Hamilton Thorne Ltd.

Welcome to the Hamilton Thorne First Quarter 2024 Earnings Conference Call. Before turning the call over to your host today, please be reminded of our standard public company policy on forward-looking information and use of non-IFRS measures. Certain information presented or otherwise discussed on this call may contain forward-looking statements. These statements may involve, but are not limited to, comments relating to strategies, expectations, planned operations, product announcements, scientific advances, or future actions. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Should one or more risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance, or achievements could vary materially from those expressed or implied by these forward-looking statements. These factors should be considered carefully, and prospective investors and other parties should not place undue reliance on these forward-looking statements. The company assumes no obligation to update such forward-looking statements or to update the reasons why actual results could differ from those reflected in the forward-looking statements, unless and until required by securities laws applicable to the company. Additional information identifying risks and uncertainties is contained in filings by the company with the Canadian securities regulators, including, without limitation, the company's management discussion and analysis for the quarter and 12 months ended December 31, 2023, which filings are available under the company's profile at www.cedar.com. During this call, the company may reference adjusted EBITDA, constant currency, and organic growth, As non-IFRS measures, which are used by management as measures of financial performance, please see the section entitled Use of Non-IFRS Measures and Results of Operations in the Company's Management Discussion and Analysis for the periods covered for further information and a reconciliation of adjusted EBITDA to net income. Now, let me turn the call over to Hamilton Thorne's Chief Executive Officer, Dr. Kate Torchland.

Thank you. Good morning, everyone, and welcome to the Hamilton Thorne Limited First Quarter 2024 Earnings Conference Call. I also would like to introduce Francesco Fragasso, our Chief Financial Officer, who is on the call with me. This morning's call will have the following format. First, I will provide a summary of results for the quarter ended March 31, 2024, with a focus on our sales, markets, and operational performance. Francesco will follow with a more detailed discussion of our financial results for the period, as well as a review of our financial position and liquidity. I will then return to provide a few comments on our outlook for the remainder of the year. Before I go into quarter results, I would like to briefly reflect on my first almost full quarter as Hamilton Thorne's CEO. Since joining the company in January, I continue to be very impressed by the dedication of our talented colleagues to supporting our customers with best-in-class products and services, and our team's commitment to improving the field of infertility treatment and playing our part in helping millions of families globally fulfill their dream of having a baby. I have focused intensely on further strengthening our performance and execution and on ensuring that we continue to leverage our strengths as a premier innovator, manufacturer, and marketer of important products for IVF art laboratories and adjacent markets while accelerating operating efficiencies and driving profitable growth. Our leadership team has also been driving important work to update five-year strategic growth plan. Our vision is to continue to build Hamilton Thorne into a premier company serving IVF art markets. And in the coming months, we will further fine-tune our strategy and priorities in products, regions, and investments. We look forward to socializing this plan with our investors during an investor day that we're planning for September 12, 2024, with more details to be announced shortly. Now, moving to our sales results for the quarter. I am delighted to report that first quarter of 2024 was another record quarter for Hamilton Thorne Limited. Sales were $19.4 million for the quarter on the high end of the guidance that we have previously shared, and EBITDA was 18% of sales in line with guidance. Q1 continued the positive growth momentum with sales up 16% overall and 15% on a constant currency basis. Organic sales growth was approximately 9% for the quarter. Sales increased primarily due to the addition of genetics to our business, a return to more normalized operations as compared to supply chain issues affecting results in the previous year, and the continued growth in most of our regions. Gross profit for the quarter increased 20% or $1.3 million to the total of $9.2 million due to sales growth and product mix. Gross profit as a percentage of sales was 52.4% compared to 50.6% in the prior year period due to the addition of consumable sales of genetics and additional direct sales partially offset by increased sales of low-margin third-party products. EBITDA margin improved to 18% of sales compared to the same quarter of 2023, representing growth of 24% and outpacing our top-line sales growth. EBITDA growth was driven by increased sales and operating leverage from a combination of expense control and scale, and despite continued investment in our business. Overall, in Q1 2024, we made a good step towards delivering on our strategy of increasing contribution of consumables, software, and services to our revenue mix. Sales from this category were higher as percent of sales as compared to the same period of 2024. That category were up 19% for Q1 compared to last year quarter and outpacing the company's overall growth. Sales of equipment was 13% higher than last year quarter as well. On a geographic basis, Asia-Pacific region outside of China was our strongest growth region in the first quarter, followed by America. While sales in China have stabilized, the company continues to face the challenge of selling equipment due to several factors, including macroeconomic environment, enforcement of buy China policies, combined with emergence of local competition and delay in regulatory clearance. on several of our products. Europe remains our largest sales region and continues to contribute strongly to our overall growth. I will now turn the call over to the panel discussion on the numbers.

