AFT Pharmaceuticals Limited

Welcome, everybody, to AFT Pharmaceuticals' full year 2024 results briefing. Joining us today are Dr. Hartley Atkinson, Chief Executive Officer of AFT Pharmaceuticals, and Malcolm Tubby, Chief Financial Officer of AFT Pharmaceuticals. Before we begin, please note that any forward-looking statements mentioned on this call are based on management's current expectations and observations and are subject to risk and uncertainties that can cause actual results to differ from the forward-looking statement. AFD Pharmaceuticals does not undertake any obligation to update publicly any forward-looking statements to reflect the events or change circumstances after the call. With that, I will turn over the call to the speakers. Dr. Atkinson, please go ahead.

Welcome, everyone. Thank you for joining us today. Just going to move through the investor presentation. This is for the last financial year, which is the period that goes to the 31st of March, 2024. And we've already essentially been through the disclaimer, so I'll take it that you've read that. Thank you. And then, as we've mentioned, presenting today is myself, Hartley Atkinson, and Malcolm Tubby our chief financial officer. And moving on to the summary page, as you can see, we are pleased to report record revenue, record earnings, and also lowering debt. And this occurred even with considerable investment as well to expand the business. So basically, if you look at actually on the left, that bottom graph, You know, maybe that gives you some indication, if anything, we're starting to see escalating growth over the last sort of two or three years. And overall, too, we've roughly quadrupled sales over 10 years and roughly doubled sales over four years. Historically, we've grown the business significantly and going forward, all this investment and work we're doing is certainly aimed to grow the business significantly going forward. And if you look at the graph, that certainly is consistent with what we are saying. Terms on the bottom right, the AFT Group Operating Profit, When we raised money originally on the share market, we raised it in order to accelerate R&D. We did indicate we initially make losses. We have moved through that phase and are now starting to build our profits, as you can see from that graph. So basically just the numbers, full year operating revenue was up 25% to just over $195 million. So once again, we've grown sales. Ever since we started in the garage, we have grown sales year on year on year. What is pleasing and significant, we believe, is the international and Asian market revenue is starting to get more of a kick to it, which we believe it should do and will do going forward. where it's risen 70% in terms of sales, with our local Australasian markets up 14%. EBITDA improved to just over $26 million. Operating profit rose 23% to $24 million. You know, and look, what did happen, though, was there was a lot of work going on behind the scenes with pretty aggressive work on setting things up for further growth in future, which we'll talk more about as we hit some of the later slides. There's been a lot of work in the R&D portfolio and also ongoing investment into the Australasian product portfolio. Look, we were pleased and, you know, we were interested during the year to read some comments that, you know, with our growth plans, we'd be lucky, you know, to decrease debt. We probably wouldn't pay a dividend. We're happy to prove those comments totally wrong, where we've seen our net debt decline 45% to $16.2 million, down from almost $30 million. Although we do make the point that we are comfortable with a reasonable level of debt anyway, and that's still not our overriding driver. But regardless, we were happy to see the $16 million debt target. And basically, in terms of what we're kind of doing now, I mean, we're pretty close, as you can see, to ticking off the $200 million we talked about a while ago. And really, we're very firmly focused on the $300 million revenue target as our next target that we're aiming for. So to flick on and just look at the individual markets, in Australia, primarily our sales growth was led by our OTC markets, which had been some of our main focus. We grew revenues by 15%. and cracked the $100 million mark, which is something we were aiming to do and keen to do. And yeah, now if we look at figures as well, we see in terms of suppliers to Australian pharmacies, we sit comfortably within the top 20. And when I say top 20, this means any sort of suppliers, whether it's L'Oreal, or Elizabeth Arden, you know, so we're in with non-drug makers as well, sitting within that top 20 in the Australian pharmacy channel. So that's certainly helpful, you know, to make us more important in terms of business size going forward dealing in that market. Liposomal vitamins, that launch has been... bit more challenging than we had hoped and we have and are spending some more money on it to build it up. Despite this we are the number one liposomal vitamin in Australia so we ticked that one off and now from that beachhead we'll look to further growing the business and Mexagesic as well has carried on as a top combo analgesic in this segment as well and also similarly we hold the top lubricating eye drop in the Australian market. So we've got a lot of really good positions there. Importantly, we've bettered down our GP field force. We still think that's important too because promoting to doctors, especially for new types of products, is something that's important to be able to do and having your own field force really helps to execute that strategy. We did see a drop due to a number of factors, partly product mix, also some additional investment over and above what we had initially planned. So the operating profit dropped from 19 to 15.5, but we still see long term we're very well set up in the Australian market to keep growing things. So that's that slide. And then moving on to the New Zealand market, revenues rose by 11%, so still double digit, to $48.7 million. Once again, the OTC channel led that growth, and hospital and prescription channels were growing but more subdued. Operating profit was slightly down on the year before. Once again, similar things with product mix. There have been quite a few changes post-pandemic with some of the products, which has had some impact. But, you know, we as a business are confident we can work our way through those. And you always get some ups and downs. And that's one of the reasons, too, we have lots of segments and we're not just reliant on one market or one product. In fact, I mean, a point to make that's probably quite important is I think some people misinterpret that we're a Mexagesic company. Although Mexagesic is one of our key products, You'll see later on we're talking about our R&D pipeline is very broad. We've got products coming in to launch. There's a lot of things aimed at not just Mexagesic, but still Mexagesic is an important product for us, but we're much broader than some of the commentary we get suggests. Having said that, we are proud sponsors of the New Zealand Warriors you can see in the bottom left and this actually seems to be working quite well and drumming up interest from a lot of our customers so we're pretty happy with that sponsorship and you can see on the far right the pie graph we are starting to further expand our OTC sales in the New Zealand market which is another parameter that we were keen on. So flicking on to Asia Certainly, as you're all aware, Asia's a large population right on that back doorstep. This is only just and it's still in its real starting phase. But you can see, though, we got operating revenue grew by 57%, which is pleasing to crack $10 million. Driven by Hospital Channel, we got very strong demand for Mexagesic IV from the Korean market, where the product has been going literally gangbusters. Cross-border e-commerce, look, this is always a long-term play, but we're starting