Financial Data and Key Metrics Changes - DXP sales grew 11.9% to $2 billion in fiscal 2025, with gross profit margins expanding 67 basis points to 31.5% [5][12] - Adjusted EBITDA reached a record $225.3 million, with an 11.2% margin, marking the first year of sustained 11%+ adjusted EBITDA margins [16][27] - Operating income increased 21.7% year-over-year to $176.9 million, and diluted earnings per share improved to $5.37, up from $4.22 in fiscal 2024 [5][27] Business Line Data and Key Metrics Changes - Innovative Pumping Solutions (IPS) sales grew 26.4% year-over-year to $390.3 million, driven by strength in energy and water-related project activity [9][19] - Service Centers delivered 11% total sales growth, including 9.8% organic growth, supported by diverse end markets [11][19] - Supply Chain Services experienced a modest decline of 1.4% year-over-year due to reduced activity at certain energy-related sites [12][22] Market Data and Key Metrics Changes - Energy represented 22% of DXP sales, followed by water and wastewater at 15%, general industry at 15%, chemical at 10%, and food and beverage at 7% [6][12] - Geographic regions with notable sales growth included Ohio River Valley, Southeast, Texas Gulf Coast, and California [12][21] Company Strategy and Development Direction - The company focuses on diversification of end market exposure while building scale in markets with a strong competitive position [6][14] - DXP completed 6 acquisitions in 2025, strengthening capabilities and expanding reach, while also executing a share repurchase program returning $17 million to shareholders [9][35] - The company aims to maintain margin discipline while driving organic growth and executing strategic acquisitions [14][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about demand across energy, water, and industrial markets, while remaining mindful of inflation dynamics and supply chain variability [14][30] - The company anticipates continued growth in 2026, with a focus on maintaining operational efficiency and leveraging recent acquisitions [14][30] Other Important Information - DXP generated $94.3 million in cash from operating activities, translating into $54 million of free cash flow during fiscal 2025 [13][32] - The company successfully refinanced its debt, improving flexibility and positioning for growth and acquisitions [9][30] Q&A Session Summary Question: Can you share daily sales trends by month for Q4 and Q1 thus far? - In Q4, daily sales were $7.5 million in October, $8.2 million in November, and $9.8 million in December, averaging $8.5 million per day [37] - January's daily sales were $6.9 million, typically the slowest month of the year [38] Question: Will there be a meaningful margin difference comparing Q4 with Q1? - Management indicated that water continues to be accretive to margins, and recent acquisitions should positively impact Q1 margins [40] Question: What are the positive dynamics developing in energy for the second half of the year? - Management noted a decline in Q4 energy-related backlog but observed increased quoting activity, suggesting potential for back-end weighted growth in 2026 [46][47]

Core Viewpoint - Premier, Inc. reported a decline in revenue and earnings for the quarter ended September 2025, indicating potential challenges in financial performance despite some positive surprises against estimates [1][2]. Financial Performance Summary - Revenue for the quarter was $240 million, down 3.3% year-over-year, but exceeded the Zacks Consensus Estimate of $239.23 million by +0.32% [1]. - Earnings per share (EPS) were $0.30, a decrease from $0.34 in the same quarter last year, but surpassed the consensus estimate of $0.28 by +7.14% [1]. - The stock has returned +1.2% over the past month, underperforming the Zacks S&P 500 composite's +2.1% change [3]. Key Metrics Overview - Net Revenue from Supply Chain Services - Software licenses and other services was $19.68 million, slightly below the average estimate of $19.75 million [4]. - Net Revenue from Performance Services was $87.92 million, down 9.1% year-over-year, and below the average estimate of $89.51 million [4]. - Total Net Revenue from Supply Chain Services was $152.09 million, exceeding the average estimate of $149.72 million with a year-over-year change of +0.5% [4]. - Net administrative fees from Supply Chain Services were $132.4 million, slightly above the average estimate of $129.97 million, with a year-over-year change of -0.2% [4]. - Adjusted EBITDA for Performance Services was $10.62 million, below the average estimate of $15.01 million [4]. - Adjusted EBITDA for Supply Chain Services was $76.17 million, exceeding the average estimate of $72.28 million [4].

