Operator: Thank you for standing by. Welcome to the Franklin Covey Third Quarter 26 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during this session, you will need to press star-11 on your telephone. If your question has been answered and you would like to remove yourself from the queue, simply press star-11 again. As a reminder, today's program is being recorded. And now I would like to introduce your host for today's program, Boyd Roberts, head of investor relations. Please go ahead, sir.
Boyd Roberts: Thank you, and good afternoon, everyone. Thank you for joining us today on Franklin Covey's Third Quarter 2026 Earnings Call. I'd like to turn it over to Mr. Paul Walker, our Chief Executive Officer.
Paul Walker: Thank you, Boyd. Good afternoon, everyone, and thank you for joining us today. There are 2 themes I'd like to address today. The first is that the company's strategic strength and resiliency continues to be reflected in the company's performance, including in this year's third quarter results and in our expected results for the year. The second theme is that the strategic importance of the opportunities and challenges we help our clients address, coupled with our focused investments in high-impact solutions and go-to-market activities, are further strengthening our strategic positioning and establishing the foundation for accelerated growth. Before I do, I want to address our full year guidance. Q3 was our third consecutive quarter finishing in line with our expectations, and the underlying business is performing as we expected. We are revising our revenue guidance to allow for: a timing shift in $2 million of previously invoiced services for which the delivery shifted from this year to next year for a contract in Enterprise North America; a $2 million new school contract with an existing statewide education client that received gubernatorial budget reductions that we expect to return next year; and the approximately $2 million impact of the challenging international environment due to ongoing geopolitical tensions. Our new expectation is that revenue will be between $260 million and $267 million. We are maintaining our prior adjusted EBITDA guidance within a narrower range of $28 million to $31 million. I wanted to acknowledge this upfront so it's not a distraction as I walk you through what's actually happening in the business. So to our themes. The first theme — the company's strength and resiliency continue to be reflected in our performance, including Q3 being our third consecutive quarter in line with expectations. The importance of the challenges and opportunities we help organizations address is reflected by both the high levels of retention, expansion and purchases of services we're achieving with existing clients, and by our increasing revenue from winning new clients across both our enterprise and education businesses. In the Enterprise Division in North America, which accounts for approximately 80% of our total Enterprise Division revenue, invoiced amounts are up 6% year-to-date and were up 4% in the third quarter, growing for a third consecutive quarter. Revenue retention is up meaningfully year-to-date and was particularly strong in Q3, driven by further increases in client expansion and continued strong logo retention. The percent of subscription contracts for multiyear periods continues to be high at 59%, and the percent of subscription revenue contracted for multiyear periods was 60%. Year-to-date, services booking pace at the end of Q3 was up more than 25% compared to the prior year, and the amount of services already sold and contracted year-to-date this year scheduled for delivery in fiscal '27 is meaningfully higher than at this point last year. Our balance of deferred revenue at the end of Q3 was $58 million versus $49 million in the prior year, an increase of 18%, establishing a strong foundation for growth and reported sales next year. This underlying strength and momentum, particularly in Enterprise North America, is exactly what we designed the go-to-market transformation to produce. We're achieving the traction we had expected, and we expect results in Enterprise North America for the year to be strong. Turning to our Education Division — our school retention rate at both the district and school levels remains very strong year-to-date, and our subscription revenue was up 11% in the third quarter and is up 14% year-to-date. As I indicated last quarter, we had won our third statewide commitment to Leader in Me with a southeastern state. At the last minute, the governor held up budget approval for health and human services and education line items, resulting in delayed funding for this year's allotment of new schools. We believe funds will be restored in the next fiscal budget. Our other 2 fully funded state commitments are on track for a strong year. We continue to expect that our strong momentum to close the year, particularly in Enterprise North America with deferred revenue up 18% year-over-year, is setting the stage for strong reported revenue growth in fiscal '27. The second theme — the strategic importance of the opportunities and challenges we help our clients address, coupled with our focused investments, are strengthening our strategic position and establishing the foundation for accelerated growth. 90 days ago, I spoke about 3 dynamics positioning Franklin Covey well in an AI-driven environment. First, that AI is increasing the premium on human leadership and execution. Second, that our model is built around behavior change and collective action tied to measurable outcomes, not simply content or software delivery. And third, that we have significant room to grow within our existing client base. These convictions have only strengthened. As AI creates extraordinary new possibilities, leaders are discovering that the path between AI investments and achieving meaningful results runs directly through the quality of their leaders, cultures and execution systems. This is a behavior change and collective action challenge. Having completed our go-to-market transformation in Enterprise North America, and having already seen continued progress in achieving the kinds of results we had expected, we're now importing those learnings into our international business. The model is working, and we are scaling it. Fiscal '26 is one of our biggest solution launch years and we'll build on that momentum in fiscal '27, launching new solutions across leadership, execution and AI transformation, while embedding AI-enabled coaching and execution tools into our platforms. The numbers support this confidence. Deferred revenue for the company is up 7% year-over-year to $96 million. Services already contracted and scheduled for fiscal '27 delivery are meaningfully ahead of where they were at this point last year and subscription and contractually committed invoiced amounts grew 17% in the third quarter alone. I'd now like to turn the time to Jessi.
