Q1 2021 Cutera Inc Earnings Call
Yes.
Thank you for joining to terrorists first quarter 2021 earnings conference call. After our prepared remarks, there will be a question and answer session.
Discussion today includes forward looking statements. These forward looking statements reflect management's current forecast or expectation of certain aspects of the company's future business growth, including but not limited to any financial guidance provided for modeling purposes forward. Looking statements are based on current information that is by its nature dynamic and subject to change and forward looking statements and.
Among others statements regarding financial guidance regulatory approvals productivity improvements and plans to introduce new products and expand into additional geographies.
For words that May identify forward looking statements. We encourage you to refer to the safe Harbor statement and our press release earlier today.
All forward looking statements are subject to risks and uncertainties, including those factors described in the section entitled risk factors and our form 10-K as filed with the Securities and Exchange Commission and updated and our form 10-Q and subsequently filed.
Tara also caution to you and not to place undue reliance on forward looking statements, which speak as of the day. They are made you Tara undertakes no obligation to update publicly any forward looking statements to reflect new information events or circumstances or to reflect the occurrence of unanticipated events future results may differ materially from management's current expectations.
In addition, we will discuss non-GAAP financial measures, including results on an adjusted basis. We believe these financial measures can facilitate a more complete analysis and greater transparency and to keep terrorists ongoing results of operations, particularly when comparing underlying results from period to period.
Please refer to the reconciliation from GAAP to non-GAAP measures and our earnings release. These non-GAAP financial measures should be considered along with but not as alternatives to the operating performance measures prescribed by GAAP.
With that I would like to turn the call over to our CEO Dave Malory.
Thank you operator today I'm joined on the call by ROI and SaaS, our Chief Financial Officer.
I will begin today's call by providing a brief overview of our first quarter 2021 business results.
High level summary of our energy based aesthetic market trends and.
And a few operational highlights from our first quarter 2021 performance.
I'll hand will then provide additional details around our financial results and share our outlook for performance over the remainder of 2021 after.
After world and finishes he will turn the call back to me for some final comments before opening the call to questions.
Turning first to our first quarter business results.
I am pleased with the results delivered during the first quarter, which were driven by the continued execution of our commercial plans both in North America and internationally.
Revenue for the first quarter 2021 was $49 $7 million and increase of 54% over prior year results. Our first quarter 2021 revenue performance reflected broad based positive results across nearly every geography and in every product category of our business.
Capital equipment sales were strong and the period with 35% growth over prior year with notable strength in North America, Europe, and Australia, and New Zealand.
And our energy based aesthetics capital sales normally follow a seasonality that declined 20% to 30% from fourth quarter to first quarter. However, during 2021 and our capital equipment revenue declined just 6% sequentially from fourth quarter, 2020 supporting our belief and the growing recovery and the capital equipment cats.
Laurie.
Digging a bit deeper into our capital equipment revenue performance, we were pleased to see some resurgence and certain verticals that had been less of a focus of our customers through the work from home and zoom meeting environments, and particular body sculpting was sequentially stronger and first quarter 2021 versus fourth quarter, 2020 driven by increased.
Customer and patient interest and body sculpting treatment likely in anticipation of a return to more normalized social and workplace routines.
With respect to recurring revenue, we delivered $21.3 million and the first quarter of 2021, representing a growth of 89% over prior year, all three of our recurring revenue categories, including skincare consumable products and service contribute to our strong year over year growth performance.
With respect to skin care line, and we distribute and Japan, our revenue grew 17% sequentially over fourth quarter 2020 to $12 $3 million and grew 30 324 per cent over first quarter, 2020 prior year period.
As we move into the second quarter of 2021, we are crossing over the first anniversary of the heightened marketing and promotional efforts behind the skincare product growth, while we continue to be bullish on the long term prospects of the skin care business with its low customer concentration strong reorder rates and new account acquisition opportunities ahead.
We also remain very cautious on the potential for disruption and a post COVID-19 environment.
And the first quarter 2021 our consumer product revenues were $2 9 million representing growth of 16% over prior year, our global consumable revenue performance and the first quarter of 2021 was driven by the increased treatment volumes. We saw in North America. During this period.
The third component of our recurring revenue is service global service revenue associated with both time and material maintenance and repair fees as well as the revenue from sale of extended service agreements with $6 1 million for the first quarter 2021 representing 5% growth over prior year period.
