Q3 2020 Earnings Call

Good day and welcome to the marks Onyx third quarter fiscal year 2020 earnings call. Today's conference is being recorded at this time of let turn the conference over to Mr. Norberto hijacked Investor Relations. Please go ahead Sir.

Thank you operator, and good afternoon, everyone. Thanks for joining the Mikes Onyx fiscal 2023rd quarter Conference call.

Well get started in just a minute within their teams comments before doing so let me take a minute to read the safe Harbor disclosure language.

Today's call her webcast contain forward looking statements within the meaning that the safe Harbor provision.

The U.S. private Securities Litigation Reform Act of 1990 blogs and can be identified by the words such as anticipate.

I believe estimate expect future likely may should well.

Another similar references to future periods.

Samples are forward looking statements include statements regarding guidance relating to our financial results.

Forward looking statements are neither historical facts north shore answer future performance.

Because forward looking statements relate to the future they are subject to inherent uncertainties risks and changes in circumstances.

Therefore, you should not rely on any of these forward looking statements and the company undertakes no obligation to publicly update any forward looking statements that may be made from time to time, whether as a result that new information.

The developments or otherwise.

Today's call and webcast will include.

Non-GAAP financial measures within the meaning of the FCC regulation G.

When required reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Can be found in today's press release as well as in the company's website.

With that I now like to turn the call over to Mr. southwest, Missouri, Enac as President and CEO of my Sonics. Please go ahead.

Thank you Melissa and good afternoon, everyone.

Thank you for joining us on the call today through you off but still Twentytwenty third quarter results.

Joining me on the call discharge, while our Chief Financial Officer.

All commenting on the quarter performance.

I want to start recognizing that this was extremely challenging time for all of us on our fault or what does most affected by car that 19.

In particular, those whose health as the impact to bother Pembina and does on the front lines of the crisis.

Despite the significant headwinds during the second half of the quarter and many difficult decisions. We have had to make we're pleased with our results for the third quarter and first nine months of fiscal 2020.

In particular regarding the ongoing gross domestic surgical division, which saw a 41.4% growth.

On a pro forma basis, what their skin style included four last year I'm pleased to report total revenue growth of 8.6%.

As a reminder, we are reporting our results across two separate sales channels, how surgical division and now Weve Division.

While January was largely speed from the impact to the cars at Monte and then we did experience a decline in sales and they do particularly in international markets and then saw a much more pronounced slowdown domestically in March which intensive pod throughout the month and continued into April.

International markets, including China, Italy, Spain, and the UK show signs of districts early on and have continued to be challenged on the domestic front. The U.S. market is beginning to show some signs of stabilization and we hope that trend continues into June and going forward.

Overall, the revenue increased for the third quarter reflects the strong growth you're not the made the surgical market driven by an extremely strong adoption of mixes.

Followed by healthy growth and I wouldn't division supported by Sonic one theres skin.

I'm pleased with the Directionless surgical division was headed I did slots at about the opportunity as we get through the current challenges and begin once again to regular contact and directions with health care professionals.

Next up is a key component of our growth strategy.

All in one platform will help us cross sell into multiple position speciality and leverage our consignment business model to drop recurring business revenue.

In addition to the early success of mixes and the value proposition, we bring what's our hand pieces and disposable I'm also very encouraged by the results from our recent devaluation with the large IDN.

The feedback was very positive and we look forward to discuss in added detail over the coming months as things return to normal.

As it relates to our wouldn't division, we have a great success with integration of our Salesforce.

We're not doing additional trying to get us sales reps more comfortable with the o., our focus selling out each one sonic one.

I came from my to further leverage the opportunity that exists in the spot scoring wouldn't market.

One of our biggest opportunities in the room division lives within our existing surgical customers along with opportunities for cross selling that will help drive incremental revenue in the we'd division for both their risk in Sonic one.

As it relates to neo pets, we will continue to work with quite a lot of to bring the product into our wound care offerings and to implement our go to market initiatives in the coming months.

