Q2 2020 Earnings Call
After the speakers presentation, there will be a question and answer session.
Ask a question during the session you want me to press Star one on your telephone.
If you require any further assistance. Please press star zero. Thank you I would now like to end the conference over to your Speaker today, Richard Johnson Chief Financial Officer. Please go ahead.
Well, thank you operator, and good morning, everyone and welcome to the Fibra animal Health earnings call.
Our second quarter ended December 2019.
On the call today, our Jack Bendheim, our Chief Executive Officer, and myself, Richard Johnson, though I'm, the Chief Financial Officer will provide an overview of our quarterly results and then we'll open the line for your questions.
Before we begin let remind you that the earnings press release and financial tables can be found on the investor section of our website at P.H.C. Dot Com. We're also providing a simultaneous webcast of this morning's call, which can be accessed on the webcast website as well today's presentation slides and a replay and transcript.
The call will also be available on the website later today.
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.
Refer you to the forward looking statements section on our earnings press release.
Our remarks today also include references to certain financial measures, which were not prepared in accordance with generally accepted accounting principles or U.S. gap I refer you to the non-GAAP financial information section on our earnings press release for a 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 press release.
Before we get into the numbers, we want to remind everyone that we present our results on a GAAP basis and on an adjusted basis, we presented adjusted results that exclude.
Acquisition related items unusual non operational or nonrecurring items, including stock based compensation and restructuring costs. Other income expenses separately reported in the consolidated statement of operations, including for example, foreign currency gains and losses.
And the income tax effects related to any pre tax adjustments plus a unusual or non recurring income tax items.
So first year as Jack Bendheim with some introductory comments.
Thanks, Dave and thank you everyone for joining today.
Im quite pleased that our core animal health segment, we tend to grow this past quarter, China's issues and notwithstanding our vaccines and nutritional specialties product group, so double digit growth in the quarter WAM as expected our MF and other performance was down 1% versus last year, driven by China I.
Effect on animal health segment to continue to show growth for the remainder this fiscal year. Just two examples we are seeing very strong demand for our popi vaccines in many international regions and the imminent launch of our next generation homage and product look to take advantage of the improving dairy market.
As we have guided I sales kind of ran is accompanied by increased spend as we look to position ourselves for the years ahead. This strategic growth initiatives. We are undertaking that producing results. Just two examples I've just returned from the IBP the annual Pokey trade show in Atlanta.
I can say without an exaggeration that are biotech vaccination devices is one of the major innovations presented at the show.
We an integrated from around the world signing up a trial. This trial that began a few months ago and going exceedingly well and we have already signed up our first customers.
I'm very confident project will meaningfully enhance our revenue and EBITDA beginning in our next fiscal year, perhaps even more important. It is clear that produces that are introduced a five there have you got to understand fiber was one of the market leaders and animal health technology.
This is critical as well as we rollout poultry vaccine to additional countries in South America and Asia.
I am seemingly similarly encouraged by that progress, we're making but it began to our first foray into the U.S. pet market.
We have begun rolling out magenta nationwide and today, we are in more than 500 vet clinics.
We are working closely with our distribution partner, which allowing us to limit our fixed expenses as we enter this is extremely competitive market.
Were receiving tremendous feedback both directly or indirectly from social media and I'm excited to see how continued advancement here.
Finally, we continue to make headway on our vaccine against African swine fever.
To date, the Corona virus outbreak has not affected our efforts, but this could change of the virus remains on checks in the months ahead, we expect to trial. Our initial candidate unpaved later this spring.
Let me know delayed due to the Corona buyer I will likely not has significant uptake by next quarter on this project, but certainly expect to have some resolve to share on this initial candidate later this year with that I look forward to your questions at the conclusion of the presentation and I'll now hand, it back to date.
Thanks Jack.
[noise] 19 quarter I'm looking at page five of the presentation consolidated sales were $214 million for the quarter that was a 2% decline versus the same quarter.
Our last year.
Increase sales in the animal health segment, where more than offset by.
Lower average selling prices and mineral nutrition, and a slightly decreased volume and performance products.
The increase in animal health sales was driven by our nutritional specialties and vaccine prop products, partially offset by lower sales of my phase and others will get into further details regarding segment results later in the presentation.
On a reported basis net income of 11.9 million declined $2.9 million due to increased operating expenses.
