Q4 2019 Earnings Call
[music], good afternoon, ladies and gentlemen, and welcome to paper.
Third and fourth quarter in fiscal year 2019 financial results Conference call.
As a reminder, this call is being webcast slide and recorded and it's now my pleasure to introduce your host Mr. Mark cluster of West. Please go ahead Sir.
[music] good afternoon, and thank you for joining us for that they both are fourth quarter in fiscal year 2019 financial results Conference call.
Joining us on todays call or baseball terms, President and Chief Executive Officer, Joe Army, and its vice President and Chief Financial Officer, John Landry.
But we'd like to remind you that this call is being webcast live and recorded a replay of the event will be available following the call on our website.
Access the webcast. Please visit the events like in the IR section of our web site, they poker dot com.
Before we begin I would like to remind everybody said, our remarks and responses to your questions. Today may contain forward looking statements covered under the safe Harbor provisions of the private Securities Litigation Reform Act 1995.
These statements are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results could differ materially from those indicated including those identified in the risk factor section of our annual report filed on form 10-K that a year ended December 31, 2019, which was flat.
With that Securities Exchange Commission on March four 2020, and in any subsequent filings with the Securities and Exchange Commission.
Such risks factors, maybe updated from time to time in our filings with the FCC, which are publicly available on our website. We undertake no obligation to publicly update or revise our forward looking statements as a result of new information future events or otherwise unless required by law.
This call will also include references to certain financial measures that are not calculated in accordance with generally acceptable accounting principles well gap.
Generally refer to these non-GAAP financial measures reconciliations of these non-GAAP financial measures to the most comparable measures calculated and presented in accordance with gap are available in the earnings press release on the Investor Relations portion of our website with that it's my pleasure to turn the call over to baseball terms, President and Chief Executive Officer.
Joe Army.
Good afternoon, and thank you for joining us today.
I'll begin by discussing the progress we made in fourth quarter, then I'll hand, the call over to John Landry, our CFO to provide financial details of our fourth quarter 2019 results as well as our 2020 guidance after which I'll update you on our carries a focus for 2020 before taking questions.
Fourth quarter was a pretty good quarter first across the board we delivered on our revenue gross margin and operational expenses guidance.
Big picture revenue grew by 11% led by 21% growth and disposables gross margins were 45.1%.
And our cash burn improvement program is in place for 2020.
Operationally, we completed a 10% expansion of the U.S. field sales organization.
The installed base grew in line with our expectations.
Turn rates in our gold E.D. accounts continued to perform well our product development efforts are progressing according to plan.
And we completed a limited market release to new high clinical value products disposable products.
[noise], we held our national sales meeting in early January and I like what I'm seeing what are you a skilled team their energy is good they're excited about the new disposable products, we launched into first quarter.
And as these reps gain more time in the territory their pipelines are developing nicely.
The fourth quarter expansion went smoothly, we like to talent level of the new hires and are pleased when our legacy reps have grown to mature it as medical technology sales professionals.
Speaking of the new disposable products, we completed our limited market release of both the Prosoft patient interface.
And the integrated aerosol drug delivery Hybean I technology disposable in the fourth quarter.
As a reminder, these products will provide additional clinical value to our customers in carry premium pricing, which will be helpful to our ASP in gross margin.
Field team has rolled into full market release, and we're happy with all the products are performing at the bed side.
Turning now to the D. Our focus on this large opportunity continues to progress well Hybean. Our technology is now being used in more than 250 of the largest tds around the country. This quarter. Our U.S sales professionals spent more time on opening larger accounts would be easy money back guarantee program. That's a tool that we used to engage.
Each clinicians in the sales process, our mask free and Ivy for spontaneously breeding patients messaging is simple clear and compelling.
And we stand behind our technology with our unique 80 guarantee program.
We believe there's a lot of room for us to grow in the for many years to come.
Recall that our fourth quarter is when flu season typically begins so the churn rates tend to be a little higher than the annual number.
Our U.S. disposable turn rates came in at 2.06, which is slightly above our historical three year average.
Uhhuh season, hospitalizations appear to be running at a level consistent with prior years.
On the other hand, we have heard from customers and Red selected regional news reports of a higher than expected rate of RSV. This season in the pediatric patient population.
In fiscal year 2019, our E. D accounts continued to consume disposables at a higher rate than our 90 the accounts.
As we continue to open more of the largely the accounts, we see the potential for the overall turn rate to edge upwards.
We're continuing to forecast with our historical turn rates for the foreseeable future.
