Q4 2019 Earnings Call
Comfortable to make vascular fourth quarter 2019 financial results conference call.
A reminder, today's call is being recorded.
At this time I would like to turn the call over to Mr. JJ Pellegrino Chief financial officers Lemaitre vascular. Please go ahead Sir.
Thank you Liz good afternoon, and thank you for joining off our Q4 2019 conference call with me.
On today's call, our chairman and CEO, George Let me and our President Dave Roberts before we begin I'll read our safe Harbor statement.
Today, we will it makes a forward looking statements are within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, the accuracy of which is subject to risks and uncertainties wherever possible we will try to.
Hi, this forward looking statements by using words, such as believe expect anticipate pursue forecast and similar expressions.
Looking statements are based on our estimates and assumptions as of today February 620, 20, it should not be relied upon as representing our estimates or views on any subsequent date.
Please refer to the cautionary statement regarding.
Any forward looking information and the risk factors in our most recent 10-K and subsequent FCC filings, including disclosure of the factors that could cause results to differ materially from those expressed or implied.
During this call we will discuss non-GAAP financial measures, which include organic sales growth numbers as well as adjusted operating income growth operating income excluding certain one time gains.
And charges and EBITDA.
A reconciliation of GAAP to non-GAAP measures discussed in this call is contained in the associated press release and is available in the Investor Relations section of our website.
Www Dot com I'll now turn the call over to join Snake. Thanks, JJ in Q4, we posted record.
Sales of 30.2 million up 6%.
Biologic patches, embolectomy catheters, and Valvulotomes led growth.
The recently acquired cardio sell patches ramped quickly generating 1.4 million in Q4 sales.
And the July 2019, Truant size acquisition also had a strong Q.
For with $500000 and sales.
The Americas had a record quarter up 6%, while Europe grew 4% and Asia Pac was up 20%.
It was your packs momentum was fueled by export growth of 53%.
While our three direct markets of China, Japan, and Australia, all grew 10%.
In Q4, we bought out our Singapore distributor and are now director hospital in that 6 million person City state.
We're now director hospital in 23 countries and have 11 sales offices worldwide.
Biologics accounted for 37% of our sales in Q4.
The biologics theme is not a new one if.
Do you have been on our earnings call.
Vascular surgeon seem to prefer biologic patches and implants versus synthetics.
The recent cardio sell patch acquisition allows us to leverage our expertise in manufacturing and distributing biologics, while gaining access to a new customer the cardiac surgeon.
So.
Separately, we're currently watching cardiac allograph in the U.S. in Canada, leveraging the 2016 restore flow acquisition.
We're also setting up to distribute restore flow vascular allografts in Europe in each to 2020 this will be a first for us.
Turning to our team was.
Bounced back year organic growth improved to 6% and the four acquisitions of 2018 2019 performed better than expected.
All four purchases were in familiar categories, Embolectomy catheters, polyester graphs, valvulotomes and bovine patches.
We also improved.
Bottom line and 29 team with adjusted Op income growth of 3% versus a 2% decline in 2018.
Excluding the effects of the strong dollar adjusted operating income grew 8% and 29 team.
As our guidance indicated we expect this momentum will extend into 2020.
With 10% sales growth and 17% op income growth.
A quick note on dividends.
Our board has just increase the payout for the ninth straight year. This time by 12%.
If we raise dividends in Q1 2021, I believe we gave you regain entry into the dividend achievers.
As index, a 10 year version of the well known 25 year dividend aristocrats index.
I highlight our history of growing dividends to underscore how we will continue to focus on op income and cash flow growth.
With that I'll turn the call over to JJ. Thanks, George our Q4 20.
18, gross margin was 66% down 1.7% versus the prior year period.
The decline was driven largely by lower margins that are trying to subsidiary buyer polyester graph sales. The two recent acquisitions and the stronger dollar.
As our guidance indicates we expect the gross margin to remain flat in Q1.
But improved thereafter.
Q2, gross margin gains should be driven by manufacturing efficiencies while longer term recruitment should arrive as we begin selling Burlington manufactured Omniflow and then syntel products.
Our omni flow factory in Australia will be close in Q2, and we will soon be.
Factoring syntel in Burlington.
Q4, 2019, our adjusted operating income was $4.9 million.