Thank you, Kate. Good morning, everyone. I'm Francesco Fragasso, CFO at Hamilton Thorne. I will briefly highlight the first quarter 2024 financial results. Kate has already provided an update on sales and gross profit, so I will focus on other elements of the income statement, as well as cash flow and liquidity of the company. During the first three months of 2024, operating expenses, excluding expenses related to acquisition and M&A activities, were 9.5 million, an increase of 2 million, or 27%, over the same period of 2023. Of this increase, $0.3 million was due to the addition of genetics expenses and the FX effect on our cost. $0.8 million was due to increased depreciation and amortization associated to the assets acquired with the acquisitions and investment we made in expanding capacity. while the remaining 0.9 million or 11% increase of the operating expenses was related to the investment in SAFE and other personnel to support growth. The global inflationary situation that impacted our cost of goods sold and personnel costs during 2023 continued to a somewhat lesser extent in 2024, contributing to the increase of operating expenses. Increase in operating expense were in line with our expectations, with expenses growing to a lower rate than the growth of sales. Net interest expense in Q1 2024 increased by $250,000 to $525,000 due to the additional term loan incurred to finance genetic acquisition in October 2023. and the higher use of a bank line of credit to fund working capital, partially offset by the repayment of outstanding principal on term loans. Income tax expense increased to 373,000 tax expense for the first quarter of 2024, compared to 104,000 tax expense in the same quarter of last year. primarily due to the mix of income and tax rate between foreign and U.S. states in the first quarter of this year versus the same period of 2023, net of the increase in deferred income tax recovery of $212,000 in Q1 of 2024 compared to a deferred income tax recovery of $123,000 in the same period of 2023. The change in deferred taxes relate to the temporary differences between income tax value and the carrying value of assets and liabilities. Net loss for the first quarter of 2024 was $936,000 compared to a net income of $77,000 in the prior year quarter. This is primarily due to increased operating expenses, including M&A and other non-recurring expenses, and increased interest and income tax expense, partially offset by increased sales and gross profit. Adjusted EBITDA, which we consider an important metric of our financial performance, increased by 24% to 3.5 million for the first quarter of 2024 versus 2.8 million in the prior year quarter, reflecting growth, improved gross profit margin, and increased operating leverage. As a reminder, adjusted EBITDA is a non-IFRS measure, so please see the reconciliation of adjusted EBITDA to net income for the quarter in our MD&A report filed today on both SEDAR and our website. Turning now to the company cash flow and balance sheet. The company cash balance at the end of March 2024 was $7.5 million, compared to $9.7 million at the end of 2023, a decrease of $2.2 million. The decrease in cash balance was primarily due to the loss of the period, scheduled debt repayments, and cash use for capital expenditure and product development costs. The company generated cash from operation of 648,000 in the first three months of 2024 compared to 525,000 cash used in operation in the same period of 2023. The increase of 1.2 million is primarily due to improved working capital management, partially offset by the net loss of the first quarter of 2024 versus the net profit in the prior year quarter. In Q1 2024, cash used in investing activity was $1.9 million. Of this, $1.7 million is related to the expenditure in PP&E and for ongoing investment in capitalizing tangible of product development activities. Cash used in financing activities was $767,000 for the first three months of 2024. Those were mainly related to payment of scheduled term loans and lease obligations and increased use of the company working capital line of credit. Note payables and term loans outstanding total 21 million at the end of March 2024 equal to 1.6x the 12 trailing months adjusted EBITDA or 1x if we consider the available cash deposit at the end of March 2024. At the end of Q1 2024, the company has a strong liquidity position of $12 million, including $7.5 million in available cash and $4.5 million in unused borrowing capacity. With cash on hand and unused line of credit and further debt capacity, we are well positioned to continue to execute our M&A program while funding our expected growth. I will now turn the call back over to Kate to comment on the 2024 outlook.

