This week we’re following up on our Profit First-focused episodes with Mike Michalowicz and Ron Saharyan and expanding on a few of the subjects we wanted to clarify, like why taking your profit first is less about being wanting to take more out for yourself and more about keeping your company healthy long-term. We also cover how we define profit, what exactly the Profit First system says to do with that profit and our approach to paying off debt. If you have more questions about Profit First after listening to our recent episodes, don’t miss this one!
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Rob Williams, Profit Strategist | IronGateESS.com
Wade Carpenter, CPA, CGMA | CarpenterCPAs.com
Stephen Brown, Bonding Expert | McWins.com
Rob Williams: [00:00:00] Today, we’re discussing using Profit First to build a healthy company. So the Contractor Success Forum discusses financial strategies for running a more profitable, successful construction business. So Wade, do you know that we have show notes? Did you know that today?
Wade Carpenter: [00:00:25] I knew we did. I don’t really know what they are or where to get them, but…
Rob Williams: [00:00:28] Yeah, do you know how to get to those things? It’s so cool. I didn’t know for so long, you like go to the podcast thing and you like, scroll it up and you push it up. And the show note there, right down there and below there. So go do it in and share. There’s a share button down there too. Did you know there was a share button, Wade?
Wade Carpenter: [00:00:46] No,
Rob Williams: [00:00:48] Down there. You don’t even have to scroll for this one. Go right there. The bottom, there are three little dots. You click on that and boom, up pops this thing and there’s this little box with an arrow and it says, what do you think it says, Wade? Share. It says share, it says share and it lets you email it to your best favorite person or the person you think that needs this most.
So anyway, just thought you guys would want to see that or go to Contractor Success Forum dot com and subscribe to our show. So there you go. That’s how you do it Wade. Did you know that? I didn’t know that all the features are there.
Wade Carpenter: [00:01:29] I learned something today.
Rob Williams: [00:01:31] You did. We both learned something. So now that’s the- show’s over?
No, we’ll get there back to the Profit First part of the show. So I am Rob Williams, your profit strategist with IronGate Entrepreneurial Support Systems, driving profit in your businesses with decades of vertical integration. As a contractor manufacturer, aviator and financial strategist in the construction industry, and Wade carpenter is here with carpenter and Company, CPAs, helping contractors nationwide to become permanently profitable for over 30 years.
And today we’re so sad because we’re missing our buddy, our underwriter, Stephen Brown. He is a construction bond agent at McDaniel-Whitley bonding insurance agency with over 30 years of experience underwriting and placing bonds for you as a contractor. But he’s here in thought, listening to us right now as this plays.
So today, Wade we’re talking about using Profit First to build a healthy company and following up, what just happened? What two interviews did we just have that were so cool?
Wade Carpenter: [00:02:44] Well, after we did the podcast with Mike Michalowicz, Ron Saharyan of Profit First, Stephen asked some great questions and he asked it from his perspective as a bond agent and from the bond underwriter. And it actually sparked a discussion between all three of us about his perspective.
And maybe we haven’t explained it to our listeners as well. And so, I wanted to expand on some of the things that Ron and Mike said about Profit First.
Rob Williams: [00:03:14] Great. So, what do you think though? Our biggest takeaways on that? About why Profit First or what, what you do with that profit. What do you think is the first, the best thing to talk about?
Wade Carpenter: [00:03:28] Well, I did want to start with the profit thing. I mean, I just throw out a quote for today, the jim Collins, the guy that wrote Good to Great.
RobCropped: [00:03:36] Right here, right here on my bookshelf. I
Wade Carpenter: [00:03:37] Oh, okay. Well, I didn’t know that, should’ve had you pull that out. He said profit is like oxygen, food, water, and blood for the body. They’re not the point of life, but without them, there is no life. A company can’t survive very long without profit.
And I think Stephen’s take on Profit First and the name Profit First sort of implied to him that, it sounds like a greedy owner, trying to take everything out of his business, not leaving anything in the company to bond off of, or let’s be a greedy owner and take it all from our employees.
Rob Williams: [00:04:15] Yeah. Yeah, because it’s not the greedy owner thing. It’s the airplane thing of put your mask on first, the aviator comment that I had there as a pilot, you gotta put your, you gotta be able to stay in business for everybody. You’ve got to make sure the company is healthy before it can take care of everybody else.