Until we established a new baseline.
Our gross margin improvement plan continues to work as planned our three prong game plan to improve gross margins is simple and well understood by our entire company.
Selling higher clinical value products, reducing direct product costs and decreasing our overhead rates per unit produced.
In this regard we delivered in the fourth quarter and we like our plan coming into 2020 to delivery consisted 200 to 300 basis points improvement each year.
The oxygen assist module product made good progress in the fourth quarter.
Recall that oxygen is a dangerous deadly life sustaining drug with a narrow therapeutic window.
Oxygen assist module will help the clinician keep the patient in the targeted oxygen saturation range.
This is particularly important for neonates, we received the CE Mark on the auction is just module in early first quarter 2020, and Im now begun the limited release in certain UK accounts and May expand that limited release to certain European counts during the second quarter.
In the US we continue to engage with the FDA and productive exchanges around the appropriate investigational study design and the approval pathway.
Our intention is to begin the U.S. clinical trial later this year and are excited about the centers and clinicians that will be leading this important project.
With 2019 done I'd like to take a moment to look back at the year in its entirety, our disposables grew by 23% this year and now represents 73% of our total worldwide revenue.
It was great waking up on January 2nd knowing that roughly 70, 75% of our 2020 revenue plan is tied to that recurring revenue stream.
The installed base grew by 18% and we had continued success, bringing our mass Korean Ivy for spontaneously breeding patients to more of the biggest emergency departments in hospitals in the us.
Our gross margins improved 470 basis points over 2018.
We believe we're well positioned for 2020.
Product development teams did great work with our new Prosoft patient interfaces, the new integrated aerosol drug delivery disposal.
And the auction assist module, which we anticipate will contribute to our revenue growth and gross margin improvement plans in 2020.
I'm really proud of our team the sales team we have in place and love what we are building here.
Lastly, I want to thank our long term board member Neil Armstrong for all his contributions to our success over the years and wish him well on his retirement, while also welcoming lansberry to the board now I'll turn it over to John Landry, our CFO to provide a financial review John.
Thank you Joe.
Revenue in the fourth quarter of 2019 was $13 million, representing an 11.3% increase over revenue of 11.7 million in the fourth quarter 2018.
Total us revenue was 9.8 million, representing an increase of 8.7% over the fourth quarter of 2018, primarily due to a 21.7% increase in disposable revenue as a result of a large installed base of precision flow units slightly higher churn rates and higher average selling prices. This increase in disposable revenue it's.
Set by a decrease in capital revenue on a year over year basis.
Total international revenue was $3.2 million, representing an increase of 20.2% over the fourth quarter of 2018, primarily due to an increase in disposable revenue as a result to the larger installed base of precision flow units.
Higher average selling prices and to a lesser extent increases in service and other revenue.
Capital revenue, including revenue from both product sales and lease revenue was 2.9 million in the fourth quarter of 2019, representing a 10.3% decrease over the prior year.
You asked capital revenue was 1.9 million as compared to 2.3 million in fourth quarter of 2018, primarily due to lower average selling prices as a result of mix.
International capital revenues $982000 in the fourth quarter of 2019, an increase of 46000 over the fourth quarter of 2018.
Disposable revenue was 9.7 million in the fourth quarter of 2019, representing a 21.4% increase over the fourth quarter of 2018 and is primarily driven by an increase in our worldwide installed base of precision flow units and higher average selling prices.
During the fourth quarter of 2019, we sold roughly 96000 disposables worldwide.
Disposable revenue was 7.7 million in the us compared to 6.4 million in the fourth quarter 2018, representing 21.7% growth year over year.
This growth was driven by 14% growth in our us installed base slightly higher disposable turn rates on a year over year basis, and increased average selling prices of roughly 1.2%.
International disposable revenue is $1.9 million compared to 1.6 million in the fourth quarter of 2018 representing growth of 20.2%.
This growth was driven by 28% growth in our international installed base and higher average selling prices any international markets, which were partially offset by lower year over year disposable turn rates.
Worldwide service revenue was 411000 in the fourth quarter of 2019 of this amount 153000 was generated in the US and 258000 was from international markets, which increased due to greater service revenue generated in the UK.
Gross profit in the fourth quarter of 2019 was 5.9 million an increase of approximately 1 billion over gross profit of 4.8 million in the fourth quarter of 2018.
Gross margin was 45.1% in the fourth quarter of 2019 compared to 41.2% in the fourth quarter of 2018.
