VRTS - NASDAQ

Good morning, my name is Dede and I will be your conference operator today. I would like to welcome everyone to the Virtus Investment Partners’ Quarterly Conference Call. The slide presentation for this call is available in the investor relations section of the Virtus website, www.virtus.com. This call is being recorded and will be available for replay on the Virtus website. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer period and instructions will follow at that time. I will now turn the conference to your host, Sean Rourke.

Thank you and good morning, everyone. On behalf of Virtus Investment Partners, I'd like to welcome you to the discussion of our operating and financial results for the fourth quarter of 2024. Our speakers today are George Aylward, President and CEO, and Mike Angerthal, Chief Financial Officer. Following their prepared remarks, we will have a Q&A period. Before we begin, please note the disclosures on Page 2 of the slide presentation. Certain matters discussed on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and as such are subject to known and unknown risks and uncertainties, including but not limited to those factors set forth in today's news release and discussed in our SEC filings. These risks and uncertainties may cause actual results to differ materially from those discussed in the statements. In addition to results presented on a GAAP basis, we use certain non-GAAP measures to evaluate our financial results. Our non-GAAP financial measures are not substitutes for GAAP financial results and should be read in conjunction with the GAAP results. Reconciliations of these non-GAAP financial measures to the applicable GAAP measures are included in today's news release and financial supplement, which are available on the website. Now I'd like to turn the call over to George. George?

Thank you, Sean, and good morning, everyone. I'll start with an overview of the results reported this morning, and then I'll turn it over to Mike for more detail. We continued to deliver strong financial and operating performance in the fourth quarter, though our results did include net outflows, largely due to a partial institutional redemption. Key highlights of the quarter included positive net flows in focus areas, including ETFs, global funds, and retail separate accounts, attractive investment reforms across strategies, an operating margin at the highest level in two and a half years, ongoing introduction of new products, and we ended the year in an in-net cash position with significant financial flexibility while continuing to return capital to share repurchases in our dividend. As it relates to new product introductions, we remained active during the quarter in our focus areas. In ETFs, following the launches earlier in the year of newly actively managed ETFs from Kayne Anderson Rudnick, and AlphaSimplex, in December we introduced a new ETF from Sykes and have several others in development. The newest ETF invests in private credit collateralized loan obligations, which Sykes is well positioned for as it currently manages nine CLOs with over $3 billion in assets and has over two decades of CLO experience. We now offer 20 ETFs across strategies and managers and have seen significant growth. While ETFs are currently a smaller part of our business at $3.1 billion, they have doubled in size over the past year with consistent organic growth and have generated over a $0.5 billion of sales in the fourth quarter alone. In addition to ETF introductions, during the year, we launched four global funds, adding to our lineup that continues to generate positive flows. And for SMAs, we've developed a number of offerings across a variety of asset classes, including more solution-oriented multi-strategy products. We continue to prioritize increasing the availability of our ETFs, global funds, and SMAs through intermediaries. Turning now to the results, total assets under management of $175 billion at December 31st decreased sequentially from $183.7 million due to net outflows in institutional accounts and U.S. retail funds, partially offset by the positive net flows in ETFs, global funds, and retail separate accounts. Sales of $6.4 billion compared with $6.6 billion in the third quarter as higher institutional sales, led by global equity and alternative strategies, were offset by lower sales of U.S. retail funds. For the full year, total sales increased 3%, to $26.8 billion. Total net outflows of $4.8 billion included the partial institutional redemption, excluding which net outflows were $1.5 billion and compared with $1.7 billion in the prior quarter. Reviewing by product in institutional, the net outflows of $3.8 billion were largely due to a $3.3 billion lower fee partial redemption of a multi-manager mandate, which the client added an additional sub-advisor, resulting in reallocation from current sub-advisors. Excluding the partial redemption, which was implemented and completed in the fourth quarter, institutional net outflows were $0.5 billion. Retail separate accounts generated positive net flows of $0.1 billion and delivered 4% organic growth over the past year, with consistent positive net flows in the intermediary sole channel and in our $9 billion wealth management business. Open-end fund net outflows of $1.1 billion were essentially unchanged sequentially, consistent with market trends, U.S. retail fund net outflows were driven by equity strategies partially offset by positive net flows in fixed income, while ETFs and global funds generated $0.4 billion and $0.1 billion in positive net flows, respectively. In terms of what we're seeing in January, U.S. retail fund flows are tracking similarly for the fourth quarter, including continued positive net flows in fixed income, and ETFs are actually running ahead of the average monthly flows of the fourth quarter. For institutional, known redemptions for the first quarter modestly exceed known wins, with the wins representing several different managers and strategies. In terms of our financial results, we delivered strong earnings and margin growth for the quarter and for the full year on higher average AUM levels and ongoing expense management. With higher revenues and discipline around discretionary spending, which resulted in a reduction in other operating expenses for the full year, the operating margin of 35.1 reached its highest level since the second quarter of 2022 and was up sequentially from 34.4. Earnings per share is adjusted of $7.50, increased 8% from the third quarter to the highest level since the first quarter of 2022, and for the full year, earnings per share grew 20%. Turning in our capital, we ended the year with a solid balance sheet, including a net cash position of $30 million, while having consistently returned capital to shareholders that invested in the growth of the business. During the year, we repurchased or net settled over 250,000 shares, $57 million, and raised the quarterly dividend by 18%, representing the seventh consecutive annual dividend increase. And with that, I'll turn the call over to Mike. Mike?

