Zynex - Earnings Call - Q2 2019

Transcript

Speaker 0

Good day and welcome to the Zionex Second Quarter twenty nineteen Earnings Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Certain statements in this release are forward looking and as such are subject to numerous risks and uncertainties. Actual results may vary significantly from the results expressed or implied in such statements.

Risk factors that could cause actual results to materially differ from forward looking statements are described in our filings with the Securities and Exchange Commission, including the Risk Factors section of our annual report on Form 10 ks for the year ending December 3138, as well as Forms 10 Q, eight ks, eight ks and A, press releases in the company's website. Please note that this event is being recorded. I would now like to turn the conference over to Thomas Sandgaard, Founder, Chairman and Chief Executive Officer. Please go ahead.

Speaker 1

Good afternoon. My name is Thomas Sandgaard, President and CEO of Cynix. Welcome to our second quarter twenty nineteen earnings call. I'm pleased to announce that the second quarter was our twelfth consecutive quarter with positive net income. Our second quarter revenue was $10,300,000 with a net income of $06 per fully diluted share.

Revenue increased 36% compared to the same quarter last year and we reported positive net income of $2,200,000 Adjusted EBITDA in the quarter was just over $2,800,000 slightly above our estimate for the quarter. Many of you may have seen our press release earlier this month. We were named the fastest growing company in Colorado from a net income perspective during the last two years. This speaks not only to our growth, but also cost controls as well. We're very proud to have received this honor.

Our cash position was $10,100,000 at the end of the second quarter. We had some significant cash payments in the first half of twenty nineteen, including the payment of our fourth quarter special dividend of $2,300,000 and a significant amount of income taxes. As we keep growing our sales force and geographic footprint across The U. S, we've grown orders 65% year over year comparing the second quarter and we continue to see strong reimbursement for our products. Orders grew 29% between the first and the second quarters as a result of more new sales reps becoming productive.

This order growth is a result of aggressively adding new sales reps to the sales force every month and the steep order growth is an early sign of order growth momentum and the subsequent revenue growth that we expect to see over future periods. As you may know already, the revenue of an order is typically recognized over many months as patients continue to use our device and the related supplies for continued pain relief. In the second quarter, we sustained our aggressive sales force growth. We continue to add 10 new reps every month. That pace should get us to around 200 sales reps by the 2019 with reduction in our independent sales reps down to approximately 60 reps, stemming from before 2018 and approximately 140 direct new sales reps, all added in 2018 and 2019.

I'm also very pleased to see our gross profit margin remain at a level of 81%, an indication that the industry for prescription strength electrotherapy is still not only stable, but very healthy and viable. The opioid epidemic continues to be a serious issue in this country and we are increasingly working to get patients off opioids and for physicians to use our prescription strength technology as a first line of defense when treating pain. Currently, the devastating impact has reached a level where tens of thousands die yearly due to opioid abuse. We continue to develop more tools to make physicians aware of our technology that literally has no side effects. Our products for pain management and rehabilitation still stand out as some of the best products in the industry.

The NexWave for pain management, our NeuroMove device for stroke rehabilitation and the InWave for incontinence treatment puts us in a very strong product position in the rehabilitation markets. We also continue to see great potential in both of our product divisions, our existing revenue generating area for pain management as well as the huge unmet potential for our Blood Value Monitor. 2019 has been a transformational year from an investor perspective. In February, we succeeded in getting listed on NASDAQ and in June we were added to the Russell two thousand Index. The combination of these events increased our daily traded volume over 10 times from approximately 30,000 shares traded per day to over 350,000 shares traded per day presently.

We also continue to add talent to our organization to help facilitate our continued growth. In February, we added Chris Brown as our new VP of Sales. And last week, we added a new Chief Operating Officer, Joseph Papandrea. Both Joseph and Chris will help us accelerate and streamline our growth as we finish 2019 and head into 2020. I will now turn the call over to Dan Moorhead, our CFO.

Speaker 2

Thanks, Thomas. First, I'll review our twenty nineteen second quarter results. Orders grew 65% year over year, which drove net revenue up 36% to $10,300,000 from $7,600,000 in 2018. Device revenue increased 37% to $2,300,000 compared to $1,700,000 last year. Supplies revenue increased 36% year over year to $8,000,000 from $5,900,000 Gross margins were 81% in the second quarter.

