EP15 - Bridge Over Troubled Water - The Historical Cash Flow and Forecasted Cash Flow Connecting To Your Valuation for an ESOP

This episode focuses on the development of an expected valuation to help a shareholder understand selling their shares to an ESOP.  When the historical average cash flow is much lower than the forecasted cash flow, the negotiated fair market value or adequate consideration can be much lower than desired.  This is what the podcast refers to as “bridge over troubled water.”  Where the bridge is historical to forecasted cash flow.

Transcript

[0:09] Hey everyone this is the ESOP guy we're on a journey to an ESOP and Beyond this podcast is a resource to help early understand the not only the. Transactional side of esops but also just to look at other things. Go that go beyond the ESOP transaction and look at other issues that were that you have and if you are contemplating ESOP. Or are an existing ESOP this is a great podcast for you and it's really there to try to.

[0:37] Provide a an accessible means of information for people to to understand better um how this whole thing works and I know sometimes it's, gets confusing with all the different elements that you can find in an employee stock ownership plan with that I wanted to kind of kick off the new podcast episode with this.

[0:58] Music.

[1:33] Oh I'm on your side so here is the classic Bridge Over Troubled Water written by Simon Mr Simon Paul Simon. And 1 of 1 of the things about this song that has been kind of just.

[1:49] Resonating with me lately is something that I wanted to talk about today which is this idea of, the the issues that you get into and this is really important from a like a brand new company thinking I want to do an ESOP all the way through the whole process of doing an ESOP because it's going to be really about the valuation side, and I'm going to get into the what I would call the bridge between the. Cash flows from a historical basis to the cash flows on a forecasted basis and talk about this this what I call the bridge which is really kind of getting between this historical periods and the forecasted periods so, 1970 the reason I I like this song first if it's just kind of 1 of those songs that just stick out to you right in in. History and all the things that that um happen in in our world um this was written by Paul Simon in around 1969. Bobby Kennedy and Martin Luther King were assassinated and there was like a lot of racial tensions and it the world was crazy the world's still crazy you know when you get down to it so this is why this song will kind of always be at least in my opinion 1 of those in a Classics and when you get down to it.

[3:06] There is a just a sense of everything's going to be fine and we just need to be there for each other when you get down to kind of some of the, the basics but that's this applies to directly today in terms of our podcast so as I go into that I want to really kind of dispel out like. The value that this is going to have for people and looking at like whether or not you you keep listening or not is going to be trying to really understand what I think is is so. As a as I've done a lot of different ESOP transactions and I've walked through. Even just a lot of work where the the company's looking at that these planning parts of their valuation to determine do I want to go down this road or not and. This is this as we go into this topic I think it's really helpful because it's 1 of the most I think most important elements of whether or not people will go forward or not when you get down to the net value of the business or at least the current net value or what would it could be depending on you know the future, so having said all that thank you again for listening to the podcast if you are new to the podcast please go to our website at journey to an ESOP cam.

[4:15] If you have any questions about the podcast or about esops or about you know or anything really just ask the questions there and we will come back to those either on a podcast or we'll actually, um reach out to you depending on what your question is and and how you want to go about that so. Um that's great and if you like the podcast please rate and review it give us a 5-star rating that's always helpful. For people that are thinking about you know esops and they look at it and I always say this too it's it's helpful, if you know somebody that's looking at an ESOP and you've discovered this podcast please you know email them the link or share it with with a friend because you never know you know what they're thinking so it's really designed to help people think about think about the reality and the practicality of of an employee stock ownership plan for, their business.

[5:07] So having said all that let me let me start with some I think just some foundational things that I think are important and this is probably redundant for some people. That have listened or have been through a lot of different conferences or. Things but I think it bring it brings some light to the pro the process or the what I call the ESOP process and. The very very very first start of and you get past what I would tell people when you get past this idea of. I'm I'm conceptually really in agreement with what an ESOP is and I have talked to experts I've gone to conferences I've read books I've looked at all sorts of of aspects this seems like a very good direction for the company and that could look like a lot of different things for a lot of different companies that could look like Hey we're we're really interested in doing what we think is a partially ESOP which would be I'm going to sell part of the company to um in a play stock ownership trust and, maybe over time I'll sell more you know but maybe I'm going to just do a partial or we we're just ready to go ahead and do the 100% um we're looking at different you know. That processes around the 100% part or we're really just starting to either prefund the ESOP or look at like a more of a non-leveraged, contribution strategy strategy so all of these are are going to be important.

