Q3 2021 Integer Holdings Corp Earnings Call
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Good day and thank you for standing by welcome to the in teacher Holdings Corporation, Q3, 2021 or evening scholar at this time all participants are in a listen only mode. I stayed the speaker's presentation. There will be a question and answer session to ask a question during the session you'll need.
To press Star one on your telephone please be advised that the district for today's conference is being recorded if you require any further assistance please breast sorry zero.
I would now like to hand, the conference over to your Speaker today, Mr. Tony Bar weeks Senior Vice President of Investor Relations. Please go ahead Sir.
Good morning, everyone. Thank you for joining us and welcome to integer third quarter 2021 earnings Conference call with me today, or Joe decent President and Chief Executive Officer, and junction Garlan Executive Vice President and Chief Financial Officer as.
As a reminder, you read dolphin Dana we discussed today reflect the consolidated resulted manager for the period syndicated.
During our call we will discuss some non-GAAP measures for reconciliation.
Please refer to the appendix on today's presentation, today's earning press release and the training schedules, which are available on our website entered your dot net.
Note that today's presentation includes forward looking statements. Please refer to the company's SEC filings for a discussion of the risk factors that could cause our actual results to differ materially.
On today's call Joe will provide his opening comments and more details on the recently announced strategic investments, including the agreement we announced today to acquire ask working.
And then Jason will review, our financial results for the third quarter or benefit from refinancing and we will provide an update at our full year guidance.
John will come back out to provide his closing remarks, and then we will open up the call for your questions with that I'll turn the call over to Joe.
Thank you Tony and thanks to everyone for joining the call today.
Dedicated associates have continued to deliver for our customers. During these dynamic times and it also remained focused on executing our strategy I'm excited to share with you today are strong third quarter results as well as some significant steps we've taken to execute our strategy to accelerate our growth.
And generate a premium valuation for shareholders.
We delivered our second quarter in a row of 30% sales growth versus last year are adjusted operating income through 86%.
Are adjusted EPS grew 110%.
We continued our strong cash flow generation Ah reduced our that leverage to two six times adjusted EBITDA the lowest level since 2015.
The strength of our third quarter supports our increased full year guidance with adjusted net income now up 41% to 50% versus last year.
Earlier today, we announced our plan to acquisition of our score a highly respected and trusted medical device outsourcing company with a 40 year history of designing developing and manufacturing medical devices for their cardiovascular cardiac with a management and neuromodulation market.
Score is a clear strategic fit with integer that adds proprietary products and technologies complementary capabilities and low cost manufacturing capacity.
We're excited to welcome awkward to integer upon closing later this quarter.
In addition last month, we announced the planned construction of a new innovation in manufacturing facility in the Med Tech hub of Galway Ireland.
This important investment will provide the development and manufacturing capacity needed to support increased demand from our customers that already have a significant presence in the region.
We signed the agreement with Al Gore yesterday and are excited to welcome their 900 associates to integer.
We have a shared philosophy of delivering innovation and manufacturing excellent to our customers.
They haven't expansive portfolio of proprietary products intellectual property and manufacturing know how that delivers life saving and life enhancing technologies to their customers.
Score is headquartered in Palm Harbor, Florida, where they performed design and development work for customers with their primary manufacturing operation and the Dominican Republic.
We expect the addition of <unk> of ring sales growth and operating synergies that will be accretive to EPS in 2022.
Score has been serving the medical device industry for 40 years and has a privately owned and operated company.
Hey generated $57 million of sales in 2020 and have historically grown their sales high single digits.
The strong strategic fit with integer makes this an attractive and compelling acquisition as asheboro will expand our highly differentiated cardiovascular access and Neurostimulation lead wire finished product offerings in fast growing in markets that are aligned with engineers growth strategy.
And to drink a big scale of manufacturing excellence through our integer production system and lean manufacturing practices that we expect to deliver operating synergies and even higher levels of customer service.
The purchase price of $220 million will be that financed.
The acquisition structure includes a tax election that is expected to reduce cash taxes by approximately $43 million over the next 15 years.
After the acquisition, we expect our that leverage to still be within our target range of two and a half to three five times adjusted EBITDA.
And we expect ask or to increase our 2022 EPS growth rate by low single digits.
The combination of <unk> and ask or will deliver book for both customers and shareholders and.
