Q3 2021 Phibro Animal Health Corp Earnings Call
Okay.
The.
Good day, and thank you for standing by and welcome to the Phibro animal.
Animal Health Corporation Q3, 2021 conference call at this time, all participants are in a listen only mode.
For the speaker's presentation, there will be a question and answer session.
A question during the session you'll need the press star one on your telephone you got any further assistance. Please press star zero.
And then I hand, the conference over to Damian Affinia Chief Financial Officer. Please go ahead.
Thank you Tabitha and good morning, and welcome to the fiber one animal health earnings call for our third quarter ended March 31 2021.
I am Damian Finny, Oh, Chief Financial Officer of Phibro, and I'm joined on today's call by Jack Manheim fiber is chairman, President and Chief Executive Officer, as well as Dani Bernheim director and executive Vice President of corporate strategy the <unk>.
Plan to cover key themes for the quarter financial performance for the quarter and year to date and guidance for our fourth quarter and full fiscal year ending June 32021 before opening the line for your questions.
Before we begin let me remind you that the earnings press release and financial tables can be found on the investors section of our web site at P. H C. Dot com. We're also providing a simultaneous webcast of this mornings call, which can also be accessed on the website.
A replay of today's presentation, the slides that accompany the presentation and a transcript of the call will also be available on our website.
Our remarks today will include forward looking statements and actual results could differ materially from those projections for a list and description of certain factors that could cause results to differ I refer you to the forward looking statements section in our earnings press release.
Our remarks include references to certain financial measures, which were not prepared in accordance with generally accepted accounting principles or U S. GAAP.
I refer you to the non-GAAP financial information section in our earnings press release for a discussion of these measures.
Reconciliations of these non-GAAP financial measures to the most directly comparable U S. GAAP measures are included in the financial tables that accompany the earnings press release.
I want to remind everyone that we present our results on a GAAP basis and on an adjusted basis. We present adjusted results that exclude acquisition related items unusual nonoperational or nonrecurring items, including stock based compensation and restructuring costs.
Other income and expense of separately reported in the consolidated statements of operations, including foreign currency gains or losses net of <unk>.
Income tax effects related to pre tax adjustments and unusual or nonrecurring income tax items.
And now I am pleased the start by asking Jack the share his opening remarks, including a walk through of our key themes for the third quarter Jack Thank.
Thank you Damian and good morning, everyone let.
Let me share what I see as the four key themes for the third quarter.
First we posted solid financial performance in the.
The third quarter consolidated net sales and adjusted diluted EPS were both ahead of the guidance and sales were comparable to the same quarter of the prior year.
While it's difficult to quantify.
The comparable performance relative to last year is masked a little bit of the year over the year of growth as our industry saw some customer stocking of those crazy last days of March 2020.
We're the world, we're just beginning to grapple in earnest with COVID-19.
Our profitability declined slightly due to unfavorable product mix and increases in certain expenses, including incremental investments in our future.
And I'm pleased to report that we received EU GMP approval for a new vaccine facility in Sligo, Ireland, we continue to build out of companion animal pipeline, having recently finalized the agreement that adds two early stage oral care product.
Looking ahead, we expect the strong fourth quarter, it's closed out of fiscal year, well ahead of the same quarter of the prior year because of our basis was hardest hit by the effects of the pandemic in the quarter ending June 30 of 2020.
Our next earnings call in the latter half of August I look forward to sharing full year actual financial performance and I hope to be able to provide a view of our future projections as well.
Damian will share more details of what our actual and projected financial performance in just a few minutes.
Second COVID-19 recovery varies by country. As you are aware, we sell our products in over 75 countries across all species of food animal the diversity of our portfolio has certainly helped to stabilize our basis throughout the course of the pandemic. We continue to monitor the recovery on a country by country basis, and we see the most challenging.
Conditions in our Macy region, which is impacting our vaccine business, while the faster recoveries in other geographies of helping to offset those impacts.
