Q3 2023 Northern Technologies International Corp Earnings Call
Good morning, ladies and gentlemen, thank you for standing by.
Come to Northern Technologies International Corporation third quarter, 2023 earnings conference call and webcast.
At this time all participants are in a listen only mode.
After the Speakers' presentation there'll be a question and answer session. Just a question during the session you will need to press star one on your telephone you will Dunkin' automatic message Yohan advising Johannes race.
Please note that today's conference is being recorded.
That's part of the discussion today, the representative from NTIC will be making certain forward looking statements regarding ntic's future financial and operating results as well as their business plans objectives and expectations.
We advised I just forward looking statements are covered under the safe Harbor provisions of the private Securities Litigation Reform Act of 1995, and I N. T. S. He decides to avail itself of the protections of the Safe Harbor statements.
It should also be advised that actual results could differ materially from those stated or implied by the forward looking statements due to certain risks and uncertainties, including those described in Ntic's. Most recent annual report on Form 10-K subsequent quarterly reports on Form 10-Q, and recent press releases.
Please read these reports and other future filings that NTIC will make with the S E T.
NTIC disclaims any duty to update or revise its forward looking statements.
I will now hand, the conference over to you.
Our host for today, Mr. Patrick Lynch, Chief Executive Officer.
Please go ahead Sir.
Good morning, I'm, Patrick Lynch, Ntic's, CEO , and I'm here with Matt Wolsfeld Ntic's CFO .
Please note.
We had a press release regarding our third quarter fiscal 2023 financial results was issued earlier this morning and is available at NTIC Dot com.
During today's call we will review various key aspects of our fiscal 2023 third quarter financial results provide a brief business update and then conclude with a question and answer session.
Record topline sales for our Xerox industrial U S oil and gas and nature Tech segments in turn pushed total sales for the third quarter to a new quarterly record as well.
It would appear therefore that our strong third quarter performance not only re validates the efficacy of our long term growth strategies, but also the value that our corrosion inhibiting products and services and bioplastic solutions provide to our growing customer base.
I am proud of these results as they show that our team members and joint venture partners have been working hard to support the complex needs of our global customers.
So navigating extremely dynamic currents.
Okay.
As planned we also made considerable progress rebuilding our gross margins and controlling operating expenses this period.
Our third quarter gross margin of 36, 7%.
Marks a significant improvement on both a sequential and year over year basis.
This primarily reflects the positive impact of the counter measures, we put in place against supply chain issues significant raw material cost increases and challenges across our European and Asian markets.
As we look to the fourth quarter and beyond.
Momentum in our business remains positive.
We believe NTIC, China sales will improve in the fourth quarter.
And into fiscal 2024 now.
Now that the Chinese economy, finally has the opportunity to start rebounding from its exceptionally long self imposed pandemic freeze.
She was the oil and gas and nature Tech are both expected to continue to benefit from new customer relationships and incremental orders from existing customers.
Therefore, we believe we are well positioned for a strong finish to fiscal 2023 and believe fiscal 2024, we'll also enjoyed good growth and higher profitability.
So with this overview.
Let's examine the drivers for the third quarter in more detail.
For the third quarter ended May 31, 2023, our total consolidated net sales increased 10, 6%.
To a quarterly record of $21 million as compared to the third quarter ended May 31 2022.
Broken down by business units. This included a 32.7% increase in U S oil and gas net sales a 9% increase in <unk> industrial net sales and a seven 8% increase in nature textbook net sales.
Total net sales for the fiscal 2023 third quarter by our joint ventures, which we do not consolidate in our financial statements decreased year over year by one 1% to $26 $3 million, but were up three 3% on a sequential basis.
Yes.
A slight year over year decline was due primarily to softer demand across the territory serviced by our global joint ventures and currency exchange rate fluctuations.
Fiscal 2023 third quarter net sales by our wholly owned NTIC, China subsidiary decreased by eight 4% to.
To $3 $3 million due to weaker economic conditions on a year over year basis.
On a sequential basis NTIC, China sales were up 15, 6%, which we believe reflects stabilizing demand trends and we continue to expect demands to improve throughout the remainder of this fiscal year.
We remain committed to the Chinese market and the long term opportunities. It represents for NTIC, we continued to take steps to enhance and protect our Chinese operations and we continue to believe China will likely become our largest geographic market in the future.
Now moving on because U S oil and gas.