Thank you, Francesco. As we look ahead, we believe that our company is in a strong position as demand for our products and services remains solid and growth trends in our industry continue to be strong. We are on track to achieve double-digit organic growth in 2024, continuing through the longer term. We confirmed the guidance for the full year to be between $78 and $82 million in revenue equivalent to 10% to 15% organic growth and adjusted EBITDA margin in 19.5% to 20.5% range. Please note that while we expect to continue to make acquisitions, since the size and timing of those are hard to predict, we have not included any future acquisitions in our guidance. In 2023, we made significant investments in our operations to facilitate long-term growth. Management is committed to EBITDA margin expansion, and we anticipate tighter operating expenses control in 2024 while continuing to leverage our larger scale. Cash flow is expected to improve as the investment is expanded. in expanding capacity and other capital investments has been completed. And we're managing inventory tightly, as Francesco mentioned, throughout this year. We have an extensive pipeline and are actively working on multiple acquisition opportunities. With significant cash on hand and our unused line of credit and further debt capacity, we believe we're well positioned to continue to execute on the acquisition program. In summary, we feel extremely positive about our market position and are confident in our team's ability to execute on the strategy and to drive long-term growth and everyday expansion by investing in our organic growth while building scale, enhancing our product offering, expanding our geographic and direct sales footprint through acquisitions and organically. I'm confident in our team's ability to create a robust future for our company and to contribute improvements in the field of infertility treatment, helping millions of families globally to fulfill their dreams of having a baby. We will now open the line for questions, and then at the end, I'll come back with brief closing remarks. So, operator, thank you. I think we can move on to questions.

We will now begin the question and answer session. To ask a question, you may press star, then one, on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw it, please press star, then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Kyle McPhee of Cormac Securities. Please go ahead.

Hi, everyone. Good quarter. Nice to see you delivering exactly as guided. I have some higher-level questions, starting with, Many of your acquisitions in recent years have come with direct sales infrastructure, creating that opportunity to displace third-party distributors that you've historically used in those regions and internalize that margin. I think that was definitely the case with Planar, TechEvent, IVF Tech, MicropTec. So at a high level, where is Hamilton Thorne in that process of exploiting this channel opportunity? Is it done, close to done, or is there still a lot of margin upside left with this specific opportunity?

Kyle, thank you for the question. So I think we are generally well underway, but probably not done, right? And so I think every acquisition and the latest that we made was not an exception. It comes... with some direct footprint as well as substantial distribution, right? Many of the businesses that we acquire, they happen to be direct in a particular region and then they have distribution network everywhere else. And so that's when the work begins, right? To first convert the areas where they are through distributors to our direct channel where we have it. as well as leverage the direct sales that were acquired in a particular country to put more of our other products into the bags. And so I think that typically takes, to really work through that, especially with existing contracts, with existing distributors and so on, I think it takes you know, months or a couple of years, right, before it's all said and done. But that's absolutely the direction that we take. And to your point, that has contributed to margin expansion from those acquisitions.

Got it. Thanks for that, Culler. And then beyond this channel shift opportunity, I think past M&A also opened a lot of cross-selling opportunities. You know, where is Hamilton Thorne in that process of optimizing acquisitions? share of wallet for the labs you already have direct reach into? Is there still a lot of upside left with this opportunity related to the current portfolio of offerings you have?

Yeah, thank you. So absolutely we believe that there is continued opportunity. I think generally From my experience, commercial execution and commercial excellence is one area you can never rest on your laurels, and there is always more to do in terms of expanding the reach and building out the organization, ensuring that the organization is as strong and as well-trained and as well-performing as it can be, ensuring that product portfolio gives really complete as complete as possible, right back to our salespeople when they go and call on the lab. So I think we're kind of consistently building it and then we'll also continue to raise, I would say, the bar on the overall performance and execution as well in the coming months and quarters.

Got it. And Kate, maybe you can draw on your experience in past roles at Thermo Fisher, but does this cross-selling opportunity which results in market share gains, is this a process that gets easier as your portfolio of offerings increases? Or in other words, is there increasing returns on cross-selling efforts as your portfolio grows?