[6:32] When you start with the at the basis or the premise of the idea of like what what should we do next right when what what should we do next and the ESOP process. Very much should start no matter what whoever you work with should start with a very good understanding of the valuation of the business.

[6:50] Now.

[6:51] That is a very big thing to say in a sense because first off let me say that in general with all the people I've talked to throughout the country and doing ESOP valuation work and sales side advisory work this is very very.

[7:07] Misunderstood and I say that like I'm not saying people don't understand valuation that's not what I'm saying at all, what I am saying is that there in terms of what the valuation um is the process of coming up with the numbers to understand what that is I think that is where things go into this like well I think I know what my multiple is this so let me just move on to the next thing that I that I need to do which is going to be naturally the feasibility model, to structure the ESOP transaction and figure out whether or not that's going to work from a financing standpoint so we're not we're not going to go into that we're going to get deeper into this idea of what the valuation is and really understand. Um the the primary um target of today's topic is understanding the bridge what I call the bridge so, first off let me just kind of spell out again a couple things that are just just purely valuation in terms of theory and methodology.

[8:04] For for those that don't know um the business valuation, approaches that basically means the approach to estimating what this business is worth what it would sell for are going to be in 3 buckets there's going to be the income approach bucket the net asset approach bucket and then the. Uh Market approach bucket and so very simply put the income approach is really, to develop and understand what the company's cash flow really is and so when we say cash flow you know let's just talk about it could be adjusted ibida which is earnings before interest taxes depreciation and amortization.

[8:45] Or it could be um free cash flow which is we're just taking that number and reducing it out for. Uh capex so there's we're going to go deeper into that but just you know with cash flow itself it's how much the company really generates, that the buyer is buying this economic benefit stream so that's the idea of the income approach value is it's going to be the amount of cash flow the company produces.

[9:11] And the risk of that cash flow going on into the future so that if I have a lot of risk premium on the cash flow, then my value on that cash flow is going to be lower if I have lower risk it's going to be higher so so that's the income approach and I'm going to I'm starting with that but I'm going to go with these other 2 areas and I'm going to come back to the income approach. The next is just simply if I fair market valued all of my assets and all of my liabilities meaning that I'm looking to, determine how much the um those net assets would be.

[9:46] After I've adjusted for the actual True Market Value so we're going to move past accounting cost accounting or any kind of accounting where it says say this is what the this is what I'm booking the assets for with, debits and credits what I have on my balance sheet literally if it's at the end of the year or really right now which is kind of the the point in time then I'm going to Value the balance sheet there and that's going to be any net asset net fair market value assets minus the net fair market liabilities.

[10:17] Is going to equate to what we call Net asset value so that's going to be a number that we're going to want to think about and consider normally speaking in a profitable cash flow company that's going to be what we call the floor value unless there's a a real Capital intensive business that's going to be. Um built around like hey the the balance sheet actually is much bigger than the cash flow value So that obviously that could be that could weigh out, in some cases most of the time it's not going to be but it is something that we're going to want to think about the third bucket would be the market approach and the market approach basically says this it's the. Kindly you know we call guideline companies or subject comparable companies that were if we took our. Ark specific company and we said hey we have these companies over here that are very similar let's look at some say transactions in terms of their actual sale prices of similar types of companies and then come back to that and extract multiples out of that and then apply those multiples, our financials and determine hey that's that's kind of the market approach of where we would sit if we were selling you know in terms of the market place and so.

[11:32] The the primary issue that I see that drives us continually back to as we look at the net out and then I set value and the market approach is in the market approach is first off the, actual applicability of those subject companies when you're looking at adjustments to get the the subject company and the market approach to to kind of align well um I believe that is a a bit more difficult, in those types of things because it's um there's a lot of assumptions in that um but it does it can give you an overall hey this is what the the big picture might look like and it is used. As a um a means to determine you know is the income approach really. Does that really make sense as well um but the market approach can be a problem because if.

