CONMED Corporation

Thank you for standing by and welcome to ConMib's Q3 fiscal year 2023 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. To remove yourself from the queue, press star 1 1 again. You will be limited to one question and one follow-up, then return to the queue. Before the conference call begins, let me remind you that during this call, management will be making comments and statements regarding its financial outlook, its plans, and objectives. These statements represents the forward-looking statements that involve risk and uncertainties as those terms are defined under the federal securities laws. Investors are cautioned that any such forward-looking statements are not guarantees of future events, performance, or results. The company's actual results may differ materially from its current expectations. Please refer to the risk and other uncertainties disclosed under the forward-looking information in today's press release, as well as the company's SEC filings for more details on the risk and in certainties that may cause actual results to differ materially. The company disclaims any obligation to update any forward-looking statements that may be disclosed during this call, except as may be required by applicable law. You will also hear management refer to non-GAAP or adjusted measurements during this discussion. While these figures are not substitute for GAAP measurements, Management uses these figures to aid in monitoring the company's ongoing financial performance from quarter to quarter and in year to year on a regular basis and for benchmarking against other medical technology companies. Adjusted net income and adjusted earnings per share measure the income of the company, excluding credit or charges that are considered by the company to be special or outside of its normal ongoing operations. These adjusting items are specified in the reconciliation supporting the company's earnings releases posted to the company's website. With these required announcements completed, I will turn the call over to Kurt Hartman, ConMed's Chair of the Board, President and Chief Executive Officer, for opening remarks. Mr. Hartman.

Thank you, Lateef. Good afternoon and thank you for joining us for ConMed's third quarter 2023 earnings call. With me on the call is Todd Garner, Executive Vice President and Chief Financial Officer. Our plan is to share with you our third quarter results and updated guidance and then open the call to your questions. I will start by saying we're very pleased with our team's performance in the third quarter and as important year to date. Total sales for the quarter were $304.6 million, representing a year-over-year increase of 10.7% as reported and an increase of 11.9% in constant currency. On an organic constant currency basis, sales growth finished at 11.5%. I would remind everyone that in early August, the BioRez acquisition reached its one-year anniversary. We remain very encouraged after one year with the BioBrace product offering and the cadence of market acceptance that we have seen. Our priorities remain the introduction of a delivery system for MIS rotator cuff repair, international regulatory and channel expansion, medical education, and clinical studies. We're making solid progress in all of these areas. Overall, our performance this quarter highlights the benefits of our diversified portfolio from products to geographies. Every business and every geography are not always linearly predictable quarter after quarter. The benefit of diversification is that one adds another flows. And we saw that dynamic deliver a very healthy Q3 2023 with double digit organic growth. From an earnings perspective during the third quarter, our gap net income totaled $15.8 million. This compares to $46.2 million in the third quarter of 2022 and represents a decline of 65.7%. Excluding special items that affected comparability, Our adjusted net income of $28.4 million increased 19.5% year-over-year, and our adjusted diluted net earnings per share of $0.90 increased 16.9% year-over-year. At a macro level, the news cycle has been challenging and global events unsettling, in addition to there being a lot of noise in the medtech markets. Our results today are indicative of our ongoing focus on providing innovative solutions to our customers around the world so they can treat their patients. The underlying surgical specialties and markets that we serve are healthy and healthcare staffing levels continue to improve. In summary, I'm very pleased with the focus and the results delivered in the quarter and year to date and confident that we will finish 2023 in great shape and with positive momentum to start the new year. Before turning the call over to Todd, I'd like to take a quick moment to express our condolences Upon hearing of the tragic and way too early passing of Matt Michon, we want to express our sincere condolences to the Michon family and the KeyBank family. I'll now turn the call over to Todd.

