Q3 2023 Alpha Teknova Inc Earnings Call
Hello, and welcome to Alphatec Noble, Inc. Third quarter 2023 financial results Conference call.
At this time all participants are in a listen only mode. After the Speakers' presentation, there would be a question and answer session to.
To ask a question. During this session you will need to press star one on your telephone you would then her automated message advising your hand is right.
To withdraw your question. Please press star one again.
I would now like to hand, the conference over to Jennifer Henry Senior Vice President of marketing you may begin.
Thank you operator welcome.
Welcome to check now the third quarter of 2023 earnings Conference call with me on today's call are Stephen downstream technical as President and Chief Executive Officer, and Matt Law Tech noticed Chief Financial Officer, who will make prepared remarks, and then take your questions.
As a reminder, the forward looking statements we make during this call, including those regarding our business goals and expectations for the financial performance of the company are subject to risks and uncertainties that may cause actual events or results to differ.
Additional information concerning these risk factors is included in the press release the company issued earlier today and they are more fully described in the company's various filings with the SEC.
Today's comments reflect the company's current views, which could change as a result of new information future events or other factors and the company does not obligate or commit itself to update its forward looking statements, except as required by law.
The company's management believes that in addition to GAAP results non-GAAP financial measures can provide meaningful insight when evaluating the company's financial performance and the effectiveness of its business strategy.
We will therefore use non-GAAP financial measures a certain of our results during this call.
Reconciliations of GAAP to non-GAAP financial measures are included in the press release that we issued this afternoon, which is posted to check nova's website and at Www Dot S. E C Dot Gov Slash Edgar.
non-GAAP financial measures should always be considered only as a supplement you and not as a substitute for or as superior to financial measures prepared in accordance with GAAP.
The non-GAAP financial measures in this presentation may differ from similarly, named non-GAAP financial measures used by other companies.
Please also be advised that the company has posted a supplemental slide deck to accompany today's prepared remarks. It can be accessed on the Investor Relations section of Tech Nova's website on today's webcast and now I will turn the call over to Steven.
Thank you Jen good afternoon, and thank you everyone for joining us for our third quarter of 2023 earnings call.
<unk> is a leading producer of critical reagents for the life Sciences industry.
All of the therapies vaccines and molecular diagnostics that will help people live longer healthier lives.
We manufacture high quality customer agents with short turnaround times, and our position to scale with our customers as they advance their products from discovery to commercialization.
We had a solid third quarter, both financially and operationally against the backdrop of a difficult market.
Our ability to deliver in these challenging conditions is a testament to the dedication of our very talented team and the diversity of our market segments.
Also during the third quarter, we raised $22 9 million of capital through a registered direct offering and concurrent private placement and we paid down $10 million of long term debt.
We remain optimistic about the potential of our target markets and are pleased with the progress we've made executing our growth strategy in the third quarter.
As we reported during our Q2 update our new facility has been certified for GMP grade production.
We are enthusiastic about the potential of this multi year investment will not hurt the business.
During Q3, we extended the types of products available for both research and clinical grade production, which now include single use bags and assortment of bottles given us the ability to serve nearly all bio processing and diagnostic customers in our target market segments.
In addition, since the beginning of June we have been qualified by 12 high profile customers eight of which are companies involved in cell and gene therapy development.
We have been very encouraged by the reaction to our new GMP facility and Tech Novus transformation there.
Response to the qualification audits and our conversations with these customers has increased our confidence that the facility investments. We have made will begin to bear fruit in mid to late 2024.
As a reminder, we believe this new facility that's our existing operational operated infrastructure will give us the capacity to deliver approximately 200 million in annual product revenue when fully utilized.
Next on the R&D front I am pleased to say, our new product introductions are progressing ahead of schedule.
In September we added the third share type of our Aes buffer screening kit by extending the portfolio to include AAV six and we launched a suite of reagents to support the plasma bio production workflow.
Our AAV product pipeline, which we just introduced earlier. This spring now encompasses more than 60 total reagents, simplifying and streamlining AAV related workflows for process development scientists.
In late October we presented three posters at the European Society of gene and cell therapy, including data for a new reagent kit to streamlined TCR analytics for empty full capsid analysis.
Full launch of this pit is expected in Q4.
Through our new product offerings, we expect to become an even more valued supplier to our customers as they advance their therapies towards commercialization.
