Q4 2021 3D Systems Corp Earnings Call
Hello, and welcome to the <unk> systems, Q4, 2021 conference call and webcast. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
If anyone should require operator assistance. Please press star zero on your telephone keypad as a reminder, this conference is being recorded.
Now my pleasure to turn the call over to Jonathan <unk> Treasurer and Investor Relations. Please go ahead Sir.
Thank you, Kevin and good afternoon, and welcome to <unk> Systems Conference call with me on the call are Dr. Jeffrey Graves, our President and Chief Executive Officer, Jack turn a ruler Executive Vice President and Chief Financial Officer, and Andrew Johnson, Executive Vice President and Chief Legal Officer.
The webcast portion of this call contains a slide presentation that we will refer to during the call. Those following along on the phone who wish to access the slide portion of this presentation may do so on the Investor Relations section of our website.
Those who have accessed the streaming portion of the webcast. Please be aware that there may be a few seconds delay and that you will not be able to pose questions via the web.
The following discussion and responses to your questions reflect management's views as of today only and will include forward looking statements as described on this slide.
Actual results may differ materially.
Additional information about factors that could potentially impact our financial results is included in today's press release, and our filings with the SEC, including our most recent annual report on Form 10-K , and quarterly reports on Form 10-Q .
During this call we will discuss certain non-GAAP financial measures in our press release and slides accompanying this webcast, which are both available on our Investor Relations website, you will find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures.
Finally, unless otherwise stated all comparisons in this call will be against our results for the comparable period of 2020.
Now I'm pleased to turn the call over to Jeff Graves, our CEO Jeff.
Thanks, John and good afternoon, everyone.
Before I begin my prepared remarks, let me take a moment for a brief statement regarding the ongoing Russian invasion of Ukraine.
Given the clear and unacceptable humanitarian implications of Russia's recent actions, we've elected to immediately suspend all sales to Russia.
We're hopeful that the situation will be resolved quickly and peacefully and Ukrainian people can move forward is a free country with an elected representative government.
Our guidance for 2022 that we provided in our press release. This afternoon and then we will discuss later in this call reflects to the best of our ability. These risks to our anticipated results this year.
So with that said, let me begin our call today by wishing all of you a happy and healthy new year.
As I'm sure you'll agree 2021 was a year filled with both optimism and challenges.
Optimism as we saw the rollout of Covid vaccines that were developed approved and distributed with astonishing speed.
But also significant challenges as new variants emerge, which continue to impact families and businesses alike.
Looking ahead I'm optimistic that 2022 will be a year of meaningful progress because these effects ultimately recede and we see consistent sustainable economic performance once again.
In spite of the significant challenges that we faced in 2021. He was by all measures a tremendous year of renewal for <unk> systems.
What began in May of 2020 is a four phase plan to refresh refocus and transform our company was completed in 2021 with our transition to the final phase investing for growth.
This 18 month journey comprised reorganization into two business units.
Health care, and industrial solutions restructuring to gain efficiencies and divesting of non core assets.
We completed all of these efforts, while prioritizing the health of our employees and delivering on a dramatic increase in demand for our products and services.
Couldnt be prouder of our team's performance, which made 2021 one of the most successful years in our company's history.
Let me share with you a few key highlights of what our <unk> systems team accomplished over the last year.
At the outset of 2021, we as a management team decided that given the momentum that we achieved as we exited the prior year, but in addition to comparing ourselves to 2020, which was a year severely impacted by Covid. We would also use our 2019 pre pandemic performance as a primary benchmark for comparison.
We set as far as this set the bar at a much higher level why don't we felt would be an appropriate challenge for both of our businesses.
As we closed out the year the results clearly spoke for themselves when adjusted for divestitures of noncore assets. Our results for 2021, not only dwarfed our 2020 performance, but also significantly surpassed 2019 across all key financial metrics from topline growth to profitability and cash flow.
From a balance sheet perspective, our combination of operating performance and sale of non core assets allowed us to add over half a billion dollars to the balance sheet by the end of our third quarter.
We then strengthened our cash position further through a convertible bond offering at an opportunistic time in the fourth quarter details, which Jack will elaborate on in a few moments.
This operating performance was delivered in spite of the significant headwinds we experienced from supply chain shortages and logistics issues.
As we completed each quarter in 2021, and our trajectory became more apparent.
A question that was increasingly asked was how did all this come together so quickly.
Particularly in the face of the challenges from Covid.
Well the answer is very simple, we rallied our team around our singular core belief that if we focused our energies we could be the best additive manufacturing solutions company in the world.
Everything that distracted us from our singular mission was either stopped shutdown or sold and we focused our entire efforts on reaching our goal.
This approach resonated strongly with our employees and our customers and its effectiveness was reflected in our financial results strong double digit organic growth industry, leading profitability and positive cash performance.
Our shareholders benefited significantly as well as our share price rose by over 100% for the year.
Outstripping, our public company industry competitors.
By staying committed to this approach and supporting it with a sound investment strategy I believe this singular passionate focus will continue to serve us very well in the years ahead, creating significant value for all of our stakeholders.
One less obvious but extremely important benefit to this performance has been our ability to increasingly attract key talent to our organization.
Just as in sports everyone wants to be a part of a winning team and to be recognized for the unique value they bring to the game.
Like the market itself talented individuals are able to distinguish between companies that offer promises of future success versus those that deliver on their promises each day.
Perhaps the most visible public examples of our organizational success in 2021 with a hiring of a new Chief Technology Officer, and a new chief scientist for additive manufacturing, both of whom came with outstanding industry experience and credentials.
However, equally exciting to me has been the influx of outstanding Young engineers, and other professionals, who bring with them talent.
Unbridled enthusiasm diversity and exceptional creativity.
One indicator of the success has been our interim program for college students, which we started at the height of Covid in the summer of 2020.
Since inception, we've averaged over 100 applicants for every internship position, we've created and these numbers continue to rise each year, the energy and excitement of these young professionals, who represent the future of our business is absolutely contagious and their impact is being felt throughout our company.
In these challenging times never has the need to attract the best talent and more important and I'm extremely pleased with our progress in this area.
As we completed our divestitures late in the year and continue to gain momentum in the market, we turned our attention increasingly to investing for growth.
We first prioritize our internal robust investments in R&D and infrastructure firming up our new product plans and priorities.
