Q3 2022 Assertio Holdings Inc Earnings Call
Good morning, and welcome to the Associate Holdings incorporated third quarter 2020 to find out to result, it's cool.
All participants will be in listening only mode.
After todays presentation, there will be an opportunity to ask questions if.
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I would now like to turn the conference over to Matt Kreps from dollar Associates Investor Relations with US Yeah. Please go ahead.
Thank you Teri good afternoon, and thank you everyone for joining us today to discuss <unk> third quarter 2020 financials.
<unk> release, covering our earnings for this period is now available on the Investor page of our website at Investor <unk> Com.
I would encourage you to review the release and the accompanying presentation as it is important to today's discussion.
With me today are Dan Houser, President and CEO Al Schwichtenberg, Senior Vice President and CFO .
Dan will open their remarks and provide an overview of the business followed by Paul who will review our financials. After that we will open the call for your questions.
During this call management will make projections and other forward looking statements regarding our future performance.
Such forward looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in this afternoon's press release as well as <unk> filings with the SEC.
These and other risks are more fully described in the risk factors section and other sections of our annual report on Form 10-K for.
Our actual results may differ materially from those projected in forward looking statements yesterday, specifically disclaims any intent or obligation to update these forward looking statements except as required by law.
With that I'll now turn the call over to Dan.
Thank you Matt welcome to everyone joining us this afternoon.
The third quarter and the weeks that immediately followed where one of the most important strategic quarterly periods for Sergio.
We've pivoted from a period of restructuring in which we improved upon the profitability of our business to the creation of a new commercial platform and now towards growth.
Not only did our financial results in the quarter once again exceed our forecast in nearly every metric we were able to extend our debt maturity and cut our cost of debt capital from 13% to six 5% increase.
Incredibly low in today's market.
Exit and unprofitable segment of our business, increasing our future revenue and profit.
And added a new source of accretive revenue and sympathy that adds to the diversification of our top line.
As a result of these actions today, we are better positioned to execute other possible business development transactions and our stock is more attractive to existing and potentially new public and private investors.
We began 2022, we had five key priorities I'm proud to say that with our actions in the third quarter, we have nearly achieved all five.
And it's about choice job environment, We said, our first priority retaining our employees and attracting new talent, we've had 100% retention in our employee base and have added eight new employees or over 42% growth.
Our second priority was to prove the efficacy of our new commercial model.
We were able to successfully transition our trucks up into the non personal digital model without negative impact supply constraints and competitive pressures has shifted the growth targets. We have for the brand in 2022 into 2023.
Our third priority was to reduce the concentration in Anderson.
The acquisition of Symposium last month provides a good start in this priority, but we're not done by any means we are far more to go.
Fourth was the execution of our lifecycle management opportunity for Henderson will be requesting a pre IND meeting with the FDA within a matter of days and should have feedback from them shortly after Thanksgiving.
That will put us in a position to file an IND and.
And begin a new clinical program for Edison aimed at expanding the label, which is all expected to begin in early 2023.
Our final priority was to improve our balance sheet and reduce our cost of capital.
This goal became far more difficult than we imagine now that rates are nearly 400 basis points higher than they were this time last year. However, we executed a refinancing transaction this quarter that pushes our debt maturity back to September of 2027.
Cuts, our cash interest cost in half and frees up a substantial amount of cash flow for business development.
We think the M&A environment is very robust and buyer friendly right now, which the sympathy and transaction exemplifies.
To acquire that asset for $15 million, including a milestone for the new patent.
And the trailing 12 months ended September 30th requested recorded $9 9 million in net sales.
We've acquired an asset that is growing well soon have patent protection to 2039 and has gross profit margins very close to our corporate average to one five times trailing revenues.
The refinancing was especially timely in this M&A environment as this M&A environment continues to ripen and we now have the cash resources and balance sheet to add more products to the portfolio.
In addition, we've built the internal resources and hired external resources to help us identify diligence and contract for more than one transaction at a time.
Last quarter, we had discussed enhanced commercial strategies for <unk> that would be implemented in our third quarter without much specifics as to what these strategies were.
The studio has taken action to withdraw from the Medicaid drug rebate program, which includes $3 40 DB.
Participation in these government programs is voluntary.
As a result of the significant growth we saw in the utilization of our products inside the 340 B program, we were incurring significant losses that some $6 million annually.
By exiting we expect to see an immediate increase of $6 million and our annual net revenue and profit.