As the size of our active installed base continues to grow the volume of service calls and service agreements, we sell into the market will grow proportionately.
Turning now to a static market trends.
We have seen that energy based aesthetic and markets continue to improve the pace and extent of customer recovery still varies by geography with regional restrictions, having a localized impact.
As anticipated and consistent with other elective procedures U S energy based aesthetic treatment volumes were a little lower and January and early February likely due to the resurgence of the virus and the late fourth quarter of 2020 continuing into the first few weeks of 'twenty one and.
We observed some customer has some consumer hesitation in the early weeks of first quarter 2021 that our clinician customers attributed to the rollout of COVID-19 vaccines and some patients elected to defer procedures until he had received the vaccine.
U S volumes rebound rebounded quickly absorbing any pent up demand improving throughout February and stabilizing and March with respect to Canada and the other component of our North American business COVID-19 restrictions remain in place and several areas and are expected to continue through a significant portion of the second quarter 2021 income.
Parse it between the U S and Canada treatment volumes closed out first quarter 2021 matching pre COVID-19 run rates and we are cautiously optimistic that these pre COVID-19 energy based treatment volumes will continue throughout Q2.
Despite the impact of COVID-19, resurgence and some of our international geographies. We were generally encouraged by our team's steady execution other regional plans.
Results reflected the slow but continued recovery of several key geographies in the Asia Pacific region, and both direct and indirect markets in Europe. There are several regions that continue to enforce restrictions to certain social events group's activities and travel. Nevertheless, we are bullish and at these regions will continue to recover and headwinds will.
Diminish as we move through the rest of 2021 as vaccination coverage expands.
Turning now to operations from the first quarter there were several positive takeaways worth highlighting from our virtual teams execution.
Our direct sales teams turned in a strong performance during the quarter combining to deliver 54 per cent year over year system revenue growth.
Type of geographical balance growth was an area of focus and I am pleased with these efforts and our collective results.
Our first quarter 2021 north American capital equipment sales performance was very encouraging overcoming the typical first quarter seasonality and posting year over year growth of 62%. Despite some lingering effects of the COVID-19 environment.
During the period, we continue to have success and expanding our north American commercial team through the addition of sales reps to date I'm pleased with both the level of talent that we have been able to attract and the rate of on boarding our sales management team has been able to effectively execute.
With respect to our international business, our previous organizational investments in Europe are beginning to bear fruit with EU capital equipment revenue up 38% over prior year.
We had previously shared that improvements were made to upgrade key sales positions and streamline our European commercial structure to place greater emphasis on sales rep development and customer interactions. We are pleased to see the revenue growth associated with these changes are already being reflected in our first quarter 2021 European and the results.
The he was region will continue to be and area of focus for our commercial development activities throughout 2021.
In addition to the European success, we enjoyed and the first quarter 2021 we had steady growth and strong contributions from previous investments made and our direct sales teams for both Australia, and New Zealand and Japan.
Over the course of first quarter 2021 while delivering positive revenue results across the board, we were able to maintain our focus on people and process and continue our investments into the commercial teams both domestically and internationally I am excited and see what our commercial organization will deliver in the back half of 2021 from the longer term invest.
And that's with that I'd like to turn the call over to Ron.
Thank you Dave before I begin. Please note our prepared remarks will focus primarily on non-GAAP results unless otherwise noted.
Reconciliation of GAAP to non-GAAP is included in our earnings release, and we encourage listeners and readers to review our non-GAAP metrics in conjunction with the GAAP results as contained in our earnings release.
And the overall volume of our Japanese business continues to grow the size of contribution associated with Japan warrants a separate reporting line on a go forward basis. Please reference our attached materials for further detail I will now go over our results for the first quarter of 2020 one.
Total revenue for the first quarter of 2020, one was $49 7 million versus $32 2 million for the same period in 2020.
And as a reminder, our revenues and 2020 were impacted by the onset of the COVID-19 pandemic I continue to be impressed by the willingness and determination of our commercial leaders and responding to the challenging market conditions related to the pandemic.
Nowhere is it more apparent than and our international segment, which grew 62% and the first quarter with particularly strong performance and our Australia, New Zealand, Japan, and Europe regions not to be outdone, Our North America business also grew 45 per cent.
