The matters discussed on today's conference call include forward-looking statements about the business prospects of Healthcare Services Group, Inc. within the meaning of the Private Securities Litigation Reform Act of 1995.

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Ladies and gentlemen, thank you for standing by, and welcome to the HCSG 2021 First Quarter Continue Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

[Operator Instructions] I would now like to hand the conference over to Mr. Ted Wahl, President and CEO. Please go ahead..

Great. Thank you, Sharon, and good morning everyone. Matt McKee and I appreciate you joining us today. We released our Q1 results this morning and plan on filing our 10-Q by the end of the week.

Overall, the vaccine rollout has been a real game changer for the industry and a significant first step towards recovery with new COVID cases among patients and residents dropping over 90% between Q1 -- Q4 and Q1. We've seen similarly positive new case trends among facility staff as well.

The success of the vaccine has led to stabilizing occupancy and has been a huge morale boost for frontline workers. As positive an impact as the vaccine has had the reality is the exact pace and even pathway of recovery is still uncertain.

But we do feel good about the stabilization that's occurred and at least directionally where things appear to be trending. Our highest level view of recovery continues to be that it will happen but we're looking at a 12 to 18-month process with fits and starts along the way.

Ongoing federal and state agency funding and actions and supportive providers will be crucial in ensuring as timely and orderly a recovery as possible. Even with all of the pandemic related variables, we again delivered outstanding operational and financial outcomes in Q1.

Again similar to the themes of the past four quarters we did a great job of controlling the controllables around service execution, customer satisfaction and budget adherence and we expect those positive trends to continue into Q2.

As far as top-line growth with the revenue puts and takes that remain in play namely depressed census levels and facility access challenges coupled with our own more cautious approach during this most early stage of recovery, we continue to expect Q2 revenues to be flattish relative to Q1.

So while COVID remains a near-term headwind on revenue, some of the recent more positive industry and customer data have provided us with improved top-line visibility for potential growth opportunities in the back half of the year, which is really exciting for us to start to think about and plan for.

Before we move on to the discussions on Q1 results, I'd like to briefly touch on the SEC update we provided last quarter and again in this morning's release. As we previously highlighted, the company and the SEC have commenced discussions regarding a potential resolution to the investigation.

We're pleased that the matter has moved into this phase and hope to continue to work with the SEC to reach a final resolution.

As I'm sure all of you can appreciate beyond what we've disclosed previously and in this morning's release, we continue to be limited in what we can say about this matter especially while these resolution discussions are active and ongoing.

So with those introductory comments, I'll turn the call over to Matt for a more detailed discussion on the quarter..

Thanks, Ted, and good morning, everyone. Revenue for the quarter was $407.8 million with housekeeping & laundry and dining & nutrition segment revenues of $215 million and $192.8 million, respectively.

Revenue included $3.9 million of COVID related supplemental billings, primarily related to employee pay premiums, which were initiated by and then passed through to our customers. Net income for the quarter came in at $24.7 million and earnings per share was $0.33 per share.

Direct cost of services was $336.6 million or 82.6% well below the company's historical target of 86%. Housekeeping & laundry and dining & nutrition segment margins were 13.1% and 10.4%, respectively. SG&A was reported at $40 million or 9.8%.

But after adjusting for the $1.3 million increase in deferred compensation actual SG&A was $38.7 million or 9.5%. And during the quarter, SG&A was also impacted by about $2 million of legal and professional fees related to the previously announced SEC matter.

Longer term excluding any COVID or SEC-related costs the company's target remains 7.5% with the primary leverage existing and top-line growth. Investment and other income for the quarter was reported at $1.8 million, but after adjusting for the $1.3 million change in deferred compensation, actual investment income was about $0.5 million.

The company reported an effective tax rate of 25.2% and expect a 2021 tax rate of 24% to 26%. Cash flow from operations for the quarter was 30 -- I'm sorry $3.5 million. This includes a $30.7 million decrease in accrued payroll.

And because we called out the timing of the payroll and the impact of the payroll accrual last year, we would point out that the 2021 payroll accruals should have a similar cadence to what we saw last year. Q1 had the lowest payroll accrual of four days; Q2 should be 11 days; Q3 five days; and then Q4 13 days.

And Q4 will also be impacted by one-half or $24 million of the CARES Act deferred payroll tax repayment. That compares to on the payroll accrual three days, 10 days, four days and 12 days that we had in 2020 during corresponding periods.

