Good day, ladies and gentlemen, and welcome to the Q1 2019 Providence Service Corporation Conference Call. [Operator Instructions] As a reminder, this call is being recorded..

I would now like to introduce your host for today's conference, Suzanne Smith, Chief Accounting Officer. You may begin. .

Thank you, operator, good morning. This is Suzanne Smith, Chief Accounting Officer of the Providence Service Corporation. Thank you for joining Providence's First Quarter 2019 Conference Call and Webcast..

With me today from Providence are Carter Pate, our interim Chief Executive Officer; and Kevin Dotts, Chief Financial Officer. Also joining us on today's call is Jeff Felton, Chief Executive Officer of LogistiCare; and Dr. Robin Heffernan, Chief Operating Officer of LogistiCare and co-founders of Circulation..

During this call, members of the management team will be referencing the presentation that can be found on our investor website under the event calendar and in the current Form 8-K, which was furnished to the Securities and Exchange Commission yesterday. .

Before we get started, I would like to remind everyone that during the course of today's call, the company's management will make certain statements characterized as forward-looking statements under the Private Securities Litigation Reform Act.

Those statements involve risks, uncertainties and other factors which may cause actual results or events to differ materially. .

Information regarding these factors is contained in yesterday's press release and in the company's filings with the SEC. We will also discuss certain non-GAAP financial measures in an effort to provide additional information to investors.

A definition of these non-GAAP measures and a reconciliation to the most comparable GAAP measures is included in our press release, investor presentation and in our Form 8-K..

Finally, we have arranged for a replay of this call, which will be available approximately 1 hour after today's call on our website, which is www.prscholdings.com, or via the phone numbers listed in our press release. .

And with that, now, I will turn the call over to our interim CEO, Carter Pate.

Carter?.

Well, thank you, Suzanne, and good morning, everyone, and thank you for joining us today for Providence First Quarter 2019 Earnings Call..

I'd like to introduce a couple of new people on today's call. I've asked Jeff Felton, CEO; and Robin Heffernan, COO of LogistiCare to join us today. .

LogistiCare is Providence operating subsidiary, as many of you know, and is the nation's largest manager of nonemergency medical transportation programs for state governments and Managed Care Organizations. .

Robin and Jeff are planning to give you an idea of how we're transforming LogistiCare into a technology-enabled company. In addition, they will provide insight on the operational and technological process that we are driving at LogistiCare..

Now before I hand the call over to them, Kevin and I will provide an update on the company's first quarter 2019 performance. Now I'd like to hit on the organizational consolidation first.

As many of you remember, when I originally made the announcement, a little over a year ago, we indicated to investors that we would substantially be complete with the transition by the middle of this year.

And it comes with mixed feelings that while we have executed on that promise to you, tomorrow is the last day for our legacy Providence employees that are located in our Connecticut and Arizona offices.

It has truly been a pleasure working with this great group of people, and this transition would not have been so seamless had it not been for the commitment of these individuals over the last year. And I wish each of them the very best in their future endeavors. Thank you so much for your service over the past years..

Now moving on to the financials. The first quarter delivered strong revenue growth of 9.2%. Total Providence adjusted EBITDA was $12.2 million and adjusted EPS was $0.37 for the quarter.

The strong revenue growth was driven by combination of new contracts, higher utilization in some of our non-full risk contracts, which include fee-for-service and reconciliation contracts as well as growth in some of the markets outside of our core Medicaid business. .

A milder winter impacted margins this year as well as adjustments ineligibility within certain contracts that drove higher member utilization. Additionally, we incurred incremental operating expenses related to the Circulation acquisition and invested in technology as we prepared to rollout our technology platform to the market..

Now as a reminder to investors, approximately 67% of our contracts are full risk capitated contracts, which means we are responsible for transportation costs when we see higher utilization. .

On the adjustments ineligibility within certain contracts, many payers typically reset membership list and covered benefits at the beginning of each year. As some plans remove or add members or services, we can sometimes see profitability impacted in the short term as contractual rates may not keep up with the overall contract profitability.

However, as mentioned previously to investors on many of our calls, once we're able to document a negative trend occurring in a contract, we are able to reapproach many of our payers and to bring contractual rates in line with cost. .

As a reminder to investors, these adjustments may take several quarters to come to fruition, which is why we believe investors should measure the company over a 1-year period.

That said, the LogistiCare management is focused on several priorities including customer rate negotiations and other impactful initiatives, which are still expected to bring down transportation costs in the short term. For that reason, we believe the company is still on target for the year. .