Beginning in 2019, we began breaking out sales and marketing expense from G and A. This breakout provides greater clarity related to our sales growth initiative and the overall financial statement impact. Sales and marketing expenses increased 111% year over year as we continue to grow our sales force. G and A expense grew 30% year over year. Much of the increase was related to increased headcount in our billing and patient support functions related to our order growth.

G and A was flat compared to Q1 of twenty nineteen. Second quarter net income was 2,200,000 or $06 per diluted share compared to net income of $2,400,000 or $07 per diluted share in the second quarter last year. Adjusted EBITDA, which is a standard EBITDA calculation plus an exclusion of noncash stock based compensation and other income expense and is reconciled in our press release, was $2,800,000 in the second quarter of twenty nineteen and twenty eighteen. We've increased income tax expense year over year due to our profitability over the last two years, which utilized our net operating losses and puts us in a taxable position. Now on to our six month results.

Orders grew 48% year over year, which drove net revenue up 35% to $19,500,000 from $14,500,000 in 2018. Device revenue increased 31 to $4,300,000 compared to $3,300,000 last year. Supplies revenue increased 36% year over year to $15,200,000 from $11,200,000 Gross margins were 81% in the first half of twenty nineteen. 2019 net income increased 4% to $4,500,000 or $0.13 per diluted share compared to net income of $4,300,000 last year. Adjusted EBITDA was $5,300,000 up 9% from $4,900,000 last year.

We generated operating cash flows during the first six months of 2019 of $2,400,000 compared to $3,600,000 in 2018. Cash flows were affected by increased tax expense in 2019 and the timing of 2018 tax payments, both of which were related to our NOLs, which were 100% utilized in 2018. On the balance sheet, as of June 3039, our cash balance was $10,100,000 and was affected by the tax expense that I've already mentioned and the fourth quarter special dividend of $2,300,000 which was paid in January. Working capital grew 62% to $11,900,000 in Q2 compared to $7,300,000 as of December 3138. During Q2, we entered into a new lease for additional office space, which caused us to record approximately $1,600,000 in lease liabilities on the balance sheet, of which approximately $300,000 are current.

We recorded the related assets, but those are nature, so there was a negative effect on working capital related to the new lease. With that, I'll turn the call back over to Thomas.

Speaker 1

Thank you, Dan. I'm especially excited about our year over year growth in orders of 65% compared to our revenue growth of 36%. It's a huge testament to our efforts to grow our sales force and clearly justifies the investments in our sales personnel, sales management and inside support functions. Our focus continues to be growing our sales force at a rapid rate in geographic areas, which we don't currently cover to take advantage of the void left in the market by two previously very large competitors. Our increased orders due to a larger sales force combined with strong reimbursement for our products continue to drive increased revenue and profitability.

We estimate our third quarter revenue to be between 10,700,000.0 and 11,200,000.0 with an adjusted EBITDA in the third quarter between 2,400,000.0 and $2,900,000 My long term goal for our Electrotherapy and Rehab division is to continue to grow our share of the huge market for prescription pain management and to take advantage of the huge void in the market after the disappearance of our main competitors. This includes growing our domestic sales force as well as potential acquisitions of complementary technologies. On the product side, the patent obtained last year in our Block Volume Monitor indicates the beginning of the next phase of developing this division with more clinical research to support our advertising, staffing up in business development, etcetera. We're also looking at adding more products to add to this division including additional product development internally. In summary, we announced yet another great quarter with strong growth in orders and revenue Plus we added some great talent including the addition of a CRO to the organization, which sets us up for a seamless growth and strong financial performance going forward.

We will now answer questions from our listeners.

Speaker 0

We will now begin the question and answer session. The first question comes from Jeffrey Cohen with Ladenburg Thalmann. Please go ahead.

Speaker 3

Hi, Thomas and Dan. How are you?

Speaker 1

Good. How are doing, Jeff?

Speaker 3

Just fine. So, again, nice quarter. Seem to be saying that fairly frequently these days. So, talk a little bit about the sales channel. You're talking about 60 previous independent reps plus, 140 now direct that you have, total 200 growing at 10 a month.

Is that a good way to envision that for the rest of this year?

Speaker 1

Yes. That's sort of a round number target for where we should be at, at the end of the year. That's right, yes.

