AngioDynamics, Inc.

Good morning and welcome to the AngioDynamics fiscal year 2024 first quarter earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded. The news release detailing AngioDynamics fiscal 2024 first quarter results crossed the wire earlier this morning and is available on the company's website. This conference call is also being broadcast live over the internet at the investor section of the company's website at www.angiodynamics.com. And the webcast replay of the call will be available at the same site approximately one hour after the end of today's call. Before we begin, I would like to caution listeners that during the course of this conference call, the company will make projections or forward-looking statements regarding future events, including statements about expected revenue, adjusted earnings, and gross margins. for fiscal year 2024, as well as trends that may continue. Management encourages you to review the company's past and future filings with the SEC, including without limitation the company's forms 10Q and 10K, which identify specific factors that may cause the actual results or events to differ materially from those described in the forward-looking statements. The company will also discuss certain non-GAAP and pro forma financial measures during this call. Management uses these measures to establish operational goals and review operational performance and believes that these measures may assist investors in analyzing the underlying trends in the company's business over time. Investors should consider these non-GAAP and pro forma measures in addition to, not as a substitute for or as superior to, financial reporting measures prepared in accordance with GAAP. A slide package offering insight into the company's financial results is also available on the investor section of the company's website under events and presentations. This presentation should be read in conjunction with the press release discussing the company's operating results and financial performance during this morning conference call. I now turn the call over to Jim Clemmer, Angio Dynamics President and Chief Executive Officer. Mr. Clemmer.