These numbers are the results of our continued efforts around the retooling and rebuilding of our commercial organizations and reflect and ongoing steady recovery and our end markets.
I'm also pleased to report that recurring revenue defined as consumables Global service and skincare revenue was 21 3 million and the quarter compared to $11 3 million for the same period last year, representing an 18, 9% growth over prior year.
Within recurring revenue.
Our skincare.
Revenue continues to outpace the market.
First quarter revenue of $12 3 million grew 324% on a year over year basis.
Service revenue grew 5% over last year to $6 1 million as a result of having an increasing number of systems under extended service contracts. Finally, global consumable revenue grew 16% to $2 9 million.
Non-GAAP gross profit for the quarter was 28 million with gross margin of 56, 4%, representing a 1060 basis point improvement compared to the same period last year. This large increase was a result of having a larger revenue base to cover lower fixed costs.
Which was achieved in part due to a concerted effort on the part of a matter of factoring leadership and organization to reduce and streamline our overhead costs.
Moving to expenses sales and marketing expenses for the quarter were $15 1 million compared to $14 8 million from the same period last year on $17 4 million of increased revenue.
This additional spending is driven by variable compensation and nearly offset by lower fixed comp fewer marketing activities and reduced <unk> expense.
Total R&D expenses were up 0.2 million over prior year and clinical spending finally onto G&A expenses for the first quarter of 2021, G&A expenses were $7 4 million compared to seven 8 million and the same period last year.
For the first quarter of 2020, one and our non-GAAP operating income also called adjusted EBITDA was a profit of $4 6 million compared to the loss of $8 3 million for the same period last year.
We experienced no material or significant changes to our tax positions.
Moving on to the balance sheet cash and cash equivalents ended the quarter at $164 9 million.
This was in large part driven by the issuance of convertible debt in early March which raised net proceeds of 118 million after $4 2 million of transaction costs, and 16 point and $1 million expanded towards the purchase of a capped call.
Our stated intention is to use it.
The remainder for general corporate purposes, which may include working capital capital expenditures and potential acquisitions and strategic transactions.
Through the issuance of this convertible debt, we have given ourselves and increased optionality to pursue the best outcomes for our shareholders.
We will continue to do so with unrelenting discipline and a firm commitment to putting this capital to use and the best way possible.
Before turning the call back to Dave I would like to provide you with our outlook for the remainder of 2021.
Despite regional travel and activity restrictions and several large population centers, we believe that the overall energy based aesthetic and markets will continue to improve slowly over the course of 2021 fueled by global vaccination processes and incremental treatment volumes over the course of the year.
However, with the lingering uncertainties related to COVID-19 from a resurgence of the virus and key markets around the world, we intend to remain measured and our approach and as such we are choosing not to issue full year 2021 guidance at this time.
Regardless of these potential disruptions, we remain steadfast and our commitment to invest and our key value drivers to include our acne program other R&D initiatives and infrastructure and advance our commercialization affect me with that I will turn the call back over to day for some closing remarks.
Thanks, Ron.
And the first quarter, we achieved broad strength across our business with noteworthy performances from our commercial and operations teams.
And the operations team inclusive of our manufacturing team.
Team Field service Engineers and technical support staff continue to step forward and deliver meaningful margin expansion results when combined with a reduced operating expense levels. The increased revenue and expanded margins delivered $12 9 million of increased adjusted EBITDA in the first quarter over prior year period. This type of result.
<unk> provides a strong motivation to our team and create positive momentum for our business going forward the leadership team and I intend to build upon this momentum remaining highly focused on executing our vital few initiatives through the remainder of 2021 doing the right things right now.
Commercial team, we'll continue investing and both people and process as we do work that places the customer at the center of all that we do the.
And the operations teams will continue to focus on expanding gross margins through very directed efforts around labor material and fixed overhead reductions, while our R&D clinical and regulatory teams work together to deliver innovative products to the market through and increased new product development investment.
We remain committed to the execution of our vital few initiatives over the balance of 2021 and our strong start in 'twenty. One came from the efforts in the second half of 'twenty carried forward and executed in the first quarter. These results serve to build confidence that future will have strong performances throughout the rest of 2021, regardless of.
The remaining pandemic uncertainties that will likely be headwinds for many in this market.
