LTC Properties - Earnings Call - Q1 2025

Executive Summary

• Introduced RIDEA/SHOP strategy at scale: converted 12 Anthem properties to SHOP on May 1 and expect one New Perspective conversion in 2Q; issued first full-year 2025 guidance including SHOP NOI of $9.4–$10.3m for the remaining eight months.
• Q1 2025 results were stable on cash metrics: Diluted Core FFO/share $0.65 vs $0.64 YoY; Core FAD/share $0.70 vs $0.67 YoY, despite lower total revenues ($49.0m vs $51.4m YoY) due to lapping 2024 one-time rent and lower mortgage income from payoffs.
• Balance sheet/liquidity positioned for growth with ~$681m total liquidity and debt to annualized Adjusted EBITDAre of 4.3x; fixed charge coverage improved to 5.0x.
• Street context: Q1 was roughly in line to slightly better vs consensus—revenue beat (~$49.0m vs $48.9m*), Primary EPS roughly in line ($0.45 vs $0.46*), and FFO/share in line ($0.65 vs $0.65*)—with catalysts from SHOP ramp, asset sales, and a $300m pipeline (~50% RIDEA) highlighted on the call.
• Dividend supported by cash flow: monthly $0.19/share for Q2 2025; Core FAD guidance of $2.78–$2.82/share implies healthy coverage of the $2.28/share annualized dividend.

What Went Well and What Went Wrong

What Went Well

• Core cash metrics improved: Diluted Core FFO/share $0.65 (vs $0.64) and Core FAD/share $0.70 (vs $0.67) on lower interest expense, rent increases, and JV income.
• Strategic execution: “Through our RIDEA platform, we now have a SHOP portfolio totaling $176 million in gross book value… The implementation of our RIDEA strategy has resulted in an increase in our investment pipeline…”.
• Capital strength and coverage: debt to annualized Adjusted EBITDAre 4.3x and fixed charge coverage 5.0x; liquidity ~$681m to fund growth.

What Went Wrong

• Revenue down YoY (–$2.3m): lapped a $2.377m one-time rent credit in 2024; lower revenue from sales and mortgage payoffs.
• Provision for credit losses increased ($3.1m) tied to working capital note/interest write-off related to RIDEA conversion; also lower gain on sale YoY.
• Portfolio churn/uncertainty: operator elected not to renew master lease on 7 SNFs; LTC is selling all seven with closings expected in 4Q25 (one under contract), replacing at least $8.3m of 2025 GAAP rent through redeployment.

Transcript

Operator (participant)

Ladies and gentlemen, welcome to the LTC Properties Incorporation First Quarter 2025 earnings call. At this time, all participants are on a listen-only mode, and a question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Before management begins its presentation, please know that today's comments, including the question-and-answer session, may include forward-looking statements subject to risks and uncertainties that may cause actual results and events to differ materially. These risks and uncertainties are detailed in LTC Properties' filings with the Securities and Exchange Commission from time to time, including the company's most recent 10-K dated December 31, 2024. LTC undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after the date of this presentation. Please note this event is being recorded.

I would now like to turn the conference over to your host, Mr. Clint Malin. Sir, the floor is yours.

Clint Malin (Co-President and Co-CEO)

Hello and welcome, everyone, to our First Quarter 2025 earnings call. With me today are Wendy Simpson, our Executive Chairman; Pam Kessler, our Co-CEO; Cece Chikhale, our CFO; and Gibson Satterwhite, our Executive Vice President of Asset Management. This year is off to a great start. Through our RIDEA platform, we now have a shop portfolio totaling $176 million in gross book value through the cooperative conversion of 13 properties from triple net leases. We completed the conversion with Anthem Memory Care on May 1 and expect to complete a conversion with New Perspective Senior Living within the next 30 days. What's more, we've added to LTC's bench strength with the appointment of our new Chief Investment Officer and demonstrated the depth of talent in our company with the promotions of several executives, as discussed last quarter.

