Q2 2023 Owens & Minor Inc Earnings Call
[music].
Good day and thank you for standing by welcome to the Owens <unk> minor second quarter 2023 earnings Conference call. Please be advised that today's conference is being recorded.
Speaker 1: Good day and thank you for standing by. Welcome to the Owens & Miner second quarter 2023 earnings conference call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jackie Marcus, Investor Relations. Please go ahead.
I'd now like to hand, the conference over to your first speaker today, Jackie Marcus Investor Relations. Please go ahead.
Speaker 1: Thank you, operator. Hello, everyone, and welcome to the Owens and Miner second quarter 2023 earnings call. Our comments on the call will be focused on the financial results for the second quarter of 2023, as well as our updated outlook for 2023, both of which are included in today's press release.
Thank you operator, Hello, everyone and welcome to the Owens <unk> minor second quarter 2023 earnings call or comments on the call will be focused on the financial results for the second quarter of 2023 as well as our updated outlook for 2023, both of which are included in today.
The press release.
Speaker 1: The press release, along with the supplemental slides, are posted on the investor relations section of our website.
The press release, along with the supplemental slides are posted on the Investor Relations section of our website.
Speaker 1: Please note that during this call, we will make forward-looking statements. The matters addressed in these statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied here today.
Please note that during this call we will make forward looking statements. The matters addressed in these statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied here today.
Speaker 1: Please refer to our SEC filings for a full description of these risks and uncertainties, including the Risk Vactors section of our annual report on Form 10K and quarterly reports on Form 10Q.
Please refer to our SEC filings for a full description of these risks and uncertainties, including the risk factors section of our annual report on Form 10-K, and quarterly reports on Form 10-Q.
Speaker 1: In our discussion today, we will reference certain non-GAAP financial measures, and information about these measures and reconciliations to the most comparable GAAP financial measures are included in our press release.
Our discussion today, we will reference certain non-GAAP financial measures and information about these measures and reconciliations to the most comparable GAAP financial measures are included in our press release.
Speaker 1: Today, I'm joined by Ed Paseka, President and Chief Executive Officer, and Alex Bruney, Executive Vice President and Chief Financial Officer. I will now turn the call over to Ed.
Today, I'm joined by Ed procedure, President and Chief Executive Officer, and Alex Bruni, Executive Vice President and Chief Financial Officer, I will now turn the call over to Ed.
Speaker 2: Thank you, Jackie, and good morning everyone, and thank you for joining us on the call today. The second quarter showed a continuation of positive momentum in many areas, including exceptionally strong cash flow, meaningful improvement in net debt, mid-single digit organic growth in our medical distribution division, and continued double digit growth in our patient direct segment. However, we continue to see a slow recovery in our global products division as demand for our higher margin SNIP products remain constrained.
Thank you Jackie and good morning, everyone and thank you for joining us on the call today.
Second quarter showed a continuation of positive momentum in many areas, including exceptionally strong cash flow meaningful improvement in that mid single digit organic growth in our medical distribution division and continued double digit growth in our patient direct segment. However, we continue to see a slow recovery in our global products Division.
As demand for our higher margin S and IP products remained constrained.
Speaker 2: One of the objectives for 2023 is to significantly reduce debt to provide flexibility for the business. Our performance in Q2 has put us well on the way to achieving this subject.
One of the objectives for 2023 is to significantly reduce debt to provide flexibility for the business.
Our performance in Q2 have put us well on the way to achieving this objective straw.
Speaker 2: Strong execution and focus by the overall organization combined with the operating model realignment program has led to over $300 million in operating cash flow in the quarter driven by the reduction of working capital, net proceeds from AR sales, and the discipline capital deployment.
Strong execution and focus by the overall organization combined with the operating model realignment program has led to over $300 million in operating cash flow in the quarter driven by the reduction of working capital net proceeds.
Sales and a disciplined capital deployment.
After celebrating the one year anniversary of the acquisition of <unk> at the end of the first quarter Q2 marks the first quarter with a year over year comparison of the patient direct segment.
Speaker 2: After celebrating the one year anniversary of the acquisition of APPRI at the end of the first quarter, Q2 marks the first quarter with a year over year comparison of the patient direct segment.
Speaker 2: After a year of double digit pro forma growth in each of the previous 4 quarters, I am pleased to report that the segment continue to produce double digit revenue growth with top line performance fueled by strong growth in most of our major product categories.
After a year of double digit pro forma growth in each of the previous four quarters I am pleased to report that the segment continued to produce double digit revenue growth with top line performance fueled by strong growth in most of our major product categories.
Speaker 2: In addition, we delivered year-over-year operating margin expansion of 25 basis points in the quarter. It is clear that the powerful brands of Vyram and Apri are working well together with a broad offering to serve the patient in the home. We remain bullish on the outlook for the PatientDirect segment for the remainder of the year, as well as the long term, as demand for chronic condition healthcare in the home continues to increase.
In addition, we delivered year over year operating margin expansion of 25 basis points in the quarter.
It is clear that the powerful brands of Byrom in App, we are working well together with a broad offering to serve the patient in the home we remain bullish on the outlook for the patient direct segment for the remainder of the year as well as the long term as demand for chronic condition health care in the home continues to increase.
Speaker 2: Moving on to our products and healthcare services segment. The results in this segment were mixed. In our medical distribution division, we saw year-over-year revenue growth accelerate to over 5% driven by growth at our existing customers and the implementation of new wins partially offset by the residual impact of previous loss.
Moving on to our products and health care services segment. The results in this segment were mixed and our medical distribution Division, we saw year over year revenue growth accelerate to over 5% driven by growth at our existing customers and the implementation of new wins, partially offset by the residual impact of previous losses. In addition, it should be.
Speaker 2: In addition, it should be noted that SANE store sales, excluding PPE, showed growth of 10%.
Noted that same store sales, excluding PPE showed growth of 10%. However, as we recognized a positive momentum in our medical distribution division. It is prudent to recognize headwinds we face elsewhere, specifically in our global products Division as demand for our higher margin PPE products declined year over year.
Speaker 2: However, as we recognize the positive momentum in our medical distribution division, it is prudent to recognize headwinds we face elsewhere, specifically in our global products division, as demand for our higher margin PPE products deploying year over year. When combined with our fixed manufacturing costs, this means we must work much harder to control cost. With elevated supply levels and lower demand for PPE, we are remaining cautious on the balance of the year given these trends.