Needless to say along with many others in the life Sciences, we found ourselves confronting that we've found ourselves confronting a challenging and dynamic market environment in Q3.
I am proud to note, we continued to deliver against our operational plan during the quarter and successfully managed our expenses.
Our total employee count at the end of the third quarter was 216 associates reduced from our high of more than 300 last year.
I am very grateful for the effort of our past and present employees, who worked tirelessly to put us in a position for success going forward.
In the near term, we continue to see emerging biotech historically, one of our largest growth segments focused on conserving capital by delaying reducing our canceling clinical trials.
That said, we have seen an increase in the total number of clinical customers purchasing from us annually.
Combined with our recent audit qualifications and new product launches, we are cautiously optimistic as we looked into 2024.
Yeah.
As we turn to our revenue outlook for the remainder of 2023, we expect the market conditions, we observed in Q3 to persist and therefore expect to finish at the low end of our revenue guidance of $37 million to $40 million each.
Even so we believe we will outperform our previously communicated free cash outflow target and now expect free cash outflow of less than $30 million for fiscal 2023.
I will now hand, the call over to Matt for a discussion of the financials.
Thanks, Steven and good afternoon, everyone sorry.
Starting with revenue total revenue was $8 $2 million for the third quarter of 2023.
24% decline from $10 $7 million in the third quarter of 2022.
Excluding two large non biotech customer deliveries in the third quarter of 2022 underlying growth was approximately 5%.
<unk> essentials products are targeted at the research use only or are you will market.
And include both cataloging custom products <unk>.
Rob Essentials revenue was $7 $3 million in the third quarter of 2023, or 23% decrease from $9 5 million in the third quarter of 2022 the.
The decline was attributable to a lower number of customers and to a lesser extent lower average revenue per customer.
Excluding two large customer deliveries in the third quarter of 2022 lab Essentials revenue grew approximately 11%.
Clinical.
<unk> products are made according to good manufacturing practices or GMP.
Quality standards and are used by our revenue.
Customers, primarily as components or inputs and the development and manufacturer of diagnostic and therapeutic products clinical solutions revenue was zero point $6 million in the third quarter, a 35% decline from <unk> $9 million in the third quarter of 2022.
The decline in clinical solutions revenue was attributable to lower average revenue per customer, partially offset by a higher number of customers.
We expect revenue per customer to increase over time as they ramp up their purchase volumes. However, this metric can be affected by the mix of Newark clinical customers, who typically order less.
Just as a reminder, due to larger average orders in clinical solutions compared to lab essentials, there can be quarter to quarter revenue lumpiness in this category.
Onto the income statement gross profit for.
For the third quarter of 2023 was $1 5 million compared to $4 8 million in the third quarter of 2022.
Gross margin was 18.0% of revenue in the third quarter of 2023.
Which is down from 44, 6% of revenue in the third quarter of 2022.
The decrease in gross profit percentage was primarily driven by the decrease in revenue and the associated lower absorption of fixed manufacturing costs and to a lesser extent increased overhead costs, which were partially offset by reduced head count.
Operating expenses for the third quarter of 2023 were $10 $2 million.
Baird to $27 $7 million for the third quarter of 2022.
Excluding the nonrecurring noncash charges of <unk> 4 million in the third quarter of 2023 related to the write off of ATM facility offering costs in the $16 $6 million goodwill impairment charge recorded in the third quarter 2022 operating.
Expenses were down $1 $3 million in the third quarter 2023, compared to the third quarter 2022.
The decrease was primarily driven by reduced head count and spending primarily in professional fees.
During the third quarter, we raised $22 $9 million of capital through a registered direct offering and concurrent private placement and we paid down $10.0 million of long term debt. As a result, we wrote off ATM facility offering cost of 0.4.
Because we do not expect to use this facility in the near term.
Net loss for the third quarter of 2023 was $10 $2 million or 34 cents per diluted share compared to a net loss of $22 $5 million or <unk> 80.
Per diluted share for the third quarter of 2020 to the.
The company recorded minimal non current tax expense this quarter against its pretax losses due to increases in our valuation allowances against incremental net operating loss carry forwards.
Adjusted EBITDA, a non-GAAP measure was negative $5 $5 million for the third quarter of 2023.
Compared to negative $4 $6 million for the third quarter of 2022.