And the cardiovascular space ask where brings an extensive offering of proprietary regulatory approved introduces and steerable sheets that are complimentary to integers existing finished guidewire and introduce are offering.
The combination will expand integers presence with leading customers and the structural heart electrophysiology and peripheral vascular spaces, all strategic markets defined in our current strategy.
The resulting broader offering we will provide customers and even more comprehensive one stop shop for products that meet their needs as they work to accelerate their speed to market.
Combining our scores complex leaves system knowhow and they're abroad neuro in cardiac leads portfolio with integers IPG in Leeds capability creates what we believe are the most comprehensive into and active implantable capabilities of any medical device outsourcer serving both emerged.
<unk> and large Oems.
The combination of vintage or would ask scores engineering and innovation expertise will deliver both additional capacity and speed to market for our combined customer portfolio.
And the addition of a large scale low cost manufacturing facility in the Dominican Republic will support the accelerated growth of both I score and integer.
We are excited for the opportunities this combination brings.
As we look beyond the Oscar acquisition it into 2022.
We expect to generate annual acquisition capacity of between $200 million to $250 million.
The source of this capacity is our annual free cash flow combined with our organic growth and acquired EBITDA.
This capacity level is consistent with our targeted leverage of two and a half to three to five times adjusted EBITDA.
Our plan is to deploy this capacity for acquisitions that both enable and accelerate the execution of our strategy and the markets. We currently serve.
We are confident in our ability to create value through acquisitions because of the progress we've made in implementing our operational strategic imperatives across integer.
We are approaching the end of the third full year of executing our strategy to win in the markets, we serve and achieve excellence in everything we do we.
We believe our operational processes have reached a level of maturity to repeatedly acquire integrate and grow acquisitions.
All while maintaining our target that leverage range.
We have developed the capacity and capability to execute our acquisition strategy and ask or just the first of what we expect to be a regular cadence of acquisitions.
In addition.
<unk> to inorganic growth through acquisition, we continue to invest organically in the fastest growing in markets we serve.
Ireland is a well recognized medical device hub for many of the largest Oems in the industry as well as many of their suppliers.
Entered your has been operating in Ireland for more than 25 years, and currently has about 1300 associates designing developing and manufacturing products for our customers.
Last summer we open at 8000 square foot R&D center as an interim step to this larger facility.
As we have secured new customer programs.
R&D sooner is now I'd capacity and reinforces the need for this new innovation and manufacturing facility.
We are starting with a 60000 square foot facility that can be expanded to 147000 is needed.
The demand from our customers and the fastest growing and markets. We serve supports this investment and we're excited to expand in this thriving med tech hub.
I will now turn the call over to Jason.
Thanks, Jeff.
Good morning, everyone and thank you again for joining our call.
I'll provide more details on our third quarter of 2021 adjusted financial results.
Talk about the benefits of our recent debt financing.
Summarize our product line sales trend and conclude with our increased outlook for 2021.
Starting with our third quarter results at $306 billion sales had significant growth over last year of $70 million 30%.
Adjusted operating income was $47 million up $22 million compared to the prior year, an increase of 86% as we continue to benefit from the leverage associated with higher sale and the ongoing impact of our manufacturing excellent strategic imperative.
But the adjusted net income at $35 million, we delivered one dollar and five cents of adjusted diluted earnings per share up 55 cents from the third quarter of last year.
Our third quarter financial results represent another strong quarter of growth versus last year.
Adjusted net income increased $18 million in the third quarter compared to the prior year driven mostly by our sales volume returning to prepandemic level, our manufacturing and supply chain teams are doing an excellent job of accelerating production to meet growing demand from industry recovery and new product introduction.
We delivered $24 million of operational improvement as compared to last year. Despite the headwinds of a difficult labor and supply chain environment, and we will continue to prioritise meeting, our customer and patient need even with higher costs.
FX as favorable contributing to $1 million of improvement versus the prior year.
Adjusted net income also improved $3 million a year over year from a reduction of interest expense.
This was driven by our continued focus on debt repayment and realizing approximately one month of savings from the debt refinancing we completed in the third quarter, which are covered further in a few slides.
Are adjusted effective tax rate was 13% in the third quarter. While this is generally a very favorable rate we saw a year over year headwind of $10 million due to the adjusted effective tax rate in the third quarter of 2020 being negative 14.7%.
