Q3 2021 Nuwellis Inc Earnings Call

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Good day, and thank you for standing by welcome Kitchen, Inc.

Inc, third quarter 2021 earnings conference call.

At this time all participants are in a listen only mode.

After the speaker's presentation, there will be a question and answer session.

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I would now like to hand, the conference over to your Speaker today, Matt Backfill you may begin.

Thank you operator, thank you for joining today's conference call to discuss Noelle, it's as corporate developments and financial results for the third quarter ended September 32021. In addition to myself with US today are Mr. Hara meal, the company's CEO and George marks to you that the company's CFO at eight a M. Eastern today until its released financial results for the quarter ended September 30.

2021.

If you have not received new else's earnings release, please visit the investors page on the Companys website.

During this conference call the company will be making forward looking statements except for historical information mentioned during this conference call statements made by management of New Wallets are forward looking statements that are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 90, 95 forward looking statements involve known and unknown risks and uncertainties that are based on management's beliefs.

Assumptions expectations and information currently available to management.

Those risks include but are not limited to risks associated with the possibility that the company may not grow revenue in future quarters that the company may not be able to commercialize its products successfully the possibility that it may be unable to raise the funds necessary for the company's anticipated operations and the other risk factors described under the caption risk factors.

Elsewhere in the company's filings with the Securities Exchange Commission. The company believes that these forward looking statements are reasonable as of.

As and when made however, you should not place undue reliance on forward looking statements because they speak only as of the date when made by providing this information the company undertakes no obligation to update or revise any projections or forward looking statements, whether because of new information new developments or other circumstances that might subsequently arise.

You should review the caution the cautionary statements and discussions of risk factors included in the company's press release issued today. The company's latest 10-K subsequent reports as well as its other filings with Securities and Exchange Commission under the titles risk factors or cautionary statements related to forward looking statements for additional discussion of risk factors that could cause actual.

Our results to differ materially from management's current expectations those discussions regarding risk factors as well as discussion of forward looking statements in such sections are incorporated by reference in this call and are readily available to the Companys website with that I would like to turn the call over to Nestor here I'm, Neil you'll I was the CEO.

Thank you, Matt and good morning, everyone welcome to new <unk> third quarter 2021 earnings call.

Following an extremely strong second quarter, where we reported record revenue on a strong momentum across all three business segments third quarter financial results prove challenging.

Primarily due to the surge of COVID-19 Delta variant hospitalisations impacting elective procedures in.

In the third quarter of 2021, we generated $1 $9 million in total revenue, representing a decline of 3% compared to prior year period.

Third quarter sales were negatively impacted on three fronts associated would be delta Barry <unk>.

First COVID-19 prompted some hospitals to limit public access either to decrease the risk of Covid transmission.

Our focused efforts on treating critically ill patients.

This restricted our ability to meet with some customers.

Second due.

Due to reduced medical staff, some hospitals had to ration care and prioritize treatment of COVID-19 patients, prompting the cancellation of elective procedures, including cardiac surgeries, which had a negative impact in our critical care segment.

Moreover, some of the largest accounts are based in regions of the country. Most affected by Delta barrier. So we have felt the impact more than others.

No other medical device companies have also reported the adverse impact of Covid on the third quarter performance.

And thoroughly.

Treatment protocols to treat critically ill COVID-19 patients have evolved over the last year.

Specifically fewer COVID-19 patients are now being treated with fluid resuscitation as other treatment options such as room disappear rapidly improve patient symptoms.

Despite this setback experienced in the third quarter on a year to date basis, we generated $6 3 million in total revenue representing growth of 16% compared to the prior year period, and 52% relatively to 2019.

We believe our growth relative to 2019 pre pandemic levels is a better representation of the soundness of our strategy as we have expanded and diversified meaningfully in pediatric and critical care markets.

Similar to previous cycles, where COVID-19 cases dropped following the spikes in geographic hotspots.

We believe we are we would be able to execute our operating plan and accelerate revenue growth in our key markets. When the health care environment begins to normalize similar to what we achieved in the second quarter.

Another matter affecting our business is that over time revenue has become more concentrated as utilization rates at our largest accounts have grown faster than those across our broader customer base.

We believe this illustrates the potential for the <unk> therapy, especially because these top accounts include most of the.

Most of the prestigious hospitals in the country.

