when we are growing, DXP tends to make significant investments in inventory and project work in our facilities, equipment and software, similar to what we did in 2023.

That said, a majority of our CapEx is growth-oriented and controllable, and we have the ability to pivot, if necessary. Return on invested capital or ROIC for fiscal 2024 was 39% and continues to be above our cost of capital and it is reflecting our improved profitability levels and efficient working capital management. As of December 31, our fixed charge coverage ratio was 1.7:1, and our secured leverage ratio was 2.43:1 with a covenant EBITDA for fiscal 2024 of $206.2 million. Total debt outstanding on December 31 was $648.9 million. In terms of liquidity, as of December 31, we were undrawn on our ABL with $9.4 million in letters of credit with $125.6 million of availability and liquidity of $273.9 million, including $148.3 million in cash, which some of it has already been used to finance the purchase of a royal process equipment, which we closed subsequent to the fourth quarter.

We are excited to have them, and they will start reporting with us for the first quarter of 2025. Welcome to DXP. DXP’s acquisition pipeline continues to grow and the market continues to present compelling opportunities. Looking forward, we expect this to continue through fiscal 2025, and we look forward to closing a minimum of 1 to 3 additional acquisitions by the middle of 2025. In terms of capital allocation, we repurchased a return $28.8 million to shareholders via our share repurchase program in fiscal 2024 or a total of 566,000 shares of DXP stock. The last item that I want to briefly touch upon is the outstanding progress we have made with our accounting and finance team. As I mentioned last year, we have invested heavily in growing our finance and accounting department.

This has allowed us to continue the path of continuous improvement, which this year is expressing itself in full remediation of all material weaknesses. Progress is never a straight line and we are staying nimble as we continue to grow. We are at an inflection point, and I’m excited to work with PwC, our enhanced team and the entire of DXP as we are scaling in real time organically and through acquisitions. In summary, we are pleased with our fiscal 2024 performance. We achieved record adjusted earnings performance at $4.51 per share, higher earnings and improved working capital efficiency delivered a 40% free cash flow conversion to EBITDA of 7.4% sales growth. These achievements contributed to a remarkable annual ROIC of 39%, demonstrating gains from our strategic initiatives as well as our disciplined approach to capital allocation and our acquisition strategy.

Heading into 2025, we refreshed our balance sheet, which allows us to continue to invest in the business, both organically and through acquisitions while also returning capital to our shareholders, an exciting time to be a part of DXP. We are excited about the future. We will keep our eyes on — focused on those things we can control and what is ahead of us. What is in front of us is always bigger than what is behind us and the best is always ahead. We look forward to a successful fiscal 2025. I will now turn the call over for questions.

Operator: [Operator Instructions] Your first question comes from the line of Zach Marriott with Stephens.

Unknown Analyst: Is there any color you can share on daily sales trends by month for both Q4 and so far into Q1?

David Little: Yes. No, absolutely, Zach. Starting back in Q4 in October, if you will, sales per business day was $7.2 million, $7.5 million and then $8.1 million for December. And then starting off here in 2025, sales per business day for January and February were $6.8 million per day in January and then $7.8 million per day in February.

Unknown Analyst: Great. And then also for margins quarter-over-quarter. How are those trending? And are there any noteworthy factors in March that may change that trajectory?

Kent Yee: I don’t think we have full visibility into our margins at this point in time for Q1 necessarily. But I think what you’re getting at, Zach, is from Q3 to Q4, our gross margins went up pretty significantly. And I think that’s just a continued function of mix. Overall, once again, our water, wastewater acquisitions tend to be at an overall higher gross as well as EBITDA margins in with us at the end of the year closing out some of the acquisitions and then performing with us longer, they started to contribute in a higher fashion. So I think that’s what you saw going from Q3 to Q4. And obviously, going into Q1, we would like for that to continue. But we also have some, once again, always some strong initiatives in driving sales dollars, if you will, that impact mix on our base businesses.

David Little: I want to jump in and add just a little bit. Our goals have been to get to 10% EBITDA margins. We were told that would make a big difference in the valuation of our company. And so we hit that. And so now we’ve changed our goal to 11. People are their pays in alignment with those goals. And so they obviously make more if they hit them than if they don’t. And so we’re really pleased with the progress we’ve made throughout the year, and we look forward to continue to improve.

Operator: I will now turn the call back over to David Little, Chairman and CEO, for closing remarks. Please go ahead.

David Little: Thanks, Eric. Yes. It was a — our peer group didn’t have really any growth this year and most of them had some negative growth. And of course, I’m trying to change our peer group from being oil and gas people. So we’ve done a really, really good job of continuing to sell as many pumps and equipment as we can into the oil and gas deal, but at the same time, reduce it as a percent of our overall business. And so we’re kind of doing everything that’s really possible in terms of taking the company into a more diversified market basis, and we’re being rewarded for that. We’re also doing everything we can to increase gross profit margins and yet be fair to our customers. And we also are looking at a lot of things where we’re kind of heavy on the investment side on trying to drive scale and efficiencies, but we see some improvements coming as we continue to move forward.

And so I think our goal of 11% EBITDA margins is very attainable and pretty much attainable in a short period of time. The — what goes against that a possible headwind as if all these tariffs and things like that slow the economy down then it’s obviously hard to get scale — sales are declining. We don’t see any of that yet. We see the uncertainty of comments that are being made around tariffs and inflation. I will reiterate that inflation is within reason is good for us. It raises our sales, it raises our value of inventory and we don’t get — we don’t really get pressures to lower our margins. So in general, that’s good. Of course, we have to follow that up with pay raises for our people and things like that, things cost a little more. But managed all properly, that doesn’t affect us, and we’re pretty good at that because we’ve had a lot of inflation over the years that I’ve been at the helm.

So I think we feel good. Again, I want to thank our DXPeople. We’re working hard on on a lot of different projects in addition to their normal daily routine. And so I appreciate all those efforts. We’re performing pretty well. So from a stakeholder point of view, and I’m a large one, I appreciate those efforts. And so I think with that, I’d just like to thank everybody. And of course, if the stock too low, well, then I’m going to buyback. And if it’s too high. I’m going to celebrate. So thank you very much, and you all have a great day.

Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining, and you may now disconnect.