Jessica Betjemann: Thanks, Paul, and good afternoon, everyone. Franklin Covey continued to see strong demand for our solutions in the third quarter. We are pleased with our third quarter results, particularly in Enterprise North America. As we have stated previously, fiscal 2026 is a year of execution where growth in invoiced amount is expected to set us up for accelerated reported growth in fiscal '27. Total third quarter reported revenue was $67.8 million, revenue grew 1% over the prior year, with both the Enterprise and Education Divisions growing 2%. This was partially offset by the $0.5 million decline in corporate revenue as we no longer recognize sublease revenue since exiting our previous headquarter campus in June of last year. Foreign exchange rates had a $0.3 million favorable impact on our consolidated revenue in the quarter. We are especially pleased that consolidated subscription and committed services invoiced amounts for the quarter were up 17% to $37 million, building upon the 12% growth we saw in the first half. Consolidated subscription and subscription services revenue recognized for the third quarter of $57.5 million was relatively even with last year's third quarter. The foundation for increased future growth remains solid, evidenced by the 7% year-over-year increase in our consolidated deferred revenue balance of $96 million. The amount of unbilled deferred revenue contracted for the third quarter was $7.3 million, even with last year, with a total balance of $61.1 million, down 1% over the prior year. Gross margin for the third quarter was 73.9% compared to 76.5% in the prior year, decreased primarily due to increased delivery costs for services, a shift in mix of services delivered and products sold during the quarter, and increased capitalized curriculum amortization expense. Operating, selling, general and administrative expenses for the third quarter were $41.8 million, 5% lower than the $44 million in the prior year, reflecting reduced associate cost and other cost reduction efforts. Adjusted EBITDA for the third quarter was $8.3 million, an increase of 14% or $1 million compared to last year's third quarter. During the third quarter, we incurred $0.7 million of expense for restructuring activity, primarily severance and related costs. We recognized net income of $3.1 million compared to a net loss of $1.4 million in the prior year. Cash flows from operating activities for the first 3 quarters of fiscal '26 decreased 8% to $17.5 million, primarily due to lower operating income and unfavorable changes in working capital. Free cash flow for the third quarter was a negative $1 million compared with a positive $2.8 million last year, with higher operating income more than offset by unfavorable changes in working capital, largely due to a $10 million increase in deferred revenue over the prior year. For the third quarter of fiscal '26, our Enterprise Division generated 71% of the company's overall revenue with the Education Division generating 28%. Third quarter Enterprise Division invoiced amount grew 1% to $46.5 million and subscription and committed services invoiced amount grew 18% to $27.8 million. Third quarter Enterprise Division reported revenue was $48.1 million, 2% higher than the $47.3 million reported in the prior year. The North American segment invoiced amounts grew 4% this quarter to $36.7 million. The North America segment's reported revenue of $38 million accounted for 79% of Enterprise Division sales in Q3 and grew 3% over the prior year, primarily due to higher services delivered including those contractually committed in prior periods. Adjusted EBITDA for the North America segment increased $1.5 million to $7.7 million for the third quarter. Our balance of billed deferred revenue in North America was $58 million at the end of Q3, an increase of 18% from the prior year. The number of North America's All Access Passes contracted for a multiyear period continued to be high at 59%, and the contracted amount represented by multiyear contracts was 60%. Third quarter revenue from our Enterprise international segment was $10.1 million, a slight decline compared to the prior year's $10.2 million. License revenue in the third quarter increased 3%, but was offset by lower revenues in our China, Japan and United Kingdom direct offices. Our offices in France and Australia each grew compared with Q3 of fiscal '25. Our China operations continued to be adversely impacted by ongoing trade tensions and broader macroeconomic uncertainty — excluding China, the international segment achieved growth compared to the prior year. Adjusted EBITDA in the international segment was $2.1 million, a 25% increase compared to $1.7 million in the prior year, driven by a reduction in SG&A expenses. In our Education Division, revenue in the third quarter increased 2% to $19 million, driven primarily by an 11% increase in subscription revenue, partially offset by lower material sales and not holding any