Q4 2024 Assertio Holdings Inc Earnings Call
Eric: Thank you for standing by. My name is Eric and I'll be your conference operator today.
Eric: At this time, I would like to welcome everyone to the Assertio Holdings for a year 2024 results conference call. All lines have been placed on mute to prevent any background noise.
Eric: After the speakers are marked, there will be a question in the answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you.
Speaker Change: I would now like to turn the call over to Matt Kreps, investor relations for the company. Please go ahead.
Speaker Change: Thank you, Eric. Good afternoon, and thank you all for joining us today to discuss Assertio's fourth quarter and full year 2024 financials. The news release covering our results for this period is now available on the investor page of our website at investor.sertio.x.com. I would encourage you to review the release and tables in conjunction with today's discussion.
Speaker Change: With me today are Brendan OGrady, our Chief Executive Officer, and Ajay Patel, Chief Financial Officer. In just a moment, Brendan will open the remarks and provide an overview of the business. Then Ajay will cover our financial results and will return to discuss our guidance.
Speaker Change: After that, we will take questions from our covering research channels.
Speaker Change: Please note that during this call, management will make projections and other forward-looking statements regarding our future performance.
Speaker Change: Our actual results may differ materially from those projected in the forward looking statements and I'm, sorry to ask specifically disclaims any intent or obligation to update. These forward looking statements, except as required by law and with that I will turn the call over to Brendan. Please go ahead. Thank.
Brendan OGrady: Thank you, Matt I'd like to start by welcoming everyone to today's call and thanking you for joining us I'll begin my comments with some overall perspectives on 2024, and then turn the call over to a J to discuss Q4 and 2020 for full year financials. I'll then come back after a J to discuss our 2025 outlook before we take <unk>.
Speaker Change: Questions from our covering analysts.
Brendan OGrady: As you know I've been in the CEO chair for about nine months now.
Brendan OGrady: During that time I've been able to assess the overall business the growth drivers structure operating model BD landscape and talent I'm happy to say that over the course of my first nine months, we have address needs in all of those areas and are making progress to return <unk> to growth.
Brendan OGrady: Or rather than later.
Brendan OGrady: My perspective is that from late 'twenty three to 2026 is a pivotal time in <unk> evolution companies.
Speaker Change: Companies go through cycles as lead assets transition and as Sergio is no different.
Speaker Change: That is why I think of 'twenty 'twenty four is our year of stabilization. When this transition phase was new I think of 2025 is a year of transformation as we prepare prepare for the future.
Speaker Change: And I think a 2026 is the year that the growth phase begins and we are aligning our strategy accordingly.
Speaker Change: To explain a little more why I characterize 'twenty 'twenty four is the stabilization here a cereal was coming off the acquisition and integration of spectrum and the subsequent loss of exclusivity of <unk> in.
Speaker Change: In addition to managing the loss of exclusivity event Indocin 'twenty 'twenty four was focused on making the transition from into sinter role, but on as the lead asset <unk>.
Speaker Change: Part of that transition was adjusting to the reality that roll. It on is it very different asset then indocin. It competes in a very different market with different economics and requires a different go to market approach. However.
Speaker Change: However, it has given us a good foundation to build from especially in oncology and oncology supportive care. So I think stabilization is the correct word to describe that journey.
Speaker Change: Overall I am proud of what we've accomplished in 2020 for not only with rolling on in Edison, but across the board as we have made great strides.
Specifically, we exceeded 60 million enrolled around sales growing our share in the community oncology clinics segment, where we have primarily focused manage the erosion of the indices due to generic competition and optimize the rest of the portfolio stabilizing the P&L on the process, we generated good cash flow and financial.
Speaker Change: <unk> from all our assets and now have a stronger balance sheet to deploy and our transformation efforts in 2025.
Speaker Change: We completed and presented the roll it on same day dosing trial that we believe supports the use of roll it on as a safe and effective agent when given the same day as chemotherapy treatment.
