Q3 2024 InfuSystem Holdings Inc Earnings Call
The patient services segment was not far behind, with increased net revenue of $1.5 million or 7.7%.
Rental revenues made up most of the rest of the increase for device solutions and included higher volumes related to a new rental customer added at the end of this year's first quarter.
Higher net revenue for the patient services segment included increased oncology net revenue totaling nearly 1.8 million or 11 percent due to higher treatment volumes and strong per billion cash collection results and higher wound care treatment revenue totaling 530,000 or 215 percent.
These increases were partially offset by lower negative pressure wound therapy equipment sales due to a difficult comparison that included a surge in equipment leases in the prior year.
Gross profit for the third quarter of 2024 was $19 million, which was $3.4 million, or 22% higher than the prior year third quarter. Our gross margin percentage was 53.9%, representing a 5% improvement over the prior year third quarter amount of 48.9%.
This improvement was mainly driven by favorable revenue mix involving higher margin revenue such as oncology and rentals and lower negative pressure wound therapy equipment sales.
Selling general and administrative expenses for the third quarter of 2024 totaled $15.8 million, representing an increase of $1.9 million, or 13% as compared to the prior year.
The increase, which included higher accrued short-term and long-term incentive compensation, and the first expenses related to our information systems upgrade, was mainly attributable to increased personnel and other costs associated with higher revenue volume.
Adjusted EBITDA during the 2024 third quarter was $7.9 million or 22% of net revenue, which represented an increase of over $1.7 million from the prior year third quarter. The amount also was much higher than this year's second quarter amount of $6.1 million.
Turning to a few points on our financial position and capital reserves. Our operating cash flow for the third quarter totaled $9.8 million. This amount was more than twice the amount for the prior year third quarter period and was more than four times the amount for this year's second quarter.
This increase was due to higher operating income, net of non-cash expenses, and a reduction in our working capital levels as compared to the prior year period when our working capital increased.
The increase for the prior year, you may recall, was partly due to a high amount of sales-type lease revenue for negative pressure wound therapy equipment, and due to the growth of a contract asset associated with the onboarding of the GE Healthcare contract.
Our net capital expenditures were $2.9 million during the 2024 third quarter, which was higher than the $300,000 we spent during the third quarter in 2023, but was less than half the amount for this year's second quarter.
The amount during the current period was focused on the purchase of infusion pumps needed to support increased volume in oncology and device solutions rental businesses and for new negative pressure wound therapy devices needed to support revenue growth for our wound care business.
All of which are expected to contribute to revenue growth during the 2024 fourth quarter and beyond.
We continue to anticipate that our overall capital spending requirements will moderate as compared to amounts required in prior years.
as the sources of our future growth will continue to be more weighted towards less capital-intensive revenue sources, such as biomedical services, advanced wound care products, and from initiatives we have been pursuing to increase pump utilization, including reducing the number of lost pumps.
We continue to be positioned well to fund continued net revenue growth with the growing cash flow from operations backed by significant liquidity reserves available from a revolving line of credit and manageable leverage and debt service requirements.
Our net debt decreased by $6.4 million to $27.6 million during the 2024 third quarter and is $1.3 million lower since the beginning of the year. This despite having spent nearly $1 million this year under our stock repurchase plan.
Our available liquidity continued to be strong and totaled nearly $47 million at the end of the third quarter.
A ratio of total debt to adjusted EBITDA was a modest 1.15 times at the end of the period.
Our debt consists of borrowings on our evolving line of credit with no term payment requirements, nearly three and a half years in remaining term, and with $20 million of the outstanding balance locked in at below market rates by an interest rate swap having the same expiration.
I will now turn the call over to Cary.
Thanks, Barry. Good morning, everyone.
Cary: Today, I'll start with a little background refresh on our strategy in Biomed.
Cary: InfuSystem has long had world-class biomedical service capabilities. This because our core businesses involve owning and deploying a very large fleet of medical devices. Maintaining this equipment ourselves saves costs and creates significant efficiencies.
Cary: several years ago, an internal study indicated that our then quite small third-party biomedical business delivered ROIs amongst the highest of all of our revenue streams.
Cary: This launched an initiative to grow that activity, and we soon acquired two small biomedical service companies to expand our capabilities.
Cary: Then, in 2022, we were presented with the opportunity and entered into the Master Services Agreement with GE. That work has further extended our capabilities, and in 2023, our biomedical services revenue increased significantly.