When combined with our fixed manufacturing cost. This means we must work much harder to control cost with elevated supply levels and lower demand for PPE. We're remaining cautious on the balance of the year. Given these trends we are working hard to navigate these uncertainties, recognizing what we can and cannot control and manage.
Speaker 2: We are working hard to navigate these uncertainties, recognizing what we can and cannot control, and managing our business as closely as possible.
<unk>, our business as closely as possible.
Speaker 2: One of the key elements to minimizing this headwind is our operating model realignment program.
One of the key elements to minimizing this headwind is our operating model realignment program.
Speaker 2: With our operating model realignment program well underway, we have already implemented cost-saving efforts while enhancing the processes to draw operational excellence, as well as diligently reviewing each segment's opportunity for growth.
With our operating model realignment program, well underway, we have already implemented cost saving efforts, while enhancing processes to drive operational excellence as well as diligently reviewing each segment's opportunity for growth first within our sourcing and demand management work stream. The team has made significant strides to date.
Speaker 2: First, within our sourcing and demand management workstream, the team has made significant strides to date, with positive results already.
With positive results already.
Speaker 2: Second, redesigning our organizational structure will allow us to invest and build teams in areas central to our growth opportunities in the coming quarters. Third, our focus on network rationalization and operational excellence will be critical in the ongoing management of our products and healthcare services segment. Particularly if the broad demand challenges continue in the coming quarters.
Redesigning our organizational structure will allow us to invest and build teams in area of central to our growth opportunities in the coming quarters third our focus on network rationalization and operational excellence will be critical in the ongoing management of our products and health care services segment, particularly if the broad demand challenged.
We continue in the coming quarters, and finally, we are having important conversations with customers and partners to improve our commercial excellence and product profitability.
Speaker 2: And finally, we are having important conversations with customers and partners to improve our commercial excellence and product profitability.
Speaker 2: Everyone recognizes the difficult nature of an inflationary environment. But at the same time, our customers have come to rely on a proprietary distributed product as critical components of patient care. We are on a clear path to achieve the $30 million target for contribution to adjusted operating income in 2023 from this program, with the vast majority of the benefits in the coming month.
Everyone recognizes the difficult nature of an inflationary environment, but at the same time, our customers have come to rely on our proprietary and distributed products as critical components of patient care. We are on a clear path to achieve the $30 million target for contribution to adjusted operating income in 2023 from this program with the vast majority.
Any of the benefits in the coming months.
Speaker 2: Many of the actions have already taken place, and we are confident in the value provided by the operating model realignment program for the remainder of the year.
Many of the actions have already taken place and we are confident in the value provided by the operating model realignment program for the remainder of the year.
Speaker 2: When I look at the back half of the year, I like the opportunity presented by the operating monitoring program, the continued strength of our patient direct segment, and the revenue growth and our medical distribution division. However, the previously mentioned caution around the outlook of SNIP products has resulted in a slightly adjusting our full year expectation.
I look at the back half of the year I like the opportunities presented by the operating model realignment program. The continued strength of our patient direct segment and the revenue growth in our medical distribution Division. However, the previously mentioned caution around the outlook on <unk> and IP products has resulted in a slightly adjusting our full year expectations. Finally.
Speaker 2: Finally, the team and I hope you will join us for our 2023 investor day in early December in Boston, at which we will share a vision for the future of Owens and Miner. I will now turn the call over to our Chief Financial Officer, Alex Bruney, to discuss our second quarter financial performance and our guidance for the full year. Alex.
The team and I Hope you will join US for our 2023 Investor day in early December in Boston at which we will share our vision for the future of Owens <unk> minor I will now turn the call over to our Chief Financial Officer, Alex Bruni to discuss our second quarter financial performance and our guidance for the full year Alex.
Speaker 2: Thank you, Ed. Good morning, everyone. I'd like to start by reviewing our financial results and the key drivers of our performance in the second quarter of 2020.
Thank you Ed good morning, everyone I'd like to start by reviewing our financial results and the key drivers of our performance in the second quarter of 2023, following that I'll briefly touch on our outlook for the remainder of the year and the cadence for the third and fourth quarters.
Speaker 2: Following that, I'll briefly touch on our outlook for the remainder of the year in the cadence for the third and fourth quarter.
Speaker 2: Starting with our second quarter results, our revenue for the quarter was $2.6 billion, which represented growth of 2.5% and was driven by continued strong performance in our patient direct segment and growth in the medical distribution division of products and healthcare services.
Starting with our second quarter results our revenue for the quarter was $2 6 billion, which represented growth of two 5% and was driven by continued strong performance in our patient direct segment and growth in the medical distribution division of products in health care services for the quarter patient direct revenue was up 10, 5% versus the prior year.
Speaker 2: For the quarter, patient direct revenue was up 10.5% versus the prior year with strong growth across most categories, especially in our largest categories with diabetes and obstructive sleep apnea.
<unk> with strong growth across most categories, especially in our largest categories of diabetes and obstructive sleep apnea.
Speaker 2: Products in healthcare services revenue was relatively flat compared to the second quarter of 2022 with growth in medical distribution of 5 percent offset by headwinds in our global products.
Products and health care services revenue was relatively flat compared to the second quarter of 2022 with growth in medical distribution of 5% offset by headwinds in our global products Division.
Second quarter gross margin was $519 million or 23% of revenue compared to $533 million or 21, 3% of revenue in the second quarter of 2022. The gross margin contraction was driven by a change in product sales mix as less higher margin PPE was sold partially offset.
Speaker 2: Second quarter gross margin was $519 million or 20.3% of revenue compared to $533 million or 21.3% of revenue in the second quarter of 2022.
Speaker 2: The gross margin contraction was driven by a change in product sales mix as less higher margin PPE was sold. Personally, offset by reduction of LIFO expense, a $6.7 million versus the prior year. Driven by a significant reduction in our medical distribution in the...
Set by a reduction of LIFO expense of $6 $7 million versus the prior year driven by a significant reduction in our medical distribution inventory.
Speaker 2: Our distribution selling an administrative expense for the quarter was $455 million, making up 17.8% of revenue. This expense increased by $33 million versus the prior year, primarily due to variable expenses in patient direct to support revenue growth, along with increased teammate benefits expenses and inflationary pressures negatively impacting wages and occupancy costs, which affected both sectors.
Our distribution selling and administrative expense for the quarter was $455 million.
Up 17, 8% of revenue this expense increased by $33 million versus the prior year, primarily due to variable expenses and patient direct to support revenue growth along with increased teammate benefits expenses and inflationary pressures negatively impacting wages and occupancy costs, which affected both segments.
