Financial Data and Key Metrics Changes - The company's Q2 revenues reached $391 million, reflecting a 1.5% increase year-over-year on a pro forma basis [25][26] - Adjusted EBITDA for Q2 was $114 million, with an adjusted EBITDA margin of 29.2%, an improvement of 270 basis points compared to the previous year [26] - Adjusted diluted EPS was $0.27, representing a 29% year-over-year increase [26] Business Line Data and Key Metrics Changes - The company reported strong upsell and cross-sell performance, contributing to a 9% growth in the quarter [25] - Retention rates remained high at over 96%, consistent with historical performance [11][26] - The transportation vertical showed positive growth despite macro-related slowing, while retail and e-commerce experienced declines in order volumes [13][14] Market Data and Key Metrics Changes - International growth was robust, with a 7.2% increase in the quarter, outperforming the Americas in all growth algorithm metrics [58][60] - The company noted a normalization in hiring volumes across the macro environment, leading to updated expectations for slightly negative base growth in the second half of the year [16][30] Company Strategy and Development Direction - The company is focused on executing its FA five point zero strategy, which includes increasing market share in target verticals, accelerating international growth, and enhancing product offerings [10][22] - The integration of the Sterling acquisition is ahead of schedule, with a synergy target range increased to $65 million to $80 million within two years [10][27] - The company is leveraging its digital identity solutions as a competitive differentiator in the market [15][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties, citing a diverse range of global verticals and customer segments [17][30] - The company reaffirmed its full-year guidance despite updated expectations for base performance in the second half of the year [30][31] - Management highlighted the importance of customer conversations and the overall tone of caution among clients regarding hiring plans [42][53] Other Important Information - The company generated adjusted operating cash flows of nearly $48 million, a 17% increase year-over-year [28] - The cash balance at the end of Q2 was $184 million, providing ample liquidity for future operations [28] - The company plans to continue making voluntary principal debt repayments, showcasing its commitment to reducing net leverage [29][73] Q&A Session Summary Question: Change in base growth assumption for the back half - Management indicated that the change is broad-based and not specific to one vertical, driven by overall market perception and policy uncertainties [38][39] Question: Impact of Jennie I initiative on hiring - Management noted that clients are generally in a wait-and-see mode regarding hiring, with no specific ties to the Jennie I initiative [42][44] Question: Performance of various verticals - Management reported that staffing and financial services performed well, while healthcare saw a slight decline, which is not a major concern [48][49] Question: International growth metrics - International growth was up 7.2% in the quarter, with a diversified go-to-market strategy contributing to this success [57][60] Question: Upsell and cross-sell contributions from Sterling acquisition - Management stated that it is still early to track specific contributions from the Sterling acquisition, with expectations for revenue synergies to materialize more in 2026 [63][66] Question: Trends in July compared to Q2 - Management confirmed that July trends were consistent with Q2, indicating continued strong performance [70][71] Question: Interest outlook and debt repayment - Management confirmed that the updated outlook accounts for recent debt repricing and voluntary prepayments, with expectations for stable interest rates [88][90] Question: Competitive environment post-Sterling acquisition - Management noted that win rates have improved, but emphasized a focus on execution and customer relationships rather than competitor actions [92][96] Question: Digital identity framework developments - Management highlighted ongoing education and client interest in digital identity solutions, but refrained from providing specific revenue metrics at this time [101][102] Question: Impact of One Big Beautiful Bill Act on business - Management indicated it is too early to assess the long-term impacts of the new tax law, but it will support deleveraging and investment in synergy programs [104][105]

Financial Data and Key Metrics Changes - The second quarter revenues reached $391 million, reflecting a 1.5% increase year-over-year on a pro forma basis [23] - Adjusted EBITDA for Q2 was $114 million, with an adjusted EBITDA margin of 29.2%, an improvement of 270 basis points compared to the previous year [24] - Adjusted diluted EPS was $0.27, representing a 29% year-over-year increase [24] Business Line Data and Key Metrics Changes - The transportation vertical showed positive growth despite macro-related slowing in base volumes, driven by upsell and cross-sell initiatives [11] - The retail and e-commerce sector experienced a decline in order volumes due to tariffs impacting U.S. consumers [11] - Healthcare hiring momentum tapered slightly, but the overall outlook for the industry remains positive [12] Market