Greenhill & Co., Inc.
Q2 2018 Earnings Call Transcript

Published: 5 Aug 2018

[Operator:]

Good afternoon, and welcome to the Greenhill Second Quarter 2018 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Patrick Suehnholz, Director of Investor Relations. Please go ahead.

[Patrick Suehnholz:]

Thank you. Good afternoon, and thank you all for joining us today for Greenhill's Second Quarter 2018 Financial Results Conference Call. I'm Patrick Suehnholz Greenhill's Head of Investor Relations, and joining me on the call today is Scott Bok, our Chief Executive Officer. Today's call may include forward-looking statements. These statements are based on our current expectations regarding future events that, by their nature, are outside of the firm's control and are subject to known and unknown risks, uncertainties and assumptions. The firm's actual results and financial condition may differ, possibly materially, from what is indicated in those forward-looking statements. For a discussion of some of the risks and factors that could affect the firm's future results, please see our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date on which they are made. I would now like to turn the call over to Scott Bok.

[Scott Bok:]

Thank you, Patrick. We reported second quarter revenue of $88.5 million, which is 32% above last year's level and operating profit margin of 22% and earnings per share of $0.38. The margin and earnings for the quarter were negatively impacted by a $2.7 million noncash charge in relation to the accounting for the earnout related to our 2015 acquisition of Cogent Partners. For accounting purposes, we now put the probability of that earnout being achieved at 100%. For the first half we had revenue of $176 million, which is up to 42% relative to last year. Our operating margin for the first half was 22%, which was negatively impacted by $3.6 million of noncash costs relating to the Cogent earnout. And our earnings per share was $0.58 up more than 3x versus last year's level. Adjusting for a tax charge on the vesting of restricted stock awards pursuant to new accounting rules that took effect at the beginning of last year, and principally impacted our first quarter, our earnings per share for the year-to-date was $0.73, up more than 4x versus what we reported for the same period last year. In addition, are highlights on this call the key drivers of our performance will provide an update on the progress in relation to the recapitalization plan we announced last September. Focusing first on our top line, this was our best first half ever in terms of advisory revenue. The primary driver of improvement versus last year with a very strong performance by our European M&A franchise. This supports our often stated view that despite what was a quiet year for us in that region in 2017, we continue to have a very strong advisory franchise in Europe, where we have a 20-year history of advising major companies on important transactions. It was also another strong quarter for us in capital advisory, driven by a high level of activity in secondary transactions, and we also saw modest improvement relative to last year in M&A revenue in Australia and Japan. It continues to be our view that conditions are generally favorable for M&A activity globally, particularly for the larger transactions that have historically, been our primary focus. We also are seeing continued favorable conditions for capital advisory transactions. In contrast, restructuring activity has been lighter, but we are making good progress on our project of building a substantially larger team in that area in preparation for the next economic downturn. Finally, separate from the fact that marketing conditions for advisory and services continue to be quite favorable for all market participants, it's worth noting that first half financial results from all of our publicly traded competitors indicate that independent advisors like our firm continue to take market share from the large banks. We believe that trend still has a long way to go and that we can be a major beneficiary of that trend, given our strong brand with both clients and talent as well as our global footprint. Turning to compensation cost. Absolute dollars of compensation expense increased significantly for the quarter and year-to-date, but the significantly increased level of revenue allowed our compensation ratio to decline to 55% for the quarter and half, back within its historic range for the years prior to 2017. As always, the compensation ratio represents a balancing of the goal of generating attractive profit margins for our shareholders, against the need to reward our strong performers at all levels in a competitive manner. With respect to non-compensation operating cost, the bulk of the different sources last year is simply due to a difference in noncash accounting adjustments in the 2 periods relating to the earnout on our acquisition of Cogent. There's also a small difference between the 2 periods relating to the fact that under new accounting standards we now include expenses that are reimbursed by clients, as revenue, rather than as an offset to operating expenses. Our non-compensation operating cost for the first half were $40 million, which includes $3.6 million in noncash charges related to the earnout adjustment noted earlier. That $3.6 million negatively impacted our operating margin for the first half by 2 points. Adjusting for the impact of the Cogent earnout in both 2018 and '17 and the accounting change to reimbursements, our noncompetition operating expenses would have been $32.9 million for the first half of 2018, as compared to $35.4 million for the first half of 2017 or down about 7%. With