Financial Data and Key Metrics Changes - Sales for Q3 2025 increased by $890 million year-over-year to $7.7 billion, representing a 13% increase compared to the prior year, or an 11% increase on a constant currency basis [16] - Non-GAAP gross margin for Q3 was 10.8%, down approximately 70 basis points year-over-year, primarily due to regional and customer mix in Global Components and a $21 million charge in ECS [16] - Non-GAAP diluted EPS for Q3 was $2.41, exceeding the guided range, with the charge lowering EPS by $0.31 [16] Business Line Data and Key Metrics Changes - Global Components sales increased by $610 million year-over-year to $5.6 billion, up 5% sequentially [20] - Global ECS sales rose by $300 million year-over-year to $2.2 billion, reflecting a 15% increase compared to the prior year [21] - ECS billings were $5.2 billion, up 14% year-over-year, with a healthy backlog growth exceeding 70% year-over-year [21] Market Data and Key Metrics Changes - Sales in the Americas were flat sequentially at $1.7 billion, driven by strength in industrial and transportation markets [19] - EMEA sales reached $1.4 billion, with resilience in industrial and aerospace markets despite macroeconomic challenges [19] - Asia sales grew sequentially by 12% to $2.4 billion, supported by strength in industrial, compute, and consumer markets [19] Company Strategy and Development Direction - The company is focused on delivering high-quality, innovative technology solutions and is positioned to emerge with improved momentum as the market gradually recovers [5][6] - The strategy includes a deliberate shift towards higher-margin value-added offerings and expanding the addressable market through strategic outsourcing arrangements [12][13] - The company aims to leverage strong trends in cloud and AI to drive growth in both supply chain services and ECS segments [27] Management's Comments on Operating Environment and Future Outlook - Management believes the current cyclical recovery is gradual, with leading indicators remaining robust across all markets [26] - The company anticipates that the West will catch up to the East in terms of recovery, with mass market customers expected to improve over time [26] - Future guidance for Q4 expects sales between $7.8 billion and $8.4 billion, indicating an 11% year-over-year increase at the midpoint [25] Other Important Information - The company has returned approximately $3.5 billion to shareholders via share repurchase since 2020 [14] - A $21 million charge was taken in Q3 due to lower profit expectations on multi-year contracts, which are part of the strategic outsourcing model [23][35] Q&A Session Summary Question: Clarification on the interim CEO role - The interim CEO confirmed he is not a candidate for the permanent position and a search committee is in place to find a successor [30] Question: Details on the $21 million charge - The charge relates to underperformance in strategic outsourcing contracts, which are expected to be margin-accretive in the long term despite current challenges [31][35] Question: ECS margins and growth expectations - The company expects strong performance in the ECS business for Q4, with margins anticipated to improve despite the recent charge [38] Question: Slower growth in specific verticals - Management indicated that while recovery is underway, some mass market customers are not recovering as quickly as larger OEMs, impacting profit margins [40] Question: Impact of new contracts on working capital - The company noted that while new contracts may require more working capital, they are expected to be margin-accretive, justifying the investment [46]

Core Insights - Premier, Inc. reported a revenue of $262.86 million for the quarter ended June 2025, which is a 25% decrease compared to the same period last year, while EPS was $0.46, down from $0.69 year-over-year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $242.42 million by 8.43%, and the EPS also surpassed the consensus estimate of $0.34 by 35.29% [1] Financial Performance Metrics - Net Revenue from Supply Chain Services for Software licenses and other services was $19.95 million, exceeding the average estimate of $17.24 million [4] - Net Revenue from Performance Services was $92.86 million, compared to the average estimate of $87.13 million, representing a year-over-year decline of 22.9% [4] - Total Net Revenue from Supply Chain Services was $170 million, surpassing the estimated $155.56 million, but reflecting a 26.1% decrease from the previous year [4] - Net administrative fees from Supply Chain Services were reported at $150.05 million, above the average estimate of $138.33 million, with a year-over-year change of -9.3% [4] - Adjusted EBITDA for Supply Chain Services was $89.99 million, exceeding the average estimate of $81.52 million [4] - Adjusted EBITDA for Performance Services was $17.17 million, compared to the average estimate of $15.87 million [4] - Corporate Adjusted EBITDA was reported at -$38.3 million, worse than the average estimate of -$33.22 million [4] Stock Performance - Shares of Premier have returned +16.7% over the past month, outperforming the Zacks S&P 500 composite's +2.