Speaker 3

Okay. Got it. And then talk to me a little bit about the facility as you took on Floor Number 4, correct? The Fourth Floor?

Speaker 1

That's the Third Floor. So we have the First Floor where we have production and quality and IT and engineering and many other functions. We had the Fourth Floor in the building, which was basically all the other functions. And our billing group has now grown so much that we have moved them to the Third Floor. So we have a total of 64,000 square feet in this building now.

Speaker 3

Okay. And what's the FTE count in Colorado in total or corporate total?

Speaker 2

It's about 120, give or take.

Speaker 3

Okay. Got it. Perfect. And then, Thomas, talk to me a little bit about your commentary regarding getting more favorable therapy into first line as opposed to beyond. How does one kind of grapple with getting earlier amongst physicians and clinicians and prescribers of the technology?

Speaker 1

Yes, there's really two parameters there and they all spin around our sales force. One is obviously to have the geographical footprint. So we have sales rep that can meet with these physicians as well as physical therapists face to face and discuss our treatment option as an alternative. And second, the quality of those sales reps is obviously very important as the better the quality of the sales reps and the message we can deliver, the more efficient they should be in terms of convincing the physician to write prescriptions for our device before they start heading into prescribing a whole lot of opioids for patients in pain.

Speaker 3

Okay, got it. And then how do you think about if you successfully leapfrog drugs, what's the differential in the TAM as you get closer to first line or at first line versus where you currently stand predominantly currently?

Speaker 1

Could you rephrase that question?

Speaker 3

If you're able to successfully leapfrog into first line versus where you are today, that addressable market is how many times the size?

Speaker 1

That's obviously in the tens of millions of patients that are in so much pain that they seek some level of treatment for it. So we're talking tens of billions when you multiply that by the revenue we typically see on an average prescription. So it's in the tens of billions.

Speaker 3

Okay. So it's upwards of five or 10 or 15 times greater market if you're able to get more writing in a first line setting.

Speaker 1

That's right. Obviously the very long term scenario assuming that we are successful in first of all picking up the low hanging fruit that this market is well developed, well established in terms of reimbursement as well. And once we get past the point where the number of prescriptions that were traditionally written in this market and we capture all that, developing it further from that and possibly getting into the billions of revenue on the very long term. That will also require a different strategy on our part. That will be more educational rather than just asking physicians that used to prescribe this technology and send the orders our way instead, which is a very simple sales process.

The more educational sales process that may come into play in the future is obviously more complex. But I certainly look forward to hopefully getting there and really make lives better for people that are in pain in terms of providing pain relief and yet at the same time avoiding or limiting the amount of opioids that they need to take.

Speaker 3

And are you seeing prescribing trends currently that lead you to believe that you're jumping in front of drug therapy?

Speaker 1

Not necessarily. We are very focused on hiring 10 reps every month, getting them trained, getting them deployed. We just restructured our sales management with new VP of Sales and added five regional sales managers that are now holding the hands of the sales reps in these regions and making sure that we develop the sales force we have right now and that we keep adding develop that into a good quality sales force. And also compared to how the sales force looked in the past, which was comprised of primarily independent sales reps carrying many different product line, now having a much more unified sales force that are aligned more with the company rather than many different scenarios.

Speaker 3

Perfect. Thank you. That does it for me.

Speaker 1

Okay. Thanks, Jeff.

Speaker 0

The next question comes from Yi Chen of H. C. Wainwright. Please go ahead.

Speaker 4

Thank you for taking

Speaker 1

the questions. First question is, how many more sales rep you plan to add each quarter going forward? And has the top line revenue growth in proportion to the number of sales rep you've added in the past quarters? To answer your last question first, yes, we have we've been positively surprised as to how well new reps have been performing. We've also seen that the reps we hired in 2019, if we compare the first ninety day performance to the performance in the first ninety days of those reps that got hired last year, we have introduced better training.

And we now see the first ninety days of orders from these new reps approximately 50% better than those that were not trained as efficiently last year. So we're very encouraged by that. And something that really stands out when we look at the second quarter is that we were able to grow year over year 65% on the orders adding all these sales reps. It's a significant investment, but we saw that obviously in the increase of orders. So compared to the revenue growth we've seen for a while being in the 35%, 36% range, I'm very encouraged because that could indicate that we will continue to grow as a company.

