Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the Healthcare Services Group Inc. Second Quarter 2022 Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a Q&A session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. The matters discussed on today's conference call include forward-looking statements about the business prospects of Healthcare Services Group Inc. Forward-looking statements are often preceded by words such as believes, expects, anticipates, plans, will, goal, may, intends, assumes, or similar expressions. Forward-looking statements reflect management's current expectations as of the date of this conference call and involve certain risks and uncertainties. The forward-looking statements are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments, and other factors that we believe are appropriate under the circumstances. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances. Healthcare Services Group Inc.'s actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, and the forward-looking statements are not guarantees of performance. Some of the factors that could cause future results to materially differ from recent results or those projected in forward-looking statements are included in our earnings press release issued prior to this call and in our filings with the Securities and Exchange Commission. We are under no obligation and expressly disclaim any obligation to update or alter the forward-looking statements, whether as a result of such changes, new information, subsequent events, or otherwise. Thank you. Mr. Ted Wahl, President and CEO, you may begin your conference. Okay, thank you, Rob, and good morning, everyone. Matt McKee and I appreciate you joining us today. We released our second quarter results this morning and plan on filing our 10-Q by the end of the week. As we enter the back half of the year, we've now either completed or are in the final stages of negotiation with our clients in modifying our service agreements, a goal we very aggressively pursued throughout the second quarter. As we continue to engage with our clients to capture both recent and future inflation on a more real-time basis, several components of our partnership may be considered in the negotiations. Among those are restructuring our notes receivable with certain clients, altering the timing of collections with others, and even exercising our termination rights when we are unable to reach agreement. While we recognize that some of these decisions may have a temporary impact on our reported results, we remain confident that these service agreement modifications will further strengthen our client partnerships and position us to exit the year with cost of services in line with our historical target of 86%. To that end, before we get into the specifics of the Q2 results, I'd like to discuss several items related to our service agreement modification efforts that we expect will affect our Q3 results. First, we expect Q3 revenue to be affected by an estimated $10 million related to facility exits. The facility exits primarily reflect instances in which we could not reach agreement with customers to capture recent and future inflation on a more real-time basis. Second, we anticipate a one-time reduction of $17 million in revenue and $9 million in operating income net of reserves related to the expected restructuring of our note receivable with a certain client. Because this is a negotiated restructuring with an existing customer, we expect that this will be accounted for as a one-time reduction of $17 million in revenue and $9 million in operating income rather than a bad debt expense. After considering the estimated impact from the facility exits and one-time reduction related to the anticipated note restructuring, we estimate Q3 reported revenue base of $395 million-$400 million, and then a Q4 revenue base of $412 million-$417 million, absent any new business additions or facility exits. Finally, there was a temporary impact on cash collections in the quarter, primarily as a result of proactively altering the timing of collections with certain clients. In the second half of 2022, we expect to make up a portion of these amounts in addition to collecting what we bill. Overall, our negotiations to modify the service agreements have come with certain puts and takes, but we believe will position us much more favorably in the long term. With those introductory comments, I'll turn the call over to Matt for a more detailed discussion on Q2 results. Thanks, Ted. Good morning, everyone. Revenue for the quarter was $424.9 million, with Housekeeping & Laundry and Dining & Nutrition segment revenues of $199.1 million and $225.8 million, respectively. Q2 was impacted by around $2.5 million related to the facility exits that Ted just mentioned, with three-quarters of that in Dining and about a quarter of it in Housekeeping. Direct cost of services was reported at $379.4 million or 89.3%. Cost of services was impacted by a $7 million increase in AR reserves related to a client group that was placed into receivership. As Ted mentioned earlier, we remain on track to meet