Q1 2020 Earnings Call
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Welcome to Intricon.
First quarter 2020, <unk> earnings conference call at this time, all participants are in listen only mode.
After the speakers presentation, there will be a question answer session.
To ask a question during the session you'll need to press star one on your telephone. Please be advised that today's conference is being recorded if you require any further assistance. Please press star zero I would now like to hand, the conference over to your speaker today, what do you Salvo Investor Relations. Thank you. Please go ahead Madam.
Thank you Christine.
But again I would like to propel remarks, with the customary safe Harbor statement today's conference call contain certain forward looking statements. These statements are based on the current estimates and assumptions because management and are subject uncertainty in exchanges as circumstances. Given these uncertainties you should not place undue reliance on forward looking statements.
Actual results may vary materially from the expectation contained in today's call.
Less than descriptions of the risks uncertainties associated with our business. They suffer the risk factor section of our most recent annual and quarterly reports on form 10-K, and form 10-Q, respectively with the FCC.
With that I would now like to introduce Intricon CEO Mark Gorder for view of the company's first quarter performance.
Got one both the companies feel our CFO will then cover the financial results in more detail and at that point, we'll open the call for your question Mark.
Thank you Lisa Thank you everyone for joining us today.
Before we begin the discussion today I'd like to first expressed or deep appreciation to supply and health care professionals.
Continue to terrorist we've started to covert 19 battle, we are truly grateful for your dedication compassion.
An inspiration.
I would also like to thank the entire intra counties.
I'm impressed by your Brazilian flexibility and commitment to our customers as well as to each other.
The past year, we'll launch event guardedly been extraordinary on many levels.
Highlighted in our business yet they release in early April Interbranch first priority focused on protecting and supporting that happened that being about a point or communities that our customers by limiting the potential transmission of cobot 19.
Hi, good work and they've been patients from Saturday against the government and health care agencies, we couldn't be transition most employers to where the nice work environment.
Well employers were essentially supporting our manufacturing assembly and had to related operations criticized assets and we felt would best practices recommendations, including social doesn't seem that shift modifications.
In addition, we took steps to strengthen our balance sheet and reduce our cost structure.
During the deferral of non strategic investments employee for loans as well the salary reductions for directors and management.
Well, we started the you're on track submit no actually began to see the impact it overnight you not our customers at a true and Chevy performance of our business.
Total whether it's for the quarter with 21.5 million. In addition to the estimated 1.5 going into 2.5 million adverse impact from covert 19.
I heard a onetime adverse adjustment of 1.2 billion in first quarter.
Yes, it a change in our revenue recognized mission methodology for certain benefits customers.
We do not anticipate any additional adjustments and this action going forward.
Despite the challenges presented by the I'm precedent global pandemic, our strategic priorities remain intact.
Meeting the volume demand of key customers and partners.
I'm, showing new business opportunities and partnerships that best never to core competencies to accelerate growth.
Importantly, diversify revenue base.
We recently completed a level of transformational actions, but I'm confident have shown a business unexciting growth trajectory and best positioned us for success.
As many of you know a platform technology currently addresses several high growth medical markets, including diabetes surgical navigation hearing health drug delivery.
I'd like to take the next few minutes to highlight important activities and several of these markets segments, starting with our exciting acquisition of Air Medical services announced earlier today.
The strategic acquisition provides synergistic joint development and manufacturing capability that expands our melkert opportunity at surgical navigation.
Provides immediate access to a technology platform surely do high grade medical end markets. It's complex interventional catheters diversified customer base. It is expected to be accretive to revenue and earnings 2020.
Yeah, I'm old medical systems is a privately held engineering and manufacturing services organization based in Singapore.
With this facility conveniently located at the same building is our existing Singapore operations.
Living by an excellent team of engineers and robust manufacturing capabilities.
Yes, as a successful history of do the Liberty complex interventional catheters addressing a range of applications. The cardiology swiftly vascular neurology radiology pull that hold an allergy markets.
