Phibro Animal Health Corporation

Thank you for standing by. Welcome to the Fibrio Animal Health Corporation Q3 2021 conference call. This time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Requiring further assistance, please press star 0. We now have a conference over to Damian Finio, Chief Financial Officer. Please go ahead.

Thank you, Tabitha. Good morning and welcome to the FIBRO Animal Health Earnings Call for our third quarter ended March 31st, 2021. I am Damian Finio, Chief Financial Officer of FIBRO, and I'm joined on today's call by Jack Benheim, FIBRO's Chairman, President, and Chief Executive Officer, as well as Donnie Benheim, Director and Executive Vice President of Corporate Strategy. We plan to cover key themes for the quarter, financial performance for the quarter and year to date, and guidance for our fourth quarter and full fiscal year ending June 30th, 2021, before opening the lines for your questions. Before we begin, let me remind you that the earnings press release and financial tables can be found on the investor section of our website at pahc.com. We are also providing a simultaneous webcast of this morning's call, which can also be accessed on the website. A replay of today's presentation, the slides that accompany the presentation, and a transcript of the call will also be available on our website. Our remarks today will include forward-looking statements, and actual results could differ materially from those projections. For a list and description of certain factors that could cause results to differ, I refer you to the forward-looking statement section in our earnings press release. Our remarks include references to certain financial measures which were not prepared in accordance with generally accepted accounting principles or U.S. GAAP. I refer you to the non-GAAP financial information section in our earnings press release for discussion of these measures. Reconciliations of these non-GAAP financial measures to the most directly comparable U.S. GAAP measures are included in the financial tables that accompany the earnings press release. I want to remind everyone that we present our results on a GAAP basis and on an adjusted basis. We present adjusted results that exclude acquisition-related items, unusual, non-operational, or non-recurring items, including stock-based compensation and restructuring costs, other income and expense as separately reported in the Consolidated Statements of Operations, including foreign currency gains or losses, NET, income tax effects related to pre-tax adjustments, and unusual or non-recurring income tax items. And now I am pleased to start by asking Jack to share his opening remarks, including a walkthrough of our key themes for the third quarter.

Jack? Thank you, Damian, and good morning, everyone. Let me share what I see as our four key themes for the third quarter. First, we boast in solid financial performance. In the third quarter, consolidated net sales and adjusted diluted EPS were both ahead of guidance, and sales were comparable for the same quarter of the prior year. While it's difficult to quantify, the comparable performance relative to last year has masked a little bit of year-over-year growth, as our industry saw some customer stocking in those crazy last days of March 2020, where the world was just beginning to grapple in earnest with COVID-19. Our profitability clients value due to unfavorable product mix and increases in certain expenses, including incremental investments in our future. And I'm pleased to report that we received EU GMP approval for our new vaccine facility in Sligo, Ireland. We continue to build our companion animal pipeline, having recently finalized an agreement that adds two early-stage oral care products. Looking ahead, we expect a strong fourth quarter to close out our fiscal year, well ahead of the same quarter of the prior year because our business was hardest hit by the effects of the pandemic and the quarter ending June 30, 2020. Our next earnings call in the latter half of August will focus sharing full-year actual financial performance and I hope to be able to provide a view of our future projections as well. Jamie will share more details about our actual projected financial performance in just a few minutes. Second, COVID-19 recovery varies by country. As you are aware, we sell our products in over 75 countries across all species of food animal. The diversity of our portfolio has certainly helped to stabilize our business throughout the course of the pandemic. We continue to monitor recovery on a country-by-country basis, and we see the most challenging conditions in our Macy region, which is impacting our vaccine business, while fast food companies and other geographies are helping offset those impacts. And those countries still struggling to control the spread of the virus will just need to see how those situations unfold. Despite this continued variability, I remain bullish on the outlook of Fibro and our industry. We will continue to make investments that will drive our business going forward. Third, we formalize our ESG efforts. ESG continues to gain momentum. It's on the minds of not only investors, but really all stakeholders we work with daily, including our own employees. Although we centralized our ESG efforts internally in the third quarter under Damien's leadership, the principles driving the philosophy behind ESG today have long been ingrained in the culture of FIBO. Our intentions are to publish our first ESG report later this calendar year. so you'll have more insight into ESG-related activities at Fibro. Lastly, we completed refinancing of our existing credit facilities. On April 22nd, after the close of our third quarter, we issued a press release announcing that we executed an amended and restated credit agreement in the amount of $550 million with a widely syndicated bank group, primarily consisting of our previous lenders. With that, I'll turn the call back over to Damian to give a little more color on the refinancing and to review our actual and projected financial performance in more detail. Damian.