The increase in the third quarter of 2023 was primarily driven by higher operating losses, excluding the nonrecurring goodwill impairment charge recorded in the third quarter of 2022.
Somewhat offset by higher depreciation add backs.
Onto cash flow and balance sheet.
Capital expenditures for the third quarter of 2023 were 1.0 million compared to $6 6 million for the third quarter of 2022. This marks the fifth straight quarter of sequential decreases in capital expenditures. We have now completed the initial capital investment necessary to.
<unk> utilized our new manufacturing facility.
Free cash flow.
non-GAAP measure that we define as cash used in operating activities less purchases of property plant and equipment was negative $5 4 million for the third quarter of 2023 compared to negative $14 9 million for the third quarter of 2022, this decrease compared to the prior year period was.
Due to both lower cash used in operating activities and a decrease in capital expenditures.
Turning to the balance sheet as of September 32.
2023, we had $32 $1 million in cash and cash equivalents.
Well for $1 million in gross debt.
And now onto our 2023 guidance and outlook.
We now anticipate that fiscal year 2023, total revenue will be at the low end of our previously communicated range of 37 million to $40 million.
We expect the challenging market conditions, we have seen during 2023 to persist at least through year end on.
On the other hand, we now anticipate free cash outflow to be less than $30 million for 2023, Despite a revenue outlook significantly below where it started the year.
The company continues to manage expenses aggressively while preserving the critical investments, we believe will allow us to achieve our long term growth targets.
At the end of September the company had 216 associates down from 232 at the end of the second quarter of 2023 and 290 at the end of fiscal year 2022.
The company posted operating expenses, excluding non recurring charges below $10 million for the second quarter in a row.
To that end, we have taken a number of steps during the fiscal year aimed at reducing operating expenses, which have resulted in total annualized cost savings of more than $8 million compared to fourth quarter of 2022, excluding nonrecurring charges.
Similarly, the company saw a reduction in free cash outflow during the third quarter of 2023. This marks the fifth straight quarter of lower cash outflow and is consistent with the company's expectations for the year. Despite a revenue lower revenue outlook.
As we anticipate operating expenses and capital expenditures to remain at lower levels.
Based on our guidance, we expect less than $6 $5 million in free cash outflow in the last quarter of 2023.
We believe that we have already made the step up investments needed to execute our growth strategy and believe there is significant margin expansion potential with topline growth resumes.
We also strengthened our balance sheet with the additional capital raised in the third quarter.
With that I'll turn the call back over to Steven.
Thanks, Matt overall, we were pleased with our performance in the third quarter of 2023, the long term outlook for our end markets is positive.
We are committed to executing on our strategy to help our customers accelerate the introduction of novel therapies diagnostics and other products that improve human health.
We will now take your questions.
Thank you.
Ladies and gentlemen, as a reminder to ask a question. Please press star one on your telephone and then wait to hear your name announced to withdraw your question. Please press star one again, please standby, while we compile the Q&A roster.
Okay.
Our first question comes from the line of Jacob Johnson with Stephens. Your line is open.
Hey, good afternoon guys.
Yes.
Maybe first just on the macro it in guidance.
Because at the lower end now is this just a function of.
The persistence of the macro headwinds and.
And a lack of improvement or are there any areas, where you're seeing headwinds intensify.
Yeah. Thanks Jacob.
I'd say were not seeing headwinds intensify and then it's a persistence of improvement.
A lack of improvement.
Typically we actually have seen some orders slide out but the good news. There is we're actually seeing additional orders. So I think there are some positives here, but we're pretty cautious about it given the fact that.
This has been an extended period and theres lots of discussions.
On the positive side like I mentioned in the in the transcript there.
We had an increase in clinical customers and just that their order dollar amount is lower and then if you really look at our apples to apples comparison from a quarter to quarter perspective against last year. If you remove those orders, which are non biotech related we did have a positive growth of 5% and 11% in lab essentials.
And then like I said, we are starting to get a feel for that the orders are starting to potentially pick up and then a lot of customers are saying, Hey, we're ready in Q1 for some orders, but we are.
I want to be very cautious about given the fact that even and they don't totally know theyre funding environment going forward.
Okay. Thanks for that Steven and then maybe for the follow up just.
On the AAV buffer cats.