Cary: We have, and continue to emphasize, that our goal has not been to maximize the revenue potential of working with GE, but rather, to leverage that experience and the National Biomedical Services Network that it allowed us to build to win smaller concierge service deals, higher margin work, emphasizing our white glove services approach.
Cary: We are glad to be announcing progress in developing this strategic initiative. Last quarter, we announced the start of a substantial biomedical device remediation project for one of our largest device manufacturer partners. And today, we are announcing another project, leveraging the expanded capabilities.
Cary: This one is a field services agreement with Dignitana involving their scalp cooling system deployed in U.S. chemotherapy infusion centers.
Cary: The work we will perform for Dignitana is similar to the work we do for GE under the MSA, annual preventative maintenance, and periodic service and repair of equipment in medical facilities, often the same facilities already covered by our existing team of regional biomed technicians.
This is a win-win partnership for Dignitana and NP System.
Speaker Change: InfuSystems gets increased utilization of its national network, with this leading not only to increased revenue, but also to improved margins and profitability in our biomed business.
Reg: I'll make one more point before turning the mic back to Reg.
Reg: Ignis Tana is the latest example of how InfuSystem is increasingly deploying its platform services model to grow its business by solving complex problems for its partners.
Reg: Healthcare companies are increasingly adopting such outsourcing and asset light models and that is why MPSystem is seeing so many opportunities to deploy its platform services.
Reg: Other recent examples include Smith & Nephew, coming to us for a last mile in billing solution for its negative pressure wound therapy offerings, and Sonara, partnering with us for the initial purpose of extending its advanced wound care products distribution into third-party payer billing channels.
Back to you, Rich.
Rich: Thanks, Harry. I'm going to start with a quick update on developments in pain management, and then provide color around the recently announced exclusive distribution agreement for chemo monkeys.
Rich: On our pain business, for much of the last two years, we've sought to communicate two key points about this business.
Rich: First, while we are seeing more success in pain than at any time in the past, the long-term potential we see in pain has been surpassed by the newer opportunities.
Reg: particularly those we have been developing in wound care and biomedical services.
Reg: Second, one thing with the potential to change pain's trajectory is the No Pain Act, which requires that a reimbursement code be created for non-opioid alternatives to treat post-surgical pain starting in 2025. We said we needed to see how big the reimbursement would be and how doctors reacted to it.
Reg: Along with everyone else expecting their business to be impacted by the No Pain Act, we're still waiting on final decisions, but the current view is that we will not be seeing a positive impact at the start of 2025.
Reg: Among other things, the initial regulations define approved devices to include elastomeric pumps and non-electronic pumps.
Reg: While we were looking at the possibility of modifying our service offerings to accommodate the initial regulations and feel optimistic about the state of our current pain business and our customers, positive developments in other parts of our business continue to emerge and push pain to the back of the list of priorities.
Reg: Amongst these emerging priorities is the recently announced distribution agreement with chemo mouthpiece.
Reg: Human Multi-Piece has the potential to be a huge opportunity for MP System.
Reg: The agreement signed and announced in September via our joint venture with Sonara MedTech is a great example of how the JV works and why InfuSystem is seeing more and more opportunities to wrap its platform services around other companies products and services. InfuSystem is an ideal partner for chemo mouthpiece.
Reg: We already have deep relationships with approximately 2,000 cancer centers in the U.S. and we will begin to leverage our exceptional access to get the product in front of the decision makers inside these cancer centers quickly.
Reg: We also have the warehousing and logistics capabilities necessary to support the product and the team at Chemo Mouthpiece is happy to have a partner with these existing relationships and resources.
Reg: About the product itself, chemo mouthpiece was developed by a cancer survivor that suffered through a very difficult case of oral mucositis and believes there had to be a better solution.
Reg: That led to his developing his company's product, which received 510k clearance earlier this year and received an initial CPT code for reimbursement for the practice in July of 2024.
Reg: ChemoMouthpiece is an oral cryotherapy device used to reduce the incidence and severity of oral mucositis in patients undergoing chemotherapy treatments.
Reg: These painful sores can not only diminish the quality of life, but can also interfere with patients' chemo treatment by creating difficulties eating, drinking, or taking medication.
Reg: all of which may lead to nutrition and hydration issues and potentially pause their treatment.