And those countries still struggling to get control of the spread of the virus will just need to see how those situations unfold. Despite the discontinued variability I remain bullish on the outlook of fiber in our industry and we will continue to make investments that will drive our business going forward.
Third we formalized our ESG efforts EOG continues to gain momentum it's on the minds of not only investors, but really all stakeholders, we work with daily including our own employees, although we centralize the ESG avon's internally of the third quarter under Damien's leadership, the principles of driving of the philosophy behind the issue today of lobbying group.
And the culture of five of our Intel.
Changes of published our first ESG report later this calendar year, so you'll have more insights of the ESG related activities and fibrosis.
Lastly, we completed the refinancing of our existing credit facility on April 22. After the close of our third quarter, we issued a press release announcing that we executed and amended and restated credit agreement in the amount of $550 million was the widely syndicated bank group, primarily consisting of our previous line.
I'll turn the call back over to Damian to give a little more color on the refinancing and to review, our actual and projected financial performance and the more detail Damian.
Thanks, Jack turning to slide for the amended and restated credit agreement represents an upsizing of $50 million and includes a $300 million term loan a and $250 million revolver.
We're most pleased with the terms conditions and pricing of the new credit facilities are substantially the same of not just slightly better than our previous terms and the new facilities mature in April 2026, which provides us with operational flexibility for years to come enabling us to focus on driving the business forward.
We remain committed to continued debt and leverage reduction closing this agreement on such competitive terms. During these challenging times reflects both the company's and lenders confidence in the future of our business.
Moving on to our financial performance on slide five I'll start by reviewing consolidated and segment level financial performance for the third quarter ended March 31, 2021, but I'd also like to spend a few minutes today reviewing our year to date comparative results the year to day performance tends to help put in perspective some of the vault.
Until the in year on year quarterly comparisons I will close out my portion of the call with our projections for the fourth quarter and full year.
Looking at the consolidated view third quarter financial performance was ahead of guidance, while profit flat the decline in comparison to the same quarter. Prior year net sales of $211 $7 million were up slightly $1 million of less than 1%, while both GAAP and adjusted profitability metrics lagged on a comparative basis.
Net sales for the third quarter were driven by increases of mineral nutrition and performance products, partially offset by a decline in our animal health segment the.
Climbs and GAAP based net income and diluted EPS were driven by a lower gross profit related to unfavorable changes in product mix as well as increases in SG&A costs and provision for income taxes, offset partially by lower interest expense.
After making our standard adjustments to GAAP results, including one off acquisition related items and foreign currency movement third quarter adjusted EBITDA adjusted net income and adjusted diluted EPS were down 711, and 11%, respectively due to unfavorable product mix and an increase in certain corporate costs and incremental.
Investments in our future.
On the next slide we start the breakdown consolidated financial performance by business segment.
So on slide six I'll start with our largest segment animal health, which is comprised of msas and other nutritional specialty products and vaccines.
Net sales of our animal health segment decreased 3% versus the same quarter prior year.
The decrease of animal Health segment net sales is comprised of three components first the 5% decline in MFA and others versus the prior period driven by timing of domestic ordering patterns, coupled with lower international demand due primarily to poultry products in Latin America.
Second 7% growth the nutritional specialties, driven by strong international growth in dairy products.
The third of 13% decline in vaccine net sales driven primarily by growth in APAC and North America more than offset by challenging economic conditions in the Macy region.
In terms of profitability animal health adjusted EBITDA was $31 million, reflecting an 11% decline in comparison to the same quarter prior year, driven by lower sales and gross profit coupled with an increase in SG&A costs.
Yeah.
Now, let's walk through the financial performance of our other business segments on slide seven, namely mineral nutrition performance products and then a brief word about corporate expenses.
Starting with mineral nutrition net sales for the third quarter were $58 2 million, an increase of 3% versus the same quarter prior year, driven by favorable product pricing correlated with the movement of the underlying raw material costs.