Given the need to constrain cost with the Tom we've had to pause or chemical trials that initiated or intended to initiate for therascreen them Sonic one except for the RCP about that develops as to guide further evidence for expanded therapist in coverage by payers.

With regard to try and as a situation has been challenging and we are actively engaged with our partner department mutually beneficial solution in the coming months as dozens returns to normal.

Moving onto our sales resources, because I tend to have listening to preserve as many jobs as possible in particular file for members of the management team and senior team members took significant compensation cuts and we've implemented various other cros and expense cuts initiatives in order to do all that we could to minimize the disk.

Corruption to our sales team.

We still have over 150 domestic field resources across both divisions 17, surgical and 18 mood were put off plans to add new team members as we look to reach a more stable operating environment before adding team and Mr. helps us grow our addressable markets and continue to support our products and.

Lines at the highest level.

As I mentioned earlier, we are continuing to invest in our sales team by online trained surgeons cinema and other initiatives that provide valuable information feedback to both physicians and our sales team across surgical and wouldn't divisions.

Coming to the third on their operations and current operating environment, we continue to make both small and large improvements in how we handle our short mid and long term operations in 10 of the supply chain. Our outflows distribution partner for mixes has been able to produce what we've needed from a demand perspective regarding that.

As far as of Opex the chips at some tips. We've had a lot of cooperation from the end of importance and for the hand piece as we have not fully transitioned our existing team to be more focused on building in developing and pieces.

While it is impossible to know with it and see what the future has in store given the dynamic nature of the pandemic and its impact on just about all aspects of life, we're optimistic that the third and fourth quarters of Canada, Twentytwenty, we'll see hospitals and outpatient facilities. Once again before me elective surgeries and a greater number of procedures taking place.

In which our products are utilized.

So while the exact timing of the resumption of elective procedures to more normalized levels is difficult to predict with much precision. We do anticipate the vast majority of patients treated by our products will return and received the mystery treatment.

That's good enough confidence that our financial results will improve as we enter fiscal 2021 underpinned by the strength of our resources across our sales team the upside in adoption, we see regarding mix of the potential that still remains for growth in both our surgical imaging businesses and the improvement in our logistics and operations.

As it relates to our financial health, including our liquidity position, Joe will offer added detail, but I just wanted to highlight that we've taken a number of initiatives and put forth stringent controls to ensure we maintained a strong cash position in order to manage through the unprecedented environment.

And that we're in a decent position financially does initiatives include the aforementioned buys salary reductions of all direct to them above a pulled in clinical trials.

Tom Productions, the curtailing of traveling in marketing expenses and a number of other initiatives.

Finally, and most importantly, we are managing my phonics for the long term as we've always done we continued to support and invest in the business I must remains our philosophy. We will continue to stay focused on what we do based.

And.

What a fundamental problem for the success of our business investing in the trading about people in our product and in our ability to provide world class support to our customers. We're doing this while managing the business wise, we prudently and with a long term vision with us mindset to believe will overcome the challenges that we are currently facing and.

Hold on the significant success and work that has been done in the recent cost whether that I'd like to not turn the call over to our CFO, Joe Dwyer joke.

Skyworth and good afternoon, everyone.

As mentioned in today's press release on September 27th 2019.

Our next acquired privately held focused medical.

The actual results for the current quarter and reflect the operations of both by products Infosys, while the comparable period for the prior reflects only by products for the nine month period. The current here reflects only two of three quarters of the combined operations.

Salsas and the prior year exclusive.

Yes.

You are on the same page as well yeah.

Fiscal third quarter revenue increased $17.9 million compared with 9.6 million for the third quarter, the last year by geography, 83% of revenue.

It's from domestic sales was 17% coming from international markets.

On a pro forma basis, assuming by Salix had acquired sources for the full third quarter of last year Q3 revenue increased 8.6% over last year.

Including a 19.7% rise and domestic revenue and a 24.7 decline in international revenue.

The gross profit margin.