Reg: People familiar with chemotherapy probably have seen that patients are frequently given ice chips to help cool down their mouth during and after their treatment.
Reg: The intent is to reduce blood flow and thereby reduce the delivery of chemo to the mouth, hopefully reducing the incidence of oral mucositis.
Unfortunately, ice chips often fall short in this goal.
Reg: We are going to distribute chemo mouthpieces through our existing sales team.
Reg: in Oncology, supplemented by additional resources coming from device solutions and pain sales teams.
Reg: We have begun a phased approach beginning with the largest cancer centers in the country. This approach will allow us to focus and learn best practices for introducing the products to clinics and physicians.
Reg: We believe that once providers understand the health benefits and get comfortable with the billing processes and rates, chemo mouthpieces will see broad adoption, and oral cryotherapy utilizing the product will become common for cancer patients receiving chemo.
Reg: It's a big opportunity, and we're going to prioritize it with all the effort and focus it deserves. We expect to update shareholders every quarter on our progress as we begin to see customer acceptance and customer reimbursement experience.
Reg: That said, as we are just beginning to market the product and educate customers on its efficacy, it is far too early today to know how quickly the opportunity will develop and how big it ultimately will become for us.
Reg: As we finish the year with strong momentum, we are reaffirming our annual guidance for the full year 2024 with net revenue growth estimated to be in the high single-digit range and adjusted EBITDA margin to be in the high teens exceeding last year's margin of 17.8%.
Reg: Before we go to Q&A, I would also like to mention that you will see a Form 4 from me, as I have put a 10b51 in place to sell a small portion of my shares this month for tax-funded purposes.
Reg: I, without question, remain as confident as I've ever been in InfuSystem, our strategy, and our future. Operator, we are ready for the Q&A portion of the call.
We will now begin the question and answer session.
Speaker Change: To ask a question, you may press star then 1 on your telephone keypad.
Speaker Change: If you're using a speakerphone, please pick up your handset before pressing the keys. And to withdraw a question, you may press star, then two.
Speaker Change: At this time, we will take our first question, which will come from Jim Sidoti with Sidoti & Company. Please go ahead.
Hi, good morning. Thanks for taking the questions.
Speaker Change: With regards to the GE business, would you characterize that as being on autopilot right now? Is there a lot more of your attention that's needed to maintain that business?
It's certainly up and running.
Speaker Change: You know and stable we leave it we've hit all the devices now probably almost twice now. This is the second full year
Speaker Change: which is good news. So, you know, it'll never be on autopilot. It's a lot of work, right, to manage the team and where they go and how long they travel for, but yeah, it's pretty stable. I mean, it doesn't take, you know, the people on this call, it's not taking a lot of our focus. Now it's just the team to go execute, which is nice.
Speaker Change: And with regards to Dignitana, can you give us any sense on...
magnitude of that on the size of that revenue.
Speaker Change: Yeah, it's under a million dollars, so it's not a huge deal in itself.
Speaker Change: I think what's nice about it is we get to utilize the existing team that we already have in place, so we didn't have to add people to execute on it.
Speaker Change: The good news is you should see more of these, both inside GE and outside of GE, like Dignitana. You know, deals that range from...
Speaker Change: I don't know, a half a million dollars to two or three million, right? They're nice, they're profitable, we can leverage a lot of the team we already have, so this is kind of the first one, hopefully of many.
Speaker Change: this high of a free cash flow. Do you think this is the trend going forward or do you think this quarter was kind of an anomaly?
What I would say, Jim, is that...
Speaker Change: We certainly had a good quarter because our working capital didn't grow.
Speaker Change: But I think one of the other things that is a benefit is that our profitability at the bottom line is growing, our operating profit. And so that's what we would expect to continue to increase. If the element of it will continue into the future and get better.
Speaker Change: So, it may not be, you know, six million a quarter, but you expect positive free cash flow going forward?
Speaker Change: Is that right? Yes. Well, will the operating cash flow for sure will ebb and flow but always has been positive?
depending on how quick we're growing in certain areas
Speaker Change: our oncology business in a quarter at 20%, we would have negative free cashflow because we have to buy a lot of devices. But that means that right after that quarter, we would have really, really good cashflow. So you gotta be careful on that free cashflow calculation because the timing of our CapEx and the drivers from what growth we're experiencing has a dramatic short-term impact.