Thank you and good morning everyone and thank you for joining us. for AngioDynamics fiscal 2024 first quarter earnings call. Joining me on today's call is Steve Trowbridge, AngioDynamics Executive Vice President and Chief Financial Officer, who will provide a detailed analysis of our first quarter financial performance. Unless otherwise noted, all financial metrics and growth rates provided during the call today will be on a performant basis, which excludes the impact of our divested dialysis and biocentury businesses in both our fiscal 24 and fiscal 23 first quarters. And our first quarter of FY24 was highlighted by the attainment of important milestones in our long-term strategy and is a solid start financially against our fiscal year goals. Over the last few quarters, we've outlined for you several areas where we were focused on improving. And I'm happy to say that we are seeing improvements here during the first quarter, although there's still more to come. We ended the first quarter with revenue of $78 million, representing growth of approximately 6% year over year, led by growth of approximately 13% from our MedTech segment. Our adjusted pro forma EPS was a loss of 13 cents and was in line with our expectations. This excludes approximately 700,000 in sales from the divested businesses during the six business days in June that we still owned them. Beyond our financial performance, we made important progress on key milestones related to our long-term strategy. As we have stated, it is our mission to address meaningful treatment gaps in large, high-growth markets with a focus on cardiovascular disease and cancer. During our first quarter, we enrolled and treated our final patient in our PRESERVE study, which is designed to prove that NanoKnife is a safe and effective treatment for men diagnosed with intermediate-risk prostate cancer. We look forward to collecting data from this study at the 12-month follow-up stage, then submitting our data to the FDA in Q3 of calendar 2024 to support an expanded indication for Nanolife to treat prostate tissue. We believe that the timing of our submission is ideal. It is clear that patients with intermediate-risk prostate cancer are looking for new treatment options that better preserve their quality of life. The interest and desire for focal therapy continues to build with both patients and physicians. We believe that NanoKnife will be the best option for this patient population due to its simplicity, versatility, and ability to reduce the risk of undesirable side effects that other treatment options carry. Over the course of this fiscal year, We look forward to providing you with more details as physicians publish additional data detailing their experiences using NanoKnife to treat prostate. Our NanoKnife business performed very well and grew approximately 36% during the first quarter, with sales of probes growing 35%. NanoKnife growth was strong again internationally as our international team continues to establish new relationships with partners who assist in supporting our procedures. And our strong U.S. growth was driven by continuing interest in this technology as more physicians become aware of our direct and preserved trials. We believe that Nano Knife has the potential to be one of the most important breakthroughs for men who qualify for a focal treatment approach to their disease by driving beneficial outcomes and offering significant quality of life benefits. It has the potential to open up a roughly $700 million market in the U.S. and potentially $2 billion market globally for those intermediate risk patients. In the first quarter of FY24, our international businesses grew 26% year over year with impressive growth from both our med tech and our med device segments. Our team is strong and we will continue to grow in international markets through a strategy that employs key partners to support our products, continued exposure through our series of scientific symposiums, and further expansion of our MedTech portfolio as we gain important regulatory approvals around the globe. We believe this is the right approach as it allows us to leverage our partners in both the med tech and med device segments without the significant investment that would be required to build out a fully direct global sales force. Our mechanical thrombectomy business, which includes AngioVac and AlphaVac, declined roughly 6% year over year. We were encouraged to see that AngioVac revenues, while down year over year, grew sequentially We believe that the steps we are taking to drive this business are gaining positive traction. As you saw in our press release, we recently received a breakthrough designation for the use of AngioVac to remove right heart vegetation. We have engaged in productive conversations with the FDA. We expect to finalize our study design in our second fiscal quarter. Our APEX PE study is now more than 75% enrolled. This study is designed to prove that the AlphaVac F18 can be a safe and effective interventional treatment tool for physicians to treat patients who are at risk of a pulmonary embolism. We look forward to completing enrollment soon, and after the 30-day patient follow-up period, we'll collect and submit our data to the FDA. We expect the data to support a PE indication around the end of calendar Q2 2024. We have been very pleased with the clinical feedback that we've received regarding the success that physicians have had with Alphavec. They tell us that the intuitive design allows for safe and effective clot removal, and they also specifically comment about how quickly and effectively They can steer our device through an often torturous anatomy. This gives AlphaVac an advantage over other competitive options. They feel that our product will soon be an important part of the treatment options that they can choose from to treat VTE. In addition to the expected PE indication in calendar 2024, our customers will also see the second generation of AlphaVac and a number of important product innovations that will enhance usability even further. The rapidly developing venous thrombectomy market is highly competitive and contains numerous unmet clinical gaps. We are confident that we will be one of the top three players in this large and growing market for years to come. Not only will we win market share with our unique and innovative products, We will also drive adoption to catheter-based interventions and help move care in the VTE space away from historic lytic-based therapies. During the first quarter, we saw continued strong growth of our Arion platform, up 26% year over year. This solid growth is the result of the unique way we deliver laser energy and safely treat diseased vessels. We continue to gain share because physicians are gaining confidence in our technology while they're also getting exposure to data generated by their peers, which is evidence of how special Arion is as a treatment tool. Last quarter, we discussed the Arion laser micro CT data and its importance, which provides evidence that Arion can effectively fracture medial arterial calcification in small vessels, typically located below the knee. This data has resonated well with physicians, and we believe can be an additional reason for clinicians to choose Ariane over our competitors. In addition, there are a number of presentations and podium discussions during this quarter's trade meetings that highlighted the power, versatility, and safety of Ariane, Arion is special. We intend to launch catheters specially designed to allow Arion to treat small vessel DVT in 2025. We believe that Arion will enhance our venous thrombectomy strength and allow treating physicians a new and powerful option to treat clots in small vessels. We are also pursuing plans to gain an indication for Arion to treat coronary artery disease. We believe that Arion can be a safe and effective option to treat CAD, and we expect that the soon-to-be-released FARO study will support this position. We continue to do our development planning and will give you further updates in subsequent quarters. And finally, we anticipate receiving CE mark for Arion in the next few months. As part of our ongoing focus to generate additional clinical data, we are proud to be holding our fourth scientific symposium at the end of October, where we'll be hosting global key opinion leaders interested in doing research on our devices to further prove safety and efficacy. We continue to build momentum with these KOLs, and we can see how differently our company is viewed by them as our credibility has grown as an innovator that is committed to our physician customers and their patients. In addition to the progress that our medical technology segment is making, our medical device segment posted solid results and continues to provide an earnings and cash generation foundation. Growth in our med device segment was primarily driven by ports and our Solero microwave ablation system. Our ports which grew over 22%, illustrate the strength and leadership of our vascular access product portfolio and our commercial team. This is a very competitive market, and our team has continually shown the ability to win. With that, I'd like to turn the call over to Steve Trowbridge, our Executive Vice President and Chief Financial Officer, to review the quarter in more detail.