The fiscal 2023 third quarter was the strongest quarter, we have ever had for us U S oil and gas sales increased 32, 7% to a record $2 million.
The third quarter of fiscal 2023 is also the fifth consecutive quarter of zero oil and gas fields over.
$1.5 million and on a trailing 12 month basis, we have reported nearly $7 million of oil and gas sales.
We believe these positive trends reflect accelerating momentum within our oil and gas business.
Interest continues to grow from new and existing customers for our <unk> oil and gas solutions, which.
Which include applications to protect above ground oil storage tanks and pipeline casings from corrosion.
The expanding adoption of ours U S oil and gas solutions within the oil and gas industry is supporting bigger opportunities for our U S oil and gas products and technologies.
As a result.
We believe that fiscal 2023 will be a transformative year for <unk> oil and gas.
As we expect this business to scale and continue to contribute to profitability.
Turning to our nature take Bioplastics business.
As expected nature Tech sales growth re accelerated in the third quarter.
After a seasonality and the timing of both shipments and orders impacted major tech sales in our second quarter.
Fiscal 2023 third quarter nature Tech sales were a record $4 $9 million.
A seven 8% increase over the prior fiscal year period.
We expect nature Tech sales growth will remain strong in the fourth quarter supported.
Supported by favorable demand in North America, and India, and significant new customer wins and orders in these geographies.
Globally, we continue to see growing market demand for new applications of certified compostable plastic products and resin compounds as.
As well as increased interest in commercial and municipal programs that use certified compostable plastics as alternatives to conventional plastics.
As a result, we believe we are well positioned for long term sustainable growth within our <unk> Tec Bioplastics business.
As you can see our third quarter performance reflects the progress we are making to profitably grow our business and create significant value for our shareholders.
This is a testament to the leading solutions, we have created the valuable services, we provide and the strength of our team members and joint ventures.
With this overview, let me now turn the call over to Matt Wolsfeld to summarize our financial results for the fiscal 2023 third quarter.
Thanks, Patrick compared to the prior fiscal year period, NTIC consolidated net sales increased 10, 6% in the fiscal 2023 third quarter.
To a quarterly record this growth was driven by the positive trend Patrick reviewed in his prepared remarks actions to improve gross margin successfully offset a one 1% decrease in third quarter sales across our joint ventures to drive.
A one 5% increase in third quarter joint venture operating income compared to the prior fiscal year period.
Total operating expenses for fiscal 2023 third quarter were $8 million or 12, 8% increase over the prior fiscal year period, which was primarily due to increased personnel expenses and expenses incurred during the current fiscal year period in connection with the startup of the new indirect majority owned subsidiary formed.
I assume the operations of our former joint venture in Taiwan.
<unk> expenses as a percentage of net sales were 38, 3% compared to 37, 5% for the prior fiscal year period.
Gross profit as a percentage of net sales increased 36, 7%. During the three months ended May 31, 2023 compared to 32, 9% during the same period last fiscal year.
380 basis point improvement was primarily a result of successful actions taken by the company to address inflationary pressures and the increased sales of higher gross margin the arrest oil and gas solutions.
Okay.
Okay.
NTIC reported net income increased 52, 5% to $1 $5 million or <unk> 16 per diluted share for fiscal 2023 third quarter compared to $1 million or 11 cents per diluted share for the fiscal 2022 third quarter and.
And Chad is non-GAAP net income adjusted for amortization expense was $1 6 million or <unk> 17 per diluted share compared to $1 $1 million or 12% per diluted share for the fiscal 2022 third quarter.
A reconciliation of GAAP to non-GAAP financial measures is available in our third quarter earnings press release that was issued this morning.
As of May 31, 2023, working capital was $23 $7 million, including $6 $2 million in cash and cash equivalents compared to $23 $2 million, including $5 $3 million in cash and cash equivalents as of August 31 2022.
As of May 31, 2023, we had outstanding debt of $8 million. This included $5 2 million and borrowing under our existing revolving line of credit compared to $7 $1 million as of February 28, 2023 during the fiscal 2023 third quarter the company as whole.
He owned subsidiary in China, NTIC, China entered into two term loan agreements.
Both loan agreements have an annual interest rate of three 5% and the total out any balance was $12 $8 million as of May 31, 2023. The proceeds of these term loans were used to pay off intercompany loans that NTIC, China had with NTIC.