But of course the payroll accrual only relates to timing and the impact ultimately washes out through the full year. We are pleased with the ongoing strength of the balance sheet and the ability to support the business, while continuing to return capital to HCSG shareholders.

We announced that the Board of Directors approved an increase in the dividend to $0.2075 per share payable on June 25. The cash flows and cash balances support it.

And with the dividend tax rate in place for the foreseeable future, the cash dividend program continues to be the most tax-efficient way to get free cash flow and ultimately maximize return to shareholders.

This will mark the 72nd consecutive cash dividend payment since the program was instituted in 2003 and the 71st consecutive quarterly increase that's now an 18-year period that's included four three-for-two stock splits. We recognize the dividend is important to our shareholders and we have increased it in line with our performance track record.

Additionally, the company remains authorized to repurchase 1.7 million shares of our common stock pursuant to the previous Board of Directors authorization and expect to repurchase up to one million shares through February of 2022. And with those opening remarks, we'd like to now open up the call for questions. .

[Operator Instructions] First question comes from Sean Dodge with RBC Capital Markets..

Thanks. Good morning. Maybe starting with the margins real nice sequential improvement across both segments. Maybe if you could just talk about the drivers there? And then as -- Ted you mentioned the potential that growth -- revenue growth resuming later this year.

Maybe the sustainability of these levels should we expect to see margins come back in a bit here as you begin to ramp for investments to grow again?.

Good morning, Sean. You know, you're right. We've talked a lot about managing the services we provide and our costs as efficiently as possible especially, in light of the census pressure that our clients continue to face.

So from a go-forward perspective, our expectation is to continue managing the staffing, the purchasing and the production based on census and maintain that focus as census recovers. As to the go-forward, there is a portion of that margin improvement that we expect will be sustainable. We're just not at a point yet where we're ready to quantify that.

Because exactly as you alluded to with growth will bring some inefficiencies and margin pressure as we inherit the inefficiencies of an in-house operation that we're assuming. It takes us some time to implement our systems and fully get those new opportunities on budget.

So 86% remains our target, but we are very much committed to ongoing management of the labor and supply cost as well as cash collections. So we do expect to maintain some of those improvements going forward just not yet in the spot to quantify..

Hi, Sean. And just to piggyback on to Matt's answer as well.

As you're well aware there's a significant portion of that "margin improvement" that is just math, right? It's the revenue reductions and the corresponding cost reductions that as census recovers, which we expect over the next 12 months to 18 months that math will work in the other direction.

So you have that coupled with the mix of business, right? And that changing, but as Matt highlighted there's a portion with the operational imperative and what we've been focusing on even pre-pandemic that we believe to be sustainable..

Okay. Thanks. And then on the revenue outlook. Ted the kind of the more encouraging outlook for the back half of the year. Can you walk us through what you need to see? What needs to happen for that to take place? You've got vaccinations done.

What other kind of milestones or markers are you looking for to I guess begin moving forward with the plans to implement new facilities?.

And maybe Sean for me, maybe to take a step back to your question and create some context and then I'll maybe get into more of the detail on it. But you're right in the sense that the vaccine has had an impact a tremendous impact which was a critical first step.

It's driving down cases in not just the patients and the residents, but also the frontline staff by over 90%. So that -- when you ask what are we looking for, that has led at least this past quarter to stability in census quarter-to-quarter. So that's certainly an early indicator of recovery.

But as I highlighted in my opening remarks, the path and the pace of recovery is still TBD. And then even one step further removed overall and longer term, why we have so much confidence around recovery is demographics.

Ultimately and maybe we don't speak about that enough, but that instills in us the utmost confidence that census will recover with that mix likely skewing more long-term residents rather than short-term patients for reasons we've talked about before.

When you think about occupancy recovery and how that relates to HCSG and to your question more specifically to revenue in this environment, I would think of revenue as a lagging indicator meaning census first and then following would be cost and revenue, both on the way up and on the way down cost and billings in the context of the customer.

So when we think about sector occupancy stabilizing in Q1, along with very modest new business adds and really modest facility exits, that's why I mentioned Q2 being flattish like we highlighted even on the previous call.

But the back half of the year, the occupancy certainly stabilization does give us more visibility into some customer opportunities in both EVS and dining, but especially dining.