In terms of our long-term outlook, we remain confident in the value generated from the Circulation acquisition and still expect to achieve run rate savings of $25 million by the end of next year..

Now before I turn the call over to Kevin, I wanted to hit on Matrix for a minute. I recently joined that Board at Matrix, and I'm pleased to see firsthand how the team has responded to the challenges in the business that we talked about last year.

As many investors may recall, during our last earnings call, we indicated that Matrix' core in-home assessment business was realizing some potential customer churn, as one of their larger customers was in the process of potentially in-sourcing some of that volume.

But despite this, the management team was able to deliver 9% year-over-year revenue growth in the core in-home assessment business, which exceeded our internal expectations..

Matrix mobile assessments, we used to call HealthFair, had a slower though expected quarter. Mobile's muted results were primarily a result of lower visit volume and cost with the continued integration into a unified technology platform.

Integration is on track to be complete in the second quarter of 2019, which will allow management to further focus on fortifying the client base of the mobile business..

Lastly, the mobile business is expected to gain traction in subsequent quarters benefiting from an integrated platform and service as well as continued value proposition of the unique capabilities for new and existing clients..

Now with that, I'll turn the call over to Kevin Dotts, Providence Chief Financial Officer.

Kevin?.

Thanks, Carter. Before I get started on the results, I wanted to highlight the change in our segment reporting.

With the substantial completion of the organization consolidation, we have combined the NET Services and the Corporate and Other segments into 1, while also recasting service expense and G&A expense to reflect the removal of the holding company operating structure.

Although the public company costs, formally holding company costs, are now combined with NET Services, we continue to track these costs in order to make sure we are on target to achieve the financial savings as indicated to investors at the announcement of the project..

The public company, or formally holding company, costs were $4.7 million in the first quarter of 2019 compared to $6.9 million in the prior year period, an early indication of the benefits we discussed when we announced the transformation last year.

The company remains on track to achieve at least $10 million of run rate savings as part of the organization consolidation..

Revenues increased 9.2% for the first quarter to $367.8 million. This growth in revenue was driven by new Managed Care contracts, MCO contracts, in Minnesota and Illinois and a new state contract in West Virginia as well as higher revenue from our non-full risk contracts. .

Lastly, we picked up additional revenue from Circulation, as the company generated $9.4 million of revenue. These increases were partially offset by the impact of contracts we no longer serve, including a state contract in Rhode Island and certain MCO contracts in Louisiana..

Adjusted EBITDA was $12.2 million for the quarter, which, as mentioned previously, includes $4.7 million of public company cost. Excluding public company cost in both periods, adjusted EBITDA as a percentage of revenue was down 250 basis points as a result of higher transportation costs and expenses related to Circulation operations..

As Carter mentioned, from time to time we experienced periods of higher transportation costs and/or utilization leading to a negative impact on margins in the short term.

However, as we also experienced in the past, we are typically able to work with the payers to realign rates in order to reflect the shifts in transportation costs and utilization, resulting in an improvement in margins.

As context, when we set the rates we partner with our customers leaning heavily on historical data to determine expectation -- expected utilization and cost. However, public policy decisions and other factors can result in a change of behavior, an increased utilization and/or cost.

That said, we reiterate that the margins of the business should be measured over a 1-year period..

Excluding transportation cost, we have seen a year-over-year reduction of 160 basis points in cost as a percentage of revenue and excluding Circulation as well a total of 190 basis points reduction year-over-year.

This is attributable to some of the initiatives we are implementing prior to moving LogistiCare's markets onto Circulation's technology platform..

Jeff and Robin will go into further detail on some of these key initiatives, but we are seeing real reductions in our per call cost within our call centers. This expense is the second largest expense of the company behind transportation expense..

Matrix. Regarding our investment in Matrix, let me remind investors that Matrix is treated as an equity investment and therefore, we do not consolidate its revenue or its adjusted EBITDA in our financial statements. .

From an income statement perspective, we recorded an equity loss of $1.7 million in the first quarter of 2019 compared to an equity loss of $2.3 million in the first quarter of 2018.

Matrix results on a standalone basis for Q1 2019 include $1.5 million of ongoing integration cost associated with HealthFair and Q1 2018 included $2.2 million of transaction cost and $0.7 million of integration cost related to the HealthFair acquisition..

On a standalone basis, Matrix had revenue of $67 million in the first quarter of 2019, a decrease of 0.7% compared to the prior year period and adjusted EBITDA of $14 million, a decrease of 1.4% versus the prior year period. The reduction was primarily due to lower mobile assessments visits partially offset by growth in in-home assessments. .

