Q3 2023 CONMED Corp Earnings Call
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Thank you for standing by and welcome to Con Meds Q3 fiscal year 'twenty to 'twenty three earnings call.
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Before the conference call begins let me remind you that during this call management will be making comments and statements regarding its financial outlook. Its plans and objectives. These statements represents the forward looking statements that involve risks and uncertainties as those terms are defined under the federal Securities law.
Laws.
Investors are cautioned that any such forward looking statements are not guarantees of future events performance or results.
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The company's actual results may differ materially from its current.
Expectations. Please refer to the risks and other uncertainties disclosed under the forward looking information in today's press release as well as the company's SEC filings for more details on the risks and uncertainties that may cause actual results to differ materially.
The company disclaims any obligation to update any forward looking statements that may be disclosed during this call except as may be required by applicable law.
You will also hear management refer to non-GAAP or adjusted measurements during this discussion.
While these figures are not substitute for GAAP measurements management uses these figures to aid in monitoring the company's ongoing financial performance from quarter to quarter, and even year to year on a regular basis and for benchmarking against other medical technology companies.
Adjusted net income and adjusted earnings per share measure the income of the company excluding credits or charges that are considered by the company to be special or outside of its normal ongoing operations.
These adjusting items are specified in the reconciliation supporting the company's earnings release is posted to the company's website.
With these required announcements completed I will turn the call over to Curt Hartman <unk> chair of the board President and Chief Executive Officer for opening remarks, Mr. Hartman.
Thank you Latif and good afternoon, and thank you for joining us for Con Meds third quarter 2023 earnings call.
With me on the call is Todd Garner Executive Vice President and Chief Financial Officer.
Our plan is to share with you our third quarter results and updated guidance and then open the call to your questions.
I'll start by saying, we're very pleased with our team's performance in the third quarter and as important year to date.
Sales for the quarter were $304 6 million, representing a year over year increase of 10, 7% as reported and an increase of 11, 9% in constant currency.
On an organic constant currency basis sales growth finished at 11, 5%.
I would remind everyone that in early August the <unk> acquisition reached its one year anniversary.
We remain very encouraged after one year with the <unk> product offering and the cadence of market acceptance that we have seen.
Our priorities remain the introduction of a delivery system for M. A S rotator cuff repair.
International regulatory and channel expansion medical education and clinical studies.
Making solid progress in all of these areas.
Overall, our performance this quarter highlights the benefits of our diversified portfolio for products to geographies.
Every business and every geography are not always linearly predictable quarter after quarter.
The benefit of diversification is it one way or another.
Another flows and we saw that dynamic deliver a very healthy Q3, 2023 with double digit organic growth.
From an earnings perspective during the third quarter, our GAAP net income totaled $15 8 million.
This compares to $46 2 million in the third quarter of 2022 and represents a decline of 65, 7% <unk>.
Excluding special items that affected comparability, our adjusted net income of $28 4 million increased 19, 5% year over year and our adjusted diluted net earnings per share of 90 cents increased 16, 9% year over year.
At a macro level, the new cycle has been challenging and global events unsettling. In addition, there being a lot of noise in the med Tech markets.
Our results today are indicative of our ongoing focus on providing innovations innovative solutions to our customers around the world. So they can treat their patients.
The underlying surgical specialties in markets that we serve are healthy and health care staffing levels continue to improve.
In summary, I'm very pleased with the focus and the results delivered in the quarter and year to date and confident that we will finish 2023 in great shape and with positive momentum to start the new year.
For the attorney before turning the call over to Todd I would like to Craig quick moment to express our condolences upon hearing of the tragic and way too early passing of Matt Michelle.
To express our sincere condolences to Michele family and the Keybanc families I'll now turn the call over to Todd.
Thank you Kurt.
Knowing that in his dogged curiosity. It made me smile to think that maybe he got access to the med Tech results before the rest of you.
Sure.
All sales growth numbers I reference today will be given in constant currency. The reconciliation to GAAP numbers is included in our press release as usual we have included an investor deck on our website.
Summarizes the results of the quarter and our updated guidance.
Sure.
For the third quarter of 2023, our total sales increased 11, 9%.
Organic basis revenue grew 11.5%.
As a reminder, we anniversaried the bio Rad acquisition on August 9th.
The way our calendar fell Q3 had two fewer selling days compared to the prior year quarter.