Speaker 2: Gap operating income for the quarter was $10.8 million. An adjusted operation income was $62 million.
GAAP operating income for the quarter was $10 8 million and adjusted.
Operating income was $62 million.
Strong top line performance in our patient direct segment was critical to our margin performance during the quarter.
Speaker 2: Strong top line performance in our patient direct segment was critical to our margin performance during the quarter.
Interest expense for the quarter was $41 million, which reflected an increase of $4 9 million as compared to the prior year, primarily due to interest rate increases.
Speaker 2: Interest expense for the quarter was $41 million, which reflected an increase of $4.9 million as compared to the prior year. Primarily due to interest rate increase.
Speaker 2: Gap net loss for the quarter was $28 million, or a loss of 37 cents per common...
GAAP net loss for the quarter was $28 million or a loss of 37 per common share adjusted net income for the quarter amounted to $14 $2 million or <unk> 18 per share adjusted EBITDA in the second quarter was $113 million with a margin of four 4%.
Speaker 2: The adjusted net income for the quarter amounted to $14.2 million or $18 cents per share. The adjusted EBITDA on the second quarter was $113 million with a margin of 4.4%.
Speaker 2: Additionally, and as Ed mentioned, our operating mile realignment program continues to gain momentum, which improved our margin.
Additionally, and as Ed mentioned, our operating model realignment program continues to gain momentum, which improved our margin performance. We remain on track to achieve $30 million of contribution to adjusted operating income in 2023 from this program as well as exiting the year with a $100 million run rate.
Speaker 2: We remain on track to achieve $30 million of contribution to adjusted operating income in 2023 from this program, as well as exiting the year with a $100 million run.
Let's now look at cash flow the balance sheet and our capital structure in the second quarter, we generated significant operating cash flow of $313 million inclusive of $150 million in net proceeds from <unk> sales.
Speaker 2: Let's now look at cash flow, the balance sheet, and our capital structure.
Speaker 2: In the second quarter, we generated significant operating cash flow of $313 million. Inclusive of $150 million in net proceeds from AR.
Speaker 2: During the quarter, it became economically attractive for us to enter into a program that allows us from time to time to sell receivables related to a handful of customers across the
During the quarter and became economically attractive for us to enter into a program that allows us from time to time to sell receivables related to a handful of customers across the businesses also as you've seen over the trailing few quarters. Our business is capable of producing strong levels of operating cash flow.
Speaker 2: Also, as you've seen over the trailing few quarters, our business is capable of producing strong levels of operating.
Speaker 2: which is driven by margins within patient direct, followed by cash conversion and rigid working capital management across all visits.
Which is driven by margins within patient direct followed by cash conversion and rigid working capital management across all business lines.
Speaker 2: Due to the level of cash from operations, we reduced total debt by $49 million, and net debt by $269 million during the second quarter. We have built invested cash balances, much of which is earmarked toward our 2024 series note.
Due to the level of cash from operations, we reduced total debt by $49 million and net debt by $269 million during the second quarter.
We have built invested cash balances much of which is earmarked towards 2024 series notes.
Speaker 2: Presently, these investments are out earning the coupon on much of our near term and longer dated debt.
Presently these investments are out, earning the coupon on much of our near term and longer dated debt.
Speaker 2: It's also worth noting that we have reduced total debt by $309 million since the finalization of the app react.
It's also worth noting that we have reduced total debt by $309 million since the finalization of the <unk> acquisition at the end of Q2, our total debt was $2 3 billion and net debt was $2 billion.
Speaker 2: At the end of Q2, our total debt was $2.3 billion, and that debt was $2 billion. Delevering...
Deleveraging remains a top priority.
Speaker 2: With another quarter behind us, we were able to narrow our guidance for 2023. We are revising our revenue, adjusted EBITDA and adjusted EPS outlook to reflect our confidence in patient direct in the operating model re-alignment program.
With another quarter behind us we are able to narrow our guidance for 2023, we are revising our revenue adjusted EBITDA and adjusted EPS outlook to reflect our confidence in patient direct and the operating model realignment program balance against the lack of visibility and caution we have around S&P product sales in the back half of the year.
Speaker 2: Balance against the lack of visibility and caution we have around S&IP product sales in the backup.
Speaker 2: The new details are available in our press release from earlier this morning, and the supplemental slide on the investor relations portion of our website.
The new details are available in our press release from earlier this morning, and the supplemental slide on the Investor Relations portion of our website.
Speaker 2: As we think about the cadence for the second half of the year, and consistent with our expectation that our earnings will be heavily weighted to the back end of the year, it's reasonable to expect that Q4 earnings could be roughly twice that of Q3 due to traditional seed and moreover timing of the realization of the operating model re-alignment benefit.
As we think about the cadence for the second half of the year and consistent with our expectation that our earnings will be heavily weighted to the back end of the year. It's reasonable to expect that Q4 earnings could be roughly twice that of Q3 due to traditional seasonality and Moreover, timing of the realization of the operating model realignment benefits.
We are heavily focused on delivering savings on time and in full as well as driving the performance of the business.
Speaker 2: We are heavily focused on delivering savings on time and in full, as well as driving the performance of the business.
Speaker 2: I'm for turning the call over to the operator for Q&A. I'd like to thank all of our dedicated teammates for their efforts in enabling Owens and Miner to provide the highest quality of service to our customers.
Before turning the call over to the operator for Q&A I'd like to thank all of our dedicated teammates for their efforts and enabling Owens <unk> minor to provide the highest quality of service to our customers with.
Speaker 2: With that, I'll now turn the call over to the operator for questions. Operator.
With that I'll now turn the call over to the operator for questions operator.
Speaker 3: Thank you. At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. We'll go first to Kevin Kelly.
Thank you at this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
We will go first to Kevin Kelly Endo at UBS.
Hey, guys.
Speaker 4: Hey guys, oh, I'm gonna collapse on pack here, but I guess the start
The last one pack here, but I.
I guess to start turning to help us.
Speaker 4: bridge first half, the second half, third quarter to fourth quarter in terms of what is embedded in the expectations to go from in essence at the midpoint 222 million of EBITDA to 333 million in the second half. Like what needs to happen in your opinion to get there from now third quarter, fourth quarter, I get part of it is the cost savings plan but operationally.
Bridge first half the second half third quarter to fourth quarter in terms of.
What is embedded in the expectations go from in essence at the midpoint $222 million of EBITDA at $333 million in the second half like what needs what needs to happen in your opinion to to get there from now third quarter fourth quarter I get part of it is the cost saves.