Thanks, Jim. Good morning, everyone. Before I begin, I'd like to direct everyone to the presentation on our investor relations website summarizing the key events from our quarterly results. As Jim mentioned, unless otherwise noted, all metrics and growth rates mentioned during today's call are on a pro forma basis and exclude the results of the dialysis and biocentric businesses that we divested in mid-June. Our revenue for the first quarter of FY24 increased 5.7% year over year to $78 million. driven by continued strength in our MedTech platforms. This is exclusive of approximately 700,000 of revenue from dialysis and biocentury in June. On an as-reported basis, revenue for the first quarter was 78.7 million. MedTech revenue was 25.9 million, a 13.3% year-over-year increase, while MedDevice revenue was 52.1 million, growing 2.3% compared to the first quarter of FY23. For the first fiscal quarter, our MedTech platforms comprised 33% of our total revenue, compared to 31% of total revenue a year ago. Our Arion platform contributed $11.1 million in revenue during the first quarter, growing 25.7% compared to last year. Mechanical thrombectomy revenue, which includes AngioVac and AlphaVac sales, declined 5.8% over the first quarter of FY23. AlphaVac revenue for the first quarter was $1.8 million. AngioVac revenue was $6.3 million in the quarter, representing a decline of 7.7% over the prior year, but up sequentially from the fourth quarter and trending in the right direction. AngioVac continues to stabilize and rebound from the challenges we faced in Q2 and Q3 of fiscal 23, and we continue to take meaningful steps to address those challenges, including new sales leadership as well as a more robust sales training platform. Additionally, we recently received a breakthrough device designation for the use of AngioVac in right heart, and we believe this is an illustration of the distinct role that AngioVac can play in the VTE space. We remain confident that mechanical thrombectomy will be a significant contributor to our growth strategy, and we will continue to prioritize investments in this platform, including the new product introductions that Jim mentioned, as well as our clinical initiatives, such as the Apex PE study. Nanonite disposable revenue during the quarter increased 34.5% year-over-year. Early in the quarter, we announced that enrollment in preserve is now 100% complete. And as this data starts to be made public over the course of this year, we look forward to sharing it with you. In the first quarter, our med device segment grew 2.3% year-over-year, led by strength in our port products, angiographic catheter products, and microwave ablation business. As the end of our first quarter, our backlog stood at 3.3 million. Moving down the income statement, our gross margin for the first quarter of FY24 was 50.8%, a decrease of 20 basis points compared to the year-ago period. For the first fiscal quarter, MedTech gross margin was 64.7%, an increase of 150 basis points, and MedDevice gross margin was 43.9%, a decrease of 170 basis points, each one compared to the first quarter of last year. MedTech gross margins were positively impacted by sales mix driven by our nanonife performance. Med device gross margins were negatively impacted by raw material inflationary pressures and sales mix driven by growth in our international markets. As we've discussed, our strategic business model contemplates gross margin expansion as our high margin MedTech segment continues to become a larger portion of our overall revenue base. As mentioned last quarter, The next phase of our transformation is to address the scale and structural limitations of our operating footprint in a capital-efficient manner, which will reduce the impacts of many of the raw material and inflationary headwinds that we've seen recently. And we look forward to continuing to update you on our plans and actions to drive margin enhancement in the short and medium term. Turning to R&D, our research and development expense during the first quarter of FY24 was $7.9 million, or 10.1% of sales, compared to 8.3 million, or 11.2% of sales a year ago. Spending on clinical programs was 32% of total R&D spend during the first quarter of fiscal 24, compared to 26% during the first quarter of last year, and 16% for the full fiscal year 2021. This mixed shift within our R&D spending is well aligned with our long-term