Including increased costs for strategic investments.
As well as increased interest expense from higher level of debt outstanding.
Partially offset by improved gross profit driven by product mix.
On an earnings for share basis diluted EPS was 29 cents per share for the current quarter and that was seven cents per share below the same quarter last year. So now let's look at adjusted results on.
The following page.
Net sales overall as I said declined about $4 million all the discuss the change in net sales in more detail at the individual segment level overall adjusted gross profit increased.
Almost a million dollars or 1% compared to the prior year.
Our animal health volume growth and nutritional specialties and vaccines.
Was partially offset by reduced volumes and MSR phase and others.
Mineral nutrition gross profit decreased as average selling prices and unfavorable product mix more than offset lower raw material costs.
And in performance products gross profit decreased due to reduced volumes of partially offset by favorable product mix.
Operating expenses overall or as we refer to them as selling general and administrative SG M&A increased $4.4 million or 10% driven by spending on strategic investments in key development projects to position ourselves for future growth.
In addition, the effects of the recent acquisition of the Osprey business.
Our adjusted net interest expense increased about $300000 on higher debt level quarter over quarter.
And from an adjusted income tax perspective, our effective tax rate for the current quarter was 28% as compared to 29% last year.
Looking more closely at the animal health business net sales of 100, and almost $144 million increased about $4 million or 3% compared to the prior year.
And that phase and other sales declined $1 million or 1%.
Increased us demand was more than offset by lower volumes in China due to the effects of African swine fever.
Yeah in the quarter, our customers in China did make some purchases at the end of the current quarter in advance of regulatory changes that became effective January one 2020.
In the nutritional specialties area net sales were $33 million in the quarter, an increase of $3.6 million or 12%.
The recent Osprey acquisition accounted for approximately two thirds of the sales growth in that category.
We also experienced organic volume growth in our us dairy and poultry businesses, which was partially offset by of timing the sales in certain international markets.
The increase in the domestic poultry segment was driven by the introduction of new product, probably a prime a direct fed microbial product that helps optimize the gut microbiome in poultry for improved health immunity and productivity.
Thanks seen that sales of.
$18.7 million increased $1.6 million or 10% from last year, driven by strong international demand and increased market penetration.
For the segment adjusted EBITDA was $33.8 million and that was a decrease of about $2 million or 6%, primarily due to increase SG M&A costs, partially offset by.
The sales growth and increased gross profit.
The SG in a increase was due to the investment in strategic Indra state investment in strategic growth initiatives and also the effect of the Osprey acquisition.
And now looking at our other segments mineral nutrition net sales were $55.7 million in the quarter and that was a decline on the topline the $6.6 million or 11%. The decline was fundamentally due to lower average selling prices as related to.
Correlated with the movement of underlying raw material costs. We also saw a slightly lower volumes this year compared with last year.
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From a gross profit perspective the.
The decline in.
The decline in.
And.
Sorry.
So overall.
At the bottom line mineral nutrition reported $3.7 million adjusted EBITDA that was a 400000 dollar decline.
Compared to the same quarter last year.
Performance products net sales of $14.6 million decline.
$1.7 million or 10%.
We saw some volume declines and copper based products.
With a partial offset from continued growth in ingredients for personal care products segment EBITDA declined decreased slightly by about $100000 corporate expenses were $10.5 million that was a increase of $600000 overlap.
Last year again, primarily due to increased cost of strategic initiatives and in addition.
Increased investment in public company costs.
Looking at our capitalization.
Our gross leverage ratio of of debt to adjusted EBITDA was 3.6 times at the end of December.
$374 million total debt than on a trailing 12 month basis $105 million of adjusted EBITDA, We had 75 million of cash and short term investments on hand on the balance sheet at quarter end.
So on a net leverage basis that gave us a net leverage of just under three times, we had a strong cash flow month in the quarter, we generated $23 million source of cash.
In the quarter before financing and excluding changes in short term investments.
And we updated our guidance for our full fiscal year.
Really just.
Not not major changes to our guidance.
At the key adjusted EBITDA line, we kept that.
That level unchanged at 103 to 107 million of EBITDA for the full year.
On the net sales level, we brought down overall consolidated net sales expectations, reflecting lower pricing in the mineral nutrition business primarily.
Which was which was correlated related to the underlying raw material costs. We also tightened the range on our animal health segment.