We had been selected with our M&A activity, but our concert confident that Dms directly meets the core criteria, we identified for a successful candidate.
This included access to a key technology platform complimentary skills customer diversification and a strong management team with a proven track record.
Furthermore, we specifically looked for synergies with our existing businesses.
The catching for business development to expanded markets its deep technology curves.
Listing strong intellectual property and most importantly, the ability to deliver a technology platform that would enable us to leverage our existing capabilities rapidly expand our opportunity in surgical navigation.
Number of medical systems that all our criteria.
As we pre as we've highlighted in previous calls surgical navigation has a broad market segment, we identified for video meaningful near term upside that we were concerned it would present significant opportunities to leverage our existing capabilities and Michael package for electronics were centered molding and medical coil.
Technologies.
Our business in this market today consists primarily an intervention pulmonologists along biopsy in electrophysiology for her mapping and precise Appalachian.
Yeah, I'm asking enhance the concept, which we can provide these markets.
The agreement to acquire ammo medical systems includes an upfront payment of approximately 7.1 billion.
80000 shares Intercon common stock in.
In a cash earn out based on the achievement of specific sales milestones were three year period.
Each milestone she'd defines a revenue generating event, which we believe has the potential to drive substantial long term growth.
Scott will share with you shortly some additional financial details the transaction.
The acquisition of Vms also a beat easily adds complementary skills in engineering capacity.
Support growth of medical coil, it Catholic assemblies to meet the demands of current surgical navigation customers.
This includes production capability.
Consists of a full range of design development and band you manufacture in testing and non sterile packaging services.
An attractive component of the E.M.S. acquisition is our ability to immediately diversify our revenue base.
Yes, currently has more than 20 customers, including its largest customer that try to cardiac and vascular.
Well, which he currently serves as the show manufacturer for Medtronics Chauffeuring Ptca balloon catheters.
Chocolate a key product in Medtronics peripheral vascular sure catheter portfolio. These decided clinically proven to reduce vessel drama that's providing that building inflation that is predictable control uniform.
Yeah. That's revenues in 2018 were approximately 7.5 million compound annual growth rate.
Only 16 through 29 teed up 34%.
We anticipate the acquisition to be accretive to our 2020 revenues earnings.
With regard to integration, we believe the E.M.S. team brings a wealth of knowledge intellectual property in this space and as such.
Glad to maintain most business operations into Singapore facilities to ensure continuity and scalability by leveraging our ERP and Qs systems.
The facility includes offices manufacturing in assembly space.
Of approximately 8200 square feet.
Along with a 4400 square foot ISO 700, ISO age clean room storage.
From a business development perspective, while we plan to leverage our team in the U.S.M.S. quality reputation the location in a region considered a center of excellence in Singapore for medical devices innovation.
Buys this was a higher profile for expansion into the Asian markets.
We are obviously delighted to move forward with is truly transformational acquisition.
Next I'd like to discuss our hearing health business as we highlighted on our last quarterly call.
We believe our long term success in this market will largely be driven by our indirect to end consumer channel.
Earlier this year, we began reprioritizing our investments to more clearly focused on securing high profile partners value our ability to deliver at ecosystem of care platform, which includes superior hearing AIDS self sitting software and customer care because the U.S. market.
Despite the widespread disruption, resulting from the call that 19 pandemic.
Continue to engage in discussions with several commercial entities and are actively pursuing and consumer health care initiatives.
And specifically solutions, we're hearing health market.
Putting retailers Randy partners.
Pharmacies.
However ships is legislative attention and F.D. priorities, resulting from the virus.
Let me give an update on draft guidance, if youre Tc hearing aid regulation I'm sure.
We are confident however that given the high cost of hearing age today.
Consumer enthusiasm for change there remains tremendous potential ahead of this market.
Importantly, following our decision last quarter could no longer pursue a direct to consumer approach to the hearing health market. We recently made the decisions to transition our remaining direct to consumer operations.
Hearing help express to show solely support our partnership initiatives.