Consolidated adjusted EBITDA margin for Matrix was 20.8% compared to 21.1% in the first quarter of 2018, primarily due to lower mobile revenue partially offset by the reduction of mobile direct cost and higher in-home visits..

As Carter mentioned, earlier in the year, we anticipated that Matrix would see slower volume growth resulting from membership pullback; however, we did not see any pullback in the results noting strong Q1 2019 performance with assessment volume growth of approximately 10% and adjusted EBITDA growth of approximately 31% on a year-over-year basis..

Adjusted EBITDA was 27%, which benefited from higher visit counts, higher average sales price driven by growth from its peripheral artery disease offering and lower direct cost from operational improvements. Additionally, membership is above plan as management has been focused on higher conversion rates in Q1 compared to the same quarter last year..

On the HealthFair or mobile assessment side of the business, the management team continued to focus on generating volumes. Although the mobile business was dilutive to earnings during the first quarter of 2019, the team continues to work towards a goal of profitability in the second half of the year..

I'll turn to the balance sheet and cash flow. I would like to first to point out that we have adopted the new lease standards adding $23.2 million of assets and $24.5 million of liabilities to the balance sheet. The company has elected to not restate prior periods for the new lease standard..

Moving on to cash, we ended the quarter with a strong balance of $42.4 million. Please note the strong cash flow generation for the quarter benefited from some working capital timing. We typically pay providers on a biweekly basis resulting in 2 months, where we will see 3 transportation provider payments made. These ones typically incur in Q2 and Q4.

That said, we continue to expect 2019 to be a solid year for cash generation, as LogistiCare continues to maintain its asset-light operating model despite investments in the Circulation technology platform this year. Additionally, we still expect meaningful tax benefits in Q4 from the sale of WD Services. .

So far this year, we received $5.2 million of the $34.3 million of refunds that we expect to receive this year, and we expect to receive the remaining balance of $29.1 million in the fourth quarter of this year. With that, I will turn the call back over to Carter.

Carter?.

Thanks, Kevin. And I'd like to now turn the call over to Jeff and Robin. Some of our investors have probably already gotten a chance to speak with Jeff. Robin joined Providence and LogistiCare at the end of last year when we completed the acquisition of Circulation. So Jeff, go ahead. .

Thank you, Carter. Both, Carter, Kevin and I have received a lot of feedback from investors thirsty for an update on the transformation that we're undergoing at LogistiCare..

As I think, many of you know, we are a clear leader in the Medicaid nonemergency medical transportation space. We have a presence in 49 states, serve 24 million members annually, and have relationships with 5,000 transportation providers. It is our vision to expand this leadership position to serve adjacent faster-growing markets.

To accomplish this we needed a platform capable of accomplishing 2 things. First, we needed people, process and technology capabilities that would enable us to leverage our enormous scale to achieve new levels of efficiency and effectiveness to deliver excellence to the payers and members we serve today. .

Second, we needed a technology platform that enabled access to adjacent market, so it needed to be flexible, scalable, on demand and much more consumer centric..

Historically, we've achieved success by serving the needs of a vulnerable population. Those we serve are the most frail of an already fragile population. The population we serve is medically and behaviorally complex.

And if we are doing our job, we are ultimately lowering the cost of care by ensuring adherence to ongoing treatment regimes and keeping the members we serve out of emergency rooms. The population that uses our services is 40% behavioral, composed of adults and children with developmental and intellectual disabilities and substance abuse.

20% of our passengers are dialysis and 15% are preventative..

The ROI benefit to this subset of the Medicaid population has proven to be over 10x. A core competence of ours is a detailed understanding and optimization of the intricate relationship between population mobility and care coordination in the non-acute continuum of care..

We are leveraging this knowledge and our existing customer relationships to expand into our nearest adjacency Medicare Advantage. .

Our MCO customers have applauded our approach and we have multiple initiatives in play to work with them on serving the Medicare Advantage market. To put some metrics around this, the Medicare Advantage market currently represents approximately 10% of our business, and we've seen our Medicare revenue grow by 33% over the past 2 years..

Moving on to Circulation and how it will help us grow beyond the traditional Medicaid and Medicare markets.

Circulation brings a contemporary, flexible technology architecture to the nonemergency medical transportation space that addresses health care transportation from an on-demand user interface, while still fulfilling the credentialing, benefits management and compliance capabilities our customers demand.