Sales for the quarter was essentially flat 70.3, preset compared with 70.7% in the prior year.

Total operating expenses increased to $17.9 million.

Compared to 8.4 million in the prior year period, primarily reflecting the acquisition of sources.

To $17.9 billion represents about 10 level of operating costs, because our second quarter.

Which was $18 million.

For the third quarter selling costs were down around $200000.

Primarily from lower commissions that restrictions on travel in March.

Gionee costs were down about $700000 in the second quarter.

Resulting from the write off of our contract at sort of $960000 in the December quarter.

R&D expenses.

Were about eight we're up about $800000 for the quarter over the second quarter.

Principally resulting from the costs were ongoing diabetic foot ulcer study.

The tax line includes an income tax benefit to 455000 towers.

Which relates to an adjustment of the purchase price accounting for this helps us acquisition.

We reported that third quarter net loss of $5.6 million at 34 cents per share compared with a net loss of $1.6 million or 70.

Cents per share in the prior year period.

The quarter over quarter increase in net loss was primarily attributable to the acquisition of salsas and acute challenges associated with covered that came during the current quarter.

We reported Q3, adjusted EBITDA loss of $3.8 million.

Compared to an adjusted EBITDA loss of approximately $90000 in the prior year period.

Moving on to cash flow and balance sheet.

$39.7 million in cash at March 31st 2020.

Largely as a result of.

Gross proceeds of 31 $34.6 million related to the equity offering we completed at the end of January.

We ended fiscal Q3 with approximately $40 million in debt.

We are in compliance with our debt covenants.

Working capital at March 31st 2020 was 55.2 million up from $28.7 million at December 31st 2019.

Cash used in operations for the third quarter was $7.9 million about the same is 8.1 million we use in the second quarter.

For the third quarter cash used in operations consisted of $4 million.

For the net loss lifespan cash items and $4.5 million.

Accuses for working capital.

Working capital use consisted of an increasing inventory of $3.3 million than an increase of accounts receivable of 1.2 million offset by a decrease in payables.

We recognize our need to preserve liquidity and to manage the cash flow positive operations with our existing cash and debt facilities.

Accordingly have implemented the following cost reduction plan.

We have reduced the base salaries the lost after the title of director and above.

The reduction is ran from branch and 15% to 15, 50% of base salaries.

Our board of directors, who is also readers that reduced their cash compensation by 100%.

We reduced our headcount by around 8% through a reduction in force at the beginning of April.

Hiring hiring freezes put in place in March.

We're not hiring new sales personnel, but we're focused on keeping the current sales force in place to take advantage of selling opportunities when the markets open again.

We restructured our international sales organization to reduce commissions.

[noise] travel restrictions in place for all staff indefinitely, except for local travel of sales reps to customers.

Additionally, principally all company events have been put on hold or canceled including trade shows.

Marketing activities have been significantly reduced.

Yes, let's use the company's discretionary spending has been canceled or postpone.

This concludes one studies in certain product development efforts, we do our plan to finished the first phase approach. The few one study in the fourth quarter.

And then put the other phases on hold.

Hi, there nature very variable selling expenses will be lower based on lower revenue levels.

Finally, we continue to trim and conserve wherever we can.

Overall, we expect these actions to reduce quarterly operating costs in the 20% to 25% range.

We applied for and received a $5.2 million PPP loan from the Sta in early April.

While we were in full compliance with the eligibility requirements of the loan when the program was first enacted the SBK as you know as change the eligibility requirement several times since then.

Board of directors continues to evaluate this changing landscape and we're waiting to see the new has FDA guidance on this topic, which is expected to be published this week.

Accordingly, we have not yet made a decision as to whether or not to repay the loan by the new late 14, they set by the FDA.

Despite the challenges ahead. They salix is committed to using every resource available to support our liquidity position and recruit and to reduce our cash burn.

As revenue was reduced to pandemic.

With a strong balance sheet, reflecting over $39.7 million in cash.

And the aggressive actions, we've taken to reduce their overall costs.