In terms of how we expect to add sales reps, we expect to we out, so we ultimately will have sales reps in 400 territories across United States with a little less than a million citizens in each territory. And we expect to get there in approximately twenty three, twenty four months from today. So we still need to add approximately 200 over the next eight quarters. So that's I guess you can do the math terms of the pace we'll be hiring at. So that's approximately 25 a quarter that needs to be added.

So a little less than 10 a month that we're currently running at, but we should also expect a little bit of attrition. So it should all come together that way. Thank you. My second question is, of all the patients who received an X wave device in the second quarter, how what percentage of them are newly diagnosed patients receiving each treatment? And what percentage are patients who have switched from opioid product treatments to NexWave?

Sometimes we have that information in form of very extensive medical records. These days they're not always just handwritten, but printouts from hospitals or doctors' offices. And in some cases, barely have a prescription and a photocopy of insurance card. And we may obtain some information as we contact patient the same day as we receive the prescription and get the patient enrolled. So we exactly have that information.

That would just be a qualified guess. But I would expect it to be, at this point probably well below 50% showing that scenario that you're asking about there. But it's not something we're exactly able to measure.

Speaker 4

Okay. Thank you.

Speaker 1

Thank you.

Speaker 0

The next question comes from Mark Wiesenberger with B. Riley FBR. Please go ahead.

Speaker 5

Thank you. Good afternoon. Can you talk about any changes to the types of physicians the sales staff is targeting and some impacts on the business?

Speaker 1

There's not a whole lot of change in who we are targeting. Significant group that we're targeting is obviously orthopedic surgeons. It's a great technology for getting pain management introduced in some cases even before the surgery. So the patient is used to the device and how to operate it. But increasing blood circulation and getting some pain management right after orthopedic surgery.

We see quite a bit of prescriptions also from pain management doctors, physical medicine and rehabilitation doctors. And we also see quite a bit prescribed by anesthesiologists. And as you can probably expect, doctors of physical therapy also account for a significant amount of orders. And then it's literally spread out all kinds of specialties, family physicians, podiatrists, chiropractors, etcetera. But our primary target has been for a long time, has been orthopedic surgeons that is about 20 something percent of all orders coming in with a couple of the other groups I just mentioned are nearly up there in the 20% range.

But nothing has really changed in terms of our focus. That's still the same. It's a very, very broad spectrum of physicians that we see.

Speaker 5

Understood. Thank you. On previous calls and even earlier, you alluded to kind of the realignment of sales territories and adding the five sales regional managers. Can you talk about how that's impacted the sales reps and their business?

Speaker 1

It's gone really well. Obviously, there has been some we can call them legacy reps that's been with us for many, many years that not necessarily fit into the territories we defined that was very computer based and based on population. And we have obviously carve out a few exceptions so that they could keep seeing clinics that may historically have produced a very high volume. But for the most, it's gone really well. I can kind of tell per your question that that's something that you we can always expect that when we're talking about that many sales reps and some of them being impacted that could create a lot of noise.

That's actually gone over really well. We've been very structured about it and approached it very delicately. So I really applaud our sales management team for having implemented that in a very professional manner. And that really sets us up for the future. So it's very easy to just take one territory at a time or I should say 10 territories per month and plug in new reps with the whole interviewing, the qualifying and getting them hired and trained.

It's working like a well oiled machine at this point.

Speaker 5

That's really good

Speaker 6

to hear.

Speaker 5

And that kind of goes along with my question. Are you having any difficulty at this point finding qualified sales reps? And as you kind of ramp that process, do you anticipate having trouble with the tight labor market?

Speaker 1

No, I can see the logic here that as we add more sales reps that it should maybe be a little harder to keep finding good sales reps. But the fact that we have mapped out the territories the way we have and every time we add a sales rep in a new territory after having interviewed a number of applicants, the number of applicants is always the same because the population we're putting them into, whether it's a rural area or high density area, amount of square miles might be different. But the size of the population and therefore also the percentage of that population that has a sales background or interested in selling medical devices is about the same every time. So that's why we can keep that cadence and that pace and there doesn't seem to be any slowing down because the pool of talent is the same for every new territory we interview for. So that's actually good news.