Thank you, George. Good to be with you all this morning. Starting with our results on Slide 7, assets under management. Our total assets under management declined 5% sequentially to $175 billion at December 31 due to net outflows and negative market performance. Average assets under management increased 3% to $182.1 billion, with ending assets 4% below the quarter's average. Compared with the prior year period, AUM increased $2.7 billion, or 2%, due to market performance. Our assets under management represent a broad range of products and asset classes. By product, institutional is our largest category at 34% of AUM. Retail separate accounts, including wealth management, at 28%, and U.S. retail funds at 27%. The remaining 11% comprises closed-end funds, global funds, and ETFs. We are also diversified within asset classes. In equities between international and domestic, and within domestic, well-represented amongst mid, small, and large-cap strategies. And fixed income is well-diversified across duration, credit quality, and geography. We continue to have compelling long-term relative investment performance across products and strategies. As of December 31, 72% of rated retail fund assets and 32 funds had four or five stars, and 90% were in three, four, or five-star funds. In addition, 64% of fund AUM outperformed the median of their peer groups over the five-year period. And 84% of retail separate account assets have beaten benchmarks over the same five-year period. ETFs have also had strong performance with 91% of ETF assets exceeding median peer performance for the three-year period. And 10 of our 14 rated ETFs were rated three, four, or five stars. Across all products, 58% of AUM at December 31st were beating their benchmarks over the five-year period. Turning to Slide 8, asset flows. Total sales of $6.4 billion were down modestly from $6.6 billion in the prior quarter, as higher institutional sales were offset by lower sales of retail separate accounts. Institutional sales of $1.6 billion increased from $1.2 billion, driven by higher sales of global equity and alternative strategies. Retail separate account sales of $1.8 billion declined sequentially from $2.3 billion, as higher sales in the wealth management business were more than offset by lower intermediary sold sales, particularly in certain SMID cap equity offerings, which were soft-closed in the prior quarter. Open-end fund sales of $3 billion were essentially unchanged, with higher ETF sales offset by lower sales of U.S. retail funds. For ETFs, sales of $0.5 billion increased 13% sequentially, and were up significantly from $0.1 billion in the prior year period, with particularly strong sales of our preferred stock, utilities, and senior loan ETFs. We continue to prioritize further availability of our ETFs through intermediaries. Global fund sales of $275 million were relatively unchanged sequentially, and up 40% from the prior year period, led by domestic equity strategies. Total net outflows of $4.8 billion compared with $1.7 billion last quarter, and were in large part due to the partial institutional redemption, excluding which net outflows were $1.5 billion. Net flows continued to be positive in ETFs, global funds, and retail separate accounts. Reviewing by product, institutional net outflows of $3.8 billion were largely due to the $3.3 billion lower fee partial redemption. Excluding that redemption, institutional net outflows were $0.5 billion, which compared with $1.1 billion in the prior quarter. By strategy within institutional, we had positive net flows in international equity and alternatives. As always, institutional flows will fluctuate depending on the timing of client actions. Retail separate accounts continued to generate positive net flows in both the intermediary sole channel and in our wealth management business, totaling $0.1 billion in the quarter, and with a full year organic growth rate of 3.9%. For open-end funds, net outflows of $1.1 billion were at essentially the same level as the prior quarter, with positive net flows in fixed income and SMID cap equity. Within open-end funds, ETFs and global funds continued to generate double-digit organic growth rates. ETF positive net flows of $0.4 billion represented the highest quarterly level with an organic growth rate of 67%. Over the past year, ETF AUM has doubled $3.1 billion with an organic growth rate of 84%. Global fund net flows of $0.1 billion represented organic growth of 10% for the quarter, and for the full year generated an organic growth rate of 9%. I would also note that for fixed income offerings in total, net flows continued to be positive in the quarter as well as for the full year. Turning to Slide 9, investment management fees as adjusted of $192.2 million increased $6.7 million, or 4%, reflecting the increase in average assets under management and a stable fee rate. The average fee rate of 42 basis points was unchanged from 41.9 basis points in the prior quarter. Excluding performance