Because when you think about dining, they're largely cross-selling opportunities, where some of the challenges I highlighted earlier around facility access are lessened and even our own customer assessments are more straightforward, since we have that existing client relationship.

So feeling good without being able to pinpoint a number or a dollar amount, we're feeling very good that we'll start seeing some sequential growth and maybe in the aggregate comparing first half of this year to second half of this year..

Okay. Sounds good. Thanks again..

Hey, thanks, Sean..

Next question comes from A.J. Rice with Credit Suisse..

Hi. This is Rob Moon on for A.J. Rice. Thanks for taking my questions guys. Around your largest customer Genesis we've seen them divest about 40 facilities in 2020 and talk to at least 70 more in 2021.

Just curious, if those facilities rolling off in your kind of outlook for growth opportunities in the second half? And then also if you could talk to maybe the retention rate you guys generally have when a facility rolls off or even the process that takes place when a new operator comes in and if you have a chance to go after that business or what those discussions look like?.

Yeah. Good morning, Rob. I would say just sort of to speak at a very high level as to kind of the health of the Genesis partnership. From the facility level up through the C-suite that relationship, that partnership remains strong and it's an important one for I would say both us and for Genesis. They've been a great partner.

There's frequent and very open communication. And from our perspective, they've continued to pay us within terms, which is an especially important marker as to the health of the relationship.

And quite honestly, Genesis has continued to execute the plans that they've outlined both publicly and to us, right? And that's both their portfolio optimization plan and continuing to seek relief from landlords and leases.

That portfolio optimization plan being an important part in rightsizing their holdings and really refining their operational focus. So we expect to continue working with the Genesis leadership and to deliver our services at the facility level as to those pending and perhaps even future facility transitions that you alluded to.

As those details unfold, we expect that at a minimum we'll have a seat at the table. We'll have an opportunity to engage with the new operators and determine if maintaining a partnership at those facilities would be mutually beneficial. There is a process that unfolds. We largely treat those as a new business opportunity.

Now obviously, we have insight into the inner workings from an operational perspective of those facilities, but we have to assess the financial health and well being of that acquiring company to make sure that they're a partner with whom we feel comfortable working.

So, going into it the companies that Genesis has partnered with to date have yielded good results for us and we've been able to retain almost all if not all of that business. So, at a minimum we expect to have seat at the table. We expect to have those conversations. And we're not assuming any loss of that business going forward.

But, if things change, we'll certainly keep you apprised of any of those developments..

Great, thank you. And then, I guess just one follow on. Your customer base in general -- occupancy does seem to be stabilizing in a positive trajectory from here. But it seems the advance Medicare payments, are still needing to be paid back in the payroll taxes.

Just curious as to how you guys are thinking about a potential increase in bad debt expense at some point.

Are we kind of out of the woods on that? Or is there still some risk in the next few quarters in the customer base? What are you seeing there?.

Well, I think with -- certainly with the weekly payment design we've implemented now going on two years, there's -- we had improved visibility and I think predictability in terms of payment. And again, if you look back over the past couple of years, eight of the nine last quarters we collected what we've billed.

So, for us, it's a matter of daily, weekly, monthly execution on that. So, we're never out of the woods regardless of how stable or unstable the times maybe. But again, with that weekly payment initiative and continued focus that we have around that part of the business, we feel confident moving forward in being able to deliver and achieve our goals.

Having said that, you mentioned the repayment of the Medicare Accelerated and Advance Payment Program, we're going to continue to monitor what exact -- what government both federal and state actions are on the comp. We're taking a bit of a wait and see approach.

I think in the prior administration, there was a pretty clear line of visibility into how they were thinking of everything. And I think the new administration with some of the new appointees, it's still wait and see. I think some of the early dialogue has been positive.

But, whether it's the repayment of the Accelerated and Advance Payments, the Medicare three-day rule waiver, CARES Act, now that that's completed and some of the new legislation that's on the horizon.

We're going to monitor that closely and see what impact that could have positive or negative on our customer base and that obviously will determine certain courses of action we would take with our customers..

Great. Thanks, guys, and good job in the quarter..

Thank you..

Thanks, Rob..

Next question comes from Andy Wittmann with Baird..

Hey, great. I guess I just wanted to drill in a little bit more on some of the prior questions and around that growth outlook, Ted. It sounded like stabilizing occupancy is one of the core reasons, if not the most important reason for the second half more positive outlook that you're kind of feeling here today.