[12:23] If the market approach has so so let's just say there's been a lot of sales um to companies of companies like yours. That have sold to to more strategic or more financial like private Equity buyers and they're they're they're doing big Roll-Ups in that market and that's kind of 1 of those things that. Could influence your purchase price but when you get down to it that Market approach could be so so much higher than the fair market value approach with income approach value that the cash flows for an ESOP would not sustain it and so this is 1 of the 1 of the things that we would dig into a little bit deeper at the front end um when we're doing the modeling and just determine like hey is that that a reality, um for your business because part of what we're doing isn't necessarily just to do the valuation we're trying to get, what I would call prove out the model the valuation for the goals and objectives of the shareholder.

[13:19] And so it's not like I'm trying to say you should take a lower value or anything like that I'm just saying that what's the most applicable value. To saying I really want when we done when we've done the work the conceptual work of saying I want to do. An ESOP because of all kinds of reasons I want the Legacy I want the tax benefits I want the you know the long-term, um employee benefit I want to do things that the company I want to I want the company to continue with what he was doing and we've really kind of rounded out the goals and objectives. To be you know this balance this kind of this weighted balance like these are all important to us as opposed to, I really want this market value that I could probably get if I sell it to a private Equity Group so what we want to do is filter through that at the front end.

[14:07] And not go through this whole exhausting process of doing an ESOP and realize oh my gosh and it's not really what I wanted so so that's part of the reason why I wanted to talk about the 3 buckets and kind of compare mostly compare the market approach to, the cash flow approach but really what I wanted to do is paint the picture of that and give us a foundation to talk about the bridgethat I'm that I'm referring to, so with having said all that what I would say is that we definitely want to and and what we do is we really look at the cash flow valuation, um at the strong at the highest level right or or putting more and more weight on that when we're doing ESOP planning because primarily the cash flow of the company is what is going to pay off, the debt that the company is going to be borrowing. Either from the bank and the seller or entirely from the sellerso if my cash flow can't support the The Debt Service.

[15:03] Then it doesn't really work for the company because it's not going to be sustainable so that's 1 of the major reasons that I would kind of kind of Veer towards the cash flow valuation side, now within the cash flow or the income approach method of valuation what we are going to deal with is this idea of how much emphasis do we put on historical Cash Flow versus forecasted cash flow, now specifically what happens is in the modeling is it we're going to. Put all of the information that the company has and and put this into a model that really will help um first off educate the client on um. You know in some in some cases of course it can it can range from you know some terminology and things like that to actually helping them understand the assumptions. Behind add backs and so I've done some podcasts on normalization all that so that's that's going to be part of the process of of you know building the model to understand your cash flow both again from historical and a forecasted basis.

[16:12] So as we do that we're going to, you look at just in general guidelines here that you would have a 5-year look back period so that would be, you know wherever I am today let's do 5 annual um cycles of your income statements go backwards and then come um through that whole process and look at the average cash flows for The Last 5 Years, and. Meanwhile populate that into a a forecast so we can see the historicals and then also look at a forecast model that shows the forecasted 5-year cash flows, so let me just kind of walk through that real briefly so in that you're going to have primarily what we would start with is your income statement data that would obviously have Revenue.

[17:01] You're going to have gross margin So based on the amount of cost of goods sold that's going to produce gross profit and then we're going to be able to kind of, um come up with say some percentage of gross margin based on historicals and then look at you know going forward off of that what is your net. Um gross margin going forward so so Revenue cost of goods sold like because this gross profit then we're going to go through all of the GNA expenses now. On the GNA expenses we're really going to be, mostly looking at summary accounts for GNA not if you have you know a big chart of accounts that's got 15 million accounts we're going to want to group those up to things in GNA like, your total insurance your total rent um your total marketing expense all of those are going to group up in GNA.

[17:49] Now 1 of the things that we're going to do in the process is we're still getting down to this historical cash flow and this idea of the bridge so so if I if I explain the bridge this way what happens is. Um if my cash flows historically over the 5 years as compared to the forecasted cash flow are drastically different in that we're we're let's just say we had average cash flows over the last 5 years of a million dollars, in ibida.