It’s not, don’t give anything to everybody else, but take, I liked sometimes I use the word appropriate profit first.
Wade Carpenter: [00:04:41] Right. I mean, too, too many times the owner they’re struggling to survive and sometimes you see the receptionist takes home more money than the owner.
Rob Williams: [00:04:51] Right.
Wade Carpenter: [00:04:51] Sometimes we use that as a badge of honor: I didn’t take anything out of here and we are constantly plowing our money back into the, and reinvesting our profits. So buy some more equipment or whatever thinking it’s going to pay off one day.
Rob Williams: [00:05:06] Yep.
Wade Carpenter: [00:05:07] And going back to you’re putting your mask on first, the owner needs to take care of himself first. Otherwise he can’t take care of the company.
Rob Williams: [00:05:17] Yeah, that’s right. I mean, I mean, who is the most valuable member of most of these contractors, who’s their best employee? It’s usually the owner, it’s the owner of the thing, and he ought to be rewarded for working in there. Sometimes, like in some of the stories, the wife wants them to quit because they’re not bringing home enough money. that may have happened in my house once or twice.
Wade Carpenter: [00:05:42] Well, I mean, we all feel like, you see it all the time. Somebody gets the entrepreneurial bug and they end up taking home no more than, what they were making or even less working for somebody else. And it’s sad.
Rob Williams: [00:05:56] My favorite thing is explaining to my wife how I didn’t bring home much money, but at the end of the year, then I had to pay a huge tax bill. She’s like, what? We didn’t even bring that much home. How are you paying that much in tax? I’m like, well, see that big saw over there? And the other thing that hadn’t depreciated yet, and yeah, and we’re growing and, and I didn’t even get that far. It’s just like, she, it, wasn’t a great conversation for me.
Wade Carpenter: [00:06:26] Yeah.
Rob Williams: [00:06:27] before Profit First, by the way, everybody. So…
Wade Carpenter: [00:06:30] Right.
And I can say the same thing, for 30 years- I’m a CPA, I’m taught profit is, there’s generally accepted accounting principles. IRS has their own definition of profit.
There’s accrual basis and percentage of completion basis for a contractor. But in Profit First, we define profit – I’ll let you say, answer that. How do we define profit, Rob?
Rob Williams: [00:06:56] Well, profit is the cash that you take out of your business as cash or accumulate-
Wade Carpenter: [00:07:04] -retain, right, right. We, we look at profit as cash that increased over the, the previous year we strip out all the, you gotta pay back debt, you got, depreciation and those kinds of things. So we’d look at it a very different way. And the behaviors are, I mean, personally, after two years of doing it in my own business, I’ve transformed my own business by doing it.
Rob Williams: [00:07:28] Yeah. The value I was a finance major in, in, in the real estate and stuff and the value of something is the net present value of the cash flow of the return, not the accumulation of assets inside there. It’s, it’s the value of something is the net present value the value today, discounted back of all the future cash flows that you get.
Value doesn’t count when you leave it in the business, it’s until you take it out that you’re beginning to get value from that.
Wade Carpenter: [00:08:02] Right. For all these years, I’ve taught people to run it the way I was taught. Know your numbers, learn a balance sheet, learn a P and L, your cashflow. And that’s not bad advice. That’s great advice, actually. I still advocate that, but what comes down to happening is, what people do, their innate behaviors are around cash and we make unconscious decisions around cash all the time.
Rob Williams: [00:08:31] Yeah. So, we’re back on the bonding and we have a profit account. For, for you guys out there that may not have listened before, we take our revenue account and then take your profit first. So you take even if it’s just 1%, maybe it’s 10% that you’re taking and you’re putting in this profit account.
And then you have your owners paying your tax and your operating expenses. What do you do with that? That’s the great mystery There’s so many different things that you can take with that. And I love our bonding discussion. So maybe we’ll explore that in a little bit more depth. So when you take your profit and you put it in that profit account, what do you do and how does that help on your bonding?
Wade Carpenter: [00:09:16] Well, I think a lot of people don’t realize it’s like, yes, we are going to put aside money for profit. And every dollar that comes in and a certain percentage is going to go to that. And it goes back to the same discussion. Profit does not happen. It’s not an event. It’s not after December 31, and then they come sit down with me in march, April doing their taxes and they find out how much profit. Profit’s gotta happen every single day.