12% from Q4 2018, the decrease was driven by a lower gross margin and an adjusted operating expense increase of 10%.
In the full year 2019.
Operating income increased 3% or 8%, excluding the effects of the strong dollar.
Looking forward, our full year 2020 guidance implies an operating income increase of 17% to $24.7 million at the midpoint, an important sequential improvement from 29 team.
That's deserves some explanation as you know cost containment has been staple estimate over the years and we will redouble our efforts in this area in 2020.
Our guidance implies a 6% increase in expenses down from 10% 2019, as we find ways to avoid some costs and reduce others.
In addition, with the.
Large acquisitions, I'm 2019, coming Onstream for the full year, we anticipate that our record revenue growth of $12 million will also drive profit growth.
We ended Q4 with $32.7 million in cash the decrease of $12.2 million during the quarter. The decrease was driven.
Given by acquisition related payments of $16.4 million capital expenditures of $1.4 million and dividends of $1.7 million.
EBITDA in Q4, 2016 was $6.5 million and for the full year 2019, EBITDA was $26.4 million.
Our Q1 2022 guidance of $30.5 million to $31.7 million represents a year over year increase at the midpoint of 9%.
We also expect Q1 2020 operating income of $3.8 million to $4.6 million a decrease.
And at the midpoint.
Our full year since 2020 sales guidance of 127.4 million to 130.8 million represents a year over year increase at the midpoint of 10%.
We also expect full year operating income to be 23.6 million to $25.9 million, an increase of 17% at the midpoint.
As noted in our Q3 2019 10-Q, the transition from M.D. to MDR in Europe requires more costly testing and data collection for most devices.
All companies are undergoing this MDR transition.
Separately, we had to refile, our existing MDD approvals with a new notified body.
As our previous provider abandoned CE Mark support.
We expect that we expect us to largely resolved in each 120 20.
In the interim Weve overstocked, our Frankfurt warehouse to lessen any sales impact. We've tried to include any anticipated effects of MDD and MDR in our guidance.
With that I'll turn it over to the operator for questions.
As a reminder, ladies and gentlemen to ask a question you will need to press Star then one under telephone keypad to withdraw your question press the pound Keith.
Again that is star then one if you'd like to ask a question at this time.
Our first question comes from a line of Jason Mills with Canaccord.
Fortunately Citi. Your line is now open.
Hi, It's John young on for Jason Good Twain 20 guidance pretend the more back end loaded year for both top and bottom line could you walk through a more detailed like cadence of quarterly gross and operating margin leverage coupled with corresponding drivers through the back end loaded.
Guidance in terms of product launches year over year comparisons or other drivers.
Sure. This is Jay maybe I'll I'll start on that there was a lot loaded in there, but but I guess I would say.
On the sales line you know the.
Good sales growth by quarter is a fairly even cadence is that sort of feels.
You know not necessarily to vary on a reported sales basis by quarter. Although this quarter are looking back next year at this quarter might be an easier comp. If we if we think about it that way in some way so I would say not necessarily on the sales.
And on the gross margin line, we're talking about Q1 being sort of static with where we are now but getting some nice manufacturing efficiencies potentially in Q2, and so American nice pickup there on the gross margin line and that sort of come back down to somewhere in between maybe where we are in there and sort of getting to that number that we guided for the year.
So I think that's sort of how your gross margin feels as you go throughout the year and then in terms of operating expenses I talked about cost cutting and so we typically have a pretty highly loaded op expense line in Q1, because of our worldwide sales meetings and higher fringe and.
Audit and tax work, that's getting done around the turn of the year and all that kind of stuff and that will naturally decrease a little bit throughout the year, but in addition, we're gonna be doing some cost cutting I'm pretty seriously I think as we go through the next quarters and that should really help your opex line decrease over time, so if you're looking for the cadence of how that bottom line improves you can sort of trying.
Model out what I just told.
Great. Thank you and then my follow up is that gross margin took another leg down in Q4 and guiding something that's like much recovery in 2020 could you give us your thoughts on medium to long term trajectory of your gross margin and he has any aspirations maintained or improved gross margin specifically going.
And how important is gross margins to you relative to other metrics such as organic growth or operating margin lightbridge.
So a gross margins, obviously, a pretty important metric for us as a big part of the answer on the bottom line you can see as we've done for acquisitions over the last 12 month. That's had that's had a pretty important.