Thanks, Jack. Turning to slide four, the amended and restated credit agreement represents an upsizing of $50 million and includes a $300 million term loan A and $250 million revolver. We're most pleased that the terms, conditions, and pricing of the new credit facilities are substantially the same, if not just slightly better than our previous terms. And the new facilities mature in April 2026, which provides us with operational flexibility for years to come, enabling us to focus on driving the business forward. We remain committed to continued debt and leverage reduction. Closing this agreement on such competitive terms during these challenging times reflects both the company's and lender's confidence in the future of our business. Moving on to our financial performance on slide five, I'll start by reviewing consolidated and segment-level financial performance for the third quarter ended March 31, 2021, but I'd also like to spend a few minutes today reviewing our year-to-date comparative results. The year-to-date performance tends to help put in perspective some of the volatility in year-on-year quarterly comparisons. I'll close out my portion of the call with our projections for the fourth quarter and full year. Looking at the consolidated view, third quarter financial performance was ahead of guidance, while profits reflected a decline in comparison to the same quarter prior year. Net sales of $211.7 million were up slightly, $1 million or less than 1%, while both GAAP and adjusted profitability metrics lagged on a comparative basis. Net sales for the third quarter were driven by increases in mineral nutrition and performance products, partially offset by a decline in our animal health segment. Declines in GAAP-based net income and diluted EPS were driven by a lower gross profit related to unfavorable changes in product mix as well as increases in SG&A costs and provision for income taxes offset partially by lower interest expense. After making our standard adjustments to GAF results, including one-offs, acquisition-related items, and foreign currency movements, third quarter adjusted EBITDA, adjusted net income, and adjusted diluted EPS were down 7%, 11%, and 11% respectively due to unfavorable product mix and an increase in certain corporate costs and incremental investments in our future. On the next slide, we start to break down consolidated financial performance by business segment. So on slide six, I'll start with our largest segment, animal health, which is comprised of MFAs and other nutritional specialty products and vaccines. Net sales of our animal health segment decreased 3% versus the same quarter prior year. The decrease in animal health segment net sales is comprised of three components. First, A 5% decline in MFAs and others versus the prior period, driven by timing of domestic ordering patterns coupled with lower international demand due primarily to poultry products in Latin America. Second, 7% growth in nutritional specialties, driven by strong international growth in dairy products. And third, a 13% decline in vaccine net sales, driven primarily by growth in APAC in North America, more than offset by challenging economic conditions in the Macy region. In terms of profitability, animal health adjusted EBITDA was $31 million, reflecting an 11% decline in comparison to the same quarter prior year, driven by lower sales and gross profit, coupled with an increase in SG&A costs. Now let's walk through the financial performance of our other business segments on slide seven, namely mineral nutrition, performance products, and then a brief word about corporate expenses. Starting with mineral nutrition, net sales for the third quarter were $58.2 million, an increase of 3% versus the same quarter prior year, driven by favorable product pricing correlated with the movement of the underlying raw material costs. Mineral nutrition adjusted EBITDA was $5.2 million, an increase of 29%, driven by increased gross profit on favorable product mix, and the adjusted EBITDA margin improved to 9%. Our performance product segment continues to have a very strong year. Net sales of $19.2 million for the three months ended March 31, 2021, reflects an increase of 23% over the same quarter prior year, driven by strong demand for copper-based products and favorable product pricing correlated with the movement of the underlying raw material costs. The increased gross profit drove $2.9 million of adjusted EBITDA for the quarter, a 94% increase versus prior year, and an adjusted EBITDA margin of 15.3%. Lastly, corporate expenses increased 10% versus the same quarter prior year due to savings in SG&A costs, more than offset by incremental investments in our future, and an increase in expected employee performance-based incentives. Now let's walk through year-to-date financial performance in much the same manner, beginning with consolidated results on slide eight. The consolidated view of year-to-date financial performance perhaps reflects a clearer view of underlying business and financial performance than the third-quarter view on slide five. Net sales for the nine-month period ending March 31, 2021, were $613.1 million, $1.4 million, or less than 1% behind the same period a year ago. driven by an increase in performance products just slightly more than offset by decreases in animal health and mineral nutrition. However, net income was $37.3 million and diluted EPS was $0.92, reflecting increases