Rob Williams: [00:09:42] So if we start by putting it into a profit account, then we might distribute it from there based on advanced Profit First strategies and advanced accounts. But we are discussing working capital and the definition of it. Do you put it there and just hold it?
Maybe you call it, put it something called a working capital account, which brings up what in the heck is working capital and what counts, and how do you use that towards improving your business so you’re able to grow your company? Not it takes cash to grow your company as a bonded contractor.
Wade Carpenter: [00:10:17] Well, any contract, any business for that matter to grow,
Rob Williams: [00:10:21] True. Because…
Wade Carpenter: [00:10:21] It really does take cash working capital to do it. What, what I don’t think was said, when Mike and Ron were on the podcast was our philosophy in Profit First is, let’s accumulate this cash. And we’re going to do something with it every quarter.
The idea is like, let’s not take it all out. Let’s leave maybe half of it for retained earnings, but then again, the owner
Rob Williams: [00:10:47] Which
Wade Carpenter: [00:10:47] a profit
Rob Williams: [00:10:48] Retained earnings is what, Wade? is that the money that you well, that’s like you retaining in there, not taking out?
Wade Carpenter: [00:10:52] Yeah. The, the, the money that we’re leaving in the business to grow it.
Rob Williams: [00:10:56] And now, now, your other half, I was wondering,
Wade Carpenter: [00:10:59] right.
Rob Williams: [00:10:59] I was just thinking most people were like, what the heck does that word mean?
Wade Carpenter: [00:11:04] Well, I sometimes do that and I apologize. The owner is taking a risk and first of all, we need to replace our salary first. We set aside a little bucket for that. We put aside money for our taxes, but in this profit number we’ve taken a risk, just like if you invested money in the stock market or whatever, you want that money to pay you back something.
And part of the profit should be a reward for the owner for taking the risk to jump out in business and he should enjoy those. So we do advocate that the owner should take something from it, but not at the expense of building a healthy company. So we can talk about that.
Rob Williams: [00:11:43] Yeah. There’s so many things that even as you were talking, I was thinking all the different things I’ve seen people do and even mistakes- I hope this isn’t off topic, but I’ve recently seen somebody when they’re putting that in there, they’re reducing long-term debt with that. And then I’m thinking, oh, you may have really messed up. Did you calculate how much you’re doing? Cause you can you get that long-term debt back You may need that working capital. Think about your bonding requirements and your working capital needs before you pay that long-term debt back- which hopefully, our accounts kind of help us do that. Do you want to talk about that for a second? That’s just one common thing I’ll see, besides buying a truck.
Wade Carpenter: [00:12:26] Yeah. I mean, normally we, if you’re, you’re where you want to be in your business, we would leave maybe half the retained earnings in there, but if you’re far in debt- and this is why a lot of people say, I can’t start Profit First, I’m too far in debt, I’m not making any money- Profit First is exactly when you need to start that.
And what we do with the profit is at the end of the quarter, we will take that profit and roll it into that debt and knock down that debt. And, with Profit First- I don’t know if you want to talk about it. Rob’s also a mastery Level Profit First. I think he’s a little humble and he doesn’t throw some of these things out of there sometimes, but, he talks about the the Dave Ramsey debt snowball.
Rob Williams: [00:13:08] I was just thinking that one. That’s where I was going too.
Wade Carpenter: [00:13:11] You want to explain that?
Rob Williams: [00:13:12] Well, the first thing I was thinking about is the Dave Ramsey rice and beans, rice, and beans. That’s on an individual basis. You actually can’t go to rice and beans and still run your company though. So don’t put every penny you’ve got towards your debt.
That’s the first thing. You can’t put all your money into the debt snowball. First, you’ve got to figure out what you need to run your business and keep there. And then what you can put towards your debt snowball and the debt snowball says, don’t start with your highest interest rate, which that’s what you want to do. You start with your smallest debt first and when you’re paying those off, there’s, there’s a logic to it. It’s, Wade’s got a great demonstration that we did for a contracting group the other day, in a live seminar. And you pay down the smallest ones first, but you keep making that same payment.
And when that small one disappears, then you can take that full, let’s say it was $500 in that, and apply that towards the other one and say, I know in your example, we were paying $4,800 a month. And if you pay that small one down first, it actually somehow erases your debt faster, but it’s also a psychological impact.
