Q3 2020 Conmed Corp Earnings Call
Morning, its financial outlook and its plans and objective, which represents forward looking statements that involve risks and uncertainties as those terms are defined under the federal securities laws.
Doctors are cautioned that any such forward looking statements are not guarantees of future results.
Well results and the company's actual results may differ materially.
Current expectations. Please.
Please refer to the risks and other uncertainties.
Under forward looking information in todays press release as well as the company's SEC filings for more details on the risks and uncertainties that may cause actual results to differ materially the.
The company disclaims any obligation to update any forward looking statements that may be discussed during this call except as may be required by applicable law.
You will also hear management refer to certain non-GAAP adjusted measurements during this discussion.
While these figures are not a substitute for GAAP measures.
Management uses these figures to aid in monitoring the companys ongoing financial performance from quarter to quarter and year to year on a regular basis and for benchmarking against other medical technology companies.
Adjusted net income and adjusted earnings per share measure the income of the company excluding credits or charges that are considered by the company to be special or outside of its normal ongoing operation.
These adjusting items are specified in the reconciliation supporting the Companys earnings releases posted to the company's website.
These acquired announcements completed I will turn the call over to Curt Hartman, Conmeds, President Chief Executive Officer, and chair of the board for opening remarks Mr. Hartman.
Thank you Crystal good afternoon, and thank you for joining us for Conmeds third quarter 2020 earnings call.
With me on the call is Todd Garner Executive Vice President and Chief Financial Officer.
Today, we'll walk you through our third quarter results and share with you our thoughts on the current operating environment, while still recognizing the uncertainty that exist across the global markets well then open the call to your questions.
Turning to our results total sales for the third quarter were 237.8 million, representing a year over year increase of 1.8% as reported and in constant currency.
Globally, our entire team did a fantastic job responding to and working with our customers as they continue to increase their surgical procedure volumes a closer look shows that within the international business.
Four of six key markets delivered positive growth.
With the export countries remain challenged while within the U.S. two of four businesses delivered positive growth.
Our global Orthopedics business represented 43% of sales in the quarter.
Our sports procedure volumes continue to improve however capital sales in these markets remain slow as expected.
Well there is no way to clearly tell his entire deferred procedure backlog has cleared we think the majority of that volume is behind us at this point.
Further we do think new procedures have been slower to return to normal run rates with many factors contributing to this condition in.
In 2000 2019 volumes are considered the benchmark for normal we think were still ways from that level across the globe.
Global General surgery continued to see solid trends and delivered 9.8% constant currency growth both capital and single use sales exceeded prior year levels, we had two or three businesses that comprise our general surgery offerings for past their 2019 performance on a worldwide basis.
The enthusiasm I noted for the Airseal in the Buffalo filter products during our previous two calls continued throughout the third quarter driven by ongoing clinical education surgical safety protocols and improved access to medical facilities, which allows our sales force the opportunity to demonstrate these clinical solutions.
As we have discussed in the past, we continue to see growing awareness and installations of these products in the clinical community. Our last three quarters reflect the benefits of this trend and we are confident this will drive longer term sustainable business outcomes.
I have noted in past calls were focused as a company to address and operate in the COVID-19 environment consistent with our comments or the previous calls our three priorities remain the safety and well being of our workforce and their families. The financial security company and finally operating executing in this new environment.
Why Adams, one and two are always part of our offerings. We are confident at this point, we have institutionalize them as it relates to operating and executing in the COVID-19 environment. That's.
That said, we remain mindful of the market uncertainty and the possibility of further slowdowns around the globe, but our business has demonstrated resilience in a serving our customers as they identify their critical needs.
Well, we feel our efforts have us well positioned under a variety of scenarios in the macro environment, we understand that the nature of this virus will cast uncertainty across some markets on a regional basis as governments and health care providers adjust to the changing COVID-19 caseload.
At this time, we don't anticipate another mass procedure deferral, but rather believed that procedure volume inconsistency is likely to persist and slow the overall market productivity.
In closing I remain very proud to be part of the kind of mid team and I'm proud of the results. We are discussing with you today.
We continue to run a very focused on offense and candidly have pivoted remarkably well into an operating mode to support today's environment.
People made that happen.
I'll now turn the call over to Todd who will provide a more detailed analysis of our financial performance Todd. Thank you Kurt.
Oh sales growth numbers I reference today will be given in constant currency. The reconciliation to GAAP numbers is included in our press release.