<unk> plan, but operationally.
Speaker 4: ordering patterns, what do you need to see to get comfortable that you can achieve this.
Ordering patterns what needs to what do you need to see to get comfortable that you can achieve this.
Speaker 5: Sure, let me break it on a different component. Let me start first with patient direct. So patient direct has normal seasonality in their business. And that's historically shown if you look at.
Sure, let me break it out in a different components, let me start first with patient direct so a patient direct has normal seasonality in their business and that has historically shown if you look at.
Speaker 5: You know, the, the, what the performance was last year and patient direct as patients hit their deductibles, you know, the increase in the demand for products escalates at a pretty rapid pace in the back half of the year. In addition to that, just the tradition of the continued strong performance in our patient direct business. So that's the normal traditional ramp there. Can we expect that to continue at the pace, not accelerate from where it's been historically?
What the performance was last year and patient direct as patients hit their deductibles and the increase in the demand for products escalates at a pretty rapid pace in the back half of the year. In addition to that just that tradition of this continued strong performance in our patient direct business. So that's the normal traditional ramp there and we expect that to continue at the pace if not accelerate.
<unk> from where it's been historically.
Speaker 5: Then in the second aspect of it is you're absolutely right in the operating model realignment in the four major workstream that we have. You know, a lot of that work has already been done and locked in. It's just it needs to work its way through the system. So take sourcing, for example.
And then in the second aspect of it is you're absolutely right in the operating model realignment in the four major work streams that we have a lot of that work has already been done and locked in it's just it needs to work its way through the system. So take sourcing for example, while we've gone out and been able to source product and raw material at a lower price.
Speaker 5: While we've gone on and been able to source product in raw material at a lower price, those products, raw material, are working their way through, they inventory it through the systems, which those will end up coming into place in the back half of the year. I think another example in that would be the way we've structured our organization and from our network optimization, those actions have taken place. So those are locked in and going into the marketplace.
Those products raw material are working their way through the inventory through the systems, which those will end up coming into place in the back half of the year and I think another example, and that would be the way we've structured our organization and from our network optimization. Those actions have taken place. So those are locked in and going going into the marketplace.
Speaker 5: You know, the next thing is really the continued reduction of deaths. You know, we've done a really good job on taking debt down, which is actually going to help drive, you know, that impact. Not so much on ebitop, but on the adjusted operating income.
The next thing is really the continued reduction of debt. We've done a really good job on taking debt down which is actually going to help drive that impact not so much on EBITDA, but on the adjusted operating income than in our medical distribution segment. The continuation of the growth in that segment and the fixed cost will leverage we're getting in it and lastly.
Speaker 5: So then in our medical distribution segment, you know, the continuation of the growth in that segment and the fixed costs will leverage we're getting in it.
Speaker 5: And lastly, which is really the toughest one for us to predict in full transparency is the expectation of improvement within the demand for our products within our product products, global products division, specifically PPE.
Is really the toughest one for us to predict and in full transparency is the expectation of improvement within the demand for our products within our product products Global products Division, specifically PPE. What I can say is we have seen sequential or month over month improvement in the dim.
Speaker 5: What I can say is we have seen sequential or month over month improvement in the demand for those products as the years
Manned for those products as the year has progressed, but look it's still difficult to put your finger exactly on it or put a pin on it because.
Speaker 5: But look, it's still difficult to put your finger exactly on it or put a pin on it because what the customers have in safety stock in addition to that, I don't want to miss the fact that you've got major distributors out there that carry our product and distribute them that have significant excess stock both of our product as well as other brands in there. So that's why we're trying to be cautious, that last component. Look, the first three or four I talked about.
What the customers have in safety stock. In addition to that I don't want to Miss the fact that <unk> got major distributors out there that carry our product and distribute them that have significant excess stock both of our product as well as other brands in there. So that's why we're trying to be cautious that last component look the first three or four I talked about.
Speaker 5: They're pretty much locked in and we just need to continue to execute on those. And then the one at the end is the one that's really difficult to put a pin on, which is why we're trying to be a little bit more cautious from the back out.
Pretty much locked in and we just need to continue to execute on those.
And then the one one at the end is the one that's really difficult to put a pin on which is why we're trying to be a little bit more cautious on the back half.
Yeah.
Can I ask a follow up.
Speaker 4: Can I ask a follow up, um, when it comes to PPE, can you maybe talk about where the pricing is in the marketplace and maybe, maybe more importantly than pricing, how does, how is your competitive positioning in your opinion?
When it comes to PPE can you maybe talk about where the pricing is in the marketplace.
Maybe more importantly than pricing.
How is your competitive positioning in your opinion.
Speaker 4: changed, if at all, over the last six months or nine months as these inventories are built and are now coming down? Are you seeing any additional competitive pressures from sourcing outside of the United States or anything else? Just help us sort of understand how the market dynamics are playing out for you, in your opinion.
<unk> if at all over the last six months or nine months as these inventories are built and are now coming down are you seeing.
Any additional competitive pressures from sourcing outside of the United States or anything else just help us sort of understand what how the market dynamics are playing out for you in your opinion, yes.
Speaker 5: Yeah, in my view, I think we've seen prices stabilize. We saw a rapid decline in price in 2022, but through 23 here, they somewhat, you know, I would say in essence they stabilized, you know, and so that's where I would say they are right now.
Yes, My view I think we've seen prices stabilize we saw a rapid decline in price in 2022.
But through 'twenty three here, they somewhat I would say in essence they stabilized.
And so that's why I would say they are right now.
Okay.
Speaker 4: And just from a positioning perspective, do you feel like in terms of share or in the reordering that you're seeing, is it as you're expecting in terms of your share of that? Or can you share or lose share? No, the mix hasn't changed.
And just from a positioning perspective do you feel like in terms of share or.
Reordering that Youre seeing is it as you are expecting in terms of your share of that or yes, the making sure that the.
<unk> Hasnt changed.
Okay.
Great.
Thank you guys.
Yeah.
We will take our next question from Michael Cherny of Bank of America.
Speaker 3: We'll take our next question from Michael Turnie at Bank of America.
Speaker 6: Thanks so much for taking the question. Maybe if I can follow up a bit there, obviously a lot of moving pieces both within your control and without, maybe just...
Thanks, so much for taking the question, maybe if I can follow up a bit there.
Obviously, a lot of moving pieces both within your control without can you maybe just give us some sense on a risk weighting the various components as you build that back half ramp I know you've been adamant about the ramp over the course of the year. It seems like relative to at least where consensus is that the four 3% to 40 jump opsal steeper so curious how.