Our efforts bore fruit fruit in the fourth quarter with the release of the of three new powder bed printing systems, including our <unk> III <unk> polymer based system as well as our DNP Flex 200, and <unk> hundred 50 dual metal based printers.
The latter of which is a dual laser version of our top top selling single laser system.
The increased productivity that are dual laser system delivers is already expanding our market opportunities, particularly in healthcare business, where our productivity benefits to medical device customers has proved compelling.
In addition to these new printing systems in 2021, we released the largest number of new material offerings in our company's history.
These materials spanned all of our polymer technology platforms and address key application needs such as those requiring precision surface finishes fire retardants seat and improved strength and toughness characteristics.
This expertise in polymeric materials technology is a key differentiator for our company in the marketplace and an important sustainable competitive advantage.
Given the exciting lineup. We are ahead for all of our product lines and a rapidly growing demand outlook, we've decided to incrementally increase our R&D commitment for 2022 in order to bring these products to market at regular intervals over the next year.
We look forward to sharing highlights of our new product introductions with you in the months ahead.
In addition to our new hardware introductions customer feedback over the last year made it very clear the software will play an increasingly important role in the move of <unk> printing from the laboratory into factory production environments.
While for many years, we've had very strong software offerings to control and optimize the print process itself.
Production focused customers have now clearly identified the need for a software system that can control entire fleets of printers, regardless of the manufacturer as well as an array of post print inspection and in light automation processes spanning from raw material to finished parts.
And additional challenges that need to be fully compatible with existing enterprise systems, such as SAP Oracle, Microsoft and Salesforce in order to minimize factory disruption and costly upgrades as production additive workflows are introduced.
In short in order to be successful at scale.
Factory environment, our customers need a cloud based manufacturing operating system, there could optimize and manage the entire workflow applying native AI and leveraging machine intelligence to maximize component quality and throughput.
To meet this challenge in 2021, we significantly strengthened our software portfolio with the acquisitions of additive works, which brings real time process simulation to optimize the printing of new components and production.
And often a unique and versatile cloud based manufacturing operating system that meets all of the key requirements articulated by our customers.
We believe the <unk> system will not only benefit the adoption of our company's solutions, but could dramatically expand the adoption of additive manufacturing for all companies in our industry for this reason we've opened are often software suite, which includes our entire legacy software portfolio as optional add ons to the entire additive industry as well.
As our collective customer base.
We've been pleased to see numerous equipment suppliers have already announced plans to partner with Austin and we look forward to the growth we believe it will enable.
In addition to software in 2021, we also expanded and exciting new markets through the acquisition of volumetric and a levy in the regenerative medicine space.
These two acquisitions leverage breakthroughs that we've made in the printing of biomaterials as part of a multi year development effort with United Therapeutics. The goal of which is to ultimately manufacturer an unlimited supply of human organs for transplantation.
Getting with the human lung to meet the needs of critically ill patients around the world.
This expansion into <unk> printing technology for biologics is an important long term growth plan for the company, but I've spoken about extensively in past quarters. So I'll limit the time today.
But suffice it to say that I'll look forward to updating you on our progress in this incredible area of development in the future.
Altogether, our four acquisitions completed in 2021 supported our strategic focus by adding technologies that complement our core strength in additive manufacturing, bringing these capabilities to new and exciting markets, which we believe will continue fueling our growth and profitability well into the future.
By the end of 2021 with these acquisitions, having closed we exited with roughly $800 million in cash on our balance sheet for the future.
Before we turn to our plans for 2022 I'll take a minute to comment on the unique foundation that creates our leadership position in the additive manufacturing industry.
In short, we're a full solution provider, meaning that we bring together the industry's broadest set of metal and polymer printing technologies hundreds of unique materials and industry, leading software platforms using our exceptional applications expertise to deliver production ready solutions for industrial and health care.
<unk> around the world.
The effectiveness of this approach has proven itself over time through the installation of one hundreds of production printing systems across countless factory sites around the world.
This scale has a tremendous advantage.
Not only increasing our operating efficiencies, but also in providing critical ongoing customer application support as well as 24 seven service to our customers no matter, where they're located.
Over the life of their investments.
We're proud to say that our installed base currently prints over 700000 parts per day, which is more than the rest of the industry combined.
This production experiences and valuable in providing the feedback needed for us to adapt to the ever changing needs of our customers in this volatile but exciting time.
And lastly, we continue to innovate invest and grow our business all while tightly managing our financial performance for customers moving to additive manufacturing is a very strategic decision any customer investing significant capital and fleets of hardware to adopt additive manufacturing and production scale wants to know that their partner.
<unk> is financially sound and has the scale capability and commitment to support them wherever they operate over the immediate and long term.
Our combination of scale expertise and financial profile is the best in the industry inspiring the confidence of our customers as they balance their growth opportunities with the ever present risks that we all face in this complicated global economy.
Simply put we are increasingly the partner of choice for companies ready to make significant long term investments in additive manufacturing.
So where do we go from here.
First and foremost we continue to run a disciplined business balancing our short and long term performance and making prudent investments for the future.
Even our operating momentum our demand outlook and our financial strength. We continue to look for investments that will enhance our customers' capability to adopt additive manufacturing, while delivering strong returns for our shareholders.
This has led us to two additional acquisitions, which we announced last week each of which bring us a new unique technology for our industrial and healthcare businesses.
The companies are call tightened robotics, and <unk> and I'd like to spend a few minutes discussing each.
Tiger Robotics based in Colorado as the market leader in <unk> printing systems using pellets based extrusion.
This technology addresses critical customer applications, requiring a large build volumes superior performance and improved productivity is significantly lower cost.
Through Titan, we can now provide solutions to new applications in markets, such as foundries consumer goods service bureaus transportation of Motorsports, and aerospace and defense and general manufacturing.
Like <unk> systems tightened takes a solution based approach with customers working to ensure they provide the best product to address the customers' applications.
They are the only manufacturer offering hybrid tool head configurations that include any combination of pellet extrusion filament extrusion and spindle tool heads for component finishing.
This unique capability gives customers the flexibility to choose the best production printer configuration to meet their specific application needs with the selective use of pellet based polymers, providing a significant cost advantage over filament based systems.
With an open system architecture of tightened printer has available to hundreds of standard polymer formulations, allowing customers to not only select the ideal material for their application, but also realize potential cost savings of up to 75% versus traditional filament extreme.
With tightened technology and our go to market reach as well as the combination of Titans engineers in our applications group. We're confident we can rapidly expand into the extrusion marketplace for our industrial business.