The implementation of our RIDEA strategy has resulted in an increase in our investment pipeline, giving us a clear pathway to growth by more fully aligning our interests with those of our existing and new operators and unlocking additional opportunities for performance-driven upside. Currently, our pipeline stands at $300 million, of which RIDEA opportunities represent approximately 50%. We welcomed our new Chief Investment Officer, Dave Boitano, on April 21st. Dave adds even deeper expertise to our team. Spending most of his career in seniors housing at Ventas, he played a pivotal role in sourcing investments and had direct underwriting responsibility for $5 billion in transactions. As we expand our RIDEA platform, Dave's experience and substantial industry relationships will contribute to our future growth. You will be hearing directly from Dave on our next quarterly call.

We've clearly laid the foundation for transformative expansion, and with growth as our focus for 2025, we are moving into the future with momentum and confidence. Next, I'll turn the call over to Cece for a review of our first quarter financial results.

Cece Chikhale (CFO)

Thank you, Clint. All of the numbers I'll be discussing today are for the first quarter of 2025 compared with the same period in 2024, unless otherwise noted. In yesterday's earnings release, we provided a detailed description of our financial results, so this morning I'll focus my comments on items of note. Fully diluted FFO per share, excluding non-recurring items, our core FFO grew to $0.65 from $0.64. Fully diluted FAD per share, excluding non-recurring items, our core FAD increased to $0.70 from $0.67. Core FFO and core FAD increased primarily related to a decrease in interest expense, rent increases from fair market rent resets, escalations and amendments, an increase in income from unconsolidated joint ventures, and an increase in interest income from additional loan funding.

These were partially offset by lower interest income due to mortgage loan payoffs and principal paydowns, an increase in G&A, and lower rental income from properties sold. During and subsequent to the first quarter, we sold shares under our ATM for net proceeds of $9.6 million. These proceeds are being used to fund the initial investment in our RIDEA platform, comprised of our purchase of Anthem's leasehold improvement for $1.4 million, which will be capitalized, and a $6.5 million lease termination fee to New Perspective, which will be expensed, as well as one-time RIDEA platform transaction costs of approximately $1.1-$1.5 million. Our total liquidity is approximately $681 million. Our debt-to-annualized Adjusted EBITDA for real estate is 4.3 times, and our annualized adjusted fixed charge coverage ratio improved to 5.0 times from 4.7 times for the fourth quarter of last year.

Today, we are providing full year 2025 guidance for core FFO per share between $2.65 and $2.69, and core FAD per share of between $2.78 and $2.82. Please refer to our supplemental for our assumptions for this guidance. Now I'll turn things over to Gibson.

Gibson Satterwhite (EVP of Asset Management)

Thanks, Cece. We'll start with RIDEA, where we've made meaningful strides since our last update. In close collaboration with our partner Anthem, on May 1, we transitioned 12 memory care properties from triple net leases into our shop portfolio. The Anthem portfolio currently is 81% occupied. Additionally, we have agreed to cooperatively convert one independent and assisted living property operated by New Perspective into the portfolio with a target closing date of June 1. The New Perspective property is stabilized, while Anthem offers some upside as that portfolio progresses toward increased occupancy. In 2025, for our current shop portfolio, we are projecting shop NOI in the range of $9.4 million-$10.3 million. Note that these figures are reflected in the guidance Cece shared earlier. In addition to the $600,000-$800,000 FAD CapEx estimate outlined in our earnings release, we've committed $4 million for renovations.

Regarding Prestige, we received full contractual cash interest of $5 million through $3.8 million of cash interest paid and the application of $1.2 million from their security. Subsequent to March 31, Prestige received $2.3 million in retroactive Medicaid payments, which were funded into our security deposit, which now equals approximately $6 million. When combined with the current cash paid, we expect to receive full contractual interest at least through May 2026. As a reminder, our loan modification in the fall of 2023 introduced a current pay interest component and a mechanism to increase our security from Prestige's retroactive Medicaid payments. It also included LTC's participation in excess cash generated by the portfolio beginning in 2025. This structure was designed to provide more than a two-year runway for Prestige to recover from occupancy challenges experienced during the pandemic.

With the level of security we now hold and increased occupancy and performance, our investment is on much stronger footing and is continuing to improve. From our portfolio of 14 properties subject to market-based rent resets, we expect to collect $5.1 million of revenue this year, up from guidance of $4.4 million last quarter on a same property basis. Current guidance for this portfolio on a same property basis represents an approximate 50% increase from the $3.4 million of rent received related to these properties in 2024. Regarding the operator's decision not to renew their lease on seven skilled nursing centers for strategic reasons, we are continuing the sale process and remain committed to replacing at least $8.3 million of 2025 gap rent. We plan to strategically deploy sale proceeds into growth opportunities we have discussed.