There’s, there’s a little bit of both.
Did I explain that okay?
Wade Carpenter: [00:14:36] I mean, you take out your minimum payment on your smallest one. And then you add to that, and it becomes increasingly, it feels good when you got, five accounts, then four accounts to pay, then three and then Profit First has their spin on, what do we do with that?
Rob Williams: [00:14:51] Yeah. Yeah. I guess, let me, let me go back. I guess what I didn’t say is, yeah, because you are erasing $300 or $500 a month. And then when you get rid of that extra 300 minimum payment, then, then all of a sudden you’re erasing $800 a month of, of the debt when that one disappears. And then maybe that next one has a thousand dollars minimum payment.
And $800 goes to $1,800 a month that you’re erasing. And when you start paying that down on your biggest one first, it doesn’t add up that way. So it adds up to less than that 1800. It’s not intuitive to me that it works, but just trust us, pay the smallest ones down first and get rid of them so you can get it, but keep paying that same amount, even though your minimum payment goes down.
Wade Carpenter: [00:15:40] Well, I mean, you have like seven credit cards or something like that. You never pay any of them off. And sometimes you give up, you keep paying on those minimums and the Profit First spin on that is we use the debt snowball, but every quarter we’re going to take, it may be 95% of our profit and put it towards that debt.
Debt is not a bad thing when you use it properly. If you leverage the money to get another machine that you can use, but too many times people will go buy a pickup truck on December 29th just to knock their taxes down.
And the one revelation, I guess, of Profit First is, debt is an expense that you paid in the past that you’ve got to come up with in the future.
Rob Williams: [00:16:24] Yeah.
Wade Carpenter: [00:16:25] You’ve got to have that profit to pay it back.
Rob Williams: [00:16:29] Let me ask you this question because I get it all the time. When you pay down your debt, is that on your profit and loss. Is that an expense on your P&L when you’re paying your debt off?
Wade Carpenter: [00:16:44] Absolutely not. I mean, maybe the interest is, but the principal, and that’s where we’re trying to get to is like, what is the cash basis- how much did the cash go up from year to year? We’re trying to define it so that these contractors that struggle so hard to take something home, actually get to take home what they deserve.
Rob Williams: [00:17:03] Yeah. And it’s not that when you bought that truck that you didn’t get to expense the truck, but the problem, the reason that your debt is not an expense off of your taxes is because you already deducted it in the beginning. If you got a full deduction that first year there’s some tax benefits. If you call it a benefit, I think it’s almost a reverse logic trick to fool you, you take it all in that beginning.
So when you’re paying down $20,000 a year of that, if it’s a hundred thousand dollar loan, well, you already took the whole hundred thousand dollars, perhaps, and expensed it out that first year, instead of spreading it out.
And now all of a sudden you got a $20,000 more tax bill in the future that you hadn’t allowed for. I see all the time with very smart people and some of these people are numbers people, but not CPAs. So I’m sure you’re not going to get it just from that explanation guys, if you’re listening, but just remember those debt payments- except for the interest part is deductible- but when you’re paying down those big debts, it doesn’t come off your taxes.
Wade Carpenter: [00:18:11] Yeah, you’re continuing to pay it. And the point of the talk that me and Rob did the other week for that trade organization was, there are business cycles in construction and, things could turn south tomorrow and the ones that survive are the ones that are healthy. And so we can build some working capital that can build up some cash. And when you do have cash, you can take advantage of opportunities. When, when things go down or you can survive it where other companies probably can’t.
Rob Williams: [00:18:42] Yeah, what’s so scary is I see people maximizing their cash flow in these big, upward years, their current cash flows, with the debts and stuff and it, and it may help them grow, but what’s really scary is most people don’t realize that they are putting a cash obligation in the next five years in the future.
And then they may not have that income and then they’re going to go out of business. And when people are doing it, all they’re hearing is their tax savings that year. And they don’t realize the hole that they’re digging for themselves.
Wade Carpenter: [00:19:19] Exactly.
Rob Williams: [00:19:20] That’s scary.
Wade Carpenter: [00:19:21] Yup. I think that hopefully proves the point that, Profit First is not about like, let’s take it all out because that’s not at all what we advocate.