strategy to support increased physician adoption of our MedTech platform technologies through the generation of data and clinical evidence. SG&A expense for the first quarter of FY24 was $38.2 million, representing 49% of sales, compared to $36.6 million, or 49.6% of sales, a year ago. Our adjusted net loss for the first quarter of FY24 was $5.2 million, or adjusted loss per share of 13 cents, compared to an adjusted net loss of $6 million or adjusted loss per share of 15 cents in the first quarter of last year. During the first quarter of fiscal 24, we revised our annual equity grant practice for our non-employee directors, moving from granting shares with a one-year vesting term to granting immediately vested shares. The target grant value was not changed from the prior year. This change is reflected in adjusted loss per share for the quarter of 13 cents, meaning that approximately two cents of the negative 13 cents was shifted into this fiscal quarter instead of radically being included in our second, third, and fourth quarters of fiscal 24. Gap net income, as reported in our earnings release this morning, included a gain on the sale of assets related to our med device segment in connection with the divestiture of our dialysis and biocentury businesses. As we mentioned last quarter, these businesses that were divested on June 8, 2023, subsequent to the company's fiscal year end, were accounted for as held for sale as of May 31, 2023. As a result, we recorded a goodwill impairment during the fiscal fourth quarter ended May 31, 2023. The impairment resulted in the loss of $14.5 million, or $0.37 per share basis. Due to the timing of the transaction, the loss is recorded in our fourth fiscal quarter of FY23, with the offset in gain on the sale of assets recorded as part of this quarter's results. The result is a large gap loss in the fourth quarter of FY23 and a larger gap gain in the first quarter of FY24. Adjusted EBITDA in the first quarter of FY24 was $0.4 million compared to negative EBITDA of $1.6 million in the first quarter of FY23. In the first quarter of fiscal 24, we used $25.9 million in operating cash, had capital expenditures of $0.8 million, and additions to ARION placement and evaluation units of $0.8 million. At August 31, 2023, we had $57.6 million in cash and cash equivalents compared to $44.6 million in cash and cash equivalents at May 31, 2023. So we continue to expect to finish the year with cash balances in the range of $65 to $70 million, and we expect to be cash flow positive exiting FY25, having utilized an aggregate of $10 to $20 million of cash over a two-year period. Given the timing of Q1 payments and managing our working capital, Q1 exhibited the highest level of cash utilization we will see in FY24. As has historically been the case, our first fiscal quarter is expected to have the highest utilization of cash during the fiscal year, with cash balances building throughout the remainder of the fiscal year. We believe that we have more than sufficient cash to execute on our strategic initiatives as we move to generating positive cash flow towards the end of FY25. Turning now to guidance. We continue to anticipate that FY24 revenue will be in the range of $328 million to $333 million, and we expect full-year adjusted loss per share to be in the range of $0.28 to $0.34. As a reminder, this compares to pro forma revenue and loss per share, excluding the recently divested assets, of $306.3 million and a loss of $0.43 respectively for FY23. We expect FY24 gross margin to be in the range of 50% to 52%, compared to pro forma FY23 gross margin of 50.5%. We expect FY24 MedTech revenue growth in the range of 20 to 25% and MedDevice revenue growth in the range of 1 to 3%. We expect MedTech gross margins in the range of 63 to 65% and MedDevice gross margins in the range of 43 to 45%. We're continuing to transition our company with a focus on delivering value to our global customers. We also understand that investors expect us to be a company that will grow at attractive rates while improving profitability and cash generation. We believe that our first quarter exhibits execution against those expectations. Finally, I'd like to thank our team here at Angio Dynamics for their hard work and commitment, and we're looking forward to executing further on our strategy and delivering a strong fiscal year 24. With that, I'll turn it back to Jim.