Moving next to come over there.
They are a very special engineering company headquartered in Munich, Germany, with a strong focus on the development and commercialization of a unique three D printing system for use with medical quality peak materials peak, which stands for poly aether aether Keystone.
As a high performance polymer material that's approved for use in the human body for orthopedic applications.
Simulates the properties of human bone very effectively.
To date peak has been fabricated for these applications using slow expensive and wasteful machining techniques, which have limited its usage in medical implants. The.
<unk> three D printing technologies unique, allowing high volume cost effective manufacturer of custom medical implants.
This acquisition is a perfect fit with our current health care business and will allow us to expand from our historical leadership in titanium orthopedic implants to now offer customers a choice between titanium and peek polymeric solutions each of which have their own specific use cases.
Integrating <unk> into our healthcare business will drive growth in three principal areas.
The first is cranial maxillofacial reconstruction, which has been a cornerstone of <unk> systems healthcare for many years and one of which we're the dominant player for titanium solutions today.
Having the unique COVID-19 COVID-19 printing capability will allow us to expand our virtual surgical planning portfolio to include peak implants. In addition to surgical instrumentation and <unk> models.
The second application areas spinal cases, where <unk> systems is a leader in the development production and sale of both implanted titanium components and complete printing systems for in house OEM medical production.
<unk> expands the material options for customers in this key product line enhancing patient experience by allowing us to provide the best solution custom tailored for each patient.
And third bone plates for trauma patients.
<unk> is developing a carbon fiber reinforced peak process for bone plate applications for patients suffering from severe trauma and fractures.
In addition to mass produce custom patient solutions.
This has also developed a unique self contained clean room printing system.
Which opens new opportunities for <unk> systems to expand our point of care market segment for trauma patients. We're printing capabilities provided locally within the hospital or even within the surgical suite itself.
These applications offer perfect complements to the point of care work, we're doing today with large medical institutions, such as the VA Hospital system.
We believe the point of care printing for customer patient solutions will be an increasingly exciting market in the years ahead, and one for which we are a clear leader.
When taken in total we believe the <unk> market opportunity is measured in hundreds of millions of dollars and the synergies with our current offerings in infrastructure are outstanding.
Given the FDA approvals that are already in place for peak materials in human applications, we expect regulatory clearance for printed peek components to be granted later this year and that this technology will contribute in a meaningful way to our health care business in the years to follow.
Okay.
So in summary, with our tremendous progress over the last 18 months, our continued strong momentum our breadth of technology combined with our clear application leadership and the benefits of scale is one of the largest pure play additive manufacturing companies, we enter 2022 with a great deal of optimism.
This optimism is not only for <unk> systems.
The additive manufacturing industry as a whole.
As new production opportunities open each day.
We firmly believe that additive manufacturing adoption and production settings will continue to grow at an exciting pace and we're confident that we will help lead this transformation.
Our value proposition is simple.
We offer the strongest and most complete portfolio of additive manufacturing technologies brought together with the most knowledgeable and creative engineering teams to solve the most valuable application needs of our customers.
We do so by combining our belief and financial discipline with an overlay of strategic perspective to guide our continued investments for the future as.
As we look forward, we see a growing industry and a tremendous potential to serve our customers.
For US 2022 will be a year of exciting growth and investment as we continue to strengthen the company for the future. Our investments will continue as they have over the last year, including adding industry specific application expertise back office infrastructure and this is important the foundational technologies that enable the value.
We bring to our customers.
Specifically, we expected over the next 18 months, we will refresh our entire lineup of metal and polymer hardware platforms, while continuing to release record numbers of new materials and improvements to our software products offered through auction.
In partnership with United Therapeutics, We will make some substantive process progress at our regenerative medicine efforts, creating what we believe will be significant value in the years ahead.
We recognize that bureaucracy is an impediment to growth.
So we're committed to remain a lean and nimble organization the challenges itself to execute flawlessly.
Producing new products on an almost continuous basis, while reducing manufacturing cost and maintaining industry leading quality.
Growing adoption of our technology into customer production applications will drive high margin post install recurring revenue streams via consumable materials software and services.
In the coming years, we're confident that this focused approach and simple business model will result in consistent year over year double digit organic growth.
With expanding gross margins our goal of wish to to exceed 50% over time.
With <unk> systems at the forefront of driving adoption of additive manufacturing, we will continue to transform existing industries within healthcare and industrial markets as.
As well as creating entirely new markets such as regenerative medicine.
With that let me turn the call over to <unk>, who will now describe our fourth quarter and full year financial results in more detail <unk>.
Thanks, Jeff Good morning, good afternoon, everyone.
As Jeff said 2021 was a tremendous year.
Our teams worked extremely hard and delivered outstanding results, which I'm pleased to share with you today.
I'll begin the discussion with full year 2021 numbers starting with revenue.
Revenue for 2021 was $615 6 million, an increase of 10, 5% compared to the prior year.
This increase occurred despite the divestiture of our portfolio of non core businesses.
When adjusted for those divestitures 2021 revenue increased 31, 8% as compared to 2020 and versus pre pandemic 2019 revenue increased 16, 9%.
This impressive performance. It gets both 2020 in 2019 validates the transformation efforts, we have guided the company through an APA, which our team has executed over the past several quarters.
Our strategy of providing additive manufacturing solutions for industrial and healthcare customers utilizing our broad portfolio of hardware materials software solutions combined with applications expertise.
Liver and consistent strong double digit revenue growth.
Gross profit margin for 2021 was 42, 8% compared to 41% in the prior year.
non-GAAP gross profit margin was 43% compared to 42, 6% in the prior year.
Gross profit margin increased primarily as a result of prior year nonrecurring write downs related to equipment and inventory.
Operating expenses for 2021 on a GAAP basis decreased 13, 3% to $296 8 million compared to the prior year.
Cost per share of one dollar and 27 cents in 2020.
The increase was primarily due to the gains recognized and businesses divested during 2021.
Are non-GAAP earnings per share for 2021 was 45.
Compared to non-GAAP loss per share of 11 and 2020.
This increase was primarily due to our higher revenue combined with the lower operating expenses talked about earlier.
Now, we will turn to fourth quarter results.
For the fourth quarter, we generated revenue of $159 million, a decrease of 12.6% compared to the fourth quarter of 2020.