On the bottom line left because it's driven down our gross margin. That's typical for what May we'll do the acquisitions. They will hurt the margin for awhile will eventually incorporate our transition in manufacturing into the Burlington facility and will rebound from those margins, but we we choose to meet that all four deals and 12 month and so that's clearly having an impact so.
I would say I've, given you sort of a look through the year in terms of gross margin I.
I'm not going to guide you pass that in terms of past 2020, I think that's a pretty good luck for us.
Our next question comes from Rick Weiss with Stifel. Your line is now open.
Hi, guys itself.
Drew ranieri on for it Tonight I guess first just wanted to touch on 2020 profitability from a different angle.
I understand some of the 2020 headwinds you you've talked about them before on some other recent calls which is can you help us understand your commentary a bit more regarding the restrained 2020, opex spending I mean should we read this.
As you are taking out your foot off the gas to drive gross enhancing or grow sustaining investments limiting R&D. Your sales force hires just help us think through where these cost cutting initiatives coming from basically.
And through this is George I'm going to go at this one a little bit differently, which is actually op expenses.
It is slated to grow 6% 2020 in 2020, it did grow 10% in 2019 and I feel like a lot of that had to do that Q4 acquisition. We did the at me. This acquisition that you know and I think 6% not that much of a stretch we will have to do cost cutting.
To get there, but it's not that bad if you look back at our Opex you built the cadence and to use that word is 10% in 19, 7%. This is op expense growth, 10% 19, 7% in 18 and 6% in the year before that 2017, so to get us to 6%.
This year, Yeah, we would have do cost cutting, but it's very doable for us I think the bigger piece as you look at you know when you look at our while those guys are doing a 17% op income growth I think the bigger piece the secret piece to me that I sort of started figuring out as we were getting close to this call was we're loading on a record amount of dollar growth next year.
Putting on $12 million of dollar growth.
And I don't want to make myself look silly later, but if you can't would that $12 million of dollar growth from these acquisitions and the organic growth you can't make something happened in the bottom line. Well then maybe you should be restraining op expense, a little bit, but I think the picture for me is a little bit more about while.
There's a lot of sales going on top of this company next year.
Got it but just to be a little bit more specific when you're talking about cost cutting initiatives is this just.
It is it head count or is it pulling back on on R&D projects can you refine that just a little bit more.
No like I've said it.
Still op expense is still growing 6%. So I don't want you think this is some kind of draconian thing going on inside the company, it's going to op expenses are going to grow, but we're going to be a little bit better than what we were last year and if you look at last year with 10% op expense growth I don't know the figure right now, but the amount that we got by buying that company in Q4 was.
Actual then it would have that number that's interesting numbers because without that probably op expense growth was 8% or something like that so pulling back to 6% shouldn't be that big of a deal.
Okay, and then just sticking with 2020.
Got it is for a second just backing into 2020 organic growth it looks like its decelerating from.
For side, maybe down into the low single digit.
Or maybe 5% range just first is that math right and maybe you kind of water your expectations.
For organic growth in 2020, and maybe just help us understand some of the dynamics there and deceleration is that all MDR driven.
Right.
Okay. So good question. So the answer is yes that numbers right that you pulled out so we expect 10% reported growth in 5% organic growth a piece of this that you don't know what are you could know about is the OEM business inside our company slowing down and this is a business that it comes and it goes in its slowing down right now so I feel like that.
Holds about a point off of it next year. So if that were not the case, maybe you're sort of a 6% company and Furthermore, the MDR self pulls about we figured about 800 euros out of sales, which is worth about half a point. So you could if you wanted to although we're not really that guy we just we're going to grow 10%.
Reported theres going to be a lot of ins and outs and puts and takes inside of it but you have a couple of things slowing it down there the OEM as well as the CE Mark stuff and then to put the number in context drew.
We're real excited about 2019, being a 6% growth versus a 3.8% growth in.
In 2018, and so this 5% growth next year, you know with the takes from those two items I mentioned it seems okay to us when we wanted to be better of course, we would.
And then just one last housekeeping question just can you talk about maybe what pricing was in the quarter and any.
Topline growth for omni flows you know shore restore flow anyway anything that you can give there.
Sure we can I'm trying to think about how we approach that so pricing what was what was pricing in Q4, you mean.
Right.
I think at a high level, we said it was.