The increase in gross margin was primarily driven by increased worldwide disposable Sps.
Increased capital Sps and decrease in disposable component cost in comparison to the fourth quarter of 2018, and a favorable sales mix of disposables.
Research and development expense was 3.7 million in the fourth quarter of 2019, an increase of 959000 over the prior year.
The increase in research and development expense was primarily due to new product development cost associated with our oxygen assists module and nexgen Hybean I platform.
Sales and marketing expense was 9.9 million in the fourth quarter of 2019, an increase of 307000 over the prior year.
The increase in sales and marketing expense was primarily due to the fourth quarter 2019, U.S. salesforce expansion and corresponding compensation travel and employee related expenses and other sales and marketing initiatives.
General and administrative expense was $5 million in the fourth quarter of 2019, an increase of 1.6 million over the prior year.
The increase was primarily due to public company related cost, including increased headcount and employee related expenses legal fees accounting and compliance cost and consulting fees.
Net loss in the fourth quarter of 2019 was $12.5 million or 60 cents per share compared to 12.9 million or $1.39 cents per share in the fourth quarter of 2018.
Adjusted EBITDA for the fourth quarter of 2019 was a negative $10.8 million compared to a negative 10.2 million in the fourth quarter of 2018.
Adjusted EBITDA adjusted for foreign currency gains or losses net interest expense changes in the fair value of warrant liabilities gains on litigation settlement loss on debt extinguishment income tax benefit depreciation amortization expense and stock based compensation.
The $584000 increase in adjusted EBITDA loss in the fourth quarter of 2019 was primarily due to higher operating expenses, partially offset by higher gross profit.
As of December 30, Onest, 2019, cash and cash equivalents were 71.7 million compared to 83.5 million as at the end of September 2019, and 58.2 million as at the end of December 2018.
In the fourth quarter of 2019, our cash burn was 11.9 million an increase of 1.1 million from the third quarter of 2019 due to public company related cost, including Dino insurance premiums and accounting expenses legal fees. The expansion are you at Salesforce and investments in our product pipeline for products launched in the first quarter of 2020.
Please note the third quarter cash burn calculation excludes the impact of our follow on offering.
Now turning to guidance for the full year 2020, we expect revenue to be between 52.9 million and 54.5 million, which represents a year over year increase of 10% to 13%.
For the full year 2020, we expect gross margin to be in the range of 46.5% to 47.5%.
For the full year 2020, we expect operating expenses to be in the range of 71 million to $73 million given the timing of our new product launches and national sales meeting as well as limited release of our oxygen assist module I expect operating expenses to be weighted slightly more heavily in the first quarter of 2020.
For the first quarter of 2020, we expect revenue to be 13.4 million to 13.9 million representing growth of 9% to 13% over the first quarter of 2019.
I want to give you a heads up on an accounting change that we will implement in 2020 going forward a small portion of the revenue stream attributable to our disposable sold to customers who systems are under placement arrangements will be classified as capital product revenue.
There will be no impact on total revenue just a reclassification of a small portion of this recurring revenue stream between product revenue categories.
This concludes my remarks, I'll now turn it back have you Joe.
Thanks, Johnny before opening the lines for questions I'd like to review, how we intend to focus our efforts in 2021st we intend to drive topline growth by executing on our goal EDI strategy, increasing the installed base and launching the new oxygen assist module system in the UK.
Any year.
Second we intend to improve our gross margin by 200 to 300 basis points by selling the two new high clinical value disposables, the prosoft patient interface series and the integrated aerosol drug delivery Paypal term disposable.
Reducing our direct product costs, and leveraging our overhead and production capacity.
Third we intend to reduce our cash burn by revenue growth gross margin expansion leveraging our previous operational expense investments.
And driving working capital efficiencies.
Lastly, we intend to plant the seeds for future growth and margin improvement by continuing to develop our next generation vehicle term platform.
Expand the Salesforce, yet again in the second half of the year and publish more clinical evidence on our effectiveness at providing rental at Torrey support for hyper Celtic patients as compared to bypass.
The more you as investors understand what we do and how we make the clinicians and patients feel the clear you will understand the opportunities and challenges in front of us as we attempt to change clinical practice to provide you with a little more insight into this I want to share our patient story with you from last quarter. It comes from one of our new CFO.
Customers.
We just started using hybean technology at the hospital and our recall learning did it could reduce your two in patients.