Speaker 6: Give us some sense on risk weighting the various components as you build that that cap ramp. I know you've been adding in about the ramp over the course of the year. It seems like relative to at least where consensus is that the 432 to 4K jump-off is a little steeper. So curious how we think about where you have the high degree of visibility, where you think there's still items that are out of your control that your weight and make sure comes through, especially maybe on...
Think about where you have the highest degree of visibility where you think theres still items that are out of your control that you're waiting to make sure come through especially maybe on <unk>.
Pricing for one.
Speaker 5: Sure, yeah, I think the clearest line of visibility is in our operating model realignment savings.
Sure Yeah, I think the clear line of visibility is in our operating model realignment savings.
Speaker 5: You know, like I said, those are those are completely locked in, you know, and then I think they're high level of confidence also in the seasonality in this to continue strong performance across all the segments and patient direct where I believe we continue to continue to win business and continue to generate operating leverage in that business.
Like I said those are those are completely locked in.
And then I think there is a high level of confidence also in the seasonality in this the continued strong performance across all the segments and patient direct where I believe we continue to continue to win business and continue to.
Generate operating leverage in that business I think in our medical distribution business. We continue to have momentum with growth. So a higher level of confidence there and I think I was trying to be clear that the one area that is still difficult to put an exact pin on it is windows destocking and when I say destocking, not just had a customer but at all.
Speaker 5: You know, I think in our medical distribution business, we continue to have momentum with growth, so, you know, higher level of confidence there. And I think I was trying to be clear that, you know, the one area that's still difficult to put, you know, an exact pin on it is.
Speaker 5: You know, when does the stocking and when I say the stocking, not just had a customer, but at our at other distributors that sell our product because they bought a tremendous amount of ours as well as other product in the market and that flushing through. You know, that's the 1 variable that again, we don't have complete control over as well as, you know.
At other distributors that sell our product because they bought a tremendous amount of ours as well as other product in the market and that flushing through that's the one variable that again, we don't have complete control over.
As well as.
Speaker 5: 100% visibility on. So, you know, waiting, and that's the one I would put as the risk factor the other four or so, you know, pretty, you know, very high level of confidence in them.
100% visibility on so waiting and Thats. The one I would put as a risk factor. The other four so pretty very high level of confidence in them.
Speaker 6: I guess on that last risk factor, sorry the harp just on the most negative
I guess on that last risk factor, sorry to harp on the most.
Negative part but.
Speaker 6: How do you think about the proof points you're looking for just because no one could have predicted the pandemic, no one could have predicted the rollercoaster that we've seen on demand on PPE. You went out of your way to service your customers incredibly well in terms of delivering what was needed. We've all been wondering to figure out when are we going to get to the new normal and what that is and so especially with your look into not just your direct customers but also the distribution side what are the proof points you're looking for to call success.
How do you think about the proof points, you're looking for just because.
No one could have predicted the pandemic no-code predicted the roller coaster that we've seen on demand on PB. You went out of your way to service your customers incredibly well in terms of delivering what was needed. We've all been wondering to figure out when are we going to get to the new normal and what that is and so, especially when you look into not just your direct customers also the distributions.
Side, what are the proof points you are looking for to call success call victory there yes.
Speaker 5: Yeah, so the first points we're looking at is comparison back to 2019 demand. That was kind of a called that a steady state program. And then within our existing customers, we're starting to see some customers that we know that again, customers where we distribute to them and they use our products.
Yes, so the proof points. We're looking at is comparison back to 2019 demand and that was kind of called out a steady state program.
And then within our existing customers.
We're starting to see some customers that we know that again customers, where we distribute to them and they use our products.
Speaker 5: We're measuring those customers and we're starting to see some of those customers back to pre-COVID levels of ordering. So that's telling us that they burned through that level of inventory. And in the other side is really taking a hard look at tracing to other distributors of what they're doing. So those are some of the key factors. And again, we have seen improvement month over month, you know, but, you know, to get it overall back to the improvement that fluctuated from month to month. They haven't been out of steady state. I'll put it that way.
We're measuring those customers and we're starting to see some of those customers back to pre COVID-19 levels of ordering so thats, telling us that they burn through that level of inventory and then the other side is really taking a hard look at tracings to other distributors as of what Theyre doing so those are some of the key factors and again, we have seen improvement month over month.
But to get it overall back to is that the improvements are fluctuated from from month to month. They haven't been on a steady state I'll put it that way.
Thank you.
We'll take our next question from a J rice at credit Suisse.
Speaker 3: Take our next question from A.J. Rice at Credit.
Alright, Thank you Jonathan young on for Andrew Here, I guess, if we think about the range of.
Speaker 7: Hi, thanks. You have Jonathan Young on for Edge right now. I guess if we think about the range of your your ebit dev guidance and obviously the the biggest factor is the destocking component, I guess
That guidance.
The big risk factor is the Destocking component I guess, how much more does it how much more does need to improve for you to come to the midpoint and then.
Speaker 7: How much more does it need to improve for you to come to the midpoint? And then at the bottom end of the range, what is kind of assumed there in terms of what happens under the stocking trend? Is it similar to what you're experiencing now or is there some improvement? Just trying to get flavor of the risk factor of from the bottom end top and the batty, but the guy.
At the bottom end of the range what is kind of assumed there in terms of.
What happens on the Destocking trend is it similar to what we're experiencing now.
Some improved interest China playbook to risk factor.
From the bottom and top end of that EBITDA guidance.
Speaker 5: Sure, from a risk factor standpoint, here's a way I would summarize it. The weight, the material is significant. Majority of our EVA doctor this year is coming out of the patient's direct study.
Sure from a risk factor standpoint is the way I would summarize it the wait.
The material is significant majority of our EBITDA for this year is coming out of the patient direct segment.
Speaker 5: You know, so if you obviously you go back and if you look at the first and second quarter of the adjusted EBITDA generated in our patient direct segment.
Obviously, you go back and if you look at the first and second quarter of adjusted EBITDA generated in our patient direct segment and expect the ramp in the back half of the year, that's where the bulk of that EBITDA is going to be coming from for the full year. Then you can think about just a small amount of the operating model that has been in the first quarter and then.
Speaker 5: and expect a ramp in the back half of the year. That's where the bulk of that EBITDA is going to be coming from for the full year.