Interim nutrition, adjusted EBITDA was $5 $2 million, an increase of 29% driven by increased gross profit unfavorable product mix and the adjusted EBIT margin improved to 9%.
Our performance products segment continues to have a very strong year net sales of $19 2 million for the three months ended March 31, 2021 reflects an increase of 23% over the same quarter prior year, driven by strong demand for copper based products and favorable product pricing correlated with the movement of the underlying.
Raw material costs the.
The increased gross profit drove $2 9 million of adjusted EBIT for the quarter of 94% increase versus prior year and an adjusted EBITDA margin of 15, 3%.
Lastly, corporate expenses increased 10% versus the same quarter prior year due to savings in SG&A costs more than offset by incremental investments in our future and an increase in expected employee performance based incentives.
Now, let's walk through year to date financial performance in much the same manner, beginning with consolidated results on slide eight.
The consolidated view of year to date financial performance, perhaps reflects a clearer view of underlying business and financial performance in the third quarter view on slide five.
Net sales for the nine month period, ending March 31, 2021 were $613 $1 million $1 4 million or less than 1% behind the same period, a year ago, driven by an increase in performance products, just slightly more than offset by decreases in animal health. The mineral nutrition. However, net income was <unk>.
$37 3 million and diluted EPS was <unk> 92.
Reflecting increases of 34 and 33% respectively.
The significant improvement in these GAAP profitability measures was driven by higher gross profit lower interest expense and increased foreign currency gains offset partially by an increase in SG&A and provision for income taxes.
After making our standard adjustments to GAAP results, including the one off acquisition related items and foreign currency movements third quarter adjusted EBITDA adjusted net income and adjusted diluted EPS were up three four and 4% respectively. Due to higher gross profit offset partially by an increase in certain corporate and information.
Technology expenses and incremental investments in our future.
Partially offset by lower travel expenses due to COVID-19 limitations.
Turning to slide nine we break down year to date consolidated financial performance by business segment, starting again with our largest segment of animal health net sales decreased 1% versus the same nine month period, a year ago. The decrease in animal Health segment net sales was comprised of three components first the 4% decline in EM.
<unk> and other versus the prior period, driven by domestic growth more than offset by lower international demand and primarily APAC and South America.
Second 8% growth in nutritional specialties, driven by domestic and international growth in dairy products offset partially by lower demand in domestic poultry products.
Third of 4% decline in vaccine net sales driven by growth in APAC, and North America more than offset by challenging economic conditions in our makes the region.
In terms of profitability animal health adjusted EBITDA was $94 $4 million, reflecting a 1% improvement in comparison to the same nine month period last year, driven by an increase in gross profit coupled with lower SG&A costs driving an increased EBIT margin of 23, 7%.
Okay.
Slide 10 reflects year to date financial performance for our other business segments, namely mineral nutrition performance products incorporate.
Starting with mineral nutrition year to date net sales were $163 $8 million were comparable to prior year and driven by increased unit volumes more than offset by unfavorable product price and correlated with the movement of the underlying raw material costs mineral nutrition, adjusted EBITDA was $12 $5 million, an increase of 11% driven by.
The increased gross profit unfavorable product mix, while year to date mineral nutrition adjusted EBIT margin was seven 6% up 12% versus the same quarter of the prior year.
Our performance products segment posted strong year to date results net sales of $53 million for the nine months ended March 31, 2021 reflect an increase of 11% over the same period in the prior year driven by strong demand for copper based products, which translated into increased unit volumes.
The strong year to debt gross profit is driving the $7 $2 million of year to date adjusted EBIT for the quarter and 88% increase versus the same period, a year ago and a much improved adjusted EBIT margin of 14, 2%.
Lastly year to date corporate expenses increased 10% driven by lower travel costs relating to COVID-19 limitations more than offset by incremental investments in our future and expected increase in employee performance based incentives professional fees and information technology expenses.