fees, which totals $1.6 million, the average fee rate was 41.7 basis points, also essentially unchanged sequentially. Looking ahead, we believe an average fee rate in the range of 41 to 42 basis points is reasonable for modeling purposes. With performance fees of $3 million to $5 million per year incremental to that range. As always, the fee rate will be impacted by markets and the mix of assets. Slide 10 shows the five-quarter trend in employment expenses. Total employment expenses as adjusted of $104.3 million increased 2% sequentially due to higher profit-based variable incentive compensation. And as a percentage of revenues, they were 49.2% down 80 basis points. Looking ahead, it would be reasonable to anticipate employment expenses to continue to be in a range of 49% to 51% of revenues. As always, it will be variable based on market performance in particular, as well as profits and sales. For modeling purposes, the first quarter will also include seasonal employment expenses, which are incremental to this outlook. Turning to Slide 11. Other operating expenses, as adjusted, continued to be in a relatively stable range as we have offset increasing costs with expense management. For the quarter, other operating expenses were $31 million, up from $29.8 million, reflecting higher facility costs and a seasonal increase in distribution-related travel activities. For the full year, other operating expenses declined modestly even with the first full-year impact of an additional manager. As a percentage of fourth quarter revenues, other operating expenses were 14.6%, essentially unchanged from the third quarter and down from 16.1% in the prior year period. Looking ahead, a quarterly range of $30 million to $32 million is reasonable for modeling purposes, all else being equal. Slide 12 illustrates the trend in earnings. Operating income as adjusted of $74.5 million increased $4 million or 6% sequentially due to higher average assets under management. The operating margin as adjusted at 35.1% increased from 34.4% in the third quarter with an incremental margin of 58%. On a full-year basis, the operating margin increased 100 basis points over the prior year period. With respect to non-operating items, interest and dividend income increased by $1 million, primarily reflecting higher CLO interest income. For modeling purposes, the fourth quarter level of interest and dividend income is reasonable going forward. Interest expense declined by $0.8 million, reflecting a lower effective interest rate on our term loan. Non-controlling interests, which reflect minority interest in one of our managers, were lower sequentially by $0.5 million, primarily due to the increase in our ownership of the manager during the prior quarter. Net income as adjusted at $7.50 per diluted share increased 8% from $6.92 in the third quarter. For the full year, diluted earnings per share increased 20%. In terms of GAAP results, net income per share of $4.66 decreased from $5.71 per share in the third quarter and included $0.72 of expense related to the increase in fair value of minority interests, $0.41 of realized and unrealized losses on investments, $0.27 of CLO expenses and $0.17 of expense related to fair value adjustments of contingent consideration. Slide 13 shows the trend of our capital liquidity and select balance sheet items. Cash and equivalents increased sequentially to $265.9 million from $195.5 million at September 30. In addition, we had $140 million of seed capital investments to support growth initiatives and $142 million of other investments, primarily in our managed CLOs. Working capital was $134.5 million, up 24% from $108.5 million as cash generated more than offset the return of capital to shareholders and debt repayment. During the fourth quarter, we repurchased 52,176 shares of common stock for $12.5 million. We also made a $5.7 million payment on our term loan. At December 31, gross debt-to-EBITDA was 0.7x, and we ended the year in a net cash position of $29.8 million. We generated $88 million of EBITDA in the fourth quarter, up 5% sequentially due to higher average AUM and up 14% from the prior year level. We have adequate levels of working capital and modest leverage, providing financial flexibility to continue to invest in the business, return capital, and repay debt. In terms of cash balances, in the first quarter, we will make our annual incentive payments typically our highest cash usage of the year, and we will also make the annual revenue participation payment, which we expect will be similar to last year's level of $24 million. The bulk of the remaining revenue participation obligation will be paid in the first quarter of next year. I would also note that our intangible assets continue to provide a cash tax benefit, which is not included in our earnings per share as adjusted. The net present value of the tax asset is approximately $114 million or $16 on a per-share basis. And with that, let me turn the call back over to George. George?