Thank you, Steve. And before we open up, the call for questions, I'd like to say a few words. Like Steve and I, many of you have had the pleasure of knowing Matt Michon, who sadly and unexpectedly passed away several weeks ago. Matt did an excellent job of following our company for many years, and all of us here at AngioDynamics truly enjoyed working with him, both as an analyst and as a person. Matt will be missed, and we offer our condolences to his family and his key bank colleagues, particularly Brett. Now, operator, could you please open up the call for questions?

Thank you. If you'd like to ask a question at this time, please press star 1 from your telephone keypad, and the confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants that may be using speaker equipment, It may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Thank you. And our first question today comes from the line of Jason Bedford with Raymond James. Please receive your questions.

Hi. Good morning, guys. Maybe just to start on the business. Nana knife use is quite strong. I was wondering if you could break out growth U.S. versus internationally. And internationally, are you seeing it mostly in prostate, or are you seeing use in other areas?

Hi, Jason. Actually, we're seeing it in both. So we track the different organs that we treat. The international team has had a head start in the U.S. team. They've done a great job establishing relationships internationally with some really strong prostate physicians. And then I'll refer back to the July call we had for Q4. We announced that NICE had upgraded our status in the UK. So we think that also has a knock-on effect in other areas within Europe, Jason. So we're going to continue to work with our clinicians and grow in Europe and the U.S. Steve, do you have a breakdown?

Yeah, and then Jason, we saw strong growth in both geographies. So in the U.S., disposable growth was 28%. And in the international markets, our disposable growth for NanoKnife was about 44%. So we've seen really strong growth both sides of the ocean.

Okay. On mechanical thrombectomy, you seem to be stabilizing AngioVac. AlphaVac still seems like it's kind of stuck in first gear. Can you just give us a little indication as to why growth should improve in AlphaVac? And I think you also alluded to a second-gen product. I apologize. I may have missed the timing there.

No, it's fine. Again, AngioVac, we're really confident in, you know, obviously how the device works and what it does, and getting the breakthrough designation from the FDA is important because they've acknowledged an area of unmet need that we think AngioVac can fit, and we'll work with them on the study design and get that communicated soon. Second, Alphavac, you know, we love the product, and the physician feedback is really strong. I was at PERT two weeks ago talking to many, many physicians who've used it, want to try it, The trick for us, Jason, are two things. Completing the APEX PE enrollment. You saw we announced today we're 75% of the way there, which is actually a great timeline, being that there are two other good products already with a PE indication. And we're going at the same pace, I think, that the first one of those went at a couple years ago, and they got their indication. We're really pleased in the take-up of the product. So we did announce this morning we have a couple design enhancements that we'll launch next calendar year, Jason. So you'll see those enhancements. So really, next year is really important for us. We'll have that PE indication, we believe, about mid-calendar year next year. We'll also have some design enhancements to the product. Anybody does when you, you know, after you launch a first gen, just pay some physician feedback to make it a little more intuitive and user-friendly. But we have full confidence that AlphaVac F18 will be a major player, not just PE, but other clot removal within the anatomy.

Okay. And did the design enhancements require an additional filing?

No.

No, these are simple enhancements. I think they're just done as letter to file to our current design. Again, I'm answering it from my regulatory team, but I'm pretty sure that's the case, Jason. We'll let you know.

All right. And then just lastly, and I'll let others jump in, on Orion, Strong, can you just give us an update in terms of the installed base? And I realize you don't get a lot up front for the capital, but is this The growth you're seeing, is it procedure-driven or have you seen a bolus in placement or capital fail?