Data and Key Metrics Changes - International growth was strong, with a 7.2% increase in the quarter, particularly in EMEA and the U.K. markets [56] - The overall customer retention rate remained high at over 96% [24] - The macro environment has led to a normalization of hiring volumes, with a cautious tone among customers regarding their hiring plans [14] Company Strategy and Development Direction - The company is executing its FA 5.0 strategy, focusing on increasing market share in target verticals, accelerating international growth, and enhancing product offerings [8] - The integration of the $2.2 billion Sterling acquisition is ahead of schedule, emphasizing customer retention and synergy realization [8][9] - The company aims to achieve adjusted EBITDA margins of 28% for the full year, reflecting a meaningful expansion from 2024 [29] Management's Comments on Operating Environment and Future Outlook - Management noted a shift in base growth expectations for the second half of the year to slightly negative due to macroeconomic uncertainties [14][28] - Despite the cautious outlook, management remains confident in the company's ability to generate upsell and cross-sell revenues [29] - The company anticipates continued strong performance in the second half, supported by a robust deal pipeline and high customer retention [29] Other Important Information - The company has increased its synergy target range to $65 million to $80 million within two years, with $47 million already actioned as of Q2 [25] - The company is focused on reducing net leverage towards approximately three times adjusted EBITDA within 24 months post-acquisition [27] - The passing of the One Big Beautiful Bill Act is expected to significantly reduce cash tax payments for 2025, enhancing free cash flow [31] Q&A Session Summary Question: Change in base growth assumption for the back half - Management indicated that the change is broad-based and not specific to one vertical, driven by overall market perception [36][38] Question: Impact of Jennie I initiative on hiring - Customers are generally in a wait-and-see mode regarding hiring, influenced by broader policy uncertainties rather than specific initiatives [40][41] Question: Performance of verticals, particularly staffing - Staffing held its own, with financial services performing well, while healthcare saw a slight decline, which is not a major concern [46][48] Question: International growth metrics - International growth was up 7.2% in the quarter, with a diversified go-to-market strategy contributing to this success [56][58] Question: Upsell and cross-sell contributions from Sterling acquisition - Early revenue synergies from the Sterling acquisition are expected to materialize more in 2026, with current focus on improving customer experience [62][66] Question: Trends in July compared to Q2 - July trends were consistent with Q2, indicating continued strong performance despite cautious outlook for the second half [70][72] Question: Sales force adjustments due to weaker demand - The company is not reducing the sales force but is maintaining it to capitalize on expected demand as macro uncertainties clear up [116]

Q2 2025 Performance Highlights - Revenues reached $391 million, a 1.5% year-over-year growth assuming the Sterling acquisition occurred on 1/1/2023[21, 23] - Adjusted EBITDA was $114 million, resulting in a 29.2% Adjusted EBITDA Margin[21] - Adjusted Net Income amounted to $47 million with an Adjusted Diluted EPS of $0.27[21] - Adjusted Operating Cash Flow was $47.7 million after adjusting for $10.4 million in Sterling acquisition and integration costs[23, 49] Synergy Realization and Cost Management - $47 million in run-rate synergies were actioned as of June 30, 2025, progressing towards a total run rate synergy target of $65 million to $80 million within 2 years[38, 69] - $18 million in year-to-date synergies were realized as of June 30, 2025[38] - Debt was repriced in July, reducing the borrowing rate by 50 bps, leading to approximately $10 million in annual cash interest savings[49] Financial Outlook and Capital Structure - Full year 2025 revenue guidance is reaffirmed at $1.5 billion to $1.6 billion[53] - Full year 2025 Adjusted EBITDA guidance is reaffirmed at $410 million to $450 million, with an Adjusted EBITDA Margin of approximately 27% to 28%[53] - Full year 2025 Adjusted Net Income is projected to be $152 million to $182 million, with Adjusted Diluted Earnings Per Share of $0.86 to $1.03[53] - Net leverage is targeted to reach approximately 2-3x within 24 months post-closing, with total debt repayments exceeding $45 million since closing[46, 47]