respect to interest expense, we incurred $5.6 million from the quarter, up from last year, given the large borrowing we did as part of the recapitalization plan we announced last September. With respect to taxes, our rate for the quarter was 24%, which was within the expected range we indicated following the reduction in U.S. tax rates. The new U.S. tax law is complex but clearly, overall, we are a major beneficiary of the new law with the tax rate for the quarter that is more than 10 percentage points lower than what we typically reported in prior years. Turning now to capital returns to shareholders, our board declared a dividend of $0.05 a share, consistent with last quarter. Also in regard to return of capital, I will now provide an update on the share repurchase we announced as part of our recapitalization plan last September. In the second quarter, we repurchased 3.5 million shares and share equivalents at an average price of $23.98 per share. As of quarter end, we had $107 million remaining under the share repurchase authority we announced as part of for recapitalization plan. During the month of July, we purchased an additional 311,000 shares in open market transactions at an average price of $30.25 per share for a total cost of $9.4 million. That means that as of the end of July, we have repurchased a total of 9 million shares since our September recapitalization announcement at an average cost of $20.83 per share for a total cost of $187 million. This represents 66% of the $285 million in share repurchases we set as our objective last September and leaves us with $98 million remaining to be spent on repurchases. We've used a patient and thoughtful approach to our repurchase plan, buying only about 7% of trading volume since we first announced the plan. Going forward, we will continue to use that patient approach and the method of purchase, the timing, the pricing and total amount expended will all be dependent on market conditions and a range of other factors noted in our press release. Given regulatory constraints and the level of liquidity in the market for our shares, implementation of our full share repurchase plan looks like it could extend to around mid- next year. At quarter end, we had a cash balance of $149 million and term loan debt principle of $341 million, following the first installment repayments on our loan. Taking into account the additional share repurchases referred to above, our cash balance, as of July 31, was approximately $166 million. I'll now spend a moment on our progress towards the larger objectives of our recapitalization plan. Our principal objectives in the plan would've take advantage of what we viewed as overly negative market sentiment, increase tax efficiency, reduce our cost of capital and increase employee alignment with shareholders, all toward the overarching goal of enhancing long-term shareholder value. We also intended to use the recapitalization plan as a catalyst for upgrading and expanding our team. Clearly, we are achieving each of those specific objectives. We have recruited 10 managing directors in the year-to-date. We've repurchased significant shares totaling about 2/3 of our original goal, and we are pleased for the prices we've paid in our repurchases, given that our current stock price is 58% above our average repurchase price. We've increased tax efficiency by shifting away from large dividends to our large share repurchases and further benefited from a substantial cut in U.S. corporate income tax rates. And we have significantly increased the economic ownership of our employees, who collectively now own about 36% of the economics of the firm through their holdings of common stock and restricted stock units. We continue to believe our recapitalization plan has the potential to deliver attractive returns to shareholders as well as to our team over the next several years. It's worth noting that our strong financial performance in the year-to-date has little to do with that plan or with our recent recruits. Our sharp rebound and result is largely a function of our long-standing team, performing the way it has historically, apart from what was an unusually quiet year in 2017. I know that some commentators thought our result last year were indicative of a trend, but, at least, so far it's looking like our view that last year was an aberration in an otherwise strong 22-year track record was the correct one. Looking ahead, our many Managing Director recruits of last year and this should start to impact our results in a meaningful way in 2019 and beyond, and we intend to maintain our intents of recruiting effort so that we can continue to expand the revenue potential of the firm for years to come. Whatever revenue growth we can generate should have a magnifying impact on earnings and shareholder value, given the fixed nature of much of our noncompetition expense, significantly lower tax rates and a much reduced share count. While we are pleased by our year-to-date financial results and by the 128% increase in our share price since we announced our recapitalization plan, we are far from satisfied. The success of our plan is best measured over a period of multiple years and we believe there's great potential for the further creation of shareholder value over that time frame. Finally, I know that we just posted on our website a new investor presentation that summarizes much of what we've just said, while also reviewing our overall strategy. With that, we are happy to take questions.

[Operator:]

[Operator Instructions] The first question comes from Devin Ryan with JMP Securities. Please go ahead.

[Devin Ryan:]

Hey Scott, good afternoon. How are you?

[Scott Bok:]

Good. How are you?