Our actions to remove our products in this program were made public in July since we wanted to avoid and customers that had seen the public notice by significant quantities of product under $3 40 be ahead of our exit we deliberately reduced channel inventories for Henderson in September to under five days.
It is normally in the low twenties.
This had a negative impact on our volumes and revenues in the quarter, which we expect to reverse in our fourth quarter.
Offsetting this was a one time reversal of an over accrual for expected product returns, which Paul will describe in further detail.
Our estimates for $6 million benefit assume that these unprofitable sales six because of this price is no longer available.
However, well, it's still far too early to conclude the opportunity does exist for there to be upside to this.
Customers find our products medically necessary and continue to acquire them.
We are offering programs for customers to purchase directly from <unk> at a discount to the published list or WAC price as well.
I'm quite excited about the potential for some does it it fits all of the criteria that we're looking for and our business development search first long lived IP.
Shortly after completing the acquisition of quest have received the notice of allowance for a patent which triggered that $6 million milestone payment that will be made later this month we.
We expect this pattern to be issued and included in the Orange book during the first quarter of 2003 and will extend IP protection to 2039.
Second it's out in the market and accretive.
<unk> had been generating annual sales of about $9 5 million on that basis, we expect it to add between four to four and a half million dollars in annual adjusted EBITDA and five <unk> and adjusted EPS accounting for the full dilution from the convert.
Third generates opportunities for growth.
<unk> reported $2 3 million in net sales for the third quarter, which represented year over year growth of 15%.
From what we saw in diligence, there's very little competitive pressure and it's a stable and positive payer environment very different situations on otrexup.
<unk> is a nice niche you can play in the treatment of lgs.
Many of these children are put on a keto diet. In addition to medical therapy to control their seizures.
We noticed some diligence that few physicians were aware of the commonly used liquid quotas and products containing 33% or more of the daily carbohydrate limits under the restricted keto diet.
Simpson has just 2% over the card content that the liquid formulation.
In addition, we are excited at the opportunity to partner with the patient advocacy community, which is very strong and both epilepsy and lgs. We're proud to be part of this community now and raising awareness November 1st was lgs awareness day and it also marked the beginning of epilepsy awareness month.
Fourth it fits within our commercial model Quest have launched this product in 2018 with 30 reps and prior to our acquisition they had less than 10 unfilled territories.
We think thats symposia and will fit very nicely into our non personal platform, where we can expand upon the physician reach with what is largely an educational message to treating physicians were very familiar with the <unk> molecule already.
In terms of our goal to further diversify our business.
Well mathematically symposium does help.
He was on the smaller side as we had mentioned we were seeing the smaller sized acquisitions and our M&A pipeline accelerate while the larger ones are being delayed.
We are still pursuing those larger transformative transactions.
We had originally set a goal of acquiring products that brought us an additional $50 million and gross profit by 2024.
The approximate $10 million from a trucks up and now 8 million from shippers and we're a little over a third of the way to accomplishing that goal.
We have another year to go a deep pipeline of favorable M&A environment and the capabilities to multitask. So I'm confident we can accomplish this goal.
Finally.
We're still expecting the 2022 as the pivotal year for our investment and then yes. They are very close to being able to finish their NDA for submission to the FDA as a reminder, our investment converts to equity upon FDA acceptance of the NDA.
The FDA has up to 60 days to decide whether or not to accept.
We do not expect to provide any update to investors until it is known whether or not the FDA has accepted the filing.
Now I will turn the call over to Paul to discuss our quarterly results Paul.
Thank you Dan.
Good afternoon, I will review the financial highlights.
From our third quarter of 2022 as.
As in previous quarters, there are slides available on our website that I will reference as I discuss our results.
Starting with slide three net product sales were $34 3 million for the third quarter of 2022 compared to net product sales of $26 million in the prior year quarter, and $35 4 million last quarter.
The increase in net sales versus the prior year quarter is primarily driven by <unk> and the addition of Otrexup.
And it's in family net sales in the third quarter increased by $7 3 million over the prior year quarter, primarily due to higher net pricing.
And it's an also decreased by $1 million versus last quarter due to a reduction in channel inventory levels, partially offset by a return accrual benefit recorded in the quarter.
$1 5 million of the return to accrual adjustment as a onetime benefit that will not impact future periods.
Otrexup net sales for the third quarter were 3 million versus $2 6 million in the prior quarter.