Thank you, Mike. So, we will now take your questions. Dede, can you open up the lines, please?

Thank you. [Operator Instructions]. And our first question comes from Ben Budish of Barclays. Your line is open.

Hi, good morning. Thanks for taking the question. Maybe just to kick it off, can you talk a little bit about how you're thinking about how the year may unfold? I know the last couple of years, there's been very strong S&P performance. I know you guys tend to say -- you tend to see things shake out a little bit better in your non-correlated strategies when the markets are a little frothier. I know you indicated January, I think, flows looking similar to Q4. Where do you see yourself as sort of best positioned for the year? You kind of gave us some color on ETFs and retail SMAs, but maybe from a sort of strategic or asset class perspective, how are you thinking about the best opportunities in '25?

Yeah. No, it's a great question. And predicting how 2025 is going to play out in the markets, as you know, is going to be quite a challenge. So, I think as we've kind of looked through it, part of the purpose of our strategy is to have those diversified offerings. So, whether there is an opportunity to go to certain of the risk assets in terms of equities. Again, we have good offerings, or if there are searches for other income and fixed income strategies outside of cash, we have the fixed income. So again, fundamentally, we want to be able to try to take advantage of whichever way that goes. We're currently seeing and we sort of referenced the continued positive flows in fixed income. And I think that's continuing on. And right now, all else being equal, we continue to see those as the opportunities where we're having the most conversations and even seeing some mandates into some of the fixed income asset classes that were previously out of favor. So that could certainly be an interesting area where we'd love to see that emerge because we have some really interesting offerings. So, it's good to see the positive flows we've had in fixed income. It will be nice to see them broaden out, and particularly in other areas such as the global funds as well as some of those institutional mandates. So again, our goal is wherever the preferences are to make sure that we're meeting the demand. And that's really where we see a lot of the new product introductions is we're really trying to introduce strategies into those structures that people are gravitating towards, which again leads you to the ETFs, and for us, the global funds and more of the institutional offerings and obviously seeing less of the demand for the traditional open-end fund structure.

Understood. And maybe just one follow-up. How are you thinking about use of capital this year? Clearly, we've seen a pretty fairly steady pace of stock repurchase. Your dividend increase has been quite robust. The M&A question is sort of always out there. So, I guess the things that are sort of like the known knowns, seed capital for new products, things like that. And then any color on what may be in the M&A pipeline?

Yeah. So, on the whole capital, again, since we generate a nice level of cash earnings, and we're currently have lower levels of leverage, we have the flexibility to continue to look at things like returning capital as well as, to your point, investing in the growth of the business, which really does really get down to the seed. And generally, we have been very good in terms of managing and recycling our seed. But as those opportunities for future products arise, that is one of the utilizations we would consider in terms of using some of the cash if we were to offer a product that needed seed for a period of time. But again, I do think we have the flexibility to manage all of those areas. And again, I think we've shown that we believe fundamentally that return of capital is an important part of our strategy. Going to the M&A, and it has been a period of time since our last transaction. I think as we've said before, we continue to be very active in terms of evaluating opportunities. We do think there are things that could be additive to our business. We generally look at M&A in terms of only those things which we believe have a high value strategically to enhance the value of the business. So, we will not do M&A for the sake of doing M&A. We do think there are interesting opportunities out there, and we'll continue to evaluate those.

Understood, thanks so much for taking my questions.

Yeah, you’re welcome. Thank you.

Thank you. Our next question comes from Crispin Love of Piper Sandler. Your line is open.