[Devin Ryan:]

Doing well. First question here just on the kind of the cadence of the year, so great first half, obviously in the books year-end, and in the back half of the year it tends to be seasonally stronger for you guys and for the industry and it does seem like the backlog is relatively solid. So I'm just trying to get any more flavor if you can, just on kind of what the backlog feels like today and maybe if you can, just the tone heading into the back half of the year after such a good first half?

[Scott Bok:]

Sure. First of all I don't think I would say there's any seasonality really to our revenues or that of our peers. I mean, I think it's somewhat random one transaction is closed and so they can come at the middle, beginning or end of the year, it's kind of hard to predict, but look, we feel good about how the business is developing. We feel good about the environment or certainly seeing a much broader participation globally, the U.S. market I think, it's still pretty clearly, the strongest one in terms of deal activity, but we're really encouraged by what we're seeing in Europe and Australia and Japan, even Latin America, recently. So we feel good about things. I realize that economic and market conditions can change quickly, but as of right now, things feel quite good.

[Devin Ryan:]

Okay, great. And then just on recruiting, also, a lot of activity thus far this year. So 10 additions and just love any more kind of commentary on the conversations that you're having. Do you still think there'll be more kind of signed this year? And then just where kind of where we are on the comp ratio at 55% year-to-date. Does that contemplate, I guess, all of the additions? And then any additional hires or just - I'm trying to think about that 55% and whether if you had some more people it would be some upward pressure or they could actually be some leverage on the positive into year-end.

[Scott Bok:]

Okay. First of all in terms of recruiting, obviously 10 is a lot for 1 year. I think there's some - you never know, of course, until the people have actually signed up, but I wouldn't exactly - we may see 1 or 2 more before the year is over. I doubt it would be much more than that, but it could be. There already are a number of people where we sort of mutually agreed lets continue to talk, but do it early next year for various reasons, it's just not the right time for them to move, but look, I expect maybe a bit more this year and I expect another strong year of recruiting next year. There's a lot of interest in joining our firm. I still think there's quite significant flow of talent out of the big banks, where people to steal like the better place to spend, maybe the latter half or third of their carrier isn't a place that's focused entirely on the advisory business, so I don't think anything has changed. I still feel our main competition and in almost every recruiting discussion we have is somebody staying where they are. We tend to hire people that are quite loyal and that makes them easy - difficult to pry away to join us or anyone else. So that's kind of the update on recruiting. On comp ratio, I think our ratio for the first half is roughly what we expect for the full year, and that's what the accountant tellers were supposed to do when we set these ratios was to sort of think for the full year in mind, and that's kind of our best estimate right now.

[Devin Ryan:]

Got it. Okay, that's helpful. Just a last quick one here. So just on the repurchase plans to the stock prices currently $9 above kind of the average level repurchase in the second quarter, so obviously good trades on your end. And I heard your comment on the timing and kind of that extending into next year and without getting too specific, which I know you wouldn't want to do on exactly what the buyback is going to look like from here. I'm just trying to get a sense of, is there still an outlook for there being a regular cadence, or as you've kind of already been repurchasing stock, or are you really just stepping in at a point where you feel like it's really attractive. I'm just trying to think about how you've been executing in the expectation, if you can share going forward.

[Scott Bok:]

Look, we've obviously been - within the various constraints, liquidity and regulatory requirements and so on. We've been fairly aggressive, and that doesn't add up to a huge percentage of the daily volume as you noted from my comments, but look, we felt like the share price has been incredibly attractive, certainly, buying in as much as we have a $20.83, which feel extremely good about. Going forward, I think we'll, as I think I've said that various investors in the past, we're going to continue to monitor two things

[Devin Ryan:]

Okay, terrific. Well, thanks very much, Scott and congratulations on the nice first half.

[Scott Bok:]

Thank you.

[Operator:]

The next question comes from Jeff Harte with Sandler O'Neill. Please go ahead.

[Jeffery Harte:]

Good afternoon, Scott and congratulations on another good quarter.

[Scott Bok:]

Thanks Jeff.

[Jeffery Harte:]

I hate to lead off at the buyback but just follow-on on Devon a little bit. But - with the price of this share is obviously higher, I guess timing can come and go, but it sounds like your intention would be to still execute the entire buyback, even with the stock trading where it is in the mid-30s?