Thank you, Kurt. Knowing Matt and his dogged curiosity, it made me smile to think that maybe he got access to MedTech results before the rest of you. All sales growth numbers I referenced today will be given in constant currency. The reconciliation to gap numbers is included in our press release. As usual, we have included an investor deck on our website that summarizes the results of the quarter and our updated guidance. For the third quarter of 2023, our total sales increased 11.9%. On an organic basis, revenue grew 11.5%. As a reminder, we anniversary the BioRez acquisition on August 9th. The way our calendar fell, Q3 had two fewer selling days compared to the prior year quarter. For Q3, our sales in the U.S. increased 9.5% versus the prior year quarter, and our international sales grew 15.1%. Worldwide orthopedics revenue grew 6.4% in the third quarter. In the U.S., orthopedic sales grew 1.3%, and internationally, orthopedic sales increased 9.7%. Intubones and Biorez both performed well during the quarter. However, we continue to experience supply constraints on our legacy orthopedic business. In addition to those issues, during Q3, our allograft tissue partner, MTF, informed us of an industry-wide reagent supply disruption that will linger into Q4. Those combined constraints will have an impact on revenue and gross margins in Q4 2023, but we expect supply to continue to improve and be back to normal by the first quarter of 2024. Total worldwide general surgery revenue increased 16.0% in the quarter. U.S. general surgery revenue grew 12.9%, while internationally general surgery revenue increased 23.8%. As Kurt said, the benefit of our diversified portfolio was on full display this quarter, delivering healthy double-digit organic growth for ConMed. Now let's move to the expense side of the income statement. We will discuss expenses and profitability in the third quarter, excluding special items which include charges for acquisitions and contingent consideration, amortization of intangible assets, and amortization of deferred financing fees net of tax. Adjusted gross margin for the third quarter was 55.9%, flat compared to a year ago and 150 basis points better sequentially, consistent with our prior guidance. When we guided Q3, I also projected that Q4 margins should improve again sequentially at least 100 basis points. We still expect sequential improvement in Q4 gross margins, but due to the supply disruptions I just talked about, we now expect that improvement to be less than 100 basis points sequentially, but well above gross margins from Q4 a year ago. We remain committed to having gross margins around 60 percent by the end of 2025. Research and development expense for the third quarter was 4.1% of sales, 50 basis points lower than the prior year quarter. Third quarter adjusted SG&A expenses were 37.7% of sales, consistent with the year ago. On an adjusted basis, interest expense was $8.5 million in the third quarter. The adjusted effective tax rate in Q3 was 20.8%. Taxes came in lower than expected, principally due to finalizing our federal tax returns. We still expect the tax rate to be around 25% going forward. Third quarter GAAP net income was $15.8 million. This compares to GAAP net income of $46.2 million in Q3 of 2022. GAAP earnings per diluted share were 50 cents this quarter compared to $1.48 a year ago. Excluding the impact of special items discussed earlier, in the third quarter, we reported adjusted net income of $28.4 million an increase of 19.5% compared to the third quarter of 2022. Our Q3 adjusted diluted net earnings per share were 90 cents, an increase of 16.9% compared to the prior year quarter. Turning to the balance sheet, our cash balance at the end of the quarter was $30.5 million compared to $27.8 million as of June 30th. Accounts receivable days as of September 30th were 68 days compared to 65 at the end of Q2. Inventory days at quarter end were 215 compared to 200 at June 30th. Long-term debt at the end of the quarter was $942.2 million versus $971.5 million as of June 30th. Our leverage ratio on September 30th was 4.8 times. We continue to expect our leverage ratio to be below 4.25 times by the end of the year. Cash flow provided from operations in the quarter was $46.1 million compared to cash flow from operations of $25.9 million in the third quarter of 2022. Capital expenditures in the third quarter were $5.4 million compared to $6.7 million a year ago. Now let's turn to financial guidance. For the full year, we now expect reported revenue to be between $1.240 billion and $1.260 billion compared to our previous guidance range of $1.230 billion to $1.260 billion, with no material change to the expected currency impact on the year. We expect full-year adjusted EPS in 2023 to be between $3.45 and $3.55 compared to our previous range of $3.40 and $3.55. As Kurt said, we are pleased with the performance through the first nine months and are focused on executing a strong finish to the year. We remain confident in our ability to deliver innovation to our customers while driving above market growth and profitability over the long term. And with that, we'd like to open the call to your questions, and I'll hand it back to Lateef.

Thank you. As a reminder, to ask a question, you will need to press star 1-1 on your telephone if you've not already. To remove yourself from the queue, you may press star 1-1 again. Again, you will be limited to one question and one follow up, then return to the queue. Please stand by while we compile the Q&A roster.

Our first question comes from the line of Vic Chopra of Wells Fargo.