The decrease as a result of the aforementioned divestures with adjusted for divestitures, we saw strong double digit growth of 13.1% versus Q4 2020.
10.4% increase over Q3, 2021, and impressively of 21.9% increase versus Prepandemic 242019.
We are seeing great demand in both healthcare and industrial segments that are driving this consistent growth in our core business, which I'll speak to in more detail shortly.
In the fourth quarter, we had gap loss per share of five compared to gape loss per share of 16 in the fourth quarter of 2020.
non-GAAP earnings per share was nine nine.
Flat to non-GAAP earnings per share of nine in the fourth quarter of 2020.
As I mentioned earlier, our revenue growth is being driven by strong demand in both healthcare industrial segments.
On a full year basis adjusted for Divestures revenue in 2021 for healthcare increased 41% and industrial increased by 24.4% as compared to 2020.
The rebound and industrial began in Q4 of 2020 and has continued through 2021.
Industrial revenue in the fourth quarter of 2021 outpaced Q4, 2020 by 22.2% in Q3 2021 by 12.4% after adjusting for divestitures.
In fact, this marks the fourth consecutive quarter of year over year organic growth in the industrial segment.
This consistent growth pattern as a result of the strategic investments, we have made such as adding crucial application expertise and key industrial subsegments like aerospace and transportation as well as our focus on materials development to provide customer solutions to complex problems.
And perhaps most importantly, we continue to invest in our software platform, which not only enables customers to move from designed successful build faster than ever but also allows them to literally run their entire manufacturing process with one integrated cloud based software solution.
This will be a key driver and empowering customers to make the transition from traditional to additive manufacturing at an ever increasing pace.
And our investment in tight tightened robotics with their extrusion based technology opens up even more opportunities for our industrial business to grow as we enter new markets.
Healthcare growth growth was broad based in 2021 from dental to personalize healthcare and point of care services.
With dental enjoying a large tailwind from the sale of materials for a liners crowds and dentures.
These subsegments are heavily influenced by patient access to dental and medical offices.
2021 ended with a substantial wave of Omnicom cases, and a similar pattern to the original Covid wave patients were either unable to get appointments. Our offices were understaffed due to infections, resulting in a reduction in short term demand for certain elected healthcare procedures during.
Q4.
As such we expect material sales to moderate early in 2022 as existing inventory originally met for Q4 is consumed during the first half but demand should remain strong for healthcare is the backlog of appointments are filled throughout the year.
In addition, our investment in <unk> opens up new markets for Us medical devices.
We have a leadership position in this area and are now able to satisfied customer application requests for parts and hardware that require medical grade polymers like peak.
Now, we turn to gross profit margin.
<unk> gross profit margin was 43.9% in the fourth quarter of 2021, bringing the full year gap gross profit margin to 42.8% as compared to 41% for the full year 2020.
non-GAAP gross profit margin in the fourth quarter was 44.1%, bringing the full year non-GAAP gross profit margin to 43%.
Appeared to 42.6% for the full year 2020.
Gross profit margin and non-GAAP gross profit margin increase in the fourth quarter, primarily as a result of better absorption of supply chain overhead, resulting from higher production volumes combined with strong inventory management, resulting in reduced obsolescence.
GAAP operating expenses decreased 2.3% to $70.1 billion in the fourth quarter of 2021 compared to the same period a year ago.
On a non-GAAP basis operating expenses were $54.3 million six 4% decrease from the same period, a year ago, driven primarily by lower SG&A expenses due to restructuring efforts divestitures.
GAAP operating expenses for the full year, 2021 decreased 13.3% to $96.8 million compared to the prior year.
Primarily as a result of the goodwill impairment charge of $48 $3 million in cost optimization charges of $21 million that both occurred in 2020.
On a non-GAAP basis operating expenses were $214.7 million in 2020, 194% decrease from the prior year.
The lower non-GAAP operating expenses are primarily a result of restructuring efforts done in late 2020 and businesses divested as part of the company's strategic plan.
Adjusted EBITDA defined as non-GAAP operating profit plus depreciation was $74.1 million for full year, 2021, or 12% of revenue compared to $28.7 million for full year $2025, 2% of revenue.
The year over year improvement was primarily due to higher revenue in spite of Divestures and lower operating expenses. A result, as a result of cost optimization actions and domestic businesses.
Now, let's turn to the balance sheet.
I will begin by noting the we issued a four $460 million five year convertible bond in the fourth quarter.
We decided to issue the spot after considering the growth potential of our industry and business and the robust investment opportunities that we see going forward.
The marketing of our Bob met with a very healthy demand and we were able to issue our bond and a zero percent coupon provided the company with significant a significant arsenal for investment with very low carrying costs.
After completing this bond offering and combined with our previous activities of divesting non-core assets, making strategic organic investments in January $48 $1 million of cash from operations. We ended the year with $789.7 million of cash on hand.
An increase of 705 $3 million from the beginning of 2021.
We believe we are good stewards of Investor capital as we manage our cash and evaluate investment options that will drive future growth and profitability.
We were excited to have an early opportunity to invest some of our cash as we expand our hardware technology to include two extrusion days platforms through the acquisition of tightened robotics and <unk>.
The acquisitions are expected to close in the second quarter. We are very excited about these investments both of these acquisitions bring unique capabilities and are well positioned for the industrial and healthcare applications that they are into that they intend to serve.
We expect that these acquisitions white, a point or more of organic growth and be accretive to earnings in 2023.
Going forward, we believe cash from operations, along with a portion of cash on hand will fund organic growth opportunities and we will continue to explore a robust M&A pipeline to support our strategy of driving recurring revenue growth and greater adoption of additive manufacturing and Buffy.
Real and healthcare segments.
I want to reiterate my view that our revenue our revenue growth strong adjusted EBITDA cash generation and cash available for investment sets us apart from others in our industry.
Yeah.
Beginning last year, we provided guidance on a full year non-GAAP odd full year non-GAAP gross profit margins.
This year, we are expanding our guidance to include revenue and non-GAAP operating expenses we.
We believe these are helpful data points for investors to evaluate our company.
For full year 2022, we expect revenue to be within the range of $570 million and $630 million non-GAAP gross margins to be between 40, and 44% and non-GAAP operating expenses to be between $225 million and 250.
Million dollars.
Our revenue guidance reflects our expectation of an expanding additive manufacturing opportunity that will drive demand and as a result, our continued revenue growth adjusted for divestitures.
At the same time, we see demand continuing to expand not just in 2022, but in future years as well.