[Scott Bok:]

I think we're - look, like I said, we're going to take it 1 step at a time and think through where we think the value is, but look we're still - I'd like to better it $19, at $34 but - or $33 or whatever it is closed today, but look, we think we were hugely undervalued. We're are not perhaps as undervalued today, given the - more than 100% move, but it's still within reason it's our intention to get this done. We think it's the right thing from a capital structure for a few. With think it's right thing from a long-term value point of view and I think we have been careful throughout not to chase it, not to push the share price, I don't think we have any impact at all on pushing the price higher by buying such a small percentage of the daily trading volume, so we'll - but not - we don't think we're done. As I said towards the end of my comments, I think we feel like there's a lot more value we can create, and over the next multiple years, we never thought of this is a one year plan or 18-month plan, but I really thought of it as a 5 year plus plan.

[Jeffery Harte:]

Okay. And in the comments you mentioned strengthen both Europe and Australia. Can you talk a little bit about client conversations and I suppose I'm more interested in looking for signs of kind of a real cyclical change in attitude suggesting the potential for a multiyear touchup in strategic activity, as opposed to, okay, economies have stabilized a little bit financing still cheap things are getting better, but maybe not as strategically better as we could expect her like a multiyear period.

[Scott Bok:]

Look I would say in every market there seems to be a tremendous interest on the part of CEOs and their management teams to talk about kind of transformational deals , whether for that particular company that means a $500 million deal or a multibillion deal, but there's a lot of interest in what the robust economy, with lower tax rates, with relatively available financing, with relatively high share prices to think about what's the next thing they can do strategically to really advance their company. I think that's true around the world. In Europe, the point I would make is that if you look - I know the volume statistics are very high, but if you look at, say, the number year-to-date, the number of $500 million transactions with either a European buyer or seller on them, it's not that different a number than what we spent the last several years and as a matter of fact year-to-date its lower than it was, not only pre the financial crisis, just lower than it was in 1998, 1999. Think about how much market caps have gone off in the intervening 20 years. So I do think at some point there's a lot of pent-up demand for strategic activity across Europe, and I think we've seen a little bit of that so for. Certainly, we're pleased with year-to-date for us and there's been a number of high-profile transactions, but we feel like there's a lot more to be done there. It's just that it hasn't even come close to catching up to the historic levels of the deal activity the way it has come closer to let's say, in the U.S.

[Jeffery Harte:]

Okay. And finally, for me, the hires have been strong and some good people coming in by the looks of it, but we still see the MD count maybe even down year-over-year not growing a whole lot. Should we expect that MD count to start kind of rolling again? And is it really important that we do see that?

[Scott Bok:]

I think you certainly will. I mean, I think we - and we are up year-over-year. I think we were at 71 at the end of last year, we're at 74 now. I mean, also remember we effectively exited the real estate capital raising business, that was 4 MDs. So if you want to think about in terms of merger and acquisition MDs, we are up quite considerably over the last 12 months, but I think however, you want to measure it by looking at just that business or whether you want to think about it just in terms of total client-facing MDs, we're up some and we certainly expect to grow that number on a net basis over the months in fact and of course years to come.

[Jeffery Harte:]

Okay, thank you.

[Scott Bok:]

Thank you.

[Operator:]

The next question comes from Ann Dai with KBW. Please go ahead.

[Yian Dai:]

Hi. Good afternoon. Thanks for taking my question. Scott, I wanted to first address your commentary on the outlook and so you said things feel quite good. I guess I'm just kind of curious what you're seeing related to tariff discussions and a potential trade war? Are you seeing any potential for breakage? Or incremental caution amongst the clients that you're speaking to?

[Scott Bok:]

So far I would say not. I mean, we don't do much business at all related to China and the rest of world. We do on the capital rates inside of the business not in M&A, and frankly in retrospect, I'm glad we didn't build out that business, because I don't think there's going to be a lot of activity between China and the U.S., certainly. But I think the more broad issue certainly, one could imagine a so-called trade war that would be really bad for the economy and markets and our business and everything else, but that's not - I'm not getting a sense that people are overly concerned about that now. I think they're - what I think most business executives probably think right now, is that there's a lot of brinksmanship shifts going on that there's a hope that the brinksmanship ultimately brings people to the table, compromises are reached and maybe we're even all in a better position than we were before all the brinksmanship. So that's - it's a different approach than probably we've had and politically in this country for some time, but I don't think people are overly worried about, at least, in terms of what we see in our client dialogues.