One property is currently under contract, and we expect the remaining six to be under contract in the second quarter, with all sales expected to close in the fourth quarter of this year. Now I'll hand the call over to Pam.

Pam Kessler (Co-CEO)

Thank you, Gibson. With momentum building and growth as our key priority, we're actively pursuing and underwriting opportunities to add newer, stabilized assets with prospects for improved performance that enhance portfolio quality and amplify LTC's upside potential. We expect shop to represent a growing share of our portfolio as we scale our platform. By complementing our RIDEA strategy with investments in traditional and structured finance transactions that offer compelling initial yields, we're building a resilient, performance-driven portfolio structured for long-term value creation. We see our RIDEA as a game changer for LTC. Backed by a seasoned team, ample access to capital, and a growing investment pipeline, we're prepared to execute with discipline and precision to capture new opportunities ahead. Before we open the call to questions, I'll turn things over to Wendy for closing remarks.

Wendy Simpson (Executive Chairman)

Thank you, Pam. The entire board and I are energized by the progress LTC has made and even more enthusiastic about the opportunities ahead. Before transitioning to Q&A, I'd like to recognize Doug Corey, who recently retired to focus on his health and family after a remarkable 40-year career in the industry. LTC was fortunate to have him as part of our team for the last decade. Doug was instrumental in broadening our strategy beyond traditional triple net investments, was a champion for innovative and flexible structured finance solutions that expanded our capabilities and deepened our industry connections. We will miss Doug's sharp insight, dry humor, and steady hand, and we wish him and his family all the best in this next chapter. Operator, we're ready for questions from the audience.

Operator (participant)

Thank you. At this time, we will be conducting our question-and-answer session. If you have any questions, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question is coming from Juan Sanabria with BMO Capital Markets. Your line is live.

Juan Sanabria (Managing Director)

Hi, good morning. I hope you guys are doing well. I'm just curious on ALG, what's assumed in guidance with regards to their option to buy those assets, and how's that process going in their ability to secure financing to move that process forward?

Pam Kessler (Co-CEO)

Thanks, Juan. This is Pam. Yeah, they are still working on their financing in this uncertain rate environment with the wild swings in Treasuries, you can imagine. It's an off-and-on sort of prospect at this point, but we are hopeful that they will be able to refinance this year. However, our guidance assumes that they don't and that they continue to pay full rent.

Juan Sanabria (Managing Director)

Great. Then just on the New Perspective, if you could just give a little bit more color on the lease term payment that you're paying there of $6.5 million and how that was kind of arrived at and the payback period you guys are thinking about, given I think you said that asset is a bit more stabilized. Just hoping for a little bit more color there.

Clint Malin (Co-President and Co-CEO)

Sure. It is a stabilized asset. With New Perspective, it's a company we've known for many years. Looking at doing investments with them, we only have the one asset with them. They do have shop experience with other REITs, so we see them as a growth opportunity for LTC going forward. They have been very successful with this asset we have with them. Paying this amount for lease termination was to reward them for the value creation that they've created and gives us a runway with them to be able to look at new opportunities and grow our shop portfolio. That was our rationale in doing that with New Perspective. For us to launch this platform with these assets we were familiar with, with both Anthem and New Perspective, it was a great starting point for us.

Juan Sanabria (Managing Director)

Thanks. Just one more for me. Just on the shop platform, should we expect other triple net to shop conversions? On the pipeline, what percentage would you say is kind of fee simple shop of the $300 million?

Clint Malin (Co-President and Co-CEO)

Of the $300 million, I mentioned in my remarks, Juan, that it was 50% represents RIDEA for the pipeline. There is going to be some opportunity for potential other triple net conversions, not of scale. We are really looking at shop as an external growth story.

Juan Sanabria (Managing Director)

Thank you. Good luck.

Clint Malin (Co-President and Co-CEO)

Thank you.

Operator (participant)

Thank you. Our next question is coming from Austin Worshmidt with KeyBanc Capital Markets. Your line is live.