But, just in terms of new facilities, I was hoping you could just comment on what the outlook is on the potential for net new facilities recognizing that the industry is deconsolidating your track record pertaining them is excellent. There might be some that do slide to the cracks just given the amount of deconsolidation.

So again, can you just like talk about kind of the pluses and minuses on potential for adding new facilities not just occupancy?.

Yes. Yes, well, I guess when we think of back half of the year and just to be clear, I was more highlighting census just for the purposes of thinking about revenue and the impact that that has -- had over the past six to 12 months, and will likely have as a tailwind to any revenue growth over the next six to 12 months.

But, most of my -- what I was intending to comment around, Andy, was more greenfield opportunities or cross-selling opportunities, so actual net facility growth as you called it.

So that's when I talk about having additional visibility into the back half of the year, I'm specifically talking about net new facility growth, not just census recovery and as a result some tailwind to the revenue growth..

Okay..

And I think, Andy, to your point on the deconsolidation within the industry.

We view that really neutrally, right? I mean if you look at our customer base, it really does and has always mirrored the industry at large between the large national type operators the regional players and then the smaller independent operators or even non-for-profit facilities.

And certainly that middle bucket the regional type player is the bucket that we're seeing with the most growth potential going forward. So that's a good thing for us. And it really doesn't change the way that we target the business or sell the business or execute from an operational perspective.

And that we obviously need to assess each facility as its own unique opportunity regardless of the ownership structure or whether that one facility is part of a multi-hundred facility chain or it's a stand-alone facility.

Because it's important for us to understand in serving that facility how we would staff the building, how we would supply it, what our cost structure looks like specific to that facility, assuming that we will honor the facility-specific conditions of employment as far as wage rates benefits et cetera.

So in that sense, it doesn't change our prospecting -- prospects, our sales process nor our operational efforts. So we're happy to continue to play along as the industry evolves. .

Got it. Great. And I guess my follow-up question that I just want to touch on because I just haven't heard your response to this one in a while. Not directly related to anything here in the quarter, but just kind of bigger picture.

And that's about Ted you've talked -- kind of dabbled a little bit in other classes of senior living including -- you've talked about that there might be an opportunity in assisted living dining maybe even other parts of the continuum for senior care and senior living.

Just with so much change happening in the SNF world and -- I was just wondering if you had any updated thoughts about your desire or interest in growing that business out.

If you've done anything to mark down that or if you've been really hunkered down in dealing with the present-day challenges of COVID on the core business? So just kind of wanted an update there?.

Yes. We're always evaluating always assessing.

And I've talked about before how one of the great benefits we have as a company and being designed in almost a franchise-like way with an entrepreneurial spirit throughout the organization is that we are able to trial, evaluate and even commit on a trial basis, when we're interested in whether it's a new service line as you said or a new initiative.

I'd say for the moment though, Andy we've had our hands full just in focusing on the task at hand which has been COVID within our niche, but still continuing to evaluate new opportunities.

And there have been new opportunities or new situations that we were proposed to pursue with all of the changes just in society and certainly within cleaning and sanitization that have been brought our way. So, we're going to continue to explore those opportunities.

But for the moment our focus is almost exclusively dedicated to the niche and navigating our way through with our customers this situation and the pandemic. .

Okay. Thanks a lot guys. Have a good day..

You too, Andy..

Thanks Andy..

Next question comes from Ryan Daniels with William Blair. .

Hey guys Nick Spiekhout here for Ryan. Congrats on the quarter and thanks for taking my questions. I guess the first one would be going on from the sales process.

I wonder if you can provide kind of an update on, how SNFs are kind of allowing you guys to come in? Are you guys on-site or is it still kind of a little bit of the COVID era sales process right now?.

Yes. Ted touched on it a bit earlier Nick, but I would say that for sure the sales opportunities that are more imminent for us would be the cross-sell of dining services with our existing housekeeping customers.

It's -- we haven't spoken about this quite a bit in some time, but we're still less than 50% penetrated in providing dining services to our existing housekeeping customers.

So given the lack of access that has been prevalent throughout the industry over the past 13 months or so there's been a great opportunity to advance those discussions with our housekeeping & laundry customers.

Some of whom have been waiting for us to provide dining services in their facilities for years now and it's just been a capacity issue where we've not yet been able to expand and provide those services.