Speaker Change: But generally speaking, as we're going to the top line, we're definitely, if you look at a trillion twelve, both operating cash flow and free cash flow are growing. And our amount of free cash flow that we get out of the revenue, because the capital expenditure requirements are decreasing, is improving faster.
Okay, all right. Thank you
Thanks, Jim.
The End
Speaker Change: And our next question will come from Brooks O'Neill with Lake Street Capital Markets. Please go ahead.
Thank you. Good morning. Can you hear me okay?
We sure can. Good morning, Brooksville.
Speaker Change: Good morning everyone. So I just want to follow up on Jim's line of questioning there. I was a little surprised by the magnitude of equipment purchases this quarter.
Speaker Change: Obviously, as Barry said, that's going to ebb and flow, but would you expect to continue to need, whatever it was, $10-12 billion of equipment purchases to sustain the growth opportunity you're seeing out there in that business?
Speaker Change: Yeah, Brooks, the actual equipment purchases this quarter was only 2.8 million. You're probably looking at the whole year-to-date number, so it's much much lower than it was last quarter.
Speaker Change: Yeah, it was much lower than last quarter and keep in mind we have to buy advices in advance so and we're still growing I mean oncology grew nicely it's like 10% this quarter so we have to have devices to support that additional growth.
Speaker Change: which then next quarter we won't buy devices for that particular revenue we added and that will then become just good solid new cash flow that we get.
Speaker Change: So the other thing is that we bought some devices for the negative pressure program. We have the Smith and Nephew relationship that you may recall us talking about. And then even your pain management is growing a little bit too, so we buy some devices for that business.
Speaker Change: It makes so much sense. Should I interpret? I was listening to Kerry talk about the Biomed business, which I personally think is very exciting.
Speaker Change: Should we interpret the comment to suggest that the pipeline of potential future opportunities is pretty robust in that area?
Speaker Change: Yeah, I think that's a good way to interpret it. You know, we had held off, I think we had mentioned on these calls that about a year ago we were still holding off on other opportunities because we were still trying to get the GE program stable, to Jim's point earlier.
Speaker Change: So now that that's up and running and the team's executing on it.
Speaker Change: and we have our feet under us. Now we can go add the Dignitana type of deals as well as other opportunities within GE. That's, you know, they're still there as well. So.
Speaker Change: You know, my expectation, Brooks, is that Dignitime is the first one you'll see. Actually, we had the pumper mediation for our big manufacturer, too. So there's really two in the last quarter.
or so, you know, we won't get...
Speaker Change: Five of these a quarter, you know, they're relatively big deals, but when they come in, they'll be very profitable Easy to execute the team's already in place So yeah, there is a pipeline of these behind, you know, the magnitude of each deal and when exactly they'll they close We'll let you guys know and give you some visibility into that as it happens
Speaker Change: Great and then the last thing I and I might have missed this I'm jumping a little bit here this morning but
Speaker Change: Did you give any parameters on the size of the potential chemo mouthpiece opportunity? I think when we talked about it in the past
Speaker Change: I was quite surprised at how big that could potentially be for you. I know it's not going to happen immediately, but just want to think appropriately about what the long-term opportunity might be for you in that area.
Speaker Change: Yeah, so we we don't really have an internal expectation yet that we've talked about. I think if you look at the TAM, it's huge. It's, you know, half a billion dollars kind of thing if you just multiply the number of patients that that could use it times the price of the device.
Speaker Change: You know, we think the potential is huge moving forward. What we don't know yet is, you know, how reimbursement comes in for physicians, how the customers accept the product, how do patients like it as much as we think they will. So there's still a lot to be done.
Speaker Change: But the initial reaction and response from customers has been great.
Speaker Change: So, what does that potential mean? I don't know. It's not hundreds of thousands if it works. It's in the millions, but we have a long way to go before we get there. And I think I said in my prepared remarks, you know, as soon as we get information and we start to see that process move,
Speaker Change: We'll give you guys visibility into that for sure. But it's an unbelievable opportunity just because of the type of product.
Speaker Change: There's reimbursement for the customer. There is no real gold standard besides ice chips that really just don't work. So, you know, all the pieces are there to have a tremendous opportunity. We just have to see if they all fall into place.
Speaker Change: Sure, makes sense. Congratulations on a terrific quarter and thanks for all the information.
Speaker Change: And our next question will come from Kyle Bowser with B. Reilly Securities. Please go ahead.