[Yian Dai:]

Okay. Appreciate the thoughts. Also on the new headcount that you're bringing online, I guess I'm curious whether there's some higher component of stock comp for these new MDs that are joining the platform today or anything different that you've done in terms of incentive structuring. Just align these bankers with the overall success of the firm, even maybe more so than you've done in the past.

[Scott Bok:]

No, I wouldn't say we've really changed anything. I mean, people still typically get some stock when they join that obviously, is sometimes connected to how much stock they leave behind at the firm they're leaving. They get a guarantee for the relatively near term, and so none of that's really changed. I mean I do think there were certainly some people who joined us over recent months who thought the stock was at a very, very attractive level, but I don't expect any less interest going forward. As a matter of fact, I think, the higher that share price goes, the more it indicates momentum and it attracts more talent and to every deal you announce helps - it makes a little bit easier to win the next deal, and so I think our employees, including the senior ones we've hired recently are highly incented, but pretty much in the same they always have been.

[Yian Dai:]

Okay. Appreciate that color. And last one for me, it's regarding the remarks in the release on the year-over-year increase. I think you guys had attributed that to some increases in transaction announcement fees of a capital advisory on the secondary business and some higher retainer fees. So I I'm - on the higher transaction announcements and retainers, are these more related to non-M&A advisory or does it reflect some shift in structuring of some of these engagements relative to what we see in the past? I guess, I'm just thinking historically, I don't think of announcement or retainers being a huge component of it for you guys, and please correct me if I'm wrong.

[Scott Bok:]

Yes, and you're correct and - I mean there's still really not. I mean, the bulk of our business is still completion fees and we were just highlighting some of those factors as things to change. Announcement fees can be meaningful, certainly, retainers less so especially, under the new accounting roles where you can't always count the retainers one - once when they're received, a little unusual there but that's the new rule. So our - look I would say, we highlighted a few things, but if you look at really any aspect of our business for the year-to-date, whether it's the number of fee paying clients of any size or number of million-dollar fee paying clients or announcement fees or completion or capital advisory, it looks very favorable by any perspective that you take and I - we're always doing quite a mix of things, but the bulk of it is still what people would sort of normally consider good old-fashioned M&A or in the capital advisory side secondary transactions, which are frankly also like small M&A transactions for private equity portfolios as well. So I wouldn't read too much into that. Nothing's really changed. We're just, frankly, getting a lot more of everything than we got last year.

[Yian Dai:]

Okay, great. Oh sorry, and one more clarification. First quarter you announced there, I think there were a handful of million in fees that got pulled forward into first quarter. Was there anything of that effect second quarter?

[Scott Bok:]

Nothing material. We didn't have any sort of large transactions that closed in early Q3 that we're counting in Q2, which was - so we didn't highlight anything. There's a lot of puts and takes and - under the new accounting, there's some fees that get deferred that we would've accounted in Q2 that weren't accounted under the new rules and there were other things that get pulled forward and the net of it is pretty immaterial for us.

[Yian Dai:]

Okay, prefect. Thank you.

[Scott Bok:]

Thank you.

[Operator:]

The next question comes from Michael Needham with Bank of America Merrill Lynch. Please go ahead.

[Michael Needham:]

Hey thanks. First of all just, I've got just kind of a modeling question, the 74 Managing Directors, how many are still pending on or whatever?

[Scott Bok:]

Two. Only two. 1 we just announced a few days ago and 1 that I think starts fairly soon. So I think it's just down to two.

[Michael Needham:]

Okay. And for the deal pipeline, I got the comments on the environment getting better. Can you give us something quantitative on where the pipeline stands? Like number of mandates year-over-year, just how you feel about the back half versus last year's back half?

[Scott Bok:]

I really - I can't give anything quantitative and we never have, so that's certainly not a new policy. I mean we - I've always thought that word backlog is one that can mean a lot of different things. I mean of course I have with me most of the time a probability waited backlog that shows the next 4 quarters, but it's not the kind of thing I can share with outsiders, that's way too premature, it's certainly our best thoughts and we update it probably almost every week as things continue to develop. So I think I indicated we feel good about the environment, we had a lot of announcements in the month of July, it's quite - I figured it was 7 our 8 or something like that are posted on our website, and so that's another good quarter of progress, and we think that momentum is continuing. And last, frankly, last year's not the most difficult comparisons in our firm's history. So that's really all I can say, sorry. It's impossible really to quantify more.