We generated $3 $5 million in operating cash flows for the nine months ended may 31, 2023, including $1 $3 million in the third quarter, which was driven which was driven primarily by stronger profitability.
And waning inventory levels.
On May 31, 2023, the company had $22 $9 million of investments in joint ventures of which approximately 53, 2% or $12 $1 million was in cash with the remaining balance primarily invested in other working capital.
During the fiscal 2023 third quarter Ntic's Board of directors declared a quarterly cash dividend of seven per common share that was payable on may 17, 2023 to stockholders of record on May three 2023.
To conclude our third quarter and year to date financial results demonstrate the continued progress we have made to increase sales across our diverse end markets and geographies.
And the success of our near term initiatives to improve profitability.
Im encouraged by the direction, we're headed and while the economic environment remains extremely fluid. We continue to believe fiscal 2023 will be another good year of sales and profitability at NTIC.
With this overview, Patrick and I are happy to take your questions.
Thank you ladies and gentlemen at this time I'd like to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Again to ask a question. Please press star one one please standby, while we compile the Q&A roster.
I'd also like to mention that the need to allow us joining us. This morning. So if you have any questions regarding <unk>.
On Maui preference question.
No first question coming from the line of Timothy Clarkson with Van Clemens. Your line is open.
Hey, So I got a few questions here.
Just a big picture basis.
Well, what's the impact of this trend towards electric cars does it change the need for Russ corrosion products.
An electric car versus a gas car.
It will because there simply.
Fewer parts in an electric vehicle than they are in an IC engine.
Okay.
Have not seen yet.
And actually we're doing some work.
Again, where our sales are growing into the market is at stake.
But we do ultimately expect that there will be some transition as the industry moves more towards the vehicles.
Okay.
Well I ask about on.
On the compulsory ball and again, what's what would you say is so far so we got the expert there.
What would you say is the differentiating factors on a major checks compulsive products versus.
The competitors.
I think we just.
We make products that are easier to process on conventional plastics equipment.
<unk> and <unk>.
Better properties.
<unk>.
We are kind of unique in the fact that we are base material agnostic. So we work with <unk>.
Work with the brand to understand their packaging requirements and then based on those batch packaging requirements, we actually engineer a solution that meets our requirements at <unk>.
Affordable price.
Okay.
At what point does the typical Mcdonald's or that the typical fast food restaurants start to be using these kinds of products I know they use them in the airports, but at what point does it become kind of a standard.
I think I think it's a function of a regulation obviously a lot of the <unk> are price conscious so widespread.
<unk> adoption is still further out but in those areas where by law. They are required to use compostable products we have.
We're seeing adoption happening.
What's what would be the typical extra expense on a compulsive packaging versus conventional packaging.
It depends on the type of product it could be anywhere from.
Let's say, a 10% to 20% premium to maybe two or three ex.
Okay, Alright, Okay, and then just another question here on the oil business I mean, how.
How big is that market versus.
The legacy market.
We think that.
That the oil and gas market at more potential than everything we've done so far.
Okay.
No no.
When that those products you know I always tell my customers that you know for essentially about a 1% cost that you can extend the life of these tanks.
From 10 years to 30 years. It is are those kinds of payoffs actually occurring in the field yes.
Yes, we've seen the evidence in the in the Inflations, we've done we've proven it to our customers that the solutions work in that manner yet.
Right right and it's not just.
Replacing the tank, it's all the problems with leaking oil and EPA and production problems that are associated with that if the tank start start leaking obviously, there's a huge incentive by the tank farm owners to implement a solution like we are offering.
Right.
You guys haven't talked anything about Brazil, what's is there anything new going on in Brazil.
Nothing worth mentioning that this phone call today.
Okay.
Well, that's why my questions great quarter, good to see the profitability come back. Thanks.
Thanks, Tim.
Thank you.
And our next question coming from the line of Gus Richard with Northland Capital markets. Your line is open.
Yes. Thanks for taking my question I was just wondering if you could add a little color you mentioned sort of new customers.
In nature Tac, both North America, and India I was wondering if you could.
Is that for a garment bags in India, where we are.
Compostable for consumer products.
Just any color on that on that pipeline, what's going on in North America as well.
In North America, we have expanded our distribution network.
We are starting to see some market share pickup so hopefully over the next few quarters, we'd be able to that should add to the sales of the finished products that we sell in North America.