For Q3, our sales in the U S increased nine 5% versus the prior year quarter and our international sales grew 15, 1%.
Worldwide Orthopedics revenue grew six 4% in the third quarter.
In the U S. Orthopedic sales grew one 3% and internationally orthopedic sales increased nine 7%.
Enter bones and <unk>, both performed well during the quarter.
However, we continue to experience supply constraints on our legacy orthopedic business.
In addition to those issues during Q3, our allograft tissue partner MTF and.
Informed us of an industry wide reagent supply disruption that will linger into Q4.
Those combined constraints will have an impact on revenue and gross margins in Q4, 2023, but we expect supply to continue to improve and be back to normal by the first quarter of 2024.
Total worldwide General surgery revenue increased 16.0% in the quarter.
U S General surgery revenue grew 12, 9%, while internationally general surgery revenue increased 23, 8%.
As Curt said the benefit of our diversified portfolio was on full display this quarter delivering healthy double digit organic growth for con Ed.
Now, let's move to the expense side of the income statement, we will discuss expenses and profitability on the third quarter, excluding special items, which include charges for acquisitions and contingent consideration amortization of intangible assets and amortization of deferred financing fees net of tax.
Adjusted gross margin for the third quarter was 55, 9% flat compared to a year ago, and 150 basis points better sequentially consistent with our prior guidance.
When we guided Q3 I also projected that Q4 margins should improve again sequentially at least 100 basis points.
We still expect sequential improvement in Q4 gross margins, but due to the supply disruptions I just talked about we now expect that improvement to be less than 100 basis points sequentially, but well above gross margins from Q4 a year ago.
We remain committed to having gross margins around 60% by the end of 2025.
Research and development expense for the third quarter was four 1% of sales 50 basis points lower than the prior year quarter.
Third quarter adjusted SG&A expenses were 37, 7% of sales consistent with a year ago.
On an adjusted basis interest expense was $8 $5 million in the third quarter.
The adjusted effective tax rate in Q3 was 28% taxes came in lower than expected principally due to finalizing our federal tax return.
We still expect the tax rate to be around 25% going forward.
Yes.
Third quarter GAAP net income was $15 8 million. This compares to GAAP net income of $46 $2 million in Q3 of 2022.
GAAP earnings per diluted share were <unk> 50, this quarter compared to $1 48, a year ago, excluding the.
The impact of special items discussed earlier in the third quarter, we reported adjusted net income of $28 $4 million, an increase of 19, 5% compared to the third quarter of 2022.
Our Q3 adjusted diluted net earnings per share were <unk> 90, and.
An increase of 16, 9% compared to the prior year quarter.
Turning to the balance sheet, our cash balance at the end of the quarter was $35 million compared to $27 $8 million as of June 30th.
Accounts receivable days as of September 30 were 68 days compared to 65 at the end of Q2 <unk>.
Inventory days at quarter end were 215 compared to 200 at June 30th.
Long term debt at the end of the quarter was $942 $2 million versus 971 $5 million as of June 30.
Our leverage ratio at September 30th was four eight times.
We continue to expect our leverage ratio to be below $4. Two five times by the end of the year.
Cash flow provided from operations in the quarter was $46 $1 million compared to cash flow from operations of $25 $9 million in the third quarter of 2022.
Capital expenditures in the third quarter were $5 $4 million compared to $6 $7 million a year ago.
Now, let's turn to financial guidance.
For the full year, we now expect reported revenue to be between $1 240 billion and $1 260 billion compared to our previous guidance range of one 230 billion to $1 260 billion.
With no material change to the expected currency impact on the year.
We expect full year adjusted EPS in 2023 to be between $3 45, and $3 55.
Compared to our previous range of $3 40, and $3 55.
As Kurt said, we are pleased with our performance through the first nine months and are focused on executing a strong finish to the year, we remain confident in our ability to deliver innovation to our customers, while driving above market growth and profitability over the long term.
And with that we'd like to open the call to your questions and I'll hand, it back to Latif.
Thank you as a reminder to ask a question you will need to press star one on your telephone if you've not already to remove yourself from the queue. You May Press Star. One again again, you will be limited to one question and one follow up then return to the queue.
Please standby, while we compile the Q&A roster.
Our first question.
It comes from the line of Vik Chopra of Wells Fargo.
Hey, good afternoon, thanks for taking the questions and congrats on a great quarter I have two.