Hey, good afternoon. Thanks for taking the questions, and congrats on a great quarter. I had two. First, maybe in the guidance, you know, just talk about some of the factors that will get you to the low versus the high end of the guidance. And then I had a follow-up, please.

Yes, Vic, we basically kept the high where we had it a quarter ago. We had a small beat on the top. And, you know, as Kurt talked about, kind of all the noise Geopolitically, internationally, we've got this supply disruption that's just marginally more than it was a few months ago. So I think we felt really good about the performance in Q3. I think we still see Q4 largely how we did a quarter ago. And so we brought up the bottom end of the guide, but essentially kept the full year The same just recognizing that the strong performance in q3 brings up the bottom end of that range that we had 90 days ago and On EPS similar, you know, we have some tax benefits in this quarter that helped us We still see the year playing out pretty much like we did again raising the bottom end of the full year guide by a little less than the beat but I think we still feel the year shaping up pretty much the same as we did three months ago and are happy with the performance through the first nine months.

Great. And then my follow-up question, I'm not sure if you said this, but did Buffalo filter and air seal grow over 20% combined in Q3? And just maybe talk about your expectations for the fourth quarter and any color on 2024 if you can. Thank you.

Yeah, well, we're certainly not talking about 2024 today. Let me try and be as clear as I can on this. Buffalo and AeroSeal did very well. Again, we're definitely growing at that 20% range that we've talked about, and we've been doing that all year. We are not going to talk about specific growth product lines in the nature that we have in the past. I'll remind you, we started giving that level of disclosure in the pandemic when there was large uncertainty about how, you know, how ConMed was going to do given our size, given the challenges with the global pandemic. And so we called out those two really strong growth drivers that we felt would be very resistant and durable and sustainable even through the uncertainties of the ups and downs of those years that we went through. So we felt like that was important disclosure at the time. We were accurate and true. And those product lines did provide that level of growth through that period. We have since added more high growth products to the portfolio. And obviously we're focused on all of our portfolio, trying to get it all to grow above market. So this has been a big part of the thesis for the last few years. I would now direct investors' attention to the fact that we're growing double digits organically, half of the last couple quarters, expect to going forward, and we will no longer be talking about specific growth rates of specific product lines as we move into 2024.

Thank you. Our next question comes from Robbie Marcus. of JP Morgan.

Oh, great. Thanks for taking the question. Congrats on a good quarter. Thanks. I wanted to, a less pointy question on the future here, but I know you've talked at least about, you know, about 150 base points gross margin expansion next year, around 250 BIPs in 25 with a path to 60% by the end of 2025, street's a little bit lower than that. So I thought it'd be helpful just to refresh us on the drivers and your confidence levels and how we think about that translating into operating margin expansion, assuming it's even greater than the gross margin. Thanks.

Yeah, you're correct, Robbie. Operating margin would, you know, we expect to get SG&A leverage during that time as well. So operating margin should grow a little better than gross margin. We remained committed to that 60% level and in that kind of timeframe. We'll update more specifically as we give guidance in January. I think that's probably the more relevant time to do any sort of refresh. But to update you on the thesis and why to feel good about that is really the mix of our business, right? All the things that are growing faster and all the product lines that are getting our resources through R&D and through acquisition all come at higher growth than the company average and higher margin than the company average. And so that mixed tailwind is real, has actually been manifesting itself and helped us offset a lot of the inflationary pressures over the last few years. And the logic is that if the cost could stabilize, which we are seeing, then that mixed tailwind that we've actually been experiencing for the last few years will now start to show through in the P&L. And I would just remind you that our latest two acquisitions, Interbones and Biores, both are north of 80% gross margins. And those have been relatively small contributors to that mixed tailwind so far and are only growing in impact and contribution. So as they grow, as the revenue part of that, those businesses grow. So we feel very good about the mixed tailwind of the business, our ability to improve our cost position and have margins approach that 60% level by the end of 2025, as we've said before.

Great. And I haven't been able to check the filings yet. I don't think it's out. But how should we be thinking about free cash flow for this year and beyond? You know, where should it probably end up for 23 going forward? What's the right free cash flow conversion rate to think about, Comet? Thanks a lot.

Yeah, we were so for this year, we guided the year at about we said 130 of operating and and The capex would be around $20 million. So somewhere in that $110 million range, I think, is a reasonable expectation for 2023. And as we move forward, that should grow with earnings, right? So we would expect that just to continue to grow with the growth of the company and maintain that kind of relationship with earnings that we've had.

