UniFirst Corp
NYSE:UNF
Earnings Call Analysis
Q2-2024 Analysis
UniFirst Corp
A significant story is unfolding for investors as the company reports an 8.8% surge in revenues for the second quarter, compared to the same period last year. This uptick has been bolstered by the acquisition of Clean Uniform, adding a positive momentum to the company's top-line growth since its inclusion just over a year ago. Furthermore, the core laundry operations notched an organic growth of 4.8%, harmonizing with net income and EBITDA growths of 14.9% and 23.8% respectively, which positions the company on a strong growth trajectory.
The financial health is further strengthened by the significant improvement in cash flows from operations and controlled merchandise costs. The profitability has expanded with the consolidated operating income jumping to $27.9 million, a notable 34.9% increase, supported by a disciplined approach to operational efficiencies and cost management. The operating margin of core laundry operations has increased to 3.6%, attributing this to robust new account sales and strategic pricing with customers.
The company looks beyond revenue and profit as it makes strategic technology investments to future-proof its operations. Despite the initial expansion of costs linked to the transformative technology projects like CRM and ERP, these endeavors are expected to taper down, paving the way for increased efficiencies and reduced long-term expenses. It's not solely about the bottom line, as the company remains invested in driving superior service execution, customer satisfaction, and continuous improvements in efficiency and profitability. This is evident with strong performances in the van operations, which not only signifies growth but reflects the company's commitment to its sales and service infrastructure.
Exemplifying financial prudence, the company boasts a solid balance sheet with no long-term debt and a hearty pool of cash and short-term investments amounting to $101.9 million. Cash flows from operating activities have impressively risen to $106.7 million, indicating a robust financial position that can support its ambitious investment agenda, which includes $72.9 million in capital expenditures and a share buyback worth $8.1 million.
Looking ahead, the company anticipates revenues for fiscal 2024 to land between $2.415 billion and $2.425 billion, with diluted EPS projected to fall between $6.80 and $7.6—a guidance that encapsulates an additional week of operations compared to the previous fiscal year. These forecasts assume operational and EBITDA margin midpoints of 6.5% and 12.6% respectively for core laundry operations and a one-year cost of approximately $12 million associated with ongoing key initiatives.
Investors can also factor in a projected full-year effective tax rate of 25%, alongside expectations of managing key initiative-related costs totaling $12 million for fiscal 2024. This guidance carries a disclaimer, assuming there won’t be future share buybacks or any unforeseen severe economic downturns.
The company marks success through its cross-sell efforts within the first aid expansion, tuning into the potential of leveraging its existing UniFirst customer base for incremental growth opportunities. Though the specifics of core laundry cross-sell components are not dissected, consistent success in this arena fuels optimism for strategic investment to enhance these initiatives, hinting at untapped potential that's yet to be realized.
While the picture painted so far is bright, a minor shade is cast by legal expenses—50 basis points that signify a headwind, albeit a sporadic and non-routine element that predominantly pertains to environmental reserves adjustments. Such factors are not anticipated to persist regularly, implying that margins might improve without these intermittent pressures.
The company notes a flattening in the cost of merchandise, which historically posed a headwind. Now, this trend appears to be stabilizing, providing a slight fiscal cushion, even amidst a commendable 10% increase in new account installations, which act as a driver for future revenue growth.
The unfolding narrative becomes richer with the company’s intricate dance between further investments and operational efficiency. Building upon the adoption of new CRM technologies by frontline service workers is enhancing day-to-day plant operations and customer experience. This technological shift is expected to smooth out and bolster overall growth, affirming their long-term strategy focused on operational finesse.
Even with seasonally impacted quarters, like the second quarter traditionally being the lowest in profitability, the company expects margins to rebound. This anticipation is fortified by benefits realized, such as energy savings of 40 basis points, and cushioned by provisions, like those made for new facility openings and selling incentives, which contributed to additional expenses in the second quarter. Confidence emanates from the expectation that these margins are on an upward trajectory, despite occasional dips attributable to strategic investments and external factors.
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Hello, and thank you for standing by. Welcome to UniFirst's Second Quarter 2020 Earnings Conference Call. [Operator instructions]. After the speakers' presentation, there will be a question-and-answer session. [Operator instructions].I would now like to hand the conference over to Steven Sintros, UniFirst's President and CEO. Sir, you may begin.