We have begun working to capitalize on this opportunity by increasing utilization at other accounts and ensuring that all active accounts continued to use and benefit from our therapy.

Ultimately leading to a larger customer base.

Now to demonstrate the strength of our business fundamentals I will provide further details on each business segment, starting with the critical care.

Critical care was once again, our strongest and most durable business segment in the third quarter with revenue more than doubling compared to the period last year.

While revenue declined modestly on a sequential basis, we continued to see strong utilization from key accounts that rely heavily on the <unk> system to treat non COVID-19 critically ill patients.

Moving to our pediatric business.

On a sequential basis revenue declined materially compared to the second quarter of 2021.

With lower patient volumes in certain accounts.

I will believe that this is transitory is supported by the fact that we opened three new pediatric accounts during the third quarter.

The malls, we have open during any quarter in 2021.

Moreover, we are encouraged that the pediatric accounts more affected during the third quarter has already bought consumables in the fourth quarter, suggesting perhaps an increase in patient census.

We also continued to make progress on all of their pediatric initiatives, most notably the development of epic theatrics dedicated device for infants and neonates under 20 kilograms.

You will recall that our product development partner Koran at Biomedical Technologies Corporation was recently awarded a $1 $7 million grant during the third quarter from the National Institute of Health to support this important development program.

Turning now to our heart failure business.

Also recall that sales will be heart failure market declined sequentially from the fourth quarter of 2020 to the first quarter of this year due to COVID-19 impact on heart failure patients behavior.

Overall procedural volumes and our limited access to hospitals.

That trend reversed in the second quarter due to more normalized patient behavior and increase access to hospitals as COVID-19 infection rates decline.

During the second quarter users of the <unk> system release additional clinical evidence demonstrating the therapeutic benefit of <unk> therapy.

However, Q3, the Delta Varian caused the spike in Covid cases.

Prompting a sequential sales decline compared to Q2 of 2021.

It should be noted that on the year to year basis. This quarter's heart failure sales remain higher than those in the third quarter of 2020.

This concludes my business segments update and looking forward.

Although we were disappointed with the third quarter sales performance, we remain optimistic regarding the long term potential of the <unk> therapy.

We believe that sales in 2022 will be impacted positively by the following three future growth catalyst.

First the category three CPT code for the use of therapeutic ultrafiltration, which will become effective on January 1st 2022.

<unk> CPT code allows for reimbursement of ultrafiltration in an outpatient setting and payments for physicians.

The category three does not impact the current payment to the hospital for ultrafiltration when perform in an inpatient setting.

The second catalyst our national purchase agreement with Premier incorporated one of the nations largest group purchasing organization with shooting improve access to affiliated hospitals.

Specifically, new well as a premier partner to create a new Aqua produces category, which allows premier members to purchase the <unk> smartphone consoles at a pre negotiated price.

<unk> is the first and only therapy currently available in the newly established <unk> product category and we are actively working with premier affiliates.

Sure how their own data demonstrates the improved therapeutic benefits and economic value provided by our therapy.

Lastly relating to our strategy of making ultrafiltration and valuable therapy for outpatient care. During September we received the CE Mark certification for our 24 hour blood circuit set.

This new device will help new wellness expand access to ultrafiltration, among patients who need less than 24 hours of <unk> therapy.

For the past two years, we have watch hospitals around the world experienced tremendous capacity pressure.

Which has further emphasize the important role that the ambulatory setting can play a significant role in heart failure patient care.

Reducing health care costs, and improving patients' quality of life.

We remain very excited about this opportunity as the ambulatory care settings is one of the fastest growing segments in the healthcare industry and.

We believe this unique offering positions us very well for the future.

When you put it all together the reassurance of Covid.

During the third quarter negatively affected sales performance, but it did not prevent us from executing on our growth strategy and serving our customers.

I applaud our employees for their continued resilience in doing so through the pandemic.

We expect once the healthcare environment begins to normalize our strategy will yield a resumption of positive revenue growth at.

Demonstrated from late 2019 through second quarter of 2021.

Moving forward, we will continue to execute on our growth strategies by building additional supporting clinical evidence.

<unk> a firm foundation for appropriate reimbursement expand commercial relationships and launch differentiated products to ultimately drive sustainable growth.

Now I would like to turn the call over to George to discuss the financial statements.

Thank you Nestor and good morning, everyone.