As we have accelerated this restructuring we anticipate incurring a 1.2 to 1.5 million dollar charge in the second quarter for severance lease termination that enter operations related expenses.
I anticipate these actions in addition to providing a greater focus on more synergistic high growth opportunities.
We'll also substantially versus reduce associated losses as Scott will detail later in his comments.
In addition, as we included in our first quarter Preannouncement.
For sold our anticipated self sitting software clinical trials.
Till such time as we can ensure the health and safety of trial for consequence.
Lastly, turning to our diabetes market sales to our largest customer represented 63% total revenue was the first quarter.
As we signals on our last call, we had anticipated tempered growth in 2020.
At the onset of covert 19 lives are impacted anticipated sales, resulting in approximately 21% year over year decline.
The U.S.
Tronic signaled further challenges presented by covert 19 pandemic.
And resulting continued challenges in insulin pump starts at Carrington force transmitters.
In Europe.
Insulin pump system starts also were made notably impacted.
Encouragingly, we are seeing continued strength from disposable sensors and growing interest in Standalone CGM.
Then a needle hospitals to provide remote monitoring and keep diabetes patients safely at home.
As we noted in our Q1 pre announcement, we already anticipated impact on ordering in inventory expectations.
Impact our second quarter.
However, we continue to set that we will see improvement in the second half a year.
In addition to the reduction in staff facility associated with our hearing help express business.
We have completed a global that workforce reduction of approximately 25 administrative support employees.
Partially offset by a few key hires.
We anticipate the net effect of these actions to further reduce or operating expense by approximately $1.5 billion.
Undoubtedly enterprise is taking a number of significant transformational actions.
Each of these strategic decisions, we've made over time and through careful planning and execution in order to best position the company for long term growth and shareholder value by focusing on what we do best.
Delivering complex I committed to your devices that require specialized design expertise and high production volumes.
We remain steadfast in our commitment to be a leading joint development manufacturing partner for venture medical devices, including micro miniature products microelectronics micro mechanical assemblies, and complete assemblies that April affordable and accessible health care and improve the quality.
We have life for those to be sure.
Our priorities for the year remain unchanged and include.
One continue to meet the volume demands of Medtronics diabetes business.
To accelerate the diversification of our non diabetes revenue.
Leveraging our core technology platforms.
Certainly continue to pursue and secure partnerships that can utilize our hearing aid technologies self hitting software technology and customer tear expertise and finally.
Implementing an organizational structure, the best aligns with our focus on driving a sustainable pipeline of growth opportunities.
On this last point I want to highlight two recent key additions to our leadership team.
That's specifically address this priority.
In March other writer joined our board.
More than 30 years as a leader in global human resources for the medical technology industry. She brings a wealth of experience in both domestic and international HR best practices and global integration.
Last month, Curahealth joined Intercon, Who's our chief Human Resources Officer.
Sarah has more than 20 years growing high performing teams and we look forward to her contributions.
As a member of our executive team and this newly created role.
I'm incredibly proud of the intercom team has a substantial progress made towards for furthering these goals.
Despite the unprecedented challenges to the global healthcare landscape and the week of corporate 19.
Now I'd like to turn the call over to Scott to discuss our financial results and guidance. Thank you Mark.
Turning to our financial results the 2021st quarter, we reported revenue of 21.5 million.
Versus 29.6 million comparable prior year period.
The decrease was primarily due to the covisint team impacts on our diabetes and legacy hearing all channels.
Absence of revenues from highly innovation.
In a onetime adjustment was 1.3 million to reflect the change no revenue recognition methodology for certain medical customers.
Hi, core business segment revenue in our medical business for the quarter.
16.4 billion, a 21% decrease year over year represented 76% of or put a rough.
Again this decline was largely due to the covert 18 impact on diabetes onetime revenue recognition adjustments, partially offset by strong oil.
And our hearing health business segment total revenue in the first quarter was 3.9 billion down 45% over the prior year through school.
Once again this decrease was largely due to no revenue from pilots innovation and the cold that my team impact kind of legacy to retail channel.
Within the hearing health segment indirect and consumer revenues of 744000.