Only thereafter, I had a woman and the emergency department in or mid Fortys, who presented with pneumonia, who was on for leaders nasal Kenya left with a respiratory rate in the high Thirtys working very hard to brief and was visibly uncomfortable.
The Doctor ordered and arterial blood gas, which showed Seo two of 77.
The Doctor ordered by path to which the patient refused due to her cost or phobia. This was also around 730 PM and EDI. Dr was about to end their shift so they were leaning hard to Intubate, if things Didnt change.
Our total about Hybean I technology and asked if they would try it the doctor were skeptical but agreed.
After going on Harvey and I'd technology within a few minutes to patients respiratory rate had returned to the mid to low twentys and she was visibly more comfortable the doctor was surprised and pulled me into an unintended room for me to educate her and several nurses on vapor.
The dark went and got the other physicians to look at how well this therapy was working and eight to one of the education on it.
The repeat blood gas at two hours post showed a much better Seo two of 52 and the woman was relaxed and resting.
Two hours later, she's ready to be admitted for 24 observation with a CR to a 42.
It was this woman who not only open my eyes to the usefulness of Hybean I'd technology, but also opened the doors in the EDI for this therapy.
In conclusion I'm feeling good with how we performed in the fourth quarter and now we're set up for 2020 in 2019, our installed base is on track with expectations disposables grew by 23% and now represent approximately 73% of our total revenue.
Gross margins were 44.3% in fiscal year 2019, and the expanded Salesforce is coming along nicely.
Thank you for trusting us with your capital it means a lot to us now I'd like to open it up for questions.
Thank you to ask your question you need to press Star and then one on your telephone to withdraw your question press the pound or hash key please standby will be compiled acumen a roster.
Your first question comes from line of Margaret Kessler from William Blair. Your line is open.
Hey, good afternoon, guys. Thanks for taking the questions.
First one for me.
Yes.
Good to hear from me too.
Just wanted to walk through maybe first the growth drivers both in the fourth quarter and then what you guys assume for 2020, and it's kind of a multifaceted question so growth within new versus existing accounts.
Particularly augmented by that penetration into the channel that you guys keep referencing so as we think of 2020 and now that you've seen some good traction and ease in 2019 should that have a bigger impact or how should we think about that scaling up.
Hi, Margaret's John speaking here.
Good afternoon, so in terms of our fourth quarter progress in terms of the specifically there was a major driver for us for the growth in the fourth quarter.
Continuing along with our 80 programs specifically focusing in on the gold accounts in particular those very.
Helpful. In a big driver for our revenue in the fourth quarter in terms of those 80 gold accounts that typically going into current customers were expanding our installed base in those 80 gold accounts.
And they're typically ordering.
A larger volumes to make sure they have enough equipment for the patients when they arrive in the D as well as moved to other areas of the hospital so thats been.
Key focus for us in 2019, we saw nice progress again in the fourth quarter 19, and look to see more of the same going into 2020.
Okay. So from your perspective, you do thank you have that some of these these placements are paying off in terms of additional orders. So maybe they ordered 15 29 Shannon added second sale as you go into 2020, they would they would order another 50 or 100 and you think that's the same or could it could it cannot be expanded I guess the on with the benefit you saw.
90.
So from a.
Modeling perspective with modeling it to continue as we've seen it in 2019.
We are seeing a little bit of an uptick in our utilization rates.
That we posted in the fourth quarter of 2019.
Three of the last four quarters had a slight uptick versus historical purchasing patterns, we attribute that to the 80 gold progress.
All the count progress of expect Ixia continue expect to see reorder rates and potentially a slight uptick but there are a couple of quarters in 2019, the first quarter in the fourth quarter, which are.
The flu season.
In the for first quarter in the fourth quarter is the start of the flu season, particularly RSV. So it's tough to drive a very specific.
Conclusion that this is the direction going to go into but we're going to leave it we're going to leave our modeling as is going forward from DPC utilization perspective.
Okay.
Makes sense and then in terms of the aerosol delivery products.
Neil how should we size that market for us the initial launch.
Plan for you guys as well as.
Packed in the near term whether its units raise piece.
Well I'm not sure I think its I don't think you're going to see a whole lot impact Margaret in the near term because we've just begun our limited market release in one country than a handful of accounts.
Remember a lot of what we're doing right now is to really dial in on what is the appropriate business model here. There's there's three pieces that we're trying so we're going to really work hard to make sure we get that right before we begin to move beyond that in any shape former manner. So if I was you I would be thinking about it starting to maybe start.
To show up in RPL later in the second half of the year I think thats probably right.