Turning to our financial results revenue for the third quarter was $1 9 million down two 7% from the third quarter of last year and 26, 1% below the second quarter of 2021.

Compared to prior year positive growth in critical care and heart failure were offset by lower pediatric and international sales the higher sales that critical care in heart failure came from increased utilization of consumable blood products, partially offset by lower console sales compared to prior quarter sales to all segments <expletive>.

Client sequentially for the reasons previously discussed by Nestor.

Gross margin was 64% for the third quarter, a full 14 percentage points higher than the prior year due to favorable geographic and product mix, meaning relatively more U S sales and circuit sales gross margin also proved resilient compared to the prior quarter, increasing 20 basis points. Despite the sequential sale.

Decline due to the timing of production period costs and favorable geographic mix.

<unk> General and administrative expenses were $4 6 million for the third quarter, the 9% increase compared to the third quarter of 2020 came from higher sales training and administrative expenses. However, SG&A costs decreased 8% from the prior quarter due to the nonrecurring leadership transition costs that I mentioned during our last earnings call.

Along with increased cost headwinds amid the uncertain market environment.

Third quarter research and development expenses were $1 7 million at.

98% increase compared to prior year. This was driven primarily in new products by investments in new products, especially our new pediatric system and our new catheter, along with increased clinical regulatory and reimbursement activity.

The net loss for the quarter was $5 3 million.

<unk> 75 per share compared to a loss in the third quarter of $2024 3 million or.

Or $2 <unk> per share based on adjusted share count.

Regarding our liquidity position, we bolstered that position on September 17th by raising approximately $10 million in gross proceeds through the issuance of 4 million shares and in all common stock offering made pursuant to a shelf registration statement that we had filed during the second quarter.

This was partially offset by financing costs and a $4 $5 million of cash used during the quarter to fund operations. As a result, we ended September with $28 4 million of cash and marketable securities up from $24.0 million reported in June.

Looking forward to our protection for the remainder of 2021, we are cautiously optimistic as we continue to closely monitor the situation caused by the Covid pandemic and availability of health care workers, we remain focused on winning new business and increasing utilization among our existing customers.

However, we have also scaled back spending in areas not critical to our growth our key strategic initiatives, thereby decreasing our cash burn until revenue visibility improves given this macro uncertainty we are not providing specific fourth quarter guidance at this time.

I will now turn the call back to net fair for some final remarks.

Before concluding our formal remarks, I would like to provide some context around the equity financing we completed during the quarter.

Early in Q3, as we saw the Delta variant start to impact businesses in certain accounts and saw signs of uncertainty in the financial markets. We consider it prudent to pursue an old common stock financing to further strengthen our financial position.

The offering was well received the.

The underwriters fully and immediately exercise their over allotment option.

As a result, we ended the quarter with over $28 million of cash in our balance sheet, roughly double where we started the year and in a strong position to continue executing our growth strategy.

I want to reiterate that new wellness has enhanced its financial position and entering an exciting new phase in making the <unk> therapy standard of care with significant opportunities in critical care pediatrics on heart failure.

We believe that now we have sufficient cash on the balance sheet to provide a meaningful runway to fund operations to the first quarter of 2023, while we execute our growth strategy.

Operator, you can open the call to questions.

As a reminder to ask a question you will need to press star one on your telephone.

Your question press the pound key please standby, while we compile the Q&A roster.

Our first question comes from the line of Jeffrey Cohen from Ladenburg Thalmann. Your line is open.

There are certain George how are you.

Excellent. Thank you. Thank you Joe.

So firstly could you talk about your new 24 hour circuit and talked about.

The waiver requirements from the staffing side.

How thats affecting individuals.

Yes. Good question, Jeff The 24 hour circuit is special circuit that.

Some features.

That allows for the device to be used less than 24 hours.

During that time 24 hours that is less need for some sensors that the regular filter and the regular circuit half. So therefore, we can price it at a more a much more.

Beneficial price for accounts that wants to use ultrafiltration inpatient for less than 24 hours.

Got it Okay can you talk about.

New catheter and we did see the news of the Corona sprawling medical issue.

The grant from the government can you talk about what stage Youre at I'm, assuming that's a class two and when might that be filed.

And available.

Okay, Let me, let me clarify that.