Thank you, and good morning. I'm Steven Sintros, UniFirst's President and Chief Executive Officer. Joining me is Shane O'Connor, Executive Vice President and Chief Financial Officer. We would like to welcome you to UniFirst Corporation's conference call to review our second quarter results for fiscal year 2024. This call will be on a listen-only mode until we complete our prepared remarks, but first, a brief disclaimer. This conference call may contain forward-looking statements that reflect the company's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties. The words anticipate, optimistic, believe, estimate, expect, intend and similar expressions that indicate future events and trends identify forward-looking statements. Actual future results may differ materially from those anticipated depending on a variety of risk factors. For more information, please refer to our discussion of these risk factors in our most recent Form 10-K and 10-Q filings with the Securities and Exchange Commission. We are pleased with the results from our second quarter, which met our internal expectations. I want to sustainably thank our team partners who continue to always deliver for each other and our customers as we strive toward our vision of being universally recognized as the best service provider in the industry, all while living our mission of serving the people who do the hard work. The people who do the hard work are the workforce that keeps our communities up and running. So many of them are our existing and prospective customers as well as our own UniFirst team partners. Our mission is to support those employees by providing the right products and services, enabling them to do their job successfully and safely. Whether that means providing uniforms, workwear, facility services, first at and safety, clean room or other products and services, our goal is to partner with our customers to ensure that we structure the right program, products and services for their business and their team, all while providing an enhanced customer service experience. Overall, revenues in our second quarter were up 8.8% compared to the second quarter of fiscal 2023. The current quarter benefited from the acquisition of Clean Uniform, which just passed its 1-year anniversary of becoming part of UniFirst this month. We continue to be pleased with the overall performance of clean as we have been able to retain its customers and continue to move its top line positively over the last year. Core Laundry Operations' organic growth totaled 4.8% in the quarter. Net income and EBITDA increased 14.9% and 23.8%, respectively, in the quarter compared to a year ago, benefiting from growth in our top line and lower cost expended during the quarter related to key initiatives. Excluding the impact of the key initiatives, we still experienced solid EBITDA growth in the first 6 months of the year. We are also pleased with the significant improvement in cash flows from our operating activities compared to 2023 as well as some positive trends in certain key areas such as merchandise costs.As a reminder, we have been expanding costs over the last couple of years related to our technology transformation. As expected, these costs are declining due to activities surrounding the deployment of our CRM largely winding down. We continue to expend dollars related to our ERP project. However, as we enter implementation phases of the project, more costs are being capitalized. During the quarter, we saw continued strong performance from our sales organization, delivering a 10% increase in new account installations compared to the prior year. We continue to sell prospects on the value that UniFirst can bring to their businesses. Our approach is a consultation, where, as I mentioned, we focused on creating the right programs with the right garments and products for our customers. Overall, we are pleased with solid organic growth for the quarter despite a somewhat more challenging pricing environment. In addition, wears versus reductions were flat in the quarter compared to a positive impact in wearer levels that we had a year ago. As we look forward to the rest of 2024 and beyond, we will continue to focus on delivering profitable growth fueled by strong execution from our sales organization and our continuing efforts to drive superior service execution and customer satisfaction. In addition to executing our growth model, we continue to focus on opportunities to improve our efficiency and profitability. Our team continues to become more proficient utilizing and optimizing the capabilities of our new CRM, including leveraging some of Clean's proprietary technology across UniFirst, with all efforts focused on deploying standard processes and driving productivity. In addition, areas such as strategic pricing and account profitability as well as strategic manufacturing and sourcing represent significant margin enhancement opportunities. Although some of these benefits going forward will be more significantly enabled through the implementation of our ERP, we continue to focus on these areas and others that we feel can move the needle in the near to midterm. We continue to believe strongly in the bright future of our First Aid and Safety division. During the quarter, we continued to deliver strong growth in our van operations, which was partially offset by a decline in our wholesale operations. We continue to make investments in the sales and service infrastructure of the van business to expand our footprint and ensure we can reach existing UniFirst customers as well as new prospects in the market that have a strong need for these products and services. As we progress, increasing route density in addition to penetrating customers with the full breadth of services that we provide will be critical steps in building the profitability of this segment. With that, I'll turn the call over to Shane, who will provide more details on our second quarter as well as the outlook for the remainder of fiscal '24.