Yeah, so in terms of placement, Jason, the net new placements for this quarter were about 10 from where we finished last year. But we have also, as we've talked about in the past, seen a lot of shifting of lasers from some of the lower volume users and moving into higher volume users. So as we talked last year, we were going to pair back a little bit on buying the new systems and the cash utilization that goes along with that, but we were going to focus on driving utilization, and that's what we've seen. So, you know, we finished the quarter with right around 415 total lasers in the field. That's about 10 new net from the end of the year, but then also a significant number of lasers that we've been shifting from maybe lower-performing customers to finding some of those higher-performing customers. Okay.

Thank you. Our next question is from the line of Steve Lichtman with Oppenheimer.

Please proceed with your question.

Thank you. Good morning, guys. I was wondering if you could provide a little more detail on nanonite performance outside of the U.S. Sounds like that business has been a key performer in your international growth overall. Can you give us any visibility on what that could look like in the coming quarters and years? What are you seeing on the ground there? How sustainable is that?

Hi, Steve. You know, we think it's sustainable. You know, that was a really strong number, Q1. I don't know if I expect that number throughout the course of the year. The team did a great job. You know, but they're also training, you know, our partner network to get, you know, clinical support during cases and procedures. We're going to have our, in Monte Carlo at the end of this month, you know, our fourth clinical symposium where we have physicians presenting on their experiences and their data with nanolife, and a lot of it is highly compelling. So we've got a lot of things happening. You also have A little knock-on effect here as well with our Solero growth. We think that nano, as it gets more widely recognized as to how it works, the mechanism of action, we're getting doctors also utilizing our Solero at a higher rate. We've got some great competitors in the microwave space. We think our Solero is the most effective tool out there. We're seeing doctors also give that a try and adopt it with, I think, nanolife side-by-side. So a lot of good things are happening, Steve. It's going to grow strongly this year. I don't know if I'd expect the same growth rate during the next couple quarters. But we're also working here in the U.S., as you know, to wrap up the data collection on preserve, which will be done next summer, submit, and then we hope to get that indication in the U.S. next year. But we should still see strong growth, U.S. and internationally, even prior to that.

Got it. Thanks. And then Oregon Small Vessel DDT, I think you reiterated calendar year 25. You also talked about some docs that are using it in the field. Can we expect any single center data or anything you're getting a sense on that from some of those customers in small vessel TBT?

Steve, we're not sure if you'll see any data published by our customers prior to 2025. We hear anecdotes too where people try it in different areas because they're so confident in how it works. We're focused on our internal R&D process, and the research has shown we're really, really excited about what it does. You know, there's a good aspiration device on the market today that does a really good job in small vessel DVT. But we think what Ariane does, in addition to aspiration, the way our laser can disrupt and break up some of the clot we found in our testing is really significant. So we're going to continue to focus on our internal testing, get the product ready for launch. In the meantime, you know, doctors are always free to do their own research, but I wouldn't expect to see anything I don't believe prior to our launch.

Got it. And then just lastly... As you're thinking about the devices business, how are you thinking about, you know, balancing the potential benefits of additional sales on the top line gross margin versus, I think you mentioned again, Jim, some of the cash benefits that those products provide to the overall company. So, you know, should we be thinking about, you know, potential additional product line investors ahead, or how are you thinking about balancing those two things?

A couple things. We've always talked about our role as an active portfolio manager as we grow our MedTech businesses. But the MedDevice segment does a terrific job in providing us that cash and the stability to invest in the other side of the house. And we really love what the business does. We mentioned today we highlighted our ports. Here we compete against a really great company. The number one company in that market is a strong, great company. Our ports are better, and our company is better, and our team is strong. So although we're the small guy here, David versus Goliath, we're going to continue to win in categories like ports. Our midline's doing really well as well. Picks will always be a battle. We know that. But it's a good business, Steve. We like the balance it provides us today. Let's go back two years ago when we first talked about our transformation into the MedTech business that we want to be. MedTech was only 15% of our revenue. Now you see it about a third of our revenue. So as that continues to grow, we'll be less reliant on the device cash and stability. But today, we still think it has a good mix. Over time, that could change.