For the third quarter of 2020, our total sales grew 1.8%.
Performance during the quarter was fairly stable comparing each month to the same month in the prior year July grew slightly.
Has declined slightly and September grew slightly.
For the full quarter, our sales in the U.S. increased 4.7% versus the prior year quarter.
Our international sales decreased 1.7% for the full quarter compared to the prior year.
Geography is around the globe are experiencing varying levels of impact from koby 19, and the related government responses.
Europe grew in the mid single digits overall Asia was down single digits, Canada.
Canada grew in the low single digits, and Latin America was down significantly.
While the uncertainty about the virus and how it impacts the future is global we see the challenges in Latin America is likely the most persistent.
[noise] worldwide Orthopedics revenue declined 7.1% in the third quarter in the U.S. orthopedic sales decreased 8.5% and internationally orthopedic sales decreased 6.2%.
Capital sales were down double digits in orthopedics in the third quarter, both in the U.S. and globally.
Worldwide sales of single use orthopedic products decreased in the mid single digits in the third quarter.
Total worldwide General surgery revenue grew 9.8% in the quarter.
You asked general surgery revenue grew 11.3%.
Internationally General surgery revenue increased 6.4%.
Airseal in Buffalo filter growth remains strong as hospitals around the world focus on improving operating room safety.
Now lets revenue expense side of the income statement.
We will discuss expenses and profitability, excluding special items, which include charges related to acquisitions and integrations restructurings manufacturing consolidations amortization of intangible assets and amortization of deferred financing fees and debt discount net of tax.
Adjusted gross margin for the third quarter was 56.8% an increase of 40 basis points from the prior year quarter our.
Our product and channel mix is driving improvement here as we expected.
In Q4, we expect underlying gross margin improvement offset by the timing of recognition of unfavorable manufacturing variances.
We expect these variances in Q4 2020 to be about $6 million worse than that was recognized in Q3 of 2020.
So our Q4 total gross margin may look similar to the prior year quarter, but the underlying improvements are meaningful as should be obvious once we get through this difficult period.
Research and development expenses for the third quarter was 4.2% of total sales a 50 basis point decrease from the prior year quarter.
While the R&D spend was a little light in Q3, we anticipate higher levels of R&D spend in Q4.
Third quarter SGN expenses on an adjusted basis were 36.3% of sales a decrease of 220 basis points from Q3 2019.
Due to the strong expense controls and despite the challenges presented by the pandemic, we improved our adjusted operating margin by 300 basis points over Q3 2019.
Interest expense in Q3, 2020 was $8.5 million on an adjusted basis.
Tax rate has been pretty volatile through this pandemic as we have moved for losses in Q2 to very strong profitability in Q3.
For that reason the GAAP tax rate is elevated in Q3 and the adjusted tax rate is lower as we updated the tax provision for new guidance around the details of handling foreign income.
Third quarter GAAP net income totaled $6.9 million or 23 cents per diluted share, which was flat to the prior year quarter.
Excluding the impact of special items discussed earlier, we reported adjusted net income of $26.0 million compared to $18.2 million in the third quarter of 2019.
Our third quarter adjusted diluted net earnings per share was 88 cents, an increase of 42% over the prior year period.
Turning to the balance sheet, our cash balance at the end of the quarter was $35.6 million compared to $35.0 million as of June Thirtyth 2020.
Accounts receivable days as of September Thirtyth were 63 days compared to 82 days at the end of the second quarter and compared to 67 days at the end of Q3 2019.
Inventory days at quarter end were 158 compared to 184 days at the end of the second quarter and compared to 151 days at the end of Q3 2019.
Long term debt at the end of the quarter was $760 million.
Versus $790 million as of June Thirtyth.
Our leverage ratio at September Thirtyth, 2020 was 4.9 times, a good decrease from the prior quarter and well within our original covenants.
We are performing very favorably to our amended agreement with the banks our fixed charge coverage is 3.35 versus our agreement of 1.5.
And our liquidity is $388 million at September thirtyth compared to our minimum agreement of $135 million.
Cash flow provided from operations for the quarter was $35.1 million compared to $36.6 million in the third quarter of 2019.
Capital expenditures in the third quarter were $3.3 million compared to $4.9 million in the prior year quarter.
So as sales have continued to return our disciplined expense control has led to improved profitability and strong cash flow generation we.
We believe that by remaining focused on being the best possible partner to our customers. During this ongoing pandemic will be rewarded with increased market share over the long term.