Correct and consumer revenue through our hearing help express business.
1.2 million and legacy OEM revenue was $2 million.
First quarter gross margins were 21.3% down from 28.9% in the prior year first quarter.
Margins were constrained primarily due to excess manufacturing capacity.
Operating expenses for the first quarter 6.6 million compared to 7.5 million the party the truth.
The decrease stem from the substantial reduction in advertising administrative expense hearing help express.
We posted a loss.
Net loss attributable to shareholders, a $2 million or 22 cents per diluted share versus net income attributable to shareholders of 775000.
Since pretty true for the 2019 preschool.
Turning to guidance is communicating first quarter Preannouncement on April seven Intricons suspended guidance until such time, you have enough visibility to confidently forecast key financial metrics.
We did however want to provide more color and our accelerated UGI restructuring that's.
During the second quarter, we further eliminated certain EG sales marketing and administrative positions.
Resulting in an annual cost savings of approximately 900000 Boes.
In addition, we significantly cut our consumer advertising investments, resulting from additional $2 million reduction in operating expenses in 2020 is compared to 2019.
He has some of these actions, we anticipate reducing our loss the chichi from roughly 4.5 million in 2019, excluding impairment charges.
To 1.6 million in 2020.
Of which 400000 is attributed to the second half 2012.
Furthermore, we while continued uncertainties remain the pools at 19 point that you want to highlight many of the steps that we've taken to this increase or expenditure profile and current Stephanie blenders.
In early April we instituted furloughed, some temporary salary reductions for drifters and manger.
Last week, we completed mobile.
Workforce reduction of approximately 25 positions.
Many of the previously approval positions.
Resulting in annual savings of 1.5 million.
In connection with the Tucci restructuring and global workforce reduction, we anticipate incurring $1.2 million to $1.5 million restructuring charge in the second.
Importantly, Heller these actions were done without impeding we're compromising.
Our ability to execute on long term strategic initiatives.
Lastly, we're not providing comprehensive guidance for the full year 2020. It. This time, we did want to highlight some other factors that will have an impact in our piano.
Putting additional color.
On Emerald medical system acquisitions financials.
First as noted on a vehicle seven update.
We anticipate a notable inventory level adjustment from our largest customer that will negatively impact or second quarter results.
As it relates to enroll medical systems as Mark previously mentioned.
In 2019, they posted revenue of 7.5 <unk>.
We anticipate this business to grow the low double digits in 2012.
We also anticipate the acquisition to be accretive that income.
For the year.
During the second important we incurred approximately 400000 hours in professional fees associated with the transaction.
Lastly.
Our cash balance post transaction post transaction is approximately $30 million.
Now I'd like to turn the call back over to the operators some market I can take your questions.
As a reminder, ask a question you don't need the press star one on your telephone to withdraw your question press the pound.
Please standby, we compile the Q and a roster.
Your first question comes from the line of gone block from Stifel. Your line is open.
Thanks, guys. Good afternoon, Mark maybe just to kick things off any a mess.
You know why now for the acquisition. It seems like you may have known these guys for a while you mentioned you were literally in the same building in Singapore, and Scott just to sort of talk going in that same topic I.
I think you alluded to low double digit growth for you a mess for 2020, but there was a mid 30 CAGR number that we started there longer term. So it's a low double digit growth is that because of coded Colin I mean, we expect.
The growth rate to accelerate on the back and just more clarity I guess on the D cell versus the CAGR that was given that I've got a couple of follow ups. Thanks.
Hi.
John just as.
Your question on the the reason for the acquisition then I'll turn the rest of it over to Scott.
We as I think we mentioned a couple of quarters quarters ago, We started to talk about the importance of surgical navigation in our future and we were making good inroads designing our medical coils into us catheter assemblies that we're going into interventional pulmonology and electro physiology applications as well as others.
And as part of our criteria looking at acquisitions, we raise that money back in August 2018, and I've been looking for the right.
Cartner sense that.
Had we became aware of.