We completed a commercial pilot project for synthesis and to confirm that growth is not only possible, but probable with the addition of in person promotion.
Speaker Change: We also added new talent to our leadership team with the appointment of Mary Patricia as Chief Commercial officer, and in tandem appointed former Chief commercial officer and former Chief.
Speaker Change: Chief Financial Officer, Paul Schwichtenberg, as Chief transformation Officer.
Speaker Change: Lastly, we made changes and added new talent to our board with the appointment of David Stark a former colleague of mine and former Chief legal officer of Teva Pharmaceuticals, and Mark Horizon, Our Ah.
Speaker Change: Our seasoned pharmaceutical senior executive with 30, plus years of commercial experience, including significant oncology experience and of course, Heather Mason Board member the interim CEO. Prior to my arrival also became chair of our board.
Speaker Change: As I sit here today, we are in a stronger position on all levels than we were just nine months ago to deliver on our commitment to return to Sergio to growth with that as a prelude I will turn it over to a J to discuss our financial performance in 2024.
Thanks, Brendan today, I'll walk through our financial results for the fourth quarter and full year 2024.
Speaker Change: Before I begin I want to highlight a key few key points.
Speaker Change: My commentary will focus on quarter over quarter comparisons as year over year comparisons are less relevant due to the spectrum acquisition and then descends generic competition in late 2023.
Speaker Change: <unk> is now our lead asset and brings with it associated changes in margin operating cost structure and cash flows as seen in the 2024 results.
Speaker Change: Q4 product sales were $29 6 million.
Speaker Change: Zero point $9 million from Q3, driven by strong overall baton in Otrexup sales.
Speaker Change: <unk> sales were $15 $4 million.
Speaker Change: Zero point $4 million, driven by higher volume, partially offset by changes in price.
The Q4 step up in volume was inclusive of new customer stocking, which helps to diversify our base and expand our opportunities. We do expect the stocking pull through to occur throughout the first quarter.
Speaker Change: In addition sales were $5 $5 million slightly down from $5 $7 million in Q3 due to pricing impacts from generic competition.
Speaker Change: Reported gross margin was 61% down from 74% in Q3, due to $2 $9 million and higher excess inventory write down primarily foreign discern due to generic competition.
Speaker Change: Excluding these charges gross margin was 71% with the decline from Q3, driven by changes in product mix.
Turning to operating expenses SG&A expense was $21 $4 million up from $16 $7 million in Q3.
Speaker Change: R&D expense was $1 $2 million slightly up from $1 million in Q3 adjusted.
Speaker Change: Operating expenses, which excludes stock compensation DNA and changes in fair value and impairments was $21 $6 million in Q4 compared to $16 4 million in Q3.
Speaker Change: Fourth quarter adjusted operating expenses reflected a net five 4 million dollar increase in litigation contingencies, which was partially offset by lower general operating expenses.
Speaker Change: GAAP net income for the fourth quarter was a loss of $10.5 million compared to a loss of $2 $9 million in the third quarter.
Speaker Change: Fourth quarter was impacted by an impairment charge on intangible assets of $5 $2 million.
Speaker Change: Adjusted EBITDA for the fourth quarter was a loss of zero point $5 million compared to income of $5 $3 million in the prior quarter.
Fourth quarter adjusted EBITDA was impacted by the inventory write downs and litigation contingencies, a detailed reconciliation of adjusted EBITDA is available in our press release.
Speaker Change: Turning to full year results I wanted to highlight key takeaways in comparison to our 2020 for guidance and related commentary previously provided.
Speaker Change: Total product sales were $128 million at the high end of our sales guidance range.
Speaker Change: <unk> sales exceeded our expectation at $61 million in defense sales exceeded our expectations at $26 8 million.
Speaker Change: Gross margins performed largely as expected based on the change in product mix from Indus into all without however, it was negatively impacted by $4 $2 million in write down for <unk> excess inventory as a result of generic competition, which is now behind us.