our goal of exiting the year with cost of services in line with our historical target of 86%. Housekeeping & Laundry and Dining & Nutrition segment margins were 9% and 4.5% respectively. SG&A was reported at $29.3 million, but after adjusting for a $6.4 million decrease in deferred compensation, actual SG&A was $35.7 million or 8.4%. We expect 2022 SG&A to approximate 8.5%-9.5% in that range. We reported an effective tax rate of 17.3% and expect a 2022 tax rate between 24%-26%. Net income for the quarter came in at $6.8 million, and earnings were $0.09 per share. As I highlighted earlier, Q2 operating income was impacted by a $7 million increase in AR reserves related to a client group that was placed into receivership, which reduced operating income by $7 million and reported earnings per share by about $0.07 per share. Cash flow from operations for the quarter was $9 million and was impacted by a $31.6 million increase in accounts receivable, primarily related to the timing of cash collections, offset in part by a $19.4 million increase in accrued payroll. DSO for the quarter was 71 days. As far as the payroll accrual, we would point out that the Q3 payroll accrual will be six days, and that compares to the 12 days that we had in the second quarter. The payroll accrual only relates to timing, and the impact ultimately washes out through the full year. We're pleased with the ongoing strength of our balance sheet and the ability to support the business while continuing to return capital to our shareholders. We announced that the board of directors approved an increase in the dividend to $0.21375 per share, payable on September 23, 2022. The cash balance is supported, and with the dividend tax rate in place for the foreseeable future, cash dividend program remains the most tax-efficient way to get free cash flow and ultimately maximize return to shareholders. This will mark the 77th consecutive cash dividend payment since the program was instituted in 2003, and the 76th consecutive quarterly increase. That's now a 19-year period that's included four 3-for-2 stock splits. With those opening remarks, we'd now like to open up the call for questions. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Your first question comes from the line of Andy Wittman from Baird. Your line is open. Hi. Great. Thanks. Good morning, guys. I wanted to ask, I guess, questions related to the revenue line. Specifically, Ted, maybe you could talk a little bit about the dynamics on the price increases that you're trying to realize in response to the inflation versus the customer loss. You know, sequentially, the revenues were down just a smidge, but I would imagine that the price increases were, you know, a decent factor. Can you just help us understand where you think by the end of the year when you get to Q4, how the dynamic between price increases and customer loss is going to wash out on the revenue line? In other words, do you think that the price increases will more than offset the customer losses that may result from the pricing discussions that you're having? There's some upside, I think, for sure, Andy, to the revenue base numbers we shared, you know, which were $395 million-$400 million for Q3 and $412 million-$417 million for Q4. Beyond that, the visibility that we have is more related to the 86% cost of services. You know, hopefully you can appreciate as some of these negotiations are still although they're in the final stages, they're still active and ongoing, and we wanna be sensitive to that and respect the process, without negotiating out in the open. Look, there's certainly some upside to that range that we provided, but that's the revenue base that we feel most comfortable providing. We do have conviction around that 86% cost of services. That's been the goal, you know, since we started the year. We knew it would be, you know, an all hands on deck exercise involving, you know, a bottoms-up, client by client, customer by customer approach. We've made significant progress, especially during the second quarter. Again, in terms of revenue and cost of services, those ranges we provided are what we're most comfortable sharing. Yeah. Just on that gross margin comment or the 86% target versus what you put in the quarter, how indicative is the quarter's result on gross margin? In other words, how much of the changes that you're looking for were realized in the quarter? Recognizing that I know you are working hard, was it substantially not realized in the quarter that the Q3 and Q4 rates are gonna be much more. I mean, you're saying it's 86%. I'm just trying to understand. It seems like there's a decent amount of work to get there, so I'm trying to understand how much of an impact the changes you had, that you've made were impacting the second quarter results. Yeah. Well, we did have the client that was placed into receivership, which impacted cost of services by about $7 million. If you adjusted for that, cost of services would have been more in line with where we were last quarter, which reflected certainly some traction and some gains we had as a result of the service agreement