of 34% and 33% respectively. The significant improvement in these GAAP profitability measures was driven by higher gross profit, lower interest expense, and increased foreign currency gains, offset partially by an increase in SG&A and provision for income taxes. After making our standard adjustments to GAAP results, including the one-off acquisition-related items and foreign currency movements, third quarter adjusted EBITDA, adjusted net income, and adjusted diluted EPS were up 3%, 4%, and 4% respectively, due to higher gross profit offset partially by an increase in certain corporate and information technology expenses and incremental investments in our future, partially offset by lower travel expenses due to COVID-19 limitations. Turning to slide nine, we break down year-to-date consolidated financial performance by business segment, starting again with our largest segment, animal health. Net sales decreased 1% versus the same nine-month period a year ago, The decrease in animal health segment net sales is comprised of three components. First, a 4% decline in MFAs and other versus the prior period driven by domestic growth more than offset by lower international demand in primarily APAC and South America. Second, 8% growth in nutritional specialties driven by domestic and international growth in dairy products offset partially by lower demand in domestic poultry products. And third, a 4% decline in vaccine net sales driven by growth in APAC in North America, more than offset by challenging economic conditions in our Macy region. In terms of profitability, animal health adjusted EBITDA was $94.4 million, reflecting a 1% improvement in comparison to the same nine-month period last year, driven by an increase in gross profit coupled with lower SG&A costs, driving an increased EBITDA margin of 23.7%. Slide 10 reflects year-to-date financial performance for our other business segments, namely mineral nutrition, performance products, and corporate. Starting with mineral nutrition, year-to-date net sales were $163.8 million or comparable to prior year and driven by increased unit volumes more than offset by unfavorable product pricing correlated with the movement of the underlying raw material costs. Mineral nutrition adjusted EBITDA was $12.5 million, an increase of 11%, driven by increased gross profit on favorable product mix, while year-to-date mineral nutrition adjusted EBITDA margin was 7.6%, up 12% versus the same quarter of the prior year. Our performance product segment posted strong year-to-date results. Net sales of $50.3 million for the nine months ended March 31st, 2021, reflect an increase of 11% over the same period in the prior year, driven by strong demand for copper-based products, which translated into increased unit volumes. Strong year-to-debt gross profit is driving the $7.2 million of year-to-date adjusted EBITDA for the quarter, an 88% increase versus the same period a year ago, and a much improved adjusted EBITDA margin of 14.2%. Lastly, year-to-date corporate expenses increased 10%, driven by lower travel costs relating to COVID-19 limitations, more than offset by incremental investments in our future, an expected increase in employee performance-based incentives, professional fees, and information technology expenses. Okay, that wraps up the review of third quarter and year-to-date financial performance. In summary, we are really pleased with our strong financial performance during these very challenging times. Let me shift gears and address some key capitalization-related metrics on slide 11. Via enhanced profitability and favorable movements in working capital, the business continues to drive strong cash flows as reflected in the $26 million of cash provided before financing activities in the third quarter. Our gross leverage ratio, calculated by taking our total debt of $381 million, divided by trailing 12-month adjusted EBIT of $105 million, was 3.6 times as of March 31, 2021, consistent with the prior quarter end. In terms of liquidity, we had $164 million available as of March 31st. This included cash and short-term investments of $93 million, as well as $71 million of unused and available revolving credit. I just wanted to make mention that as of April 22nd, 2021, when we closed the amended and restated credit agreement, our unused and available revolving credit increased from $71 million to $156 million, subject to leverage ratio limitations. And lastly, consistent with the past several quarters, we have announced a routine quarterly dividend of $0.12 per share for $4.9 million. Slide 12, looking ahead, we expect to end our year strong with a solid fourth quarter and full year financial performance ahead of the prior year. Fourth quarter and full year financial guidance is as follows. Net sales of approximately $213 to $217 million and $826 to $830 million, respectively. Net income of approximately $11 to $12 million and $48.4 to $49.4 million, respectively. Diluted EPS of approximately $0.28 to $0.30 and $1.20 to $1.22, respectively. Adjusted EBITDA of approximately $27 to $29 million and $107.9 to $109.9 million, respectively. Adjusted net income of approximately $12.1 to $13.1 million and $50.7 to $51.7 million, respectively. Lastly, adjusted diluted EPS of approximately $0.30 to $0.32 and $1.25 to $1.27. respectively. That concludes our opening remarks. Thank you for your extra time and attention. Tabitha, please open the lines for questions.