And in terms of sizing the market you know like I said were off will early in limited market release, So we're going to be talking to you folks again in another 60 days with our first quarter numbers. So I think we'll have a little bit more understanding then we'll be able to share a little bit more we do there to be able to size.
Great and then just if I am if I could one last question.
Just a follow up John on your last comments at the end you kind of reflected a little bit of an accounting change.
Placement revenues. So can you give us a sense of how big of a change that will be in how should we think about that growth by category throughout the year. Thanks.
Sure so from.
And accounting change perspective, it's a reclassification of the recurring revenue.
Between disposables and capital.
Relatively immaterial amount very small amount.
We will provide a little more color after the first quarter Paul in terms of the the magnitude of that but.
From an accounting perspective, it's immaterial to our financial statements.
Okay. Thanks, guys.
Thanks Mark.
Your next question comes from the line of Jason Mills from Canaccord Genuity. Your line is open.
Hi, Good afternoon, Joe and John can you hear me okay.
You bet I know in Jason.
Doing well thank you very much.
Couple of questions Joe.
Handed over to John whichever one of that start by just asking your perspective on sort of a topic does your corona virus and just be interested to hear your perspective, specifically on what it clearly is an evolving situation both from.
April is perspective, as well as sort of.
Your perspective on an overall.
Could this potentially be a positive for you from a capital sales perspective.
I certainly don't want to get over my skis here on it but just would love your perspective is I'm sort of thinking about this from the standpoint of expanding treatment volume.
With this crisis as fast as possible, if I'm, a hospital and fill the Philips and IP TV capital being two to three times more expensive versus Hybean I received to set up well for you.
I would love your perspective.
Well.
It's something we've given a lot of talk too.
These patients show up in the hospital with pneumonia and over 19 of the in today is a former pneumonia right and they are in respiratory distress. So it's it's reasonable to expect that to the extent that hospitals that are customers of ours now are experiencing over 19.
Pretty good chance that theyre going to be using our technology on those patients would be my guess.
In terms of what it would do to our business. We spent more time thinking more about making sure we've got our supply chain ducks in a row.
As you as you know Weve spent last couple of years getting most of our supply chain organized so that it's really a domestic us focus supply chain and our factory here is in new Hampshire. So.
We've we've bumped up our production a little bit we've bumped up our safety stocks little bit.
We're going to make sure that we're going to be able to meet the needs of whatever our customers need.
Where we're going to be communicating with them in the next 24 hours letting them know that.
Making sure that they understand that theres no need to to buy extra products, we're going to be able to take care or whatever they have.
And I talked to some of these customers in the last 24 hours 48 hours and what I'm hearing from is kind of a mixed bag I am here and in some hospitals, they're not doing a whole lot.
Looking out a lot like the flu and some hospitals are doing more and doing a little bit more planning and preparation. So I don't I think it's probably from a supply chain point of view were offset not a problem I would be really surprised if I had an issue there from a we sell more boxes and that kind of thing because.
Hard pressed Jason if.
If they're not already using our technology now used to be pretty pretty rough time to go learn how to do it right. I mean this one is for keep so I would really not expect to see that.
If theres anything you know it could be a bump but on the other handing off at last for a while or gets more serious I just saw that Italy, just closed all their schools in the country for two weeks. So we think about that kind of thing too and does that create complexity for our employees and our workforce.
How do we plan for that which I think we're doing a pretty good job. So net net you know where in the wait and see category and we just want to be prepared to support our customers.
Good perspective, Joe I appreciate that.
Just moving on.
Wanted to talk a little bit about your overall philosophy. It seems clear to us I think a lot of your investors that you are really focused on the disposal revenue growth and for good reason obviously.
What is that what does that imply as we not only look at 2020, but over the next couple of years with respect to your.
Your capital sales strategy.
We have had.
Various models that you are going to deploy to increase your installed base with the latter comment being good chief focus so talk to us maybe a little bit about if you wanted to sort of can find the comments within the context of your guidance maybe talk about how we should think about.
Capital revenue growth comparing to the disposable revenue growth clearly the latter being the focus and tell me if I'm wrong about that but any comments there would be helpful.
So I'm going to talk briefly about the business model and then John is going to talk to a more about the modeling I would tell you that business model has changed we're working with some larger accounts, which means we're placing a few more boxes, we've got more reps. So.