And on an earnings per share basis adjusted earnings per share, we now expect a $1.15 to a $1.22 for the full year.
A decline from the prior year, but an improvement from our previous expectations.
We have.
Our expectations now is for.
Less interest expense than we had originally projected and guided too. So the improvement in earnings per share is is really all related to.
Improved interest expense.
And with that that's a that's the end of my prepared remarks. So operator, if you would open it up for.
Questions. Please.
Thank you as a reminder to ask a question you want me to press Star one on your telephone.
Your question pressed upon our Heskey.
Your first question comes from the line of David Risinger from Morgan Stanley. Your line is open.
Great. Thanks, very much and good morning, Jack and Dick and congrats on the performance.
I have a couple of questions first.
Maybe it'd be helpful.
Jack if you could just help us better understand the competitive marketplace that omni Gen competes and who the company competitors are.
How much of an inflection for omni Jan this is going to be that that you're launching a next generation.
So that would be very helpful.
And then.
Dick if you could comment please on the MFC growth, excluding China. So we have a better sense for the growth ex China in the quarter and also if you could comment on the outlook for M.S.A. growth prospects ex China going forward. Thanks very much.
David Hi, Thank you. Thank you those questions.
So I think.
As we've talked in the past I mentioned with an extremely successful product.
Where most of our customers were.
Small adair dairies of say 500 council less which was a predominant dairies in United States.
10 years ago, but that has shifted very very dramatically because last 10 years. So the total amount of Derek hasn't I'd say, it's about the same as it's been 10 years ago.
9.2 million count.
But it shifted from smaller varies a logic to areas. So we needed to do something with Amgen, which was a very successful product.
On the small and Aries.
It was if successful products, where the dairy man.
Got it out and so the sort of basically physically saw the health of the animal and was able to see that result of homage and which has allowed to do with immune strengthened immune how.
So we formulated product to add some other components to it.
And really remanufactured.
Not blending and contracting a bit more now on milk production, which becomes more important when you have 5000 had 10000 head is uncertainties.
Farms, and I think that goes losses over 20000.
So for us is.
Taking that product.
Relatively to new markets. Some of the same reduces we saw our we know when they ran 500 dairy what's going on now with bigger dairies, they're kind of their needs a slightly different so they know the product works of human health and now we're introducing it as well with its new added function.
He is going to increase no production. So it sort of a wide open trio is always competition. There's no end of competition, United States Revvy level, but we have a good history.
We have a great sales team and we're very confident we're going to grow this business growing segment.
Yes, David and to your second question.
Whatever the number is around my phase in the second quarter.
It is to.
Reiterate we saw overall in the phase down about a million dollars or 1% if we.
Ex the China as a.
Effect, we did we did see growth we saw growth within the probably 3% range year over year on a full year basis.
Where we're expecting mm phase.
Ex China to be somewhere around.
I'll call it breakeven to until a slightly positive number as we will will continue to overlap the effect of.
Of not having much if any China VM sales for really all of the year.
Okay.
Great. Thank you.
Your next question comes from the line of Aaron right from Credit Suisse. Your line is open.
Great. Thanks, a follow up on time.
With that stocking dynamic in terms of the purchasing ahead of the regulatory changes and can you just described but that's all related to in terms of that purchasing dynamic and should we anticipate denim pullback kind of in the next period here in terms of feedstock.
I guess any color you can get there would be helpful. Thanks.
And as we sort of had forecasted we didnt expect to do any business in China.
This fiscal year.
Our distributors our customers really in China had inventory.
Which we expected them to sell down.
With the old registration deal registration was the growth mode registration and we've been working for last many years two three years.
As we've done in most markets and well now to change the registration from growth most into a therapeutic claim.
And we've been successful.
The problem with African swine fever in China was obviously well the pays on there. So the market was declining and this came along to answer your question, but it can be bear with me.
So the peaks on them, but it's also the government was not allowing.
So anybody can move things around for testing, so our ability to test and on farms and due to show.
We need to do for the therapeutic claim was slowed down so that's really where we weren't going forward on therapeutic claim but in the Meanwhile, the price of pace in China Roes So high.
That people felt even though.
Some piccs were going to die from Africans My favorite still pay to grow pigs, because even with the only had a 30, 40% Yeo you can make more than enough money to cover the loss. So.