[18:16] What or adjusted ebit or free cash flow so it's a million dollars on average for The Last 5 Yearsbut my and I'm just being hypothetical about this but by forecasted cash flows showing that I'm going from a million dollars of IBA to 5 million of you but and you can use different numbers here maybe it was. You know 5 million in average but up to 20 million in Iva right so the point I'm making here is that you have instead of a bridge between the historical and the forecast which you really have is this. This high-level sloping increase from 1 fiscal period. On average into a new 5-year average fiscal period or even even in transitioning you know say from 20 Ste 2023 is cash flows to 2024. Depending on what year you're doing this and you're looking at just 1 year to the next and having this incredible increase in um additional cash flow now the the issue with that. Is not whether or not it's right or wrong it's it's really in the details of how did we get there and so so in general when the bridge is so crazy like that when there's just this million-dollar EBA to say 5 million. And somebody has togo back and look at that so let's kind of stop and and take a a pause there and say that's kind of the scenario that we have. Now keep in mind for for everybody to understand all that we're doing right now is estimating the valuation.

[19:44] For the future negotiated arms like the um negotiation between the seller and the um. And the trustee or the buyer right so the seller and the trustee are going to be negotiating this back and forth, in the future now the the negotiation for the trustee is going to be built around. Input that they're getting primarily from their own financial advisor which is evaluation firm that's looking at all the things I'm talking about right now and.

[20:18] So keep that in mind as we come back into the scenario between this this really strange. You know concept of like what is this bridge really mean at the end of the day.

[20:30] Um and then we're going to talk about like as we get to proving out like this bridge as well so so what would what would make sense for anybody in terms of understanding this because again it's it's it is going to be reviewed. In multiple ways and we're going to talk about that a little bit as well um to determine the viability of getting to those forecasted numbers. Solet me stop and just talk a little bit about the cycles of business when you get down to it now every company that starts out. Is going to be called a startup company so the very first part of the cycle of any company is going to be. The um startup phase where they are just starting out and they have a um you know all kinds of things happening they're just.

[21:14] You know they could have a lot of growth they could have a lot of you know everything could be just kind of strange and just difficult to get through that that period of of the startup, days which is unpredictable characterizes unpredictable highly likely they could go out of business not sure exactly maybe they have um maybe only 1 customer. Um they have lots of dependents on 1 or 2 people it's not it's not from a risk per a risk profile it's not the best situation right but that's how companies start they come out of like.

[21:46] The beginnings right once they mature out of that. Then the next real cycle or the next real stage of things is that they really grow they're in more of a growth phase in the growth phase can be characterized as hey we're we're we're we've made some investments in infrastructure we're seeing maybe good growth whether what depending on what kind of industry they're in it could be single digits or double digit growth rates but they're they're not like they were when they started up because they have now they have a lot more customers they have more, employees things are getting kind of that point where they're actually making some money um. And sometimes in the growth stage they don't make a ton of money because they're still building and reinvesting in infrastructure so they're kind of in that. Um you know beginning growth stage where they're stabilizing but they're not necessarily out of that. Um like white water if some people call it that the idea that everything's kind of a little still choppy it's a little bit scary but they're not but they have a lot of things they can do to keep themselves you know going.

[22:49] Then we move into more of a stable growth stage where they are now they're able to kind of learn they they've learned that from mistakes you know they've gotten through things like. You know a recession or they've gotten through the coid period or they've they've learned from losing customers or gaining customers hiring people so they've kind of matured in that sense but they're still in a growth stage and they've started to kind of dial into, let's just say their target market and some of the core competencies that they've they've been able to really leverage and maybe they niched into something that's really going into the next level. So they're still growth they're still a growth stage like in a syn and I would say kind of more predictable growth as opposed to, this unstable growth that they're still working through you know right after the um stage that we talked about with startup.

[23:37] So kind of going from there eventually let's just say the company goes through in terms of the market and what they've done and they're kind of hitting more of a plateau and so that would be kind of the mature stage of the company and the mature stage is going to be characterized by. Very predictable cash flows nothing's really changing and, partly it's kind of nice for some people to deal with companies like that because they're like Banks like that right because there's very know there's kind of boring there's nothing really going to happen different, um they do need to stay on top of the changes you know of course our company or our companies always going to be subject tochanges in the in the marketplace especially with technology but for the most part, they've dialed in and that's kind of mature but what happens then after that stage is the company moves into the declining stage where now they have you know they're they're dealing with.