We believe buy side it is well positioned to stand is challenging environment, given our current expectations.

Of hospitals, beginning to a level elective surgeries to return resumed during the next several quarters.

Regarding guidance, while my Sanex was well on track to meet.

Our fiscal 2020 revenue growth go through the first half the fiscal 2020, the onset of covert 19 materially impacted the industry and our business in the third quarter fiscal 2020 and continues to impact.

Operations in the fiscal fourth quarter as a result on April 2nd the company formally withdrew his previous issue guidance is that currently polishing guidance.

With that I'd like to open the call for questions operator.

Thank you, ladies and gentlemen, if you'd like to ask your question. Please single pressing star one on your telephone keypad, if using a speaker phone. Please make sure you mute function is turned off what are you seeing us reach our equipment again press star one to ask your question, we'll pause for just a moment talking run an opportunity signals for questions.

And we will take the first question from the line of Kyle Rose with Canaccord. Please go ahead.

Hi, This is the an entre Kyle was hoping I could ask for some more detail on the ongoing Nexus rollout.

I now that's been a major area of focus for the company recently he told they take away from any efforts there I'm on the last call. I think you mentioned over 15 Nexus units I think consigned.

And you probably exceed the 150 units by June is that so the case area has anything changed there. Thank you.

Well, thank you very much for joining.

Nicholas runoff was progressing extremely well and in spots of the setbacks. We are on track to exceed 150 units that we'd given guidance too. So I think weather disruption, we will still exceed that number.

There's a lot of work in progress with makes us a lot of.

Evaluation, but still ongoing opting for had been paused really of the result of the card would cost us and we're hoping to pick those up when can start normalizing, but I.

I think weve demonstrated very early on that with a national rollout that there's a lot of pent up demand for the product or product has held up very well in competitive situation. So we've taken some good competitive accounts.

As I said, we had some success with a large IDN as well so everything is indicating that makes us we'll continue to gain momentum as we returned to normal.

Perfect. Thank you and then on just on hand piece ordering patterns on are you seeing any changes there from coveted or over the last few months I think on last call. You mentioned most for buying to hand piece is narrow is around 10% of the total just any color on that.

It would be appreciated thank you.

Yeah, we still see we still continue to see the trend continue every system has to hand pieces that purchased.

Sure a constitutes about 10, but thing kind of what we see no as a significant opportunity I think as the sales force matures them gets more comfortable and as we build the installed base there will be the opportunity not only to sell neuro hand pieces to new accounts, but also to go back to existing bonescalpel customers and been up sell Cup.

The moves on the euro capabilities of the system as well, but in terms of that everything is on track.

Basically had a couple of months to validate what we thought we'd seen in the early parts of the launch and that has certainly continued.

Perfect. Thanks for taking the questions.

Thank you.

We'll take the next questions from the line of Ryan Zimmerman with BTG. Please go ahead.

Hey, Thank you for having us.

So just wanted to ask a couple questions Cyrusone job number one where did you and your sales headcount for the quarter I heard I. Appreciate your comments on holding off on hiring further, but one where did you and for the quarter and then I want to ask Joe So just on us, but cost basis or your cost basis now what is your fixed costs look like.

Relative to your variable only thing about expense savings going forward.

Thank you.

Thanks, Ron Thanks for joining in terms of head comps I was so the surgical ended on 70 field resources that sales manager and sales representative and on the when filed we ended on 81 sales reps and managers, so a little bit less.

On the 153 that we had but I think you know as Joe indicated.

Sales expenses and keeping the sales force in Texas as being run about top priorities I think when we see business returned to normal start accelerating will backfill the the two or three position, but we've still got to backfill and then resumed normal hiring when we see things stabilize in the mall.

Consulting and everything is on track to round out thinking in terms of preserving the files boards. We bolsa just on a fly during the period done a lot of online programs you know to keep the sales force engaged on a daily basis on the marketing team has picked up quite nicely.