Yes, thank you. And obviously I've been for many years before joining Hamilton Thorne with a company, right, Thermo Fisher, as you mentioned, that I think did really excellent execution and demonstration on how the broad portfolio actually helps you and creates kind of a snowball effect, right, of helping you build bigger and bigger company that is more and more meaningful partner to your customers. So I think that's our strategy, and we absolutely believe that it will continue to create additional upside, right, just to give a couple of examples. In our field, while it's different region by region, there is definitely dynamic in some regions to form more of a larger kind of chains of clinics. And as they form and their purchasing behavior will start evolving to some extent, the more meaningful partner Hamilton Thorne is with more products that they can buy in a meaningful way for us, the stronger our position will be. Another really important benefit from having a broad portfolio as opposed to just a couple of product lines is our commercial team has multiple reasons every week to call on customers. There is always something else to talk to customers about or come in to service the equipment and start talking about consumables during this visit or come two weeks late and talk about incubators and workstations and so on. So that is really, really important from just in the field execution for commercial people to have that chance that only comes with broader portfolio. And again, that's what we're deliberately building and hoping to keep, you know, seeing the benefit of it going forward.

Okay. Thank you for all that explanation. I'll pass the line.

The next question comes from David Martin of Bloom Burton. Please go ahead.

Good morning, Kate and Francesco. You mentioned the expanded capacity, and I'm wondering, were you capacity-constrained before this work was done, and should we now see strong growth effect as the capacity constraint is relieved? And also, will this ultimately be a lower-cost infrastructure?

Thank you for your question. We were not really constrained, but we would have been this year if we didn't expand our capacity. If you remember, I mentioned this in prior calls, our expansion was related to our German operation, where it's mainly consumable. So there is a lot of warehousing that enables growing that type of business. but we increase also our manufacturing capacity in UK and United States. So today, we have not been penalized in the past, but we would have been this year if we didn't do this expansion. And of course, with this expansion, come also an upgrade, an improvement of those processes. So, We expect to be more efficient, which eventually will result in a lower cost of manufacturing and logistics.

Okay, great. You mentioned the items that contributed to the increased OPEX, and I'm wondering, were they transient in Q1 and they should go away? And, you know, where do you expect the OpEx to be, the OpEx level to be for the remainder of the year?

So overall for, you know, the remainder of the year, we will reconfirm our guidance. You know, the current quarter is in line with our plan. We will see an increase in operating expenses as we saw in Q1, but as expected and planned, this will be less than proportionally to the increase of sales and profitability and gross profit. Now, I broke down the overall increase, spelling out that out of the $2 million increase in Q1 2024 compared to Q1 2023, there was, and these exclude M&A activity and non-recurring, there was about $800,000 of increased DNA expenses that were related to amortizing the asset we acquired with the acquisition, especially with the last two acquisitions. So let's say the true increase due to M&A Supporting growth, adding employee and investing in marketing and sales has been really $900,000 or 11% if we compare it to Q1 2023. Okay.

And the M&A expense, even though the M&A occurred in Q4 and carried into Q1, will it carry through to further quarters or is that for this transaction ended now?

But the M&A activity includes not only the direct expense related to the acquisition that we consume, but it's also related to building the pipeline and, you know, working on... And diligence and... Diligence on deal that might not close or we will announce when they close. You know that M&A is one of the key aspects of our strategy, so we are constantly working on opportunity. So I will not say that the acquisition we consume are really the driver of that expense. is probably more the work that is done before in terms of building pipeline, running due diligence, and the work related to M&A.

Okay, got it. One last question. The organic growth is 9% in Q1, but your guidance is to 10% to 15% for the year. Are there specific catalysts ahead that you see to move it up into that range?

Yeah, I think some of it is kind of general acceleration as we see in several kind of timing of when we think different capital purchases as well as expansion of penetration with our consumables will occur. So there is not specific like one event that will contribute or drive that.

Also, David, as you know, the organic growth is a function of the prior year quarterly profile. If you look at 2023, the first quarter in terms of revenue was actually higher than Q2 and Q3. So we confirm guidance because there is overall for the year the plan to achieve that organic growth.

Okay, thanks.

Thank you, David.

Our next question comes from Justin Keywood of Stiefel. Please go ahead.

Good morning. Thanks for taking my call. Just by geography, are you able to comment on the growth rates that you're seeing? I know there was some headwinds cited in Asia Pacific last quarter.