symposium events in the quarter. We had 200 additional training and coaching days delivered compared to last year and 700 more year-to-date. The financial impact of the gubernatorial budget cut reduced invoiced amount approximately $2 million, net revenue approximately $1 million and adjusted EBITDA approximately $1 million from our previous expectations this quarter. This further impacts our fiscal year results by approximately $6 million in invoiced amount, $2 million in net revenue and $2 million in adjusted EBITDA compared to our previous expectations. Adjusted EBITDA for the Education Division in the third quarter decreased $0.4 million to $1.7 million. On our balance sheet and capital allocation priorities — our total liquidity remains strong at over $74 million at the end of Q3 with $12 million cash on hand compared with a $62.5 million credit facility which is fully available. Year-to-date, the company has purchased nearly 1.6 million shares of its stock for $28.1 million. During the last 12 quarters, the company has used 120% of free cash flow to buy back shares. We have a $50 million share repurchase authorization from the Board with $20 million remaining. In the near term, we plan to rebuild the base of our cash on hand as we generate cash, and we'll evaluate opportunistic share buybacks in the future. On our revised guidance for fiscal 2026 — the revised revenue range of $260 million to $267 million reflects a timing shift in $2 million of previously committed and invoiced services shifting from this year to next for a contract in Enterprise North America; $2 million for new school contracts with the statewide education client that received gubernatorial budget reductions; and approximately $2 million in lower year-to-date and forecasted revenue for Enterprise international due to ongoing geopolitical challenges. Despite the revision of revenue projections, we have maintained our prior adjusted EBITDA guidance within a narrower range of $28 million to $31 million, reflecting the effectiveness of cost reduction measures implemented throughout the year. Before I pass it back to Paul, I would like to thank the entire Franklin Covey team for their hard work and dedication to our business and providing unparalleled service to our clients.
Paul Walker: Jessi, thanks for taking us through that. And we'd now like to invite the operator to open the line for questions.
Operator: Our first question for today comes from the line of Alex Paris from Barrington Research.
Alexander Paris: Got a couple of questions. Starting with the macro environment. In the first half we noticed both positives and negatives. But we've had a couple of issues on this call — the timing shift for the large enterprise contract, the education gubernatorial budget cutback and the challenging international environment. If you peeled away the timing shift for the large enterprise client and the education reduction, can you talk about the underlying strength of the various businesses?
Paul Walker: The large contract — this is a contract we actually won in Q1 of this year. It's a combination of a very nice All Access Pass contract with a large number of services, and it's actually a 3-year contract for us. The client has paid for all of year one and the majority of year two already — we've invoiced for that. Along with that is scheduling of a number of contracted committed services. What we thought would be delivered towards the end of this year, some of those are shifting into early next year and throughout next year. This is business we've won, business that is contracted, largely business we've already invoiced for and paid for. It's just the timing of when the client will deliver. So that's the enterprise piece, and we're not seeing in Enterprise North America a change in the larger environment — it's just isolated to the timing of delivery of that one contract. In education, it was very similar. It was a bit of a surprise in the 11th hour that the funds, which had been approved by the state legislature, were pulled back when the governor went to sign off. We do expect that we'll get those back next year, and we're working with those schools to try to get some number of them to begin in Q4 since they were ready to go. Those I wouldn't connect to the environment at all — it's just isolated to 2 contracts. Where we are seeing a little bit of environmental impact is in our international business. Our largest license partner is in the Middle East, in Dubai, and it's been a challenging situation for them there. We expect that to abate — we think it's more timing related to geopolitical things going on and not necessarily a reflection of underlying strength of that business. And then China has continued to be a problem — we thought this year we were at the bottom, but we're going to be a little lower than that in China this year. In the larger macro environment, it really hasn't changed at all from what we reported last quarter or the quarter before.