The Circulation platform ultimately allows us to expand our ridership base beyond our current Medicaid and Medicare markets, which we estimate to be around $4.4 billion to a total addressable market of approximately $10 billion. This expansion includes the ambulatory clinics, drug adherence, VA and accountable care organizations, to name a few. .

To put this plan into motion, as Kevin touched on earlier, and as we have discussed previously, we've launched a multiyear market conversion plan to migrate each of our locations and contracts from the LogistiCare platform to the Circulation platform.

We have restructured the business to focus on a Center of Excellence model, which reduces the layers in core functions that form the most significant elements of our cost base and drive performance for our clients and the members and patients they serve.

In addition, a lot of the prework that we are doing in the call centers is already reducing headcount, and this is before migration to the Circulation platform. .

I'm excited about the course we have charted for the coming years and believe we embraced a transformation that allows us to more efficiently and effectively serve the needs of our existing customers as we simultaneously expand our available markets. .

With that, I will turn it over to Robin to dive deeper into the technology and the transformation of foot. .

Thank you, Jeff. It's with great pleasure to be on the call today speaking to our investors. I will provide some color on our new technology platform, and how this platform will benefit our business operations and enable the larger transformation we're undergoing..

one, a push from more technology and data to make health care always on and always accessible; two, new consumer expectations focused on convenience and simplicity; and three, more economic incentive for our clients to drive down their total cost. These are our value-based care initiatives. .

These trends are driving de-institutionalization of care, hence, moving away from traditional facilities and into a new ecosystem for care delivery focused around the community and the home. We have more and more clients who are expanding their ride benefit for members.

We're supporting more rides for behavioral health and substance abuse management, and we have more clients who use our solution to power home care services. We believe the future of health care will operate in this new ecosystem and rely on easy access, trusted navigation and a frictionless experience for the user.

For us to be successful on this new world, we need a sophisticated technology platform. That said, we also need that same enterprise technology platform to service our clients today.

We hear common feedback from our payers, such as, please give us fewer members complaints, greater member empowerment, fewer driver no-shows and shorter wait times, stronger communication and a true sense of partnership. .

The Circulation platform is a sophisticated enterprise platform that was developed from the ground up to address the immediate needs of our payers while also positioning our company to succeed in the longer term. .

one, operating leverage; two, network efficiency; three, a better member experience; and four, a way to scale systematically. I'll talk a little bit about all 4. .

Operating leverage comes from structured and programmatic eligibility assessment, benefit authorization, exception handling in claims and billing. The result, a fewer calls and shorter call times to schedule and manage rides.

Programmatic logic also allows for the use of the platform by providers, caregivers and members in a secure environment without worry of misappropriate usage or unintentional utilization..

Network efficiency is a result of a digital on-demand network for all levels of service. Real-time ride monitoring and programmatic preferences and controls to optimize ride assignments and minimize potential fraud ways and abuse. The result is better on-time performance, shorter wait times, higher-ride satisfaction..

We also see better relations with our transportation partners, as they can spend less time focused on ride acceptance and billing and more time on delivering high-quality rides. .

We have a unique focus on our members and this is intentional. We enable members and caregivers to schedule rides directly, initiate rides when they're ready to go, understand driver ETAs and watch real-time maps. They have a direct anonymous line to their driver, they can quickly rate every ride and more.

Although we're very technology savvy, we interact with members based on their preference, for example, via our app, text message, landline phone calls and e-mails in multiple languages..

As Carter mentioned, on the last earnings call, we've already have several clients using the Circulation platform and they're experiencing these benefits. We're excited to get all of our clients onto the digital platform and we are now converting full geographic markets. Our conversion activities are on schedule.

And as planned, we launched our first full market conversion in Massachusetts on May 3, and our plan remains to substantially convert all markets by the end of 2021..

In parallel to our technology and conversion efforts, we're also implementing a number of process improvements across our organization to prepare markets for conversion and to achieve some quick wins prior to full technology enablement..

Our new centralized operating model has helped us identify best practices and playbooks across the organization and then implement both targeted pilot initiatives and full-scale new processes. Early results are positive, I'll share a few. Our new member experience team has already reduced member complaints from 0.7% to 0.3% across all our operations.

Our new consolidated workforce management solution and daily standup calls for our contact centers are helping drive down operating expense 190 basis points year-over-year. .