Speaker 5: You know, then you can think about just the small amount of the operating model that's been in the first quarter and then this person's second quarter with the bulk of that coming in the third and fourth quarter, that'll hit more in the patient, I'm sorry, product and healthcare service is tied. So, look, from a risk factor on that, we've got, it is heavily weighted, significantly weighted towards patient direct with.
And this first and second quarter with the bulk of that coming in the third and fourth quarter that will hit more in the patient or I'm, sorry product in health care services side. So from a risk factor on that we've got it is heavily weighted significantly weighted towards patient direct with the bulk of the stuff in product in health care service coming from some seasonality.
Speaker 5: You know, the bulk of the stuff in product and healthcare service coming from some seasonality, but the true benefit of the of our operating model real.
But the true benefit of the payout.
Of our operating model realignment.
Speaker 5: So I guess the short answer to the risk it is, is there's little of it coming from the product and healthcare services in the back half of the year compared to what's coming from the other parts of the business. Sure.
Because I guess the short answer is that that does de risk. It is theres a little of it coming from the product in health care services in the back half of the year compared to what's coming from the other parts of the business.
And I would say and then some.
Yes.
Speaker 2: Sorry, I was gonna say just to a lesser extent, we do think that, you know, lifeoants.com will be factors in terms of where we land within that.
Sorry, I was going to say just to a lesser extent, we do think that LIFO and stock comp will be factors in terms of where we land within that range.
Okay. That's helpful.
Speaker 7: Okay, that's helpful. And then you mentioned that some customers are improving their purchasing patterns.
And then yeah.
And that some customers are.
Improving their purchasing patterns I guess.
Speaker 7: from it sounds like they're burning too, but what about the distributors? Do you have any sense of how much perhaps excess inventory they have? And then are they, are they, you know, purchasing other competitive products or, you know, kind of how is that trend looking and how much months stock do they all have on hand relative to what you would normally think that they would.
It sounds like they're burning too, but what about the distributors that do you have any sense of how much.
Perhaps excess inventory they have and then are they.
Are they.
What you're seeing other competitor products or kind of how is that looking at how much how much months.
Do they all have on hand.
I wanted to what you would normally think that designation.
Speaker 5: Yeah, I think that's tough because getting that data is difficult. You know, but we believe that, you know, look, we look at ourselves as a proxy. And we know we've done a really good job in the last quarter of taking inventory down.
Yes, I think that's tough because getting that data is difficult.
But we believe that look we look at ourselves as a proxy.
And we know we've done a really good job in the last quarter of taking inventory down.
Speaker 5: which turn around and help us generate tremendous cash flow for the quarter. So we know that we believe that if we're using ourselves as a proxy, we know we're thinking they have similar and we've probably been more highly focused on moving our inventory out specifically our products.
It's turned around and helped us generate tremendous cash flow for the quarter. So we know that we believe that if we're using ourselves as a proxy we know we're thinking they have similar.
And we've probably been higher more highly focused on moving our inventory out specifically our products to get them to get it to get it to turn so short answer here is we don't have direct visibility to but we can buy a proxy look at what we have and believe that across the board whether it's the four five or six distributors.
Speaker 5: to get it to turn. So, you know, the short answer here is, you know, we don't have direct visibility to it, but we can by proxy look at what we have and believe that across the board, whether it's the 4, 5, or 6 distributors that are key distributors to us, we believe they have similar, if not more than what we would have in stock. Okay, thanks.
Our key distributors to us we believe they have similar if not more than what we would have in stock.
Okay. Thanks.
Yes.
Next we'll go to John Stanfill at J P. Morgan.
Good morning, this is John on for Lisa.
Speaker 7: Good morning, this is John on for Lisa. Just a question going back to some of the commentary around sourcing and demand management. Sounds like you're having positive impacts already, as you said, but I noticed, you know, you kind of adjusted the commodity price assumptions in the guidance from kind of stable to...
Just a question going back to some of the commentary around sourcing and demand management.
It sounds like Youre, having positive impacts already as you said, but I noticed.
You have adjusted the commodity price assumptions in the guidance from kind of stable to improving just the stable is there anything more than just like added visibility on kind of the input side has changed for you through the quarter or kind of what's driving your cost outlook for the back half. Thank you.
Speaker 7: Is there anything more than just like added visibility on kind of the input sides that's changed for you through the quarter or Or kind of what's driving your cost outlook for the back
Yeah, Thanks, John obviously, and our products Division in particular, we keep a very close eye on commodities and how they impact things.
Speaker 2: Yeah, thanks John . Obviously, in our products division in particular, we keep a very close eye on commodities and how they impact things. I would say that the update here was just based on a broad look across trends.
I would say that.
The update here was just based on a broad look across trends in.
Speaker 2: I think a judgment that it's probably more stable than stable tune.
I think a judgment that it's probably more stable than stable to improving.
Okay, Great and then just I know, we had some discussion last quarter around home respiratory.
Speaker 7: Okay, great. And then just I know we had some discussion last quarter around home respiratory potentially being a little below kind of the average within patient direct
Entry being able to below kind of the average within patient direct how that trend during the quarter and I guess are you seeing any any changes in patterns there.
Speaker 5: Yes, at a high level in a patient-direct business, you know, again, this can't be more pleased that we had double-digit growth overall in that segment.
Yes at a high level in a patient derived business again, just can't be more pleased that we had double digit growth overall in that segment.
Speaker 5: And that's coming off of some pretty tough comps where we had double digit growth on a pro-form and basis, last year in that respect.
That's coming off of some pretty tough comps. So we had double digit growth on a pro forma basis last year in that segment. The one category coming off of Covid as home respiratory that is still not growing at the rate. We wanted to it has improved sequentially quarter over quarter. The other aspect of what we have with the home respiratory is with the <unk>.
Speaker 5: You know, the one category coming off of COVID, it's home respiratory that is still not growing at the rate we want to do. It has improved sequentially quarter over quarter. You know, the other aspect of what we have with the home respiratory is with the Phillips recall on NIVs and other home respiratory products. You know, it has caused us to actually have to spend more capital to get new machines that are qualified.
Philips recall.
These and other home respiratory products. It has caused us to actually have to spend more capital to get new machines that are that are qualified the long term benefit of that as though we're comfortable that Philips over time is going to get it fixed and we'll get it fixed or going to have we're not going to need to spend the capital because those machines will all be refurbished and ready.
Speaker 5: The long-term benefit of that is, though, we're comfortable that Phillips over time is gonna get it fixed. When we get it fixed, we're gonna have, we're not gonna need to spend the capital because those machines will all be refurbished and ready to go.