At this time, if you'd like to ask a question, simply press star 1 on your telephone keypad. Again, that is star 1 to ask a question. Your first question comes from the line of David Westenberg. David, your line is open.

Oh, sorry, that pesky mute button. Thank you for taking the question. This is David from Guggenheim. Can you talk about the long-term outlook for MFAs? Any kind of commentary on when we expect to see, you know, maybe give us a five-year kind of outlook or maybe ten-year, and I realize that no one's crystal ball is perfect here. It's just... Obviously, with the percentage of revenues that is MFAs, it would be just great to get your updated thoughts there.

Well, you know, number one, in our MFA sort of section, we have MFA and others. So there are a lot of products that come into the MFAs. But typically, MFAs, which would be products that are regulated, that we sell to the feed, we see a growth in that business. We see a growth around the world. Obviously, after COVID is over, well, people will go back to eating protein and, you know, sort of enjoying the trend lines. that we had until a year and a half ago. So it's hard to put numbers on it, but it's a product line that we keep investing in, and we see, again, growth across the world in various markets.

Okay. Yeah, I realize it's a little bit more abstract of a question. Can you kind of maybe talk about the reopening of the U.S. economy, whether it be schools, restaurants, et cetera, and kind of the impact on the overall business, and I guess more outside the U.S. too as well with reopening? Thank you. Thank you.

I think what we've seen here, I mean, this is, You know, this is really a tale of two cities. This is going to be a tale of wealthier countries, and let's start with the United States. This is obviously the wealthiest country. So, you know, what we've done, number one, in putting money into people's pockets, and number two, in getting vaccination across the country, that – you know, we see sort of a return. I mean, I would say the coaching business in the United States today, different outlets, it's less restaurants and more supermarkets, but pretty much has returned to where it was pre-COVID. I mean, there's some pockets, some, you know, some anomalies, but overall, business is solid and will continue to grow. If I look at the rest of the world, and there it goes, as I said in my opening remarks, we sell in 75 countries, And literally, every country has a story. And some countries have done better with COVID, and the economies are coming out faster. And some have not. And some, the effect of COVID is not just people being sick, but the effect on the overall economy. And, you know, our business, as we've said over and over again, is very much tied to the ability to people – to have money to buy protein, which is, you know, in the bread basket, so to speak, is one of the more expensive parts of that. So I think we're seeing some recovery. In some countries, it's going to take a year at least. But in the major markets, like the U.S. being a major market for us and South America, we see a faster recovery. And, you know, we're quite optimistic that, you know, basically when we talk again in August, when we talk about our plans, projections for next year, I think COVID will not play a major role in the discussions.

Got it. I think you brought up an interesting point, and I was wondering, maybe for my last question, you talked about the inflating of the economy here. We've been seeing a lot of increases in commodity prices across the board. Can you talk about maybe just the correlation between commodity prices and then, you know, agricultural and prices of meat and dairy, and then finally the kind of effect on your business as we kind of see, you know, assets being a little bit more inflated than we've seen in the past, and then I'll just hop off cue after that. Thank you.

So in the production animal business, The key driver is the cost of feed. The underlying feed cost is mostly corn and soybean, and that is the biggest cost in raising a chicken or a pig, dairy cattle and cattle. So as those prices go up, it costs the grower more money to raise those animals. They're going to raise prices, and... And those prices are going to go up. We're starting to see it already, and we will continue to see it because right now there's no abatement in the increase in cost of the underlying feed components. So that's number one. Directing to the business, you know, there are other effects as well. We all read every day about what's going on in the world in terms of shipping and shipping You know, how a stuck ship in Suez Canal, you know, affects the world. But we've seen higher freight costs even before that because of the imbalance produced by people buying different things than everyone thought they were going to buy. So the ports in California are clogged. The ports around the country are backed up. And it's not just the United States. It's also true in other parts of the world. I can tell you crazy stories about... trying to get a ship to some markets of ours. And because of the need of getting that container back to China, product software, we need to be trying to ship this only to the board. So it's much more difficult, and costs are going up. So, yes, costs are going up. And like anybody else, we will endeavor to what we can to raise our prices as well to cover these increased costs that we're seeing sort of on a daily basis.

Thank you very much.

Your next question comes from the line of Aaron Wright with Credit Suisse.