Austin Wurschmidt (Senior Equity Research Analyst)

Thanks. Good morning, everybody. Can you just talk about how you arrived at the NOI range for the shop assets over the remaining eight months of the year and kind of what that range implies for either sequential or year-over-year growth?

Gibson Satterwhite (EVP of Asset Management)

Sure, Austin. Hi, this is Gibson. Let me get to it. One second. We looked at the shop portfolio. Because these are conversions, we looked at 2024 on a pro forma basis so that we are safe we have similar accounting treatments. If you look at 2024, the portfolio is 85% occupied. We are only assuming 85% occupancy for 2025. I can get into some detail why later. Right now, on a full-year basis, 2025 over 2024, we have $15.2 million versus $14 million. That is $15.2 in 2025 over $14 million for 2024. A big driver of the growth going forward from where we are now is continued lease up in the Anthem portfolio. They had a little bit of, they had higher than normal discharges in Q4, and we expect them to get back to occupancy that they had in Q3 last year.

Austin Wurschmidt (Senior Equity Research Analyst)

Beyond occupancy, are there other opportunities on the expense front? Just curious how you're thinking about the growth profile of this portfolio as we think about the next several years.

Gibson Satterwhite (EVP of Asset Management)

With respect to the portfolio that we've talked about converting, I think that we do have some upside beyond the end of 2025. We end up in 2025 assuming about 87% occupancy on a unit basis for the portfolio versus 86% in Q3 of 2024. There are some we tried to make realistic budgets. Anthem's made some progress on cost reductions and efficiencies in their staffing model in Q4 of 2024. We feel like we have some room and try to give ourselves multiple paths to be able to hit the guidance that we provided.

Austin Wurschmidt (Senior Equity Research Analyst)

That's helpful. Just last one here. I guess for that 50% of the investment pipeline that includes shop assets, I mean, how are we thinking about going in cap rates on those deals? Just as you're building out your senior housing portfolio, how are you balancing, I guess, operator and geographic diversification versus trying to kind of build some scale with the assets you already have? Thanks.

Clint Malin (Co-President and Co-CEO)

Sure. We'll definitely focus on operator concentration. That's a key element for us as we look at having ALG exercise a purchase option to reduce that concentration. It's something that's very much on the forefront. Primarily in our investment pipeline, we're looking at deals that are one or two assets. There's a couple of small portfolios, but our focus really is on one or two assets, being cognizant of that diversification with operators. We've actually been actively pre-marketing RIDEA over the course of the last five, six months, getting traction. A number of deals in our pipeline are off-market, which we're very encouraged by. I would say on the shop front, we're looking at probably 7% going-in yields, plus or minus, with the forward-looking yield going up to 7.5-8% as you look at cost reductions, rate growth, and occupancy improvement in shop.

We are looking at balancing that, as Pam mentioned in her prepared remarks, with leases, loans, and structured finance products that have higher initial yields to offset those initial shop yields as we are growing the portfolio.

Austin Wurschmidt (Senior Equity Research Analyst)

That's helpful. Thank you.

Clint Malin (Co-President and Co-CEO)

Thank you.

Operator (participant)

Thank you. Our next question is coming from Rich Anderson with Wedbush. Your line is live.

Rich Anderson (Managing Director)

Hey, thanks. And good morning. This $176 million is roughly, using your enterprise value, about 7% of the company. I think I have that math right. I'm just curious if you can sort of share a pipeline of your conversion activity. We talked about the $300 million pipeline external growth, but what's the pipeline of internal conversions that you see going forward? What's the pace to get to something like 25% or 30% of the company in the next couple of years?

Pam Kessler (Co-CEO)

Hi, Rich. We currently do not have plans to convert anything that is in our triple-net portfolio at this point, though we always hold that option open. It is really going to be the organic growth that Clint talked about, acquiring, doing investments through the RIDEA platform, and also blending that with more traditional triple-net and loans. As occupancy improves in our portfolio, those operators that have triple-net leases probably become less inclined to want to transition to the shop platform. If they have created value in their portfolios and they would like to be rewarded for that, we would entertain doing something similar to what we did with New Perspective.

Rich Anderson (Managing Director)

Okay. Great. Thanks for that color, Pam. The other thing is you're converting to shop a memory care portfolio with Anthem, higher acuity assets, and so on. Do you think you'll kind of be looking downstream a little bit in terms of lower acuity for future shop transactions in your external growth strategy, or do you like the memory care sort of thesis in a shop wrapper?