It's good to see you continue to build out that offering and I know, it's kind of a screening opportunity as it gets in the door with customers in different kind of revenue perspective.
Limited in the near term, but is there any way to.
To quantify it kind of that the interest level in that the number of customers who are asking for those kids that are maybe just anecdotes about as we think about how a fraction of that operate in skylake.
Yeah. So yeah, we're really happy with the team I mean, we have a team that's super efficient here and he's done a great job developing products that aes buffer screening kit that you mentioned has been very popular lots of conversations a number of orders there from multiple companies in the AAV space.
It's a combination of two things one is do we have to share type they're interested in we talked about 89, which is interest in that one we're still working on it's a very complicated one to purify.
But.
We had a number try it and the goal here is not necessarily right away near term revenue as you mentioned, it's to get them into the right buffer and then happened scale up so I can tell you of the customers that have tried it within about a month or so one of our customers is actually now ordered.
Or for delivery next year, a larger scale of one of those buffers that kind of gives us. The idea that this is actually working the way we wanted to and that will pay off obviously as they take those platforms those.
New therapy down the pipeline I just wanted to point out that we have the aes fiber screaming care, but also a number of other products, which we launched at our catalog products across that help complete entire AAV manufacturing process end to end, including our plasmids, which we launched this last quarter and then.
Are doing some work on reagents to help streamline.
And simplify the analytical side on empty full.
Ratios this quarter, we'll be launching a product that sets up the workflow for digital PCR that we're seeing great results for internally, but then also externally we've had a couple.
Customers give that as early access to some great feedback so again real happy with the progress we've made in developing our pipeline, but yes. These are things that it's about getting our customers into these products and then helping them get on that pipeline.
Got it that's really helpful context, I'll leave it there.
Sure. Thanks Steven.
Thanks Jacob.
Thank you.
Please standby for our next question.
Our next question comes from the line of Steven MA T J with T. D. Cohen Your line is open.
Great. Thanks for taking the questions.
Question for you, Matt on the gross margins, which were impacted by the absorption of the.
The fixed costs of the new GMP facility, how should we think about when.
Gross margin low point will be hit or maybe this is a low point and when do you think the gross margins.
I'm going to start inflicting and starting to grow.
Yeah. Thanks, Steve Yes, the gross margins have been impacted here recently as we've added additional depreciation in particular from the bringing on the remainder of the facility in Q3 or.
For GMP production.
I would say that.
It's hard to say, if we're actually at a low point I mean, there is certainly possible that it could be lower but when we start seeing the revenue growth we have a very high fixed cost ratio in our cost structure.
Not just depreciation, but other costs, which will allow that to leverage up pretty quickly and maybe just as a reference point to think about what we saw in Q2.
When we had a much higher quarter and more GNP revenue, we had significantly higher gross margins, but of course, we've added additional costs and depreciation since then so.
But I do think that once we see the revenue growth resuming we'll see some pretty good pretty good leverage there.
Okay got it okay, yes.
That makes sense is highly dependent on product mix.
Yes, Mark mix in total volume.
Yes that makes sense.
And then I just wanted to dig in a little bit more on the on the operating expenses down significantly you guys had.
Pretty significant.
Reduction in force.
Are there going to be any more cost cutting efforts already.
Or do you think the company is now right sized and then.
Should we think about the opex run rate going forward.
As this quarter Q3 or.
Can you talk about that.
For the balance of the year and then also into 2024. Thank you.
Yes, as it relates to operating expenses as we mentioned in the remarks, we've worked really hard there during the course of the year to bring that down substantially again over $9 million in annualized savings.
On a run rate basis so.
We're always looking to manage obviously managed but reduce costs, where we can.
I would say we've done the lion's share of that through the rest of that you mentioned earlier this year and other things that we've done since then.
No.
I do expect a.
Slightly downward trend on those as we move forward, but nothing as substantial as you've seen from the beginning of the year until now so.
It's really important for us to make sure that we maintain the investments that we've made that we think are going to be key.
Key drivers of growth and be able to support that growth, which which will come back. So we're being very careful to to find the right balance of maintaining the investments. While also taking out any excess costs that are needed for the short term. So that's kind of where we're at.
So I think the outlook is sort of flattish to slightly down looking outward.
<unk> is also going to depend on when the revenue comes back in and how we think about cost of the future.
Okay, great. Thanks for taking the questions I appreciate it.