The hour, we have product development partner Corona's Biomedical technologies Corporation here in Minneapolis, and they are very good at submitting grants and that giving grants acceptance. So we partner with them because of the technology expertise and their expertise in.

Giving grants to develop a pediatric dedicated device for that we'd received $1 7 million to develop this product.

The catheter that we mentioned in our comments is it different length of catheters to access the peripheral.

Venous system.

As you May know that lot of these patients have different anatomy, and we need to provide our customers with different options.

To tweet or to access the venous system.

Does that clarify.

Your question, Jeff Yes.

Yes.

With their product.

Files for linear.

Near term when do you expect that <unk> will be available.

Yes. Good question. Good question, we plan to introduce the category the new Catherine January of next year.

And the pediatric dedicated device.

We have not provided a definitive date as to when we're going to release it but it would be.

A normal med tech product development and it would require rig.

Regulatory approval.

Don't know yet it is going to be.

<unk> K oar in IBD.

And the only thing I would add that we submitted.

Application regulatory applications for the catheter, so thats been a regulatory.

Great.

Okay.

Got it and could you talk about the pediatric centers. Congratulations you opened three im assuming youre.

Totality you are in the 20 to 30 range could you talk about that a bit and talk about <unk>.

Future edge.

Utilization.

Pediatric centers.

Yes, let me start with the second part of your question.

We saw we've seen in some of the accounts that had a decline in utilization in Q3, starting to reorder consumables. So that is a very good sign that they continue to believe in the therapy and.

Having a increasing patient census.

On the first part of your question.

The pediatric.

The three accounts that we opened in this quarter were accounts that we've been working with them on the last six months to get their approvals get the purchase orders and we have other accounts in our pipeline that will allow us to open into future quarters.

Okay.

Got it and then lastly for us.

Gratulation on receiving the <unk>.

International Trade award by the Governor There can you talk about the.

Oh U S business as far as.

Current placements now in activities and.

Forward looking over the next say yeah.

Year or two how that may develop it change.

Be glad to do that our international business continued to be relatively small compared to the U S revenue.

We know that we are primarily operating with distributors outside of the United States.

And they have been impacted equally if not more than we have here in the United States due to the Covid.

So we expect them.

The deal environment outside of the United States to normalize we would expect sales to increase significantly.

Perfect.

One thing.

Yeah, Yeah. The one thing I would add the one thing I'd add is that 24 hour device actually aligns well with the way the.

Therapies administered in some European markets, albeit in an inpatient setting so that will enable us to sell to those accounts, where we might have not been the most cost effective solution before while also giving us real world experience with that product as we prepare for the larger.

And longer term outpatient opportunity.

Perfect. Thanks for taking our questions.

Your next question comes from the line of Brooks O'neil from Lake Street Capital. Your line is open.

Thank you good morning, guys.

I have a few questions. So first.

Pleasantly surprised by the strong.

Gross margins do you guys think.

That's sustainable going forward.

That's a great question Brooks as we've shared before there is given our relatively low volumes or is sizable fixed overhead component.

So we as we grow maintaining.

Maintaining 60, plus gross margins should be.

No.

You can count on.

And this and more stable environment.

We stated we would increase that just by 20 basis points. So it gets a little bit a little bit trickier, but I think I can tell you for our modeling purposes, we're right around 60, plus or minus a percentage point or two but you won't see that I don't anticipating the big dips like you saw in Q3 of last year right, because we want to maintain the stable.

<unk> contribution from the sales growth and in working with the ops team has done a great job.

That consistency that we need.

Great.

George you mentioned.

Health care worker shortages and I've heard about some from some other companies we cover.

Would you say.

Your impression is the hospital environment.

Has.

<unk> for you guys because of overall shortages or.

Are they typically related to impacts from Covid.

How would you parse that out.

Yes.

It's a great question Brooks.

Mary headwinds that our field based personnel are relating to us relate more to COVID-19.

And then impact on procedural volumes and customer access.

So although the staffing shortages reported by other companies would also affect us.

That is the two advantages capex therapy is that it can actually help decrease readmissions and require less intensive nursing coverage. Some alternative therapies. So I'd like to think that that could actually help us.

If we play it well and but for US we talk more about that.

The Covid impact.

We're not immune.

Does it have the nursing personnel necessary to administer the therapy.

And I would add to that Brooks you may recall that early in the pandemic last year.