Kyle Bowser: Great, thank you for taking my questions. Maybe just following up on Kimo Mousy's there, I know there's still a decent amount to learn here, but in any sense to kind of timing on when things could become material and maybe more importantly the kind of expected margin profile, I imagine it would be accretive to the business or at least kind of in line. I'm just kind of curious.
Speaker Change: Yeah, so let me let me take those in reverse. So margin should be accretive to our EBITDA, for sure, even after we split it with Sonara through the JV.
Speaker Change: I think on the timing, we expect nothing this year, so nothing in our current guidance is chemo mouthpiece related. It'll just take us a little while to get customers and sit down with them and get purchase orders. We expect it to contribute.
Speaker Change: not a significant amount next year but it's it's not insignificant either you know probably a couple million dollars kind of thing next year if it if it launches well
Speaker Change: It could be much bigger than that, we just don't know. So it'll be part of our number next year, because by the time we give guidance in the spring, late winter, early spring, we'll have our feet under us a little bit and we'll start to see what's going on.
Speaker Change: and we'll put it in appropriately at that point. So it should contribute next year, we're just not 100% sure yet.
Thank you.
Speaker Change: Yeah, ice chips is really the the first line of defense against this and you know it's why a nurse will come over with a cup of them and have the patient just have it hold them in their mouth.
There are some mouthwashes that people can use.
Speaker Change: A lot of those tend to be kind of after the SOARs develop.
Speaker Change: and you know at that point it's painful, you have risk of infection, like I said there's hydration, nutrition issues, people have to pause or stop treatment. I mean these things are, you know, it's not just one mouth sore, there's multiple and they're just, they're not fun.
Speaker Change: So there really is no good standard of care just beyond the ice chips to start. It's the same concept, right? This just does a much much better job of cooling down the oral cavity and constricting the blood vessels so that the chemo never really gets to your mouth to create the sores and that's the concept behind it.
Speaker Change: So, we believe in it. We've been talking to these guys for quite a while. We think this could become the standard of care. We just have to see how the adoption is at the practice level.
Speaker Change: The opportunity is there, the need is there for sure for patients. This is not a minor side effect of chemotherapy. It's a massive side effect, and it affects almost everyone on chemo. It's not just kind of our core colon cancer patients and oncology. In theory, anyone that's taking chemo could be affected with this.
Speaker Change: got it yep that's a pretty exciting product so look forward to additional updates there maybe on the margin side of the business that you're on track to delivering some nice expansion and hitting you've got your goal of
Speaker Change: 18% or north of that for the year and it looks like
Speaker Change: Most of that should come from margin expansion on gross margin side of the business, as opposed to kind of on-facts leverage, seeing increased third-party payer collections and scale and sales mix. I mean, is that fair in order to kind of march towards this goal, which you're doing nicely?
Speaker Change: Actually, we don't exactly look at it that way because some of our businesses have quite a bit of variable costs down in G&A. For example, all of our TPP business, we have to spend money as we grow it to improve our volume of, keep our capacity for billing insurance.
Speaker Change: So but I think there are fixed costs down in G&A that we definitely will leverage depending on what we're going in. Some of our DME businesses like the rental business has very little G&A so that's where you can get some leverage. So I think we would look at it more in positive product mix as we go forward.
Thank you.
Speaker Change: Okay, great. I'll jump back in queue. Thank you for the update.
Thanks, Kyle.
The End
Speaker Change: And our next question will come from Matt Hewitt with Craig Hallam. Please go ahead.
Speaker Change: Good morning and congratulations on the quarter. Maybe just one more question, and I apologize if I miss this, but regarding chemo multis as it's a joint venture, will you be recording the revenues or will you be reporting the operating profit, or how will that flow through the income statement?
Sure. It's a product coming through the partnership.
Speaker Change: But we are selling it so all the revenue will be in our top line
Speaker Change: You'll see a little bit of gross margin for us to pay certain bills that we take on.
Speaker Change: like commissions and things down in SG&A. But then ultimately the bulk of our profit will be shown on the equity line, the equity investment line with Sonara, a line item that we do not have currently in our P&L but we'll have in the future as we get revenue on this product.
Speaker Change: God, it's super helpful. And then maybe one, and I apologize if this was asked, but it is...
Speaker Change: Does the outcome from the election have any impact on your business? You know, as you think about, you know, shifting maybe a greater push towards home health care and the needs that are kind of ramping for that sector.