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Total full year revenue reached $986 million, exceeding guidance by $11 million, while adjusted EPS was $1.54, surpassing the high end of guidance by $0.11 [14][15] - Fourth quarter net revenue was $258 million, a 1% increase sequentially but a decline from the prior year due to higher fee share from contract renewals [14][15] - GAAP net income was $18 million or $0.22 per share, down from the prior year mainly due to lower revenue [15] - Adjusted EBITDA for the fourth quarter was $71 million, flat sequentially, with a margin of 27.6% [15] Business Line Data and Key Metrics Changes - Supply Chain Services segment performed above expectations, with gross administrative fees growing over 3% in fiscal year 2025, driven by higher contract penetration and onboarding of new members [16][17] - Performance Services segment showed sequential improvement in advisory business, although it was lower compared to the prior year due to rebuilding the sales funnel [18] - Other supply chain services revenue grew by 17% in the co-management business and 15% in the digital supply chain business [17] Market Data and Key Metrics Changes - The company noted increasing demand for margin improvement solutions among member hospitals due to ongoing cost pressures and reimbursement uncertainty [11][12] - The acquisition of Illumicare is expected to enhance the company's ability to deliver real-time insights and expand its addressable market [10][49] Company Strategy and Development Direction - The company is focused on helping health systems transition from short-term cost containment to structural changes that enhance operational resilience [8][9] - The acquisition of Illumicare is part of a strategy to strengthen clinical decision support capabilities and leverage AI for better healthcare outcomes [10][49] - The company anticipates returning to positive growth in total net revenue, adjusted EBITDA, and adjusted EPS in fiscal year 2027 [22][24] Management Comments on Operating Environment and Future Outlook - Management highlighted ongoing financial pressures for member hospitals and the need for value-based strategic support [7][8] - The company expects fiscal year 2026 to be a year of stabilization and transition, with a return to growth anticipated in fiscal year 2027 [21][22] - Management expressed confidence in the ability to drive growth due to the strength of the business and the commitment of the team [12][24] Other Important Information - Free cash flow for fiscal year 2025 was $181 million, with a conversion rate of 69%, and is expected to be in the range of 70% to 80% for fiscal year 2026 [19][20] - The company completed a $200 million accelerated share repurchase program, bringing total repurchases to $800 million under a $1 billion authorization [15][20] Q&A Session Summary Question: Changes in customer buying behavior in Supply Chain Services - Management noted no significant pull forward in buying behavior due to tariffs, with some increases attributed to regional issues [26][27] Question: Momentum in the advisory business - The advisory business is driven by market dynamics and the expertise of the newly hired leadership, with recent large engagements contributing to growth [28][30] Question: Cadence of admin fee renewal and growth assumptions - Management expects fee share to increase to the mid-60% range in fiscal year 2026, with broad-based growth across key categories [36][38] Question: Size and impact of Illumicare acquisition - Illumicare is projected to generate $8 million to $10 million in revenue for fiscal year 2026, with breakeven EBITDA [49][50] Question: Advisory business growth visibility - Advisory business is expected to grow above 25% in fiscal year 2026, largely driven by recent large contracts [61][62] Question: Free cash flow guidance and TRA impact - The TRA benefit is included in free cash flow guidance, with expectations for improved cash flow in fiscal year 2026 [66][67] Question: Demand for technology post July 4 - There remains strong interest in clinical decision support capabilities, with technology driving demand for performance improvement [93][97] Question: Unique advisory contracts and differences from consulting - Advisory engagements focus on comprehensive performance improvement strategies, with consulting and advisory viewed as interchangeable terms [104][106] Question: Life sciences or pharma support business updates - The life sciences business is performing as expected, with growth opportunities anticipated moving forward [107][108]