Our custom is there sort of big increase and with their calculation. They had made to have enough inventory to get to the six months of two thats. The first six months 2020. They felt they were wrong and they know they had again material and before the end of the year by Chinese regulations. So that was is that was that for.
It's not a huge.
It was a bomb.
A couple of million dollars and.
That's gone.
Okay, Great. That's really helpful. And then can you give us an update on just the U.S. market across the species groups here at U.S. poultry finding dairy market I guess in particular I'd be curious around if you're seeing really a stabilization across dairy markets as well.
Yes, you could give us some color on where we stand today and industry.
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I think generally we are seeing a stabilization is at least what we hear back feedback from our customers.
Yes, the market depends where you are in the market I think if you're so if you're still out there with our pharma.
100, 150 cows youre under pressure you're in travel and you will most likely be out of the business, but I think for the largest areas. They are making money at these levels.
And again part of it is because China is looking for sorts of protein.
And.
So some have added that effects directly or indirectly you ought to be produces around the world of any protein.
Okay.
Okay.
Okay. Thank you.
Your next question comes from the line tough allows you put aside from Barclays. Your line is open.
Hi, Thanks, Good morning, everyone. So I had coming back to the subject on Asps have had couple of questions on there.
Firstly on the as you May proceed companies and good sample.
Bookings four cents increase but 10%.
As you mentioned that you have some registration changes underway to to be able to sell Miller I wanted to understand wait till they export markets already be able to target done what are the timelines and again seen that in Korea, and secondly, specifically on so from any hurting prospect how would that play into it.
On a go on.
The second continent up my question was on.
Days of vaccines I would love to hear your thoughts on the radiance development programs currently ongoing including the progress on Wednesday.
And specifically from fibrosis perspective can you help me understand how youre dobyns down of many components to the vaccine targeting the onetime tenant emptying. The U.S. The is working on it does make any difference from a commercial auto timeline perspective. Thank you.
If you haven't hour.
[laughter].
So let's talk first about you know overall dynamics of protein and sort of call the peak protein.
Versus the effect of African swine fever in China. So you may as we sit here right now.
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There is no vaccine.
And there is for and that will control African swine fever, and the effect of it as as we've seen it sort of.
Played out slowly.
Is in excess of 50, maybe even up to 70%.
Hey, guys have gone missing that doesn't mean pig necessarily who've gotten the virus and died in means that people see they paid down.
They got the virus they die so I'm knocking on new page on the market it doesn't pay.
Overall so.
That that has affected a huge shortage of protein protein in China, and they're out there all over the world looking to buy all sorts of protein.
From a from every market. So yes, we are seeing.
Our sales into customers raising again, all proteins, specifically, yes, peepo team, but chicken protein based protein kind of poking around the world.
All of those customers are doing better now in the U.S., It's a little bit asked I don't want to get into it because of the continuation on that on the trade one the terrorist it's not clear, but I think that will get clear.
But the business around the world our business is getting better.
Can you make up for the loss of I don't know 500 million pegs in a world that only is currently raising 250 million pays the answer is no which could take a long time, if ever but I think there's some point, where there will be that come through the second question without will be a point, where there will be a vaccine develop.
There will be able to slow or to control some of some of the asset.
Where there will be a meeting point, where the Chinese we'll be able to start growing pigs again.
A decent prices good prices economic prices and the world will grow producing more pick me and it will all be meet somewhere happily in the manner.
We've taken a proud on our vaccine we've taken an approach.
Different than what we see and what you will see a we see coming out of home Island.
We're working mostly with boat with the proteins that you are found in in the virus and we're now working to attenuate a virus.
So to that extent.
As I've said it.
Often I'll say it again, we don't know yet.
Bob <unk> of our vaccine is going to work, we're doing a lot of work and some positive indications but.
You don't want anyone to listen to this and think we're saying that it works we have work to do and we will have a better indication.
As I said earlier in my remarks by late late spring.
It's a different approach so what they're going if they start of how to making vaccines is you basically attenuate of Iris you make the virus sort of software. You then can you can vaccinate the virus.
The pigs own immune system start acting and it will it will protect the peg against whatever the diseases in this case African swine fever.
The initial work on that combines his was not successful.
They were unable to do it and now with this USPI you and upon Mylan it looks like they have a candidate that could be very effective so that that's great.