You may recall that we benefited from several significant discrete items were recorded in the third quarter of 2020 related to the favorable impact a final tax reform regulation.
The benefit of our tax planning strategy and favorable R&D tax credits.
The discrete items in the third quarter of 2021 were also favorable but not as significant as the prior year.
We continue to strong conversion of income to cash in the third quarter generating $49 million in cash flow from operating activities.
This was primarily lifted by the benefit of third quarter cash collection from a recovering sales.
We generated $37 million in free cash flow inclusive of $11 million of capital expenditures.
As we continue to invest in our strategy, we expect a full year capital expenditures to be in the range of $50 million to $55 million.
Consistent with our strategy, we further reduced our net total debt in the third quarter by $31 million and with that reduction and improving adjusted EBITDA.
Or that leverage ended the quarter. It's two six times adjusted EBITDA, which is down from three one in the second quarter and is Joe noted is the lowest leverage the business has seen since 2015.
As further demonstration of our commitment to strong debt management, we're excited to share that in September we completed a refinancing of our credit facilities to better align with our strategy and deliver lower borrowing costs.
The new structure consists of a five year $400 million revolving credit facility, a five year $250 million term loan a and a seven year at $350 million term loan be.
With our improved financial strength were able to achieve credit rating upgrades and capitalize on a more favorable credit market to arrange a facility with meaningfully lower borrowing costs.
With this new structure reduced are all in effective interest rate by approximately 120 basis points, which we expect will improve our annualized earnings per share by approximately 15.
To support the execution of our ongoing acquisition strategy, we increase liquidity by doubling a revolver size from $200 million to $400 million and we improved our covenants to provide greater flexibility.
We benefited from great support from our bank partners throughout the process and believe that the disciplined management or a capital structure positions us to better execute our strategy with lower borrowing costs.
We will now transition to our product line discussion.
As a reminder, slide 20 reflects trailing four quarter organic adjusted sales year over year changes.
Through the first quarter of 2021, our sales were significantly impacted by the Covid pandemic that trend reversed in the second quarter and continued to improve in the third quarter as reflected in significant improvement in our trailing four quarter sales growth rates.
Starting with our first product line.
Cardio vascular sales were up 29% organically in the third quarter. This is compared to the third quarter of 2020, when Covid had the greatest impact on CNBC sales.
The third quarter growth was driven by double digit sales increases.
Across all cardiovascular markets with neurovascular, and electrophysiology, delivering particularly strong year over year growth.
We expect the trailing four quarter sales to grow high single digit year over year in the fourth quarter of 2021.
Moving to cardiac rhythm management and Neuromodulation the.
The product line had another strong quarter growing 46% organically in the third quarter on continued customer demand.
Both cardiac rhythm management, and Neuromodulation increased high double digits.
We expect the CRM an end product line trailing four quarter sales to continue to grow strong double digits versus year over year in fourth quarter of 2021.
As a reminder, the advanced surgical orthopedics and portable medical product line includes sales Undersupply agreement to acquire of our divested acinar product line. In addition to our portable medical sales.
Third quarter organic sales declined 5% versus the prior year, mostly due to the decreased demand for ventilator and patient monitoring component that peaked last year during the pandemic.
For the fourth quarter, we expect the trailing four quarter sales to continue at high single digit year over year decline.
Finally, wrapping up with electric Ken are Nonmedical segment, we have seen a continued improvement in the energy market and with that our third quarter sales increased 14% organically versus the prior year.
We remain focused on monitoring the market and the indications are that it will continue to recover it through the rest of the year and in 2022.
Moving to the expectations for the remainder of 2021 I'm pleased to share that for the third consecutive quarter. We are increasing our outlook. Please note that the 2021 guidance presented excludes any impact from the asked for acquisition.
We now expect 2021 sales to be in the range of $1.205 billion to $1.220 billion, an increase of 12% to 14% versus 2020.
This increases the low end of our range by $5 million.
Customer demand in our current backlog gives us confidence in the outlook.
Third quarter sales were in line with our previous guidance and we now expect fourth quarter sales to be similar to the third quarter.
We are delivering the 12% to 14% revenue growth, while our manufacturing and supply chain teams or managing the difficult labor and supply environment.
With our full year sales expected to now be in the range of 1.200 billion $5.