To go so I guess in the home respiratory it's still not where we want it to be it is improving as the year has progressed, but again, we've got to look at the other aspects of it were across all of our categories are two major ones being diabetes and CPAP both of them growing in the double digit range overall.
Speaker 5: You know, so I guess in the home respiratory, it's still not where we want it to be. It is improving as the year has progressed.
Speaker 5: But again, we've got to look at the other aspects of it where across all of our categories are two major ones, being diabetes and CPAP, both of them growing in the double-digit range, overall the total segment growing in double-digit, and across the board, whether it's ostomy and cotton and wound care, urology, all those categories continuing to do extremely well in the marketplace.
The total segment growing in double digits and across the board, whether it's ostomy and continence.
<unk> care urology all of those categories continuing to do extremely well in the marketplace.
Great I appreciate the color.
We will go next to Daniel Crosslight at Citi.
Speaker 8: I think it's for taking a question. I want to go back to what's the topic of the day or maybe topic of the year, the PPD stocking. Earlier this year, I think you mentioned around and your conversations with.
Hi, Thanks for taking the question I wanted to go back to what's the I guess the topic.
Topic of the day or maybe top of the year the PPE destocking.
Earlier this year I think you mentioned around in your conversations with health systems.
Speaker 8: around a third of hospitals were working through their inventory, the third still had access and a third of about a year's worth of stuff. What it gets you, if there's been any change to that, and if there's any way to kind of quantify your conversations with hospitals and their PPE stockings.
Around a third of hospitals were working through their inventories of third still had access in the third of about a year's worth of stock.
If theres been any change to that.
If theres any way to kind of quantify your conversations with hospitals and their PPE stocks right now.
Speaker 5: Yeah, all of a say is based on conversations as well as some of the data we looked at, that has gotten slightly better. And again, we've seen that gets slightly better from Q1 to Q2, you know, but it's just, it's that second bucket, those last two thirds.
Yes, all I would say is based on the conversations as well as some of the data we've looked at that has gotten slightly better and again, we've seen that gets slightly better from Q1 to Q2.
But it's just it's there it's that second bucket those last two thirds.
Speaker 5: you know, that, you know, they have excess stock that's less than a year and up to a year on the other side of it, those are the ones that it's slow for those to come down. And again, that's just one component of it. That's just what hospitals have. So we've seen that improve, but we also have the factor and also we've got other channels to the market of our product work. You know, those other channels have excess stock and that's another one that's tough to get your arms around as you look at different data like sales tracing to try to get to where you need to get to on that.
That they have excess stock thats less than a year up to a year on the other side of it those are the ones that it's slow for those to come down and again, that's just one component of it thats just what hospitals have so we've seen that improve but we also have to factor and also we've got other channels to the market of our product work those other channels.
Extra stock and Thats, another one thats tough to get our arms around as you as you look at different data light sales tracings to try to get to where you need to get to on that.
Yes, yes, Okay, and then on the core distribution ex PPE.
Speaker 9: Yeah, yeah. Okay. And then on the core distribution, it seems like that's trending nicely around 10%. Year over year growth this year versus mid single digit. Last quarter.
It seems like that's trending nicely around 10%.
Year over year growth this year versus mid single digit last quarter.
Just curious, what's causing that acceleration in same store.
Speaker 8: Just curious what's causing that acceleration in same store sales flow.
Sales growth.
Speaker 5: I think that's a couple things. I think it's the great service. I was actually out of the customer yesterday where we're running just raw fill rates between 98 and 99%. Some of the industry leading raw fill rates.
And I think there's a couple of things I think it's the great service.
Now with a customer yesterday, where we're running just raw fill rates north between 98%, 99%. So some of the industry, leading raw fill rates and again thats no noise, it's what they order they get what they want when they want and that's one of the things that's driven that I think the other aspect of it has been some of the new win.
Speaker 5: And again, that's no noise. It's what they order. They get what they want when they want. And, you know, that's one of the things that's driven it. I think the other aspect of it, you know, has been some of the new WIN implementations that are starting to take place. And then just better execution in the field. I think those are three of the major factors that are driving that strong performance in the medical distribution division. Got it.
Mentation that are starting to take place and then just better execution in the field I think those are three of the major factors.
That are driving that strong performance in our medical distribution division.
Got it thanks for the color.
We'll go next to Eric Coldwell Baird.
Okay.
Thanks.
Speaker 8: Thanks, Leah. The last one touched on my first question, but again, going back to the distribution growth, either the 5% or the 10% X.
The last one touched on my first question, but again going back to the.
The distribution growth.
Either the 5% or the 10% XP PPE, it's pretty good.
Speaker 8: pretty good, probably better than market trend in hospitals.
Probably better than market trend in hospitals.
Speaker 8: I was hoping you could parse that out, perhaps differently. What component of that growth is new wins versus penetration of existing accounts?
I was hoping you could parse that out perhaps differently.
What what component of that growth is new wins versus penetration of existing accounts, maybe what kind of offset you had from prior period losses, and then if you could sprinkle in some conversation around volumes and pricing outside of PPE that would be helpful as well.
Speaker 8: maybe what kind of offset you had from prior period loss.
Speaker 8: And then if you could sprinkle in some conversation around volumes and pricing outside of PPE that...
Speaker 5: I think at a high level Eric and I know he normally haven't gone into this level of detail, but at a high level, I would think there's a reasonable blend between price and volume. Call it roughly half price, half volume from a broad standpoint. Again, manufacturers, a lot of times they're setting the price with the hospital, we're passing that out with the cost plus. So it's roughly about half and half, I would say if we look at our business.
Yes, I think at a high level, Eric and I know a normally haven't gone into this level of detail, but at a high level I would think there is a reasonable blend between price and volume.
Call it roughly half price half of volume from a broad standpoint.
Ken manufactured a lot of times are setting the price with the hospital, we're passing that on what the cost plus so it's roughly about half and half I would say if we look at our business.
Speaker 5: You know, again, our same store sales is, you know, again, it is driving a significant portion of this, which, you know, when we use it as a proxy for the health of our business and the health of the industry, when we see 10% same store sales, excluding PPE, that tells us we're continuing to expand and gain share, whether that's both through additional services within the customer.
Again, our same store sales as well.
Again, it is driving a significant portion of this.
Which when we use it as a proxy for the health of our business and the health of the industry. When we see 10% same store sales, excluding PPE that tells us we're continuing to expand and gain share whether that's both through additional services within the customer.
Speaker 5: as well as broader portfolio, or with additional products and penetration of the account.