modification efforts, as well as operational improvements around labor management, specifically related to overtime and premium pay. To your point, Andy, the efforts and ultimately the results The service agreement modification efforts are really more back-end loaded, meaning they won't be realized in full until, you know, the first quarter of 2023, which is why we're framing it and orienting our strategies around exiting the year at that 86% cost-to-services run rate. Okay. Thanks, Ted. Your next question comes from the line of Tao Qiu from Stifel. Your line is open. Hey, good morning. I was curious if you guys could provide some colors on the trend of labor and food costs in the quarter. Just regarding kind of the guidance on the quarterly revenue, the $17 million step up from this third quarter to the fourth quarter, is that a reflection of the real-time pricing adjustment that we achieved through the contract negotiations? Just to tackle the second question first, Tao, as Ted noted, we're still sort of in the final stages of negotiation with several clients of ours, so we've not fully completed that exercise. It's hard at this point to necessarily project the exact output and the effect that it'll have, not only from a revenue perspective that Ted alluded to, but perhaps some choppiness as we work through the back half of the year from a margin perspective. From our perspective, obviously, we're interested in you know, establishing the best outcome for the partnership. You know, such that we're gonna establish a really sustainable partnership with our clients and of course, very much focused on exiting the year at 86%. We anticipate that as we're in the concluding stages here of these negotiations, there could be, you know, some additional choppiness. It's not necessarily gonna be a nice, clean, perfectly linear pathway to get to 86% with, you know, corresponding increases in revenue per se. But certainly we are in the final stages, and once that work is complete, we are very much focused on exiting the year at 86%, which is still, you know, very much on target for, from our perspective. Tao, just to put a finer point on even Matt's commentary, if I heard you correctly. Yes, that $17 million one-time reduction that we anticipate in revenue in the third quarter, which would have a corresponding $9 million reduction in operating income, would strictly be one time. If this negotiation of that restructuring plays out the way we believe it may, that would be a one-time effect in Q3, which would then, again, it would not be part of recurring revenue. It's just the accounting treatment of how that particular transaction or restructuring would be handled. The bounce back in the fourth quarter just reflects the one-time nature of that, you know, that write-down. That's exactly right. Right. Then to your initial question, Tao, as to you know, sort of the inflationary environment. You know, I would say that we're sort of comparable to last quarter. You know, as far as the labor side, there was some stabilization, some signs of improvement related to our internal data and experience. You know, from an industry perspective, if we think more broadly about the skilled nursing industry, for the first time in over two years, we saw some improvement in the nursing home workforce data. You know, from March through June, preliminary data suggests that there was about 13,000 hires added to the industry. You know, we're still looking to get back to pre-pandemic levels of employees within the space, and there was a bit of an uptick between March and June. That's encouraging. The most recent five months of data also suggests that wages of employees more broadly within the nursing and residential care facilities may be stabilizing. This is reflective of our experience as well. The industry saw a then high in wages in January, followed by a drop in subsequent months, and preliminary numbers for May look to be level with January. Our numbers are comparable, you know, a similar trend with a peak in March that has dropped modestly through May. Similarly, our application data is trending in a positive direction. We've seen a steady climb in the applications received. We've gotten about 33% more applications in June than compared to the month of January. You know, currently hires are outpacing employee separations, which is obviously, you know, encouraging and that's where we need to continue to drive that dynamic. You know, stabilization and modest improvement is certainly encouraging, but there's obviously still quite a ways to go within the industry and market in general to really foster that full recovery of staffing, which would then have the trickle-down impact on occupancy as well. As to the sort of broader inflationary metrics, Tao, you know, we saw CPI similarly in the quarter about 2.6% change in Q2. You know, food-at-home inflation specifically was about 3.4%, and wage inflation was about 2.1%. Again, the theme would be stabilization and some encouraging signs. Got you. Those are very helpful points. One more clarification from me. You mentioned that, you know, you guys are