I think.
We're in the basis of making sure people have protein and successful and live long time, so that we are 100% behind that.
Our approach is a different approach.
And.
There is some logic to say since we're not x. absolutely injecting vaccinating. The virus that are our poach might be safe at animates safer than it might get to market faster than the approach, which attenuate the box.
So that's is different approach and again remember there were 800 million pesos in China, So huge market.
Hopefully everyone will be successful.
Thank you.
Your next question comes the line of Michael Ryskin from Bank of America. Your line is open.
Hey, guys. Thanks for taking though the question one I'll follow up on a couple of things I think people walk through a lot of the market implication so sort of trying to dig in on the guidance comments.
First on the on.
Revenue guide it looks like.
I can say most of the up they did come from mineral nutrition, and you talked about how that sort of flow through from the underlying commodity prices, but also you did trimmed the topline animal health.
The high end of the guide by about 10 million from 557 different 47, So I'm curious if that had anything to do.
With nutritional specialties in vaccines and more specifically with osprey, because I think by my prior nodes that off pretty is about a 20 million dollar contribution for the year.
By my math for the quarter over it was only about two and a half million and some first question is is that what are the delta is coming in is it off price is not contributing quite as much as you thought or sort of where's that on the numbers.
Yeah.
Yeah, all your numbers make sense, Mike This is Dick.
Yeah, I think I, we trimmed the top end of the animal health number.
For a variety of factors I would say.
[noise] just in terms of expectations ended.
We continue.
I think our our strongest growth expectations are going to be in the vaccine.
Product area, then followed by nutritional specialties.
Yes, we're seeing some yeah, we're seeing some customer order patterns in our spray where.
Those those may reverse themselves later in the year, we'll have to see.
And but nutritional specialties otherwise were.
We've talked a lot about dairy we talked about.
Neil products that are going into poultry and those are all doing well and M.S.A. is really outside of China are holding their own so.
No not like not a huge modification I think to the to the sales guidance overall, but.
You know that gives you a little more color.
Got it appreciate the bridge there and then a follow up sort of some online on the on the piano the Delta in the US you know I mean, you talked about consistently about 2020 fiscal year twenties as an investment here both in Salesforce and R&D you know the companion animal products.
All of your investment in R&D for wash stock as well, including the vaccine used to trim the screening guidance.
Pretty meaningfully by about seven to 10 million I'm, just curious, whereas that extra spend coming from is that flexible spend you can take out of mineral nutrition, because the lowered expectations. There were sort of is it on the sales forces on the R&D line I'm trying to give a sense of where the delta comes in there.
I think that trimming comes into place as some of these strategic investments are.
They the.
The timing of the spend is driven by.
A lot of factors that we can't necessarily control exactly the timing so.
So some of these spend honesty strategic initiatives as Ben is extended out a little longer than we originally initially expected.
We've also just.
You know reduced our expectation for the the the base spend on operating expenses. It's maybe specifically is really not around minerals. As this spend is in the bulk of the business as the animal health segment and and so when you're talking about changes in spending.
Really fundamentally talking about.
Changes in the animal health business.
Okay.
We should that and then sort one last one along that line from there.
You might you talked about and stuff vaccine you talked about than the omni Gen expansion I would say the third product that in terms of innovation I've gotten a lot of attention on a focus is the companion animal.
Sort of direction, you're moving into can you give us an update there how that's trending sort of continued feedback and how you see that progressing well next couple of years.
Yes.
So let me lay blood will give you had two answers I'll give you a number answer it's the numbers in the PNM dollars still small we don't break them out in and they're not.
At this point really meaningful to trends.
Now and where.
I think where this goal is is still open to question, where we're optimistic that what we're seeing and with that I'll turn it over to Jack or more of the color.
Right so.
There are about 25000 vet clinics in the United States.
And we have successfully gotten magenta are one product into 500 clinics.
We are adding more clinics every week. So we're still spending money. We are very optimistic I missed product is a great product and when the feedback we see.
Sort of unpaid for from customers on social media.
It's really exciting so if anyone listening to this call has a dog would deliver little bit older has had some trouble.
Operating income while I think go to the site and go by some product but.
So where we're still spending money and we might be.
This continues on the trend that it's good.
Well spend more money next year I think Thats generally July we haven't got no one's asked that question, but I want to get ahead of it.