The $400000 increase in Otrexup net sales from the last quarter is primarily due to increased volume in the quarter. Despite a slight decline in wholesaler inventory levels.
Regarding the recent supply constraints, we have received finished goods deliveries to support existing demand and expect to resume full sample allowance in late Q4, and early Q1, 2023, which we used to drive new prescriptions.
Additionally, payer pressures continue as members move into more restricted benefit designs and our key competitor has become extremely aggressive with payer contracting.
We continue to focus on maintaining profitable payer access for Otrexup.
Can be a net sales were 400000 lower than the prior year quarter, primarily due to lower volume as we pulled back on promotional leading up to the loss of exclusivity in January 2023.
The third quarter was the first quarter after the discontinuation of Sally matrix and as expected there were negligible sales in the quarter.
Overall portfolio net sales were up 32% versus the prior year quarter. Please refer to our 10-Q for specific product level net sales information.
Cost of goods sold in the third quarter reflect lower costs due to product mix and improved margins on <unk>, resulting in a gross margin of 88, 3%.
Absent the onetime returns accrual benefit I mentioned gross margin would have been 87, 8% in line with our previously communicated expectations.
We still expect gross margins to be in the high <unk> for the full year.
Our continued focus on profitability across the portfolio has led to improved net sales and gross profit margins and was achieved through lower co pay and consignment costs, plus reducing the shipment of free goods, resulting in lower gross to net expenses and cost of goods sold.
Also on slide three adjusted EBITDA for the third quarter was $21 4 million compared to $22 9 million last quarter and an adjusted EBITDA of $15 8 million in the prior year quarter adjusted.
EBITDA margin reflected as a percentage of total revenue in the third quarter was 62, 7% versus 65, 2% in the prior quarter, which included a $2 million net insurance benefit.
The third quarter non-GAAP adjusted earnings per share was 22.
Versus 28 in the prior quarter and 19 in the prior year quarter as.
As mentioned in prior quarters, we do not pay any royalties on the first $20 million and its himself. So as we progress throughout the year. We are seeing the royalty impact on adjusted earnings per share as we back out the royalty payable during the period and our adjusted earnings per share calculation.
Earnings per share was also impacted by our debt refinancing, which I will discuss in a moment.
Summarized on slide four adjusted selling general and administrative expenses in the third quarter were $9 3 million compared to $8 6 million last quarter, which included a $2 million insurance benefit and $7 9 million in the prior year quarter, which included a $750000.
Oh settlement.
Looking forward, we do expect an increase in operating expenses in the fourth quarter versus our third quarter year to date run rate.
Funding, both increase otrexup sampling and marketing costs as well as the additional cost of support symposium.
Net income for the third quarter was $4 2 million compared to $7 8 million last quarter and $3 7 million in the prior year quarter.
The third quarter was the fifth quarter of positive net income.
On August 25th we closed our offering of $70 million aggregate principal amount of six 5% convertible senior notes due September 2027.
The net proceeds after deducting discounts and commissions were $65 9 million.
These proceeds were used to redeem our 13% senior secured notes of $59 million due in January 2024, plus accrued interest of $3 million.
The conversion price on the convertible notes was approximately $4 90.
I want to point out that we added a somewhat unique feature to the convertible notes by which they will be redeemable in whole or in part for cash at a <unk> option at any time and from time to time.
On or after September eight 2025, and before the 40 <unk> scheduled trading day immediately before the maturity date, but only at the last reported sell price per share of common stock exceeds 130% of the conversion price for a specified period of time.
We believe this feature enables us to manage or even avoid dilution associated with the conversion keeping the interest of our equity holders front and center in this financing.
We also believe the new convertible notes provide additional benefit by cutting our interest rate in half carrying no amortization and eliminating any near term maturities all of which are business will support our business development efforts through improved financial and negotiating strength as already demonstrated in the <unk>.
<unk> Symposium acquisition.
Going forward earnings per share will be calculated using diluted shares including the if converted impact of the convertible notes as is required under GAAP.
Additional dilutive share impact of $17 1 million shares and the accounting rules require inclusion of all of these shares even if the convert it's out of the money.
On September 30th 2020 to our long term debt balance is shown on slide five with 66 million, reflecting the $70 million convertible debt balance less unamortized debt issuance cost of $4 million.
Also on slide five ending cash on September 32022 was $64 8 million.
Net increase in cash in the third quarter of $12 6 million as multi due to cash flow from operations and the excess proceeds from our convertible debt offering.
