Q1 2023 STERIS plc Earnings Call
Good morning, everyone and welcome to the Cerus plc first quarter 2023 conference call.
All participants will be in a listen only mode should you need assistance. Please you know a conference specialist by pressing the star key followed by zero.
After todays presentation, there will be an opportunity to ask questions.
I'll ask a question you May press Star and then one.
Withdraw your question you May press Star two.
Please also note today's event is being recorded.
At this time I'd like to turn the floor over to MS. Julie Winter VP of Investor Relations. Please go ahead.
Thank you, Jamie and good morning, everyone.
As usual all speaking on today's call will be Mike tickets, senior Vice President and CFO and Dan Crusty, all our president and CEO .
And do you have a few words of caution before we open for comments from management.
It's all cats contains time sensitive information that is accurate only as of today.
Any redistribution retransmission or rebroadcast of this call without the expressed written consent is strictly prohibited.
And that the statements made during this review are or maybe considered forward looking statements spending.
And the important factors could cause actual results to differ materially from those in the forward looking statements, including without limitation those risk factors described in status of securities filings.
The company does not undertake to update or revise any forward looking statements.
As a result of new information or future events or developments.
There cause SEC filings are available through the company and on our website.
In addition on today's call non-GAAP financial measures, including adjusted earnings per diluted share.
Operating income constant currency organic revenue growth and free cash flow we used.
Additional information regarding these measures, including definitions is available in today's release, including reconciliations between GAAP and non-GAAP financial measures.
non-GAAP financial measures are presented during this call with the intent of providing greater transparency to supplemental financial information used by management and the board of directors in their financial analysis and operational decision, making.
Those questions I will hand, the call over to Mike.
Thank you Julie and good morning, everyone is once again my pleasure to be with you. This morning to review the highlights of our first quarter performance.
For the quarter constant currency organic revenue increased 6% growth was driven by organic volume as well as 240 basis points of price.
The net impact of acquisitions and divestitures added approximately $151 million to revenue in the quarter, which is broken down by segment in the press release tables.
As a reminder.
The renal divestiture will trim revenue by approximately $45 million per quarter through December .
During the quarter, we anniversaried the acquisition of Cantel medical.
Integration continues to go very well, we achieved approximately $20 million of cost synergies in the first quarter and are on track to achieve a total of approximately $50 million in fiscal year 2023.
As anticipated gross margin for the quarter decreased 150 basis points compared with the prior year to 45, 1% as pricing and favorable impact from <unk> acquisitions, and divestitures were offset by lower productivity and higher material and labor costs.
Material labor costs continue to be a headwind and totaled about $30 million in the quarter.
Despite the decline in gross margin operating margin held flat at 22, 9% of revenue compared with the first quarter of last year as we did a nice job of controlling SG&A expenses.
The adjusted effective tax rate in the quarter was 21%.
Net income in the quarter increased to $191.1 million and earnings per diluted share were $1 90.
At the end of the first quarter cash totaled approximately $316 $3 million, we continue to focus on debt repayment as evidenced by our leverage ratio now being just below two three times.
Our focus on debt reduction continues to provide us great flexibility to make investments in growth capital expenditures and the capacity to pursue potential opportunities to expand our businesses.
Capital expenditures totaled $115 9 million, while depreciation and amortization totaled $138 9 million in the quarter, our first quarter spend on capital expenditures was higher than anticipated, primarily driven by the timing of investments within our <unk> segment.
We still expect our full year capital expenditures to be approximately $330 million.
Free cash flow for the first quarter was $117 1 million as we benefited from increased net income, including a reduction in costs associated with the cantel medical acquisition somewhat offset by higher capital expenditure spending.
And finally <unk>.
Last week, we announced our 17th annual dividend increase which raised our dividend by four to <unk> 47 per quarter.
With that I'll turn the call over to Dan for his remarks. Thanks.
Thanks, Mike and good morning, everyone. Thank you for taking the time to join us to hear more about our first quarter performance and our outlook for the rest of the year as you heard from Mike We had a solid start to our new fiscal year and continue to experience strong demand for our products and services.
I will review the highlights of the quarter and then shift my commentary to our revised outlook.
Health care constant currency organic revenue grew 4% in the quarter.
Strong capital equipment and service growth was offset by an organic decline in consumables, which is largely attributable to the timing of orders against very strong comparisons in the prior year.