Our traditional kind of resin sales for foodservice their demand is consistent but we expect some additional.
Pick up of sales in Asia were.
We're seeing some new customers in the government space in Asia, and South Asia for example.
Where we have had some good wins.
So I think overall, we are starting to see.
New customers come in some other we've got a good pipeline of opportunities and especially.
Especially as things kind of come down in the supply chain challenges.
We are seeing some of these customers starting to adopt our solutions.
Got it and then sort of a similar question for oil and gas.
Just wondering.
We've got a lot of work in Caspian Sea.
You talked about sort of additional orders from existing customers and new customers coming in can you gives a little bit of color on that that pipeline as well.
Where we are getting repeat orders from existing customers and bringing in new customers on a regular basis.
As we speak to our market continues to grow.
Pretty much okay.
Okay got it and then.
Switching over to the cost side.
Energy prices have been fluctuating.
Would expect given the heat waves and whatnot that natural gas prices could increase.
Sort of how are you positioned on cost escalators.
How are the commodities impacting.
So the gross margin line currently or is it.
Just a mix issue, that's going to drive upside going forward.
Well, if you kind of got this is Matt.
You kind of take a look back over the past nine months obviously.
Before we started this year we are.
Really high commodity prices for a lot of our base materials over the past nine months, we have seen that come down.
To a much more reasonable level and thats one of the things that fueled the rebound in the gross margin is kind of back to meeting what are what our typical gross margins were before we saw the spiking of the raw material pricing.
I would say even right now from a natural gas standpoint.
And the derivative resin pricing.
We're still seeing relatively low levels.
So were not seen.
At this point in time or have an expectation that the raw materials, specifically the resins are going to be increasing anytime soon.
So.
Right now, we're continuing to see that rebound in gross margin as we see it flow through all of our existing inventory and.
The pricing that we're giving to our customers.
Got it and sort.
Sort of your long term.
Contracts in.
Correct in assuming that there is.
Sort of escalators, if if there is a spike in raw material.
I mean, there are obviously in most situations, we're doing spot pricing and about 70% of our business, we're doing spot pricing based on the price of raw material at that time.
30%.
Some of it is just purchasing of our stock inventory, which we can control, but it takes longer for us to adjust that pricing and then have that flow through the inventory we have on hand.
A small portion of our total business our blanket orders for a full year for a longer period of time that tends to be the situation where we.
Potentially it could get caught with.
Either either negative or negative or positive.
Yes.
Impacts on margin. So we think we have a much better handle on where we are right now from a pricing standpoint, and I think we are positioning ourselves now to act quicker than we did 12 to 15 months ago. When we saw some of the some of the volatility that we've talked about over the past five quarters.
Got it got it and then just flipping over to you.
China.
There's been a lot of commentary in the press about.
The strength and duration that recovery.
Just any penny.
Comments on kind of what you've been seeing over the last quarter in terms of.
The trajectory is it just stabilized.
Improving.
Moving on beyond auto.
Any any help there.
It's difficult it's difficult for us to say exactly where it is hitting and what's going on from a from from a sales standpoint in China.
Existing customers that are ordering that are ordering less is what we're seeing so there's just kind of a general slowdown compared to when I look at like the revenues that we achieved in all of our fiscal 2021.
The first half of our fiscal 2022 or simply at lower a lower sales level and not seen the recovery in the rebound we expected to see.
We did have better sales in Q3 than in Q2, but we are.
A $5 million to $1 million off on a quarterly basis, where we were through the majority.
Our fiscal 2021, so what we're looking at to see kind of that that recovery take place to get back to that level and then ultimately grow.
Grow the market in China beyond that it still has a large very large potential market for us and obviously, it's a bit of a headwind given that we are basically hovering right at.
Breakeven point on that subsidiary.
Got it and then last one from me you mentioned.
The FX impact on the Jv's.
Is that a dollar euro.
Impact.
Or.
Yes.
Mueller on that one and that's it for me.
Majority of it.
There's two there's two.
Two key.
Three key exchange rates that we view as obviously the euro from a JV standpoint, which had been relatively stable between one seven and 1.1.
For the past few quarters.
Part of the part of the.
The secondary impact would be in India and that appears to be.
And have a consistent.
The increase in the exchange rate.
Which would take what you've had some issues from the standpoint of if theyre paying us for RASM, just theyre paying us for their receivables.