Finally in closing I'd like to spend a few moments thinking Jason Richey for his commitment and service to key Tara Jason.
Jason came to cute terror and 2018 as the company's Chief operating officer, and when asked by our board of directors, Jason stepped up to serve as the interim CEO dutifully filling the role until my arrival in July of 2019.
Ever since I joined to tear adjacent has been a strong and willing partner and our efforts to turn this business around and create the future of medical aesthetics as you might've seen in the press release issued after hours today, Jason will be moving onto a new role.
And I personally along with the rest of the <unk> team wish him the very best and expect great things will follow him wherever he lands the.
The company has initiated and retain search for chief commercial officer to fill this vacancy.
With that I'd like to open the call to questions operator.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad and confirmation tone will indicate your line is and the question queue. You May Press Star two if you would like to remove your question from the queue.
And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the sarkies.
Our first question comes from Matt O'brien with Piper Sandler. Please go ahead.
Hi, this is carrying on from that thanks for taking the questions and best of luck to Jason and.
And so starting off historically your split evergreen and Cabo sales like 30, 70 last quarter 40, 60, and this quarter a little over 40, and you've mentioned getting closer to 50 50.
Are you moving along with that and this year are we going to hit that break out this year and when do we expect to.
And to see that type of breakout growth.
Sure.
Well, they screen and I'm glad you could join the call give her best about I think the split you see is probably driven in part from our growth and consume and consumables and skin care, but it is also somewhat driven by some of the decline.
And our capital sales as a result of the COVID-19 environment that we've seen so I want to be careful not to take a lap on on kind of the suppression of our capital sales I would expect the capital sales continue to grow, especially in the back half of this year and we may revert a little bit on the current balance and to the upper thirties, but it.
Not going to drift all the way back and I feel very good about our recurring revenue streams and we feel very bullish about those but I think the recovery of our capital business and the back half may create a little bit of overshadow to that.
Great. Thank you that's really helpful and then one more for us.
The skincare and margins a little bit lower what sort of things do you have in place to offset that headwind as you work towards your long term margin goals.
Yeah, It's a great question and I'm going to start and then kick it over to Ron and if he has some additional points you'd like to make and I think I'm going to talk more specifically about skincare and maybe Ron can talk more globally about our margin expansion.
With skincare, we're working very aggressively and actively with the manufacturer.
To evaluate what we can do to take out of some of our logistics costs and some of our handling expenses as well as negotiate and in the best possible way to improve our pricing and then ultimately the profit margin that we generate and we'll be working through those through.
Through the course of the next several months and in hopes of getting and landing and the spot that is less dilutive to the overall margin. So.
And so we're active and looking at that and and we'll be able to hopefully see some benefit from those activities running and maybe you want to talk about margins in general Yeah, and and you know thanks, a lot Dave So I'd say first of all you know some of the the the results of our efforts over the past several quarters are kind of.
Bearing fruit already and and that was evidenced and and the results and the numbers that we put forth and Q1, I'd say with the faster than expected growth and our skin care business and delays by a little bit our previously communicated outlook on margin, but that being said that being said the.
The skin care business continues to increase our conviction and bottom line profitability I feel really good about where adjusted EBITDA and.
Ended up this quarter and where it's trending towards.
Thank you.
Great.
Next question, Chris Cooley with Stephens. Please go ahead.
Good afternoon, and thanks for taking my questions here.
Just for US maybe at the outset and I apologize if you covered this in your prepared remarks, but is there any update just in terms of your thoughts on the timing.
And we can either see data or and a more formal update as it pertains to the new product cadence and more specifically the acme offering.
And then just as a second kind of follow up on the Terrace house compare and succession.
You know again really impressive what you all did on the adjusted EBITDA line on a year over year basis this quarter.
Just curious a little bit as we see that rise and capital going forward and the back half would you go that you just alluded to.
Any any concerns there that you'd have pressure on your ability to generate.
Strong year over year growth and adjusted EBITDA, and maybe you can get a little bit of pressure adjusted gross margin line or you think youre. Realizing some operating synergies there that would more than offset that thanks, so much and it.
Thanks, Chris.
Great questions I'm going to I'll take the first one and and maybe Ron and can speak more specifically to the trends on bottom line and margin again.