Alexander Paris: Let's talk a minute about the Education Division, because this fourth quarter is a big quarter for education. Setting aside the large contract and the gubernatorial change, maybe just get a little update on progress there in terms of net new schools and school retention?
Paul Walker: I've got Sean Covey here. Sean, do you want to comment?
Sean Covey: Sure. A few things about education. We had won the deal we were expecting this year the last 3 years and expect it to come back. But we feel really good about the fourth quarter and about the year as a whole pushing that aside. We're working to get back some of these schools — we won't get all of them, but we can get a few back with their own funding mechanisms. Our retention is running 1% to 2% higher than last year, which is a really good sign of strength in the business. Our new school growth — we expected it to be higher than last year with the Georgia deal, but without it, it will be comparable to last year. We're also finding great success with charter schools and after-school programs. These are adjacent markets, they're large, there's a lot of money behind them, and we're able to make up some ground with our after-school initiatives. We've also got 2 other state deals coming through and large district deals, which are sometimes as big as state deals, and those are doing really well. What we offer is needed today more than ever before. In the world of AI, so much of what we do is going to be even more important — teaching leadership and durable skills like initiative, collaboration and empathy. We just came out with a new report showing that Leader in Me helped significantly with chronic absenteeism compared to non-Leader in Me schools, plus better teacher turnover reduction and increased test scores. So we've got really good solid outcomes that we continue to produce. We feel really good about the business generally, and we had this setback with the state that we expect to recover.
Alexander Paris: Before I yield the floor, I just wanted to talk a little bit about the Enterprise business — new logos versus retention, win back rate and perhaps lost contracts, and maybe specifically the government contracts that were lost because of those last year.
Paul Walker: We had another good quarter in terms of retention, driven really by a lot of client expansion. Holly, do you want to talk about that and any thoughts about the overall Enterprise business?
Holly Procter: Both strong retention and strong expansion in the Enterprise business, which was a big part of our transformation effort — that we could both increase the retention effort and also drive additional and incremental expansion beyond our run rate. Specifically on government — we have not yet seen our government business have an uptick post the large impact from Q1 of last year. We've remained relatively flat from the bottom out of that, but we're hopeful that we can see impact once we get to the next 2 years.
Operator: Our next question comes from the line of Dave Storms from Stonegate.
David Storms: I wanted to start with international. Paul, you mentioned in your prepared remarks that you're starting to move some of the go-to-market strategy over into international markets. Do you have any early indications of how this is going and any expectations? Could it maybe counteract some of the macro headwinds you're seeing?
Paul Walker: Holly, do you want to take that one?
Holly Procter: We will start our international situation in Europe. Our direct offices there include the U.K., Ireland, Germany, Switzerland and Austria and France. The primary effort there will be around dividing the sales force into a similar hunter-farmer structure, where we have dedicated hunters focused on new logo acquisition and a dedicated set of farmers attached to the retention and expansion effort of our current customer base in Europe. After we've successfully navigated that transition in Europe, we'll evaluate other geographies. In terms of timing, we will begin most of those efforts with a go-live date in Q1 and plan to roll that out over next year.
David Storms: I know China has kind of been a sore side for a couple of quarters now. Is there any thoughts around what could put that back on track or how many moves you have left to make over there?
Paul Walker: We're looking at some options there. China was a license operation for us 10-plus years ago. We converted it to a direct operation recognizing the size of that economy, and for a few years that looked like a really good decision — we grew rapidly on the top line and bottom line. Then coming out of COVID in the last number of years, it has been much more challenging and there's been a drag on our overall growth. There's still a good opportunity in China, but we're looking at a number of different options on how to operate China in a way that would give it the best chance to grow top line and bottom line. We'll share more as we get through that process of evaluating different options.
Operator: Our next question comes from the line of Nehal Chokshi from Northland.
Nehal Chokshi: Speaking to the strength of underlying metrics, is it fair to say that on Slide 10, the total additions to the balance sheet under the breakout of subscription and committed services is the best indicator with respect to that underlying strength?