Speaker Change: Adjusted operating expenses were $73 $7 million, which was higher than expectations. This was mainly due to higher litigation related costs, including about $1 million and net contingency reserves.
Speaker Change: Full year, adjusted EBITDA was $17.1 million below the $20 million low end guidance range, mainly due to the $4 million and this and the inventory write downs and $1 million and higher litigation contingencies there.
Speaker Change: The business generated $26 $4 million in operating cash flows in 2024, allowing us to exceed the high end cash goal of $100 million. As a reminder, in 2024, we began to invest cash into short term investments our total cash position.
Speaker Change: <unk> cash and cash equivalents and short term investments.
Brendan OGrady: With that I will turn the call back to Brendan to discuss 2025 priorities and outlook.
Speaker Change: Thanks, a J.
Speaker Change: So now with 2024 behind US I would like to turn to 2025, our year of transformation I would like to begin by explaining clearly what I mean, when I say transformation.
Speaker Change: It really comes down to four strategic priorities in 2025.
Number one is simplifying our structure and processes. This really started late last year with the appointment of Mary Patrice <unk>, Chief Commercial officer, and Paul Schwichtenberg as Chief transformation Officer.
Speaker Change: Mary will focus on go forward commercial strategy and aligning the commercial organization to execute on our growth priorities.
Speaker Change: While Paul will work directly with me, a J and the entire management team to streamline overall structure and processes to enable a successful transformation of our business.
Number two is focusing on growth assets, which today are primarily role, but on incentives and to which we hope to build upon.
Speaker Change: Number three is reducing our legal exposure and associated opex like many companies that have grown through M&A, we have inherited a significant amount of legal baggage over the years, we have made significant progress in reducing this exposure in 2024 and will continue to do so in 2025 and this will ultimately have a beneficial.
Speaker Change: Effect on Opex and EBITDA going forward.
Speaker Change: Number four is deploying our capital in a smart and accretive way to generate long term value.
Speaker Change: We are currently in the process of evaluating numerous strategic opportunities to better position of Sergio for near term and sustainable growth.
Speaker Change: Well I want to emphasize that we are engaging in many transformative strategic discussions.
Speaker Change: I'm not able to disclose additional details at this time.
Speaker Change: I also want to remind all of our stakeholders, while we have strengthened our balance sheet, which will expand our hunting grounds and improve our odds for closing a strategic deal any deal must be synergistic comp.
Speaker Change: Complementing our omnichannel commercial approach and must make economic sense.
As I look at 2025, we believe modest growth enrollment honest possible. This year combined with double digit <unk> growth, but being largely offset by continued into some decline in the rest of the portfolio being flat to slightly declining.
While we have made realistic assumptions as it relates to <unk> the market is uncertain and difficult to predict in addition, the long acting G. CSF market is very competitive and continues to be dynamic from quarter to quarter.
That said I want to be clear that we are focused on growing overdone and continue to add new role, but on accounts and customers late in 2024, while expanding payer access early this year to better position us for expansion into the commercial and institutional segments too.
Speaker Change: To enable that growth as a J mentioned, we increased inventory at the end of Q4 to support customer and Tam expansion as we bring those customers online it will take time to pull through some of the inventory hence.
Speaker Change: Should not expect to see equal quarters as you saw in 2024, where we were primarily focused on the part B community oncology clinics segment.
Speaker Change: However to achieve continued growth and rolled it on we must expand beyond the community oncology clinics segment.
Speaker Change: This will also be critical for continued growth in 2026 and beyond for.
For these reasons Q1 rolled around sales will likely be lower than Q4, but Q2 should see growth from Q1.
Speaker Change: In addition, as a result.
Speaker Change: Previously mentioned pilot project, we have increased our promotional efforts on sympathin, combining our non personal promotion platform with a small field sales team to call on high decile prescribers and key markets.