First maybe on the guidance.
Talk about some of the factors that will get you to the low versus the high end of the guidance.
And then I had a follow up please.
Yes.
Basically kept the high where we had it a quarter ago, we had a we.
We have a small beat on the top.
And.
As Kurt talked about kind of all the noise geopolitically internationally, we've got.
This supply disruption thats, just marginally more than it was.
A few months ago. So I think we felt really good about the performance in Q3, I think we still see Q4, largely how we did.
A quarter ago, and so we brought up the bottom end of the guide, but essentially kept the full year.
The same just recognizing that the strong performance in Q3 brings up the bottom end of that range that we had 90 days ago.
And on EPS similar we had some tax benefits in this quarter that helped us we still see the year playing out pretty much like we did again raising the bottom end of the full year guide.
By a little less than the beat but.
I think we still feel like the year shaping up pretty much the same as we did three months ago and are happy with the performance through the first nine months.
Great and then my follow up question.
I'm not sure. If you said this but did buffalo filter and <unk> grow over 20% combined.
In Q3, and just maybe talk about your expectations for the fourth quarter and any color on 2024th you can thank you.
Yeah, well, we're certainly not talking about 2024 today.
Let me, let me try and be as clear as I can on this Buffalo Air sale did very well again, we're definitely growing at that 20% range that we've talked about for and we've been doing that all year.
We are not going to talk about specific growth.
Product lines and that and the nature of that we have in the past when we I'll remind you we started giving that level of disclosure and the pandemic. When there was large uncertainty about.
How.
How continental was going to do given our size given the challenges with the global pandemic and so we called out those two really strong growth drivers that we felt would be very resistant and and durable and sustainable even through the uncertainties of the <unk>.
And downs of those years that we went through.
So we felt like that was important disclosure at the time, we were accurate and true and those those product lines did provide that level of growth through that period.
We have since added more high growth products to the portfolio.
And obviously, we're focused on all of our portfolio trying to get at all to grow above market. So this has been a big.
And we will no longer be talking about specific growth rates of specific product lines.
As we move into 2024.
Thank you.
Question.
Comes from Robbie Marcus of Jpmorgan.
Oh, great. Thanks for taking the question congrats on a good quarter.
Thanks, I wanted to.
Unless plenty question on the future here, but.
You've talked at least about.
About 150 basis points of gross margin expansion next year around 250 bps and 25 with a path to 60% by the end of 2025 Street is a little bit lower than that so I thought it'd be helpful. Just to refresh us on the drivers in your confidence levels.
And how we think about that translating into operating margin expansion I, assuming it's even greater than the gross margin.
Yes, you are correct Ravi operating margin would we expect to get SG&A leverage during that.
Time as well so operating margins should grow a little better than gross margin we remained committed.
To that 60% level and in that kind of timeframe, we'll update more specifically as we give guidance in January I think thats, probably the more relevant time to do any sort of refresh but the.
To update you on the thesis and why do I feel good about that is really the mix of our business right.
All the things that are growing faster and all the things all the product lines that are getting our resources through R&D and through acquisition.
All come at higher growth than the company average and higher margin than the company average and so that mix tailwind is real has actually been manifesting itself and helped us offset a lot of the inflationary pressures over the last few years.
And the logic is that is if the cost could stabilize which we are seeing then that mix tailwind that we've actually been experiencing for the last few years, we will now start to show through in the P&L.
And I would just remind you that.
<unk>.
Our latest two acquisitions into billings and <unk>, both are north of 80% gross margins and those have been relatively small contributors to that mix tailwind so far and are only growing in impact and contribution so.
As they grow as the revenue part of that those businesses grow. So we feel very good about the mix tailwind of the business our ability to <unk>.
Improve our cost.
Position and.
And have margins approach that 60% level by the end of 2025 as we've said before.
Great and I haven't been able to check the filings yet I don't think it's out but.
Should we be thinking about free cash flow for this year and beyond.
You know what.
Should it probably ended up for 'twenty three now gone Florida.
The rate free cash flow conversion rate to think about combat.
A lot.
Yeah, we were so far this year, we guided the year at about we said 130 of operating in the Capex would be around $20 million. So.
Somewhere in that $110 million range I think is a reasonable expectation for 2023 and as we move forward that should grow with earnings right. So.