Okay that wraps up the review of third quarter and year to date financial performance. In summary, we are really pleased with our strong financial performance during the very challenging times.
Let me shift gears and address some key capitalization related metrics on slide 11.
The enhanced profitability and favorable movements in working capital of the business continues to drive strong cash flows as reflected in the $26 million of cash provided before financing activities in the third quarter.
Our gross leverage ratio calculated by taking our total debt of $381 million divided by trailing 12 month adjusted EBITDA of $105 million was three six times as of March 31, 2021, consistent with the prior quarter of them.
In terms of liquidity, we had $164 million available as of March 31. This included cash and short term investments of $93 million as well as $71 million of unused and available revolving credit just wanted to make mention that as of April 22021, when we closed the amended and restated Craig.
That agreement, our unused and available revolving credit increased from 71 million to $156 million subject to leverage ratio of limitations.
And lastly, consistent with the past several quarters, we have announced the routine quarterly dividend of <unk> 12 per share or for $9 million.
Slide 12 looking ahead, we expect to end our year strong with a solid fourth quarter and full year financial performance ahead of the prior year.
Fourth quarter and full year financial guidance is as follows net.
Net sales of approximately 213% to $217 million and $826 million to $830 million respectively.
Net income of approximately $11 million to $12 million and 48, 4% of $49 4 million respectively.
Diluted EPS of approximately <unk> 28 to 30.
And $1 20 to $1 22, respectively.
Adjusted EBITDA of approximately $27 million to $29 million, and 107, 9% to $109 $9 million respectively.
Adjusted net income of approximately 12, 1% to $13 1 million and 57% to $51 $7 million respectively.
Lastly, adjusted diluted EPS of approximately 30 to 32.
And $1 25 to $1 27.
Respectively.
That concludes our opening remarks, thank you for your extra time and attention Tabitha. Please open the lines for questions.
At this time of day like to ask a question simply press star one on your telephone keypad again that of star one to ask a question.
The first question comes from the line of of David Western Bank.
Yeah.
David Your line is open.
Oh, sorry at that debt pesky mute button.
Thank you for taking the question.
This is David from Guggenheim I'm can you talk about the long term outlook for for Msas.
The kind of commentary on when we expect to see.
Maybe give us a five year kind of outlook of our maybe 10 year and I realize it no one's crystal ball is perfect here, it's just odd.
I mean, obviously with the the percentage of revenues that is MSA is we'd be just great to get your of your updated thoughts there.
Well.
Number one.
MFA.
Sort of section, we have MFA and other so there were a lot of products.
Come in for the Msas, but typically mfa's, which would be <unk>.
<unk> that are regulated that we sell to the feed.
We see of growth in that business.
We see our growth around the world.
Obviously half of the COVID-19 is over.
We'll go back.
Add to eating protein and sort of enjoying the trend line that we had till end of year.
The half ago.
It's hard to put numbers on it but it's the product line that.
We keep investing investing in and we see again growth of across the world in various markets.
Okay Yeah.
Your line.
It's a pretty a little bit more abstract of the question is can you kind of kind of maybe talk about the reopening.
All of the U S economy, whether it be schools restaurants, et cetera, and kind of the the impact on the overall.
And I guess more outside the U S too as well with reopening.
Well I think thank you I think what we've seen here I mean this is.
This is really a tale of two cities.
This is gonna be a tale of of wealthier countries and let's start with the United States for us.
We see the wealthiest country so.
What we've done number one.
Putting money into People's pockets.
And number two in getting vaccination of across the country.
Debt.
We see sort of return I would say the protein business and I'd say today.
Different outlets, it's less restaurants, and more supermarkets, but pretty much as return to where it was pre COVID-19.
Some pockets.
Some of it.
Anomalies, but overall.
Business is solid and we will continue to growth if I look for the rest of the world.
Because as I said in my in my opening remarks, we sell from 75 countries.
And literally every country has the story and some countries have.