[Michael Needham:]

Okay, alright, got you. And the last one, just on hiring. You guys have had a lot of external people this year, it sounds like next year that's kind of the - going to be the strategy over a multiyear period. For your existing franchise, those guys appear to be producing well in the first half of the year. Are they generally supportive of the more aggressive growth strategy? Is there any risk that they feel like they're subsidizing new people? Or is it that they'll grow with as the new guys start producing?

[Scott Bok:]

Sure. I think our team is incredibly united and excited about what we're doing. I think they like their recap plan. They like the increased ownership. Obviously, they like what's happened to the share price over the last 10 months. They like the quality of the people we're bringing on, and they want to build a much bigger franchise over time. So no, people are very excited about what's happening and completely supportive, and I don't think anybody sees any downside for themselves at all.

[Michael Needham:]

Okay, thanks.

[Scott Bok:]

Alright, thank you.

[Operator:]

The next question is from Brennan Hawken with UBS. Please go ahead.

[Brennan Hawken:]

Hey, good afternoon, Scott. Thanks for taking the question. Just wanted to come back to I think, last quarter you had reaffirmed the non-comp expense guidance of about $70 million for the year. I know we had almost $3 million of the Cogent noncash stuff that you walked through here, but the pace looks like it's above that. Any update to that outlook?

[Scott Bok:]

If you take out - no, I would say no and as matter of fact, we posted our investor presentation I referred to we kind of used that same figure. I think if you take out the noncash Cogent sort of mark-to-market of the probability of earnout, you get - you've got, I think, the $36 million as opposed to $35 million that obviously would be half of $70 million. There are some other items that are a bit different, some of which we refer to in the press release, and if you adjust for various things, it could be even lower, but - so we still think it's around $70 million. I mean, of course you can always have headhunter fees, you can have foreign exchange, you can have legal fees, you can have all kind of things that can move that, but I still think the $70 million a year is a decent rough estimate.

[Brennan Hawken:]

Okay. And then when we think about the impact of the 36% economic ownership, which I think you've referenced is the updated number for employees. How should we think about the outlook for fully diluted - the impact there for fully diluted shares outstanding and when would the schedule will look like when that will start to get reflected? Because I'm guessing a lot of that had to do with issuance that you did in the debt recap.

[Scott Bok:]

No. We actually didn't. I mean, in dollar terms, we gave out, frankly, what a shareholder would think of as very little money at that time. We thought it was very underpriced and certainly that's proven to be the case, and now it's kind of real money in the pockets of people, but it certainly is not anything that's going to - the shareholder are going to look at it in any kind of meaningful dilution at all. The rise in our - at collective ownership really comes down to 2 things

[Brennan Hawken:]

Okay, all right. Thanks for that. And then you downplayed, I think, it was to Devan's question, sort of downplayed seasonality. Is that something that we should interpret as the back half of the year, revenues, maybe below the first half of the year? Or am I reading too much into that comment?

[Scott Bok:]

Yes, you would be reading too much into that. I mean, I'm just saying, factually, I know we've had some great, fabulous quarters over our 14 years that fell randomly into all 4 of the calendar year quarters and it can have to do when you have 2 or 3 deals of real size clustered together or something like that, so I don't think of it as the seasonal business at all in terms of when the revenue comes in, but I think I've said what I've said about the outlook and the July announcements and the - that market environment and so I - no, I wouldn't read anything positively or negatively into the comment about the seasonality, it's just a factual thing.

[Brennan Hawken:]

Okay, great. Last one for me. Was there any difference month-over-month in the pace of the buybacks this quarter?

[Scott Bok:]

There - I mean, there was some. Yes, there were - I remember we had a tender offer, I guess, sort of at the very beginning of the carried over, maybe a little bit into the second quarter, but no material difference. We've have some difference in liquidity of what's available, we can only buy a certain percentage of the daily volume under the SEC rules about companies buying back shares. So when you go through periods where there's a lot more market volatility, especially if things are going down, you can buy in more, when things are going up or there's less trading volume you can buy in less. So no, I - not any big difference over the course of the quarter in terms of what we bought back, other than just what related to the ups and downs of market volume and volatility.

[Brennan Hawken:]

Okay, thanks for taking my questions.

[Scott Bok:]

Okay, thank you, and thanks everybody. I think that's our last question, so we appreciate you listening and we'll speak to you again next quarter. Bye now.

[Operator:]

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.