When there was a shortage of CRT device dialysis machines and patients we're treating with tween it with.

Fluid, which you see patients that fluid needed to be removed.

And our Dubai play a really good role because it requires less nursing per patients.

But in this case now the second time around with these delta variant.

Not the case patients are not being treated with fluid with some C patient as much as they did in the beginning of the pandemic.

Uh-huh Uh-huh makes sense.

Can we talk just a little bit about this outpatient opportunity my personal view is it's a huge opportunity for you guys and I just wanted to be sure I am clear about the reimbursement and whether you think it's going to be sufficient to drive adoption in the outpatient settings, particularly.

The physician reimbursement I know, it's a category III code I know, it's kind of.

Temporary code and then experimental code, but what's your assessment of that.

Patiency of reimbursement to drive a change of behavior and outpatient settings beginning in January.

This is a very good topic.

And one that we're very excited about it and the reason for that in the past three weeks.

Myself as well as our VP of marketing have travel across the nation talking to customers.

That used to or are still doing outpatient treatment using the app, what decks and those that discontinued the use.

Specifically because of the reimbursement.

And.

<unk> mentioned not only CMS, but also private payers were not recognizing ultrafiltration as a valid therapy for them to reverse now that these reimbursement code exist and it would be effective.

In January we believe that this is going to have a positive impact on our.

Revenues.

Great.

I am excited.

Very much.

Thank you Brooks.

Yes.

Your last question comes from the line of Anthony Vendetti from Maxim Group.

Your line is open.

Thank you.

Yes, most of my questions have been answered Nestor, but I just wanted to focus on the pediatric side.

I know you said.

Utilization was down.

I'm just trying to understand is it because the Delta I know you said in your prepared remarks Delta did impact.

The opening or the <unk>.

Dale ability of accounts.

I'm just trying to understand is it because.

The pediatric <unk>.

Hospitals have.

<unk>.

An increase in COVID-19 patients that they weren't utilizing.

The <unk> therapy system or was it something else.

Yes, okay.

Okay. Let me see if I can separate that question into two one is opening new accounts and as you heard me.

We have done a good job in opening accounts, we opened three b malls that we have ever opened this year.

And to open an account we need to start working with them not six months to nine months before getting them ready getting trained and so III.

Three centers that we opened we've been working with them for the last six to nine months, we have a very extensive and robust pipeline that we are discussing with centers right now that would be open in the near future remember they need to be trained and to get all their.

Purchasing contracts et cetera, So we feel really good about our pipeline on that so we will continue to see.

New centers starting to use the therapy.

Regarding the decline in units of declining sales. We believe that has to do two things happened. There one is a patient census.

I traveled to three of the three of our largest accounts and tube them.

I walked through the <unk> on the PQ and they were empty and were empty beds. So for some reason there wasn't enough patients coming through the cost.

The second part is that.

A few of our largest users. We're also participating on a raft study is the name of the study and.

That study has the purpose to treat thetis, while they were still in the womb with some sort of a treatment. Once the baby was born vein that fluid need to be removed. So there was a pause in that study. So therefore, we saw a decline in a few of those accounts that we.

Half that we're participating in the studies. So those would be two recent decline in patient census, as well as a pause in this clinical trial.

So this clinical trial.

A little further on that so fluid removal.

And infants there was a pause in that in that trial and that clinical trial.

Sure.

But what was the.

The medical reason to do that I would assume excess fluid.

Yes sure.

You should always be at Luke.

Yes, yes. So this is George let me provide a little bit more complete answer so the retro.

<unk> publicly available.

Principal investigator based at Johns Hopkins. This is a trial for fetuses that otherwise wouldn't survive because they were not properly functioning kidneys and so through this experimental procedure they would inject.

And jet amniotic fluid into the.

The the room.

And then when the time when the baby the baby was born ally.

Would need to go on.

Therapy.

We've learned at our therapy was used with a number of these days until they could have unfortunately until they either died or could have a kidney transplant. So.

Unfortunately, the actually the principal investigator passed away.

And Thats, what led to this trial the suspension of the trial and we do know that some of our catheters.

<unk>, leading academic pediatric.

Hospitals.

This extensive work we're involved in.

Because this is.

I'll play we're not all of it all with this we learned to them that set that our products have been used to keep these taken July as part of this trial that's right.

If you Google if you Google raised strategy.