Hospital capital spending remains very robust as evidenced by our healthcare backlog, which totaled over 500 million at the end of the quarter and our orders for the quarter were 40% large project related.
A S. T grew constant currency organic revenue, 10% in the first quarter as we continued to benefit from underlying demand from our core customers.
Growth was somewhat limited by the timing of large capital shipments from our <unk> business unit, which can often be lumpy.
Life Sciences also delivered 10% constant currency organic revenue growth in the quarter with strong capital equipment shipments and solid mid single digit growth in our consumables business.
Our dental segment grew low single digits constant currency year over year for the quarter as revenue was limited by supply chain challenges.
Turning to our revised outlook from a macro perspective, we have several things impacting our business have you heard from many of our peers currency has moved significant efficacy and a forward rates continued to indicate headwinds for stairs in both revenue and profit for the rim.
<unk> of the fiscal year.
In addition, the supply chain environment has been limiting our ability to ship capital equipment.
We believe approximately 35 million in capital equipment shipments were delayed in the first quarter.
While procedure volumes continue to recover particularly in the U S. We are not seeing recovery as quickly as anticipated.
The key variable for that recovery appears to be staffing availability at hospitals, which seems to be limiting their ability to catch up with the pent up demand for procedures.
Reflecting these challenges we are adjusting our revenue outlook for the year as reported.
Revenue is now expected to grow 9% in constant currency organic revenue is anticipated to be 10% as you recall, we grew 13% last year, so double digit constant currency organic growth on top of that is a significant goal, but one we believe is achievable due to the momentum in our business.
And strong capital equipment backlog.
Well, we are not overly optimistic on supply chain improvements, we do see pockets of improvement there.
The real key for us will be relief on parks in particular electronic components.
In many cases components are needed to convert our significant work in progress inventory to finished goods. So that it can be shipped to customers.
As a result of anticipated easing in supply chain constraints, we expect revenue growth rates to increase at a faster pace in the second half of the year as compared to the first half.
Factoring in these elements our current expectations for earnings or $8 40 to $8 60 for the full fiscal year, a 15 cent decline from the prior outlook with most of that decline due to foreign currency fluctuations.
For the year currency is now expected to reduce as reported revenue by $100 million and adjusted EPS by approximately 10 cents. The primary drivers of this are the weak euro and British pound.
Overall, our business continues to perform very well in this environment the challenging the challenging environment. We're in is no different for other companies.
Foreign currency fluctuations are limiting both top and bottom line supply chain disruptions are slowing our ability to ship capital equipment and higher interest rates may negatively impact interest expense.
Despite these macro challenges fiscal year 2023 is still expected to be another record year for stairs, our teams and portfolios continued to come together to better meet the needs of our customers and the breadth of our offering allowing us to take advantage of several significant trends in the industry by leveraging our.
<unk> shipped to cross sell within business segments and deliver value to our customer.
Thank you that concludes our prepared remarks, I will hand, the call over to Julie to start the Q&A.
Thanks, Mike and Dan So your comments, Jamie if you give the instructions they can get started on Q&A.
Ladies and gentlemen at this time, we'll begin the question and answer session.
Ask a question you May press Star and then one using a touch tone telephone.
If you are using a speaker phone would you ask you. Please pick up your handset prior expressing the key is to ensure the best sound quality.
Draw your questions you May press Star then two.
Again that is star and then one to ask a question.
Our first question today comes from Mike Matson from Needham. Please go ahead with your question.
Hi, guys. This is Joseph on for Mike I guess, just first question around guidance. So you guys grew six 3% in the quarter looking at 10% can you maybe give some detail on.
What segments will be driving the acceleration there in the next few quarters and you know if you can maybe some of the pacing of that.
Yeah, obviously, you know what what hurt us this quarter is capital shipments due to supply chain constraints. Obviously as you heard Dan talk about we do believe there are some pockets of strength that are out there. So we believe that capital shipments should continue to get released.
Lower surgical volumes, we continue to believe we're about 95%.
Procedure volume pre COVID-19.
So those should continue to get better.
And then the other big headwind for us outside of just as reported revenue was FX, which is.
It's hurting both top and bottom line for us.
As far as the year standpoint in May we talked about EPS split up 45% first half 55% second half. We believe we are still on track for that and as you heard Dan talk about revenue will grow and increase sequentially going forward with more of that growth happening in the.