[24:27] Maybe you know less compet more competition they've they haven't evolved in their new and new niches and so now you can kind of see that things are going to. You know go down now either it's going to go down out of the cycle and lo and basically leave the marketplace or it could kind of pivot back up and redefine itself so so those are important and I and I kind of let that kind of roll out a little bit deep in in terms of like the the descriptions because I think it's important when you're looking at historical cash flow and the forecasted cash flow and really understanding the bridge in in terms of where we are in the stage of the company. And so I think when you come back and and when we come back and we're we're analyzing the.

[25:11] Historical versus forecasted cash flow and then this bridge which really is the the million dollars let's just go back to my hypothetical example the million dollars say instead of 5 million we we're gradually growing maybe the next year was a million 2, and then we're kind of getting up to maybe by the end of the 5 years to maybe 1.8 million or something like that that's a very um smooth bridge between the history and the and the forecasted cash flow.

[25:39] So the more the more that there is a uh a solid bridge between historical and forecast then I would argue that we're we're able to show that there's there's a lot more, support and evidence towards the forecasted cash flow and not having to um, kind of worried about like the difference in what the trustee is going to look at in that and so we'll we'll get into that in a minute um but the idea here is that we want, we're kind of like in that like really stable type of pro um model that says hey we we feel pretty confident that we can um we can kind of show that in all the steps that we're going to go through um and prove that out because the bridge is really there and showing us that now, what can happen let's just kind of give you some some, some scenarios when we're talking about the bridge like get back to the bridge over troubled water right so let's just say we we're doing a forecast last year and we get through 2023 and it's and it's pretty you know it's pretty solid maybe it's not what we thought it was going to be in our forecast. Um and then we readjust things. And we're kind of trying to do a deal now right now and we see that the the actual 12-month trailing cash flows. Are not in line with our forecasted cash flows and we're trying to get to whatever that number is in this analysis.

[27:02] And then we're in the middle of a deal. And so this is where the trouble comes from and where we're not really proving out that what we put down in the forecast so so 1 of the parts of this in terms of I would say either planning the ESOP, or timing on the ESOP is to start to feel some strength around what you've actually forecasted in terms of what we're actually showing in Real Results, on the trustee and evaluation side what they're going to be looking for is support on the interim levels to document that you're hitting. Close to that forecasts which is part of proving out that the bridge is really happening right so if I'm proving it out and let's say hypothetically we said we were going to go from a million to a million 2, um in cash flows which is really kind of pretty straightforward that's pretty just nominal growth anyways when we think about itbut. We are actually going in their interims we're not showing that at all we're actually showing that we're we're dipping down in the middle of the year and we're like how do we catch up now that can happen for multiple reasons, could be we seasonally have like this little low spot but in a 12-month trailing average you're going to kind of smooth out the season.

[28:20] So we're going to ask like questions about that so um so what happens in in really planning out and then walking out a deal is like we're going to be like look we need to really think about, the impact of that and it may cause us to come back in the process if we're in the middle of. Due diligence or negotiating and readdress where we are and it may have some implications on the total value and so, help the pro the part of this podcast is really to kind of help you understand that, the everything that everything that you're you're doing on that historical to forecast the cash flow is very very important and significant in terms of your net valuation that you're coming up with and so.

[29:01] I've actually had deals where I've walked away because the the sellers. Um had another advisor and we they were working with me and they they had their own advisor and or a separate adviser and they had other advisors just taking, their forecast and saying all right we're we're going to hit those numbers no problem and I'm looking at it saying look you know historically I'm not seeing a good case in an argument that shows us to be able to get to that that you know land of milk and honey so to speak like how are we getting there but and here's what happens and this is literally why I walked away from that that helping that client is because.

[29:38] I'm I'm not trying to I remember like some of the things that we were talking about I'm not trying to get them to hire me to be honest with you I'm trying to help them walk through what's real. In predictable and so that, in and this is why we do this at the front end like I don't want them to get into too deeply with me if there's some kind of like. Difference in what they're looking for and what I'm actually showing them that they can actually do now the reality in the ESOP industry is this there are people that can get a deal like that done in ways that are not actually. Advisable kind of so to speak right and they're putting their they're putting the sellers. And I Believe In Harm's Way and what they're really what I'm getting down to is that they're trying to prove out a a bridge you know between historicals and forecasts and put a lot of emphasis on the on the discounted cash flow models. So when we look at the income approach you're going to have the capitalization of earnings which is your historical cash flow valuation. In your forecasted cash flow valuation which is your discounted cash flow so what they're doing is they're putting a ton of weight on the DCF model. But it and that can make sense but if there's not a very good bridge then you are as a sell-side advisor are putting them in Troubled Waters and I'm kind of using this this song as we go through this because I think it's reallyum a reality. To the industry because.