Lastly, given the continued global uncertainty created by the ongoing pandemic.
I feel it appropriate to issue guidance at this time.
And with that we'd like to open the call to your questions I'll hand, it back to Crystal.
Thank you.
Ladies and gentlemen, if you have a question at this time.
Followed by the number one key on your Touchtone telephone. If your question has been answered or you wish to remove yourself from the queue. Please press the pound key and in the interest of time, we do ask that you. Please limit yourself to one question and one follow up.
And our first question comes from Robbie Marcus from Jpmorgan. Your line is open.
Hi, This is signed on for Robby.
Congrats on the good quarter. So I just had a question regarding the.
Give some guidance on what the backlog this new demand look like in the third quarter, but is there anything you could see on how sustainable new patient growth.
Growth going into the fourth quarter.
I don't I don't think we're going to work you know Todd commented in there at the end that we're not going to it.
Issue guidance in the fourth quarter or guidance for the rest of the year given all the uncertainty that remains what we were trying to say in our scripted comments was there's there's still a lot of variability there some patient anxiety, there some health care worker fatigue, so those things and others drive variability in the.
Demand.
On the orthopedic side, we feel like any backlog that may have existed as we exited Q2 has been work through so we don't we don't see a lot of backlog that would keep.
Surgical volumes high so it is dependent on new patients presenting and on general surgery.
We've seen a little better side of surgical volumes, there and I think our results reflect that but.
Not not wanting to get anything too specific here on the fourth quarter.
Great. Thank you that's all from me.
Thank you. Our next question comes from Rick Wise from Stifel. Your line is open.
Good afternoon.
Hi, Todd.
Fantastic job in a challenging time, both on the sales and the outside.
Outside.
Just to.
Hi, I'm, just intrigued with some of the opportunities that and then some of the challenges.
Kurt several times you highlighted.
But all that long I think that was your word just I should make sure I'm understanding what you're suggesting slow to come back slowly rebound.
And how are you thinking about not just the set up for.
Just.
Looking ahead generally are you are you concerned.
About the capital environment should we be worried about.
About the set up for next year because of the bad or.
Yes, I mean, just give us some flavor would be great.
But I think what we're trying to.
Comment on and this would be consistent with what we said last quarter as well Rick.
That.
Capital purchases are not the priority right now for the health care environment. It's it was first and foremost about learning how to operate in a co bid environment getting through the deferred procedures.
As people get further into that environment capital may come back onto the scene in terms of priority.
In Conmeds position, we offset that a little bit by the fact that our capital is not the big ticket items, our capital is used to operate our capital.
Is required to do the cases, so it's a little easier it from a price point to acquire Conmeds capital, but were just candidly not seen that as much in today's environment now I think we did comment.
Capital and orthopedics was down in the double digits, both domestically and internationally.
But capital was up on the general surgery side, and obviously Buffalo filter and air she'll have a capital component, but there was other capital items in general surgery that delivered positive growth. So again, it's a little bit of two different stories.
And I think we're just trying to tell you how things are right now versus reading anything into that in 21 or fourth quarter or 2021 at this point.
Yeah and maybe.
Maybe just talk to us a little bit about right.
[laughter], what's happening in the field level I mean again the results speak for themselves.
But.
You know to what extent.
Are your new products.
Driving the performance, we're seeing oh, or your ability or maybe an easier ability to open up.
New accounts or drive penetration in existing accounts can you just give us a little more color.
On from that perspective.
I'll I'll try I think it's a little bit varied by geography Rick.
In the U.S. I would say for the most part our reps have pretty good access and they're there.
I wouldn't say, they're showing up quite as much as they did pre co bid because theres just a lot different conversation around we'd like you to be present for that case, you don't need to be present for this case in both sides recognize the inherent risk of more people being in that environment.
But but access in the U.S. is pretty open whether that's in the core orthopedics business Sports Medicine cases, a general surgery Hospital base cases, or the you know the endoscopic technologies the Endo Center.
So I would say cases are opened therefore, our facilities are opened therefore, our reps have the capability of presenting new products or legacy items and it really is them following the path of where the customer wants them to go outside the U.S.A. I think you have a little different level of variability right now.
I think in the last call Todd and I talked about.
The Melbourne, Australia area literally had shut down while the rest of Australia was going gang busters getting through procedures and so you see kind of that that regional very geographic specific shut down and anytime you have that environment.