Back half of the year.
Okay great.
And then maybe just moving on to the backlogs are.
I guess two.
Things didn't start out are.
Are you seeing any order cancellations or you know any risk that customers are turning to <unk>.
Other competitors to meet the demand I understand they may also be dealing with the exact same issues with you, but I guess, maybe the second part on that is there any risk that theres any artificial I guess artificial demand built into these backlogs, let's say from customers double ordering and then.
Canceling the order that's that's not fulfilled or I mean are going with the company that can fulfill the order first.
Yeah, we don't have we don't see any.
Pattern at all in terms of order cancellation.
We continue to see new orders come in it has had a significantly strong rate you know a lot of these are projects that take longer term and we've been able to prioritize those projects as they are ready to come online to make sure. We can deliver for our customers and then we're managing through the backlog you know as oftentimes customers projects slip and others tend to get pulled forward.
So we're managing our production to meet the demand of the customer and shift.
Product, where it needs to go when the customer needs. It. It's just challenging right now because it's a it's a bit hand to mouth at times with some of the electrical components.
But no order cancellations.
And at this point.
Yeah, and I would just okay.
Remember don't forget we have can't tell and our backlog now didn't have cantel in the backlog last year.
Hum.
Definitely isn't I've taken about $60 million in the backlog number.
Okay. Okay, great. That's really helpful. And then if I can just a really quick one I think you guys called out.
$30 million of.
Increased costs from inflation as it is the $70 million for the year you guys decided on the last call is still accurate.
Yes, we believe 70 for the year. So if you remember last year, we were not impacted well we were impacted heavily more heavily in the second half of year than the first half of the year. So it's a $30 million is the incremental piece, so $45 million last year headwinds and $70 million. This year is what we still believe.
Okay. Thank you got so much yep.
Yeah.
Our next question comes from Chris Cooley from Stephens. Please go ahead with your question.
Hey, good morning, everyone and thanks for taking our question here. This morning, but just wanted to start if we could on the backlog and your commentary around the supply chain issues.
Could you help us think a little bit about how that backlog both on the health care side, but also on the life Sciences front pool.
Pulls forward versus historical periods I think you mentioned, 40% was project related.
When you're in the current quarter in terms of the new the new order flow I'm, just trying to think about aging of that backlog a little bit here with these kind of supply chain disruptions that you just saw that you don't expect to to.
To get better necessarily in the short run if you could just provide some color around that that'd be appreciated and then I've got a follow up.
Yeah, Chris This is Mike in regards to backlog as we've talked about for some time. You know are we are getting nice order growth, but at the same point in time are delays have probably more than doubled and what we typically would see for especially around health care and I'm talking more.
About the replacement cycles, not the not the project cycles. So typically we would would've told you that we get an order in from a replacement standpoint that order would be.
Most likely filled within 90 to 120 days so most likely in the quarter that is probably double that at this point in time.
So that's gives you some type of indication as to the lead times that we're expecting and we're talking to are telling our customers is we're taking the orders I don't know Dan if you want it yes, I would just add two things Chris.
Chris One we can we are able to build we are building product everyday we are not losing manufacturing slots.
We have a lot of whip right now though of machines that are 99, 7% complete that are awaiting the golden screw if you will to finish it off in terms of some electrical component.
So we're as we get those components coming in we'll be able to flush through a lot of backlog.
And a reasonable amount of time, it's just the timing of those components.
TBD in terms of how it plays out over the next couple of quarters.
But generally speaking.
We're in a good position in terms of manufacturing.
I appreciate the color on that and then if I could just for my follow up could you maybe shift gears to.
D I S. T franchise, and you cited a little bit higher than anticipated capex there in the quarter Corporately I'm. Just curious if you could give us some color there about the continued build out of.
The company's capabilities, both domestically and abroad in terms of X Ray and when we could start to see some of that come online commercially.
And if in fact that how I should say how does that does come on online how that may or may not.
Effect of the operating margin profile of the business. Thank you.
Chris We had our first X ray come online approximately a year ago in Venlo, Netherlands, and a very successful.
Actually from an engineering perspective, and very well received from a customer perspective. The facility is operating at significant positive margins within the first year of operation, which is not necessarily the norm.
So doing quite well the next operation to come online at least domestically here will be in libertyville, Chicago suburbs, and that's likely to be Q4 timeframe for us So no material impact on the current fiscal year.