Thank you.
Please standby for our next question.
Okay.
Our next question comes from the line of Matt <unk> with William Blair. Your line is open.
Yeah.
Hi, good evening.
Thanks for the update on <unk>.
The customers who've been in Tioga, Kansas facility.
And it sounds like they've done audits and have qualified that facility.
You talked about sort of a full fall audit calendar and just curious as youre now kind of peeking into to winter, Alex Sheila directly in the Midwest.
And spring sort of what the what the pipeline of orders looked like and then.
Sure beyond that.
Stephen you referenced.
Sort of scaling into production with customers next year.
Can you just maybe give us the sounds like are there great points, along the way as they move from qualification to full production that.
We need to reflect the level of commitment to working with you or give you some higher level of certainty that.
Sort of businesses.
Anything sort of at least internally that you track.
Yes, great.
Certainly in winter, we are starting to book audits.
And in 2024 right now.
Based on request and continue to build out that calendar.
So.
It looks pretty good from that perspective, obviously, the feedback has been really positive from the customers that have seen the facility. So.
The pipeline I'm pretty happy with the work that the team.
The field is doing but also just our current customers going through there and being really excited about what we've built.
Now for the next year production piece right in that.
Moving to as the timing from that qualification until really they start ramping with scale.
And that is that is a delay it's less so a delay for existing customers that have ordered this before in a GMP grade products less than those that were converting from other companies and there is for.
For example, we have one that we've been working with that is we've done a number of pilots with where we will actually make their products in our facility and we'll ship it to them and then they will test at a very small batch sizes to make sure. It's meeting what they need and that with from their current supplier and comparing the two and then start migrating and we tend to do an audit and then the host.
Minimally stripe planting.
A transition and that that period can be sometimes if they are in urgent need it could be quick but at this point in time.
The current environment that tend to be much more selective or timing of those things and they take more of a six to 12 month time period. So.
That ramp up can take some time when you are shifting from a new customer and that's we've been doing quite a bit of that fairly recently, so that gives us a little bit of confidence as we move into 2024, particularly in the back half.
Okay and then.
Given you have the benefit of.
Critical last year within within earnings season, we've heard sort of two sides of the coin from companies throughout the certainty even about sequential improvement or not.
Out the months in the third quarter, and then and then October and so just curious if you could sort of a sense of the latest.
We have a solid year over year declines.
Sequential declines in revenue, but from an order perspective.
Kind of curious with the more recent trends.
Yes, I am not.
I don't think were in a position to say we're at the bottom, but I can tell you that it feels like we're at or near the bottom for our perspective I think the question is about how fast it ramps back up more than anything else.
We have been I've been very encouraged by the orders recently and like I said.
For us when I look at it obviously have a lot more insight than you get on the customer perspective, but I know we had two really large orders last year that were very <unk>.
Unique one time orders outside of this biopharma space. When you take when you remove those you really start to see behaviors underlying growth is there for Q3 and so to me that is a actual financial metric of where we are and I do think that the biotech funding has seems to have stabilized right and so.
And that that is typically for us three four quarter, leading indicator as we look through the data so.
Starting to feel good about those are all positive signs and then with the conversations are also pretty positive. It's just.
It's really a question of.
Seeing the timing of those orders and whether or not there'll be additional pushes out as we get into next year and how fast that ramps.
Okay, and then sorry, just wanted just one more Ms Janet <unk>.
At around the gross margin. So you haven't been out to the facilities I certainly can appreciate that there's more.
Sophistication built into the new facility relative to the legacy ones. Matt is there anything different about any of the depreciation schedules or any of the accounting with respect to the new facility compared to the last facility, we would need to be aware of that you're thinking about building out depreciation going forward.
Yes, it's a good question I would say that generally speaking we have we have pretty long lives associated with these these assets maybe on average compared to.
Our legacy facilities because of the.
The quality of the equipment and other improvements that we've made in this versus our other facilities. So.
The depreciation is spread out a bit longer on average than the others and of course on the others.
Depreciating for a while in some cases, so some of that will offer will be rolling off so if I had to make any high level observations those will be yet.
But I would also just say that we have been absorbing this depreciation into gross margins.
And I think as we as we ramp up production with Sellable products, and making inventory out of that facility will be able to absorb some of that.