Of Emerald medical sometime during the 2018 and began to look at them.
Earnestly.
As a potential candidates and the more we got into at the more we realize that their position in neurovascular cardiovascular and peripheral vascular type applications would give us a substantial new platform that we could not only a grow the the platform with them into interventional.
Catheters, but also their expertise was going to be able to help us grow our business in surgical navigation that's for the applications and.
Form analogy electrophysiology and some of the core technology executive at he a mess would allow us to expect accelerate growth would that area.
We're very excited about this and if it gets a perfect fit.
Engine related to your question low double digit growth as we move it into 2020, obviously, the uncertainty with 19 and what that could mean, we wanted to be able to put a conservative view on what we said the transaction could be over the first seven and a half months. There's also some.
Product launch timing that could impact that number and make it stronger than we've outlined but again want to come back.
A number that we felt very comfortable with in this environment.
Got it very helpful. Maybe two more I'm just thoughts on the softening trial as you mentioned you disclose it was postponed you reiterated that again on this call, but just kind of Dalton when the trial might pick back up in time to approval. Once the trial was initiated would be helpful.
The original date for.
The FDA required to provide guidance was August of this year.
However, we realized that.
The overwhelming demands on the F.D.A. from the coal would 19.
Pandemic relative to a number of factor equipment.
Vaccines testing methodology is just overwhelming we don't think that.
The LTC guidance is going to get a lot of priority in the short term here. So we're anticipating.
I don't have any good data from.
Anyone now ask when this is going to be Reengage. We're we're planning that we might be able to they might be able to get it done by April 1st of next year.
Somewhere around between April 1st and July 1st and so we're we're doing our planning to get our our technology ready and our ecosystem of care ready by on April one date that we can control.
We can't really control the FDA days.
Attention to that so.
I guess is it's definitely going to be delayed how how how much delayed I don't know.
Okay, I'm, sorry, just to clarify Mark and I was.
In answering the question. It was you think the F.D.A. might push until early to mid of next year and you think yourself fitting might be around that same time I'd want to make sure I've got that correct. Yes. That's correct. So we're we're hoping that we can start doing trials later in the year, but the problem, but the problem with doing.
Trials with our age group the average hearing aid were somewhere around 70 to 75, that's the that's the age group most potentially vulnerable to the covert virus. So.
Our ability to recruit.
We will be an issue.
So we're hoping we could start doing something.
Later in the year as this thing.
If we get more clarity.
Yep.
I don't want thanks for that part of one Scott you mentioned pro forma for email. So think about 30 million in cash and I know you don't want to give explicit guidance, but is there way to think about burn levels for the balance of a year and I'm not trying to back into a revenue number you just talked at length about some of the Opex initiatives that you guys are going through so how do we think about burn.
For the balance of 2020, thanks for your time does.
Yeah, Great question. Thanks, John.
Well, obviously, we've taken some pretty aggressive steps to reduce our cost structure.
The same time, we've done that we've really positioned ourselves.
To drive our business for so we look at doesn't move into the second half as the years.
We believe that our business will be in a in a position where is generating cash so from that perspective, and protecting the piano pickens or excuse me the balance sheet, you've taken some aggressive steps and feel very well positioned as we enter into less than seven months of here.
Thank you.
Your next question comes from line of Andrew Dsilva from B. Riley FBR. Your line is open.
Hey, good afternoon, I'm glad to hear me, what do you sounds healthy and a you know congratulations on the acquisition I'm.
Just to start a couple quick bookkeeping questions for me.
What was depreciation and amortization.
Stock based comp cash flow from operations and Capex for the quarter and then also were there any severance or other onetime costs in the first quarter that that we should account for a and then while that's being pulled.
It just seems that since you decided to pivot away from a that DTC hearing aid business, that's tele health initiatives have been gaining.
Significant traction you to covert 19 and that was just curious if that changes anything with your approach with AG.
What we.
We supply a lot of these.
Other direct to consumer people people like your goal MD hearing.
Hearing assist names you'd see out there we are providing them with technology, so like Intel inside.