Speaker 5

That is good to hear. Have you noticed any changes in reimbursements in terms of dollar value or maybe timing of payments? And what are your expectations for the near and medium term?

Speaker 1

No. It's what we've seen for several years now is pretty constant. The thing that keeps changing is, as I believe I mentioned before, the name of the insurance company that's the most difficult this month. But other than that, across the board, it's still the same as it was twenty years ago, twenty five years ago, ten years ago. Just as I also have mentioned or talked about in previous earnings calls, over the past three years, we've gotten a

Speaker 3

lot

Speaker 1

better at just processing the files and not making so many mistakes internally. And that seems to be at a fairly constant level. We keep getting great or hiring great talent into all parts of the company including the billing department as the orders grow. And I expect we can keep being as efficient as we've been in the past.

Speaker 5

Sure. With the success you've been having, are you seeing any changes in the competitive landscape with new entrants?

Speaker 1

Not yet. I know that question comes up on every earnings call and there's another one where we haven't really seen anything. And I'm sure we would hear about it pretty quickly through the grapevine and the sales force. So that is still the same. So we are obviously in a very unique position here with a well developed market, well established reimbursement and with basically no significant competition and we just keep adding sales reps to expand our geographic coverage.

Speaker 5

Got it. And one final one for me. Got to have an obligatory blood volume question on the call. Any updates on FDA or CE Mark approval? And I guess how are the clinical studies progressing as well?

Speaker 1

Clinical studies are progressing well. There were some technicalities at the site where we had initial tests through our clinical research organization and so we're doing that here in a few weeks. That should be fairly easy. And then all the studies we have lined up there should follow shortly after that. And in terms of the FDA and CE marking, I would say we are probably closer today than we were three months ago.

Speaker 5

Understood. Thank you very much.

Speaker 0

The next question comes from Sean Boyd with Nextmark Capital. Please go ahead.

Speaker 6

Good afternoon. Can you hear me okay?

Speaker 1

Yeah. Good afternoon.

Speaker 6

Great. Just wanna clarify one thing. The, Salesforce expansion, which is, of course, near and dear to all of our hearts here. If I understood it correctly, you indicated you're at about 200 reps right now, going to 400 about two years now. By

Speaker 1

year end. So right now, we are more in the, 175 to 180 range. And by year end, maybe we can be over 200, but that's kind of a round number target. Yeah. Okay.

Speaker 6

So 200 or so by year end and then with intention to expand that, to 400 another two years out, twenty four months out. So that's what got you to that cadence of 25 per quarter.

Speaker 1

Yep. Exactly. Okay.

Speaker 6

And perhaps I just misunderstood this, but I originally thought that 2020 might involve a little bit of a slowdown on adding reps as you kind of refine territories. So either I just got that wrong or you're kind of changed the plan a little bit and you've accelerated your hiring because possibly because you're seeing the good payback on the hires. Can you just

Speaker 1

Maybe so what that does is it spies us a little bit of cushion to maybe aggressively trim some of the independent sales reps that are not as productive. And it also has some cushion built in if we have a higher than expected attrition. But else you're right that we could slow down a little bit, but I'd say since we don't really have any resistance or bottlenecks or barriers, to adding 10 reps a month, I'd like to continue to do that, here as soon and as fast as possible. So if we can get to the 400 in twenty two or twenty three months instead of twenty four months, that would obviously be even better.

Speaker 6

Got it. Okay. Thank you very much for the clarification.

Speaker 1

Okay.

Speaker 4

Okay.

Speaker 0

The next question comes from Kevin Mackey with Analyst. Please go ahead.

Speaker 4

Hi. Thank you for taking my questions, and also thank you for the responses that you've given me previously privately. I appreciate your help. I'm wondering if you could give us a more exact number on how many orders you had this quarter.

Speaker 2

The disclosure we give, we don't get to the exact order. We give growth percentages and from the materials in the decks that we have, you can semi extrapolate those, but it's, you know, what we give is is the numbers we we're comfortable with.

Speaker 4

Alright. If my understanding is correct, last year in December, the competitive bidding program ended for for Medicare, and that had previously excluded you guys from nine metropolitan markets, I believe your 10 k had said. Are you working to push into those markets you were previously excluded from? And do you plan on bidding in the next round that is due for 2021?