Speaker Change: Does this election change anything there? Does it maybe put more of a focus on it? Just any thoughts post-election on how that could impact your business. Thank you.
Speaker Change: Sure, so I don't think the election impacts that. I think COVID had a bigger impact, right? It was already kind of moving that way to get people out of the hospital and then COVID just put a big spotlight that, you know, a lot of these patients, not just our patients, but a lot of patients don't need to be sitting in a hospital for various reasons.
So I think everything was already moving there.
Speaker Change: I think, from an election standpoint, we're pretty shielded to those kind of things. You know, people have cancer regardless of who the president is and who's in the Senate and who controls it.
Thank you.
Speaker Change: So we're relatively shielded from those types of macro things, which is nice, right? Our business is just our business, and we don't have to worry about those kind of things.
Got it. All right. Thank you. Thanks, Mike.
Speaker Change: And our next question will come from Aaron Warwick with Breakout Investors. Please go ahead.
Aaron Warwick: Hey guys, congratulations on the great quarter. I had a question as it relates to the Scenera joint venture, obviously...
People are excited about this chemo mouthpiece for good reason.
Speaker Change: But just, you know, that wasn't the initial product that you guys were talking about with them. Can you give some update as to, like, how that initial business with them is going, what you expect as we start to turn the calendar to 2025 and the growth opportunities there?
Sure. Good morning, Aaron.
Speaker Change: I think with Scenario there's there's three pieces to that JV.
Speaker Change: To your point, the initial products, the Biacos and Hycal, which are the antimicrobial and the collagen product, I think it's going great. We have those as part of our advanced wound care product line. That's how kind of we refer to it internally. So it's not just those two. Those two are phenomenal products and a piece of it for sure. But there's a lot of products that patients need to treat their wounds. So we, you know, if you look at wound care for us,
Speaker Change: but in addition to that with Sonara you know they brought us chemo mouthpiece they brought us a radioderm which we talked about I think in August to treat radiodermatitis.
Speaker Change: And then there's obviously the third piece, which is their Tissue Health Plus initiative that I think is launching next year.
Speaker Change: The relationship is as good as it's ever been. Those guys are phenomenal at finding these types of products and opportunities.
Speaker Change: But the good news is, at least in advanced wound caring with chemo mouthpiece and radioderm, those are all either already launched or launching and all growing, which is nice.
Speaker Change: And how much have those contributed to 2024 and what do you expect in terms of growth opportunities within 2025?
Speaker Change: Yeah, so they're going to contribute quite a bit next year. We expect wound care to grow considerably. We're still working through the budget process now for next year. But it should be a big part of our growth will be in wound care, if not the majority of it.
Speaker Change: I think in 2024, the advanced wound care piece, they've done a really good job, our team has done a good job of replacing that lease revenue we had from 2023, which was a few million dollars.
Speaker Change: So they had to overcome those comps, which they have, and it will grow beyond that. So that business as a whole is still, you know, mid-millions, right, $5, $6, $7 million in 24. But that should more than double next year.
That's the expectation, right?
Speaker Change: Yeah, that's what I kind of thought based upon your previous guidance and just wanted to clarify that since you had such a strong quarter And sounds like there's some huge opportunity in 2025 there as well. So that's great
Speaker Change: And then, in terms of the margins, you know, really impressive EBITDA margin, what should our expectations be? I mean, I see you...
Speaker Change: The guidance for the year, obviously, it was weaker than that in the previous quarters than we had in Q3, but on a go-forward basis, is there going to be that kind of inconsistency with the EBITDA, or should we start to see it get more in that 20% range moving forward?
or higher even.
We're trying to take that.
Speaker Change: Yeah, so definitely we were higher this quarter. As we look at the guidance, that sort of implies basically just slightly beating last year which was a 19 point something percent.
Speaker Change: We would point out that it is very typical for us to be lower in the first quarter generally.
Speaker Change: because the way the business works, there's some seasonality to how we get paid.
Speaker Change: and how much revenue we can book on that college in an RTPP level business. And we have some expenses that sort of are heavier in the first quarter. So you should always look for the first quarter to be a little bit lower than say what we just reported in the third quarter or even the fourth quarter.
The End.
Okay, thank you.
Speaker Change: And this concludes our question and answer session. I'd like to turn the conference back over to Richard DiIorio for any closing remarks.