That's just a little bit of a headwind that's going to be a push on.
On overall revenue.
Thirdly, and obviously this bounces around a little bit more is in China.
One of the things that we've done in China to kind of mitigate some of the exchange.
Exchange flux. This fluctuation was to move the debt that we had at NTIC, China from alone to NTIC and North America to be localized in China, and so our Chinese entity took out.
Good.
Little over $2 million and right around right around $2 million in term loans, and then repaid that amount to NTIC in North America that helps a little bit with the currency the currency volatility there.
But you still have fluctuation with the.
With currency in China, given the given the sales and given the overall profitability of that they have.
Got it got it very helpful. Appreciate it that's it for me.
Great. Thanks, Scott.
Thank you and our next question coming from the line of Richard Hillman Private Investor Your line is open.
Yes, good morning, gentlemen.
Yes, I had two questions first thing was about.
The sales cycle in oil and gas.
It was before and what it is now.
To sign up a new customer.
Basically and also how did you get to the inflection point Youre at right now or is there some sort of industry accreditation for those products or can you just talk about that a little bit. Please.
I think what we're seeing as well.
We've talked before about some of the difficulties in oil and gas being the volatility and not having kind of a baseline level of sales and what we're finally starting to see is more of a consistent.
Amount of ordering coming in so that we can have a base level of sales.
So we can kind of count on on a quarterly basis and so if I look back at the past five quarters, it's been nice growth from the standpoint of yes.
If I go back to like Q3 last year of $1 5 million to $1 6 million to the level of $1 6 million to $1 8 million and now for $2 million.
Being a nice level of growth. The one thing that you do have with oil and gas is it is a much longer sales cycle. It takes much longer to become integrated with the customers for them to test out the product for them to understand the return that it will give them and the benefits that will have the overall overall infrastructure and.
Historically, the oil and gas market is a slower market to adopt new technology.
But what we're what we're happy with is that the sales that we have now and that we've seen over the past as I said four five quarters are coming from a wide number of customers and a lot of different applications, meaning that the opportunity inside of each of those customers are significantly bigger youre not talking about <unk>.
Selling one tank or selling one case into a customer and then that customer goes away you are talking about selling one or two tanks to a customer when they potentially have.
Tens or hundreds of.
Yes.
Sales opportunities or infrastructure issues and so that's one of the reasons why we are excited about the oil and gas basis, just because and you get integrated with these customers and you show the potential return.
The opportunity is.
Huge multiples compared to a situation where you would just have a one off sale and then you move on.
Okay. Okay.
And then Matt also I wanted to ask you about.
R&D.
Across the company basically what are you do you consider yourself to be a specialty chemical company.
And also what are you doing to improve your R&D effort on the divisional level.
Your companies your joint ventures, and also with universities, our outside partners sure well I think what I'll do is I mean, I can touch a little bit on R&D from a.
From the <unk> standpoint, and then I'll, let vineet touch on the R&D aspect from the from the major Tech standpoint, but.
Zero standpoint, you can obviously see what we're doing as I, just kind of explained in oil and gas as far as how we've transitioned a lot of the work over the past really the past decade from being researched to more development to be more integrated with.
And building sales, we've really seen that transition happen.
We don't partner as much from a industrial standpoint with universities. The development that we do is typically.
In our R&D facility here or in our R&D facility that we have with <unk> in Germany.
Typically a lot of that development has to do with tweaking existing products coming up with new formulations to potentially sell or new products to sell to existing customers.
And potentially new markets and that's how we've gotten into some of the new markets over the past I look over the past five or 10 years. Some of the new markets that we've got into have dealt with a lot of new products that were that we did develop internally into our selling.
No.
R&D capability from <unk> standpoint, it is much more internally focused.
And geared towards selling and providing products to the existing markets that we're currently serving.
Yes, and from a from an <unk> perspective, we do have a good strong core R&D group here in Minnesota.
But we also have R&D labs in India, and some R&D going on in China.
On the nature of excited we also partnered very heavily with Michigan State University, which is probably one of the leading biomaterials.
Program in the World.
And then we do have some.
<unk>.
The instruments with claims.
Clemson University for usage of.
Testing capabilities.
Capability than some of the specific advance.
Development capabilities so.
We do work with the University is also in India to kind of develop specific aspects of new product development that we're engaged in in those areas but.