Thank you. Our next question comes from Rick Wise of Stifel.

Good afternoon to you both. Maybe starting off with the U.S. ortho business and the allograft lack of availability, can you just expand that a little bit? And I'm curious to hear. What happens to the products and the procedures that might have happened? Are they in some way, shape, or form delayed? I mean, so that when you get access to all the product you want, there's a little bit of backlog there. And just how confident are you as you look ahead to the fourth quarter, Curt, that that gets resolved? And you can get back to, I think, you know, sort of mid-teens U.S. ortho growth, right, if I'm looking back historically correctly?

Yeah, so the issue at hand which impacted the entire tissue processing industry was the availability of a reagent that is used in the sterile processing and the overall processing of the tissue. And there was a supply constraint on that, so everybody in the industry felt this constraint. And our current understanding is that will remediate itself sometime in the fourth quarter. The question to the procedures, I don't have a great answer on that one. I think in some cases the procedure can go to a non-allograft donation. It can go to more of a synthetic material donation. The case can be deferred, and I think that's going to be up to the doctor and the individual patient's decision to be made. So how much of that is recoverable? I think there's also a category of procedures that use an alternate available instead of a prime tissue sample. They may have used a little bit different tissue sample and modified it to fit the exact case they needed. Because remember, they're taking dimensions and they're looking for age and characteristics of the donor to match the patient. So they may go a little bit off prime if they felt that was acceptable. So again, each one of those is an individual decision. You know, to the question of our orthopedics business, we feel really good about it. We think the business right now is better than the numbers. In the quarter, we, U.S. orthopedics specifically, got a great taste of growth in the second quarter, and that's where everybody in that category wants to be. We're super excited about what's going on with BioBrace. Just continues to be a really encouraging play for our team, and as I noted, the The expansion of that globally is really important for ConMed Corporation, our patients, and the surgeon community. So we're very excited about what's going on. And beyond MTF, as Todd noted in his opening comments, there were a few supply constraints on just the single-use consumables and implants that delayed our revenue in the quarter. So just working through all that, you know, listening to other earnings calls, kind of non-med tech, and GE and Boeing have supply chain challenges. It doesn't surprise me that our industry is still having some supply chain challenges, and we just have had our head down and been fighting through those over the last 18 months, and we'll continue to do that.

Right. I assume a happier note, earlier this month, California became the 15th state to pass a bill requiring the state to adopt, implement regulations to evacuate and remove which I'm sure you know, and I think those regulations are adopted like June 27, so it's not close at hand. At the same time, they are obviously a huge state. It seems like a big win. Again, is that a big state like that making a decision like that, auger well for a continued 20% plus smoke evacuation? or does it accelerate legislation in other states? Just any high-level pictures, perspectives?

Sure. Great question, and your stats were pretty accurate, Rick. Fifteen states, ten are active, five are pending. The five pending go active anywhere between 2024 and 2027, and those 15 states cover roughly 44% of the population, 37% of the hospitals. And there's six on deck, West Virginia, Massachusetts, Florida, Texas, North Carolina, Pennsylvania. So the trend is favorable in terms of U.S. marketplace and smoke legislation. Our data would say where the legislation is in place, the growth rate is higher. Where the legislation is pending is the next level of growth rate. And where there's no legislation is the lowest level of growth. So a state like California, which also had a unique approach in that they did this through OSHA, whereas most states are doing it through standard legislation, California did it through OSHA. So it probably carries a little bit more gravitas with it. So that is encouraging and certainly was well received by the nurses associations and the state of California and ConMed is watching that, working with that. we'll do everything we can to be a participant in those markets. So I think all of that bodes well for the continued growth of the overall smoke evacuation market.

Thanks for that.

Thank you. Our next question comes from the line of Matt O'Brien of Piper Sandler.

Great. Thanks for taking the questions and my condolences as well to the mission family. The first one is a two-parter, but it's just more clarification, if you wouldn't mind. Kurt, can you be specific on what the impact was from the supply and MTF issues in Q3 and how much it's going to impact Q4, just dollar-wise, you know, in both periods? And then, Todd, you said it. I know you don't want to talk about next year, but you said it. You said double-digit growth is the anticipation for the next several quarters. Does that mean, you know, heading into, 24, that's kind of the level we should be thinking about in terms of comment on the top line.