Net cash provided by operating activities as reported and the Companys statement of cash flows for the third quarter was $10 million year to date, we have generated $51 9 million in cash flow from operations. This was our sixth consecutive quarter of positive operating cash flow.
I'll note again that first quarter casuals were positively impacted by the $8 3 million income tax receipt and in the second quarter by a net $2 million and favorable insurance settlement recede.
As I previously noted quarterly operating cash flows will fluctuate due to the timing of working capital.
Royalties and interest payments.
Looking ahead to the fourth quarter, ending cash will reflect the $15 million in total purchase price payments for <unk> and the final purchase price payments for all trucks are up $10 million.
Lastly, we are raising our guidance for the third time this year.
Our updated annual guidance for 2022 summarized on slide six is as follows.
Product net sales are expected to be greater than $141 million compared with our prior expectation of $129 million to $137 million adjust.
Adjusted EBITDA is now expected to be greater than $86 million, a considerable step up from our previous guidance of 73 million to $79 million.
The updated guidance for 2022 reflects our latest revenue margin and operating expense expectations for the remainder of the year.
There are several moving parts, including.
Favorable year to date results, which include favorable <unk> volume.
Favorable channel mix across the portfolio due to lower volume and unprofitable channels.
<unk> net sales growth driven by the new commercial and channel strategies.
Our exit from 340, <unk> and returned to normal channel inventory levels are expected to result in higher net product sales for <unk>.
And lastly, a step up in operating expenses in the fourth quarter related to additional costs for symposium otrexup samples and additional recruiting and related employee costs.
Overall, we're once again incredibly pleased with the quarter results and cash flow from operations as they reflect continued execution of our business strategies and goals aimed at positioning <unk> for long term sustainable growth.
And now I'll turn the call back over to Matt.
Yeah.
Thank you Paul and Dan at this time, we will take questions from our research analyst and institutional Investor community.
Jerry can you go ahead and provide the instructions for Q&A from our listeners. Please.
Of course, thank you if you would like to ask a question. Please press star one if I want to thank key parts now if you wish to withdraw your question. Please press star one if I E. I wanted to ask your question. Please ensure that your line is muted lately.
The first question comes from Thomas Flaten Lake Street. Please go ahead. Your line is open.
Hi, Thank you congrats on a great quarter, a couple of questions.
Dan any insight into demand from the 340 B Hospital segment that as of October one no longer have access to any any inclination as to how robust that demand has been I know, it's only been five weeks, but curious to get any color on that.
Yeah, it's been five weeks and unfortunately, our data that would come from the wholesalers is on a lag. So we've got very little insight into that right now.
But.
There is reason for optimism, but what we're reflecting in our guidance and our plans going forward is just the cessation of those sales.
Got it and.
Just following up on the sampling or the samples for Otrexup is that on the glide pass now or is there a critical path items that could kind of distort that situation, even further or do you feel pretty good about end of end of this quarter early next.
No.
Starting to deliver on time for all of our Pos and those are scheduled manufacturing time timelines right now.
Got it and then one final one anything you can share with what youre going to propose to FDA. During your during a pre R&D meeting in terms of size timeline anything like that.
Yes.
What I can disclose right now is what we're proposing is that it's just a single arm trial.
So the <unk>.
The size of it will depend upon what ultimately the FDA does want but.
I think it's too premature to get into the details until we get some FDA feedback and then later on submit our R&D.
And just just tacking on to that from a strategic perspective do you do you anticipate any issues. If you get label for moderate risk, but theres significant utilization high risk you don't see the payers paying more attention to this and cracking down on utilization to you.
Oh I don't think so.
Evan.
We haven't seen a lot of pay.
<unk> pressure in this category it doesn't seem to be something that.
Is called out.
In addition to the procedure cost and.
A full list price.
There is a one time 700 dollar items, so I don't anticipate it's going to be.
A material thing for payers.
Great I appreciate you taking the questions. Thank you.
Yeah.
The next question on the line comes from Scott Henry of Roth Capital. Please go ahead.
Thank you Scott and good afternoon.
I think I'll start with Anderson.
First I'm a little confused with the idea of if you.
Pulled out of the three or four b or $3 40 would be which however, those numbers go together.
Typically if I'm not selling to these hospitals.
That would have a negative impact on revenues.
Back then.
Oh.