Two $1.220 billion. We are also raising the low end of our outlook for adjusted operating income and now expect to be between $185 million and $195 million, reflecting growth of 29% to 36%.
Our manufacturing and supply chain teams have continued to manage through an exceptionally difficult labor and supply environment incurring some additional costs. Despite these coughs, we still expect to achieve our financial objective of growing adjusted operating income at a rate two times that of our year over year sales growth rate.
We are increasing the adjusted net income outlook to a range of $130 million to $138 million, resulting in a growth of 41% to 50%.
This reflects the growth of adjusted operating income as well as the benefits from improvement in our interest expense and adjust adjusted effective tax rate.
We now forecasts are adjusted ETR to be 14.5% to 55% down from the prior guidance of 15.5, 17.5% as we continue to execute tax planning initiatives in 2021.
Our total your guidance reflects the continued year over year strength of our financial performance and demonstrates our commitment to serve our customers and the patient faced support.
As I conclude we are maintaining our cash flow outlook and expect to generate between $150 million to $170 million in cash flow from operations.
Free cash flow is estimated to be in the range of $95 million to $115 million and net total debt reduction is expected to be in the range of $90 million to $110 million.
The difference between free cash flow and debt Paydown includes withholding taxes on restricted stock units and the cost of a recently completed that refinancing.
As a reminder, the outlook does not reflect the impact the announced acquisition of US for however, as we have mentioned, we will still expect to remain within our target leverage range post the acquisition closing.
I'll turn the call back to Joe Thank you.
Thank you Jason integer.
<unk> has a clear vision, but compelling strategy and strong values combined with the most talented associated still amongst all medical device outsourcers.
Mid single digit industry growth combined with integers breath of product portfolio Craig's are very resilient business model.
Just world class R&D capabilities at our global manufacturing footprint combined with our deep customer relationships creates a compelling growth strategy and.
And the investments we discussed today furthers that strategy or.
Our commitment to our associates and investment in their growth coupled with our focus on building leadership capability to deliver performance excellence instills, a performance culture that creating a competitive advantage finally, our track record of delivering on our financial commitments and generating strong cash flow reinforces our.
<unk> strength.
To wrap up we delivered strong year over year growth during the third quarter and are that leverages. The lowest it has been since the 2015 Lake region acquisition.
Our recent debt refinancing is expected to increase annualized EPS by 15 cents and contributed to our 2021 EPS outlook, increasing by 5% at the midpoint of guidance.
We announced that compelling acquisition that is expected it to be EPS accretive in 2022, and an ongoing strategy to deploy annual acquisition capacity of $200 million to $250 million.
We're building a new innovation in manufacturing facility in Ireland to support our long term growth outlook as a result of our strategy to win in the markets. We serve I remain confident in our strategy and our associates and our ability to earn evaluation premium for our shareholders.
Thank you for joining a call. This morning, I will now turn the call back to our moderator for the Q&A portion of our call.
Thank you and as a reminder to ask a question you'll need to press one on your telephone again, sorry, one on your telephone too. We try your question you mean press the pound key.
Need somebody will be compiled the queue any roster.
Your first question comes from the lineup Matthew Sean Some Keybanc your line is open.
Okay. Good morning, guys and thank you for taking the questions and Oh, sorry, congratulations on all the work that looks like you guys are.
Putting into build a foundation.
Good morning, Matt Thank you.
I think it's just first I mean the the.
The macro environment, we're coming out of in the third quarter. What you had about two months of course across the U S.
Rolling pauses or electric procedure, but with the help how comfortable are you that your your.
Duction.
Is matching the demand for your customers.
I'm going to see you know one or two quarter lab.
As they saw Paul's and their demand.
What are you guys may have just continued to produce.
Thanks for the question manage it's a great question, but good as you do know.
As you know, we do have oftentimes of lag and the impact of and market medical procedure volumes in our actual production or sales link match our customers manufacturing.
Plans and it matches, what they're doing with their inventory levels and we commented on the second quarter earnings call that our customers. We thought had decided they they were willing to carry a little extra inventory and and after in an attempt to mitigate supply chain challenges that everyone is experiencing and so the dip that we've heard all of our.
Customers talk about in August from from the Covid resurgence in some of the procedure slowdown.
We think that didn't have much of an impact on us in the third quarter, we saw a little bit of it as we look looked at September October November December volumes, we have factored that into our fourth quarter outlook quite frankly, it's reasonably close to what we were expecting going back to where we were at the end of the end of July.