Yeah, thank you, Justin. So we're not, I think, releasing specific dates, but I would like to reiterate. So Asia-Pacific outside of China, we saw a very strong, like, high double-digit growth. So I would say that's in relative terms our highest kind of growing region, at least in Q1. China is kind of... and then in absolute dollars contributing to our growth Europe remains our largest region and so we're seeing some good traction there and then I'd say America is coming in somewhere in between so between Asia Pacific and Europe and we'll start I think also The question probably delineating a little bit more Asia-Pacific outside of China and then China so that the dynamic is clear. But I think we're seeing really good growth in that region overall.

Thank you. That's helpful. And then on the reaffirming the EBITDA margin for the year at 20% midpoint versus 18% that was recorded this quarter, what's the bridge look like as we progress through 2024? Should we see that margin lift in Q2, or is it going to be more back-end weighted?

Historically, there is some seasonality in our business, so we always expect... Q4 to be the best performing quarter, and EBITDA will reflect that as well.

There was comments last quarter that Q1 would be the margin low for the year. Is that still consistent?

Yeah, it's been lower than the full year, so lowering Q1 is lowering the average. We expect the second half of the year, as historically has been happening, to be better than the first half from sales and from profitability point of view.

Maybe just one follow-up. Any significant headwinds in Q2 to note?

We don't see anything different than Q1 at this stage. I will let also Kate elaborate if we see any headwind in Q2 compared to Q1.

Thank you for taking my questions.

Okay, thank you, Justin.

The next question comes from Devin Schilling of Ventum Fin. Please, go ahead.

Hi, good morning. Maybe if you can just comment here on your inventory levels. It looks like Q1 is down a bit from year-end. Are you guys happy with these levels now, or is there still room to further decrease given that supply chains have normalized here?

Yes. On inventory, we've been expecting that normalization for a couple of quarters now. The expectation was that after COVID, the situation was normalizing. As we know, it didn't because supply chain never went back. to COVID situation. So some supplier increased their lead time, some component were no longer available or available in the quantity we needed. So now we anticipate the inventory level to be to more normal. We always work in reducing it and improving our efficiency in managing that asset. So the trend is, let's say, not to increase proportionally to the growth of the business because that is another aspect. As we grow the business, the working capital will grow. Our goal is to minimize that growth.

Perfect. That sounds good. That's very helpful. Thank you so much. The next question comes from Tanya Armstrong-Whitworth of Canaccord Genuity.

Please go ahead.

Good morning and thanks for taking my questions. First off, just kind of following on David's previous question, I'm wondering how you expect those inflationary headwinds that you referenced to trend over the remainder of 2024 to get to that kind of 20%, even a margin guide, will they gradually decrease to nil by Q4 or will they kind of persist into, are you expecting they persist into potentially 2025?

We always compare to the prior year period. So, you know, in 2004, in Q1, we noticed an increase in pricing. It is going to probably converge to zero toward the rest of 2024. But, you know, at this point, we don't expect major change going forward other than what we've been experiencing in Q1, again, compared to last year. Even last year, the inflationary effect has been at some point stabilizing. So as we go into the following quarters, that inflation effect should reduce to zero by the end of the year.

Okay, perfect. That's helpful. And then that small expense, I think it was about $200,000 related to the new European medical device regulations. How do you expect that to trend for the rest of the year? Will that also come down?

I think, and then I'll let Kate elaborate, I think the deadline is 2026. The largest portion of that work has been completed, so we should see that going down, at least from an adjustment point of view, meaning the non-recurring aspect of registering the product should be smaller and smaller going forward, and then will be just the regular maintenance that we will not be adjusting in the EBITDA.

Yeah, no, I think that's correct. I think a lot of hard work and the bulk of it kind of probably is getting behind that, but it will be an ongoing expense up until we're done with the full portfolio and then maintenance. I mean, that's one thing just to put out there. So I think regulatory generally is something that... is increasing right across most countries as far as the expectation and we continue to be in decent shape but it's ongoing expense.

Okay, and then if I may just following one of Justin's questions as well. As it relates to China, you mentioned that it was relatively stable. Could you maybe clarify is that year over year or sequentially stable? Given you had really good growth in the Asia-Pacific region, even ex-China, could you speak to maybe the specific geographies in Asia-Pac that are contributing to this outsized growth?