Speaker 1

No, we don't plan on bidding, and we don't see that we are really excluded from many markets.

Speaker 4

Okay. And in terms of the NeuroMove, I mean, sounds like an amazing device. I personally know people would have had a stroke and could really benefit from that. But through the years, you continue to report that you have a negligible amount of sales from the NeuroMove. I'm just curious what might be hampering you from getting that product to stick.

Is it patient acceptance? Is it physician acceptance? Is it a hurdle in the marketing environment? If you could speak to that, please.

Speaker 1

Yes, you're right. The NeuroMove is a very exciting device. It literally detect attempts from the brain when you're attempting to move muscles, could be trying to extend fingers and hand. So it's a very unique device and design, so it can also be used in the home. And more than ten years ago when it was introduced, actually had a decent amount of revenue when our total revenue was only a few million dollars annually.

Nearly half of the revenue came from the NeuroMove device. What has happened since is since we until recently had fairly limited resources, we saw a bigger opportunity in terms of growing revenue and therefore also creating profits for the company growing the pain management market. So it's been a very deliberate decision to focus on that. Unfortunately, therefore we've decreased the efforts on promoting the NeuroMove device. It's something that we see to really get significant revenue on will require quite a bit of heavy lifting and that translates into a significant financial investment in the marketing of it.

Occasionally sell some to clinics as a clinical sale. And we have patient friendly programs with relatively low self pay option. So it's obviously something could do much more of in terms of promoting it to stroke survivors. There are 600,000 or more new strokes every year in this country. So there's a lot of potential here.

However, order to not spread ourselves too thin, we're still focusing on the pain management market. But as you're alluding to, it could be one of the things we do more of going forward to diversify our revenue a little bit. And fortunately, it's somewhat of of the same call point for our our sales force. I hope that that answers.

Speaker 4

Yeah. Yeah. That helps a lot. And and finally, also on the blood volume monitor, you guys mentioned in your reports that you're kind of fielding questions, from the FDA responding to questions that they have. Did you give us an idea of what those questions might be and and what your responses have been just so we can get a better feel for how that progress is coming?

Speaker 1

Yes, there have been the nature of those questions that have changed over time. In the beginning, it was very much pointed at our inability to literally write up the application so that it fitted their framework. We spent some time on that. There's been questions, a little while back as to getting additional safety testing done to a new standard that had been introduced in the meantime. So that took some time to get that done and have our device pass those additional tests.

And here more recently, they have had specific questions as to the specific six parameters we use to combine into an index and basically getting the wording right, it fits into the framework of the five ten ks clearances that we're trying to get it through with. Recently, we've submitted a response that should be aligned with nearly word for word with their suggestions as to how we should phrase things. With a bit of luck with the next response, they don't have any further questions or suggestions to us. Else we'll just keep answering the questions. In summary, there hasn't really been any very heavy, very difficult questions.

It's just getting the technicalities right. And unfortunately, every time we get around the questions, it takes sometimes several months before then we are able to get back to them and then they have the time to respond back to us. Unfortunately, it's taken some time. And it's somewhat similar, although different kind of questions that we've in terms of getting moving forward on the CE marking process.

Speaker 4

Thank you. And the last one for me, I just kind of ran some rough numbers based on your orders growth and how many sales reps you have. And it looks like your revenue per rep went up from the last quarter, but your revenue per order went went down slightly. I'm just wondering if you could speak to that, maybe in particular what your billing department, the efficiency that you're trying to create there because I understand that they're the ones that are responsible for collecting the revenue after the orders placed. So with that number going down slightly, just wondering if there's anything we should be aware of there.

Speaker 2

There aren't any changes in reimbursements or productivity. It's really you have to take into account the sales headcount numbers still aren't huge numbers. So when you bring in a large number of people at the end of the quarter, beginning of the quarter, it can skew that revenue per order or dollars per submission. So I think I would say your numbers aren't correct.

Speaker 4

All right. Thank you for that. Appreciate it. That's it for me. Okay.

Thanks, Ken.

Speaker 0

This concludes our question and answer session. I would like to turn the conference back over to Thomas Sandgaard for any closing remarks.

Speaker 1

Thank you. I hope today's earnings call has been informative for everyone and I appreciate the interest in Sionics and listening in on this call. Thank you and great day to all.

Speaker 0

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