Pam Kessler (Co-CEO)

I mean, we like memory care. Obviously, we were one of the first entrants into standalone memory care, and we developed these properties with Anthem. As being very aware of concentration and the fluctuations that memory care experiences and the shorter average length of stay, we're not looking at that property type to grow in. I'm not excluding that, but it's not a focus of ours. We're really looking at larger properties that are more of a continuum of care, IL, AL, with some memory care, but not the standalone.

Rich Anderson (Managing Director)

Okay. Last question for me is Omega had a little minor issue with Genesis this quarter. Perhaps not much of a deal according to them, but Genesis makes your top 10. Any issues that you're having with them at this point that you can share? If the answer is no, then that's fine as well.

Clint Malin (Co-President and Co-CEO)

We have received the May rent, Rich, and we have no request from Genesis for any assistance. Our portfolio has strong coverage and is located in core markets that Genesis operates in.

Rich Anderson (Managing Director)

Okay. Fair enough. Thanks very much.

Clint Malin (Co-President and Co-CEO)

Thank you.

Operator (participant)

Thank you. Our next question is coming from Michael Carroll with RBC Capital Markets. Your line is live.

Michael Carroll (Managing Director)

Yeah. Thanks, Clint. I know I appreciate some of the comments on your projections for the Anthem portfolio and the general shop portfolio. Can you maybe spend some time and talk about how those assets have performed over the past few years? I know that they've been struggling, and I was a little surprised where the shop NOI is coming out at versus where the triple net lease rate is for Anthem. Did Anthem have a pullback in their operations, or how should we think about that portfolio and maybe the longer-term outlook of it?

Clint Malin (Co-President and Co-CEO)

Like, as Gibson mentioned in his last in the Q&A portion earlier, they did have a dip in occupancy in Q4 relating to some clinical discharges. I mean, that's something that, as it's an earning season, we've seen other REITs have similar dips in occupancy. That wasn't unexpected. We're going into the key selling season that started in May, and we think there will be upside for improvement in occupancy. There's not a lot of new supply being delivered, so we think that's beneficial to occupancy growth. We're looking at the key selling season to be an upside opportunity for Anthem.

Michael Carroll (Managing Director)

I guess, can you maybe provide some comments on how Anthem has performed the past few years? I mean, have they been recovering as you originally would have expected, and they just had this blip in the fourth quarter that kind of took them lower? I mean, I guess, how meaningful was that blip, and how have they performed the past few years?

Clint Malin (Co-President and Co-CEO)

I mean, there have been a few dips on a quarter-by-quarter basis, but they have recovered previously. We do not expect—I mean, we expect similar here.

Michael Carroll (Managing Director)

Okay. And then, I guess, on the shop NOI, if that included both the Anthem and the New Perspective tenants, I mean, can you break out how much of that projected NOI is New Perspective and how much of that is Anthem?

Pam Kessler (Co-CEO)

Yeah, sure. Mike, it's at the midpoint. Anthem is $1.2 million of the increase, and New Perspective is $1.6 million.

Michael Carroll (Managing Director)

Okay. And then.

Pam Kessler (Co-CEO)

It is a total of $2.8 million over if you were looking at the combined lease rate. It is a substantial pickup from converting to RIDEA.

Michael Carroll (Managing Director)

Okay. Is the plan to grow with New Perspective? Are they going to be one of your core operators where you're going to add assets within that shop structure over the next, I guess, several quarters or maybe execute this current investment pipeline with them?

Clint Malin (Co-President and Co-CEO)

Absolutely. I mean, they're an ideal company for us to work with. I mean, they have the ability to develop. They have a strong culture, a long-tenured family business. They're SOX compliant. They are familiar with RIDEA. We see them as an excellent opportunity and a great partner to grow with. That was part of the catalyst for us looking at this opportunity to put them into the initial round of our shop portfolio.

Pam Kessler (Co-CEO)

Yeah. They demonstrated through our triple net lease with them an incredible ability to increase value.

Michael Carroll (Managing Director)

Okay. Great. Thank you very much.

Clint Malin (Co-President and Co-CEO)

Thank you.