Hello, everyone and the variable expenses versus fixed I don't have that with me I can I can get back at it but we did I guess with revenue being down there. They are the variable costs are down also but.

I can give you maybe a better take out a little bit later on.

No problem and then just broad strokes style rose kind of how you see the wound market you know recovering over the coming quarters.

You know I guess I wouldn't expect wound bases to how how are willing to talk a little better away because.

They want they want to keep those patients out of the hospitals given their ability to get coven things higher than others. So this would love your thoughts on that thank you for taking the question.

Sure I think what we saw in the on the room business is that the room business actually decelerated a lot quicker than the surgical business with we've seen a marked decline in the room business already by the end of March the numbers with significantly down.

I think that was.

Hi, such a number effect as you know leads to being denied administrators within hospitals in many instances deeming that.

All these routing patients were elective cases and that they could put them off and we saw that that turned around with a lot of pressure from the physician. So we've seen in a room cases come back fairly significantly in the in the hospital outpatient.

Market, we've seen enough pickup.

In other parts of K lock physicians offices, where they've been unable to do that treat the patients in the hospital, but we've also seen a maroon five debt.

Youre really chronic wounds, where you essentially got it yeah look at limb salvage surgery. Those cases have been there and we've been fortunate that up salespeople are still being engaged difficult comps will be unable to have access to those surgeons in those cases for the really in a difficult to heal wounds I think what what weve.

Also seen during this room to stabilize it is improving every week or less if that's a small improvement, but yet the wind businesses are certainly makes perfect had been then the surgical one and I think we'll see more gradual steady recovery on the wind cyber is on the surgical we're expecting.

You know something more dramatic because you've got a lot of pent up demand.

Also what do you see knows that in a lot of the HR PD fittings wed be phentermine normally very congested I think there will be very well positioned going forward because there is going as really indicated to be used every two weeks instead of weekly or biweekly signing with physicians are looking at it.

Accretion the load on some of these areas of the hospital that gives us increased optimism that we'll continue to do well with their risk and but.

Early indication what we've seen in the marketplace surgical.

Come off as quickly as rooms.

But I think surgical for more we'll certainly take longer to recover spawn in particular.

Thank you Tom.

Once again, ladies and gentlemen, as a reminder, if you do have a question. Please press the star followed by the one in a few using a speaker phone. Please make sure you mute function is turned off what your single Felicia equipment.

Well take the next question from the line of Alex Nowak with Craig Hallum Capital Group. Please go ahead.

Right. Good afternoon, everyone I'm just follow up on that last question stylist could you help us quantified the impact you saw both business both businesses and April.

And what you're starting to see here in the first two weeks in May our how much did volume get hit compared to pre corporate levels at a trough level standpoint, and then in the past few weeks here in May what have you seen from case volume and starting to come back book and surgical it and it was.

Yes, I said at the end of March you know, we ended being pretty significantly hit so that we looked at April we bring volume with what's still significantly declining and then I'd say.

We're about the middle of the month I saw the increasing pretty nicely sub as as a combined unit, we probably end of April as Ted and 50% down.

But for the plan I would say that you know rune was probably six probably 75% talk where as you know surgical was more like 70% often I think that was particularly bad on spine side of things and.

Pediatric deformity with still there.

Your your routine bonds. So do you like M&A activities infusion bugs have all been put up pretty significantly and what we've seen as a steady.

Got any increase because we wanted to sales orders in a number of units shipped et cetera. So rude has been steadily increasing them going up on the surgical side I think it's at plateaued.

Over the last three weeks, what we've seen as you know certainly more activities in the field at hospital spot opening up but we haven't seen a significant uptick in spinal cases, yet so it could be that hospitals are bringing physicians back getting surgeons back getting patients back and ready for surgery, but we havent seen that.

You know bump up on the surgical thoughts as as we predicted but I think that is coming to the encouraging thing is if you look at.

Around the country. The northeast is still very very dramatically affected but.

All other plays to seem to be opening up gradually so I think there's more of the surgical team active every week, but nothing.