We would expect that just to continue to grow with the growth of the company and and maintain that kind of rate.
Relationship with earnings that we've had.
Thank you our next question.
Comes from Rick Wise of Stifel.
Good afternoon to you both.
Maybe starting off with the U S ortho business and the allograft.
Lack of.
Availability.
Can you just expand that a little bit.
And I'm curious to hear.
What happens to the products and procedures that might have happened are they.
In some way shape or form delayed.
So when when you get access to on a product you want.
A little bit of a backlog there and just how confident are you.
<unk>.
As you look ahead to the fourth quarter current.
But that gets.
Resolved and you can get back to I think in.
Sort of.
Mid teens U S ortho growth right, if I'm looking back historically correctly.
Yes.
The issue at hand, which impacted the entire tissue processing industry was the availability of a reagent.
That is used in the sterile processing and.
The overall processing of the tissue and there was a supply constraint on that so everybody in the industry felt this constraint and our current understanding is that we'll remediate itself sometime in the fourth quarter.
The question to the procedures.
I don't have a great answer on that one I think in some cases is.
As a procedure can.
Go to a noun.
Allograph donation it can go to more of a synthetic material donation the COO.
<unk> can be deferred and I think that's going to be up to the doctor and the individual patient's decision to be made so how much of that is recoverable I think theres also.
Category of procedures that Houston alternate available instead of a prime tissue sample. They may have used a little bit.
Different tissue sample and modified it to fit the exact case they need it because remember, they're taking dimensions and theyre looking for agent.
Characteristics.
The donor to match the patient.
So they may go a little bit off prime if they felt that was acceptable. So again each one of those is an individual decision.
To the question of our orthopedics business, we feel really good about it we think the business right now is better than the numbers.
In the quarter we.
U S orthopedic specifically got a got a great taste to growth in the second quarter, and Thats, where everybody in that category wants to be we're super excited about what's going on with <unk>.
Just continues to.
To be a really encouraging play for our our team and as I noted the the expansion of that globally is really important for Continental Corporation our patients.
And the surgeon community. So we're very excited about what's going on in.
Beyond MTF as Todd noted in his opening comments there were a few supply constraints.
Just a single use consumables implants that delayed our revenue in the quarter. So just working through all that.
Listening to other earnings calls.
Non med tech.
GE and Boeing have supply chain challenges it doesn't surprise me that our industry is still having some supply chain challenges.
Have had our head down and been fighting through those over the last 18 months and we'll continue to do that.
Alright.
I assume a happier note.
Earlier this month, California begin to 15 state to pass a bill requiring state to adopt implement.
Regulations to evacuate remove smoke, which I'm sure you know.
And I think those regulations are adopted.
June 27 does not close at hand at the same time, they're obviously a huge state it seems like a big win.
Again.
Is that a big stake like that making decisions like that.
Augur, well for a continued 20% plus smoke evacuation.
Growth accelerated.
To accelerate.
Legislation in other states just any high level pictures perspective, sure. It's great great Great question and your stats were pre.
Pretty accurate rig 15 states tenor active five are pending the five pending go active anywhere between 2024, and 2027 and those 15 states cover roughly 44% of the population of 37% of the hospitals and there are six on deck, West, Virginia, Massachusetts, Florida, Texas, North Carolina, Pennsylvania.
The trend is favorable in terms of U S marketplace and smoke smoke legislation.
Our data would say where the legislation is in place.
Growth rate is higher where the where the legislation is pending is.
As the next level of growth rate and where Theres no legislation is the lowest level of growth and so a state like California, which also had a unique approach and that they did this through osha.
Whereas most states are doing it through standard legislation, California did it through Osha.
So probably carries a little bit more gravitas with it.
So that is encouraging and certainly was well received by the nurses Association.
The state of California, and <unk> watching that working with that and we'll do everything we can to be a participant in those markets. So I think all of that bodes well for the continued growth of the overall smoke evacuation market.
Thanks for that.
Thank you. Our next question comes from the line of.
Matt O'brien of Piper Sandler.
Great. Thanks for taking my question and my condolences as well to the emission family.
The first one is a two parter, but it's just more clarification. If you wouldn't mind Kirk can you be specific on what the impact was from the supply and MTF issues in Q3, and how much it's going to impact Q4, just dollar wise in both periods.
You said it I know you don't want to talk about next year, but you said it you said double digit growth.