More into inventory as well, but right now it's been it's been kind of directly hitting our margins. So we're getting the worst of it right now in terms of impact, but as I mentioned earlier.
It's going to be the revenue growth coming back where we get that absorption, that's really going to see those come back higher and where there used to be.
Alright, thank you.
Thank you.
Please standby for our next question.
Our next question comes from the line of Anna Makowski with Keybanc. Your line is open.
Hi, This is Anna on for Paul Knight. My question is about revenue per customer do you still see a 1.4 increase in revenue in 2024, and if so what would be the reason for that increase is it just customers moving towards commercialization or what are you seeing with that.
Yes.
Maybe just to make sure we clarify the question you're asking if we're expecting to see average revenue per customer climb next year is that or did I misunderstand.
Yes that is my question. Thank you.
Okay.
Well I would just say this I mean, it's a little bit different for our lab essentials versus our clinical solutions right. So as we ramp up the more the smaller part of our business the clinical solutions business theres going to be actually revenue per customer may stay flat or go down.
Not necessarily a bad thing it just means that we're bringing on more customers that are younger in their cycle, maybe haven't gone through that clinical pipeline are just wrapping up with us for whatever reason, so I wouldn't expect necessarily to see higher revenue per customer on the clinical solution side.
On the lab essential side.
We have been seeing strong trends there in terms of average revenue per customer going upwards and this particular quarter. We did have a year on year decrease in that metric as I mentioned in the remarks and that was not because we're not seeing good increase in customer average customer volumes. It was due to the fact.
That last year, we had two very large orders shipped which skewed the average revenue per customer metrics. So it's a little bit of.
Technical answer there, but we haven't generally been seeing pretty steady increases in average revenue per customer on the lab essential side and.
Are certainly expecting that going forward, depending on the rate at which depends on the health of the overall market and when.
More <unk>.
Normalized revenue ordering our order patterns return next year.
It will be dependent on that.
Thank you.
Thanks, Thank you.
Please standby for our next question.
Our next question comes from the line of Mark Massaro with BTG. Your line is open.
This is getting in on for Mark Thanks for taking the question.
Narrowing of the guide.
Given that the current spending environment continues.
Can you remind us what percentage of your customer base do you feel you have visibility on and just how would you characterize your customer base as far as the percentage of smaller.
Thanks.
Okay. So I think the question is around what percent or what visibility, we have and particularly you are interested in the biopharma side is that accurate.
Yes.
So we don't we don't typically disclose the exact percentage of the Biopharma I can say that generally biopharma is probably about half of it of which.
No.
A half of that is emerging biotech, let's just say put it in that ballpark right and we have seen a significant decline there.
There's two pieces of this that would make me confident one is obviously it as it related to the funding we can see that directly.
The other pieces that we have.
The rest of our business, which is actually is growing which is growing quite nicely. So as the stabilizer. That's why we're pretty confident about where we fit long term as we onboard these customers.
Sure.
Okay perfect.
Thanks for taking your Opex, a little bit more can you discuss how you're thinking about cash utilization after the financing.
What you're prioritizing as areas of investment maybe on the commercial art.
Where you might look to pull back.
Let me, let me take a stab at that one so in terms of Opex as we discussed a little bit.
Right now, where we feel comfortable with the investments that we've made you highlighted one area, which is in the.
The commercial side and the team that we built there are the other investments that we've made ramping website et cetera.
And then we've also.
Ben been spending in Opex on our new product development team.
And Steven alluded to some of the product launches that we have made and plan to make there. So we're continuing to invest as we see those as critical to building awareness and relationships with companies in our target market. So we're not we're not pulling back anywhere there.
We have we have over the course of this year as I mentioned, but then over $9 million in annualized savings we have reduced in many different areas.
We're lucky.
Yes.
Do so or their capabilities that might not be needed to execute on the near term priorities. So that's where we and obviously that's in areas of G&A.
In some cases in the manufacturing itself and and also sprinkled throughout the organization engineering and some other areas. So.
Those are the tough decisions that we've had to make and we continue to make.
As I said, we are not expecting dramatic reductions in opex going forward.
In order to preserve those investments, but we feel confident that we're making the right decisions there.
Okay. Thanks for taking my question.
Thank you.
Thank you.
I am showing no further questions in the queue.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
Thank you.
Yeah.
[music].
Okay.
[music].