As a result are operating expense guidance includes our commitment to invest organically the technology behind our market, leading hardware materials and software platforms as well as investing in the right talent to continue the successful successful execution of our strategy.
We believe these investments will position the company to continue to lead the additive manufacturing industry with robust market leading solutions.
Our guidance does not include the potential for significant additional macroeconomic events that could negatively impact our business such as COVID-19, geopolitical events or other factors that could further impact either demand or disrupt our supply chain.
Before we turn the call over for questions.
I'm thrilled to announce that we have finalized date and location for our our Investor day event.
It will be held in Detroit on May 16th prior to the opening of the rapid plus TCT tradeshow.
Leading added manufacturing conference.
This will be an in person event and we are excited to give attendees more details about our strategic vision, including our plans for new products services and exciting new applications invitations will be coming soon we hope to see you there.
With that we will open it up to questions.
Operator.
Thank you and not be conducting a question and answer session if you'd like to be placed in the question queue. Please print stone one on your telephone keypad, a confirmation tone will indicate your line isn't the question queue. You Me press two if you'd like to move your question from the queue for participants using speaker appointment may be necessary to be comprehensive before pressing star one.
One moment, please let me pull for questions.
My first question today coming from another Burleigh from capital your line as allies.
Yeah. Good afternoon, guys, Hey, congrats on the on the momentum and thank you for taking the question I really appreciate it.
And.
Yeah, Yeah, you got it.
Like one and a half glass and cancel I'm gonna be Super Clinic, and then and then one one issue that I'm a junior at one but.
The 22, great forecast.
How are you guys thinking about the organic growth contribution in that forecast and went to get away from us to think about it and then.
And then on on a new Plotnik and then what would be the new planet contribution in 22, and what's the best way to think about that you that it seems like clearly instead of setting.
Setting us Kenny.
Getting a context for asking snack ongoing new planet injured knocking you need throughout the portfolio in the next couple of years.
Okay with the right way to think about let me use the way you think about new product contribution in 22.
Those are my two questions. Thanks.
Not at all common objects or if you want to add some of yours you are welcome to the so the vast majority of our growth this year will be organic and on to the investments. We made late last year and then we've made now with commotion tightened.
Primarily impacts starting in 23.
It'll be relatively immaterial in 22 and were nice nicely, we have a very strong demand profile right now so when we talk about double digit growth. This year, it's virtually all organic.
There will be some small contributions from these acquisitions, but most of those a ramp up.
Materially and 23, so that's really what we're positioning herself for me in terms of new product contributions will talk a lot more about that as we go through the year. We were pleased to launch a few in the fourth quarter of 21, you'll see those increasingly rollout through 22 now.
And a 23.
Banned by the time, we're finished <unk> refresh our entire platform over that period of time the revenue from that will obviously phase in over time and again most of that will be will be hitting in twenty-three as what we're thinking Jackson or any other company. The only thing I would add for you and then there is that if you go to the press release, we did provided a disclosure on revenues.
<unk> Divestures of 500.
For 2021, so if you want to see what 2020 of them look like now Divestures are behind us and so you can see what that means for year over year ago growth based on our guidance.
Till I got it alright keep your house on Thanksgiving.
Thanks and honor.
Beg. Your next question today is to me from Greg Palm from Craig How long do you mind, if my life.
Yeah, that's a great afternoon, and yeah, Hey, congrats on the good end of the year here.
Thanks, Greg.
Uhm, starting with gross margin really good cue for performance and I'm, just sort of <unk>. What are the what are the assumptions behind the the guy knowing that Q4 was sort of the first clean quarter. It looks like the guidance for fiscal 22 is a little bit below what you did in queue for so just try.
To get a little bit more color there.
Yes.
We had a great Q4 on gross margin Gregg.
Said, you're my prepared remarks, right Q4, we were at higher production levels, which helps us from.
Perspective absorption on fixed costs are a supply chain.
We did a great job of managing inventory. So it didn't have a lot of obsolescence or scrap or other areas that was the primary two drivers of gross margin performance, there was pricing and mix a little bit but that was less impactful than just good solid execution supply chain. So as we as we look to 22.
We will continue to manage supply chain tightly, but really gross margins will be impacted a little bit by.
What's going on.
Kind of geopolitical wiser or.
<unk> wise as we're seeing kind of the supply chain constraints around the world sort of continuing for at least the first half of the year.
And the rising costs that are resulting so that's a little bit of the delta as well as kind of production volumes and.
The extent that we continue to manage the supply chain tightly so hence the range. We think we did a excellent job executing in queue for obviously, we will continue.
Tomatoes execution going forward, but that was basically the assumptions in the winter. The range. There is there is no. There is no hidden messages in that at all Greg. We're just trying to anticipate risks risks risk factors around ongoing cost and and supply issues for our building product and then just the overall unknown between Covid and.
Politics, we just wanted to be at the beginning of the year here.
Realistic about risk factors and to factor that in in the guidance range.
Totally understandable, Okay and then.
In terms of the breakout between segments healthcare and industrial it looks like specifically in queue for industrial was really the stand out I don't know if I missed it but did you give a dental and a non dental growth for health care.
We didn't.
Dental.
Dental was up.
Oh I would say.
Just eyeballing it.
15% ish.
Non dental was flat to slightly down.
Okay, and then just one quick follow up on on Jeff and your remarks about Russia, I don't think they're a material part of your revenue, but do you have any sort of estimate on the revenue contribution that might be impacted by your decision not to salt into that region.
No it's not it's really not a material number of Greg.
A bit more point of principle and symbolic on our part but it was a market that we're excited about growing when everything was under control and going well, but with this recent incursion into Ukraine, we just don't want to be supporting them with sales right now. So that's why we've taken this position.
Got it Okay, Alright, I'll hop back in queue best of luck going forward. Thanks.
Thanks, Greg.
The next question today is coming from Troy Johnson from the tree capital Your line is that right.
Hey, gentleman and I also want to say I, congrats on the great <unk> and great here.
Sure.
Hey, so Jessie for you I'm just interested in Titan Uhm.
Can you let me know if this is this a high temp build envelope and specifically can do all of that material and then how's the time with Roadrunner.
Yeah, two good question Troy. So so it is it is designed for.
Higher temperature applications as well as mazur interpreter applications, where they can go to higher temperatures will be extending those so it is designed to encompass all Tim.