However, we think.
That no one has yet.
Proven a scalable model had we feel our best.
Approach is to work very closely with potential branding partners add retailers in order to figure out what that scalable model might look like.
And we're very comfortable with our position how we position our HPG.
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Business as a test platform. They currently have both audio.
Tell audiology capability and when a customer service capability, which is going to be essential to support branding partners and retailers. So we think we've maintained the keep building blocks necessary to build that ecosystem of care work with the branding partner to supply high quality.
Uh huh.
Hearing AIDS through an ecosystem of care into a retailer. So we're very comfortable with that approach. We've we believe there's going to be.
Position in the market for that.
Okay.
Okay, Great and then.
Andy This is Scott.
In terms of depreciation and amortization in the first quarter is 921000.
Stock based comp mm 376000.
We had cash used from operations.
1.2 million.
And purchase of.
The Capex was 1.7 mode.
And in terms of any one time unusual expenses in the first quarter really the words.
Much to speak.
Did I heard something about M&A related costs is that in the in the first quarter or was that in the second quarter.
We incurred in the second quarter the 400000.
Question fees.
That will all be expense in the full Cindy second.
Okay, Okay great.
And then just as it relates to the LTC hearing aid Act.
It even possible to get the final rules out by the other three year August deadline at this point.
Or is it the draft guidance in the commentary Perry, Okay, all right sort of figure and then go ahead.
I was just say, it's not because they they have a six month comment period that they have to allow by by statute as even if they were to issue that now.
Six months would put us well into the fall.
Okay, that's what I figured and then I know you're holding off on the self fitting trials. The phone Act recently launched.
Fitting platform and I was just curious.
If you have any thoughts on that.
And what it does to the competitive landscape at this point.
Well the each of the.
Large manufacturers of the oligarch Lee that that serves the traditional market through the Audiologist has has put out some type of a.
Tell audiology platform to serve those shops, however, I would I would point out that that's still the traditional model going through the audiologist.
And that through the Audiologist to the consumer and what we're anticipating is through a call centers in an ecosystem of care that we're going directly into a re trailer through branding partners.
So we think that at that channel is somewhat unique.
And.
It takes particular expertise to figure out how to get into that retail environment, but I. It's no doubt that the the only got really would dominate the any.
Type of technology implemented through the traditional channels, but we don't think than a long run that affects our ability to do.
An ecosystem a pair into the retailers.
Okay. Thanks, good color. Thank you very much and then.
Mentioned that your largest customer might have an inventory level adjustment.
That will impact the second quarter.
Was that the 1.3 Rev. Rec adjustment that you talked about during the first quarter or is that.
And additional adjustment, we should be thinking about in the second quarter or if you have any metrics that we should consider that'd be useful.
Sure.
It is separate and do the 1.2 million that was.
Recognized in the first quarter had to do with the change of methodology in revenue recognition for both non Medtronic nodes. This revenue.
The adjustment that we highlighted back and get is April began to say relates to our largest customer.
And we're still quantifying what that number it's going to be but could be anywhere upwards of a $3 million.
Your next itself and we'll continue to work throughout the quarter, but.
That would be kind of Max exposure is the second quarter.
Okay can you help I.
I guess bridges the gap between the context Tronics provided they they said that their diabetes repurchasing.
Patient increase there on hand level supplies, you to covert 19, and you know.
I am kind of care, how that translated to your first quarter diabetes revenue and then.
But we just discussed with the second quarter and I would assume that some of the supplies have to be very CGM components.
That that your involvement.
Involved with correct.
Great question, maybe so if you go back and look at what they had talked about as part of the April 21st update on colder than kind of was impacting the various groups.
Bdcs wanted was highlighted if you look at the diabetes group can you break down revenue impact if we've had on the revenue you will see diabetes supplies with something.
There wasn't necessarily want to performing well and frankly that translated.
Into our first quarter.
As it related some of the disposable products that we do for Medtronic.
Unfortunately, some of the more elective products the faced headwinds.