So that -- although the kind of shifting paradigm with -- as it relates to infection prevention and infection control has certainly got a lot of attention from an environmental services perspective a housekeeping & laundry perspective. I'd say, most imminent from a growth perspective has been the access allowed to explore those dining opportunities.

Beyond that, there is an access issue that remains in place. And it varies geographically and it varies by customer group. But our sales folks have absolutely continued to initiate dialogue and field those inbound requests to cultivate the opportunities such that, when we are able to access the facilities we can do so in a swift manner.

And of course, that has to be coordinated with the local operations teams from a management capacity perspective to make sure that we're doing a thorough analysis of the facility to make sure that operationally, we can implement our systems and operate it according to our budgetary expectations, all the while conducting that exceedingly thorough financial analysis of that would-be partner.

That's always been a really important part of our sales process. And obviously, in this moment, continues to be more important than ever.

So, it's that current assessment of their financial wherewithal, their view of contract integrity and the light in which they would view our partnership, their ability to pay us and just as much their intention to pay us, on-time and in full.

So, as is always the case there's a lot that goes into it, but certainly we're beginning to see a loosening of the access, sort of, limitations that we had faced over the past 13 months and are optimistic that feeding into the back half of the year. We should be well positioned to begin exploring new business adds..

Great. Thanks. And then, kind of, as we're moving into a little bit more, kind of growth, more normal growth in the second half. I'm assuming, kind of given the margin profile there's not a large pipeline of the management kind of trainees ready to go at the moment.

Is that something that you are starting to kind of build-up now? And will it be the type of -- hit the ground running type of thing as you get into H2, as those management have been trained up and are ready to go?.

Yeah. It's actually a bit different than how you -- what you presupposed in the sense that, we are actually more in a business-as-usual environment with respect to management development and including the recruiting of the managers. So that part is spread out throughout the country.

And there's, different areas that have different stages of management development. And it's always the most important part of the business and one of the things that we're always trying to do a better job at. But we are essentially normal course of business in management development.

I would not characterize our thoughts on the second half of the year and the growth opportunities as being normal course just yet or business as usual. I think that's something we're going to continue to evaluate.

However we do feel good that, directionally and from a visibility perspective, we are going to have some opportunities to expand our footprint..

Okay. Great. Thanks guys for the color..

Thank you..

Next question comes from Brian Tanquilut with Jefferies..

Hi guys. Congrats on the quarter. I guess,….

Thank you..

… you clarified Ted. Yeah. No, definitely. And just to clarify on your comments on, the revenue expectation for Q2 and the back half of the year.

So on the Genesis assets that are being transferred to ProMedica, are you assuming that those stay with you through the whole year? Is that the way you're thinking about that?.

Well, for us, when we're talking about growth we're not looking at it just on a net basis, right? That's -- there are certain unknowns.

So what I've talked about in terms of growth and what we're comfortable talking about is, our view on adding new clients, whether they be greenfield or adding additional services through a cross-selling of dining services to an existing EVS client. That's where our conviction has increased as a result of that visibility.

But in terms of trying to predict the future with any customer transition, whether it be an independent mom-and-pop or otherwise, the best I think data point to look towards would be our past experience, where we're typically successful in retaining greater than 90% of any sort of customer transition.

And for us, and Matt alluded to it earlier, that's foundational to our growth, as we're in a constant state of transition with customers and clients, whether it be at the administrator level or owner/operator level.

And we've proven adept at developing those new relationships, and then, when the situations present themselves, leveraging those relationships for expanding the company or for growing with that new customer.

So conviction, high conviction and with improved visibility that we should see some sequential growth back half of the year, compared to first half of the year. And I would just point to past being prologue in terms of our expectations around retaining, whether it be administrator, or principal, or owner transitions Genesis or otherwise..

Got you. And then I guess just a follow-up to the question on consolidation versus deconsolidation.

As we see some of these new players emerge like a ProMedica, for example, how do you see -- what are your relationships with the emerging new consolidators? I mean, are these existing relationships already? Or are these new opportunities for you guys as things open up in the space?.

Yes. It's interesting, Brian.

This is an industry that tends to be fairly incestuous, if not quite incestuous then certainly exceptionally highly networked, right? So whether you're talking about a new regional player or a mom-and-pop that's building some momentum, it tends to be that we either are familiar with the principals or if we don't know them directly we know someone who knows them.