Financial Data and Key Metrics Changes - Total full year revenue reached $986 million, exceeding guidance by $11 million, while adjusted EPS was $1.54, surpassing the high end of guidance by $0.11 [13][14] - Fourth quarter net revenue was $258 million, a 1% increase sequentially but a decline from the prior year due to higher fee share from contract renewals [13][14] - Adjusted EBITDA for the fourth quarter was $71 million, translating to a margin of 27.6%, benefiting from revenue outperformance in Supply Chain Services [14] Business Line Data and Key Metrics Changes - Supply Chain Services segment performed above expectations, with gross administrative fees growing over 3% in fiscal year 2025, driven by higher contract penetration and onboarding of new members [15][16] - Performance Services segment showed sequential improvement in advisory business, although it was lower compared to the prior year as the sales funnel is being rebuilt [17] - Other supply chain services revenue grew by 17% in the co-management business and 15% in the digital supply chain business, indicating growth opportunities for fiscal year 2026 and beyond [16][17] Market Data and Key Metrics Changes - The company noted increasing financial pressures on member hospitals and health systems, leading to a demand for value-based strategic support [6][10] - The acquisition of Illumicare is expected to enhance the company's ability to deliver real-time insights and expand its addressable market [8][20] Company Strategy and Development Direction - The company is focused on helping health systems transition from short-term cost containment to structural changes that enhance operational resilience [6][10] - The acquisition of Illumicare is part of a strategy to strengthen clinical decision support capabilities and leverage AI for better healthcare outcomes [8][20] - The company anticipates a stabilization year in fiscal year 2026, with a return to growth in key financial metrics expected in fiscal year 2027 [21][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive growth, citing a robust pipeline of advisory business and strategic engagements [7][11] - The company expects free cash flow conversion in fiscal year 2026 to be in the range of 70% to 80%, with a cash tax rate anticipated to be less than 5% over the next five years [18][19] - Management highlighted the importance of addressing contract renewals and the anticipated increase in fee share to the mid-60% range in fiscal year 2026 [16][36] Other Important Information - The company completed a $200 million accelerated share repurchase program, bringing total stock repurchases to $800 million under a $1 billion authorization [14][19] - The company is winding down the Contigo Health assets, with expected revenue of $9 million and an EBITDA loss of $6 million in fiscal year 2026 [49] Q&A Session Summary Question: Changes in customer buying behavior in Supply Chain Services - Management noted no significant pull forward in buying behavior due to tariffs, with some regional increases observed [25] Question: Momentum in the advisory business - The advisory business is driven by market dynamics and the expertise of the newly hired leadership, with significant recent contract wins [26][30] Question: Cadence of admin fee renewal and growth assumptions - Management expects a gradual increase in fee share throughout fiscal year 2026, with gross administrative fees anticipated to grow around 4% [35][36] Question: Size and impact of Illumicare acquisition - Illumicare is projected to generate $8 million to $10 million in revenue for fiscal year 2026, breakeven on EBITDA, and is expected to drive future growth [48] Question: Advisory business size and growth visibility - The advisory business is estimated to be between $50 million to $100 million, with expectations of over 25% growth in fiscal year 2026 driven by recent large contracts [58][60] Question: Free cash flow guidance and TRA impact - The TRA benefit is included in free cash flow guidance, with expectations for improved cash flow in fiscal year 2026 due to the absence of the $100 million headwind [64][66] Question: Demand changes post July 4 and SaaS offerings - There remains significant interest in clinical decision support capabilities, with ongoing demand for technology that drives performance improvement [90][92]

Financial Data and Key Metrics Changes - DXP Enterprises reported total sales for Q2 2025 of $498.7 million, reflecting an 11.9% year-over-year growth and a 4.7% sequential increase [9][19] - Adjusted EBITDA for Q2 was $57.3 million, representing an adjusted EBITDA margin of 11.5% [9][25] - Diluted earnings per share for Q2 was $1.43, up from $1.00 in the same quarter last year [25] Business Line Data and Key Metrics Changes - Innovative Pumping Solutions (IPS) led sales growth with a 27.5% year-over-year increase, while Service Centers grew by 10.8% year-over-year [10][20] - Supply Chain Services remained flat year-over-year, with a slight sequential growth of 3.3% [14][21] - The energy segment within IPS saw a significant year-over-year increase of 37.3% [10] Market Data