Lastly, as I stated we are currently evaluating numerous strategic options and opportunities that will impact our go forward strategy should they play out.
Speaker Change: Given that background and the uncertainty of 2025, I'm, giving guidance ranges for net sales between 108 and $123 million and adjusted EBITDA of $10 million to $19 million.
Speaker Change: Hope to be in position to lay out our strategy in more detail during the May earnings call and provide updates to our strategy and guidance ranges as appropriate throughout the year.
Speaker Change: And with that I think we're ready for Q&A operator. Please go ahead with the instructions.
Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
Speaker Change: Colors will be allowed one question and one follow up question.
Jim Sidoti: Your first question comes from the line of Jim Sidoti with Sidoti <unk> Company.
Speaker Change: Please go ahead.
Jim Sidoti: Hi, good afternoon. Thanks for taking my question. So it's a pretty broad guidance range you know what.
What are the factors that can change that get you from the 180 to 123.
Jim Sidoti: Yeah, Hi, Jim Thanks for the question, Yeah, I know, it's a pretty high guidance range that range, there's a lot of <unk>.
Puts and takes this year as we look at the business, we're still not quite certain how indices will evolve and of course into sin has traditionally had a pretty good margin. So that could have an impact on EBITDA, one way or the other I mentioned that.
The long acting G. CSF market is dynamic from quarter to quarter, we've done very well in the Medicare part B space, we've grown share.
But we really need to expand beyond that into commercial and institutional segments. So.
Jim Sidoti: To continue to fuel that growth. So there's a lot of uncertainty Ah theres uncertainty for the rest of our portfolio. So as we look at 2025, we felt it appropriate to give a wide guidance range and as some of the strategic options that aren't included in that guidance, whether they come to fruition or not we will come back and narrow that guidance as appropriate.
Speaker Change: Alright, I know you said to ask one question, but I'll just throw one more in how likely is it that you do.
Speaker Change: And acquisition in the next 12 months.
Speaker Change:
Speaker Change: I mean, I think it's I think the odds are above 50 50, it's hard to put a number on it I mean, we've certainly strengthened the balance sheet.
Which puts us really in a different range of assets that we can look at so there is a broader range of assets that we can look at.
Speaker Change: So that's all good but the important thing here is we're trying to find the right fit for the organization. We certainly don't want to overpay, it's been a little bit of a seller's market.
And it has to fit our model.
Speaker Change: So we've seen some things we've had we've had numerous discussions we have discussions ongoing today.
Speaker Change: But it's hard to tell when or if they'll pan out, but I'm optimistic that we will do something in this year.
Okay. Thank you.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Thomas Flaten with Lake Street capital markets LLC.
Go ahead.
Thomas Flaten: Hey, good afternoon, guys. Thanks for taking the questions.
Thomas Flaten: And then maybe I could start you had an entire kind of pillar for 2025, Rob legal exposure and you had the relatively large legal reserve that was taken in the fourth quarter can you maybe provide some color around what those exposures are.
And just how.
Thomas Flaten: How we should think about you know what that means for you guys going forward.
Thomas Flaten: Yeah, No I mean, I know, we've talked about in the past and thanks for the question Thomas but I mean I.
Thomas Flaten: I think the legal exposure is well known I mean, we've got the ongoing opioid legal exposure. That's there we've worked through that we've had.
Thomas Flaten: I don't know 140, <unk> hundred 40, some cases dimmest dismissed to date and we're optimistic that will continue on a on a good trajectory there, but it just takes time right. We don't control the M. D. L. We don't control what that looks like but we're making progress in reducing that that exposure we've had some shareholder lawsuits.
Thomas Flaten: We're working through and some other things. So you know I think you know without divulging any confidential information we made progress last year as I said and I think we'll make progress this year and as we clear some of those issues are opex on legal comes down and that has a direct impact on EBITDA. So.
Thomas Flaten: It's a little bit of a journey, but things are going in the right direction.