You'll learn more about it than brocade incentives and so on the important point is that we were not boiling in that trial, our Dubai was not part of the protocol and not every one of our accounts was part of the weapon implanting site.

But.

With a relatively small business, we have account level visibility and were able to go in and say okay. When we saw the decreases in certain sales, which will be translated into decreased utilization and then went into to find out why do you learn that that was a.

A contributing factor.

Anthony the top academic centers was part of the studies and that.

We're using our device because they knew that what the safest most effective way to treat these patients when they were born and if anything that debt.

Illustrates the importance of the pediatric device and the critical unmet need but that device will serve westbury.

Okay. That's helpful.

And then.

Just maybe.

Talk a little bit more about the change in protocol.

I'm not I'm not I'm not clear as to why.

That change occurred to minimize the use of fluid resuscitation and critically ill COVID-19 patients.

Can you just talk about that change in protocol.

You're talking about this study.

All of the Covid between the Covid patients.

Sure.

Yes, COVID-19 patients.

The.

Only independent Mick.

The precision with tweeting.

Patients with fluid with Susi patient fluid, which you'll see patient is just an infusion of <unk> to stabilize the hemodynamics of these critically ill patients coming in with Covid.

During this year that treatment has evolved the medical community has learned how to treat these patients and there are other.

Options such as rent disappear.

<unk>.

Respirators.

Therapies that.

Can alleviate the symptoms very quickly without the need of fluid resuscitation.

That's the reason why.

We see now less use of the <unk> in these critically ill patients COVID-19 patients.

Right right, Okay. So if they're not if they're not.

They are not using fluid and obviously you don't need to use the aqua decks to remove the excess fluids.

That's the color that you saw in this particular quarter.

Correct correct.

And now I said that.

That proved with simplification steal a very valid option treatment for non COVID-19 critically ill patients. Thus the importance of the synergy we have obtained from using it in COVID-19 patients now tweeting non COVID-19 patients continue to be very strong.

Among our critical.

Care customers.

Okay, so for non Covid patients.

The fluid resuscitation is still.

Still early.

Hi, Mary.

Treatment protocol for critically ill patients and that continues to benefit your critical care critical care channel in terms of.

Revenue and utilization opportunities correct.

Correct that is correct.

One example is also for post cardiac surgery.

Patients. These patients are infused with fluid during the surgery, so that fluid needs to be removed when they do that in the ICU and they use our device to mechanically remove that excess fluid.

Great, Okay and then.

I know you don't provide an exact breakdown of revenue by channel, but in terms of critical chair the critical care channel and the pediatric channel in terms of percent of revenues for the quarter do you have an approximation for that.

Critical care continues to be our strongest.

Followed by on this quarter, followed by a heart failure and then pediatric preview.

Previous quarters pediatric has had a stronger performance.

Two quarters theatrical number too, but this quarter because of the fact that we just discussed pediatric is a close third a third but critical care continues to be the <unk>.

The sector right.

Okay, and then I just want to make sure I heard your comments in your prepared comments correctly.

We're obviously in the fourth quarter here.

You said the pediatric, especially after the addition of these three new pediatric accounts.

You have seen now and increasing utilization in the pediatric channel is that correct.

That is correct, especially on those in those accounts where had a decline in Q3, we've seen and reorder consumables.

This quarter.

Okay.

And then the last question on the pediatric channel I thought.

A little bit surprised that when you said that some of your top pediatric.

Accounts some of the top pediatric hospitals had lower ICU and PQ patients you just didn't see as many.

In there.

I'm shocked that that because of.

Everything I've read.

Because of the Delta variant I've heard some pediatric hospitals are actually fall, but maintenance.

Paul with Covid patients, but they're not in the pick you or the ICU is that is that correct.

That's correct.

That is correct and.

And they may not be treated with fluid with some citation or any source of.

Fluid therapy.

And.

It's something that even the hospitals and the.

New rollout the pediatric Nephrologist Kannan explained either.

They just have had a low volumes coming through the ICU.

The Q on Q.

Okay. Okay very helpful. Alright, Thanks ill turn it back into the queue.

There are no question at this time I would now like to turn the call over to Mr. Nestor Herman Miller for any closing remarks.

Well I want to thank you all for joining our third quarter conference call and I wish you all a good day. Thank you.

This concludes today's conference call you may now disconnect. Thank you for participating.

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