Hi.
As we look into next year, we don't see our customers at least forecasting any meaningful change in the trajectory and the growth rates in the industry. So we don't see.
One or two quarter out into the future impact from the slower procedure volumes that that customers and the market experienced in the August timeframe. So we feel good about our forecasts for the rest of this year and as we enter 2022.
Excellent and do you feel comfortable in your in your visibility.
With the supply chain and especially around.
Trying to components batteries.
Uhm semiconductors.
But it's necessary for some of your devices.
Yeah, So it's hard to be comfortable in this environment, Matt because everybody's dealing with supply Jean issues.
Know that there is an industry, who has not been impacted we're feeling that for sure.
Hi chain of manufacturing teams have done a phenomenal job of getting as far ahead of those issues as you can and then managing the issues when they do arise and I think we're seeing the same kinds of supply chain constraints and allocations across multiple products.
And industries that then everybody's talking about you read about in the headlines every day with the teams have done a phenomenal job of managing that our focus is on ensuring we delivered for our customers. So they can take care of patients and we feel we've done a very very good job of that is the feedback we get from our customers and we will continue to focus on that.
But it's a it's a heavy lift and I think you've heard that from everybody, but our teams have done a phenomenal job at managing it and we feel confident in our process has the capability to continue to do so.
Okay.
And the capital allocation with the opportunity.
Or M&A over the next several years.
You have a pipeline of targets that are already within your current vertical.
That's enough to feed that's 200 $250 million or is at some point or are you looking at having to add like a another leg.
To to the glass verticals.
So.
We liked the products in the market that we're serving today and we feel we have differentiated capability, we think our score adds to that differentiated capability.
We also have a strong pipeline of acquisition opportunities.
We've been working a strong pipeline for a number of years. We feel we have reached the ideal time as a company to begin the regular cadence of doing acquisitions of a more meaningful size and scale over the last couple of years, we've done a handful of small five to 15 million dollar acquisitions Oscar.
Or is it a bigger acquisition for us, but I would still characterize it more in the bolt on context at 220 billion.
It's got basically one one location a couple of buildings for R&D in Florida, It's got a large manufacturing footprint in the Dominican Republic. This low cost was the ability to continue to expand.
We're confident that this pipeline of opportunities we have Ken Ken Ken can use the two the $250 million of capital that we think we generate every year going forward.
So we're going to stay within the vertical that we have because we think there's plenty of opportunity to continue to grow and find find great great New editions and partners to join entered your like ask work.
Okay, Uhm, a bigger picture when when you think about everything that's going on right now are.
Supply chain and the macro environment.
You have to you have to think there's some level of dislocation.
The device supply chain, how happy are your customers with with.
The broad supply bass do you have like this is this presenting you with cigna.
Significant opportunity to gather more business here as they kind of look at it and it says it's gotta be one of the toughest manufacturing environment they've ever seen.
I think we are uniquely positioned to benefit and capitalize on the dislocation or the disruption that's occurring in the industry our customers want to focus on therapy development. They want to focus on clinical trials they want to focus on commercialization.
A smaller supply bass, they want fewer suppliers, they want them to be strategic in nature and when they say strategic there thinking I want innovation I want accelerated speed to market I want high confidence in quality on time delivery and I want a competitive price.
It's also in the mix, but they're focuses on how do they help more patients which is what we want to be part of it and how we're focused on enabling their success. So I think this environment, that's more difficult from a manufacturing standpoint globally for everyone plays to our strengths are scale and breadth and depth.
Gives us the ability to solve our customers challenges from a manufacturing supply chain and innovation perspective, and a very unique way. The addition of Asgard brings additional breath of offering of current products bring strong development capability. We're excited for for their engineering and innovation teams to the integrate and become <unk>.
Of integer and the manufacturing footprint in the Dominican Republic, which we can continue to grow and expand gives us another low cost location, where we ran volume not only from Oscars pipeline, but also integers pipelines. So we we see that as a significant opportunity. We think we are uniquely positioned to capitalize on what you.
You just described as the.
This occasion or disruption that's occurring in manufacturing and supply chain globally.
Alright, so congratulations Jason and Tony.
Thank you Matt.
Yeah.
And again, if you would like to ask a question. Please press star one on your telephone keypad.