Thomas Flaten: And then switching gears.
Thomas Flaten: <unk> ASP files from yesterday, it looks like you had a little bit of an uptick in enrollment on Asps can you confirm that and then also talk about what you guys have been doing to manage it to mend JSP.
Thomas Flaten: Yeah, Thomas I can take that thanks for the question you are right Yep. If you kind of look at it sequentially over quarters, we did see about a 2% increase in our published ASP that just came out.
You know its primarily been a function of ensuring we can continue to get the volume gains as we penetrate more and more in the market and then being really disciplined on the pricing side.
Thomas Flaten: So I think a combination of that and execution by our commercial team.
Has really paid dividends in that.
Thomas Flaten: Excellent thanks for taking the questions.
Speaker Change: Your next question comes from the line of <unk> Rama with Maxim Group.
Thomas Flaten: Please go ahead.
Rama: Hi, everyone. Congrats on the quarter and thanks for taking my question just a few on rolling on so obviously you had the same day dosing data come out in December I guess at this 0.2 questions. One are you seeing any physicians.
Rama: Prescribed Robert on for same day dosing or have you seen like an uptick in that and two could you kind of walk us through.
Rama: I guess now the logistics and timelines for getting that into the <unk> guidelines and we can really start seeing the benefits.
Rama: Of that data.
Speaker Change: Yeah sure Hi, <unk>. Thanks for the question.
Speaker Change: I think that we haven't really seen the impact of same day dosing or an impact of same day dosing with roll down yet.
Speaker Change: We just presented the results at the San Antonio Breast cancer Conference in December.
Speaker Change: So that was when the information really became publicly available we presented.
Speaker Change: The results again, I think at the Miami breast cancer Conference, just a week or two ago here in March.
Speaker Change: And the process now is that to put the manuscript in a peer reviewed journal and then in the back half of the year approach N CCN for potential inclusion in the guidelines so.
Speaker Change: It's an evolving strategy throughout the year I think.
Speaker Change: Up until this point when we were asked by providers or physicians.
Speaker Change: If rodin was a safe or if there'd been any studies was rolled on in same day.
Speaker Change: We basically say that we don't have any information there's been no data to support that.
Speaker Change: And that would be the end of the conversation I think now we're.
Speaker Change: <unk> able to direct them into.
Speaker Change: Our medical Department and Dr. Howard Franklin, our head of medical is able to to have a dialogue with physicians about that study. So I think we're making progress with same day.
Speaker Change: And getting that information out there, but I don't think we've seen much of a commercial uptick as of yet.
Speaker Change: So when you say get it into the Shanghai market on the back end of the year are you are you, suggesting that we may see more of an impact from this I guess in 2027 or so do you still think it'd be a 2022nd half 2026 event <unk>.
I'm, sorry, what 2020.
Speaker Change: I think it's I think it's built right I don't think you're going to see all of a sudden this big step up in in the same day dosing, whether it's in the guidelines or whether it isn't.
Speaker Change: I think it's just kind of an awareness that that it's a that there's data to support that.
Speaker Change: We believe supports that it's safe and effective.
Speaker Change: And there is no guarantee that it will be included in the N. CCN guidelines either I mean, you know as we presented the data twice, we get it into a peer review journal will certainly approach N C C N and.
As for inclusion in the guidelines, but theres no guarantee there that that's up to end CCN as to as to what they do there, but I just think in general having the the trial completed and with.
Speaker Change: With positive results as that information is disseminated and becomes more aware in the public domain. Then we will see a gradual uptick in usage there.
Speaker Change: Thanks for taking my question.
Speaker Change: Sure.
Speaker Change: Your next question comes from the line of Rod.
Speaker Change: Graham so violent.
Rod Graham: With H C Wainwright and company.
Speaker Change: Please go ahead.
Speaker Change: Good afternoon. This is Dan on for Ron Thanks for taking our questions.