Done better with COVID-19 and the economies of coming out faster and some have not and some of the effects of COVID-19 is not just people being sick.
The effect on the overall economy.
Our business as we've said over and over again is very much tied to the ability to people.
To have money to buy protein, which is the loss and the breath and the bread basket sort of speaking.
<unk>.
Is one of them will expensive parts of that so.
So I think we are seeing some recovery in some countries, it's going to take a year of at least.
But in the major markets like the U S being a major market for us and South America, we see a faster recovery.
We are quite optimistic that.
Basically when we talk again in August when we talk about our plans for <unk>.
Actions for the next year I think COVID-19 will not play a major role in the discussion.
Got it I think he brought up an interesting point and I was wondering if maybe from my last question.
For you you talked about the the the kind of in the inflating of other of the economy here.
We've been seeing you know a lot of increases in commodity prices.
Across the board I mean can you talk about maybe just the the correlation between commodity prices and then you know agricultural end and prices of meat and dairy and then finally, the the kind of effect on your business. This way as we kind of see assets being a little bit more insulated than we've seen in the past and then all of the.
Top off the queue after that thank you.
Okay.
So and in the in the production of animal basis the <unk>.
Key driver is the cost of feed.
The underlying <unk>.
Of course is mostly corn and soybean.
So and that is the biggest cost in raising.
Check in or of page.
Dairy cattle in the cow.
So as those prices go up it costs.
The growth more money to raise those animals.
They're going to raise prices and.
And those prices are going to go up we start to see it already and we will continue to see it because right now there's no abatement in the.
And the increase in cost of the underlying fee components.
That's number one.
Directly to the basis of the other effects as well.
We all read every day about the.
What's going on in the world in terms of shipping.
And you.
Have a stop ship in the Suez Canal.
The world, but we have seen.
Higher freight costs, even before that because of the imbalance produce.
By people buying different things that everyone thought they were going to buy so the.
What's in California of our Cogs debt.
What's around the country are backed up and it's not just United States. It's also true in other parts of the world.
I can tell you crazy stories of bad.
Trying to get a ship for.
So some markets of ours.
And because the.
The need of the gain that container back to China.
Product offering that we need to be transship, just don't leave the board so.
It's much more difficult and cost of going up so yes cost of going up.
Why do you buy out we will endeavor to what we can to raise the I'll call out prices as well to cover these increased costs.
We are seeing sort of on a daily basis.
Thank you very much.
Your next question comes from the line of Anne Wright with Credit Suisse.
Great. Thanks.
<unk> got a little bit more specifically on the driver or anything your competitive positioning across the nutritional specialties business at this point.
The annualized he says well that's the working just like the double digit growth for you kind of going forward on the longer term basis.
So thank you for that we see the nutritional unrelated from product growing at a double digit basis.
Across our markets.
That doesn't mean that every one of the products we have in that group of products will grow.
This competition is change in what we're seeing in <unk>.
And the market it often depends on the change of the underlying feed but overall, we are we have invested a lot. We continue to invest in nutritional specialties and we we fully expect that to grow.
Double digit.
Clearly you have to remember the COVID-19 with the.
He has played a major roads last year.
Yeah.
But as we get out of it.
You will see that double double digit growth.
Okay perfect.
Could you give us an update on your companion animal initiatives, where that stands and what your expectations are for that business over the next few years.
I'm going to pass this is donny okay. Good morning.
So we continue to execute well with regeneron, which is our product on the market right now.
We had talked about last quarter that it had doubled the six months over the previous six months and we're expecting that trajectory to continue throughout the rest of fiscal year.
And then.
Are steadily building up of our pipeline pipeline. So we had foreshadowed last quarter that we were working on the oral care.
Neil and we've successfully completed that in the early stage product where the sites.
For us about the two product actually is that we believe.
That they will fall under the medical device standard as far as the regulatory is concerned.
The more streamlined process.
So that would allow us to get to market a little faster than if we went.
Through different processes within the FDA so.