Dave you started this pretty close shirt, so hi drew.
Pricing was down in the quarter about 3% happened to be driven by a large disposables order in China.
Hey, Jay mentioned, China earlier of try backs on units were up 4.5%.
And then mix offset by 1.5%.
Also like price. So that's that was that I think you asked about restore flow that was up 12% in Q4.
Got it Xenosure and Omniflow.
I don't have Omniflow my fingertip Xenosure was was.
Flat.
2% organic growth for Xenosure for all of 2019.
Yeah, and omni flow was up over that.
Got it thanks for taking the questions.
Thanks Onex.
Our next question comes from Joe Munda with first analysis your line.
Let's now open [laughter]. Good afternoon, guys can you hear me okay.
Yes, Joe.
So George I was just wondering if you could give us a breakout of what the rep count looks like at the end of year, given the guidance going forward I think it would be helpful.
Sure. So you mean Q4.
2019 like the December 31st we just finished.
Yeah.
Okay. So 54 in the Americas, that's up to from Q3 40 in Europe, That's down 118 in Asia Pac that's up to and worldwide hundred 12 being a total up three from ended the quarter the.
Previous quarter Okay.
And then as we as we think out going forward you know you're talking about.
Opex spend slowing down going forward.
All right is that 112 is that the right way to think about going out through 2020 or do you think you'll continue to pick up rats going.
And then I guess with everything that's going on in China, How does that I guess craft you're thinking both on the rep perspective, as well as operationally with.
Eventually China shutting down here.
The essentially the beginning of the year. Thanks, what if I handle the China question first and get onto the Rep question. After.
That it's a good there's a good question I'm sure a lot of want to hear about that so you know I know as much as I read in the Wall Street Journal about the Corona virus and I'm sure. Most folks on this phone call at that level and it feels like you're saying that China's shutting down to put a boundary on this for everyone. We had a 1.5 million dollar business last year in China.
And it grew 27% reported and 14% organic.
Kind of bouncing back from a big year three years ago, and then it went down went up we sort of stopped thinking this is going to be a mega growth opportunities. So it's 1% of our sales if were $129 million company next year, and it's 1.5 million.
Dollars I would say, it's something you guys don't have to worry about you know we don't we don't think it's gonna be great for us, but I feel like it's going to get to a certain extent buried for you guys at your level. So I hope that's a good one on China is our or sort of an explanation on China for you I'm, Joe and then as far as the reps go we just.
Just printed our goals for this year for 2020, and our goal is to sort of keep the reps around where they are right. Now I think you saw us really go to some lengths to get the rep count up from about 90 to about 110 over the last three years, but I don't think we aspire to have a broader group of reps right. This.
The second.
Okay. Thank you.
Joe.
As a reminder, ladies and gentlemen that is star then one if you'd like to ask a question.
Our next question comes from line of Frank Talking with Lake Street Capital Markets. Your line is now open.
Hey, guys. Thanks for taking my questions just a couple of for you here.
Just to come quickly be clear about the contribution from non organic next year, what what do you guys can thinking about Fred meets next year. Thank you all mentioned, 6% to 6.5% on your last call for 2020 contribution from that cardio somebody ask yourself.
Hey, Frank it's Dave Good question.
Yeah, We said six to six and a half million dollars of revenue that's what we projected in October call.
But obviously card you sell came out of the gave a little bit quicker. So we're looking more around a little over $7 million for 2020 at this point that the annualized number and if he is still in the incremental.
Like five and a half okay.
That's why.
Okay.
Makes sense and I know, there's been a lot of conversation around this and a couple different areas, but could you just give us a broad overview of different.
Moving pieces for the gross margin I know you were got nice crossing T's and a couple of products right at the end of the year to get.
Fully integrated into Burlingham, and then I know you have cardio stone basket. So for this year, but you just give us a broad overview on the different things you're doing to improve gross margins W. fantastic.
Yeah. So there's a lot going on on the gross margin line. These days FX FX year over year actually hurt us 0.3% or so.
And that China topic, with a lower margin, there and a little higher sales efforts as well and then mix wise, where we're selling more dacron graphs. These days, that's that's hurting us as well and the cardio sell in the true inside the two new acquisitions are coming up strong and that's on favorable to the margin as well and then we had year end cleanup costs.