And reps are not present, it's going to slow down new new product trials or new customer trials.
I would say as we look at some of our statistics MSA.
Especially on things like Buffalo filter smoke evacuation in air seal.
We are seeing the continued momentum of new customer interest, we can break out those sales to some level not 100% perfect but to some level.
So we do see those technologies was innovation platforms still continuing to be gravitated to buy new customers, which obviously is no new cases, new procedures, new trials and evaluations.
Great I must sneak in one more I apologize opex again, great job this quarter.
Operating margin up 300 basis points I think you said.
How much more to go what are the drivers.
From here I mean, it sounds like just based on your comments Todd.
Youre feeling pretty good.
On that front as we as we look ahead. Thanks, so much guys.
Sure Rick Yeah look we're going to stay nimble right. We from the started this pandemic we've taken a principled approach like Kurt said first protecting employees and customers from health perspective, then protect the financial strength of the company and then figure out how to operate it.
Wisely in this in this pandemic. So we continue to do that will remain nimble and flexible.
So we're we're watching expenses closely I told you before on a previous call that on.
It's important to us that revenue comes back faster than expenses that happened in Q3 right revenue revenue came back and we did not release the spending.
To the same level. The question is how sustainable is that right.
But we still feel like we're in a period of pretty good uncertainty here and so we're not going to start increasing investment on the spending side and still we have until we have more stability and predictability.
On the revenue side, I would say I would call out.
On the topic of the piano.
As we as we look to Q4, we do see a couple of headwinds that are that are temporary and specific to Q4.
When I mentioned in my prepared remarks about the timing of manufacturing variances.
And that's a meaningful headwind that will be recognized in the piano in Q4, and then R&D either just the way that the projects laid out it was a little light in Q3, and B and we see it a little heavier in Q4. So those those two line items together is worth about 20 cents sequentially.
The step down.
To our EPS from Q3 to Q4 now the good news is neither one of those linger after we get past this.
Kind of messy Q4, we think the.
The profitability improvements will be obvious and and consistent and sustainable.
Thank you. Our next question comes from Matt Mission from Keybanc. Your line is open.
Hi, good afternoon, and thank you for taking the questions.
Kurt Todd I'm, just curious how how methodical is the quoting and evaluation period for Intersil.
And Buffalo filter here.
I mean, my sense would be that you had you you have a lot of interest in those products from us from a lot of customers are you seeing some of them just say you know what let's just let's let's let's.
Fast track the evaluation process and get it done as fast as possible. I know you see are you seeing customers still maintaining that normal quoting activity for it and you have a backlog that cats.
Thats continuing to improve as you go through the next.
Several quarters.
Great Great question, Matt and I think in Q2 as people anticipated.
Returning to surgery and they wanted to be in a position to do surgery and as safe a manner as possible.
There would have been more fast tracking or shortening of the evaluation cycle I think as we got towards the end of Q2 things started to normalize a little more in that the evaluation protocols that historically have always been in place.
Probably started to to take a little more foot hold in as we exited Q2 and got into Q3 and again.
Geographic variation is always at play here, but.
But I think the third quarter would probably have been more of a normal evaluation quoting purchasing process.
But like everything else those people in the decision, making chairs are making their priority list and we think those technologies, both Buffalo filter and Airseal belong near the top of those priority list today, I think thats evident somewhat in our results.
Okay excellent.
Just a couple on the international side.
Could you just give us your best read on how Europe is starting to react to them to the rising cases, and if there's any difference between how they're reacting now and how and how they did previously I realize theres like Europe is a blog today so.
Multiple regions and then just as a follow up what percentage of sales is Latin America could you called that out.
As a as a certain settlement.
Yeah, I think my response on Europe would be.
Similar to what I said in my scripted comments, we did we don't think the health care system, whether its us or any of the international markets will jump into a complete lock down 100% deferral of procedures I think I think that was appropriate at the time I think it was responsible there was.
A whole bunch of factors at play a lack of.
Pp a lack of great understanding on how to deal with the COVID-19 on and on and on right.
I think the entire health care system is much more educated today understand that deferring surgical procedures is probably create.
Creates a lot of unintended consequences downstream for the patient and candidly the health system.
So I think what you'll see in a second go around if things slow down it's going to be more geographically driven instead of a blanket statement and I think surgery will continue at some level I don't think it will be a complete shutdown and.
I think it's probably a little too early to say that we are seeing anything right now in in.
In this quarter and all were just a couple of weeks here into October.