Our pipeline is fairly early stage still.
With all of the pilots that we have but we are seeing that we've filled some gaps as far as the timeline and we are.
For the excited about over the next number of years will bring as far as the products. Some of them, we can bring them to completion.
Okay perfect. Thank you for months.
Yes.
Your next question comes from the line of Michael Richardson with Bank of America.
Thanks for taking the question.
Jack first one for you.
Apologies if I missed the during the prepared remarks, but I don't think you necessarily mentioned, China or give an update on that market and ive always welcomed the euro can door in your your thoughts on the ASF recoveries sort of what youre seeing in those trends there we've seen some a lot of conflicting reports in terms of her rebuild.
Flare ups of new of new outbreaks of ASF could you give us your thoughts on sort of what youre seeing in China, how of that market rebounding for you and sort of how are you thinking about it for the next quarter.
So.
I mean, China is rebounding.
You can see for both.
Of the products with currently selling in.
Which are.
Non of Msas and the products of our competitors of selling in the.
That business is getting better.
The China.
As incentivize many of the high grow is to.
Do a better job of Biosecurity and Theyre, putting the definitely putting more pigs on the ground.
In the same time and what we're all reading what we're same as ASF is not under control control.
So.
They are upset.
While they can add the facilities and might not be able to fill the facilities. So I think it's going to be sort of line up and down over the next couple of years clearly the trend line is Chinese government has invested and will continue to invest a lot of money.
To become independent but for the rest of the world still China of every day.
So.
Whats from the U S from Mexico from Brazil have been strong to China or to that part of the world.
And that will continue for the next couple of years I mean, even think about.
You don't follow we follow it but every other month in China. They were releasing page from their frozen storage to keep enough pigs of the market. So that has to be rebuilt.
Millions of times so.
Overall I think.
What's happening in China as they rebuild the herd is debt.
That happened quickly and overall for.
For all of the hog producers around the world, it's going to be good business for two three years at least.
Okay I appreciate that and then just real quick follow up on the.
The fiscal <unk> guidance again.
Really impressive showing some nice sequential in obviously, a really strong year over year growth.
Is this mostly on the sort of on the comps in the MFA segment I know that the last year you guys had some really unusual onetime hits in fiscal <unk> that sort of depressed that number I'm trying to get a sense of sort of the the underlying and the sequential progression.
Is it fair to interpret that guide that you are you sort of.
Beyond all of the headwinds you saw earlier in the recovery is continuing to proceed.
Yes, I can I can take that question. So yes keep in mind that the fourth quarter of 2020 was our first full quarter in the pandemic and we were hit hardest and have since then quarter on quarter grown top line and seen a return to profitability and as we mentioned the ahead of our expectations. So our fourth quarter guidance.
Sequentially compared to the first second and third quarter of this fiscal year, we continue with the same profitability and top line, perhaps the at or slightly above I think our biggest risk between now and year end as Jack sort of alluded to is the timing of shipments and some of the backlog of some of the ports.
But we feel pretty confident that the.
The fourth quarter guidance, a good number and reflects growth much of the same that we've seen in the last couple of quarters since that low point last year.
Great. Thanks, Damian I appreciate it.
Your next question comes from the line of Kevin catch all of G Research.
Yeah.
Hi, Thanks for taking.
Question for maybe the build off of them on the Q4 guide.
Anything in there the.
And then I'll look to the.
Do you have any reason to believe it wouldn't be continuing into your fiscal 'twenty two or are there any kind of pockets of the per.
Do you expect in Q4 that maybe.
Might be seasonal or kind of kind of.
Short duration related that we shouldn't be expecting.
As we start looking into next fiscal year.
No.
We think.
We just said it.
It's mostly of more normally year compared to the shock of the.
As the pandemic and the fourth quarter of last year.
And the.
As we said earlier, we're seeing.
Recovery around the world some countries are going to be.
Going a lot better as you know meeting whatever you read every day.