Rob Williams: [00:19:29] Yeah. So, so I guess getting back to, what do we do with this profit, and what is this profit account? Let’s, let’s make it clear because I know Stephen made a great point. If you have something- and most people probably don’t call it a bond account, it may call it a working capital in their profit account. That’s not money that you saved to pay your bond, but that’s not what it’s for.
Wade Carpenter: [00:19:53] That was kind of a miscommunication on that, but…
Rob Williams: [00:19:56] Does everybody do the bond people realize that a lot of times they don’t pay that bond? I don’t know if a lot of contractors, if they’re newer, they may not-
Wade Carpenter: [00:20:05] You get a, you get a draw up front and, you put that bond premium in your, your upfront payment,
Rob Williams: [00:20:12] If it’s, if the bond is required, that that’s passed through to the, to the project owner.
Wade Carpenter: [00:20:17] To the job, yeah.
Rob Williams: [00:20:18] I mean, maybe there’s a bond contract for that, but that’s not what we’re talking about. This is a profit account to help your working capital. This is not saving to pay your bond, guys.
This is a working capital account to, to make your balance sheet healthier. that’s what it’s about and understanding when things are going great, how to build a healthy company and not how you pay the least amount of taxes This year and put yourself in a really big hole to have to pay that because some of these tax benefits, it’s almost like getting a loan against the future taxes that are coming up in the next five years. When you get an accelerated depreciation on something, especially if you’ve got loan payments out there. That means you’re getting the next five years of deductions all up front. So you’re borrowing against those five years.
People don’t realize that they, they, they’re not making that. It’s not extra tax. You’re just getting it early, which is great. But if you spent it, you’re going to have to be paying more taxes the next five years. And people don’t realize that part.
Wade Carpenter: [00:21:31] Yeah. One other point I wanted to make, whether we call it a bond account or what, you know, we need to build working capital. And one other thing that we advocate in Profit First is we take our profit and we will put it in another bank, avoiding the temptation to spend it.
We have what’s called a profit hold account, and then a tax whole account. So we put that away so we’re not tempted to spend it.
Rob Williams: [00:21:55] Yeah, well, while we’re on sort of our more technical show, because it just, you and me, the mastery Profit First Professionals, the Mastery Certified Profit First Professionals. Tell us about working capital and define that for us. We ought to say that every two or three shows.
Wade Carpenter: [00:22:13] The accounting definition of it is, your current assets, that’s assets that you’re going to turn into cash within a year, minus current liabilities- which would be things you have to pay out within 12 months. And we were talking about this before, bond agents, underwriters, they will throw out certain things, like a prepaid tax, prepaid income taxes or something like that. They’ll throw that all out all day. If you’ve got inventory or something like that, they’ll usually throw at least half of that out. There are several categories- if you’ve got loans to the shareholder, that’s gone. So we’ve got to build working capital. That’s one of the main factors that they look at and what you can both bond, as well as a banker. Bankers are not usually as sophisticated at pulling that stuff out, but they still look at working capital and equity.
Rob Williams: [00:23:05] Yeah. So from a non CPA standpoint, working capital, I like to think of it as, okay. Let’s predict your cash flow. How are you going to be able to pay your bills and not pay your bills in a short-term cash flow over the next 12 months? But the problem with that is, the way we as a contractor might look at that is a little bit different than the underwriters and the CPAs might look at it because they’ve got to kind of, they got to cover their ass, right? In case something happens because I remember we had a position with the bank that we had a wonderful cash flow because we were steadily selling lots and different things. We were selling assets that we had accumulated over decades, and it was a wonderful cashflow plan because we didn’t have to pay any taxes. Who didn’t like that? The bank examiners, because they wanted to see a profit.
So our logical cashflow part doesn’t always mesh with the way they’re defining and wanting to see that working capital. That was a bank example, but it’s a very similar situation For the bonding underwriters. And they’ve got reasons. They’re not just trying to be difficult. I mean, the bank, the bankers, their reason is that’s what the rule is. The bonding underwriters, they’ve seen stuff that we hadn’t seen and they are backing us as contractors, and they are going to count what they want to count, what they know historically they need to count.
So a contractor says, this is my plan. But if they need Wade or somebody like Wade to come help them see through this and communicate back and forth with those bonding underwriters instead of having your own plan, and then it’s too late at the end of the year because they needed to be working on this.