Jessica Betjemann: Yes, that's right. That's always a good indicator to look at what we're adding there for the subscription and contractually committed invoiced amounts, and we had very strong growth with Enterprise growing 18% this quarter. That's definitely a very good indicator because that's going to translate into net revenue growth into next year.
Nehal Chokshi: And yes, I do notice that for the second quarter in a row, the overall subscription invoice is up basically 16%, 17% year-over-year.
Jessica Betjemann: Yes, 17%. Last quarter we grew 16%, first quarter 5%. So moving in the right direction.
Nehal Chokshi: And that's what's driving the continued confidence in the ongoing healthy buyback rate?
Jessica Betjemann: Yes. Year-to-date we've purchased $20 million. We definitely believe in the growth prospects in the future for the company and the strategy we have to be able to deliver on that. The invoiced amount growth this year is going to translate to net revenue growth next year. Through the restructuring we've been doing, we believe we'll have operating leverage, and we'll be able to have growth in EBITDA and free cash flow as well in 2027 and going beyond.
Nehal Chokshi: Could you give us a sense as to how much of this mid-teens growth you're seeing is coming from existing customers versus new customers?
Paul Walker: I would say it's a pretty good split between the 2. When we undertook the go-to-market transformation in Enterprise North America a couple of years ago, there were a few core bets underlying that. One was that we could have a team dedicated to selling to new customers, where growth would come not only from subscription but from services. The second bet was that if we focused a team on our existing customer base, we could drive more expansion, better retention and more services there as well. What we're seeing is not only are we through the transition of the go-to-market, we're seeing that play out like we hoped it would, with higher and higher attach rates of services. The growth is really coming from both sides — new customers and existing customers this year. And I want to build on something Jessi said — in addition to invoiced amounts growing this year, we're starting out next year with many more contracted services on the books to be delivered with our clients. All of that, with the visibility into next year, more growth in reported revenue and adjusted EBITDA, is shaping up like we expected it would as we move through this year.
Nehal Chokshi: Where would you say you are in terms of market share of your core markets right now?
Paul Walker: We're underpenetrated. I say fortunately and unfortunately — we would love to be more penetrated, and we're excited by the size of the markets we serve and the opportunity that's there. That was one of the reasons for the go-to-market transformation — we believe that the market needs what we have to offer. We believe we can capture more and more of the potential that's out there, and now these pieces are all coming together and we're seeing that begin to play out this year. We're just beginning to see that play out and are encouraged about what it means for the future.
Operator: Our next question comes from the line of Jeff Martin from ROTH Capital Partners.
Jeff Martin: I wanted to dive into what you're seeing and hearing in terms of the sales environment. How do you feel that sales productivity was in the period? And is that productivity accelerating from the beginning of the year through Q3? Or are we in a sales environment where it's a little choppy still?
Paul Walker: Enterprise makes up about 70% of our business and Enterprise North America makes up about 80% of Enterprise. Holly, take that one.
Holly Procter: I'm generally pleased with the sales productivity across the measures we use to track our success. We have invested in several ancillary functions that support the sales team, allowing the individual seller to carry more revenue than they've historically carried — so dollars under management per person is up greater than it used to be in our old model. We've added an SDR function, which is primarily a pipe gen function that produces meetings for the sales team. Without an SDR function, it's been harder for us to onboard and ramp a net new hire. Being able to build a function where we can promote internally and build talent up through the org allows our ramp time to go way down. So when you think about productivity not just in year but in years to come, the functions we've built to support the sales team have created our ability to onboard and ramp them in a much quicker timeline to put more dollars under management for each seller. We're really pleased with the progress we've seen.
Jeff Martin: And how would you characterize the add-on services environment?
Paul Walker: We've been very pleased — it's been quite a bright spot. Our services booking rate year-to-date through Q3 is up more than 25%. While we're delivering those services right now in the year, we're also pleased with the amount of services being booked out ahead into next year, also at a higher rate than at the same time last year. What's driving that is the strategic nature of what we're trying to do. We're in there helping our clients execute strategy in a very tumultuous environment, advising clients around change and transformation related to AI, working with clients where there's a lot going on, and the need for high levels of trust and engagement are there. Our clients are inviting us in to work with their senior leaders, and they want our experts to come in and deliver, consult and coach with them. These are all the services that we provide, and they're being driven largely by demand in the marketplace, coupled with an even more sophisticated sales force able to position and sell more strategic integrated solutions.