So it has been fairly fluid for us to gain introductions and to begin to build relationships with some of the newer operators that are getting more aggressively into the space.

But I would again sort of point back to the paradigm for us, which is that regardless of the ownership structure, the complexity of the organization or the design, the size of their holdings it has to be a bottoms-up approach for us in both our targeting and our sales efforts and even ultimately in our contracting and then certainly very clearly in our operational pull-through and execution.

So regardless of that topside ownership structure, management structure, we certainly want to make sure that we are comfortable with and develop relationships with the C-suite inasmuch as that's applicable. But much more important for us is the grassroots efforts. And that holds within our district and regional structures.

Ted alluded to the element of that that relates to management development, but it also holds for business development where our local operators are responsible to cultivate their relationships and use those relationships as an opportunity and an avenue for future growth.

So, very much more a bottoms-up than a top-down process for us as it relates to new business opportunities..

Got you. And then Matt just really quick for me. Just a clarification.

On the cost of revenue line any call out this quarter workers' comp bad debts that changed in terms of accrual rate?.

No. No, nothing as noteworthy as the work comp that you called out from last quarter. .

Okay. Got it. Thank you..

Thanks, Brian..

Last question comes from Mitra Ramgopal with Sidoti..

Yes. Hi. Good morning. Thanks for taking the question. First, just on the financial health of your clients and just the industry in general. I believe you talked about in the past about $5 billion being allocated towards the industry to help through the pandemic.

And I was just curious if your clients are receiving that funding or still waiting on that?.

Yes. I would say, Mitra, census recovery is going to be over the next 12 to 18 months.

The most critical part of as it relates to the, let's say, the business recovery if the clinical crisis is behind us with the success of the vaccine, the business challenges vis-à-vis funding and operating at these still depressed census levels anywhere from 10 to 15 points below where they were prior to the pandemic is going to be the most critical part to that.

And I mentioned it in some of my commentary and responses to the questions, but we're going to keep a close eye on both federal as well as state actions, administrative and otherwise over the coming months to see the commitment levels because whether it's the three-day waiver -- three-day rule waiver, whether it's the Accelerated and Advance Payment Program that's in the process of being repaid.

There's the 1.3% increase in Medicare Part A payments, which is right now being considered. CMS is also at least thinking about recalibrating PDPM. So, there's a lot of moving parts that we're going to keep a close watch on. But census ultimately, will be the driving force behind stability, financially, as well as operationally for the industry..

Okay. No, that's great. And then just on the vaccine rollout. I saw a recently article that highlighted that maybe about 90% of nursing home residents have been vaccinated, but maybe only about 60% of the health care workers within those facilities.

And is that disconnect impacting the ability to maybe see a quick recovery than we might have seen otherwise?.

Yes, I don't think so Mitra. I think the most important population in that setting who needs to be immunized would be the residents very clearly.

And I think, there's not been data that I've seen that have sort of parsed the lower vaccination rates among employees relative to those who have had a COVID infection previously and would thus be naturally immune versus those who have flat outright objected to receiving the vaccine versus those who have received it.

So I've not seen any really compelling data that show that the disconnect between resident vaccination rates as compared to staffing vaccination rates have had any negative impact on tamping down infections within the facility because certainly, the data that we show with respect to COVID infections among both the resident and the employee populations have gone down far greater than 90%.

So, we're seeing that very much effective immunization levels within the facilities. Now, interestingly to your point, when we have seen some community outbreaks, there's been some level of corresponding facility level outbreaks and that's probably driven by the employees. So there is certainly some credence to the notion that you floated.

But generally speaking, I would say that predominant focus has been on the residents, that's for sure..

Okay. That’s great. Thanks for taking the question..

And at this time, I will turn the call over to the presenters for closing remarks..

Thank you, Sharon. We know 2021 will still have its share of pandemic-related challenges, but the early success of the vaccine, coupled with learnings and innovations of the past year is cause for optimism.

As the industry continues its gradual shift from crisis mode to a state of recovery, our commitment to internal investment and returning capital to shareholders, underscores our positive longer-term growth outlook and creates value for all stakeholders.

So, on behalf of Matt and all of us at HCSG, I wanted to again thank Sharon for hosting the call today and thank you to everyone for participating..

This concludes today's conference call. You may now disconnect..