Just in the headlines are changing daily right now, but I think thats, what we would anticipate.
If things start slowing down I'm going to let it kick the second question here to Todd Yes.
Latin America is less than 5% of total sales Matt.
Thank you.
And our next question comes from Richard Newitter from SVB Leerink. Your line is open.
Hi, This is Aaron on for rich thanks, much for taking our question Jeff.
Just wanted to quickly touch base.
On Buffalo sales there.
Obviously was really strong this quarter just wanted to see if you guys have heard anything or seen any impact.
Competitors in this space maybe.
Well, it's it's obviously a very.
Attractive market for.
It's it's implied total addressable market and the implied growth rates and that's that's why.
If you look at Conmeds history Weve been prior.
Prior to the acquisition of Buffalo filter, we were their first OEM distribution partner and that's why when they they came up for sale.
I thought it was just a perfect blend with CONMED and we.
We continue to believe that a year plus into it those results would indicate we made a very good decision. There obviously when you have a market like that it's going to bring in competitors, we're aware of.
What I would call single product technologies that have come into the market but.
But I think I would just again reiterate the history here that Buffalo filter had the definition of the product the knowledge they have in the market. The smoke capture all of the features and benefits in the institutional know how that Buffalo filter head that are now resident with Conmeds. We think we have a pretty good so.
Substantial differentiation in our platform and just remind everybody again that we are also an OEM provider to other medical device companies with this technology. So we feel pretty good about our position.
Okay, great. Thanks, and then just one more quick one from me and.
Have you seen any updates on legislation regarding smoke evacuation Navy has co that kind of.
Brought that to the attention of maybe more states enacting celanese lives.
Thanks, so much.
No it's great. It's great question.
I'll just give you the statistics on the U.S. There are two states that have legislation in place that has not changed Rhode Island and Colorado. There are 16 states that have pending legislation.
Nine of those were expected to get that legislation through in 20 or 21, and there are seven of those that were targeting 2021.
With Cove, Ed we have not heard any legislation any legislative movement, because candidly I think people have.
A lot on their plates right now and I would just point out that if you do the math.
Thats 18 states that have something which means theres 32 that have nothing pending so there's still a lot more out there.
But again the market when we acquired the technology. We said it was a healthy market regardless of legislation and then outside the U.S., we're not familiar with any additional legislative change that would just remind everybody Canada has had legislation in place for quite a while Australia parts of Australia have legislation in place. This.
Scandinavian countries in Europe have legislation in place, but beyond that it's a it's still pretty wide open.
Thank you.
And our next question comes from Mike Matson from Needham and company. Your line is open.
Yes. Thanks for taking my question, obviously, great job on the margin side here this quarter, but you know I I think Todd talk little bit about this I just curious about if your operating margin was 13.4% or so.
Thats right.
Then how much of that is really.
Sustainable going forward I mean, R&D was 4.2, you are normally come closer to 5%.
That's you know it was down a couple hundred basis points.
You know I guess.
How much of this is due to kind of unsustainable cost measures versus things that.
Can be sustained at maybe changes in the way you're doing business like travel less travel virtual training and things like that.
Yes, it's a great question, Mike and that's a key question just to clarify operating margin for the quarter was 16.9.
Which was up 300 basis points from the prior year.
Now.
We had guided.
Before co. It happened right. We were we were guiding to be north of 100 basis points better.
And and and executing well on that so the whole our whole focus is increasing the margin profile of the company as we improve the growth profile of the company right and so it's certainly whit.
It's in the neighborhood of what we're shooting for the key question is sustainability, obviously travel is still very light the trade shows and conferences are essentially not happening.
And so a lot of those that money that you spend to support the sales effort.
Is being done virtually at a much lower cost. The question is how long does that sustain and can you get back to the growth. The revenue growth we want to be at at these spending levels. The answer is probably no not not quite at these spending levels, but we're going to stay nimble and.
And manage that kind of month to month, right and we're not providing guidance because we're not sure what revenue is going to do in the fourth quarter and because we're not sure that we're going to keep our spending pretty tight.
Once you know once we get through the pandemic and it's in our rearview mirror than you can plan a little more purposefully and we can get back to a place where we're giving guidance on these things.
The the key is that the principles and the foundation that we've built at Conmeds.
To grow faster than our markets on the top.
And deliver growth faster than that topline growth on the bottom we've been able to do and we believe were built to do going forward and that we can sustain a much higher revenue base on our honor.