to make some good progress, and, yeah, we've moved well through the million-dollar sales level, and we're sort of closing in on the $2 million sales level. Yeah, things, once again, always take time in these markets. You don't click your fingers and sales grow through the roof, but that's getting, you know, nice sort of ongoing growth, albeit with some investment as well. Operating profit was up reasonably significantly, 177%. And one of our key aims this year is also the launch. We've successfully registered Christoderm in the China market. We've had to increase our manufacturing capacity by adding another two sites in preparation for this launch because even launching in Australia last year Yeah, it was one of our things that probably did pull us back and that we ran out of stock pretty much straight away. So we are going to rely on additional manufacturing, which is what we've also been spending a little bit of money on as well. So that's Asia. Then moving on to international, you can see on the revenue graph, We are getting increased revenue internationally as we start to build things up. We did have some nice licensing income last year, but we also see product sales starting to accelerate as we roll out our R&D portfolio, which includes Max Egesic, but also we have strengthened up and invested a lot in some additional affiliates or hubs as well, which we'll talk about. So we've launched Max Egesic IV in the United States through HICMA, which is the largest analgesic market in the world. And that sales sort of happened towards the end of February. So that's still ongoing. And then as well, you can see on the far right is actually manufactured Mexagesic. It's in the US, it's called Combagesic. That's actually manufactured tablets ready to sell. And we're just working presently. We're going to run it essentially through our own office in the United States, but with local partners and distributors who will sell into specific subcategories of the US market. and that presently we are undergoing a couple of negotiations which are at contract stage, can't give you an exact date, but we are anticipating that we would launch this calendar year in the US market, all going well. And then to look at the global map, We did last year have various commentaries on every market country that we were doing something in. To be honest, that got to be so crowded, we're no longer able to do that. But just generally to point out, so yellow, is where we have launched product. You can see that we filled in the North American market now with Canada, the US, Mexico, also some countries now in Latin America as well. such as Chile and Peru down the West Coast. We're also starting to get some launches within Africa as well, and the Middle East launches are extending. So, you know, we are busy extending those launches. But what's actually pretty important we see, though, is that we have built a lot on our affiliate in the U.K., Some of the things we've been doing is we've been purchasing licenses in the UK so we can accelerate that business. So we have sales going with two products presently, but we are working on significantly building that. Same with AFT Europe, we've increased resources. into our office there in Ireland. And we've done a lot of work there. We purchased assets of a German company in receivership, six product licenses, and we are going to be rolling those assets products out from those around Europe as well, which we see to be a really good beachhead. Canada, we've also set up as well, and we are working at the moment on launching Mexi-Cheese IV ourselves in Canada, but there is a whole list of other products behind it. in licensing programs where it is actually not that complicated when we're talking to partners to say, you know, we want to license Australia and New Zealand. Then we had added on Singapore and Hong Kong, and now literally we've added on the UK and Canada, you know, so we're finding that we're able to do that. And the other place, too, that we have added on, we're just in the process of setting the company up, and we already have two or three products signed for that market is South Africa as well. So we have all these now business hubs or affiliates, and we do believe that will give us a lot broader reach, diversify our business, et cetera, and really help us long-term significantly grow the business. So that's the global map. In terms of R&D, which is just looking at that, it's split into two parts, really. We've done a lot of R&D on existing products and already paid for that, most of it, for products like Mexagesic. We have about at least nine different dose forms, which we're rolling out. One of the most important, well, the two most important, really, is the intravenous, but also we have a fast... a special nanotechnology fast-dissolving tablet with a patent until 2039, and that's the one we're launching in the US market, and we'll also roll that out to our existing licensees. Cristoderm is a product we've done a lot of work on the manufacturing and dossier side, and we are working on launching that this year into Canada and into China. And as I'm sure you know, China is the world's second largest pharmaceutical market. So we've done a lot of work and we have a company retained to do that for us in China. But we're also having further discussions with local China-based companies. So the plan is not 100% firm at the moment, but we are going to launch that, planning to launch that. this calendar year and presently that's on track. We bought a niche enema product some time ago, and we just got the dossier lined up and we're starting to do regulatory filings and licensing for that product. We have developed KiwiSooth, an actinidase-based, kiwifruit-based product, which is tablets and sachets for gut discomfort and constipation, and we have some good interest for that. We're launching that in various countries, and we also have an analgesic cream as well for osteoarthritis and neuropathic pain. So we're also in the process of filing that in a number of markets this year as well. But you can see our R&D spend was reasonably flat, went up slightly, still around the $12 million mark. We are expensing more of it, Malcolm, aren't we? So there's more expensing of the R&D, which is having the P&L rather than the balance sheet, so certainly that was one of the things that did take some money out of what our earnings would have been. And flicking on to the R&D pipeline, in our opinion this is very significant because we have a number of interesting projects under development, and in the dermatology area we have a Pascoma product, We have a strawberry birthmark product, which is a very common condition around the world. Keloid scars, where scars grow, is also a common condition. And vulva lichen sclerosus is another common condition without any approved treatments. We have an antibiotic eye drop for drug resistant eye infections. We have another, we're doing a few projects with Hyloris who were our partners for exergesic IV. So we're doing a burning mouth syndrome project treatment there, which we're working with Hyloris. And actually this is a relatively common condition. There are no treatments for it that are approved. So once again, it's a nice area to target. And also NasoSurf drug delivery, we're working on that. We have had some delays on that. We are working on some technical aspects and we're hoping to resolve those during this year. We do have another project which is under late stage negotiation, which in our view is if it's achieved and we sign the agreement is very significant because it's a novel, it's an NCE, it's late stage development. It requires one large clinical study. We would do that as well in partnership with Hyloris, and that is a very interesting project which we would hope to update the market on in probably the next four to six weeks. So that's our investment into R&D, and I'll hand over to our CFO to talk about the details of the money.