Thanks, Jim. Our next question is from the line of John Young with Candid Code Genuity.

Please receive your question.

Hey, Jim and Steve. Thanks for taking our questions this morning. First, from us, just on MedTech gross margin, it was a great number to see. I know you got to 65% on the high end of the fiscal guidance for the year from MedTech specifically. But it feels a bit conservative. Can you just talk about the puts and takes here on the gross margin for MedTech? Thanks.

Yeah. So, John, as we've talked about, right, the overall gross margin kind of long-term strategy for NGOs, that you're going to see gross margin accretion coming from this mixed shift as we have the MedTech products comprise a larger portion of our overall revenue base. We've seen that, but we've seen it at the corporate level be chewed up a little bit by some of those inflationary pressures that we've talked about. On the med tech side specifically, you know, increased sales in nanonife, you know, as we've stabilized, as Jason talked about, the mechanical thrombectomy business, those are both going to be, you know, pretty good tailwinds for us on the gross margin. And then you've also seen, as we've talked about, pulling back a little bit on brand new lasers being put in the field and trying to increase utilization with those lasers on the Arion business. All of those things are going to be supportive of that continued shift with with the med tech business, you know, kind of driving that shift overall across margins.

Great. Thanks. And then on Apex too, getting enrollment now, um, I saw on the slide, you know, it's now guide for complete by early calendar 24. It feels like a bit of a push there. Have the other ongoing PE studies in the space impacted the ability to get patients enrolled?

Hi, John, it's Jim. No, I don't think so. I think if you take a look at when we started enrollment, And when we think we'll finish enrollment, it's about an 18-month window, we believe, from start to finish, which I think if you go back and look at the market leader, I think is what they took a few years ago when there's nothing else in the field. So we were a little cautious coming out, knowing that we'd be third in behind the other two players there. We thought it might be a little challenging, and it probably was initially. I think there's a lot of momentum building in the product, and physicians, you know, their peers that use it – talked about great outcomes and shared some great outcomes along the way. So I think the momentum is building, John. We're really pleased with the schedule. It fits what we internally had projected, and we can't wait to get on label next year, but we'll do the work to finish it right now. Your question's a good one. Because it is a space now, we'll be third in, and it probably will be harder for others. I can't speculate for them, but we have a unique, novel device we're bringing into that space with two other good products there. So we think we'll really give people a choice.

Great. Thanks Jim. And maybe that's my last one, like sneak it in just on the strategy and capital allocation, just thoughts on stock buyback, given the strength of the balance sheet and current stock price. Thanks.

Yeah. You know, Steve and I talked about that a lot and we have conversations with our board. I think today, given the external market, you know, kind of disruptions and where things have gone, we want our investors to say, Hey, we have a strong balance sheet. Everyone take a timeout for a second. Steve has given you guidance as to where we think our cash utilization will be this year. And if people look back a year ago after Q1, Steve gave the same guidance. We really hit that by the end of the year. So we're really, we think, in a good position to utilize the cash we have. We do have a good, strong balance sheet with cash. We'll always talk about the investments that we're looking at, and I'm sure at some point it will be a good conversation around a buyback. We believe there's a disconnect in our value today, a strong disconnect. We'll take a look at that, but we also want to share with investors who want to ensure that we have a stable balance sheet for a while. We get their view as well.

Thanks, John.

I'd now like to turn the call back over to Mr. Clemmer for any closing remarks. Mr. Clemmer?

Thank you, operator, and thanks again to all of our interdynamics employees. We are on a transformation here, changing our company to one that is highly differentiated by our science and technology and provides meaningful outcomes in patient wellness when our products are utilized. Thanks again to our tremendous employees who enable this to occur every day. I look forward to speaking with you at the end of our Q2. Thank you.

This will conclude today's conference. We now disconnect your lines at this time. Thank you for your participation.