Hesitation for the next several quarters does that mean heading into 'twenty four that's kind of a level, we should be thinking about in terms of comment on the topline.
Matt I don't think were going to breakout MTF again to Todd's earlier comment we're not going to get into product line details. Every time, there is an up and down I would just point people to the.
The reality that.
We're in a position today to absorb some of those ups and downs and I think that's what the third quarter showed that we could absorb that up and down you've been around the name for a while you know that period in time, where we couldnt absorb that up and down.
In fact, any water that came over to the side of the boat would sink us in a quarter. So I'm just thrilled with the ability of the organization to absorb those type of things, including the other supply chain challenges.
On the growth.
If you go to slide four of our Investor deck, therefore objectives that we laid out for shareholders and I think.
This year, we have achieved every one of those in the last one on there is above market growth and leveraged earnings growth.
That's our baseline above market growth and leveraged earnings growth.
And we went back if I go back to 2018, 2019, we said with the portfolio and our focus on innovation there would be periods. When we thought we could get into double digit growth and we happen to be enjoying that right now.
Sure.
If we dip down to 9% growth I don't think we're going to be disappointed obviously, we're pushing for as much growth and market capture as we can.
And we're in a very good spot right now so I would answer your question that way I'm sure Todd.
Would want to jump in here as well yeah. Thanks, Matt Yeah, we've been pretty clear for a while now that we said once we anniversaried that.
2022 acquisitions, so into bones, and <unk> that we felt like.
We should be a double digit organic growth company and we've delivered on that this year.
The one caveat that we've always said with that statement is that assumes a kind of normal healthy med tech market right. So we're not expecting any better than normal from a med tech market to be able to deliver that so I would define that as kind of.
Mid single digit if the market is growing kind of in the mid single digit.
Range that we ought to be able to be a double digit.
Growth company. So you guys can decide what you think.
The market is going to do in 'twenty, four, but given a healthy normal med tech market.
As Curt said over.
Anything can happen in a given quarter or so, but yeah, we see con meds as.
A double digit organic grower, given our healthy med tech market.
Understood I appreciate that and then the follow up question.
How do you spend a lot of time last quarter going through this.
On the <unk> side of the business, specifically, but the company that you are.
<unk> <unk> is being used frequently now is talking more more <unk>.
Locally about.
Getting into smoke evacuation, there as a supplier out there that's talking about having a <unk> product.
Has anything changed as far as your view of the competitive landscape in terms of having competition specifically for <unk>.
Being used on the intuitive robot in 'twenty four 'twenty five.
Matt Let me, let me tackle that one.
I don't think we could say anymore about that topic, then what we set out in the second quarter call and sitting here today, our view of the unique features and benefits.
Depths of clinical validation that the marketplace is done on its own around the.
Offering called <unk>.
We feel is uniquely positioned in the marketplace today, and we don't currently see anything pending to enter the marketplace that we believe would disrupt our position and in addition, we would just remind everybody that while robotics as an important part of that market.
10 exercise the general laparoscopic market.
And we have very good and growing representation and the general laparoscopic market.
And in both cases, whether it's in robotics are in laparoscopic, we're replacing standard installation and.
We feel really good about our offering.
Got it thanks, so much.
Thank you our next question.
Comes from the line of Matt Mattson of Needham <unk> Company.
Yes, thanks for taking my questions.
It looks like your capital growth was pretty strong I just wanted to see if you had any kind of feel for the environment There with hospital capital spending and then.
One of your.
Competitors strykers launching a new camera powered instrument.
Based on your results, having any sort of impact, but I just wanted to see what your thoughts were there.
Okay.
I think overall, we still view the capital market is pretty viable market.
<unk> seen any material slowdowns.
Again, I try to remind people our capital is on the lower end and it's it's essential to doing the case if your power tools broken you have to have a replacement repair or an upgrade new purchase.
Whatever competitor comes into that market when they bring a new product it does open up evaluations.
We tried to be present in all of those evaluations and we try to get our fair share and grow our share.
We have a lot of respect for our competitors in those marketplaces and.
What theyre doing but were out there aggressively trying to show the features and benefits of our products as well.
And we've been down this path before.
This is a family of products in the power tool side that upgrades every three to five years on the video side, it's more frequent because of the nature of that technology.
But we feel good about our offering right now and had really strong performance as you noted in the quarter and internationally had very strong performance on the capital side. So it was great to see.