Could you just kind of explain to me why you wouldnt be losing sales even if they were unprofitable sales there wouldn't be any.
Contraction in revenues there.
Sure. Scott. This is Paul here, just explain that a little more detail. So the 340 B pricing was obviously very favorable the hospital, given where we're at in that pricing and the maturity of the product essentially.
Essentially we were at Penny pricing.
When we ship the product or the wholesaler, we have to pay a wholesaler beyond that.
And then the product ultimately gets shut downstream.
Hospital at the lower price. So we were in fact, losing money on every shipment that went out the door related to $3 40 B.
Not shipping that volume, we no longer pay the wholesaler fee on it and we ended up saving money.
Okay. So you were you were losing money even at the revenue line not just at the bottom line.
Correct Thats correct, Okay, alright, yes.
A tough business doing it that way Oh, okay that makes sense and then I mean, obviously.
Dan one of the strengths of the company. The past couple of years has been just acquiring.
Products going to this new selling model and rinse and repeat are getting.
Getting back into the R&D business.
Everyone's not doesn't have the same core competencies how comfortable are you that you can be successful running the clinical program or not just successful what as successful as you've been.
The other business model.
That's fair.
Good question Scott.
One of the things that we're doing is we're adding to the team.
We are actively recruiting for a head of medical who will help us not only with the industry and clinical but with some of the other opportunities that we see in our in our current portfolio and especially with the addition of <unk> and the opportunities we see there.
In terms of.
The the.
The additional risks or things like that this is not a.
We're not going back to the bench and we're not dosing in mice here, we're basically just doing a confirmatory trial.
Already confirm ideally what some of the other clinical as I have done that the NIH and other so sponsored.
Okay fair enough.
And then with regard to slow tracks up we've got a couple of quarters under the belt.
Hi.
Do you think long term that can can get to and very long term I mean in the neck.
Year or two so.
So maybe medium term would be better does that could get to $4 million a quarter run rate or are we looking at kind of three to three and a half it sounds like we're a little over three right now.
Yes, we're a little over three right now I don't think its too big of a stretch to get to four from where we are now so longer term I still think the opportunity is there.
Certainly the potential is to be able to double this product when you've got a 20 share in this market.
And medium term, we're not making any product specific or even forward looking guidance for the whole company, but I don't think it's out of the realm of possibility to be able to grow that product like like you are suggesting.
Okay Alright, great.
Then on <unk>, how should we think about amortization expense for that I guess, it'll be the whole I want to say $15 million or $16 million.
What should we amortize that over what timeframe.
$16 million over 10 years, so youre looking at $1 $6 million a year.
Okay and.
Have you.
Have you said about the gross margin profile I know I can probably back.
Into it with some of the guidance, but is it similar to your other products or higher or lower I guess just to.
Mike.
A little lower.
And the high Seventy's are around 80% gross margin.
Okay.
That should do it for me now thank you for taking the questions.
Thank you Scott Thank you.
The next question on the line comes from me, Kevin Kopelman of Sidoti. Please go ahead. Your line is open.
Yes. Good afternoon. Thanks for taking the questions first on <unk> I was just wondering if you have to make some additional investments.
To support the growth there I believe you mentioned some personnel additions in some of that might be <unk>, but.
Just curious if there are some additional investments so that we should be expecting here.
Is there is nothing incremental that we've got in the plan right now there are some things that we're exploring.
It might be some very small and simple PK.
Clinical studies to support some of the things that we saw on hadn't heard it during diligence.
There isn't any other than the.
The samples you need for this product in the FDA Paducah fees.
Just the addition to our existing commercial platform.
Okay. Thanks.
And then you mentioned I believe you added about.
Eight.
The head count.
As you look out to 2023 and with Ampersand and.
Expectations on any S et cetera.
Do you expect to be even more aggressive on that front and how is the.
Labour market.
In terms of maybe having to pay up a little.
Well, we haven't seen we haven't had to.
Hopefully my employees aren't listening, we haven't had to pay up yet but.
I think three additional positions that are in the Org chart that are approved right. Now one is the head of medical that I mentioned.
And then the rest are more bench strength, but.
We don't have aggressive hiring plans.
We've seen that.
We can offer a pretty attractive package to convince people to join us or deal.
Okay. Thanks, and then just coming back.
To the BD opportunities.
If you can give us a sense in terms of what youre seeing out there.
As it relates to.
Competitive better valuations and.
Maybe.
Your expectation.