considering adjusting, you know, timing of collection as, you know, one of the factors you could use for negotiations. Just curious, would these adjustments be one time or permanent in nature? And how do you think about where DSO will shape up, you know, in the second half? You know, again, client-specific, very situational. What I can tell you without getting into, you know, specific examples that we either settled on or may work through is that overall, if you think about the shortfall that we had in the first half of the year, more than half of that w as driven, you know, through intentional negotiation, and we expect to make up a significant portion of that through the back half of the year, in addition to collecting what we bill. That said, you know, temporary in many cases, Tao, although there were some instances where we decided to make permanent adjustments. They were all, again, client by client, bottoms-up strategy. When that's a tactic in that strategy, that's no different. It's very client-driven. Understood. Thank you. Your next question comes from the line of Sean Dodge from RBC Capital Markets. Your line is open. Thanks. Good morning. Is there any more detail you can share around the client group that was placed into receivership? You know, I guess, is that both a Housekeeping and Dining client? Any bookends you can kind of give us around how much revenue they contribute? Maybe any thoughts you have on your ability to retain that business? Yeah. Sean, you know, without getting into the specifics, that was a client group. We did in fact provide both Dining and Housekeeping services there. It was placed into receivership, and that facility will be shuttering its doors. To your point, we will be obviously walking away from that piece of business. As far as the revenue contribution, it's about $2 million per quarter would be among that group, the revenue impact between both services. Okay. That's helpful. Thanks. I guess it's been six or seven months now since you made the acquisition into the education market. Are there any updates you can give us on thoughts or timelines around when we could see, maybe a more meaningful push, there? Yeah. You know, Sean, unlike sort of the base business within the skilled nursing end market, there is quite a bit of seasonality to that end market, as you'd probably imagine. We're sort of in the operational ramp-up phase right now, where really the spring is kind of the selling season, where schools are looking to make determinations as to whether to outsource or potentially switch their outsourcing partners in the upcoming anticipation of the fall academic year beginning. We're in sort of operational phase right now. I would point out that, you know, as we worked our way through what would be kind of called the sales season in the education end market, you know, we were successful in really, you know, expanding our outreach with both environmental services and in dining services as well. You know, not necessarily ready to talk about specific, you know, revenue contribution per se, but I'd say that, you know, what has been initiated as, you know, a potential new end market to explore is increasingly appealing from our perspective. Okay. Sounds good. Thanks again. Your next question comes from the line of A.J. Rice from Credit Suisse. Your line is open. Hey, guys. This is Nate on for A.J. I just had a real quick question, I guess, on how we should be thinking about dietary margins going forward, kind of given the two-quarter lag in any, you know, food inflation pass-through. I guess specifically, you know, if we think that the delta between actual food inflation and what you're being reimbursed for kind of shifts more favorably in the future, I guess, could we see any benefit to margin? We could. You know, I think Matt highlighted it, but there was a negative delta due to the lag in Q2. As when the pace of inflation either slows or flattens altogether, there would be some residual gain to the margins as well for the portion that relates to the non-labor portion of the billing. That is a possibility. Again, we're not banking or betting on that. We're gonna continue to execute operationally. That's really where the continued margin improvement would come from and along with the customer modification efforts. To your point, that could be a tailwind, at least over for a temporary period of time at some point in the future. Yeah. Just to speak to that sort of immediate future more specifically, Nate, you know, the first quarter, food-at-home inflation was 3.9%, so that's what you'd see reflected in the pass-through in the third quarter. Then the second quarter was 3.4%, so that you'd see pass-through in the fourth quarter. Thanks, guys. Very helpful. Your next question comes from the line of Ryan Daniels from William Blair. Your line is open. Hey, good morning, guys. This is Jack Senft down for Ryan Daniels. Thanks for taking my question. I think a lot of my questions have been touched on already, but just kind of curious how the remainder of the service agreement modifications went with customers. Like, I guess especially as it