Group 1: Earnings Performance - First Advantage reported quarterly earnings of $0.27 per share, exceeding the Zacks Consensus Estimate of $0.24 per share, and up from $0.21 per share a year ago, representing an earnings surprise of +12.50% [1] - The company posted revenues of $390.63 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.31%, compared to year-ago revenues of $184.55 million [2] - Over the last four quarters, First Advantage has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Group 2: Stock Performance and Outlook - First Advantage shares have declined approximately 13.5% since the beginning of the year, while the S&P 500 has gained 7.9% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.28 on revenues of $410.13 million, and for the current fiscal year, it is $0.96 on revenues of $1.54 billion [7] Group 3: Industry Context - The Technology Services industry, to which First Advantage belongs, is currently ranked in the top 38% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Financial Performance Overview [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) First Advantage reported significant revenue growth in Q2 2025, primarily driven by the acquisition of Sterling Check Corp, with revenues more than doubling to $390.6 million, while GAAP Net Income was minimal at $0.3 million due to substantial acquisition-related expenses, Adjusted EBITDA and Adjusted Diluted EPS showed strong year-over-year growth, reaching $113.9 million and $0.27, respectively Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $390.6 M | $184.5 M | +111.7% | | Net Income | $0.3 M | $1.9 M | -84.2% | | Adjusted EBITDA | $113.9 M | $55.8 M | +104.1% | | Adjusted Diluted EPS | $0.27 | $0.21 | +28.6% | - GAAP Net Income was significantly impacted by **$7.3 million** in expenses and **$41.3 million** in depreciation and amortization related to the Sterling acquisition and integration[5](index=5&type=chunk) - The company generated **$37.3 million** in Cash Flows from Operations, or **$47.7 million** on an adjusted basis after excluding cash costs associated with the Sterling acquisition[5](index=5&type=chunk) [Full Year 2025 Guidance](index=1&type=section&id=Full%20Year%202025%20Guidance) The company reaffirmed its full-year 2025 guidance, signaling confidence in its business outlook and the expected benefits from realized synergies following the Sterling acquisition, with management expecting revenues to be between $1.5 billion and $1.6 billion for the full year Full Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenues | $1.5 billion – $1.6 billion | | Adjusted EBITDA | $410 million – $450 million | | Adjusted Net Income | $152 million – $182 million | | Adjusted Diluted EPS | $0.86 – $1.03 | [Management Commentary](index=2&type=section&id=Management%20Commentary) Management expressed satisfaction with the solid Q2 financial performance, achieved despite macroeconomic uncertainties, highlighting the seamless integration of the Sterling acquisition, advancement of the FA 5.0 strategy, and strong momentum in international markets and Digital Identity solutions, alongside improvements to capital structure through credit facility repricing and voluntary debt repayments - CEO Scott Staples highlighted the company's resilient business model, consistent go-to-market execution, and progress on the FA 5.0 strategic priorities, including the Sterling integration[6](index=6&type=chunk) - The company is experiencing strong customer interest in its Digital Identity solutions and continued momentum in international markets[6](index=6&type=chunk) - At its recent Investor Day, the company introduced a long-term projected Adjusted Diluted EPS compound annual growth rate (CAGR) of **19% to 25%**[7](index=7&type=chunk) - CFO Steven Marks noted that the company repriced its credit facility in July, reducing the borrowing rate by **50 basis points**, and has made over **$45 million** in voluntary principal debt repayments year-to-date[8](index=8&type=chunk) Condensed Financial Statements [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, the company's balance sheet showed total assets of $3.87 billion, a slight decrease from year-end 2024, with Goodwill and Intangible Assets remaining significant components at $2.14 billion and $0.93 billion, respectively, while total liabilities stood at $2.57 billion, with long-term debt being the largest component Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $502,846 | $475,993 | | Goodwill & Intangibles, net | $3,068,686 | $3,112,476 | | **Total Assets** | **$3,871,212** | **$3,922,893** | | Total Current Liabilities | $253,391 | $250,688 | | Long-term Debt, net | $2,104,285 | $2,121,289 | | **Total Liabilities** | **$2,572,049** | **$2,615,854** | | **Total Equity** | **$1,299,163** | **$1,307,039** | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the second quarter of 2025, revenues more than doubled to $390.6 million from $184.5 million in the prior-year period, offset by a corresponding increase in operating expenses, particularly Cost of Services and Depreciation & Amortization, with higher interest expense contributing to a near break-even Net Income of $0.3 million, compared to $1.9 million in Q2 2024 Q2 Statement of Operations Summary (in thousands) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Revenues** | **$390,633** | **$184,546** | | Total Operating Expenses | $352,896 | $174,643 | | **Income from Operations** | **$37,737** | **$9,903** | | Interest Expense, net | $44,785 | $7,353 | | **Net Income** | **$308** | **$1,861** | | **Diluted Net Income Per Share** | **$0.00** | **$0.01** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, the company generated $56.8 million in net cash from operating activities, a decrease from $70.4 million in the same period of 2024, while net cash used in investing activities increased to $23.8 million, primarily for capitalized software, and financing activities used $21.1 million, driven by debt repayments Six Months Ended June 30 Cash Flow Summary (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $56,816 | $70,372 | | Net Cash used in Investing Activities | ($23,816) | ($13,812) | | Net Cash (used in) provided by Financing Activities | ($21,107) | $213 | | **Increase in Cash** | **$14,862** | **$55,737** | Reconciliation of Non-GAAP Financial Measures [Reconciliation of Net Income to Adjusted EBITDA](index=9&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) The company reconciled its Q2 2025 GAAP Net Income of $0.3 million to a non-GAAP Adjusted EBITDA of $113.9 million, with major adjustments including adding back $61.9 million in depreciation and amortization, $44.8 million in net interest expense, $5.7 million in share-based compensation, and a combined $8.6 million in transaction, integration, and restructuring charges Q2 2025 Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Description | Amount | | :--- | :--- | | Net Income | $308 | | Interest expense, net | $44,785 | | (Benefit) for income taxes | ($7,610) | | Depreciation and amortization | $61,906 | | Share-based compensation | $5,742 | | Transaction & integration charges | $8,561 | | Other adjustments | $254 | | **Adjusted EBITDA** | **$113,946** | - Transaction and integration charges for Q2 2025 included approximately **$2.3 million** and **$3.7 million**, respectively, related to the Sterling acquisition[34](index=34&type=chunk)[35](index=35&type=chunk) [Reconciliation of Net Income to Adjusted Net Income and EPS](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income%20and%20EPS) To arrive at non-GAAP Adjusted Net Income of $47.0 million for Q2 2025, the company adjusted its pre-tax loss by excluding items such as $50.9 million in acquisition-related D&A, share-based compensation, and other charges, then applied an effective tax rate of 25.6%, resulting in an Adjusted Diluted EPS of $0.27, compared to a GAAP Diluted EPS of $0.00 Q2 2025 Reconciliation of GAAP EPS to Adjusted Diluted EPS | Description | Per Share Amount | | :--- | :--- | | **Diluted net income per share (GAAP)** | **$0.00** | | Adjustments (net of tax) | $0.27 | | **Adjusted Diluted Earnings Per Share (Non-GAAP)** | **$0.27** | - The most significant adjustment was for acquisition-related depreciation and amortization, which added **$50.9 million** to pre-tax income, or **$0.29** per share before tax effects[36](index=36&type=chunk)[37](index=37&type=chunk) [Reconciliation of Operating Cash Flow](index=10&type=section&id=Reconciliation%20of%20Operating%20Cash%20Flow) The company presented an Adjusted Operating Cash Flow metric to provide insight into liquidity from core operations, where for Q2 2025, GAAP cash flow from operating activities of $37.3 million was adjusted by adding back $10.3 million in cash costs related to the Sterling acquisition and integration, resulting in an Adjusted Operating Cash Flow of $47.7 million Q2 2025 Reconciliation of Operating Cash Flow (in thousands) | Description | Amount | | :--- | :--- | | Cash flows from operating activities (GAAP) | $37,345 | | Add: Cost paid related to Sterling acquisition | $10,345 | | **Adjusted Operating Cash Flow** | **$47,690** | Other Information [Conference Call and Webcast Information](index=3&type=section&id=Conference%20Call%20and%20Webcast%20Information) First Advantage scheduled a conference call and webcast for 8:30 a.m. ET on August 7, 2025, to discuss the second quarter 2025 financial results with investors and analysts - The company will host a conference call to review its Q2 2025 results on August 7, 2025, at **8:30 a.m. ET**[11](index=11&type=chunk)[12](index=12&type=chunk) [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) The press release includes forward-looking statements concerning the company's operations and financial performance, cautioning that these statements are subject to numerous risks and uncertainties, including macroeconomic conditions, regulatory changes, data security breaches, and the ability to successfully integrate the Sterling acquisition and realize its expected benefits - The report contains forward-looking statements that are not historical facts and are subject to various risks and uncertainties[14](index=14&type=chunk)[15](index=15&type=chunk) - Key identified risks include negative macroeconomic changes, operating in a highly regulated industry, potential data security breaches, and failure to realize the expected benefits of the Sterling acquisition[15](index=15&type=chunk)[20](index=20&type=chunk) [About First Advantage](index=5&type=section&id=About%20First%20Advantage) First Advantage is a leading global provider of HR technology software and data, with platforms powered by proprietary technology and AI, offering comprehensive employment background screening, digital identity solutions, and verification services to 80,000 organizations in over 200 countries and territories - First Advantage is a leading provider of global software and data in the HR technology industry, serving **80,000 organizations**[25](index=25&type=chunk) - Core services include employment background screening, digital identity solutions, and verification services, enabled by proprietary technology and AI[25](index=25&type=chunk)