And that sort of 66% number as well so going forward you don't have those year end cleanup costs necessarily I talked about those integrations that happened over time I talked about in Q twos in a more more immediate benefit coming off of the balance sheet onto the piano.
These are the inventory that was made cheaper awhile ago and.
Well getting the benefit of that.
Price increases those are good guys to obviously to the gross margin until we feel like we'll probably get a pretty nice price hike.
This year hopefully going forward. This in the past year was worth about 2.5%. Good guide to the gross margin. So maybe you can do that are a little bit better going forward in 2020.
Hey, Jay maybe I could chime in a little bit gross margin sort of something that Jay does a little bit more than I do but at a really high level.
When we bought $15 million a revenue in the last 17 months or so and the revenue we buy comes with a considerably discounted gross margin versus what we.
Add before and so unfortunately this is something that we've learned a live with overtime, we build the gross margin up and then it gets beat back by these lower gross margin acquisitions that we wind up doing in the very long run will fix those gross margin issues, but it's a topic that never goes away it will mate and since we've been pretty.
Particularly active from an M&A perspective, and the last 16 months, we're all feeling that right now and it's nothing we want to go through and we know it doesn't look great. But it is what it is when you buy these revenues they mix with your good revenues and they drag it down.
Got it already that's all I had thanks very much.
Congrats on the progress.
Thanks Frank.
Our next question comes from like Petoskey with Barrington Research. Your line is now open.
Good evening, a few questions I didn't catch it if you mentioned valvole, Tom growth for the quarter and for the year.
We did not mention that I'm happy to get it if we can pull it up.
Quickly Mike in the quarter about 9% in the year I don't have been maybe one organic 3% for the year I remember distinctly and the difference there Mike He's given you the quarter, but the differences of course that we bought that value to tell him the easy site valve and some of the true in size valve its own.
Mid year until that your delta between 3% and roughly 9% reported number for the year can we get that mm reported for the year.
If I can pull the.
[noise].
Okay.
In terms of thinking about 8% reported so 9% reported in the quarter and about 8% for the year, Mike Okay, Alright, very good so.
If I look at your guidance for the year the tax rate assumption looks like sort of lower Twentys, maybe 20.
22% is that the right now.
What's your sense.
It's about 22% Yep.
And I guess on just a couple on English were real quick on on.
Sure the new products the plus.
Sure.
Guys any traction or any anecdotal.
In Fort worth sharing on that.
Or.
Right.
Mike I would say generally not really just yet it's a little bit early in the product cycle, but I would say generally speaking no not really maybe I would pivot from talking.
And by that to talking about the Asian approvals. So Australia has been going really well, we got that approved about a year in a quarter ago, and that's showing terrific growth, we did get the Korean and Singapore approval in 2019, those still haven't really produce revenues.
But we do have those now.
And the Chinese clinical trial, we've been talking about a lot we enrolled past the 288 number and then for safety sake. We decided we wanted to enroll all way up to 328, and so I think we're at about <unk> I don't know exactly when they went to 95 right now who 80 to 88 and we're trying to get to.
Three 328, and so we still ways to go but we are closing in on that that thing, we'll finish and we have all kinds of incentives et cetera to get it done in the middle of this year.
I I certainly took your message on the Corona virus.
What's the size of the China business, but I would assume that the current of my roots, maybe slows down.
Enrollment of everything over there or.
Can you just talked about that.
I honestly don't know I would assume it will given the drone footage I've seen of these cities that have been emptied out, but that's all I know so I assume it will slow down but we'll see.
Okay last question on the.
5% organic growth.
Dictation for 20, any breakout between pricing and unit growth there.
Yeah, I think we think price will be about 2% and units will be about 3%.
Good. Thank you guys really appreciate it.
Thank.
Sure.
Our next question comes from Jim Sidoti with Sidoti and company. Your line is now open.
Hi, good afternoon.
Can you please repeat what the.
Well.
Generated from the acquisition during the quarter I think you could a 500000 from a.
Cardio and.
And what was quarter year. So yes, there's still cardio sell was 1.4 and the true in size was $515000.
And whats two products do you plan to consolidate in 2020.
Two Burlington.
Right.
So the Omniflow factory in Australia is being closed in May or June of this year, we had intended to close it in December but we just didn't get it done so that's one and we'd be bringing the production of the omniflow sheep graft back to Burlington and then we bought the.