Thanks, Steve. In our second quarter of 2024, consolidated revenues were $590.7 million, up 8.8% from $542.7 million a year ago. And consolidated operating income increased to $27.9 million from $20.7 million or 34.9%. Net income for the quarter increased to $20.5 million or $1.09 per diluted share from $17.8 million or $0.95 per diluted share. Consolidated EBITDA increased to $62.5 million compared to $50.5 million in the prior year or 23.8%. Our financial results in the second quarters of fiscal 2024 and 2023 included approximately $3.2 million and $9.1 million, respectively, of costs directly attributable to our key initiatives. In addition, we incurred costs of approximately $2 million in our second quarter of fiscal 2023 related to the acquisition of Clean Uniform. The effect of these items on the second quarter of fiscal 2024 and 2023 combined to decrease, both operating income and EBITDA by $3.2 million and $11.1 million, respectively. Net income by $2.5 million and $8.3 million, respectively, and EPS by $0.13 and $0.44, respectively. Year-over-year net income and EPS comparisons were also unfavorably impacted by lower interest income in our second quarter of 2024, due to lower cash reserves subsequent to the acquisition of Clean in our third quarter of fiscal 2023. Our Core Laundry Operations revenues for the quarter were $522.4 million, up 9.5% from the second quarter of 2023. Core Laundry organic growth, which adjusts for the estimated effect of acquisitions as well as fluctuations in the Canadian dollar, was 4.8%. The solid organic growth rate was primarily the result of solid new account sales and improved pricing with our customers. Core Laundry operating margin increased to 3.6% for the quarter or $19 million from 2.9% in prior year or $13.6 million, and the segment's EBITDA margin increased to 9.9% from 8.7%. The costs we incurred related to our key initiatives were recorded to the Core Laundry Operations segment and combined to decrease both the Core Laundry operating and EBITDA margins for the second quarter of fiscal 2024 and 2023 by 0.6% and 2.3%, respectively. Excluding these items, the segment's operating and EBITDA margins were also impacted by additional reserves we recorded related to our legacy environmental sites and higher costs we incurred related to investments we have made in building our corporate capabilities over the last year. These items were partially offset by lower energy costs during the quarter, which decreased to 4.4% of revenues, down from 4.8% in 2023. Revenues from our Specialty Garments segment, which delivers specialized nuclear decontamination and cleanroom products and services, increased slightly to $43.5 million from $42.1 million in prior year or 3.2%. This increase was primarily due to growth in our cleanroom operations. Segment's operating margin increased to 22.8% from 19.1% primarily the result of lower merchandise expenses in our cleanroom operations. As we mentioned in the past, the segment's results can vary significantly from period to period due to seasonality as well as the timing and profitability of nuclear reactor outages and projects. Our First Aid segment's revenues increased to $24.8 million from $23.5 million in prior year or 5.6%. As Steve discussed, this increase was fueled by strong growth in our van operations, partially offset by a decline in our wholesale operations. Segment had an operating loss of $1 million during the quarter as the segment's results continue to reflect the investments we are making in our First Aid van business. At the end of our second fiscal quarter, we continue to reflect the solid balance sheet and financial position with no long-term debt and cash, cash equivalents and short-term investments totaling $101.9 million. Cash flows from operating activities in fiscal 2024 have increased to $106.7 million compared to $64.2 million in prior year or 66.3%, primarily due to improved profitability and lower working capital needs of the business. During the first half of the year, we continued to invest in our future with capital expenditures of $72.9 million, and we repurchased 46,750 shares of common stock for $8.1 million.I'd like to take this opportunity to provide an update on our outlook. We now expect our revenues for fiscal 2024 to be between $2.415 billion and $2.425 billion, in line with the message at the end of our last fiscal quarter. We further expect that our diluted earnings per share will be between $6.80 and $7.6. Our guidance for fiscal 2024 continues to include 1 extra week of operations compared to fiscal 2023 due to the timing of our fiscal quarter and assumes core laundry operations operating and EBITDA margin at the midpoint of the range of 6.5% and 12.6%, respectively. We now estimate that the cost directly attributable to our key initiatives that will be expensed in fiscal 2024 will be $12 million and will reduce both Core Laundry operations operating and EBITDA margins by 0.6%. We fully expect the full year effective tax rate will be 25% and our guidance assumes no future share buybacks or unexpected significantly adverse economic developments. This concludes our prepared remarks, and we would now be happy to answer any questions that you may have.