Remark on the sale, but I can say, we've seen a 10% increase we've come to become the under surgical five years.

Okay that that's really helpful. And then would you expect to see more one case you shipped out of the hospital kind of a continuation of the trend here due to cold that and how does that change the value proposition of Sonic water Theres scana under a new scenario.

Yeah, certainly things that you know the wound world is different in the Dana's change post code, but I think that people are going to in particular physician yeah lifted treating you know when patients and other settings of care I don't think it's just going to be in.

In hospital in the outpatient departments nothing there will be.

More work being done in physicians offices.

I think that in terms of the Sonic wanting a value proposition that still a very strong value proposition coal lung salvage surgery. These really complete difficult to heal wounds in the along we've seen.

Good.

Pickup in an interest in using the two technologies in the combined basis and a lot. So we feel that you know there's going to be a lot of focus from us on but it's hard to heal wounds, whether using the sonic one combined with Derisking and on the outpatient and physician office side of things.

We just see a shift the away from traditional crowded hospital kind of environment side of the I think physicians on now more open to having discussions around products that they don't have to apply as frequently as they did in the costs I think that is more of an interest from physicians to.

For the fourth supposed solutions, where they can treat deeper less frequently.

So do we see it's still early days, we learning as we go I think this is something new for everybody, but it's certainly going to provide new opportunities.

And how are you thinking about the sales environment in this pause covered world where spine in wound centers could be relatively more restrictive to outside vendors have hardly positioning the sales force there to succeed under under that potential scenario.

Yeah, I think Alex we put a number of initiatives I think it's a CMO.

Spreading the call point why that before it was just really focusing on they got centers I think we gain federal team and spending time on smaller centers as well there is going to be a focused on I see.

Near our remote remains a significant opportunity for us to grow in a given our low penetration rates based so there's certainly more focus from the sales team on the nearest onto the business and then I think it's all set up to us internally to develop new products and solutions, we're hoping to have two new product launch.

Shows.

For the end of the calendar yet one of the Moon side, which is going to be a more aggressive prior before.

They got bigger surface area. So those agreements and then we're also looking at procedures like Mako to stick to meet where we can offer listing base of option.

That typically doesn't just stick to the market that weve never really tetco before which is really soft tissue management in the spot on with arena.

Onto your question, that's why the coal planes, new products, new procedures that regarding often thats, how we looking at the market.

That's good to hear and then just one more question if I could you just provide some more detail on on how Nexus really helped that the surgical business. This quarter from a revenue growth were there just a lot of Nexus placements that went live in a quarter and that drove account growth or are there any onetime items to drive the 40 plus percent revenue growth there.

Yeah, I think a combination.

We certainly had I was said two and a button month of written normal sales I think for the first Tom we had the whole salesforce with access to Nick So far there was pent up demand, but that being said if we have to look at the placements that we've had with makes us up to now and we look at the top line down there.

I'm pretty.

Enthused.

I need to volume in the pipeline, but the quality. That's that's sitting in the pipeline that the sales forces has managed to put together and we actually hopeful that post covered that our value proposition resonates even in a higher within the hospitals because if we looked at hospitals one thing that we do know is capital.

Equipment budgets are going to be more constrained than ever before and if you look at our value proposition with Nexus, we freeing up money to be used elsewhere in the hospital. So I think that you know weve actually surprised ourselves within a lot of discussions with hospitals that with the full could be missed interested that are more interested in.

Hello model, we've had the validation with a significant ideas that we've been able to displace one of the established players in the market because it's probably going to be a dual source contract. So I think there's just a lot of things happening. There's not one thing that's driving makes us growth I don't think there's anything that's a one.

Tom in those numbers I.

I think numbers can always be bumpy quarter to quarter, especially when you have a 40% growth and not under normal circumstances, but I think there's just a lot going on I think it's a lot product you've now got a maturing salesforce the target teams being very good on that so I think it's just really about execution, if we continue quarter.

In quotes out to keep that so forth engaged we execute we have the supply to meet the demand I think we'll continue to see good growth can mixes.