Core Insights - First Advantage Corporation reported solid financial performance for Q2 2025, with revenues reaching $390.6 million, a significant increase from $184.5 million in Q2 2024, reflecting a year-over-year growth of 112.3% [3][4] - The company reaffirmed its full-year 2025 guidance, projecting revenues between $1.5 billion and $1.6 billion, adjusted EBITDA of $410 million to $450 million, adjusted net income of $152 million to $182 million, and adjusted diluted earnings per share of $0.86 to $1.03 [2][8] - The CEO highlighted the successful integration of the Sterling acquisition and the positive momentum in international markets, particularly in Digital Identity solutions [4][6] Financial Performance - Revenues for Q2 2025 were $390.6 million, compared to $184.5 million in Q2 2024, marking a 112.3% increase [3] - Adjusted EBITDA for the quarter was $113.9 million, with an adjusted EBITDA margin of 29.2%, slightly down from 30.2% in the previous year [3][34] - Adjusted net income was reported at $47.0 million, up from $30.8 million in Q2 2024, while adjusted diluted earnings per share increased to $0.27 from $0.21 [3][34] Strategic Initiatives - The company is focused on its FA 5.0 strategic priorities, which include the integration of Sterling and enhancing its product and technology offerings [4][5] - First Advantage held its inaugural Investor Day, outlining long-term financial targets, including a projected compound annual growth rate for adjusted diluted EPS of 19% to 25% [5][6] - The CFO mentioned a successful repricing of the credit facility, reducing borrowing rates by 50 basis points, and highlighted the company's commitment to reducing net leverage and realizing synergies from acquisitions [7][8] Market Position - First Advantage serves over 80,000 organizations globally, providing employment background screening and digital identity solutions [24] - The company operates in over 200 countries and territories, emphasizing innovation and customer success in the HR technology industry [24]

Core Viewpoint - First Advantage Corporation will release its second quarter 2025 financial results on August 7, 2025, prior to an earnings conference call scheduled for 8:30 a.m. ET on the same day [1]. Group 1: Conference Call Details - Participants can join the conference call by dialing 800-445-7795 for domestic calls or 785-424-1699 for international calls, approximately ten minutes before the start time [2]. - The conference call will also be available via a live webcast on the Company's investor relations website, with related presentation materials posted prior to the call [2]. - A replay of the webcast will be accessible on the Company's investor relations website following the conference call [3]. Group 2: Company Overview - First Advantage is a leading provider of global software and data in the HR technology industry, utilizing proprietary technology and AI for its services [4]. - The Company offers comprehensive employment background screening, digital identity solutions, and verification services, serving over 80,000 organizations globally [4]. - Headquartered in Atlanta, Georgia, First Advantage operates in over 200 countries and territories, focusing on modernizing hiring and onboarding processes [4].

Core Viewpoint - First Advantage (FA) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors play a role in this relationship, as they adjust their valuations based on earnings estimates, leading to stock price fluctuations [4]. Business Improvement Indicators - The upgrade in Zacks Rank for First Advantage suggests an improvement in the company's underlying business, which is expected to drive the stock price higher [5][10]. - Over the past three months, the Zacks Consensus Estimate for First Advantage has increased by 3.3%, indicating a positive trend in earnings expectations [8]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7][9]. - First Advantage's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Group 1 - The article discusses the author's previous coverage of First Advantage (FA) and the recommendation of a hold rating due to concerns about the merger with Sterling Check [1] - The author emphasizes a fundamentals-based approach to value investing, focusing on companies with long-term durability and robust balance sheets rather than just low multiples [1] - There is a recognition that investing in successful companies carries risks, particularly regarding valuation, but some situations may justify less concern about price in the short term due to significant growth potential [1]

Core Viewpoint - Fountain Asset Corp. intends to initiate a normal course issuer bid to repurchase its subordinate voting shares, believing they are undervalued at current market prices [1][2]. Company Summary - Fountain Asset Corp. is a merchant bank that provides equity financing, bridge loan services, and strategic financial consulting across various industries, including marijuana, oil & gas, mining, real estate, manufacturing, retail, financial services, and biotechnology [3]. Issuer Bid Details - Upon receiving regulatory approval, Fountain plans to buy back up to 3,216,335 subordinate voting shares, which represents approximately 5% of its currently issued and outstanding shares, over a 12-month period from June 19, 2025, to June 18, 2026 [2]. - The repurchase price will be based on the market price at the time of acquisition, and the actual number and timing of purchases will be determined by the company [2]. - Canaccord Genuity Corp. has been retained to facilitate these purchases on behalf of Fountain [2].