and Key Metrics Changes - The DXP water platform achieved its eleventh consecutive quarter of sequential sales growth, reaching $48.7 million in Q2 [22] - Regions such as North and South Rockies, Ohio River Valley, and South Atlantic experienced year-over-year sales growth [22][23] Company Strategy and Development Direction - The company is focused on diversifying its business through new products, industries, and geographical expansions [6][16] - DXP continues to execute its acquisition strategy, having completed multiple acquisitions in the first half of 2025 [5][19] - The company aims to maintain adjusted EBITDA margins above 11% and is targeting 12% in the future [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current environment, citing a strong balance sheet and robust acquisition pipeline [9][30] - The backlog for energy-related projects is at an all-time high, indicating strong future revenue potential [11][21] - Management noted that while there are macroeconomic uncertainties, they are not seeing significant hesitance from customers regarding spending [38][39] Other Important Information - The company reported a working capital increase to $349 million, reflecting a 23.8 million increase from March [26] - Free cash flow for Q2 was $8.3 million, an increase from $5.9 million in the previous year [28] - DXP's acquisition pipeline remains active, with expectations to close three to four additional acquisitions in the second half of the year [29][30] Q&A Session Summary Question: Can you share daily sales trends by month for Q2 and Q3 thus far? - April sales were $7.81 million, May was $7.55 million, June was $8.37 million, and July is estimated at $7.25 million [35] Question: Will there be any significant margin differences between Q2 and Q3? - The company expects to continue benefiting from acquisitions that are accretive to margins, particularly in water and wastewater sectors [36] Question: Are customers hesitant to spend due to macro uncertainties? - Management indicated that they are not seeing significant hesitance in spending, with a strong backlog and bookings exceeding billings [39]

Summary of Premier (PINC) 2025 Conference Call Company Overview - **Company**: Premier Inc. (PINC) - **Date of Conference**: May 13, 2025 - **Speakers**: Mike Alkire (President and CEO), Glenn Coleman (Chief Administrative and Financial Officer) Key Industry Insights - **Healthcare Provider Challenges**: The healthcare sector is facing significant labor shortages, particularly in nursing and essential technical roles, exacerbated by resignations during COVID-19 [3][4] - **Impact of Tariffs**: Hospitals are anticipating a 6% to 7% increase in costs due to tariffs, which they cannot absorb given their operating margins [9][10] - **Medicaid Cuts**: Potential Medicaid cuts could have an $80 billion impact on healthcare systems, necessitating structural realignment within these organizations [4][5] Company Positioning and Strategy - **Technological Investments**: Premier has invested in technology to assist healthcare systems in performance improvement, cost management, and operational efficiency [5][6] - **Integration with Workflows**: The company has developed capabilities to integrate its services into the workflows of healthcare providers, enhancing patient treatment processes [6][8] - **Tariff Management Tools**: Premier has created tools to help members understand the sourcing of products and the impact of tariffs, providing options to mitigate costs [7][11] Financial Performance and Projections - **Supply Chain Services Growth**: The supply chain services segment has shown a 3.5% growth year-to-date, with significant opportunities for further contract penetration [24][26] - **Fee Structure**: The aggregate blended fee share is expected to rise from the low 60s to the high 60s by the end of fiscal year 2026 [23] - **Performance Services**: The performance services segment has outperformed expectations, particularly in enterprise licenses, indicating strong momentum [48][49] Competitive Landscape - **Market Competition**: The environment remains competitive, with several key players in the industry. Premier differentiates itself through technology and data access, leveraging insights from 45% of all hospital discharges in the U.S. [33][36] - **Opportunities in Contract Compliance**: There are untapped opportunities in purchased services and physician preference items, which Premier aims to address [28][29] Capital Deployment and Future Outlook - **Focus on Growth**: The company emphasizes growth through organic investments and potential acquisitions, particularly in clinical decision support and AI capabilities [57][60] - **Share Buybacks**: Premier has conducted significant share buybacks, totaling $800 million over the past 18 months, but plans to pause these to focus on growth initiatives [61][62] - **Positive Cash Flow**: The company anticipates a $100 million increase in cash flow starting in July, which will support future growth strategies [58][59] Additional Considerations - **Advisory Capabilities**: New leadership has enhanced Premier's advisory capabilities, focusing on performance improvement and revenue cycle management [42][54] - **Long-term Growth Potential**: The company is optimistic about its trajectory heading into fiscal year 2026, expecting better performance compared to the current year [53][55]