Speaker Change: Regarding <unk>, how many generics are there at this point in time and how many are you expecting to be at the end of 2025, and 2026 and as a follow up regarding the Susanne.
Speaker Change: Initial commercial.
Speaker Change: For the study have there been any noteworthy changes on uptake there recently.
Speaker Change: So what and how is that shaping up thank you.
Speaker Change: Sure. Okay. So let me address <unk> first and then ill.
Ill take samples and so.
Speaker Change: I think it was September August September 2023 ones Zaidis launched the first form generic formulation of Edison.
Speaker Change: And then we.
Speaker Change: One generic competitor as well as the compound are in the market for most of 'twenty. All of 2024 in December Hikma received approval.
Speaker Change: For a generic formulation of <unk> that they launched in January so where we stand today is we have two generic competitors is well as a compound or.
Speaker Change: And I would expect one or two other generic competitors throughout the year.
Speaker Change: So I don't know exact timing and I don't know exact numbers it could be more than that it could be less than that if it's if it's more than that then you know that's a headwind and if it's less than that then it's probably a tailwind so we'll see where that where that ends up.
Speaker Change: Ultimately I don't know how many generic filers there are and how many will see but generally once you get five and the market doesn't fiber more it doesn't really matter that the values pretty much totally gone at that point so.
Speaker Change: We're optimizing it to send the best that we can I think today.
Speaker Change: As we sit in the market we've retained the amount of share that we hope to retain and our pricing has been somewhat stable the last month or two so we'll see how long that lasts.
Speaker Change: In regard to symposium.
Speaker Change: Yeah, they'll slippers and showed in our pilot project last year that it was promotional sensitive.
That's really a big shock.
Speaker Change: But we did add as I mentioned for field reps are back in concentrated high decile markets to call on high decile prescribers.
Speaker Change: And we have seen one of the highest months of prescriptions for <unk> since we acquired it in January so we believe that the that the that they are having an impact and we will evaluate as we go through the year.
Speaker Change: What the right FTE equivalent is for field promotion for <unk> and the best way you achieve that whether it's adding more of our own reps or you know.
Speaker Change: Augmenting that with a contract.
Speaker Change: Our contract sales force or may be partnering with somebody for secondary details, but we'll we'll explore that as the year goes on but it does appear that <unk> is responding to in person promotion.
Speaker Change: Awesome. Thank you for the insight.
Speaker Change: Youre welcome.
Speaker Change: Your next question comes from the line of Scott Henry with MVP.
Speaker Change: Go ahead.
Thank you and good afternoon.
Speaker Change: Starting with a follow up question on the legal exposure.
Speaker Change: I.
Speaker Change: What's is there something new on the opioid legal front that drove that in the quarter.
Speaker Change: Or has that been kind of steady.
Speaker Change: I need to get an idea is this a transitory event or is this something.
They may take a little longer to play out.
Speaker Change: Any color on why why now and why the magnitude there.
Speaker Change: Hey, Scott it's a thanks for the question. The short answer is there's nothing new there, but I'll, let a J provide the detail.
Scott Thanks for the question.
Speaker Change: Our contingency was not related to the legal theres a lot not a lot of nuances I can go into the topic due to the ongoing matters.
Speaker Change: We will have further disclosures on them in our 10-K.
Speaker Change: I think for the contingency itself you can look at it as kind of a onetime thing.
From a transitory perspective.
Okay.
Speaker Change: And just a couple just no.
Speaker Change: In the release first the inventory write down not insignificant.
This interest didn't have a short shelf life you know what why the write down you are still selling it as it I would assume that the shelf life.
Speaker Change: Yes, no. Thanks. Thanks for that question. Good question, Yes, So we had about $4 million as I noted in my commentary a edition excess inventory write downs throughout the year.
Speaker Change: Really kind of the Genesis is.
Speaker Change: As a virtual pharma company our production plan start several years in advance. So this would have been in inventory, we had committed to and purchased.