On our expense base and so we'll continue to manage to those principles how that plays out in any specific quarter.
It's very difficult to predict right now, but I think our results even through this crazy time has validated and proven that our execution is strong our foundation is good and we're able to compete well and and.
Deliver profitability even on muted growth.
Thanks that was helpful. Sorry about the operation we have two lines about taking that one that included the amortization, but.
All right so.
The other question I would have would just be looking.
Looking at that strong general surgery growth I.
I don't know if you can really separate this out but how much of that do you think was driven by kind of increased interest adoption of the airseal Buffalo filter from the concerns around infection prevention from coal that.
Versus just faster rebound and in those types of procedures.
Yeah, that's that's probably a trifecta, we can't answer right now.
I I think what what I did try to say, though earlier Mike was that.
Two of our three general surgery businesses in the quarter grew.
Grew.
On a global basis.
And.
One of the one of those businesses does not have air sealer Buffalo filter.
And the other business does and.
Finally, we're very excited about airseal in Buffalo filter and they get a lot of headlines because they were headline grabbing acquisitions for the company, but we.
We have other general surgery products that are doing very well as surgery has returned whether that be in the endo sweeter in the.
The hospital environment and.
Those things have to grow as well. This is this is not just a buffalo filter and air She'll story, it's a it's a broad portfolio that the team is carrying across a couple of different business lines.
Okay got it thank.
Thank you.
Thanks, Mike.
Thank you and our next question comes from Matthew O'brien from Piper Sandler Your line is open.
Afternoon, Thanks for taking my question.
Just wanted to talk a bit about about the ortho business given this environment and it's kind of surprising to hear some of the commentary about the slowdown that you're seeing and continued you know kind of a low 90 levels. So what are your thoughts as far as potentially a headwind that you should see on the ortho side, maybe for the next several.
Quarters, even though it seems like general surgeries in great shape, how big of a headwind is that going to be is that a lot more difficult, even though you've got a lot more products to get market share in this environment. Because you can get in front of as many doctors et cetera, with differentiated products or what what are we thinking about as far as that business specifically.
Well I think what we're trying to convey.
On the orthopedics business is the the procedure levels in sports.
Generally.
Revolve around team activity large.
Large.
Events and.
Because that has been slowed dramatically on a global basis.
Think think about.
Procedures related to the knee.
Probably at a much lower level than they historically have run at and so that's a big component of the overall sports medicine market. So.
Until team activities, you know outside of professionals until team activities return at some level I think the overall underlying procedure volumes going to be a little lower.
And Thats I can't predict how long that's going to be.
So that that as a potential headwind.
Out into the future.
On the other side of that I think as we've looked at our customer base.
The the preeminent centers remained very busy the more rural centers are not seeing quite the same volume and maybe that some of that is patient anxiety, maybe that is healthy.
Healthcare worker fatigue in the protocols with they have to go through to do a procedure today versus what they had to do before so I think all those things are at play here Matt.
Obviously, we we run a business with a couple of different categories and we're trying to navigate all the categories put together the best company results and.
We were down single digits here and capital was a component of that.
We'll see where customers go on capital if their appetite picks up for that that could be an offset so there's just a lot of things at play here. So I wouldn't want to paint a picture of dire a dollar picture going well into the future I. Just don't think were in a position to do that is more a reflection of where we are right now.
Okay, Curt our you've taken a little bit of share here and there and sports still.
I think in some categories, we're doing okay, I think Thats fair statement.
Got it and then the other question would be.
On Q4, I know you guys don't want to give us guidance that makes sense, there's just a lot of things moving around tier with.
The shutdown in France, and potentially I'll use city and the general surgery strength. So you guys grew here in Q3, the Street's modeling flat for Q4 are you comfortable with flat in Q4 or do you think we can get similar kind a result in Q4 versus.
Credit Q3, as far as a little bit of growth goes.
That's a stellar try Matt that.
We appreciate the attempt.
If we could if we could guide you one way or the other we would but we just don't feel like we're in a position to give guidance here today.
Given a shot thank you.
Yeah.
Thank you and that does conclude our question and answer session for todays Alfredo I now like to turn the call back over to Mr. Hartman for any closing remarks.
All right. Thank you Crystal and I want to thank everybody for your time today.
And we appreciate your attention we look forward to speaking with all of you on our next earnings earnings call. Thank you and have a good evening.
Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may now disconnect everyone have a wonderful day.
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