We look forward to continue positive results and also to continued growth. Our technology platform and tech-enabled services resonate well in the marketplace. We continue to win new state and MCO Medicaid contracts as well as new work supporting supplemental benefits for Medicare Advantage and targeted initiatives for commercial life. .

With that, I'll turn the call back over to Carter.

Carter?.

All right. Thank you so much, Robin. And with that, operator, I think we're ready for Q&A, if there is any. .

[Operator Instructions] Our first question comes from Bob Labick from CJS Securities. .

Lots of great information today so we appreciate it. I wanted to start with the new reporting obviously consolidation -- consolidated reporting. I just want to make sure I fully understand kind of apples-to-apples the former segment reporting for LogistiCare. So I just wanted to double check.

It seems like the adjusted EBITDA for LogistiCare was 4.6% versus 23.9% a year ago. And you discussed, obviously, the higher utilization due to weather and then the change in the mix of constituents as well. So first I just wanted to confirm that we're understanding the change on an apples-to-apples basis.

And maybe if you could talk a little bit, just expand a little bit more about the margin change, and also where that margin change leaves us to the Q4 discussion where you said, probably mid-6s EBITDA for the year.

Are we still on track for that?.

All right. Thanks, Bob.

Kevin, you want to take that one?.

Sure. Absolutely. Bob, yes, in our investor deck, the first quarter highlights page, I believe it's page 2, we talked about that the NET Services for the first quarter was about $16.9 million or the 4.6%.

And then when we look at that versus the prior year, you'll see on that page that we have $23.9 million on the NET Services line with the 7.1% margin. The one thing to note is we had -- in the first quarter last year, we probably had roughly -- we had a lot of onetime favorable adjustments as well we had a few in this quarter.

And when I normalize for, call it, onetime, kind of, retro rate adjustments within some of our contracts, I would say that, year-over-year we're probably quarter 2019 versus quarter '18 down maybe about $3.7 million or 150 basis points.

I think our perspective on that, as we talked about, is obviously we did have the effects of the higher transportation costs driven by higher utilization due to inclement weather. We also did note the fact that there were some membership changes in some of our larger markets that also probably drove increase utilization.

We still believe that we are working with some of our customers, our prayers. And we believe that we will be successful in some repricing events. And that may -- gives us confidence that we are still on target for the year to make our revenue targets as well as make the the mid-6 range margin rates that we had discussed on our last call. .

Okay. Great. Very helpful. And yes, I mean, we've seen obviously over the years the utilization swings you guys go back and sometimes give back and sometimes get back a little bit in retroactive price adjustments. So that certainly makes sense and speaks to your partnership with your states in MCO, so that's great. So thank you for that.

And then we appreciate the comments on Circulation. And was hoping you could speak just a little bit more about the kind of positives and negatives of the initial integration. And then also you mentioned the Medicare Advantage opportunity ahead.

Is there enough bandwidth to switch to rollout Medicare Advantage as well or is that kind of out a few years? How are you phasing the current core switchover and then expanding into Medicare Advantage as well?.

On that, let me kickoff with the Matrix, and then I'll let Kevin and Jeff, perhaps, take your Medicare Advantage, the second part of your question. On Matrix, I think many of you know that I was pretty cautious when we had our last investor call and individual calls on Matrix, as we saw really a 2-pronged issue.

One, was the weakness in one of our customers pulling back in-house some of their assessments, which gave us pause for how strong would the Matrix core business be this year in '19. And then lastly, the HealthFair has been a challenge last year as we saw churn among the customers and continued weakness in the mobile business.

The nice and very pleasant surprise due to a lot of hard work by the people of Matrix is that the core business, they responded very nicely. We were quite impressed as they exceeded all internal expectations on the Matrix core business and ended up having a terrific first quarter.

Overcame those headwinds, replaced the missing or reduced business due to the large customer and in fact, grew the business with a number of other customers.

The HealthFair side of the business was still challenging in Q1, and that's a bit of a turnaround story as Kevin talked about that we are hoping that they'll return to profitability in the second half. It's a small piece still.

We're still optimistic that, that business is going to be additive, but it is clearly off pace from what we originally envisioned it when Matrix purchased HealthFair about this time last year.

So it's been a bit of a challenge on the HealthFair, but you can see by the first quarter numbers that they have clearly responded very nicely, they've got a very intensive program customer-focused and then they've got some new talent that is focused very much on the operational and cost side, which delivered the superior performance in Q1 versus our early on expectations.

So with that, Kevin, I'll let you make any additional comments on Matrix. And then you and Jeff can tackle the Medicare Advantage question that Bob is asking. .