Matt, I don't think we're going to break out MTF again to Todd's earlier comment. We're not going to get into product line details every time there's an up and a down. I would just point people to the reality that we're in a position today to absorb some of those ups and downs, and I think that's what the third quarter showed, that we could absorb that up and down. You've been around the name for a while. You know there's a period in time where we couldn't absorb that up and down. And in fact, any water that came over the side of the boat would sink us in a quarter. So I'm just thrilled with the ability of the organization to absorb those type of things, including the other supply chain challenges. And on the growth, if you go to slide four of our investor deck, there are four objectives that we lay out for shareholders. And I think This year we have achieved every one of those. And the last one on there is above market growth and leveraged earnings growth. And that's our baseline, above market growth and leveraged earnings growth. And we went back, if I go back to 2018, 2019, we said with the portfolio and our focus on innovation, there would be periods when we thought we could get into double digit growth. And we happen to be enjoying that right now. If we dip down to 9% growth, I don't think we're going to be disappointed. Obviously, we're pushing for as much growth and market capture as we can, and we're in a very good spot right now. So I would answer your question that way. I'm sure Todd would want to jump in here as well.

Yeah, thanks, Matt. Yeah, we've been pretty clear for a while now that we said once we anniversaried the 2022 acquisitions, so Interbones and Biores, that we felt like we should be a double digit organic growth company. And we've delivered on that this year. You know, the one caveat that we've always said with that statement is that assumes a kind of normal, healthy MedTech market, right? So we're not expecting any better than normal from a MedTech market to be able to deliver that. So I would define that as kind of mid single digit. If the market is growing kind of in the mid single digit, that we ought to be able to be a double-digit growth company. So you guys can decide what you think, you know, the market's going to do in 24. But given a healthy, normal MedTech market, as Kurt said, over, you know, anything can happen in a given quarter or so. But, yeah, we see ConMed as a double-digit organic grower given a healthy MedTech market.

Understood. Appreciate that. And then the follow-up question, Todd, you spent a lot of time last quarter going through this on the air seal side of the business specifically, but the company that you're, you know, where air seal is being used frequently now is talking more vocally about getting into smoke evacuation. There's a supplier out there that's talking about having a valveless product. Has anything changed as far as your view of the competitive landscape in terms of having competition specifically for AirSeal being used on the intuitive robot in 24 or 25?

Matt, let me tackle that one. I don't think we could say any more about that topic than what we said on the second quarter call. And sitting here today, our view of the unique features and benefits the depth of clinical validation that the marketplace has done on its own around the offering called AirSeal. We feel is uniquely positioned in the marketplace today, and we don't currently see anything pending to enter the marketplace that we believe would disrupt our position. And in addition, we would just remind everybody that while robotics is an important part of that market, 10x the size is the general laparoscopic market, and we have very good and growing representation in the general laparoscopic market. And in both cases, whether it's in robotics or in laparoscopic, we're replacing standard insufflation, and we feel really good about our offering.

Got it. Thanks so much.

Thank you. Our next question comes from the line of Matt Mattson of Needham and Company.

Yeah, thanks for taking my questions. You know, it looks like your capital growth was pretty strong. I just wanted to see if you had any kind of feel for the kind of environment there with possible capital spending. And then, you know, one of your main competitors, you know, Strikers, launching a new camera and powered instruments and Based on your results, it doesn't look like it's having any sort of impact, but I just wanted to see what your thoughts were there.

I think overall, we still view the capital market as a pretty viable market. We've not seen any material slowdowns. Again, I try to remind people our capital is on the lower end, and it's essential to doing the case. If your power tool is broken, you have to have a replacement repair. or an upgrade, new purchase. Whatever competitor comes into that market when they bring a new product, it does open up evaluations and we try to be present in all of those evaluations and we try to get our fair share and grow our share. Certainly have a lot of respect for our competitors in those marketplaces and what they're doing, but we're out there aggressively trying to show the features and benefits of our products as well. And we've been down this path before. This is a family of products on the power tool side that upgrades every three to five years. On the video side, it's more frequent because of the nature of that technology. But we feel good about our offering right now and had really strong performance, as you noted, in the quarter and internationally had very strong performance on the capital side. So it was great to see.