relates to the exits that you mentioned in your prepared remarks. I guess, like, did you find that as time went on and, you know, inflationary concerns kind of grew in the overall market, that kind of had to pivot your approach for these negotiations and conversations? You know, and with that said, as time did kind of crawl on, did you experience, you know, greater pushback, you know, kind of towards the end of the first half of the year? Yeah. I guess the first thing that I would point out is that they are not yet complete, so it's not that we're able to to sort of do an official full autopsy at this point. I would say that, you know, this is one of the largest undertakings from a company to client perspective that we've ever undertaken. You know, as we alluded to, as Ted certainly noted in his opening remarks, there were many elements of the customer relationship that were on the table and were a part of the discussions, all of which, from our perspective, meant to most favorably position Healthcare Services Group and of course, the partnership in a durable, sustainable way with the customers. You know, there were a lot of elements that came into play, not only the ongoing inflation, but the labor environment and the effect that that's had on occupancy. The fact that we've seen largely a drying up of additional federal funds available, and that the focus of operators has really moved towards state-based reimbursement relief and additional financial benefit that they can achieve at the state-based level. I guess the ultimate takeaway is that there were a lot of moving parts. We feel confident that we were able to gain what it is that we needed from our customers. Clearly, in the instances in which we were not, then we made the decision to exit the business. For anyone who's followed the company for any length of time would appreciate, that's not something that we do cavalierly. You know, we don't leave a single facility in a cavalier manner, certainly much less, you know, an amount more than one facility. That's not something that we do lightly, but of course, we are acting in the best interest of the company. I would say that it's worth noting when we do exit a facility, particularly in a situation like this, we shake hands, we part ways as friends, and we'll keep tabs on that facility. We'll keep an eye on, you know, the economics that persist in that specific facility's market. There's nothing that suggests that that client, you know, when faced with life without Healthcare Services Group, doesn't get a fairly quick and significant reality check such that they're willing to come back to us to say, "Hey, yeah, guess what? Trying to hire a manager wasn't as easy as we thought. You know, trying to manage the line staff on budget or keep the department fully staffed for that matter is far more challenging." You know, forget about the operational, you know, systems and policies and procedures that we implement, the additional managerial support that we provide with the district manager and the directors of operations at the regional level. The ultimate takeaway is we did in fact, of course, exit business as we're in the final stages of completing these negotiations. There's nothing that suggests that we may not leave additional facilities. That's not something that we anticipate, but of course, we're prepared for that should it come to it. Ultimately, you know, in spite of all these moving parts, we know that we're making the right decisions to most favorably position the company and of course, the corresponding client relationships going forward. Great. Understood. Yeah, I truly appreciate the comments on that. Thanks. And then just as a follow-up, in terms of occupancy, I know last quarter it was kind of mentioned that this would be an area to watch, you know, closely going forward, you know, into the next six months or so, and that it was tracking pretty well and favorably in terms of recovery. Just kind of curious what you're seeing in terms of, you know, the health of the end market now, and if the industry is still on pace to kind of recover back to the, I think it was the 80% benchmark by beginning 2023. You know, any additional info here you have would be great. Thanks. Yeah, I know that, I think just to maybe take a bit of a step back, and you alluded to it, but, it is our view that the continued interplay between census recovery is really driven by staffing. It's going to be those two components that not only we're closely monitoring, but I think will determine the pace of recovery, at least. I'd say the most recent occupancy data are not as encouraging as it was, say, a quarter ago. There's been s ome stagnation. Right now, national occupancy sits at around 74%, which is about 70 basis points higher than it was, you know, at the end of March. That would put the industry, to the point of your question, on pace to reach, you know, recovery somewhere towards the middle to late 2023 rather than the beginning of 2023. That said, you know, our take is that we're very bullish on the notion that the industry will recover. It's just a matter of timing. I do believe