Great, thanks. Can you speak a little bit more specifically on the drivers in your competitive positioning across the nutritional specialty business at this point? And on an annualized basis, will this be more consistently a double-digit grower for you kind of going forward on a longer-term basis?

So, thank you for that. We see nutritional products growing on a double-digit basis across our markets. I mean, that doesn't mean that every one of the products we have in that group of products will grow. I mean, obviously, there's competition. There's change in what we're seeing in the market. It often depends on the change of the underlying feed. But overall, we've invested a lot. We continue to invest in additional specialties, and we fully expect that to grow, you know, double digits. And clearly, you have to remember that COVID has played a major role this last year. But as we get out of it, we will see that double-digit growth.

Okay, perfect. And then could you give us an update on your companion animal initiatives, where that stands, what your expectations are for that business over the next few years?

I'm going to pass this to Donnie.

Good morning. So we continue to execute well with Regensa, which is our product on the market right now. We had talked about last quarter that it had doubled in six months over the previous six months, and we're expecting that trajectory to continue throughout this fiscal year. And then, you know, we are steadily building up our pipeline. So we foreshadowed last quarter that we were working on an oral care deal, and we successfully completed that. It's an early-stage product. What excites us about these two products, actually, is that we believe that they will fall under the medical device standard as far as the regulatory is concerned, so it's a more streamlined process. So that would allow us to get to market a little faster than if we went through different processes within the FDA. So our pipeline is fairly early stage still with all the products that we have, but we are seeing that we've filled some gaps as far as the timeline, and we are pretty excited about what the next number of years will bring as far as the products, assuming we can bring them to completion.

Okay, perfect. Thank you so much. Your next question comes to the line of Michael Riskin with Bank of America.

Thanks for taking the question. Jack, first one for you. Apologies if I missed it during the prepared remarks, but I don't think you necessarily mentioned China or gave an update on that market, and I've always welcomed your candor and your thoughts on the ASF recovery, sort of what you're seeing in those trends there. We've seen a lot of conflicting reports in terms of herd rebuilds. flare-ups of new outbreaks of ASF. Could you give us your thoughts as to what you're seeing in China? How is that market rebounding for you? And sort of how are you thinking about it for the next quarter?

So, I mean, China is rebounding. I mean, you can see both, you know, the products we're currently selling in, which are not MFAs, and the products that our competitors are selling in, I mean, that business is getting better. So China has incentivized many of the hog growers to do a better job in biosecurity, and they're definitely putting more pigs on the ground. In the same time, and what we're all reading, what we're seeing, is ASF is not under control. So They are upset that, you know, while they can have the facilities, they might not be able to fill the facilities. So I think it's going to be sort of an up and down over the next couple of years. Clearly, the trend line is Chinese government has invested and will continue to invest a lot of money, you know, to become independent. But for the rest of the world, it's still China every day. So, I mean, exports from the U.S., from Mexico, from Brazil have been strong to China or to that part of the world. And that will continue for the next couple of years. I mean, even think about, you know, follow like we follow it. But, you know, every other month in China, they were releasing pigs from their frozen storage to keep enough pigs on the market. So, that has to be rebuilt. And that's, you know, millions of times. So, Overall, I think, you know, what's happening in China, as they rebuild the herd, it does not happen quickly. And overall, for all the hog producers around the world, you know, it's going to be good business for, you know, two, three years at least.

Okay. I appreciate that. And then just real quick follow-up on the fiscal 4Q guide. Again, really impressive, showing some nice sequential and obviously really strong year-over-year growth. Is this mostly on the comps and the MFA segment? I know that last year you guys had some really unusual one-time hits in fiscal 4Q that sort of depressed that number. I'm trying to get a sense of the underlying and a sequential progression. Is it fair to interpret that, Guy, that you're beyond all the headwinds you saw earlier and the recovery is continuing to proceed?

Yeah, I can take that question. So, yeah, keep in mind that the fourth quarter of 2020 was our first full quarter in the pandemic, and we were hit hardest then and have since then quarter on quarter grown top line and seen a return to profitability, and as we mentioned, ahead of our expectations. So our fourth quarter guide, sequentially compared to first, second, third quarter of this fiscal year, you know, we continue with the same profitability and top line, perhaps, you know, at or slightly above. I think our biggest risk between now and year end, as Jack sort of alluded to, is the timing of shipments and some of the backlog at some of the ports. But we feel pretty confident that the fourth quarter guide is a good number and reflects growth much of the same that we've seen the last couple of quarters since that low point last year.