Jessica Betjemann: Just some data points — in the Enterprise Division this quarter, we have a 59% services attach rate compared to 60% a year ago. But we noted that we have to take into account one large IP deal that doesn't show up as services attached to the subscription because they're no longer a subscription client. We had $1.8 million of services for that large client this quarter. When you normalize for that, we actually had a 66% services attach rate relative to that 60%, so you see the growth year-over-year in terms of the services attach rate.
Jeff Martin: Is it fair to say leadership and execution will be your 2 largest content areas going forward?
Paul Walker: Categorically, yes. We've been moving towards being a company that's not just here to impart knowledge or teach skills — we're a partner to organizations helping them generate the collective action necessary to execute their most important strategies. We're on the human side of whatever strategic initiatives they're trying to accomplish. And when you think about what it takes to execute strategy on the human side, it requires great leadership, high-performing cultures, high trust cultures, alignment — it's one thing to come up with a strategy, it's a different thing to get everybody organized around that strategy, clear on their roles, able to work together in highly collaborative ways. Leadership, trust and execution — those areas are where we find the collective action needs of our clients, and that's our sweet spot. We're also seeing quickly growing parts of our business in areas like hospitals, where patient experience is a function of culture and how people are led and engaged. Those types of problems are where we attach our great solutions.
Jeff Martin: I know you're not establishing fiscal '27 guidance yet, but is there a scenario where you could foresee growing high single digit to low double-digit revenue and with operating leverage, maybe a little bit of help on the gross margin side, adjusted EBITDA growth significantly outpaces that next year?
Jessica Betjemann: You're right, we're not going to be providing guidance right now for next year. I will say that with the growth we've been having this year on invoiced amounts, we believe that will translate to meaningful growth next year in net revenue. With the major investments behind us that we had done last year and the restructuring and cost initiatives we've taken, that's going to translate not only through the revenue flow-through but EBITDA growth as well for next year. And for the longer term, we do believe we'll be able to get to the higher level of growth amounts with the strategy we're executing.
Operator: Our next question is a follow-up from the line of Alex Paris from Barrington Research.
Alexander Paris: We didn't really talk about AI too much. You had said, Paul, in your prepared comments this is one of the biggest years for new product solutions introductions. In fiscal 2027 you expect leadership, execution and AI solution enhancement. Can you give a little bit of an update on the AI road map?
Paul Walker: We have launched those solutions — they're out in the market. We've seen a lot of interest and demand from our clients. Last quarter, I shared that we'd won a nice size deal to be the partner on AI transformation for a large technology company. In Q3, we actually expanded quite significantly our work with that client as the early work had been quite well received. We'll be launching in early fall the next set of modules to build on our leading AI transformation and working with AI. We're also about to launch additional functionality within our AI coach. On the technology side embedded in our solutions, there's more to be done — simulations, role play, how our clients can get access to more of our content embedded in some of their own internal AI systems and tools like Slack and Microsoft Teams. And then we're developing solutions on the AI readiness and AI change and transformation side to be the advisory and leadership support partner to our clients. Like a lot of people, we're deep in the middle of that one.
Holly Procter: I can add 2 things. The largest, most pervasive question we get right now, from both current customers and net new clients, is how do you want to equip my current leadership team to navigate the large-scale disruption they're facing right now? It is pervasive across almost every industry. And after they figure out how to equip their leaders, the very next obvious question is how do I equip our team? They're thinking about that through the lens of AI fluency — how do I navigate and get every single member of the team ready to leverage AI at scale, and they're looking for a partner to help them navigate that amount of disruption.
Alexander Paris: And just to kind of press you a little bit on fiscal 2027 — based on the press release and your prepared comments, it looks like you're committed to revenue growth and then even faster adjusted EBITDA and free cash flow growth because of restructuring actions and so on. Is that fair to say?
Jessica Betjemann: Yes. That's what we believe and expect relative to this year, yes.
Operator: I'd like to hand the program back to Paul Walker for any further remarks.
Paul Walker: Wonderful. Well, thank you, everyone, for tuning in today. Thanks for your great questions, and we appreciate you. We hope everyone has — if you're in the U.S., I hope you have a good fourth this weekend, and look forward to connecting with you. Have a great day.
Jessica Betjemann: Thank you.
Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.