Type materials and high performance materials, what I love about a Troy is the high production rates.
And the cost of the raw material using pelletize materials unique.
And it's a significant cost advantage for customers building large parks. So we really like that it's a starting point on the on the progress path to the road runner, which is more what we're saying is that is that is.
The goal of our entire extrusion program, if you will.
So we will factor and both filament now an extrusion technologies as we have all of that next generation product. So it will be more about that an investor day in may, but that's our really laying out our long term roadmap for extrusion extrusion based technologies.
Alright, perfect and maybe I went through at Jag tight ma'am. Thank you for the full year guidance here in revenues uhm any thoughts or any any help on normal seasonality and I always think of Q1 is coming down 12, maybe 12 at 6% sequentially.
To that nice when you can please flattish I'm gonna make a spike in queue for that I'd, just like to give you advice now it's yeah, what it does for greatness.
Yeah sure Troy I think what you'll see I think you'll see similar profiles to.
Prior years, you're excluding 2020, which was a little bit an anomaly.
The one thing I would point out is that right now.
We're more.
Supply constrained in demand constrained.
Meaning that the issues and supply chain. So we've been all reading about it have been more of the the impacting item to revenue for us right now than than customer demand. So as a result, I think you'll see seasonality in queue on a little lighter than normal not by much but a little.
And hopefully with supply chain issues getting fixed as we expect.
Q2, and Q3 will be a little bit stronger than normal then you'll have your your normal queue for Graham.
Alright, So I think it was just out of it.
Thanks.
You said.
The next question is coming from Brian dropped from William Blurry line is L. A.
Hey, Thanks for taking my question Uhm did you say you can you tell us it's a K is not at what percentage of sales within 21 is your largest customer.
Yeah. It was.
Actually I don't have that number off the top of my head, but it was about 25%.
25% for the ear until the year, Okay. Yeah.
Thank you and then I think it's <unk>.
Right and right is the acquisition that is using an open can see mousse model.
Is that.
I'm just curious is that something that you'd consider exploring for other product lines. Yeah. Yeah. The open consumables model and what sort of margins can you can you generate with the product line like that relative Dear your carpet average.
Yeah, just so good question is Ryan.
We want to do what's best for our customers and what will allow them to adopt added of the fastest and that really various platform my platform in some cases.
It's really difficult to separate the material from the printing platform. The process is just so interdependent and in reality that would apply all the time. It's just some machines are easier to adapt to to standard off the shelf materials and others from a processing standpoint for customers. So we want to make sure the customer experience is good if there.
It requires us to go with us with a fixed set of materials from ourselves, we do that if not we open it up to two buying.
Buying materials from from other from third parties. So.
That's one way to look at it as we're a machine is versatile flexible enough to accommodate upshot materials will make it open and we will do that knowing that we can make an acceptable margin on the hardware and of course, the aftermarket software services all of that as well.
We can we can refine our model to to tune in a process for material for a customer if they want to use that with them buying off still off the shelf materials for the future. So I'm not giving you a real crisp answer Brian it'll vary by platform in overtime, but I will tell you were looking at it from a very open minded perspective, now about what's best for our customers.
Number for each platform, we sell and we're also looking at the materials availability, we have a great portfolio of proprietary materials and we're also looking at how best to take those to market. So because we think customers broadly will value those materials. So we're looking at both dimensions of the materials question.
Okay, great. Thanks, very much they'll talk Eileen Hey, Brian it'd just double check that the percentage number for the largest customer it's 21%.
21 got it thanks Jacob.
Thank your next question is coming from Jim or shooting from Needham and company line as an ally.
Good afternoon, I just wanted to maybe go through again.
<unk> margin guidance for the year and it sounds like you're just some of the puts and takes theory it sounds like.
Yes, some extent, you're looking for potentially a little bit of a slower starts.
That impact some of the gross margin guidance for the year, coupled with what you. Just also noted what we're all hearing about supply chain challenges and should we assume that that just picks up as we go through the year.
Yeah that would that would be a fair assumption gym.
We know supply chain is challenging right now as we see it.
We're seeing shortages of of supply for certain parts that were then having to go through a broker to obtain which is in some cases, resulting in higher costs. So I would expect margins to be as I think about the the seasonality and marching through the year I would expect that that.
Margins there'll be a little lower in the beginning of the year that is volumes increase in supply chain issues.
Hopefully start to evaporate, the marginal increase over the balance of the year.
Yeah I wanted to go back to your time and the reception so far since it's been part of it was.
Three D says I wonder if you can elaborate on on what you're seeing in the market there.
Jimmy broke up a little bit of the Abyss, you want to know my perspective on the market now that I've been here no no I'm sorry, I hope that you can hear me. Okay. Now I wanted to go back to the cottage.
And it was section of some of the other industry players to the acquisition how satisfied are you with the <unk>.
Hey, this is developing sorry about that yeah, I know I know I'm with you you're interested if the software question route Octan gentlemen, yes, that's right Gotcha Gotcha, Yeah, no no I am pleased that I understand. This this industry is yana still relatively young there were there were a lot of emotions involved early on in.
As the industry matures, but my perspective, Jim coming in last couple of years is the industry is maturing now and you got you got folks, which who truly set kind of a may increasingly set emotion aside and look at what's going to drive the adoption of additive most quickly. So I know I've been very pleased.
We still fight old old feelings and things, but more and more I think across the industry everybody sees the the inroads that additives, making and whatever opens up those doors faster.
Is good so so as you look at the Austin platform is the best in the industry and the more than our customers adopt that the easier everybody will have a chance to sell their technology and of the customer base and it could handle all the platform. So increasingly we're seeing acceptance.
Among the industry on using that software and also a fairly rapid acceptance by our customers.
And we're still a highly in a demonstration face, but as customer starting to use. It is certainly that encourages the rest of the industry use it as well so yeah I like it to move faster sure absolutely would but I think if people see that we are running the business as a platform business for the entire industry that increasingly.
They'll adopted so it's coming along jump I always wish things moved faster, but I am pleased with the progress and I think we'll continue to see it in future quarters in years.
And thanks, a lot and congrats on the ear.
Thanks have osteo.
Thank your next question is coming from Paul chunk from J P. Morgan Your line is now alive.
Got it all.
Thanks for taking my question so.
It's great to see annual guide again, so I just wanted to kind of expand on that what do you think are the kind of relative burrows between healthcare and industrial verticals you had very strong performance in both the comps might be a little bit tougher in health care. This year I think you mentioned electives.