In terms of being able to close a few of those deals over the next year.
Yes.
Yeah.
I think the prepared comments, we still see a very active BD pipeline.
And as I speak.
We've got the capabilities to evaluate multiple at the same time.
And we are evaluating multiple currently so.
We feel very confident that we're going to be able to meet our goals and hopefully exceed our goals like we always tried to do.
And what we have been seeing is that these situations are not that competitive there might be one or two that are that are hanging around the hoop. It there.
We've been able to win each of the situations that we intended to win.
The valuations that we saw like the symptoms and transactions are very good one where.
Not a lot of competition for assets like this and you can acquire them at very attractive prices.
And we're seeing that in any others that we're looking at as well.
Okay, and then just the criteria I think samples and is going to be accretive.
Very quickly.
One of the things.
But you look at as you do these deals aside from.
Must have a nice revenue attractive end market et cetera.
Yeah. So we're we're always looking to do something that's accretive at least for the time being with the business that we've got until we can diversify our overall revenue.
So that is a core objective that we're looking for when we acquire something.
The other component that we do is we do.
Cash on after tax cash return, where we're targeting north of 20% and an IRR.
Okay. Thanks, and just finally just on.
Litigation fees et cetera, nothing it seems like it's pretty quiet on that front.
I'm, assuming there's nothing really to report.
There.
Yes, Theres been no movement at all.
As far as I'm aware, we don't have any cases progressing.
Okay. It sounds good thanks for taking the questions.
Thank you Mitra.
The next question comes from Matt Clawson of Dws financial Please go ahead.
Hi could you just talk about what your expectations are with some passive as it.
For you as far as revenue is concerned and what are your plans as far as doing the digital marketing for it and what your expectations are with Payors.
So in terms of the to answer that.
The last question first we intend to just move to the.
The existing request of payer contracts over to Sergio.
And are not expecting any material changes will evaluate bidding on additional business there.
As things move forward.
Likely right now it's the 'twenty 'twenty four bidding cycle that people are working on.
But what we saw there was a very favorable payer environment stable payer environment. So we're.
We're actually encouraged with this asset it will be a simple add this into the existing commercial infrastructure for the non personal and digital platform.
There will not be a lot of extra things required the only thing different about this product from some of our others will be the patient advocacy communities that we're going to be taking a large part in.
But other than that it's a.
We're starting to sell already for this product.
And because of the partial quarter, we've guided that we'll do at least a million dollars in the fourth quarter for it.
Okay. Thank you.
As a reminder, if you would like to ask a question. Please press star one if I want to thank you Pat style.
The next question comes from Scott <unk> of Sam.
Please go ahead your line is open.
Hey, guys great quarter congratulations.
I have two questions.
<unk> for you.
In your opening comments.
<unk> indicated that this quarter is reflective of a shift to growth mode and I wanted to ask is does that mean that you can show growth in 'twenty three versus 22.
That.
Yes.
That is my goal Scott so.
It's part of the objectives that I have we're not giving guidance for what 2023 years. We're updating what we had previously said, but that is our goal to be able to grow this to.
Throw this business.
Okay.
My second question is around interest and you made a comment about going direct within the same and I wanted to see if you could flush that out a bit how would that impact the relationship that you currently have with distributors what.
What would the margins on the direct business be in.
Can you talk a bit about that please.
Yes, there is a large cushion between.
What.
The list price and what we ultimately get from a wholesaler and what the end customer is paying so there is a large cushion where we can offer some discounts to make it attractive to them to purchase directly from us.
The margins won't be materially different it could be very close to the same.
And the only the only additional thing that we're taking on as additional shipping cost and collections risk from the customer.
Okay, and so then how does going direct benefit you buy back bypassing the wholesalers.
It's more of a direct relationship with your customer.
And the ability to.
Service them.
With priority.
Okay.
Great terrific quarter. Thanks, so much keep up the good work place.
Well thank you.
We currently have no further questions.
John for any closing remarks.
Okay.
Thank you in conclusion, the third quarter was one of our most important strategic orders for our <unk> as we're now poised to accelerate the growth of our company.
We extended our debt maturity improved our margin profile and a key asset added to new assets via a highly accretive transaction and continued to generate cash flow that will fuel our strategic plans to diversify enhanced and enhance our asset base.
Right you all take the time to join our call and hope you all have a good evening. Thank you.
This concludes today's call. Thank you for joining you may now disconnect Nicole.