Ladies and gentlemen, [Operator instructions]. Our first question comes from the line of Manav Patnaik with Barclays.
This is Ronan Kennedy on for Manav. First one, if I may, just to look to unpack. I know you historically don't disaggregate or break out the organic growth algo, but you did comment on strong performance with a 10% increase in new account installations. Just wondering if you could unpack that a bit further with some further detail as to the drivers there, who you're winning from some further detail, please?
Sure. From a sales perspective, I think if you look at it, as we've talked about in the past, about 60% of our new account sales come from competition, and that's sort of a wide range of competition and the other 40% or no programmers. So those are either people that had a different type of program, maybe a direct purchase program or no program at all or opening a new business and so on. From an industry perspective, I think it's pretty widespread. We haven't seen any significant shift in the type of business that we're winning. We're still winning a healthy amount of uniform business, which did run a little bit higher this year, at least year-to-date compared to a year ago. So I would say the wins are pretty broad-based.
That's helpful. And then as a follow-up also on the organic growth, I think you had referenced a somewhat more challenging pricing environment, which you had also previously spoken of seeing price sensitivity. I think it was relative to initial expectations and also a function of moderating costs. But can you just talk about how pricing is trending and whether you're seeing some -- continue to see what was previously some strategic losses and then also, just any comments on attrition and how that is trending, please?
Sure. With respect to pricing, I think my comments probably held from last quarter as well. It is a little bit more sensitive out there. I think you just look at the cycle that we've gone through from an inflationary perspective. And although costs are not going backwards, some of the cost trends just out in the marketplace have moderated. And I think a lot of companies are starting to look at their cost and maybe putting programs out to bid a little bit more than they did certainly during the pandemic.I think a lot of this is in the context of comparing to the pandemic where retention for a lot of service companies was better. Price sensitivity wasn't as strong, especially with the inflation that was being experienced across the market. So I wouldn't say during the quarter, we had any further change in that environment. It continues to be on balance a little more challenging in that area compared to, say, a year ago.From an attrition perspective, I know we had talked about it picking up a bit over the last couple of quarters. I would say no real change there, although compared to maybe the second half of last year, maybe some recent improvement in a little bit. So nothing really significantly different in the environment.
Appreciate it.
Our next question comes from the line of Kartik Mehta with Northcoast Research.
And then I know you talked a little bit about attrition. But as you look at your ad stop metric, how is that trending?
Yes. At stops is very stable right now. I think I made the comment that a year ago, we were seeing a little bit more of a pull from positive ads. And you just don't need to look much further than sort of the job numbers kind of month-to-month over the last couple of years to see that you can kind of make the connection that we were getting more pull over that period of time and less pull now.Right now, I'd say it's stable. We obviously look closely to see if there's any signals of industry sort of pulling back. And although we've seen select layoffs here and there, broadly, it's been very stable overall.
And Shane, just one last question. For the year, what would you -- just to try to understand adjusted EPS, I know you gave the EPS number, what kind of impact would you anticipate from your key initiatives? And I know the acquisition now is -- you're lapping it, but just for the year?
Yes. I think the estimate for my key initiatives is $12 million for the year.
Thank you very much.
Our next question comes from the line of Tim Mulrooney with William Blair.
This is Luke McFadden on for Tim. So last quarter, you had mentioned detecting more cautious posture from some clients as it pertains to business outlook, at least on the margin. But given that many of your clients have now likely gone through their own annual budgeting process, just curious to hear if you've noticed any shift in sentiment one way or another as it relates to the outlook for the balance of 2024.
I wouldn't say there's really been any shift, and I think you're sort of seeing that in the ads reductions, right? I think we're probably seeing people a little bit more cautious about growth outlook overall, which is causing maybe some pullback in hiring. But again, I think it's sort of incrementally cautious. But I wouldn't say compared to a quarter ago that has really changed a heck of a lot.
Understood. And then if I can, pivoting to your ERP implementation, could you just provide any update on progress as it relates to that initiative to date, just in terms of where that's trended in terms of your internal expectations? And in light of that progress is the $150 million number that you gave, given in the past for CapEx for full year 2024, still the right way to be thinking about that?
Yes. Our ERP project continues to progress sort of in line with our expectations. Again, we're in the earlier implementation phases where we're focusing on maybe some more of the foundational items as we implement that system. At this point in time, I would say largely it's progressing as expected. When you take a look -- as it relates to your question around the CapEx for the year, the $150 million, I think, through 2 quarters, we spent a little over $72 million in CapEx. And I think the way things are trending, that $150 million number still is a good number.