Start to come back just any additional thoughts there between the segments.
Kiev also we're here, we're not really giving guidance by segment.
I will say that I think that I expect both businesses to do well.
You are right comes for health care will be harder, but we've got a great business there now.
Added by a new acquisition will help the business. So I would expect both both businesses to perform well in 2022.
Paul It's interesting dynamics the industrial markets are probably in total larger if you add them up there probably larger and have greater potential for growth.
There's some are more competitive than others in terms of the what the application demands all of that stuff healthcare, maybe slightly smaller but the payoff for additive is extremely high and healthcare with some of these mass produced customized solutions for patients and I think the adoption rate will continue to be exciting so it'll be a real foot race between that can.
Version of industrial markets to additive and the embrace of the healthcare business and it's very hard to handicap it nicely the add them, both together and you get really good solid double digit growth year.
Year over year organically, which were just thrilled about.
Gotcha, and then just on the kind of pricing versus shipment dynamic for guidance.
How do we kind of think about maybe some anticipated pricing increases just the overall.
Overall unit shipments and then any comments on your pipeline and visibility.
Provided you the confidence to reinstate guidance that would be helpful.
Yeah sure so.
<unk>.
On pricing pricing is something we should constantly evaluate.
We did do a temporary surcharge in queue for US. We've continued this year, we will continue to evaluate pricing of our products pretty regularly, especially since concern of our products. We are frankly, just supply constrained right now and sort of our products. We've got more demand that we've got availability. So we are valley.
Waiting pricing on all of them.
And what was the second part of your question Paul.
Oh, sorry I was.
Just talking about the pipeline and the visibility Oh, yeah. That's the pipeline. So I really can't comment on pipeline, but I will say.
We last quarter I talked about how much revenue we left on cue on the table.
Going into Q4, which you may recall, I said $3 million I will say coming into Q1. This year exiting queue for because of supply constraints, we left about $8 million on the table. So that number increased despite the great results we have for Q4.
So the.
As I said earlier, we are more supply constrained right now the demand constrained.
I think only only comment I would add is I. If you get back to just the fundamental the revenue revenue guide how much is baked in for price versus volume so.
Predominance of our grow our growth in revenue is going to be volume based.
Looking for pricing opportunities because our costs are are also up.
And we've got other cost initiatives trying to keep them down and.
And we do have is Jack-tar mentioned, some some surcharge kind of logistics cost at pass onto that we're trying to do.
But by and large the revenue growth has volume driven because of increasing demand and the in both of our business units gotcha.
Gotcha. Thanks for that and then lastly, just on your kind of implied operating margin guide you know it sounds like you're recognizing much of the opex related to some of the acquisitions you did last year and this year.
<unk> may be expected to kind of scale and 23, so maybe.
How should we think about kind of normalized operating margins out the gate windows businesses do start to scale, maybe in 23, and then you see some normalization of gross margins. Thank you.
Yes. Thank you that we are we are focused on the strategic plan that we've talked about and we'll talk more about this particular topic on investor day, but our ultimate goal is 50% gross margins double digit revenue growth and 20% adjusted EBITDA margins and obviously.
For this year this is investing year too.
Continue to modernize our product portfolio or improve our product portfolio to have the have the continued to be the leader in this industry. So we're making those investments.
The financial goals that we've says part of our strategic plan are firmly still our objectives and we'll talk about more about the details that are an investor day.
Right. Thank you.
Thanks, Paul taking this question is coming from smoking Trepashkin that'd be Riley security your line is that right.
Good afternoon. Thank you for taking my question here.
Trying to make a quick.
Can you give us a sense for what's being paid to acquire tightened robotics and <unk>.
Yeah, so the the.
The two acquisitions together.
Just under $80 million.
Sorry, that's 80 8088 era, yes.
And I'm, assuming it is that going to be all cash or is there an all cash that's all cash okay. Okay, great and related to that can you maybe dive a bit into your your build or required strategy just kind of looking at the big balance sheet you have today Uhm and clearly you know it sounds like you're gaining talent here.
For your business for the organic site as well besides the acquisition. So just wanted to get a sense for what you're willing to spend on from from an acquisition perspective, and what you're willing to kind of build organically. Thank you.
Yeah sure no problem sorry, so our default is always can we do it ourselves can we hire the talent do it ourselves us that it's the lowest risk highest controlled way to develop a new product we have great in house capability, and we continue to expand that and we do it we've taken equal view of software material.
And hardware platforms to see what.
What we can afford to do and what we need to prioritize beyond that we are opportunistic about acquiring technologies were we when you look at our portfolio. We've got a full spectrum of technology available to US. If you go back to the earlier question I think Troy ask about the evolution of extrusion technology as an example.
We didn't have an extrusion platform is one of the few that we didn't have we added that and now it's a matter. Okay. How fast can you evolve that product line and expand it. So we'll look at doing that organically investing in it if there's a way to accelerated this using as example, we would always consider the return on that incremental investment. So if there's something opportunistically out there that would.
Accelerators, our strategic plan or direction for a platform.
We would consider it and look at the return on that investment asset prices have certainly come down.
Which makes it makes it.
Better a race between internally and externally what you've got cash on the balance sheet.
It's good to consider both so we don't have a specific formula we don't we aren't in such need of a of a new technology that we must go out and buy it.
Which is really a nice position to be in so we will opportunistically go to the outside and bring things in.
And the more synergy they have with our existing systems the more attractive that proposition because if you look at the <unk> acquisition recently, they bring a great printing technology at a new material to healthcare, we've got great synergy with all of our SG&A, an overhead infrastructure and our Denver facility to get that product to market. So that all factored.
End of the equation to go outside and bring that in to give us this wonderful new polymer technology for healthcare.
That's the way, we look at it and when those assets come along we we evaluate the cost of doing it internally at the time versus bring it in from the outside so.
That's the that's the most definitive answer I can give you.
Great. Thank you for that I'll hop back in the case.
Okay.
The next question is coming from Novell builds from Stifel. Your line is L y.
And again, congratulations and thanks for taking my question.
Just on the hardware platform refresh refresh I'm, just kind of curious if you're anticipating any sort of temporary impact your gross margin as you introduce those new platforms and if that's incorporated into your guidance.
Yeah, certainly incorporated it wouldn't expect from a gross margin standpoint, we're trying to design. Obviously like both guys are trying to design products that will bring more value to customers that UK price for and I would also have a lower manufacturing costs. So we're trying to drive gross margins in a positive direction through this introduction.