Thank you, good morning. I heard some of your comments on January flows to date on retail ETFs and Institutional. And I know it's early in the quarter, but can you just put a finer point on your comments, excluding the partial redemption in the fourth quarter. Are flows better than January compared to the fourth quarter?

Yeah. And again, as you stated, January is only 1 month and who knows how the rest of the quarter will shape out. But yes, I mean, the retail funds are kind of looking very similar to what we've seen. We're happy that the ETFs, which really had a strong quarter are actually running ahead. Our ETFs, which were $3.1 billion at the end of the year, I believe as of yesterday, they were $3.4 billion. So, we're happy that, that has continued. We hope it continues through the rest of the quarter. And then again, the trajectory that we've seen, we've continuously had generally positive flows in retail separate accounts, global funds. That has not changed. And institutional, I think the indication we gave you is from what's known, is modestly more outflows than inflows. So yes, that would be better, obviously, than the fourth quarter. But a lot of the fourth quarter was that one large partial redemption, and I think it's important to look at that as an isolated incident given the backdrop of that, which was really a multi-manager product where they added an adviser and then had to reallocate from the other remaining advisers, which one of them was ours.

Thanks, George. I appreciate that. On the $3.3 billion partial redemption in institutional, it was partial. So, can you provide how much is the whole relationship and your confidence that this is just a onetime redemption here?

Well, I mean, it's a big and it's an important relationship. And again, as we indicated in our remarks, it was as a result of an additional manager into the existing multi-manager. So, we and all of the other managers, therefore, had reduced amounts of assets. We continue to view it as a good relationship where it's been a significant grower of assets for us over the period of time. So, I'm not reading anything into the reallocation to an additional manager into the future of that relationship. It's a really good relationship.

Thank you, George. Appreciate taking my questions.

Yeah. Thank you.

Thank you. Our next question comes from Bradley Hays of TD Cowen. Your line is open.

Hi, good morning. It's Bradley Hays on for Bill Katz. Has there been any change around your thinking for tax reporting? In particular, is there a potential to adjust your non-GAAP EPS to incorporate the tax shield rather than displaying it separately? If so, what are some of the key considerations?

No. And that's a really good question. And I think as you heard in our comments, Mike was, again, reminding people about the tax attributes and we firmly believe there is economic value in those, and that's why we do try to make sure that we provide the transparency of what that value is in terms of the gross level and even if you wanted to think about it on a per share basis per se. And as we indicated, it is not currently something we adjust for in our non-GAAP measures. We do periodically reevaluate our non-GAAP measures. And I think we have one or two peers that may include that in their measure. So, we continue to evaluate that. Again, our goal is to make sure we provide our results and our operations in the best way we can to make it as transparent and clear. And again, that is something that has true economic value to shareholders. So, we will continue to, at a minimum, to highlight that and point that out. Mike, anything?

I think, as George indicated, we did and have in the past disclosed a value ascribed to the tax assets, which is important given its benefit on a cash flow generation perspective. I think any time you evaluate the non-GAAP, and as George alluded to, there's some divergence in practice, but any adjustments that come across the GAAP versus non-GAAP. You want to make sure that there's transparency in that and that adjustments are appropriate. So, we'll continue to evaluate it. But at this point, it's just reiterating that the value is there and that investors are well aware of that element of value in the stock. Would appreciate that.

Okay. Great. Thank you. And then one follow-up. Following on a prior question, could you perhaps dig in a bit more on the M&A side, particularly for illiquid alts? Generally speaking, what are you seeing in the market in terms of deal opportunities and multiple expectations, and where that may defer?

Yeah. In terms of the kinds of areas that are interesting, and I think as we've previously kind of indicated, we have a really good collection of traditional public market managers in terms of equity and fixed income. And we continue to believe that clients will benefit from access to more of the private market capabilities. So, that is an area that we believe is a very good fit for us in terms of bringing those types of capabilities and strategies to market. Obviously, that is very similar to others in the industry who are all interested in looking for ways to optimize that. So that continues to be a high area of interest. And again, some of those capabilities in terms of multiples, the valuations that people attribute to some of the traditional long-only strategies are lower than the multiples that are currently being attributed to some of those private market strategies. So again, as we evaluate our opportunities, we think through that and ultimately with the goal of enhancing our own long-term valuation and our own trading multiple.

Okay, great. Thank you.

Thank you.

Thank you. Our next question comes from Annalei Davis of Morgan Stanley. Your line is open.