Okay. Thanks, and then just on the 60% gross margin target.
The path to getting there over the next two years I think your prior commentary sort of indicated that you expected a bigger increase in 'twenty five 'twenty four.
I don't know if you're willing to.
Give any more detail there, but is it going to be linear it's going to be more related to just sort of a 2025.
Yes, you are correct, Mike when we talked about that back in January.
Did was a little more conservative in 'twenty four than 'twenty five the logic, just being again, a big part of that is simply the costs.
Side of the equation stabilizing and I was planning on just a little bit of recovery from the inflation period. So I'll remind you that.
Our math says that we digested 400 basis points of inflation.
During the pandemic from a combination of freight labor and materials.
I'm only counting on about 100 basis points of that coming back. So I don't really ever expect to get back to 2019 index costs.
So and in my assumptions, when we talked about that at the beginning of this year.
I would have had that 100 basis points of relief from the inflation side occurring in 2025, So I think.
I think that was conservative and that kind of.
Sorry.
Assumption so.
So yes, that's a long way to say, we do expect that the margin tailwind too.
Pick up.
As we move from 24 to 25.
Okay got it thank you.
Thank you our next question.
Comes from Kristen Stewart of CL King.
Okay.
Hi, Thanks for taking my question Todd I was wondering if you've done the math on the two extra selling our two fewer selling days and what that was the impact on the quarter.
Okay.
So normally it's one in one direction or the other right and we always when it's one we say we used 100 to 150 basis points, the math would be a little more than that Kristen. It's our quarters are usually either 62 or 64 days somewhere in that range right. So if you take a day on 64.
Or or a day on 62.
Youll get more than 100 to 150 basis points I think we're a little conservative on that just because.
There was an extra holidays surgeons kind of work around that and it's complicated because you've got every geography in the world with their own calendars and so.
We always think it's.
I think we're a little conservative when it comes to <unk>.
Taking credit for a day that didn't happened right.
Curt and I are Buffalo uncomfortable trying to.
And be too precise with an adjusted number when it's theoretical.
And so then when you add in this quarter, where it rounds to two days across all the geographies and how it all adds up I think.
I think what I would tell you is when we talk about one day, we say 100 to 150.
When it gets to two days I would probably add a little more fudge factor.
Because I do think that hospitals and physicians.
Do kind of adjust their agile around holidays, and disruptions and things like that so I think things do get done generally in the quarter that they would have gotten done, but obviously more sales days is better than less and the opposite is true. So.
I think thats as much help as I can give you.
Never get too precise on.
No.
Our sales growth number you should actually use or think about when it's kind of theoretical.
Okay. That's helpful.
And then just a big picture question, that's been talked a lot about by other companies, but can you guys give us your thoughts on GOP ones on any potential impact on your business.
Certainly.
A widely discussed and debated topic and I look at the specialties that we service.
And I, just don't see it having a material impact on us.
I honestly think over time.
You could have.
Large BMI patients, who lose body mass and become more active and they wind up as sports medicine candidates.
We are in the Gi space, but we're in therapeutic Gi.
Those cases don't change whether youre, a large or then.
Our advanced surgery case load is.
You are still having gallbladder removals.
Whether youre here larger things.
Just don't see it impacting us.
Maybe on the margins and maybe over time, but it's not going to be a light switch event based on my estimates.
I think.
That's just how I see it right now.
Okay. Thanks very much.
I don't want to be nave to the topic, but I just.
Talking with various people I, just don't see the impact.
Thank you.
Our next question comes from the line.
Carolyn Hudson.
Bank of America.
Yes, Hi, this is Caroline on for Chavez.
For taking my question one for me on FX.
If rates stay where they are today, just how should we think about where to dial in FX for next year on revenue margins EPS. Thank you.
Yes, Thanks, Carolyn I'm sure. That's a question everybody would like an answer to we're going to talk about FX in January.
I'm not nearly as concerned about it.
This time this year as I was last year I think last year was a bigger issue for us.
And so I don't think it's as big of an issue as we go into 2024, but.
I would now like to turn the conference back to Curt Hartman for closing remarks.
Alright, Thank you Latif and I want to thank everybody on the call today for your time and we look forward to speaking with you on our next earnings call. Thank you and good evening.
This concludes today's conference call. Thank you for participating you may now disconnect.
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