Not a negative one though.
But with that said.
In the in terms of the R&D drag on the new platform that we tried to lay out with our Opex guidance and there is the expense associated with it but from a gross margin standpoint, I would expect it to be certainly neutral at worst a positive overtime objected.
No that.
As we as we introduced new products.
We have costs within our supply chain that are devoted to sort of maintaining the products. We are in the field today right. When certain components go out of out of manufacturer. We've got teams of people would have to find new components.
Source, Nick opposed to go into those machines, so by incrementally refreshing our portfolio.
<unk>.
We're going automatically to components that are in production today that lower cost. So I would expect that as a result of that over time that will reduce the cost of supporting those machines that are in the field was our supply chain and that'll help gross margins over time, but at this stage I wouldn't be able to quantify the but I think there is.
Expectations that will approve gross margins over time.
Okay. Okay that makes that makes sense and then just on your you you kind of talked about the surpassed acquisition pipeline could you give us a sense of you know sort of what the pipeline looks like in terms of.
Five.
And I think last quarter, you talked a little bit about where your priorities lie in terms of that deal with you'd like to take on if you could maybe touch on that as well that would be helpful.
Sure Yeah, there there I think I would tell you after being in Israel. A couple of years. There is seems to be a continual stream of printing technology that comes online I think fundamentally because the components continue to evolve now there's creative people and little workshops around that are trying to put that.
Together into a new printing technology.
Which have real potential in many of which down so there's always a stream of hardware.
Printers, if you will.
If.
We evaluate those all the time and on a quite frankly most of them are not most of them have have Ah keely seals to them and they will make it but a few do and I were the <unk> application is one of our tightened for that matter I mean, bringing bringing a much faster lower cost components to customers that want big components.
So so occasionally one comes along that works, it's a really nice acquisition you bring it in but there's a lot of them. So we spend resources evaluating those materials is a lot harder to come by there are very few really good material groups out there too that you can look to acquire there are partnerships, which are equally difficult, but there are a few.
Your opportunities for materials acquisitions, which is why we tend to invest a lot of R&D money into doing that ourself.
It's extremely important part of the business and this software we did a couple of big ones to to provide missing pieces last year and process optimization and and obviously the octan manufacturing infrastructure that was a big missing piece I think for the entire industry frankly, so we I loved that one I'm not sure there is a lot more.
More to do in acquiring software or there's just more to do an internal developments, but we will continue to hot and take a look especially for a production efficiency kind of things. It's that's important. So we will continue to look for factory efficiency kind of software applications beyond that and all that so it's a lot of application expertise.
Are there ways to for our customers to bring in new applications faster through the use of process simulation Apple specific application knowledge things like that they're a little groups you can acquire to do that to just expand your application capability, which is really the cornerstone of our business. If you well what's driving our group.
So that's kind of up I gave you a suit the knots on everything that's possible out there.
There are a few larger acquisition potentials much much rarer and more difficult to do that would bring both revenue and cost synergies.
But those are highly opportunistic and we continue to be open to those but but there's not many of them frankly, so we mainly focused on technology and bolt ons.
Got it thank you.
You're welcome Thanks for the call. Thank you. Our next question is a follow up from Greg calling from Craig Hallum. Your line is that why.
Yeah, just a couple of quick follow ups is it is it relates to the two acquisitions.
Is their revenue contribution included in this year's guidance in if that's correct. What numbers are are you expecting maybe better said what contribution or what type of revenue profiled did the combined having 2021.
So they're the revenue contribution for them is included in the guidance, we're not we're not breaking it out specifically, Greg but it's.
It's not a huge component of the Guy this year.
Okay fair enough and just going back to the question on customer concentration I guess by my math, even if you look at it on a revenue from healthcare excluding divestments it looks like that the vast majority of that absolute increase in.
From physical 20th of physical 21 was driven by that one customer I guess can can you confirm if that math is correct, but more importantly, my assumption is the growth in 22 and beyond will be much more broad based so I was just hoping you can maybe sort of go through those assumptions a little bit more.
Yeah on the 20 to 21.
Clearly that customer was a big contributor to the healthcare growth.
We did have have pretty good growth in the in the medical devices segments with the exception of queue for for the reasons I talked about during the call Abakan show up which kind of impacted.
Services in the healthcare industry, which that impacted our revenue.
Do think that in 22, you will see kind of a much more broad base increase.
The customer is still a good customer, but we we have a number of activities occurring in healthcare.
Greg when you when you when you look at it Unfortunately with Covid a lot of the orthopedic procedures that were really good at supporting we're viewed as optional procedures and they were kind of the first to fall alwin when hospitals had to make tough choices. So that we would expect that to be increasing nicely. It's a real.
Good business. It was unduly impacted by Covid. If you look at the full year, so while while our large customer the dental segment.
Will obviously continue with dice growth I would expect our growth would be much more broad based next year. This year 22, and both healthcare and in the industrial market has been delightful.
Really I am really pleased with the with the applications were identifying in the industrial market that we can really go in and make a difference with it's really going well and I got to tell you of the pleasant surprises since I've been with <unk> systems. The industrial growth right now has been really impressive and strictly organic it.
It's been a really nice change so so I'm really pleased I think 22 will be a broader success story.
Across many market verticals and again I think we're as we sit here today, when we weigh the risks and the opportunities. We would tell you today, we're going to grow double digits. This year at the end.
Now there's a lot of puts and takes that go into that objects are mentioned in the acquisitions, we've done really well not we don't expect to contribute materially this year, but they do help offset a little bit of risk and add to the potential positives of the year. So I feel good about a double digit basically organic growth seen for the year with all of the <unk>.
That you and I could both list that are going on in the world right now.
Yep, well I appreciate you taking the follow ups and looking forward to seeing you guys in may.
Sounds good alright, thank you Sir.
Thank you. We we can have our question and answer session like to turn the floor back over to Jeff for any further closing comments.
Thank you Kevin listen thanks, everyone for joining our call. This evening, while the world continues to be volatile were optimistic about the future and we believe we are better positioned than ever to weather any storm, while positioning ourselves for the bright future. We see ahead, we wish you good health and a great start to the new year. Thank you.
Thank you can I just conclude today's teleconference and webcast you may disconnect. Your line at this time and have a wonderful day. Thank you for your participation today.
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