Thanks, Hartley. So yeah, revenue up 25%, just under $200 million. Gross profit up 21% to $88 million. Operating expenses also up 21% to $64 million to give us a record operating profit of $24 million, which is up 23%. Finance expenses have come down. The interest cost has actually gone up a little bit on the debt, as we know, with the higher interest rates. But we've had some favourable currency, which is pulling that number down. We're back in a taxpaying position. So that's that line there. And then profit after tax of 15.6. At the bottom of the page, we take out the license income to show the margin on the product sales and royalties. So down from 46% to 43% for the reason that Harleys touched on, which is primarily the investment into the new products in Australasia. And then in Australasia, sales growth. in relatively lower margin products. And we did have the ride offs are a bit higher this year. And that accounted for probably about 0.7, 0.8% of that change. And a fair chunk of that was products that we bought in through COVID and we no longer needed them. So we've written those off. If we go to the next slide. The balance sheet, so the current assets up a little bit. Inventory is up a little bit and debtors are down. A good improvement in the cash, up to 12 million at year end. So total assets now have 165 million and equity up to 88 million. We're still, the inventory levels, we're still holding them. There is still a bit, it's getting better, but we all know there are disruptions in the market. So we're still working on trying to bring the number of days down, but obviously we're having to stock up as well for new product launches that we're bringing in. So it's still work in progress for us, the inventory. And if we move on to the cashflow, we've generated 29 million from operating activities, Spent nine million investing predominantly research and development. And then the 10 million finance activities, that's interest. And then there's a five million dollar debt reduction in there as well. So an increase in the cash of eight million to put us in the position of 12 million at the end of the year.