Product line from applied medical the Syntel Embolectomy catheters, we made our last purchased from them in September and where we've got all the machines in Burlington getting ready to start building those syntel embolectomy catheters here and probably by the end of each one will be up and running with industrial strength production.
On the three different product lines inside of that acquisition.
Hey, what impact do you think goes to consolidations kind of on the gross margin in 2020, you've got something it's kind of neutral when when you.
Work it out that there will be in your early by the second half of the year or it's going to be.
Headwind to gross margin for this year.
Yes, Jim this is Jay so I feel like of the Omniflow piece will probably start to benefit a little bit in the second half of the year as we get away from expenses that were occurring over in Australia.
So selling.
Tory made in Australia through the end of the year. So the cost of that won't change, but there is some there are some cost probably in Australia them, then we might get away from him as we close out I think the applied pieces, a little bit longer term topic as we sell out of the inventory that we had purchased from apply that will take through the ended the year, maybe it's the beginning of.
The following year when we start to benefit from devices made here that are actually sold.
So I know you don't want to give guidance too far ahead, but I think it's fair to say that you should see a bump to gross margin in the future agent, resulting weve to come through consolidation I mean, I, what I wouldn't go forward like you're.
But I would say if you look backwards in history. That's been the story thats be been re run over and over at this company, which is you do an acquisition or two it screws up the margin for a while you consolidate you probably screw that up here for a while then you figure it out and then it really improves the margin as you've cut costs and get it to an even better place than it was before the acquisition.
So I would say that's a total totally normal answer for us. It's just that we're digesting for the time right now.
Okay, and then that was my follow up question.
You have you have done quite a few over the past 18 to 24 months.
You know you're going to keep gave home for when a while ago and integrate these deals or is he still out there.
Okay.
Well I'm actually right here in the room, but I am not looking Jim and.
I would say.
No we have a very capable integration team yeah, there's a lot to do there but.
The acquisition team, we're open for business and we're out hunting and we've got our criteria.
Areas so.
Yeah, We're you know.
It's even though it seems like yesterday, it's been about four months since we did the last acquisition. So we're out looking.
Alright, thank you.
Thanks, Jim.
Our next question comes from Alex Silverman with MWM investments. Your line is now open.
<unk>.
Hey, good evening, guys JJ I know that MDD mdrs, it's a huge pain for a lot of you for you guys in for a lot of competitors. What do you figure you guys you're spending on this.
So I'm thinking in this year 2020, there's probably about an incremental million dollars, maybe a little bit more.
That is gonna be spent on that topic.
Okay.
And how do you see the you know sort of the you said resolved in the first half.
Yeah, I mean, I think we're looking so there's two different topics one is MDD to NDR that.
Change in the regulatory regime, and what you have to do to prepare for that and that's an expense topic for us. The question you just asked how much more you're going to spend because there's more testing and more data collection et cetera involved with that there's a separate different topic, which is the reissuance of CE Mark from a new notified.
Related but different and so we are expecting that reissuance over the next month or two or so and so we think we've included any impact from that and guidance you made a ton of inventory back in the middle of last year sort of July August September timeframe sense, it over to Europe to sort of shield ourselves from.
Hopefully any impact from this topic.
But that's where we stand now and so as I said in my guidance I'm thinking over the next month, two or three we get that reissuance from our new notified body.
And last thing on that what we're hearing a little manufacturers in different markets in Europe.
Just walking away from a walking away given the expansion the difficulty of meeting the new standards are you guys seeing any benefit from that.
Yes. We are this is George Alex Yes, we definitely are particularly in some of these product lines like P.T. EFI and.
On the polyester out the graphs that we make here so more of the commodity side, we're definitely seeing that its kind of happened a lot. This is the regulatory barriers are going up dramatically in Europe, and so people that only CE marks I would say us assuming we can get all of our our issues fixed here.
I think they stand to benefit a lot lot lot of a large out you say small companies I would say it's this the larger companies that have like a 4 million dollar division that their think of who cares and just I don't want to go through the pain to get this thing re upped and I think that will help lemaitre vascular.
Assuming let me fixes zone house on this topic.
That's very helpful. Thank you guys.
Thanks, Alex.
Ladies and gentlemen that concludes today's conference I would like to thank you for your participation and you may now disconnect have a great time.
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