[31:07] And I think this is if I peel this back a little bit just for like as you choose your advisors Choose Wisely because what they're getting the advisor is getting something out of the deal to motivate them to get you to this higher number but they're meanwhile for an ESOP transaction. As opposed to a normal m&a dealthat doesn't work really well because you're going to be put into you're you're being put into risk position so if something were to happen.

[31:32] Then you're going to be um having to to eat the risk of that not the sell side advisor so. Having said all that we want as we think about the bridge we want to understand I've had deals where the bridge is going up right it's not like this just complete smooth million to a million 2 right as my example. I've had deals where we've moved up pretty significantly from historicals to Future and I've got those deals done. Um in in a couple reasons why number 1 the first thing I'll be I'll be asking about in the valuation modelis like let's, I'm going to play the the the role of the independent valuation firm not that I'm doing that but I'm going to ask questions like they would do like for their trustee and let's just say the questions I might ask on a bridge that's sloping upward in the forecast because I'm I'm trying to like prove out this this higher number. First off like we'll just talk about composition of Revenue like who are these companies that are new customers how much of your existing revenue is sticking so how much of that recurring revenue is there how much are we depending on brand new customer relationships um what what are we um what are the contractual obligations of of your customer we're trying to kind of determine first the revenue model does that really work. What has changed from historicals to the Future in terms of of giving us um a stronger business case that that actual upward sloping bridge is going to make sense.

[33:01] And it could be Yes we finally dialed in we finally got this big client or this big contract we finally got this this is happening we're getting tons and tons of traction on um our our customer Word of Mouth um. Kind of got into a new market it could be we acquired a company and the companies all the cash flow all the new Revenue, partly from an acquisition that we've either paid for or we've built into the financials so so there's a lot of reasons you can have an upward bridge and so keep in mind I'm not saying that. That doesn't happen but if there and if they're real. And if they're presentable in the in the presentation to the trustee and the valuation firm then I feel super good about it and be like look I have a lot of confidence in that. Now the less let's just kind of like take the spectrum that would be the ideal situation but as we move through. The all the elements of the income statement not just Revenue. Um but then we kind of test out the gross margin that makes sense we're not just jacking up your profit gross profit for no reason um if we go through your Gene expenses those are fully loaded then as you get down to the net income.

[34:10] And the growth of that and then finally your your cash flow piece.

[34:15] Then we're like hey that makes sense let's we can actually get that done but let's just say we go through all that analysis and we're we're more like instead of a 90% you know confidence level we have more like a 50% confidence level. After all that you know discussion back and forth um.

[34:33] Then I would say in the in the sellers are like look this is happening we highly believe it this is you know we've been here a long time and you know let's just say we know our business better than you and that's cool and I get that and you're going to know it better than the trustee, and you're going to know it better than the trustees valuation firm even though they might have and they should have industry experience. So having said all that what I would say is then let's prepare now for. Trying to get the higher number but let's go ahead and build into our analysis what how the deal structure might be there to mitigate the risk of the trustees, so now we're going to talk about clawbacks and earnouts that kind of thing. So the key to the the P the podcast today was really just kind of stop and think about that that bridge and partly as I summarized it would be to really keep. Um this is why we do models by the way so we can keep updating the model we'll keep recalibrating the model depending on new information that we have. But keep updating the model as you go through it and keep being very very aware of what's happening on the interim financials and your 12-month trailing averages on the cash flow, to show that we actually have a very smooth bridge and we don't we're not walking into Troubled Waters and a lot of different elements of of what that really means and I think if you do that.

[35:52] Then I think the the going into the next steps of your of your ESOP process are going to go a lot more, smoothly and more predictably because nobody nobody wants to get into the middle of a deal and then suddenly have surprises and realize oh no you know we've we've put all of our time and energy into this 1, Direction and now we've got a you know we've got a.

[36:15] Reorient or re you know it could blow up a deal it can do all kinds of things so so that's really the message today is just try to keep keep focused on what that bridge means as you do your analysis and hopefully that is very helpful for you. Thank you so much for listening today and we will see you on our next step on this journey to an ESOP.