We very bullish shot.

That's great to hear appreciate it thank you.

Thank you.

We'll take the next questions from the line of Michael Kaufman with MK investments. Please go ahead.

Hi, Steve Ross.

Well, it's like doing all right stuff. So you have to say.

Cost streamlined lighter this pandemic problem.

Sure you guys I'll handle a very well I'm just wondering now what's your cosmic revenue breakeven.

No, we're not giving guidance Michael I think we're working to make sure that we.

We still.

The existing cash and we have an available.

Yes, good good debt capacity to.

Picture that we can finally operations through to cash flow positive that's our goal.

The question there are not why not indicating how much that's going to be as a percentage of revenue from an expense.

Rick.

So you have no concept as well.

Yeah, we have gravitated breakeven, we do we got a crystal clear concept, we just can't.

Give that here, because we're not going to be providing guidance on the call.

No.

God is what's your spec.

That said this is how you've restructured.

Expenses.

I'm not clear from what they said.

Right. Okay. So so here's what we're looking at as we've we've got our own internal revenue plan that we're working in adjusting overtime as we need to I guess as that business starts to pick.

Pick up in the growth starts to accelerate we'll be able to Pete somebody expenses back into the operating expense line that we need to is we're going to have our sales force out traveling.

Trade shows continue maybe it's a.

Few falter project or some of the investment so we can run lean and mean and starve the business if we.

If we want to that's not our NK attentive to continue to.

Rather healthy business, so, but we do know that we we need to operate within our cash constraints.

Yeah, Yeah yeah.

Yes, I think you can take some some comfort in the fact that we're targeting that over the next five quarters, we want to be at breakeven. So I think we'll manage the business and get that but we can't give you a hard number today. That's the goal as the organization, we think we five quarters away.

Okay. That's gives me I swore feeling I'm sure you guys can do it.

Certainly this is trial by fire no.

But in the world ever expect purpose.

Thrust upon us.

I know you know.

Absolutely look there's not a playbook for it but I think the team has really resident to the challenge and we've really been very proactive in all the majors that we've taken to manage the crisis and I think we continue to do that.

Really ought to just come in the team because in spite of a lot of hardship and there's been a lot of financial hardship on the people as well I haven't you know why is that still continued doing what needs to be done. So I think that we were basically emerge out of this crosses a stronger company.

These things are brought along to pay stuff. This has certainly test for that but yeah. It's made us look at becoming more efficient smarter in terms of how we look at the both knows how we'll have good running the business I.

I think you know you can take some comfort on that that the team is.

I was also positive.

Stepping on the break a little bit since you've grown so much so many people.

Really.

Bring that people up sustaining.

So your efficiency gets better.

Uh huh.

So there may be some tiny at current or goodness.

Yes, correct correct.

Okay.

That's got stuff like that.

Keep up the good work.

Thank you. Thank you for your support.

[noise] infusion no further questions at this time I'd like turn the conference back over to management for any additional comments are closing remarks.

Thank you operator, thank you everyone for spending time with us today I'd like to take this opportunity to thank you for the confidence you continue to play SMS I'd also like to extend the very special. Thank you to the extremely talented and dedicated my Sonics team members for their contributions to make my Sonics, a world class company over the history of.

Sonics, we've had to overcome significant adversity from time to time and in every instance, we have been do it and then flourish due in large part to their resiliency and dedication we fully expect that to be the case today and look forward to once again cooperating with healthcare provider to ensure the based patient outcomes. We are proud about contribution.

And to improve the health and lots of patients across the U.S. and worldwide.

Look forward to speak into a day when we report our fiscal Twentytwenty fourth quarter results in the interim should you have any additional questions wasted life to schedule a formal meeting with management. Please contact our investor relations firm JCR at two one to 8358 500 and.

You can check with the birth or Jennifer Thank you and goodbye.

Ladies and gentlemen, this concludes today's call. Thanks for your participation and you may now disconnect.

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