In general a lot of that strip.
Strategic direction in terms of R&D is driven out of the U S. Here.
Okay.
In terms of.
Nature Tech.
What are other areas are you going into besides just compostable materials.
So.
The nature of that business is focused more on compostable and bio materials. So we are looking at bio based products. We're looking at.
Multilayer structures for packaging of consumer packaging food packaging and then on the longer term. We're also looking at fibers.
Actually our textiles.
Compunction about fibers.
Yes, biobased can boast about five years ago.
Okay.
Thanks very much.
Yes.
Thank you.
Our next question coming from the line of Gregory Weaver with <unk> Capital Management. Your line is now open.
Yes, hi, good morning, gentlemen.
Thanks for taking my questions here and glad to have anytime a call I guess.
I'll start with <unk>.
Has there been any go to market changes for nature Tech here over the recent timeframe in terms of some of this traction you are saying.
Not nothing significant I think it would be just executing to kind of our strategic plan.
Just.
I think getting over the supply chain challenges of last year was critical.
Because that meant raw material was widely.
Widely available we are also executing better on some of the opportunities that we had in our pipeline.
And how is it going with the bulk resin sales.
We don't sell bulk presence, we sell our compounds and those are growing very nicely.
Okay.
There was some opportunity maybe.
Mistaken years back in Europe , and they are passing some of those bag was for.
Characterize sort of the bulk resin, but I guess im mistaken.
And I guess, just Patrick I've known you since day one here.
<unk> had in the company.
I've never heard you. This buildup. So I mean people have pressed you on some of this oil and gas stuff, but.
I'm Super happy to see it and I guess kind of.
Try to get a little more color again here or is it just that.
The phones ringing now as opposed to you out there.
Beating the pavement.
Are your excitement.
Yes, I mean, we're getting.
The phone is ringing repeatedly from the same sources.
We're also finding new applications.
Expanding into new market segments, so geographically.
So.
Things are really humming.
All across the board.
Right.
And.
And in terms of the base level of sales that Matt was talking about I mean that doesn't really have much Petrobras. These days and if this is just onesie twosies from a lot of guys and I don't know if that big BP job has started enrolling yet or not but.
We are delivering on the BP job.
And we also signed with Petrobras.
But.
We have not been working with.
I'm working out better for us and that's why you have the tank bottom solutions from us yet.
But that certainly is a technology, where they are currently looking at.
Okay, Alright, well.
Super excited to hear the enthusiasm here on oil and gas because.
Given the margin structure there it seems like it could do wonders for the overall business. So keep up the good work and thank you.
Great. Thanks.
Okay.
Thank you.
Im sure we have a follow up question follow Gus Richard with Northland Capital. Your line is now open.
Yes, thanks for taking the additional questions.
Based on some of your comments I'm wondering are you guys starting to work on.
Recyclable products for Tetra packs.
Gotcha.
Working on recycling, but we are looking at.
Compulsively origins of those multiyear structures.
The increase increasing demand from brands or fully compostable versions of those solutions, but.
There are some specific barrier requirements. So it's still in development.
Okay.
Yeah.
Assuming that given the inability to recycle that those products that there is an increasing desire to do so.
Thank you.
Yeah, and you're working on the development of that and that.
It could be an incremental market for you down the road.
Yes potentially.
Got it got it thank you.
Thank you.
Our next question coming from the line of John Hall. Your line is open.
Hello is it was that me I'm not sure.
So all in all your line is open.
Oh.
Just one question.
Do you have an inclination to buy out.
You get 100% ownership in some of your joint ventures and are there opportunities to do so is it.
Possibility going forward and is it desirable I'm not.
As you saw we bought out of India, a little bit over a year ago, yes.
Yes.
Yes.
We are looking at.
Buying out joint ventures, as even as they come available and if that's the right decision to make at that time.
So.
There is nothing right now on our radar to do buy anymore.
It's been an opportunity presents itself and it makes sense to us we will be looking into acquiring them.
Alright, thank you.
Thank you.
And I see no further questions in the kidney queue. At this time I will now turn the call back over to Mr. Patrick Lynch for any closing remarks.
Just wanted to thank everybody for their interest in NTIC. This morning, and wish you all good day.
Ladies and gentlemen that does conclude our conference for today. Thank you for your participation you may now disconnect good day.
Okay.
[music].
Okay.
Okay.
Yes.