Placed in a few more boxes, but at the end of the day, we're very focused on growing that install base last year that installed base grew 18 plus percent I think the disposables grew into the low double twinings, so selling capital equipments important part of what we do we're going to continue to do it theres a lot of value around this technology, but at the same time, if theres an opportunity for.
As to increase that installed base and get those disposables, turning where we really want to do that Jason because 70, 75% of our revenue today comes from that recurring revenue stream and we really like that a lot John.
Yes, I agree with that Joe So selling capital is something we have done we'll continue to do so from from modeling perspective, I think about the guidance, we don't breakout specifically capital disposable or service revenue independently of each other for.
External purposes in terms of.
Directionally I think we've.
Through our installed base as Joe mentioned, 18%.
Well look to be in the mid teens.
This year as well to drive that disposable utilization to drive that disposable revenue up.
Year over year and continue to grow that.
And make sure we have an installed base a continues to support.
The growth in our disposal revenue stream as a percentage of total revenue.
That's helpful guys I appreciate that.
A sneak it.
Multipart third question just because.
But I do I guess, but anyway, specifically to product development of future pipeline.
First Joe on the OEM in the United States.
Talk talk to talk to us about.
What we should expect to hear from you with respect to your.
Conversations with the FDA and plans.
To get that product ultimately to the U.S. market and then also talk just a little bit about.
The next generation platform and what that will entail and how you think it could be incrementally disruptive to the competitive landscape in your favor. Thanks for taking all the questions.
So Jason just for the record that was third question, but you'd asked it into parts at least so every quarter south for.
Let's move.
On the there's not a whole lot that I'm going to be able to share with the beyond that we have met.
Several times with FDA and having very what we would characterize is very productive conversations with them. This is a complex. This is a complex piece of work. There is no. Other closed loop control system, that's cleared in the United States in the respiratory space. So it's it's new ground for FDA.
I would tell you the big thing to watch for from our side as we work through this with FDA is it will be our intention that will start.
An important clinical trial here in the United States.
My expectation is we will start that in the back half of 2020, So I think that would be to thing to watch where there.
And of course, we'll let you know when we when we get that thing run it.
And with respect to our Nexgen system I think we're feeling pretty good about that the guys made a lot of great progress on it in 2019.
And we're still looking and having it on our first patients here by the end of this year early next.
And we think that it's going to be a pretty cool product so can't wait to get it out in the market.
Thanks again.
Your next question comes from the line of Marine evolve from BTI GE. Your line is open.
Hi, Joe Hi, John Thanks for taking my questions site.
You bet.
Yes, Joe I wanted to start you sounded really optimistic when you talked about the progress your reps are making and I just wanted to see if I could dig a little bit deeper on that and if you could talk about kind of the productivity ramp you're seeing with these reps as they're starting to I think lap there one year anniversary. So at this time.
So just to be clear I'm, a generally optimistic person to begin with right. So I wouldn't read a whole lot into that I would tell you that I am pleased with what im seeing out of the field I think.
The teams are really settled down I think at our leaders have done a really good job was great to see.
Two thirds of our legacy B to B reps in the third quarter delivered on there on their commitments around install base and we saw something similar in the fourth quarter.
We just completed a 10% expansion and there was no drama Muniz pretty quiet and pretty Joe and everybody went to work and we had our national sales meeting in the middle of January and that was good now they've got to very cool.
Brand, new disposable products with much higher clinical value to go and so on the back so I don't know I'm feeling good about what they're doing I like what I'm seeing and let's go see some more.
Sounds good no Carlos good thank.
Just a touch on the two new disposable products the high clinical value products, you have their love to hear a little bit more about how that launch is going to progress throughout the year now that you're done with limited market release.
So we great question, so we kick that off at the National sales meeting and we really started shipping product to customers.
Full market release fashion the early part of February.
Recall that one is a prosoft line of advanced Kenya's that are made of a very soft material and we're getting really good feedback from both our customers as well as we're actually hearing from patients about how much I'd like this.
And the second one is our aerosolized disposable patient circuit, where we've actually integrated.
Aerosolized drug delivery into the disposable and that's that's gone very well as well I mean, we're getting to see that we actually hit the season pretty good because RSV is really where they're going to use a lot of this so we like the way both from a playing out.
It's still early days, we don't have a lot of revenue in our plan for this as you might expect but we feel pretty good about what we're seeing so far.
How much.
There are no further questions at this time Mr., Joe Army I turn the call back over to you.
Well I want to thank you all for your interest in April from where we really appreciate it we look forward to updating you on our progress again next quarter.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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Okay.
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Hello.
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