Yes, the only thing I would add on the Matrix is, as we -- there were some concerns that we talked about, they were anticipating a little bit higher churn with one of the larger customers.

And I think at the end of the day they had a very successful outcome because as that customer was in-sourcing some of that work and at the same time that entity that -- which they were in-sourcing too could not really cover effectively all of the markets that they needed, so we actually picked up additional -- Matrix team picked up additional market, so it was a pretty positive outcome, I think, overall.

And as we've talked about the home health care business itself, the core business, with a 9% growth rate was a big success for them in the first quarter. So I'll turn it over to Jeff to talk more about the Medicare Advantage. .

Yes, Bob, thanks for asking the question on that. So in a nutshell, we are all over Medicare Advantage. So today, it represents about 10% of our business, as I mentioned earlier, over the past 2 years that has grown 33%. But I really think the most exciting thing about Medicare Advantage for us is twofold.

So number one, many of our existing Medicaid customers are also branching out in the Medicare Advantage and want to use that as a growth vehicle. So this allows us to take advantage of existing customer relationships. The second key thing about Medicare Advantage is that they want to customize.

They want to differentiate their benefit offering to this subset of their business. And for them to do that, they need technology capabilities, they need a partnership with an organization like us.

And the Circulation platform is especially exciting to them because it allows for customization, it allows for configuration and it allows for the Medicare Advantage plans to work with us to develop a differentiated benefit. So in a nutshell, we're already there. These are conversations that Robin and her team are having weekly with the key MCOs.

Robin, do you want add some color to that?.

Thanks, Jeff. I would reiterate everything you've said. I think a key point for the Medicare Advantage market offering is they add transportation as a supplemental benefits to both attract new members and retain members in what's becoming much more of a competitive market.

And so they look at our solution and see a unique way to engage members, to engage caregivers, to give more power directly to their members and to give a level of convenience around transportation that these members have in other parts of their lives, but has not yet come to medical transportation. And they placed a huge value on that.

So our solution resonates quite well in that market, we're already serving several Medicare Advantage members, and as both Jeff and Carter have said, it's a market space that we're actively pushing into and growing very quickly. .

Great. That's really exciting. Super helpful. I guess probably last one for me. Obviously, balance sheet's returned to a bunch of cash, really strong, and you mentioned another $29 million coming in, in Q4 in addition to just general cash flow from operations, which is very strong.

So are you going to end the year, I don't know, close to $100 million -- $75 million to $100 million of net cash? Can you talk to the capital allocation again? In the past you've been pretty active in repurchasing shares, you haven't done that in a little bit. So I think you still have some capacity on your authorization.

Speak to capital allocation in general and share repurchase, please?.

All right.

Bob, the one -- how I would kickoff that is I would tell you that speaking for the Board and the rest of management team, when we did the Circulation acquisition, as Robin did a really fine job of talking about the capabilities of the system and the depth and breadth of that system, it actually opened our eyes as well as other opportunities that we became aware of that we could possibly take advantage of due to this new technological platform.

With that, we've seen a lot of opportunities and I would have to characterize that in my discussions with the Board, the common theme has been, at least to date, is to hold our powder dry. There are a bunch of moving pieces that are out on the marketplace.

And I'm not talking code about just acquisitions, but there have been a lot of interesting developments that are going on in the marketplace with some of the change we talked about in new growth areas for us.

So I guess the rule of the day would be is that we are always having a discussion about the capital allocation and the highest and best use of that capital for our shareholders. It's a conversation that we have had nearly monthly about that.

But we have decided right now to hold our powder, keep looking at these, some have changed -- some of the opportunities have migrated and changed.

And we just want to be ready to take advantage of those in the coming months and quarters ahead that we don't jump into something without giving a thoughtful approach to what is the highest use of this capital for our shareholders.

So that's probably my best answer for you right now is holding our powder dry and continue to review the opportunities that Circulation platform had given us. .

Operator, is there any further calls?.

Sir, I'm showing no further questions. .

Okay. Thank you so much, operator. And thank you, everyone, for your continued support and interest in Providence. We are pretty proud of the first quarter, sales growth. Obviously, it's an indicator of the health of the business and some of the new market opportunities that have presented themselves.

Robin, welcome to you onboard on these calls as well as Jeff, and we look forward to talking to you in the coming days ahead. Thank you, operator. Goodbye. .

Thank you, sir. Ladies and gentlemen, thank you for participating in today's conference. That concludes today's program. You may all disconnect. Everyone, have a great day..