But as the vaccine is spread around the world.
<unk>.
Kudos to our.
To Pfizer and majority of them for doing all of.
An amazing job is.
We're all here, where many of US sitting here back of the office on this call and up to now we've all taken it from our homes so and.
This is definitely progress and its progress around the world and I think.
I think our expectations.
For the fourth quarter are good and then we will see continued growth coming pass that.
Great I appreciate that Jack I was wondering if you could talk a bit about what youre seeing in poultry one of you.
The peers have noted that they've been seeing some trade down within the.
U S poultry market in particular, just wondering what youre seeing there.
The expectation for that market.
Yes.
<unk>.
I think the.
It's.
Our poultry customers.
A bit more reticent to put on a lot of birds.
And then they have in the past.
They face a lot of different headwinds.
Some of economic headwinds so it's slower growth in the in the U S poultry again.
They are suffering from higher input costs.
And when that happens always.
Everyone always wants to say well what can I do different what kind of do cheaper.
At the end of the day.
We will rotate our products because of all of our products perform of function.
And again as I've, often said St Jude.
No one buys our products because.
They don't think it helps them they buy our products book I think it helps them grow the animals, whether its chickens opaque cattle.
So we hope that we all take our current so I think it's nothing major and I think the overall in the United States all of our customers I.
I don't know okay.
Great I appreciate the color.
Two more.
Ask them up from.
First maybe for maintenance for Dani can you say a bit more about the companion animal products that you brought in.
So it sounds a little bit interesting went from the standpoint of of potentially going the other medical device pathway. So any sense you can give us the only kind of timelines when we might be able to see those come to market and then secondly.
On the Ireland facility that that should open up some new markets for you in vaccines.
What can we expect from vaccines as we start heading into the into fiscal 'twenty two can we get back to that sort.
Sort of targeted realm of double digit growth for that business.
Okay. So I guess I'll start with the <unk>.
The oral care products.
We're really not giving.
The guidance as far as how long they will take other than to say the medical devices the more streamlined process.
It is early stages so.
I think you can take from that that it will not be in the next fiscal year for sure.
And I think I will add.
The product is one product with all of the Macquarie for cats.
And what we'd license here so.
Which would be our first cat product as well, so again slowly but surely we're building out of the portfolio I think we're going to prevent the lot.
Methodology Blake.
And we are pleased with how it's proceeding and we're pleased with the kind of the inbounds. We're seeing all the time of people pitching of interesting ideas for us and we're definitely on the math now.
As far as if someone does have an idea of when the speak too so.
Yes.
Think of we'll see some really good stuff from here.
And on the vaccine side.
The answer.
Is it.
Like everyone has asked today, it's a great question.
<unk>.
I think the vaccine business within the sort of the.
The.
The slowdown really depends country by country.
And in some of the markets, where we saw of vaccines have been more affected by the pandemic.
The other markets interest.
It's the nature of our customer base, it's the nature of sort of of all of our competitors. We are the last entry into the vaccine business and most of these markets.
And where we have our registrations the.
That combination has made the pandemic more painful I think for us than many of our competitors.
Having said that.
I think it's really tied to the recovery from the pandemic. We're on a we're on the track of the recovery and.
I'm not sure I will take a quarter of two quarters or a year, but.
In the course of the next year all of our markets, we will have recovered.
In our vaccine business.
We will grow at the very fast clip of growth at group before the pandemic.
Great. Thanks.
At this time there are no further questions I will turn it back over to Damian Finny, Oh for closing remarks.
Alright, Thank you Tabitha and thank you everybody that was a great round of questions as always and we appreciate your attendance on today's call. Our next call will be towards the back half of August when we will be discussing financial performance for our full fiscal year 2021.
Well as forward looking projections of financial performance until then let's all continue to keep ourselves from one another safe and have a great rest of your day. Thank you.
Thank you, ladies and gentlemen that today's conference call you may now disconnect.
Okay.
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Yes.
Okay.
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