Your next question comes from the lineup Jim stability from Sidoti and company. Your line is open.
Good morning sounds like you guys are are entering the next phase of growth.
With this deal.
Good morning.
Seems a little more detail about a score you said 57 million in revenue in 2020, but.
No 2020th wasn't the typical year.
What was that compared to 2019.
They actually they actually did well versus 2019, they have a strong pipeline of of new new development, new programs and versus 19 of 2020 versus 19. They did not see a significant decline that the rest of the industry did they did did well 22021 2019.
They've historically grown high single digits, we would expect given the pipeline they have in the strong customer relationships that they have that that will continue and what we're looking to do is.
The greater the breath of their portfolio, a product offering into integer and with our combined strength both from a development in a manufacturing customer relationship standpoint grow both of our businesses at an even faster rate.
<unk> brings differentiated cardiovascular access capabilities, both development as well as existing strong portfolio. They have over 40 patents on their product offering today. They also bring strong neurostimulation lead wire capability.
Integrated capability to serve particularly focused on emerging customers, but they also can support the large Oems. So in terms of what they do in the markets. They serve it is a very strong fit with our strategy and we see great alignment.
Actually I'd offer their culture, we think is a great.
Sure. We think we have a very common or shared focused on innovation and taking care of customers and we look forward to the deal closing in being able to start to work more closely with them.
And I imagine there are a lot of customers that they deal with it you already done with but are there are some that are new to you and and some that are needed them. So that you could possibly have some close only opportunities.
Absolutely gym.
There are some customers that are score has a strong relationship with that.
They're growing with that will give us the opportunity to to tap into that customer base. In this in the reverse is true as well. We think we have some customers that we could potentially bring their product offering into as well we.
We think it's a great fit from a technology standpoint, maybe at a macro level of the best way I'd frame. It as we think this is right in our wheelhouse. It's products. We know it's markets we know.
We share the value we share in the focus on innovation and the customer they have development in the U S. They have low cost manufacturing, we see a lot of synergies here.
And can you give us a little color on margins what do you think you know.
Gross margins will be after the deal will they be up.
About the same.
Well right right, what we what we anticipate is we're going to be able to come in and and help with some of our manufacturing actualized lean manufacturing practices and bring some of the scale and leverage that we have in that area to help them drive additional efficiencies, we think they're innovation their engineering team in there.
Fast prototyping and NPI, we think that's going to help us accelerate our growth in those same areas. So we think it's a great combination. So we absolutely expect margins to grow and that's where the synergies come in right now their margins are less than integers, but we believe we can we can absolutely improve.
Move and expand those margins and we've got a we've got a plan to do that and once we close the deal and can work more closely with them will be able to to accelerate that the other the other key point I'd make is they've been investing in expanding in the Dominican Republic, and they've been transferring manufacturing of products from Florida to the <unk>.
R, which is given them margin expansion and we've seen that that's occurring currently in their results, we can see that trajectory and trend and so that will be an additional benefit to their margins as they continue that transfer production to the Dr.
Alright, and then I just want to be clear about something you said at the beginning of Q&A, just assuming that there's no.
Additional surge in Covid, there's no no new various it comes out the spikes.
Do you think your customer inventory levels or about it where they should be at this point or do you think that there's a chance it's.
Oh, they have a lot of inventory already.
We do not see broadly excess inventory in the in the supply chain or the system.
We're not maybe getting at the question when we don't foresee customer suddenly, saying I have too much inventory stop production or slow productions.
This environment.
What we what we see as we are meeting demand in fact customers probably want may even want to build inventories more to help mitigate against some of the risks that exists throughout the supply chain. So we're not see.
Customers have too much inventory right now we've got as you know pretty good visibility to demand for the rest of the year our shipments lineup with what our customers manufacturing plans are we feel really good about those the rest of this year and we think the industry growth going into 2022 will support our continued growth.
Alright, thank you.
Thank you Jim.
And there are no further questions at this time I would now like to turn to call back to Mister Tony Martin weeks for closing remarks. Please go ahead Sir.
Great. Thank you. These are certainly exciting times. We appreciate your interest and is always the replay of this call is going to be available on our website.
In addition to the presentation, we just covered so thanks again for your interest and that concludes today's call.
Thank you and this concludes today's conference call. Thank you all for participating you may now disconnect.
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