Our next question comes from the line of Andrew Steinerman with JPMorgan.
Could you talk a little bit about universe success in cross-selling? Like right now, how much is cross-selling existing accounts, helping the organic revenue growth. And overall, I know you talked about building out your Vans business in first aid. This is really kind of, I would say, core laundry question, but are you getting more cross-sell of core laundry from your van customers in First Aid.
Yes, I'll take the second part of the question first. Certainly, we are getting a lot of energy and cross-sell with our first aid expansion, and that was sort of the purpose of expanding that infrastructure to really take advantage of our UniFirst customer base, and I think that's being successful. As far as -- from a core laundry perspective, and again, I know we don't always break down the components of that growth. We're probably seeing a consistent amount of cross-sell going on right now in the core. I really don't want to break down the components of the 4.8 to gets a little messy with ads reductions in cross-sell and so on. But I think it's pretty consistent. I think there's more we can do there. And some of our strategy over the next couple of years is to increase some investments in that area. I think without getting into some of the details about some of the products and other things that we're looking at, we think there's incremental opportunity there. So right now, it's probably been pretty steady based on what we've been doing, but we think there's opportunity to improve that area.
Our next question comes from the line of Justin Hauke with Baird.
It's Andy Whittmann. Sorry for the confusion there. I wanted to ask, Shane, on the -- you talked about the environmental liability on some of your sites increased and impacted your margins, this question, really 2 parts to this one. Like how much was the reserve this quarter? And do you see that reserve being kind of an adjustment that is onetime? Or do you think this is an ongoing level of greater cost that you'll be having to take in your P&L on a go-forward basis?
Yes. So the first thing I'll say about those reserve adjustments is those relate to legacy sites that -- and those environmental issues were probably from 3 or 4 decades ago. So those are reserves that we've carried for a significant amount of time. The headwind that we saw during the quarter, our legal expenses were actually 50 basis points of headwind.The vast majority of that was related to the environmental reserves that we recorded. That isn't an ongoing. You shouldn't expect that there's going to be ongoing reserve adjustments on a quarterly basis from time to time. We do have to adjust those. One of the adjustments that we make to those reserves are change in discount rates, and we've talked about that from time to time. So we've had some variability go through our operating margins as a result of those types of changes. But they aren't normal operating expenses that are routine and consistent. So every now and then, we'll have to make some adjustments to those reserves, but it's sporadic.
The only other thing I'll add, Andy, is that the -- some of the progress related to these sites transpires over years. And so we'll be asked to do a little bit more work on a site, and we'll try to estimate the impact of that. And then 2 years later, we'll have some more feedback about something. So as Shane mentioned, it was both that this quarter as well as somewhat of the interest rate adjustments that we made to those reserves as well.
Yes. Okay. That all makes perfect sense. And then I guess the other key thing that you mentioned here in your margins was related to merchandise cost. This has been a lingering headwind, but it sounds like this is the quarter where you saw a little positive benefit from there. Do you feel like that bottom is in place on the merchandise costs? I thought it was particularly interesting given that new account installs were sounded like they're pretty good. You guys said positive things about that. So does that give a firmer base do you think, Steve, on merchandise costs? And can you give us the quantum of the benefit that you saw in the quarter on that one as well?
Yes. I think in the quarter compared to year-over-year, we're still sort of flat or maybe even up 1/10 or something in merchandise. But compared to our expectations, we saw some benefits there. And to answer your question, I think -- clearly now, we feel like we're seeing that flattening, right? We've been growing, growing. We started to see some early signs of flattening and we really are seeing that now. And just as a reminder, generally, more than 2/3 of the merchandise is just regular replacement merchandise for existing accounts and about 1/3 is related to new accounts. So even with new accounts higher, yes, we're seeing some benefits in that area, which are great to see.
Yes. The only thing I'll add to that is, as we came into the year, we had sort of messaged that merchandise was starting to flatten. And we had indicated that maybe we were looking at a 10 basis points headwind during the year. Based on what we've seen through 6 months, we've obviously seen some flattening in the additional ads to our merchandise and service. Again, the way that we account for our merchandise won't have as much of a meaningful impact on the current year because we amortized that over an extended life. At this point in time, when I take a look at the year, I'm looking at merchandise being relatively flat or maybe a slight benefit around 10 basis points. But again, because of the way that we account for that, that trend will aggregate over time.