Based on projections prior to generic competition. So as the generic competition came through in that baseline levels that we had to adjust our production plans on a go forward basis in that kind of results and a bit of inventory between historical production in future production, that's going to be left over.
Speaker Change: And that we wrote off throughout this year.
Speaker Change: But we're hoping most of that is behind us now as 24.
Speaker Change: Worked its way through.
Speaker Change: Okay and then.
Speaker Change: Another clarification the loss on impairment of Otrexup.
Speaker Change: Intangible assets.
I'm used to impairment losses, being good gains being bad but.
Speaker Change: It doesn't seem to be the case here, but.
Speaker Change: But what what happened with the Otrexup intangible assets.
Speaker Change: Yeah.
Generalize this is primarily kind of an accounting topic here.
Speaker Change: Like like you've seen in our past right last year and throughout this year, we've been with where our stock price has been and where our market cap has been we've been under kind of the accounting rules are evaluating impairment indicators from our book value of our assets versus the fair value of our assets. So.
Speaker Change: So as we continue to kind of evaluate that gap.
The valuation really kind of necessitated this impairment charge.
Speaker Change: Okay. So it doesn't sound like it was otrexup specific it was Florida and allocation issue you had to put it somewhere and that's where you guys decide.
Speaker Change: Is that correct, but this one was this one was our trucks up specific yes.
Speaker Change: Yes, but was there anything that happened to the franchise.
Speaker Change: And anything new that imperative.
Speaker Change: Just a general allocation.
Yeah, I think it's just generally taking a look at the trended.
Speaker Change: Accomplish during the 2024 period and as we look at it from a future perspective as well.
Speaker Change: Okay, and just just one final question.
Speaker Change: May be over the limit.
Speaker Change: You mentioned cash flow from operations of 11 5 million.
Positive, but then adjusted EBITDA of 500000 negative you Didnt normally I think of those terms.
Somewhat synonymous.
Speaker Change: Why the big discrepancy between cash flow from operations and adjusted EBITDA.
Speaker Change: Yeah, if youre looking at discrete Q4.
Speaker Change: Youre going to see that gap I would say I would look at a broader for the whole year because during during between Q3 and Q4. You also had a working capital impact if you rewind back to Q3, we had positive EBITDA, but negligible operating cash flow. So that's just the working capital kind of turning in Q4 <unk>.
Speaker Change: Are we impacted it but if you look at the full year impact of our 17 million EBITDA versus the $26 million in operating cash flows that was primarily driven by Canada.
Speaker Change: Excess inventory write down which would have been a noncash event in 2024.
Okay. So so basically adjustments to working capital are driving that.
Speaker Change: Adjustments to working capital in that part of the excess inventory charges, which are noncash a bump in 'twenty one.
Speaker Change: Driving it.
Speaker Change: Okay.
Alright, great. Thank you for taking the questions.
Brendan OGrady: I will now turn the call back over to Brendan O'grady, Chief Executive Officer for closing remarks. Please go ahead.
Yeah.
Thank you and I appreciate everyone, who has joined US today I want to reiterate that we are transforming the company to better position <unk> for sustainable near term growth we.
Brendan OGrady: We have a proven platform capable of delivering positive long term financial results. We have an excellent team a sound strategy and a balance sheet poised to unlock growth.
Brendan OGrady: Hope todays call has continued to demonstrate our ability to deliver steady execution on the commercial business, we have today as well as our commitment to finding the right assets and opportunities to further grow that platform.
Brendan OGrady: If you'd like to arrange a meeting at an upcoming event or an update call with management. Please contact Matt Kreps directly using his information provided in the press release, and we will be happy to schedule a time and thank you all once again for joining us today.
Brendan OGrady: Ladies and gentlemen that concludes today's call. Thank you all for joining and you may now disconnect.
Brendan OGrady: Uh huh.
Yeah.
Brendan OGrady: [music].
Brendan OGrady: Okay.
Brendan OGrady: Yes.