We're insulin pump new starts and as you know these insulin pump systems.
That are sold come with the continuous glucose transmitter so desserts headwinds with Dupont starts that's directly are going to affect.
To close.
The largest.
Percentage of revenue that we have going into the trial.
So we believe as we move forward throughout the year and some of the economies start opening up a bit that will fall and we will begin to see improvements.
But right now they are they're continuing to feel some of the pressure.
Hello.
Constraints.
Okay. Okay fair enough. Thank you very very much best of luck going forward.
Hi, Chris My questions offline.
Thank you I think David.
Your next question comes from line of Kyle Boller from Dougherty and company. Your line is open.
Hi, good evening, Thanks for taking my questions and thanks for the updates here. So following up on John's prior question I I realize trials across the board.
Had been postponed and then yourself in safford travel out to be put on hold as well, but but just for clarity on can you talk about what the status was before covert 19 head I mean was was the trial design finalized I think your retiree and like 85 patients and had you received kind of the green light to.
Move forward.
Yes, yes, Kyle we had we the trial was all set to launch when what coal that kick that had we had we had.
A nod from the FDA the trial design and we're ready to go with we were the process of tried to.
Line up.
Oh.
Start doing recruiting.
So it really through a monkey wrench in there, but you know will deal with it.
When we can get back to it.
We will.
The start recruiting right.
Makes sense, it and and was it about the the 85 patient level or is it higher than that lower.
85, we feel we're shooting for.
Obviously, we would have had to recruit a few more than that end up with 85 cents China.
The 85 was the design goal.
Right got it and you have to boast predicate out there, which makes it that easier from a regulatory perspective, which is great just kind of interested and what's your sense is for.
A number of other ongoing trials that we'll be using Bose is that because the predicate for 510 k. any any sense.
Oh, we've heard of a couple of them.
I I there was one that was.
We are under and be a we're working with them to separate supply some product. So I'm aware of at least one other one that's.
Looking at.
Self setting.
Got it but I'm sure there will be others sure.
Right, Thanks and and.
Of course talked about the M.S. deal being accretive.
And this is even in the midst of of covert 19. So it sounds like a your message has been able to maintain a strong double digit growth profile I know that's down a little bit from their their cagar over the past several years, but just kind of wondering how they've been able to not only hang in there, but actually grow sales in a tough and.
<unk> I mean is this a function of the company selling into non elective procedures like Ptca and AAA narrow I'm, just any kind of color here would be great.
Yes, most of the product line is mentioned there was coming from.
Trying to quantify the metropolis can see.
Those are really elective procedures as you know.
With your background and that type of procedures something that would occur.
To prevent amputation.
Yes.
But there are seen this continued strength in that business and they feel very bullish in terms of.
That's going to go and even in this type of environment I believe that we can achieve this type of growth. We believe that we can see cheap looks like it's nothing.
Got it.
Thank you Oh, one nice updates here appreciate taking the time.
Next up thanks Kyle.
I'm showing no further questions at this time I would now like to turn the conference back to Mark Gorder CEO.
Thank you. Thank you again for joining us today.
The past several months have been undoubtedly extraordinary on many levels and the pandemic is broadly impacted the business environment. We have made important strides to secure the future for intercon.
First we significantly reduced our cost structure to better align with current revenue levels. Importantly, we have done this without impeding our compromising our ability to execute on long term strategic initiatives.
Second.
Our acquisition of Emerald Medical services through our acquisition of several medical services, we gained immediate access to new high growth end markets diversified our customer base.
Lastly, we are prudently approaching the emerging otcs DTC channel by focusing our investments on securing partners and eliminating higher risk investments such as consumer advertising.
We believe the combination of these actions enabled us to successfully manage through the current pandemic business environment positions us for strong longer term sustained growth.
I would like to thank the Entercom team as well as our shareholders for your continued support.
We look forward to updating you on our progress over the coming quarters in the meantime stay healthy they have a great either.
Ladies and gentlemen.
Today's conference call. Thank you for participating you may now disconnect.
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