Yeah, look, thanks Malcolm. And look, just to try and summarise, looking at our outlook, I mean, we do believe we're positioned to drive continued growth in revenue and earnings. You know, we are basically setting a lot of things in place for growth within this coming financial year, but also financial years going forward. You know, with the pipeline, a lot of in-licensing still occurred and that in-licensing also feeds in to all the various affiliates that we've now set up. So that really does leverage things going forward. So we are targeting operating profit of $22 to $25 million. We're not really expecting any significant one-off licensing income this year. So that's then just more from normal trading. We see that going forward. I guess I'm not going to talk about out years, but certainly out you know, once some of the larger things get set in place, which don't really hit this year, like the maxi IV will start to move in the US, but really it's more in year sort of two and three and four, you really see the growth we've seen from other markets. You know, we think there'll be more of an impact going in those out years. AFT, we believe, is well positioned to build on its long record of growth. As we've shown you, we have quadrupled sales over 10 years roughly, and we doubled them over about the last four years. backing off at all. We've got the ongoing rollout of Max Egesic and its line extensions. We've still got a lot of significant launches in places as well that are still underway. Additional R&D products, we're now starting to commercialise some of those, so we've got other products starting to follow along on top of Max Egesic. As I do try and keep saying, we're not just a Max Egesic company. The planned launch of 61 new products over the next 24 months in Australasia. So as we said before, we've had a lot of in-licensing work. We've got a whole department now that does that. And we do see the margins trending back towards historical averages. Yeah, and these numerous new launches and increasing rates of growth in other markets around the world for the AFT different companies, and that's one of the other key things that we're working hard on. And also importantly, you know, this robust product development pipeline, you know, we see that as important. And we're interested too, like even when we look at the Hylorus analyst report, they ascribe a valuation of 60 million euros to Mexagesic IV, and they're only a very minor partner in the whole thing. And, you know, we sort of see our R&D pipeline as very valuable going forward. And we know that it only takes one good success in the United States, a market like that, and you really do see some significant actions. That's just something we're carrying on. Working on the R&D pipeline is very important. And I mean, after all, we're funding that out of existing cash flows. We're not going to the market to raise money or anything like that. And despite what's been said, our cash flow is not disappearing either. So look, our goal of $200 million in annual revenue, we see that as within touching distance. And really, internally, we're focused on our next target, which is $300 million annual revenue. So, look, thank you very much for listening. And I think we'll hand over to answer some questions now, if that's okay. Thank you.

Thank you. This concludes the speaker's remarks, and we will now begin the Q&A session. If you'd like to ask a question, please submit it using the Q&A function on the right side of the screen. Today's first question is from Sue Romanoff from Edison Group. She asks, congratulations on the full year 24 results. We saw some nice revenue growth, but it seems we had some headwinds with slightly unfavorable sales in the mix in the domestic markets and overstocking related issues. Could you please elaborate on these issues and where we should view these as an ongoing trend?

Yeah, no, thanks for that. So look, I can partly answer and probably Malcolm can partly answer it. I mean, certainly post-pandemic, you know, there have been some quite significant changes in the market where some of the products like liposomal vitamins sales did actually decrease quite a lot. We've seen that starting to come back now. But, you know, at one stage they were a good 40 or 50% down on what we'd sort of seen even just after the pandemic. And as a result of that, we did get caught with too much stock and we have discounted to shift that stock. So those sort of things do sort of have an impact, but we still see that as something that will resolve. So that's some sort of market changeable conditions like that, but we don't see it as a long-term problem, but certainly did have a bit of an impact in this last financial year. Malcolm, you probably also have some comments about write-offs and stuff. We had a few things, didn't we?