Okay. That's helpful. I guess I'm just going to ask one question maybe on the top line here because I'm hearing some puts and takes. I'm hearing 10% increase in new account installs, which sounds like a really good performance year-over-year and would otherwise suggest that maybe potentially, I guess, the question is, do you think -- can that lead to an inflection in your growth rate from here, just given that you installed a lot of new business in the quarter. And I guess previously, you kind of a you were talking about the revenue being maybe on the lower end of guidance. And so does the sales performance change that commentary? Or does the add stuff are now more flat instead of positive like you were getting a year ago. Does that have an effect? I guess, ultimately, just still like the low end of the revenue guidance? Or are you more positive this quarter given the factors that you saw play out?
Yes. We're probably right down the middle there, Andy. And I think that the guidance reflects that, right? I think all we did on the top line guidance was sort of narrowed the range and shifted a bit to reflect the commentary we made last quarter. And I do think the impact of some of those things you're mentioning, whether it be the impact of solid new account sales, price, adds reductions, all of those things kind of have us looking very much in the same place that we were a few months ago, I guess.
Okay. I'll leave it there, guys. Have a good day.
[Operator instructions]. Our next question comes from the line of Josh Chan with UBS.
On your core laundry margin, I guess even if you add back the 50 basis points of legal, it still seems that it's down versus last year? And kind of could you help us understand then what drives margin expansion in the second half because I think that's what you need to get to your midpoint?
Yes. I can add some additional light there. I'll start with saying that our second quarter from a profitability perspective is seasonally our lowest quarter because of certain items that annually land in that quarter. So if you take a look at our history, it usually is our lowest quarter. When you take a look at the year-over-year trend, some of the other things that are contributing to the -- that margin headwind would be the acquisition of Clean, which accounts for about 20 basis points. We've made investments that we've talked about over the last year, primarily in the second half of 2023 in our corporate capabilities, which have contributed 20 to 30 basis points to that margin headwind. Energy was a benefit of 40 basis points. And then there were a number of other items that happened within the second quarter, which contributed to some additional expenses, a lot of which were anticipated and originally provided for in our guidance. As an example, during the second quarter, we had 2 new facility openings. And usually, there's incremental expenses that we incur as we get those facilities up and running and stabilized. There were certain selling incentives that landed during the quarter that were previously or in past years were timed in different quarters. And then there were a number of other items and timing items that happened in our second quarter that contributed to that delta of 30 to 40 basis points. Again, the seasonality as well as some of these items were largely provided for in our original guidance. And as we look throughout the remainder of the year, we are expecting that, that margin will trend northward of maybe our 2Q experience.
As my follow-up, could you talk about your CRM and now that you've had that for a while, at least in the U.S. Could you talk about the progress towards capturing any savings and how you expect those to trend over the coming years?
Yes. I think certainly, I made the comments in my prepared remarks that when you change the system like we have, there's a lot of learning. There's a lot of change management. I think the teams are becoming much more comfortable kind of optimizing the use of the new system. And we've always talked about that one of the areas that we expect to benefit from with the CRM has sort of increased merchandise management with kind of a more sophisticated barcode technology and some other controls. And I think that's partially maybe what we're starting to see with the improvements in merchandise.I think over the last couple of years as we were deploying the new system, there was probably incrementally some additional cost as we transitioned and rebar coded a lot of our garments, but we're through most of that now, and I think we expect that to start to smooth out. So I think that's one of the biggest areas. And I just think the efficiency in kind of the day-to-day plant operations. I mean when you think about our cost structure, merchandise is such a big part of it and then efficiency in the plants as well. And then we've always said kind of the service execution side of it with the automation we're giving our route drivers is a big part. And although there was change management, we have been happy with the adoption of the new technology by our frontline service workers. And I think the more they continue to get comfortable with that, it's just going to provide for that enhanced customer experience, which will help our overall growth over time.
Great. Thank you all for your time.
I'm showing no further questions in the queue. I would now like to turn the call back over to Steven for closing remarks.
Well, thank you. I'd like to thank everyone for joining us today to review our second quarter results, and we look forward to speaking with you again in June when we expect to be reporting our third quarter performance. Thank you, and have a great day.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.