I think China has stabilized both sequentially and compared to prior year periods. overall in Asia-Pacific region outside of China. Multiple countries are growing, right? There are not really huge markets there, so it's really a combination, but we're seeing good growth in Japan, we're seeing good growth in Australia, we're seeing good growth in Vietnam, in Thailand, just generally. There is a big... Congress, like IVF trade show later this month in Philippines, where a big part of our management team and commercial in the region will be there, myself included. So I think we just continue to see really good momentum in the region.

Okay. Thank you. I'll leave it there.

Thank you.

Our next question comes from Kyle McPhee of Cormac Securities. Please go ahead.

Hello again. Just on CapEx, including capitalized R&D, it looks like you've already spent about two-thirds of the full year budget exiting Q1s. So am I thinking about this right? Your CapEx spend is going to really thin out the rest of the year and free cash flow goes up?

Yes, that is correct. In our MD&A, we reconfirmed that the overall plan is to have a $2.6 million capitalization of PP&E and product development. That is still the plan. It was expected to be front-loaded. There were a few specific items that we invested in Q1. I can be more specific. There was an upgrade of lab infrastructure in our in one of our business unit this was a planned activity and also we made some investment in demo unit to accelerate on direct sales so our sales people can demonstrate the product in workshop and other you know face-to-face situation with the customer got it okay thanks for those details and then

In terms of continuing to build the portfolio of offerings you have available for sale into the labs to drive those benefits with margins and strategic positioning, how many more holes are left to be filled? Maybe we can look at this question from the angle of what percent of lab spend can you already address with your current portfolio to give us an idea of how much more synergistic M&A runway is left.

So I think, Kyle, thank you. It's a very interesting and very relevant question, right? So at the macro level, right, we're about 5%. Our revenue is about 5% of the overall segment of IVF lab supplies. So there is a lot of room for growth, right? That comes to your point both from share gain in the existing account with... the more we have in our portfolio, as well as, very importantly, winning new customers, because that's also a really big part and really big focus, right, of what we're going after. That being said, in the existing, I would say, customers, we look at our portfolio, we probably touch... many, many, many categories of where they would be spending the money. We do still continue to have gaps, right? But we touch quite a few categories. And as we think about continue rounding portfolio, it's both to you know, ensure that we touch every category, but also to ensure that we actually have, and I'll give examples, multiple offerings within each category. Like if I look at incubators, something that is a workhorse in every infertility lab, that's where embryos are stored and so on. nurtured, there are multiple types of incubators that every lab would use. And so we're very strong in some, we have some gaps in others. So in that category, there is more to do. Our semen analysis system is where we're probably one of the leading companies globally with semen analysis systems. We already have several in our portfolio because some labs want fully automated high throughput systems, some labs want cheaper, little bit more manual systems. Animal reproduction has slightly different needs that we're meeting with yet another system. So there is a lot to do within each product category as well, if that makes sense. So we continue to be very bullish and continue to nurture very long tail of opportunities. for expansion.

Okay. Thank you for all that color, Kate. That's it for me.

Thank you. This concludes our question and answer session.

I would like to turn the call back over to Kate Torchland for closing remarks.

Thank you, and thank you, everyone, for joining and for questions. So before I go into closing remarks, I just want to get to maybe like put a little bit of a final print on the discussion we had about how we see the rest of the year going, right, as Francesco and I were expressing. So we're reconfirming our guidance. We're very excited. We're quite bullish on the year and double-digit growth and continued margin expansion. That being said, we do expect second half of the year to be stronger than the first half of the year. And so it's regional dynamics and purchasing patterns of our customers and our kind of commercial execution ramping up, including benefits from recent acquisitions and so on. So we are reconfirming the guidance. We'll continue, obviously, to talk about our results every quarter. But second half, we see it currently as being stronger compared to the first half. So with that, I would like to kind of close the call, and I would like to reiterate my sincere gratitude to all of our Hamilton Thorne employees for the great work that they do and their dedication to our business and to our customers, and also my gratitude to our business partners and shareholders for the support they have shown our company. We also encourage you to go to our website, hamiltonthorne.ltd, for more information on Hamilton Thorne's products, initiatives, and further investor information. Thank you.

Thank you.

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