Great. Thanks, Damian. I appreciate it.

Your next question comes from the line of Kevin Kedrow with G Research.

Hi, thanks for taking the questions. Maybe I'll build off on the Q4 guide. Anything in there in that outlook that you have any reason to believe wouldn't be continuing into your fiscal 22? Are there any kind of pockets of the performance you expect in Q4 that maybe might be seasonal or kind of short duration related that we shouldn't be expecting as we start looking at into next fiscal year?

No. You know, we think, as Damian just said, it's mostly a more normal year compared to, you know, the shock of the pandemic in the fourth quarter of last year. And, you know, as I said earlier, we're seeing recovery around the world. Some countries are going to be doing a lot better, as you know, reading, you know, whatever you read every day. But as the vaccine is spread around the world, I mean, kudos to you know, to Pfizer and Moderna for doing an amazing job. We're many of us sitting here back in the office on this call, and up to now we've all taken it from our homes. So this is definitely progress, and it's progress around the world. And I think, you know, I think our expectations, you know, for the fourth quarter are good, and then we'll see continued growth coming past that.

Great, appreciate that. Just wondering if you could talk a bit about what you're seeing in poultry. One of your peers had noted that they've been seeing some trade down within the U.S. poultry market in particular. Just wondering what you're seeing there and expectations for that market.

I think that, you know, our poultry customers, are a bit more reticent to put on a lot of birds than they have in the past. They face a lot of different headwinds, some economic headwinds. So it's slower growth in the U.S. poultry. Again, they are suffering from higher input costs, and when that happens, everyone always wants to see, well, what can I do different? What can I do cheaper? At the end of the day, We will rotate our products because all our products perform a function. And again, as I've often said, no one buys our products because they don't think it helps them. They buy our products because they think it helps them grow the animals, whether it's chickens or pigs, cattle. So we all take our turn. So I think it's nothing major. I think overall in the United States, all of our customers are doing okay.

Great. Appreciate the color. Maybe two more. First, maybe this is for Donnie. Can you say a bit more about those companion animal products that you brought in? It sounds a little bit interesting from the standpoint of potentially going down the medical device pathway. So any sense you can give us on the kind of timelines when we might be able to see those come to market? And then secondly, on the Ireland facility that should open up some new markets for you in vaccines. What can we expect from vaccines as we start heading into fiscal 22? Can we get back to that sort of targeted realm of double-digit growth for that business?

Okay, so I'll start with the oral care products. We're really not giving, you know, guidance as far as how long it will take other than to say that, you know, medical device is a more streamlined process. So, you know, it is early stage. So, you know, I think you can take from that that it will not be in the next fiscal year for sure. And, you know, I think what we will, you know, add is it's a product, it's one product for dog and one product for cat in what we've licensed here. So, you know, which would be our first cat product as well. So, you know, but again, slowly but surely we're building out this portfolio. I think we're doing it pretty methodologically. And, you know, we are, you know, pleased with how it's proceeding and we're pleased with kind of the imbalance we're seeing all the time of people, you know, pitching interesting ideas to us and we're definitely on the map now. As far as, you know, if someone does have an idea of whom to speak to, so overall, you know, we think we'll see some really good stuff from here.

And on the vaccine side, it's a, you know, like everyone has asked today, it's a great question. I think The vaccine business, we're seeing the slowdown really depends country by country. And in some of the markets where we sell our vaccines have been more affected by the pandemic than other markets. It's just the nature of our customer base. It's the nature of, you know, sort of all of our competitors. We're the last entry into the vaccine business in most of these markets. and where we have our registrations. That combination has made the pandemic more painful, I think, for us than many of our competitors. Having said that, you know, I think it's really tied to the recovery from the pandemic. We're on the track of the recovery, and, you know, I'm not sure I'll take a quarter or two quarters or a year, but, you know, in the course of the next year all of our markets will have recovered uh and our vaccine business will will will grow at the very best clip it grew before the pandemic great thanks at this time there are no further questions i'll turn it back over to damian finia for closing remarks

All right. Thank you, Tavisa, and thank you, everybody. That was a great round of questions, as always, and we appreciate your attendance on today's call. Our next call will be towards the back half of August, when we will be discussing financial performance for our full fiscal year 2021, as well as forward-looking projections of financial performance. Until then, let's all continue to keep ourselves and one another safe, and have a great rest of your day. Thank you.

Thank you, ladies and gentlemen. That concludes today's conference call. You may now disconnect.