Yeah, we did. So we've cleaned that out, and there was a fair bit of the product we bought in for COVID that was within that. But looking forward, we see good growth in the revenue in Australia and the gross profit will trend back. It's not going to pop straight back, but it is trending back up. And where we can, you know, in this market where we can get price increases, we will take them. But you've got to be careful how you do those right now.

Sue also asks, since the U.S. launch of Maxi Jessic IV in February, Have you received any initial market feedback for the product? And what are the sales split with Hikma? And are you expecting any further milestone payments from Hikma in the near term?

Sure, look, I can partly answer that and Malcolm can answer the payment part. So yeah, look, we launched towards the end of February in the United States. It's looking pretty typical to most markets where we're seeing some sales in the less restricted segments such as ambulatory care. So there are sales within that segment of the market. And much as anywhere else, there are fairly established formulary systems. within the US market hospitals and things like that so at the moment that's primarily working through those formularies in order to get a listing and usually we found that takes about six months so we're really in that sort of process at the moment and the main thing is getting listings and some of those formularies and then we'll start to see sales kind of build from there which is Pretty typical of most of the markets around the globe. Malcolm, do you want to comment on how the actual, it's a profit share agreement, isn't it, how it works?

Yeah, thanks, Hartley. So, yeah, the significant milestone, as we know, that came in at the end of the financial year and the money came in as well. And then moving forward, we make a gross profit margin as we sell product to Hikma. And then there's a profit share formula. So each time they click over 20 mil of a defined operating profit, that triggers a $4 million milestone payment to us. Unfortunately, under the accounting standards, that will be lumpy. So we'll recognize it when it actually happens. But we're anticipating that we'll be able, as we start seeing the trend in the market, we'll be able to start putting some expectation around when we think that's going to land.

Thank you. As a reminder, if you would like to ask a question, please submit it using the Q&A function on the right side of your screen. Our next question is from Matt Montgomery from Forsyth Bar. Gross margins improved through the second half of the year, but we're still below normal levels. Could you please talk to the quantum drag of the write-offs? What drove the discounting and adverse mix? What gives you confidence this will unwind? And what does normalization look like to you from a gross margin perspective?

Okay, thank you. So maybe I can just have a brief say and then hand over to Malcolm and some more numbers-based questions. I think some of the things we've touched on already, you know, such as the liposomal vitamin overstocking and then having to... we thought it was more prudent to discount it to sell the volumes at a much higher discounted rate to clear stock was the best strategy. But, of course, then that does impact on margin. There have been some products launched last year where the whole margin mix then was probably with timing was skewed towards some lower margin products. Like in the New Zealand market, we did launch one product which has been nice and successful but had a relatively lower margin um you know so i don't know i don't want to say adverse uh obviously the margin went down but you know as we then launch other products with higher margin we see that as trending back and the discounting being something we choose not to carry on with once we've addressed that current overstocking position but malcolm do you want to maybe add a bit more yeah and so with the ride-offs the ride-offs were up by

around about 1.5 million, 1.4, 1.5 mil, more than we would normally expect. I think our underlying history is sort of around 800 to a mil maybe. So, yeah, that was there. We see that's more of a one-off element that happened during the year that's just gone. I think that covered. Was there anything else in there that we missed? I think that's covered most of it, I hope.

I believe you did cover most of it. The next question from Matt is, the three of the last four years, you have downgraded EBIT guidance prior to the year end. Full year 2025 guidance is for strong growth. Could you please provide an indication of why full year 2025 will be different? Has there been a change in how you set guidance? And to provide the market with increased confidence, could you please waterfall us through the full year 2025 guidance from full year 2025? full year 2024 in terms of revenue gross margins and SG&A.