And then we have other builds going on the West Coast and East Coast that will follow after the.
After the Libertyville operation comes online and we have done significant expansions over the last 10 years or so and that the business has gotten large enough at this point that we really don't see any material dilution when we bring a plant online, whereas you know when the business was $200 million.
Not necessarily the story, but.
850, $900 million, we don't see that dilutive effect on EBIT.
Bring up a new plant and also keep in mind a lot of these expansions are on an existing infrastructure. So we already have a plan and we're just adding additional warehouse and additional X ray capabilities, our it capabilities to the existing plants. So they tend not to have the same drain on a cost perspective.
But the goal this year as as has been the past couple of years about $100 million in total expansion Capex for ASC.
I appreciate that color. Thank you.
Yeah.
Our next question comes from Matthew Michelle from Keybanc. Please go ahead with your question.
Hey, good morning, and thanks for taking the questions.
Just first on the or the change in organic growth from 11 to 10.
I couldn't really tell it was was that due simply to a slower than expected recovery in in procedural volumes or was it also due to you know.
Some expected push out of the backlog.
Healthcare capital equipment into the next fiscal year.
Matt it's a little bit of both we haven't broken out exactly but it is it is definitely both of those are impacting us on an organic standpoint.
And you guys had and or panic growth decline in consumables in the in the first quarter. You know was that expected or was it like a change you saw like an in in June .
Around around procedures, and what do you think changed versus your expectations. So you guided in sort of mid to late May. So you had a pretty good view of what the procedural environment was like.
Midway through the quarter.
Yeah, Matt This is Dan.
You know procedures here in the U S were slightly below where they were in the first quarter of last year. According to all of our data that we have at stairs, but slightly so I don't think that had a material effect on the consumable consumption or shipments. The issue was really we had a pretty strong quarter last year I think as there was some restocking going on in the half.
Spittle in some distributor orders. So I think it was just a matter of tough comps and timing and I'm confident that will flush out in Q2.
Okay, and then just lastly on on a S T and <unk>.
That's sort of the you know the.
The change in organic growth from well.
Yes, you know several quarters.
Still double digit growth is still there.
It's still positive.
Could you go back and explain.
What you what you were disc.
Describing around the timing of some shipments and growth being limited by that.
What that actually is and do you expect that to be on a normal trajectory.
I don't even know what a normal trajectory of your previous trajectory.
As you get through the next couple of quarters.
Yeah, so that related to some capital equipment shipments from our <unk> business unit and those are typically E beam accelerators and conveyance equipment control systems.
And in the issue is we don't recognize revenue until those things get fully installed and get through the process and then we were accurately recognize revenue. So your stent that we have some delays either on our end from a delivery perspective or more often it's the case that the customer is delayed on whatever construction of infrastructure they have to have in place.
For us to finish the project.
So as a result, you know our system can be a few million dollars of or more even 5 million 6 million potentially and if that slips from a recognition perspective from one quarter to the next is pretty material in terms of impacting growth rate. You know so normally we had planned to ship close to nine or so million and when.
Ships considerably less than that I think had we moved the equipment. The way we had originally planned or are our organic growth rate.
Constant currency organic growth rate for ASP, you would've been the mid teems comfortably where it's been in the past.
But that the equipment business is a little lumpy right now and as you know building anything.
[laughter], either whether it's our customers our us construction things are not necessarily tied to a definitive schedule. These days.
And just a quick follow up is how much is capex, how much is capital equipment as a part of the ASP business in a typical year.
It's small about thirtyish million ballpark how.
Out of the eight or something.
Yep.
Thank you.
Our next question comes from Michael <unk> from Wolfe Research. Please go with your question.
Hey, good morning, Thank you for taking the questions a follow up on the adjustment to the organic growth outlook I'm. Just curious why a point was the right number why not two why not three.
Why not.
Maintain the prior one you know like philosophically, how you got there how you feel about the adjustment is there risk you know where are the risks from here or do you feel like you have a very proper set of inputs now any color on that helpful. Thank you.
Yeah, Mike we talked a lot about it internally and if not for the fact that we are sitting on this enormous backlog number.
It comes down to what's our confidence in our ability to execute in a ship based on materials and I think that you know things have changed pretty significantly even in the last few weeks around our line of sight of when we'll start getting consistent component deliveries that we need to finish out this equipment. So.