Okay, thanks. And then just on the 60% gross margin target, you know, the path to getting there over the next two years, I think prior commentary sort of indicated that you expected a bigger increase in 25 than 24. I don't know if you're willing to, you know, give any more detail there, but is it going to be linear or is it going to be more weighted to sort of 2025?

You're correct, Mike. When we talked about that back in January, I was a little more conservative in 24 than 25. The logic just being, again, a big part of that is simply the cost side of the equation stabilizing. And I was planning on just a little bit of recovery from the inflation period. So I'll remind you that our math says that we digested 400 basis points of inflation in during the pandemic from a combination of freight, labor, and materials. I'm only counting on about 100 basis points of that coming back. So I don't really ever expect to get back to 2019 index costs. And in my assumptions, when we talked about that at the beginning of this year, I would have had that 100 basis points of relief from the inflation side occurring in 2025. So I think that was conservative in that assumption. So yes, that's a long way to say we do expect the margin tailwind to pick up as we move from 2024 to 2025. Okay, got it. Thank you.

Thank you. Our next question comes from Kristen Stewart of CL King.

Hi, thanks for taking my question. Todd, I was wondering if you've done the math on the two fewer selling days and what that was the impact on the quarter?

So, you know, normally it's one in one direction or the other, right? And we always, when it's one, we say we use 100 to 150 basis points. The math would be a little more than that, Kristen. Our quarters are usually either 62 or 64 days, somewhere in that range, right? So if you take a day on 64 or a day on 62, you'll get more than 100 to 150 basis points. I think we're a little conservative on that just because you know, there's an extra holiday. Surgeons kind of work around that. And it's complicated because you've got every geography in the world with their own calendars. And so we always think it's, you know, I think we're a little conservative when it comes to taking credit for a day that didn't happen, right? Kurt and I are both a little uncomfortable trying to be too precise with an adjusted number when it's theoretical. And so then when you add in this quarter where it rounds to two days across all the geographies and how it all adds up, I think we, you know, again, I think what I'd tell you is when we talk about one day, we say 100 to 150. When it gets to two days, I'd probably add a little more fudge factor because I do think that hospitals and physicians do kind of adjust their schedule around holidays and disruptions and things like that. So I think things do get done generally in the quarter that they would have gotten done. But obviously more sales days is better than less and the opposite is true. So I think that's as much help as I can give you. We would never get too precise on a sales growth number you should actually use or think about when it's kind of theoretical.

Okay, that's helpful. And then just a big picture question that's been talked a lot about by other companies, but can you guys give us your thoughts on GLP-1s and any potential impact on your business?

Certainly a widely discussed and debated topic, and I look at the specialties that we service, and I just don't see it having a material impact on us. I honestly think over time, You could have large BMI patients who lose body mass and become more active and they wind up as sports medicine candidates. We are in the GI space, but we're in therapeutic GI. Those cases don't change whether you're large or thin. Our advanced surgery case load is, you know, you're still having gallbladder removals. whether you're you're large or thin so i i just don't see it impacting us uh maybe on the margins and maybe over time but it's not going to be a light switch event based on my estimates um i i think that's just how i see it right now okay thanks very much i i don't want to be naive to the topic but i i just talking with various people i just don't see the impact

Thank you. Our next question comes from the line of Carolyn Hudson of Bank of America.

Yes. Hi there. This is Carolyn on for Travis. Thanks for taking my question. One for me on FX. I afraid to stay where they are today. Just how should we think about where to dial in FX for next year on revenue margins, EPS? Thank you.

Yeah, thanks, Carolyn. I'm sure that's a question everybody would like an answer to. We're going to talk about it in January. I'm not nearly as concerned about it this time this year as I was last year. I think last year it was a bigger issue for us, and so I don't think it's as big of an issue as we go into 2024, but I'm not going to get any more granular. We need to roll up our plans and buy geography and do all that work before we get any more prescriptive on 2024 impact of FX. But appreciate the question, and you're not the only one that has it, I'm sure.

I would now like to turn the conference back to Kurt Hartman for closing remarks.

All right. Thank you, Lateef. And I want to thank everybody on the call today for your time, and we look forward to speaking with you on our next earnings call. Thank you, and good evening.

this concludes today's conference call thank you for participating you may now disconnect