So I guess maybe once again, I can make a couple of comments and Malcolm's probably best to pick up on the rest. I mean, traditionally we had recognised, looking backwards, we had a problem around including lumpy large licensing payments and timing of those certainly caused us problems in two prior years, which was those two initial ones that Matt has alluded to. This current year we were able, if we wanted to, to trim expenditure really to fit our guidance. But we were also aware, we weren't certain when we received the large, lumpy HICMA payment for the launch in the US. It could have been either, we thought, February or March, but it could also equally easily have been, say, April or something like that. In fact, we thought it probably might be April, but in fact, it all went on track. or better than on track and we were able to secure that within this financial year. Once we were confident about that, with additional work we're doing with our R&D portfolio and also a lot of this expansion work around the world with these different affiliates, we were sort of more confident and I guess we made the decision not to pull back and really to double down on the big picture. We appreciate, of course, we'd probably get punished for that short term, but to be frank, we still are looking to really grow this business and I guess that's Our thinking has been we've invested around that because we were able to get that money. And I think still if you look at our overall profit, you're still seeing it's on an upward trajectory and that's really what we're working on. But Malcolm, maybe if you want to comment more about this year, I suppose.

Yeah, I think looking forward, I think you've covered all that last year. So looking forward to the guidance. Revenue, we're looking at similar sort of growth to the year that we've just finished. Margin, we see that getting a slight tick up. As I've just said, Australasia will be slower at bringing its margin back. But international and Asian margins are good. We are going to carry on investing into products and into markets. So you're going to see growth in the dollar value there on the spend. And then we have there's no significant license income, which we don't include. in the outlook. There is none on the horizon in any case. There is a small amount in there. I think it's around about a mil, which is just their recurring license income, which is more commercial milestones.

Thank you. As a reminder, if you would like to submit a question, please go ahead and use the Q&A function on the right side on the screen. Our next question is from Christian Bell from Jardin. Gross margin declined around 360 BPS, which you pointed to product mix, yet your ANC OTC mix lifted from 61% to 66%. Can you please explain how that works? You also called out pricing discounting. Can you further explain and whether you expect this to unwind and why?

Yeah, so that's touching on what we talked about with the new products that we're launching in Australasia. We, you know, to put more support behind them, there has been a mix of marketing and some discounting gone on there. And then the growth in OTC has come from the lower margin products. And then we've had those additional write offs.

Yeah, and I guess in terms also, part of the question maybe is about, well, your OTC increased, but then, you know, how come then also margins maybe product mix decrease? Look, I mean, in general, OTC products do certainly have higher margins, but there are some examples. I know some things we launched in the New Zealand market were still an acceptable margin, but were not up at a normal margin. OTC margin level, but overall, from a strategic point of view, they were one of, if not the biggest selling product line in retail pharmacy. So we actually decided that we did want to be in that exact product and that category, because that helps to strengthen our overall position. And yeah, sales went pretty well. I think we sold at least 400 grand or 500 grand of that particular product. So yeah, things like that. can have an impact. So there's some things that are like that, but they're not necessarily saying it's not a case of chicken little, the sky's falling.

Thank you. Christian also asks, in terms of full year 25 EBIT guidance assumptions, what is your gross margin excluding license income? It was 43% in full year 24. And why do you think it improves?

Yeah, with guidance, we do just give the operating profit guidance. We don't get into that level of detail.

Additionally, he also asks, ROW was EBIT breakeven. So what type of contribution are you expecting in full year 2025? And how much of that is driven by US sales?

Sorry, can you say that? Sorry, can you repeat that one?

Yes. ROW was EBIT breakeven. So what type of contribution are you expecting in full year 25? And how much of that is driven by U.S. sales?

Oh, I see. Yeah.

Okay. I think, once again, there's a few things there. We're not really breaking down individual market segments, are we? No. You know, and also, too, as we build our U.K. business and all these individual businesses, which, honestly, we have multiple products going in and being filed at the moment. At this point in time, we're not going to break them out and start to get – Yeah, sort of multiple watered down, not watered down, but multiple different segments. So we've just really given the overall figure, haven't we, Malcolm?

Yeah, that's right.

Thank you. This concludes the Q&A session. I will now turn over the call to Dr. Hartley-Atkinson and Malcolm Tubby for closing remarks.

Yeah, no, thank you very much, everyone, for dialing in and for listening. Look, I hope you can see, you know, we're making progress on our expansion, you know, with the growth in sales, a lot of investment and that's all future looking and stuff. And we, you know, we're doing this. yeah with the r d and all these different things but yet you know we're still overall increasing profits uh you know we're not looking to raise capital or anything like that so we're doing all this uh internally it's all self-funded um yeah and we hope you will be interested in our ride going forward thank you