We have a little more confidence now that we'll be able to to flush a lot of us out in the back half of the year and we're already well prepared to do that so that that's what give us gave us the cabins to stay at 10% you know and then I do believe that despite where procedure rates are now I don't see us getting back to.
<unk> pre COVID-19 levels during our fiscal year, but we do we do anticipate them to tick up a bit borrowings. There is no unforeseen new variants that shuts down hospitals again or something like that.
On the on.
On the backlog.
My perception has been generally.
The mix of that of health care equipment revenue ex can't tell is 50 50 kind of O R. S. P D.
Ballpark.
As you look at what's sitting in the backlog that needs to be finished and shipped as it does it skew S.
S. P D R O R or is it fairly balanced.
Okay.
It's typically heavier on the SPD side, because we tend to do more turn quicker turn business on the ore side. So okay.
Okay.
A lot of backlog and sterilizers and washers right now.
So that's good.
Yeah, I can't tell us welfare that $60 million that we're talking about is 100% of SPD based yep.
Okay, that's what I suspected I appreciate that on pricing I believe the prior.
Our guidance for the full fiscal year included 200 bps year on year, Mike I think he called out 240 basis points in the quarter. So just you know any anything to call out in the quarter why it was higher than the guide or has the expectation for pricing in the in the guidance changed.
Say that our pricing 200 basis points of pricing for the year is still within our guidance every quarter could be a little bit different as typical depending on the mix of the products and stuff like that but the nice thing that we're getting we actually are getting price across all of our segments for the first time in a long time and obviously as you guys know.
We typically get less than a 100 basis points of price. So we've done a nice job of.
Increasing.
The pricing power that we have to offset as everybody knows the higher labor and material costs and even then we're not even offsetting it one for one yes.
They can do one last one on just.
How are you thinking about capital deployment, the balance sheets balance sheet flexibility is starting to ramp back up you know historically.
Like too.
Do deals I'm curious kind of is that are you know.
[noise], taking up a lot of time right now or are you now is.
Now M&A pipeline kind of relatively.
Yeah, Mike what I would point of sale activity.
We continue to look at and and do even some small sort of bolt on acquisitions and we'll continue to do that.
Over the next year or so.
In terms of anything significant in size you know right now we've got plenty of work, finishing the integration of cantel and and also working through getting products deliver to our customers. So even though we have the financial firepower to do that we wanted to get the business running.
Like like it should be and continuous to do so so that we can do potential other business development in the future but for right now.
We'll probably take a couple of quarters off.
Thanks for the questions.
Yeah.
Yeah.
Our next question comes from Jason Bednar Bodnar from Piper Sandler. Please go ahead with your question.
Hey, good morning, Thanks for taking the questions here I wanted to go back to the procedure volume softness that you referenced.
Snares, clearly isn't alone as a staff issue seems to be hitting a lot of players here in med Tech.
But I guess I wanted to take your temperature on your visibility regarding how much of this truly is staffing, which you know may recover more slowly versus.
Something that might be a bit more transient like higher than normal COVID-19 infection rates that might be leading to things like procedure cancel cancellations and.
Possibly perpetuating the staffing challenges so.
Or are there any major regional variances to that stood out.
S procedure volumes are coming in softer than you expected.
Yes look it's complicated it's what I would say and and yes. There are unexplainable regional variances too we saw significant more of a decline in the southeast than we did in the Midwest or north east or West coast. So yeah, I can't explain it to be honest with you in particular that what I would say is the single biggest issue is staffing and.
Your question it did COVID-19 uptick in June impact that in terms of cancellations or staff shortages probably.
That probably explains a little bit of a percent or so decline versus what we saw in Q1 last year, but I'm guessing at this point I truly believe it staffing every single hospital CEO that we speak to their single biggest challenge right now of staffing and not just nursing as in general facility staffing, it's a janitorial.
In foodservice it's in.
There's a reason why you're looking at inpatient rates dropping significantly in outpatient rates going up significantly because the hospitals just don't have the staff to care for people that are in patient.
Okay.
Very clear that's helpful. Thanks, and then.
In dental.
Based on reports from others out there in your comments today. It sounds like challenges are just are really just continuing across the dental market.
But love to get your updated view on how you see your dental business doing that.
Get it back on track how much can you do to help steroids, maybe bucked the trend of the broader market.