Financial Data and Key Metrics Changes - The first quarter adjusted EBITDA was $52.5 million, with adjusted diluted earnings per share of $1.26, supported by a year-over-year sales growth of 15.5% and sequential sales growth of 1.2% [6][18] - Total sales for Q1 increased to $476.6 million, with average daily sales rising from $6.9 million in January to $8.1 million in March [11][19] - Gross margins improved to 31.5%, reflecting a year-over-year increase of 151 basis points [24] Business Line Data and Key Metrics Changes - Innovative Pumping Solutions (IPS) saw a sales growth of 38.5% year over year, while Service Centers grew by 13.4% and Supply Chain Services by 2.1% [11][19] - IPS backlog continued to grow, with energy-related backlog increasing by 5.5% over Q4 [22] - Service Centers achieved a new sales watermark of $327 million, with notable growth in regions like Alaska and Texas Gulf Coast [20][18] Market Data and Key Metrics Changes - The ISM and PMI manufacturing index indicated a slight contraction, moving from 50.9 in January to 49 in March, with expectations that price increases will offset this contraction [9] - Oil and gas, representing 23% of the business, showed consistent demand, with anticipated growth driven by large projects [10] Company Strategy and Development Direction - The company remains focused on organic and inorganic growth, with a commitment to customer-driven expertise and operational improvements [5][7] - DXP is actively pursuing acquisitions to diversify its market presence, having closed one acquisition in Q1 and planning more [8][32] - The company aims to maintain a balance between strategic investments and preserving liquidity amid market uncertainties [15][31] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding future demand despite tariff uncertainties, noting that no significant demand effects have been observed yet [16][44] - The company is well-positioned to navigate market volatility and is focused on improving efficiencies while making strategic investments [15][17] Other Important Information - The company reported a working capital increase to $325.3 million, reflecting a rise in receivables [27] - Cash flow from operations was $3 million, impacted by growth in accounts receivable and tax payments [29] Q&A Session Summary Question: Can you share daily sales trends by month for Q1 and Q2? - Daily sales trends showed an increase from $6.8 million in January to $8.1 million in March, with April at $7.8 million [38][39] Question: Will there be any significant margin differences between Q1 and Q2? - There are no substantive factors expected to cause a significant margin difference between Q1 and Q2 [40][41] Question: Are there signs of slowing down due to tariffs and macro uncertainty? - Management noted no significant effect on demand yet, although there may be some stalling due to uncertainty around tariffs [42][44]

Core Insights - Premier, Inc. reported a revenue of $261.38 million for the quarter ended March 2025, reflecting a year-over-year decline of 23.7% and an EPS of $0.44 compared to $0.55 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $238.88 million by 9.42%, while the EPS surprised by 41.94% against the consensus estimate of $0.31 [1] Financial Performance Metrics - Net Revenue from Supply Chain Services - Software licenses, other services, and support was $18.67 million, surpassing the average estimate of $17.41 million [4] - Net Revenue from Performance Services was $100.48 million, compared to the estimated $89.14 million, representing a year-over-year decline of 12.6% [4] - Total Net Revenue from Supply Chain Services was $160.91 million, exceeding the average estimate of $149.73 million, but showing a year-over-year decline of 29.3% [4] - Net Revenue from Supply Chain Services - Net administrative fees was $142.23 million, compared to the average estimate of $132.32 million, reflecting a year-over-year change of -9.3% [4] - Adjusted EBITDA for Supply Chain Services was $85.67 million, exceeding the estimate of $76.65 million [4] - Adjusted EBITDA for Performance Services was $19.45 million, compared to the estimated $14.26 million [4] - Adjusted EBITDA for Corporate was -$33.37 million, compared to the average estimate of -$30.96 million [4] Stock Performance - Shares of Premier have returned +7.1% over the past month, while the Zacks S&P 500 composite has changed by +11.5% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential outperformance against the broader market in the near term [3]