So you kind of need to let, at least your CPA, if you’ve got that
or perhaps your bonding underwriter, if you can get a really good relationship with them- your underwriter, or even your agent, if you’ve got somebody that’s really involved like Stephen is, but communicate that upfront. Don’t have your own cashflow plan, because it might not be a nice conversation at the end of year.
Wade Carpenter: [00:25:28] Year.
Planning is the key and before the end of the year, you should, I mean, a lot of CPAs don’t do this. If they do any planning at all, it’s around the tax side. For a contractor, we do a three-pronged plan at the end of the year. We want to minimize the taxes, but we also want to maximize the financial statement for the bonding company, and sometimes they’re on two different, methods of accounting where we can do that. But the other piece of that is you don’t want to screw up your cashflow in January, February, because you did make some boneheaded move in December and then you have no cash to survive in the winter months.
Rob Williams: [00:26:02] We noticed back, not, not that I’m showing my gray hair here, but when 2001 came around, it’s like all the rules changed. The common sense stuff. That example that I just gave, which always kind of worked in the past. But they like look at it three different ways and there they’re wanting to make sure the worst case scenario is okay, not the best case scenario because they, they don’t want to be in a bind.
Man, look at the time on this, Wade. You and I were worried that we were going to have enough to talk about, man, we, look how much we’ve gone over. This is this is great. We could, I could talk about this for a long time.
Wade Carpenter: [00:26:39] Well, I know Stephen brought up several other questions as we were kicking this around. So I think maybe we’ll have a few of these discussions.
Rob Williams: [00:26:47] This is great. And remember guys, looking at where are you as a Profit First contractor, and what does your life look like when you’re struggling out there and worried about every paycheck, not knowing, the fear, you’re waking up at two or three in the morning. I mean when you get with Wade or me or somebody like that and get that confidence, you’re just a totally transformed business. It may take a few months or even a couple of years, but just think about that state of mind that you can be in.
And it’s not that your company doesn’t grow. Think about, maybe you can run your company better and maybe even grow more by controlling that cash and keeping it out. Everybody thinks you’ve got to plug that cash in there, but like you mentioned, Jim Collins- in his book – in Flywheel. I forgot the name of it. He talks about these companies, looking back, that were more conservative on that actually grew faster because they were healthy. And Mike explains that, maybe you find that healthy business in the niche. The fact that you’re putting these principles into place, which are less risky, allows you to identify your better niche and your more healthy profit.
So over time, when you’re in year five, year 10, you’re accelerating a whole lot faster rather than growing unhealthy niches, which I think I had done a few times that didn’t really have that profit potential.
So the paradox of it looking like you’re slowing your growth by taking this money, controlling this stuff, versus the paradigm that the more risk you take, the faster you’re going to grow- I think that’s what we were taught in the 1980s, when I was learning things. Jim Collins was studying and taking all that data. And he said sorry guys, that stuff we were telling you, forget that. Grow as growth. If we look back over history for longterm growth, it’s the people that grow healthy, you have a better-
Wade Carpenter: [00:28:58] Smart growth.
Rob Williams: [00:28:59] Yep Smart growth. The more risk you take, maybe you’ll grow fast in two or three years, but there’s probably going to be a bombshell in there at some point. So anyway, that’s my soapbox.
Wade Carpenter: [00:29:11] That’s a topic for another show. I think we can go on that one for a while.
Rob Williams: [00:29:15] Anyway, gosh. Yeah, well Wade, I could talk about this all day long. So I guess we got to cut off at some point.
Wade Carpenter: [00:29:20] Yep.
Rob Williams: [00:29:21] So. This has
Wade Carpenter: [00:29:21] been great.
Rob Williams: [00:29:22] This is great. And this is the Contractor Success Forum. Don’t forget to go to contractorSuccessForum.com and Wade, do you remember what we just talked about? You can scroll up and you see those little show notes there, and now any of you first time listeners, you know what a magnificent show this is.
So look at those three little dots down there, click on that and hit that share button and send that to somebody that can use this, help them out. Be a good buddy to your friend. So, appreciate it. Y’all come back and we miss Stephen. Stephen, maybe he’ll be here on our next episode. So thanks a lot, Wade.
Wade Carpenter: [00:30:01] Thanks.
Rob Williams: [00:30:02] All right guys. See you soon.