Is the sequential improvement in operating margin for that segment that we saw here here today or yesterday.
Sustainable any and then the timeline youre willing to put on when that segment gets to kind of be above corporate average target that you've laid out in the past.
Yeah, well, what I would say is.
Dental if not for the supply chain issues. We had this quarter would have had a really nice quarter in terms of growth. So we didn't lose that business that will just flow through in the coming.
Coming quarters in terms of demand.
And so I think that'll sort itself out in terms of the overall financial performance on the bottom line Yeah. That's that is a.
Process of continuous improvement and it's something that we're going to work on every day every month every quarter every year, but it's not there's no magic wand to do this correctly so.
We will continue to do what we need to do to strip out waste and cost.
Obviously look at price, where it makes sense and continue to innovate with new products. So that we can bring high value to our customers.
Got it and then Mike just one more if I could a bit of a housekeeping item I'm sorry, if I missed this but can you help with the currency rates for the euro pound and Canadian dollar that youre using in forecasting out.
Update $100 million in FX headwinds for this fiscal year.
Yeah, certainly so we use the forward rates that we use them as of the end of.
June the Euro is at a dollar or one O six O.
The pound is at one point to two two.
Yeah.
Perfect. So those are both significantly lower than what we planned originally.
Yes.
Yep.
Thank you you're welcome.
Once again, if you would like to ask a question. Please press star and one.
Our next question comes from David Kelley from JMP Securities. Please go ahead with your question.
Thanks, They're just a quick follow up so if we're looking at your performance in health care.
And then your guidance I think.
Was 4% this quarter.
I mean can you.
Help us understand.
How you were able to grow a lot faster if we're looking at flat to down procedures.
And maybe some improvement, but not totally back to where we were pre COVID-19.
As a mid single digit range is that is that can you.
For that for that you know the largest business for you.
Yeah, well, what I would say as you know over the last year or so we've done a nice job of taking share.
Our recurring revenue businesses, our services business, our chemistry business in <unk>, and we expect that to continue and help offset some of the.
Natural appreciation.
So hope to have seen a procedure right now the the reason, though that takes us from the mid single digits or mid to high single digits into much higher that is the capital backlogs were sitting on right now.
And we continue to bring in.
You know backlog and grow or maintain that backlog based on our order rates.
So that's that's the reason why we think we can get a <unk>.
Much higher growth rate on top out of health Care's Flushing through the backlog that we have at hand.
Got it and then maybe just a quick follow up on a S. T. Obviously, it's been you know.
It's delivered for you or you guys have executed well in terms of the growth profile, but yeah.
How do you think of that looking out maybe even versus your 10% for.
The company.
Is that is that a mid teens grower on a consistent basis looking forward.
Yeah, it's it's double digits, but it's not mid teens I think that.
Well.
I mean, it's done incredibly well over the last couple of years in terms of mid teen looking growth rates, but.
Having been in that business for 25 years.
That has not been the norm for the life of the business. So I would expect it to normalize back towards.
Double digits or slightly below at some point in the future I think for the short term, we're going to maintain above double digit growth.
Thank you.
Yeah.
And our next question is a follow up from Chris Cooley from Stephens. Please go ahead with your follow up.
Hey, Thanks. Good afternoon I. Appreciate you taking the follow up question I guess I'll get more than two and like everybody else. The a quick question on cash flow you guys maintained cash flow guidance for the full year, but it sounds like.
It was obviously upward pressure on both.
Net interest expense, probably a little bit higher working capital need.
I just wanted to make sure I fully understand the puts and takes that you expect to see throughout the remainder of the year.
It gives you confidence in your ability to hit that cap.
Flow target that.
But you previously established thank so much.
Yeah, Chris two things there our collections efforts have been strong.
We're just helping improve working capital and then as we've talked about for the last 25 minutes the backlog when we ship that backlog we should get.
The improvement in inventory, which means it flows through to the receivable side. So that's where we believe we have the ability to maintain our free cash flow projection that at $675 million.
Okay.
Thanks.
And ladies and gentlemen at this point in showing no additional questions I'd like to turn the floor back over for any closing remarks.
Great. Thanks, Jamie and thanks, everybody for taking the time to join US This morning.
Yeah.
Ladies and gentlemen that does conclude today's conference call and presentation.
Thank you for joining you may now disconnect your lines.
Okay.