So in regard to act and you look at I think we've said an awful lot about acne, we've made sure that investors understand the level of our investment and conviction with acne and we continue to be exceptionally bullish with the results and the progress. Our team has made nevertheless, we find that the more we disclose the more we help.
And and inform other people of where we are and what's happening and I think really in our minds. We've given enough at this point and when it's time to give more we will do so I would say that we are continuing to execute our plan theres been no change to our plan and we just find that giving more.
Data just as is not necessarily and our best interest at this time.
And I'll I'll address the question on adjusted EBITDA growth. So I'd say look we feel really good about the sustainability of the results that we're delivering and will deliver for the rest of this year I feel like we're we're achieving are a little bit of scale.
And and all of the efforts that we've made over the past four to five quarters are bearing fruit that being said as the year progresses. You know we will you will use some of these resources to accelerate efforts on things such as acne, possibly.
R P and continuing to reinvest and the the best ideas that are available to us which are all internal as best as we can see right now.
Thank you.
Yeah.
Next question Jon Block with Stifel. Please go ahead.
Great. Thanks, guys good afternoon.
Nice quarter, David Roy and I guess first question, Dave you starting with what you would normally is the case and and aesthetics as capital down 20% to 30% from that <unk> and and you well outperformed I guess, what's also usual unaesthetic just for that step off <unk> and I'm, just curious because of the big outperformance.
That you had from <unk> as we think about our models and I know you don't want give specifics, but should we still think the norm occurs in other words and you're still growing capital call. It from one <unk>, despite what looks like a very impressive one and two number.
Yeah.
By the way John and I appreciate the question and I. Appreciate you, bringing that clarity I don't think we're going to see quite the same seasonality and and.
And and this is just.
My opinion and digging into this and talking with some of our sales leaders I don't think we're going to see quite the same seasonality step up in capital and Q2 I think you know the performance. We saw in Q1 might have pulled forward very you know and in terms of how aggressive our teams were in the marketplace during Q1.
And we're certainly going you know going at this thing with a vengeance to drive a another sequential improvement, but I think frankly, it's probably not going to be at the same magnitude. We have seen seasonality flow from Q1 to Q2 because of that performance.
And I am and I am you know at this point I'm very thoughtful that we should see sequential improvement, but I don't think it's gonna be and the nature of that I'm willing to guide to at this point.
Okay Fair enough and then you know Ron and maybe a quick two parter for you and then I'll end with just a higher level question, but when.
And when we think about gross margin and it seem to be and your talk track and also I believe and the press release do we think about the moving higher throughout the year like you said the success and skincare and my but a little bit of a cap on it but do we still think about you know call. It sequential improvement all of that <unk> 21, gross margin number and the follow up the two parter is.
What about skin care I mean every time I ask about it and you say don't take that as the current run rate and yet it moves higher and just finally, the time that we think somewhere between maybe that for Q and once you might be the right run rate per skin care and then I've got one more.
So I'll address the question on margin.
Say, yes, I'd say as the business continues to scale well, we'll continue to see some expansion and and gross margin I'd say, you know skin care will be a headwind.
Whether we like it or not it's there that being said it is a profitable business for us. It does help us on the adjusted EBITDA side, so while it maybe be dilutive for us on a gross margin perspective, it's a good business for US. We appreciate having so I'll I'll turn it over to day.
To talk us through where he sees skincare leveling out.
No.
And it's it's it's a little bit problematic for us because you know as you know and and probably everyone on the call recognizes Japan's kind of still and the travel locked down and for the most part has been you know while operating not operating at full capacity and a lot of folks in Japan have probably augmented their skin.
Care regimen by using topical were about to kind of see how that plays out as restrictions start to lift and Japan on travel and although Tokyo is still and shut down.
And so we'll we'll see our fear is that there is some degree of of growth that we've seen as a result of just the COVID-19 environment itself.
Well, we think we've got broad base and customers and we've got good reorder rates.
We think we have some hedge there, but I'm not so sure that the current run rate is is the real run rate and AR and AR in a post COVID-19 environment and that's what we continue to to kind of be hesitant to get in front of us.
That said you know we like the way we've set this business up and and we like the fact that it's being effectively promoted across a broad customer base and I think you know we don't see it reverting back to a pre COVID-19 number for us, but it probably settling and somewhere kind of in the.