Operator (participant)

Thank you. Once again, ladies and gentlemen, if you have any questions, you may press star one on your telephone keypad. Our next question is coming from Omotayo Okusanya from Deutsche Bank. Your line is live. Omotayo, I think you might be on mute.

Omotayo Okusanya (Managing Director)

Hello?

Operator (participant)

We can hear you now, sir.

Omotayo Okusanya (Managing Director)

Okay. Perfect. Good morning, everyone. Nice to see all this progress on the shop front. Just curious again, you've bought a couple of assets. You've hired Dave. Anything else from institutionalizing the platform that still needs to happen at this point? Is there still a need to hire data scientists? Just kind of curious of kind of making sure everything is really—you've dotted your i's and crossed your t's. What else still needs to happen?

Pam Kessler (Co-CEO)

Hi, It's Pam. Yeah. We will continue to build out the platform as we add investments into it. Yeah. We still will need analysts, FP&A. I mean, as the platform grows, you obviously have to scale up. We are confident with what we have right now supports the conversion platform.

Omotayo Okusanya (Managing Director)

That's helpful. ALG, it didn't look like in this quarter you gave any rent deferral. Is that correct? If that's the case, could you just kind of help us understand what's happening with the overall financial performance of ALG?

Pam Kessler (Co-CEO)

Yeah. That is correct. We did not give a deferral this quarter. Their occupancy has increased 150 basis points from year-end with increased lead generations and conversion rates. In North Carolina, there has been a prospective change in reimbursement. A bill has passed the House and the Senate there that would allow or that gives higher—it increases the eligibility threshold for Medicaid. If you recall, this portfolio has Medicaid in it. What happened during the pandemic and inflation was the eligibility requirements for Medicaid were not increased in North Carolina. With increases in people's Social Security and other forms of income, many residents in North Carolina were essentially no longer eligible or not eligible for Medicaid, which depressed the census in this portfolio. With the new eligibility—I keep wanting to say reimbursement. It is not a change in reimbursement rate.

It's a change in the eligibility. With the new eligibility requirements and the increased pool of potential residents, we expect their occupancy to continue to increase.

Omotayo Okusanya (Managing Director)

Gotcha. That's helpful. One more, if you don't mind. Again, Anthem now goes to shop. You have kind of redone the NCORR lease. Any other leases out there that still have quarterly market-based resets that we should be aware of at this point?

Pam Kessler (Co-CEO)

Just the 14 that Clint talked about, or I'm sorry, that Gibson talked about in his prepared remarks. The on-court lease, just to remind you, it's not been redone. It just has set market-based resets on—is it quarterly or?

Omotayo Okusanya (Managing Director)

Quarterly.

Pam Kessler (Co-CEO)

It's quarterly. They're quarterly. You're going to see this on a quarterly basis. We have some that are on a six-month basis and some that are on a quarterly basis in that portfolio. You should see over the next year, we're hoping those continue to increase as occupancy and performance improves in that portfolio. That basket of properties, those were properties that were with other operators that during COVID, we transitioned to these new operators. That is the part of our portfolio outside of RIDEA that has upside. We didn't defer rents and record receivable like some of our peers. We don't have any receivable sitting on our balance sheet. All the increases that come from improved performance in that portfolio will hit the financial statements. It will be shown through income versus hitting a receivable.

Clint Malin (Co-President and Co-CEO)

We are very much encouraged by the trending of increasing guidance in that portfolio.

Pam Kessler (Co-CEO)

Yeah.

Omotayo Okusanya (Managing Director)

Sounds good.

Pam Kessler (Co-CEO)

John, stay tuned online, Kyle.

Omotayo Okusanya (Managing Director)

Thank you very much.

Pam Kessler (Co-CEO)

Yep.

Austin Wurschmidt (Senior Equity Research Analyst)

Awesome. Good luck.

Pam Kessler (Co-CEO)

Thanks.

Operator (participant)

Thank you. As we have reached the end of our question-and-answer session, I would like to turn the call back over to Wendy Simpson for closing remarks.

Wendy Simpson (Executive Chairman)

As you can see, we're committed to growth and are successfully executing our strategy. We appreciate you all for joining us on today's call and look forward to talking to you again next quarter.

Operator (participant)

Thank you, ladies and gentlemen. This does conclude today's call. You may disconnect your lines at this time, and we thank you for your participation.