As well as broader portfolio.
With additional products and penetration of the account.
Speaker 5: You know, I would say that's partially offset by some trailing losses. You know, that's having, you know, maybe a couple points of, you know, point or so of impact.
I would say, that's partially offset by some trailing losses, that's having maybe a couple points a point or so of impact and then we've got a point or two of impact of benefit of the new wins that are coming into place right now and we expect that just to continue with momentum, but youre right Eric is.
Speaker 5: And then we've got a, you know, a point or two of impact, the benefits of the new winds that are coming into place right now.
Speaker 5: We expect that just to continue with momentum, but you're right, Eric, is really pleased with the way the revenue growth and medical distribution sales is going, the flat, the 5% growth.
Really pleased with the way the revenue growth in medical distribution sales is going.
Flat, 5% growth just overall, regardless of all the noise in the system.
Speaker 5: just overall, regardless of all the noise in this system, you know, it is really a testament to what the commercial team has done as well as.
Is really a testament to what the commercial team has done as well as.
Speaker 5: you know what we've done from going out and driving significant operation improvements relative to what you know historically has been there for bus and others in the
What we've done from going out and driving significant operational improvements relative to what <unk>.
Historically has been there for bus and others in the industry.
When you cite additional services could you give us a sense of what you're talking about there would that be things like.
Speaker 8: When you cite additional services, could you give us a sense of what you're talking about? There would that be things like kidding programs.
Hitting programs.
Stocking destocking as a service I mean is there any any kind of additional color that you could provide on the additional services opportunities. Yes. Some of the stuffs like I'll give you. An example is outsource logistics.
Speaker 8: stalking, stalking is a service. I mean, is there any kind of additional color that you could provide on the additional services opportunities? Yeah, some of this stuff, I'll give you an example.
Speaker 5: So you may have a device company or another manufacturer that's looking for, the outsourcing logistics and being able to get the product into the hospital. That's one example of where we're starting, we're seeing growth is in our outsource logistics business.
You may have a device company or another manufacturer that's looking for the outsourcing logistics and being able to get the product into the hospital. That's one example of where we're starting we're seeing growth is in our outsource logistics business. So that's I just use that as a single example, but that's an example of a service where we are.
Speaker 5: So that's, I just use that as a single example, but that's an example of a service where we're doing that. You know, and we spent tremendous amount of time in our kidding business, and she did raise that, you know, with our leadership in the operations that spent tremendous amount of time really looking at how do we eliminate cost as well as waste in there and improve service?
Doing that.
And we are we've spent a tremendous amount of time and our kitting business. Since you did raise that with our leadership in the operations have spent tremendous amount of time really looking at how do we eliminate cost as well as waste in their and improve service.
Speaker 5: And we've increased now our service levels to close to 100% of being able to manufacture and get kits out on time. And all that's done right now in the US. So from a service level, it has the ability to get it to the customer's quicker. That's another example of some of the stuff that we're focused on.
And we've increased now our service levels to close to a 100%.
<unk>.
Being able to manufacture and get kits out on time.
All that is done right now in the U S. So from a service level that has the ability to get it to the customer quicker. That's another example of some of the stuff that we're focused on.
Speaker 8: And then if you if I might, what's the in distribution, just core acute care, I guess, as well as any alternate site comments. But what is the landscape for the new business environment today? Is the market is their turn out there? I mean, we've heard it's stabilizing, and there's not as much. But what are you seeing in terms of RFPs or customers, maybe vetting other vendors?
And then.
If I might.
What's the in distribution just.
Core.
Acute care I guess as well as any alternate site comments, but what is the what does the landscape for the new business environment today as the market is there turn out there I mean, we've heard it's stabilizing and theres not as much but what are you seeing in terms of rfps or customers.
Vetting other vendors.
Just big picture on on churn and pipeline expectations.
Speaker 8: Big picture on on on churn and pipeline Expect
Speaker 5: So here's what we've seen. We've seen some big chunky ones that are out right now, you know, where there's opportunity and where we're also in every pension position. You know, the good news is the bulk of our top 10, we were renewed for extended periods of time. I think that was critical to us. But we are seeing a mix right now in some of the large bulky ones.
And so historically, we've seen we've seen some big chunky ones that are out right now.
Where there is opportunity and where we're also in a retention position.
The good news is the bulk of our top 10, we renewed for extended periods of time I think that was critical to us, but we are seeing a mix right now in some of the large bulky ones.
Speaker 5: or large ones, but then also, you know, I think that we're also, there's also the mid and small size customers that are looking for different ways to have a higher level of service, you know, as well as competitive pricing out there.
Our large ones, but then also I think that we're also there is also the mid and small sized customers that are looking for different ways to have a higher level of service as well as competitive pricing out there.
Speaker 5: You know, our pipeline is still strong. You know, we've got a very large pipeline. And if you just think about it in an average, if an average, you know, if an average customer is a three to five year contract, our pipeline should be, you know, billion plus, two billion plus, you know, at any time as we're looking to look at opportunities, as we're looking to find opportunities to win business.
Our pipeline is still strong we've got.
A very large pipeline and if you just think about it in average if an average if an average customers that three to five year contract our pipeline should be 1 billion plus 2 billion plus.
Any time as we're looking to look at is we're looking to find opportunities to win business.
Okay. Thank you very much I appreciate it.
Okay.
Speaker 3: And there are no further questions at this time. I would like to turn the call back over to Ed Paseka for closing remarks.
And there are no further questions at this time I would like to turn the call back over to Ed <unk> for closing remarks.
Speaker 5: So I want to thank everyone for joining us on the call today. You know, the participation of the of everybody on this call is extremely appreciated as well as we value the interest in the company. You know, I think we've done a really good job sharing the progress that we've made as well as what we're going to continue to do in the coming quarters. I look forward to continuing to share that progress in the coming quarters and also at our investor day in December in Boston. Again, thank you for your time and attention today and look forward to talking to you soon.
Thank you everyone for joining us on the call today.
The participation of everybody on this call is extremely appreciated as well as with value of the interest in the company.
I think we've done a really good job sharing the progress that we've made as well as what we're going to continue to do in the coming quarters I look forward to continuing to share that progress in the coming quarters and also at our Investor Day in December in Boston again. Thank you for your time and attention today and look forward to talking to you soon.
And this concludes today's conference call. Thank you for your participation you may now disconnect.
Speaker 3: And this concludes today's conference call. Thank you for your participation. You may now just connect.
Okay.
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Yes.
Thank you.
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