staffing is going to be the most critical component to that recovery. Again, in the near term, we have to remain disciplined in our approach and make decisions accordingly. Again, ultimately, it's a matter of when, not if. We're gonna continue to monitor those dynamics as closely as possible. Great. Thanks for taking my question. Your next question comes from the line of Mitra Ramgopal from Sidoti. Your line is open. Yes. Hi, good morning, and thanks for taking the question. Just wanted to follow up a little on the occupancy. As it starts to tick up a little, are you getting more inbound calls? Do you have the ability to take on new business in light of the difficulty of the market right now? I think opportunistically, Mitra, yes. You know, aside from monitoring all the dynamics I mentioned earlier very closely, the continued pressures on the providers certainly, you know, coupled with the secular trends we've talked about previously, amplify our value prop. They have increased demand, inbound calls, to your point, for our services, and they create opportunities to grow the company. You know, our focus disproportionately this year, and I think heading into the back half of the year, continues to be on the base business and the service agreement modification efforts. But we do expect opportunistically to grow in the back half of the year as well when the situations present itself. Then certainly in 2023, with the contract modifications behind us, we'll be able to refocus our attention on that top-line expansion, that we've talked about for many years. Okay, thanks. Just to be clear, in terms of the revenue guidance for Q3, Q4, that's assuming no new business? Yeah, that assumes a neutral state, you know, ex any facility exits or new business adds. Okay, great. Thanks for taking the questions. Your next question comes from the line of Sean Dodge from RBC Capital Markets. Your line is open. Yep. Thanks. Just a quick follow-up. Ted, you mentioned that the pricing resets will be phased in over the back half of the year. That $412 million-$417 million range you gave for Q4, should we think about that being a run rate for the quarter? Or do you anticipate exiting Q4 at something better than that as those prices get rolled in? Run rate for Q4, but just to be clear, Sean, I wasn't suggesting because we don't quite have the visibility into the timing of some of those revenues being added. Where we've negotiated service agreement modifications, we do have visibility into it, but the ones that are still in flux or in the final stages of negotiation, we don't have clear-eyed view as to the timing of that. Really, I think the revenue guidance we provided as far as the run rates would be kind of our expectations. Then to the extent there's updates on that, positive or otherwise, we would provide that, you know, next quarter or the quarter thereafter. We do, however, have better visibility into the fact that we plan on exiting the year at 86% cost of services. The timing of the revenue adds over the back half of the year, we have less visibility into. With the conviction that come the first quarter of next year, the modifications will be behind us, and we'll be able to. You know, everybody will be able to see the progress that we've made and, you know, the result of all the actions that we've taken. Okay. All right. Great. Thanks again. Your next question comes from the line of Brian Tanquilut from Jefferies. Your line is open. Hey, good morning, guys. Thanks for letting me ask a question. I guess, Ted, first question for you. As we think about, you know, the health of the client base, right? I think we've all been focused on your biggest client over the last year or so. A little bit of a surprise here with the receivership of this one client. How are you thinking about the health of the remaining client base as we think about, you know, the challenges that the industry continues to face, as you said, recovery and occupancy won't happen until mid to late next year? Well, look, the industry right now is in a recovery phase, right? There's the path and the pace of that recovery continue to be a bit uncertain. You know, again, longer term, Brian, certainly confidence of the ultimate recovery, whether that's the middle of next year or if it's pushed out further because of some of the staffing challenges that continue to manifest themselves. Again, our internal data and one of the best metrics we're able to use for kind of our own customer health, which we clearly monitor as closely as possible, would be how our customers are paying us. I think over the back half of the year, you know, our expectations are that we're gonna be in a position to not only collect what we bill, but also make up a portion of the amounts that we either temporarily extended to customers or in the event that we had shortfalls with customers for particular reasons, make up those shortfalls as well. I think we're gonna continue to monitor it closely, but again, the recovery is yet to be determined in terms of the timing. Optimistic there ultimately will be a recovery back to that 80% benchmark in terms of