So that companion animal products is looking good and I think we'll expand and will be a profitable product and will be a significant number and I know this next year, when we get to over a thousand or 15, the 2000 clinics.
The vaccines that big spoke earlier about is we're doing really well with our product so well accepted.
In multiple markets and we're spending money bookings anymore money to get new facility and Sly go up and running.
Still 18 months away, which will give us the capacity to sell more because right now we're running up against.
The capacity.
I bet, Jim as facility.
I think I'm, Jim Pro we just launched we had a big launch meeting last month and looking good we split the growth there perhaps in swine fever with spending money don't know the crazy thing about spending money looking thing from and sort of an analyst numbers.
Is.
You want to their money the probably not successful enable my God and then I'll write EBITDA goes up but in reality. If it's successful my it's a great potential and we'll continue to spending money. So we're around that anyone of these products where.
Which I.
You mean, if you know me, we're not waiting any money here. These are none of these products a boondoggles, where all these oil serious product to the series opportunities for the company. So.
Well, we remain excited about the opportunities here, the new product and obviously about the company.
Thanks, So much appreciate all the color from both the guys. Thank you.
Again, if you would like to ask a question press Star one on your telephone. Your next question comes from the line of David Westenberg from Guggenheim Securities. Your line is open.
Hi, Thanks for taking the questions I must have might have already been answered. So on mine will be pretty short on so first on the mineral nutrition business I know, it's very susceptible to input prices now can you remind us if you're maintaining.
Gross margin or if you're maintaining gross profit.
Hey, I'm, just trying to figure out the distinction between the two as prices go up and down.
What the objective is in terms of maintaining.
I just I'm David I.
So we have two objectives, one is where on the on the traditional sort of base business.
We are looking to make.
Profit per every unit, we handle and we tend we talk in terms of funds and the mineral business. So we're looking to make X dollars per tonne so weather.
The selling prices is higher or lower we want to make.
A certain amount of money on on every ton, we handle and and get paid for the value, we add which is no blending sourcing warehousing logistics et cetera.
We are also adding overtime and continue to add.
More differentiated ill higher value added and therefore higher margin products into the minerals business and we're seeing some early success in that Weve.
Frankly against our expectations not so much against last year, but again sort of expectation we've been seeing the bite of some of the tariffs because some of these raw materials many of the raw materials.
Come from China, and have been subject to 25% tariff so depending on the competitive situation.
With in some cases, we've not been able to.
Pass those costs through so that spend.
That's that's been something we've been dealing with lately.
That was actually very that was very helpful. So back on to the Phitek vaccination device.
So it looks like kind of one of those products that could have maybe a portfolio effect. So is that he the case and could you see.
You know this contribute to better sales of the overall portfolio and not just vaccines, but on kind of one of those things where it where it could have I halo effect on other sorry businesses and then just in general in speaking on that fiber out I mean that phitek device are there any maybe comps for us to look at it in terms of peak sales and sales ramp.
I mean is that embraces from the awareness I mean, how can we look at that and Thats. All my questions. Thank you.
That's really a great question.
So how do you can compare this I think where the first and the market with this type of machine and it's not so much. The fact that we replaced.
Paid a power on vacs in owner vaccine device to battery power power and machine that you just Poland and your fingers to protect the not so much of what the main thing here is the amount of information the grow as the reduced so we'll get.
From what's going on in other words.
Not just in terms of.
Human resources, I know, who who's doing the right job, but at what temperature or other other vaccines be put in.
Where we know what percentage of the birds I'm getting back and whatnot.
Tetrasun center that want that mix is very powerful that's why this was very very exciting addition at the poultry show last week.
We don't have the full range of vaccines that grow is used to go through this thing so right now.
It's probably neutral I mean, when Hendrick started many many years ago.
They try to control.
The vaccines that went through it I mean, they lease equipment, but you how to use of vaccines that has not been is no longer the cases they have competition. So we're not even starting there I don't think thats important but at the end.
We are building solid relationships with poultry producers around the world and you build those kind of relationships.
Then eventually you know you we enhances our relationships and then they will look at our vaccines like I'm looking at anyone else's vaccine.
Thank you.
There are no further questions at this time Mr. Johnson I turn the call back over to you.
All right. We appreciate everyone listening and thank you for your questions. We'll talk again next quarter. Thank you bye now.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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