Mid range of what we've seen since and since the pickup okay. Very helpful. Last one from me a little bit higher level, you've got the improved balance sheet. The aesthetics market is clearly coming back the markets you've been moving to body, where you guys have a really good portfolio.
And maybe talk to us and you use this as an opportunity to accelerate the rep hires even more if you wanted to do that does that get thrown off a little bit with Jason and his departure and what are some of the characteristics are ones that you have when you think about onboarding someone and Jason's place. Thanks guys.
And Jason to hard position to backfill just because of his drive and and is his commitment to excellence and I think you know that's certainly something that we will Miss here that said I do think we have to get a little deeper into the commercial organization and we have to get a lot more hands.
And as we build it out, especially and in light and in view of our future acne component.
And so what we don't want to do is get Super aggressive with adding people and then finding that we have to create some some degree of restructuring and reorganization as Acme launches. So we're trying to be very thoughtful around what's the future state and how do we bridge from now until that point.
So I think that's a very big deal I think the other thing I would share is and when I think about back filling with a chief commercial officer. You know my view is that this person has to have some some varying skills.
And I want them to have certainly some aesthetic understanding and a book and some experience and maybe even a capital market as well, but I think it's also important that they come with some clinical understanding.
As we think about some of the shifts in this business, we've seen greater and greater.
Kind of requirements for clinical data and clinical support and especially as we get into more of the medical conditions that we intend to treat.
So I think it's it's a tall order were already underway with it but it's a tall order and it but I think we will have success in finding somebody that can help us drive and and move the needle.
Great. That's good color thanks, guys.
Yeah.
Once again, if you would like to ask a question. Please press star one on your telephone keypad.
Our next question comes from Anthony Vendetti with Maxim Group. Please go ahead.
Thanks, most of my questions have been.
Answered.
But maybe Dave I know you said you didn't want to speak.
I'll provide an update on the on the acne treatment and laser.
But has it has the timeline shifted at all or is the timeline.
Still the same from from last quarter when you discuss the.
The overall timeline for getting approval and and then and true.
And launching it.
Yeah, well like that.
I appreciate the market's interested and this product and and I wanted to be very cautious because by answering your question I'm actually giving kind of I'm reaffirming so I I've said I'm not going to say more Anthony I would tell you that we haven't changed our opinion, we haven't changed our view of.
The product and and we continue to drive with great efficiency towards and what we think will be the future commercialization.
All day and time.
So all I would do is confirm to you that we haven't fundamentally seen any change that that drives our changes our view on number one the size of the market the capabilities, we have to affect the market or the model that we would probably you know it I guess from my perspective, a b move.
And towards so.
That's the best I think I can do.
Okay, and then just lastly, and maybe more higher level.
It seems like.
And most practices.
I have have obviously, we opened at this point.
And maybe some of the spas might be you know maybe some of the medical spots might be some of the only exceptions, but even most of them are I think reopened and would.
Would you say, there's there's a pent up demand for capital equipment.
Or has that demand and just coming back slowly over the last couple of quarters.
Yeah, I think you're right a lot of places and open and several people have added capital equipment and our view has long been and continues to be that we're going to see probably the greatest appetite increase in the second half of this year I think we have to not only get through the vaccination processes.
But we have to get some stability I mean, I think everyone's probably aware that theres, some new challenges and Michigan now and resurgence of the.
The virus. So we want to be very thoughtful that we haven't played out run this yet and I think a lot of people are getting a little ahead of themselves and you're getting overly excited we're trying to be measured and thoughtful around this and make sure that we don't get over our ski tips and in terms of what we say and how we say it that said we're very pleased.
<unk> with the results, we've delivered and the markets and in the environments that we're playing and and we don't want anybody to interpret that we arent.
And I'm thinking that that we're doing well and those markets. We just aren't sure and certainly on and control over you know the the full expansion and the full recovery of the economy.
Okay. Thank you I appreciate it.
I would like to turn the floor over to Dave Mallory for closing remarks.
Thank you operator, we appreciate everyone's interest and the continuing of the following the <unk> story, we're very pleased with our results very excited about our future and we will continue to make the investments we think necessary to drive what we believe to be a transformative event and this company's history with that I'll leave you and look forward to talking.
With you and updating you next quarter.
Yeah.
This concludes today's.
Okay.
This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.
Okay.
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