occupancy and, you know, we'll go from there. I just wanted to add, Brian. Brian, sorry. Just another add on to that, you know, I don't think we've mentioned thus far would be, you know, the 90-day extension of the Public Health Emergency, which has a favorable impact, not only in the three-day stay requirement, but similarly has a more pronounced effect on reimbursement rates in certain states. That kind of dovetails into the other point that I wanted to make, which is, you know, certainly from our perspective, we keep an eye on the macro national level data, not only from a broader industry perspective, but within our customer base. Increasingly meaningful is what happens within certain states as it relates to, you know, whether it's the Public Health Emergency-related provisions that each state might be supplementing or, you know, state-based reimbursement increases that we're seeing. The operating environment is increasingly varied from state to state based upon the level of support supplementation that each state is providing. You know, that of course factors into our calculus as well when we're assessing the health of our current customer base, and likewise to Mitra's question, looking out over, the new business opportunities, in the immediate future as well. I understand. I guess, Ted, you know, there's an article this morning on Modern Healthcare about the increase in staffing or nurse staffing ratios at the nursing homes that's being proposed by CMS. Have you had discussions with your clients on how that impacts your business and how their business and yours as well? Yeah. I think there's so much uncertainty around proposed regulations that, you know, I think the industry, other than monitoring it closely, and Matt alluded to it, there's so many state by state variances. You know, always planning for different scenarios, but no, that hasn't been a big topic of conversation among the customer base. I would just sort of add to that, Brian, that two things, the most obvious of which is, you know, we don't provide nurses. So, you know, as far as the direct impact on us, it's nonexistent. But the corollary to that would be that generally speaking, with additional uncertainty and pressure that operators face, you know, they're forced to look at being as efficient as possible. They're looking to contain their costs in any way that they possibly can. The primary way in which they're able to achieve that is in outsourcing services of all types, right? Including the type of services that we provide. So, you know, we've talked about the resonance of our value proposition in the face of increasing uncertainty and perhaps, you know, potentially additional regulatory burdens. You know, that does nothing but further increase the resonance of our value proposition. I appreciate it. Last question from me. As we think about, you know, the revenue base shrinking here a little bit, at least near term, right? I appreciate the gross margin targets, but how should we be thinking about your ability to reduce G&A to adjust to the shrinking top line? Yeah, it's a great question, Brian. The reality is that there's largely fixed cost in G&A. From our perspective, when we exit a new piece of business, you know, the primary objective is to be able to reassign the facility-based manager to a new opportunity as quickly as possible, you know, whether that's an existing piece of business where we have the opportunity to upgrade perhaps an underperforming manager or if it's, you know, repurposing that manager into a new business opportunity. From our perspective, if we think about SG&A, you know, we've talked about 8.5%-9.5% on a percentage basis. You know, as we're looking at exiting some of that business and the corresponding impact on revenue, you know, the way to think about SG&A is probably in that $37 million-$39 million range, which obviously on a percentage basis, with some of the revenue reductions is going to be, you know, on the higher end. We have every confidence that when we get back into growth mode, there's certainly opportunities for leverage there on the SG&A line. Got it. All right. Thanks, guys. There are no further questions at this time. Mr. Ted Wahl, I turn the call back over to you for some closing remarks. Okay, great. Thank you, Rob. In the quarter ahead, we will continue to prioritize modifying our service agreements to adjust for the significant inflation experienced during the past year, as well as account for future inflation on a more real-time basis, with the goal of exiting the year with cost of services in line with our historical target of 86%. Increasing cash collections with the goal of collecting what we bill and making up a portion of the shortfall from the first half of the year. Of course, operational execution with the goal of delivering on our operational imperative as we provide an extraordinary service and experience to our customers. On behalf of Matt and all of us at Healthcare Services Group, I wanted to thank Rob for hosting the call today. Again, thank you to all of you for joining. This concludes today's conference call. You may now disconnect.