Hey, it's Mike Cyprys from Morgan Stanley. Can you guys hear me okay?

We can hear you now.

Yes we can.

Great. Thank you so much. Just a question on M&A. Just curious how much time you guys are spending on that now versus, say, three to six months ago? And maybe you can give a little perspective on the pipeline, what that looks like, how you're thinking about acquisitions versus partnerships versus JVs. Where you think these strategic opportunities might be most additive to the platform? And as you think about the financial flexibility, you guys are under one turn of gross leverage. How comfortable would you be taking that above two turns? Or said another way, how high would you be comfortable taking that in a hypothetical transaction?

Great. And you had a bunch in there. So, I'm going to try to hit each of those, and please circle back if I miss an element of that. In terms of how active we've been, what's kind of interesting, and I think I did comment, it's been a while since we've actually closed and announced a transaction. But I would say we have been just as active in terms of conversations and evaluations as we have ever been. And in fact, in some ways, maybe even slightly more. I think like everyone, we're being very thoughtful in how we consider what types of transactions we want to do, particularly for those that might be related to leveraging private market types of capabilities. Again, I think there's been a lot of that activity. Some of it has been successful. Some of it has been less successful. So, we do want to make sure we approach it in a way that makes sense. In terms of how we look at that, as we've always said, is we're flexible in our approach to partnering. Our goal will be to find the right partner. And if that right partner is -- this transaction structure is an acquisition of a majority or a minority or whether it's a JV. We evaluate all of those different types of structures because in some cases, the best relationship structure for the best offering may be more of a JV and a minority as opposed to a majority interest, particularly with some of the types of capabilities that you see out in the private markets. So I think we keep ourselves flexible to that. And in terms of our current levels of leverage, again, we've managed our balance sheet specifically to not only protect the business, but to give us that flexibility when those opportunities come. And I think currently right now, our turn, we're below one, and we have net cash at this point. For the right as we evaluate a transaction, we would look at it in terms of what is the long-term value that it creates. And generally, that would mean that there could be at the initiation of a transaction being at the higher end of a leverage multiple, which, again, I don't think we've been at probably for five or six years or even more than that. Did I get all your points?

You did. And I would just ask a follow-up, if I could, on that. Just curious as you think about a sense of likelihood for something to materialize over the next 12 months? And if so, as you think about that, where do you feel more confident on that materializing?

Yeah. I can't give any indication of that. Again, like a lot of people, there's lots of conversations going on. There's lots of opportunities. A lot of people are having those conversations. Many of them will generally won't go anywhere or they'll materialize. So yeah, I'm not giving any specifics around my expectations of when we'll have something. Again, we'll only consider doing a transaction if we conclude that one is the right thing and the right fit for us and the right way to create shareholder value.

Understood. So, I'll maybe ask a different follow-up instead since we didn't answer that one. Just given broader advances in data science and AI, I was hoping maybe you could talk a little bit about how you're investing in technology to enhance the investment engines across the organization and support alpha generation. How do you see that evolving in the near-term versus the long-term? And as a sort of multi-affiliate boutique firm, how do you sort of best harness that? Is it some sort of shared services at the center? Or do you think about it at each and every individual franchise sort of going about it in their own unique manner?

Well, on the first part, again, I think there are potentially incredible opportunities utilizing some of these technologies that have developed. And I think like a lot of people, we're being very thoughtful in terms of how we evaluate and do research in that area. And each of our managers is a little different. So, getting to the second part of your question, generally, we provide from an infrastructure standpoint. A lot of the information technology capabilities and tools and assets, but each of the managers manages their strategies in different ways. So we currently have managers that are utilizing very sophisticated types of quantitative and strategies that are in that range. So, each of the managers may employ them in a slightly different way, and several of them are currently doing some evaluations of different things. But before we introduce anything into an investment process, obviously, as you would expect. We're going to want to make sure that there's been a lot of thought and work put behind that. But each of them could be applied slightly differently depending upon the nature of a specific manager or strategy.

Okay, thanks.

Thank you.

Thank you. This concludes our question-and-answer session. I would now like to turn the conference back over to Mr. Aylward.

Thank you, Dede. And I want to thank everyone for joining us today, and obviously, certainly encourage you to reach out if you have any other further questions. Thank you.