CYRX - NASDAQ

Good afternoon, and welcome to Cryoport's Fourth Quarter and Full Year 2024 Earnings Conference Call. All participants will start in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions]. As a reminder, this call is being recorded. I will now turn the call over to your host, Mr. Todd Fromer from KCSA Strategic Communications. Please go ahead.

Thank you, operator. Before we begin today, I would like to remind everyone that this conference call contains certain forward-looking statements. All statements that address our operating performance, events, or developments that we expect or anticipate occurring in the future are forward-looking statements. These forward-looking statements are based on management's beliefs and assumptions and not on information currently available to our management team. Our management team believes that these forward-looking statements are reasonable as when made. However, you should not place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results, events, and developments to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those describing Item 1A, risk factors, and elsewhere in our Annual Report on Form 10-K to be filed with the Securities and Exchange Commission and those described from time to time in the other reports which we file with the Securities and Exchange Commission. It is now my pleasure to turn the call over to Mr. Jerrell Shelton, Chief Executive Officer of Cryoport. Jerry, the floor is yours.

Thank you, Todd. Good afternoon, ladies and gentlemen. Thank you for joining our fourth quarter and full year 2024 earnings call. With us this afternoon is our Chief Financial Officer, Robert Stefanovich; our Chief Scientific Officer, Dr. Mark Sawicki; and our Vice President of Corporate Development and Investor Relations, Thomas Heinzen. As a reminder, we have uploaded our fourth quarter and full year 2024 in review document to our website. It can be found on the main page of the Cryoport, Inc. website. This document provides a review of our financial and operational performance and a general business outlook. If you do not have a chance to read it, I would encourage you to go to the website and download it. Now, I will provide you with a brief update on our business, and then we will take your questions. 2024 was a tough year for life sciences. The effects of macroeconomic conditions and market dynamics were felt throughout the year. We adapted to the challenges and concluded the year with solid results and total annual revenues of $228.4 million, which is in line with our expectations. Our Life Sciences Services business continued its expansion with double-digit year-over-year growth in BioStorage and BioServices revenue during both the fourth and the full year periods. For the full year 2024, our Life Sciences Services business represented 67% of total revenue compared to approximately 62% last year. We saw considerable revenue growth for the support of commercial cell and gene therapies, which rose 37% and 20% for the fourth quarter and full year, respectively. Cryoport continues to expand its market share in the growing cell and gene therapy industry. As of the year end, we supported a total of 701 clinical trials, a net increase of 26 clinical trials over last year, with 81 of these trials in Phase 3. This is a record number of total clinical trials supported by Cryoport, and it is indicative of the potential commercial revenue opportunity that is developing. Moreover, we also saw a record number of Cryoport-supported commercial approvals over the last year, increasing the number of commercial programs we support from 14 to 19. In our Life Sciences Products business, we think our order patterns are beginning to show signs of stability. I would remind you that even with the downturn of the cryogenic systems market, our management team has continued to provide positive free cash flow from this business. As previously reported, during 2024, we implemented a number of cost management initiatives in our Products segment to align our operations with current global industry dynamics. As cost reduction and capital realignment strategies were implemented across our entire company, we made considerable progress in improving our gross margin. For the fourth quarter of 2024, our gross margin rose to 45.8% compared to 40.6% in the same period last year. We remain confident that these actions that have been taken are taking effect and will lead us to a return to positive adjusted EBITDA during 2025. At the same time, we have continued to advance our most important business development plans, which have been underway for some time, as we strive to balance those plans with our commitment to achieving positive adjusted EBITDA during 2025. We're confident that these undertakings will open up new revenue streams and move us forward. For example, in the fourth quarter, we opened our IntegriCell cryopreservation solution with new state-of-the-art facilities located in Houston, Texas and Liege, Belgium. IntegriCell was set up to produce high-quality standardized cryopreserve starting material for the manufacture of cell therapies. Based on market research and our first interactions with prospects and newly signed clients, we believe IntegriCell will generate significant revenue as it offers significant advantages to cell therapy manufacturers, allowing them to produce more consistent, more robust, standardized product more efficiently. IntegriCell addresses a critical aspect in optimizing the supply chain for the development and commercialization of cell-based therapies. Another example is our Cryoport Express Cryogenic CXHV3 shipping system, or HV3, which was introduced in January of this year. The HV3 is a revolutionary cryogenic shipper that offers our clients enhanced payload production, storage efficiency, mobility, and accessibility. With the introduction of HV3, we also improve patient accessibility to vital cell therapies in smaller cities and remote areas as it will fit into smaller aircraft. We believe this will benefit patient outcomes at large. Looking forward in 2025, we believe we are well positioned to further capitalize on the anticipated growth of the cell and gene therapy industry. At this time, we're projecting that 23 VLAs or MMA filings could occur in 2025, up from 11 last year. We're happy that 2025 is off to a good start as three filings have already occurred in January. Cryoport's huge base of clinical trials continues to push forward, and we expect to post another record amount of commercial revenue in 2025. Based on all this, we're providing full-year 2025 revenue guidance in the range of $240 million to $250 million. We intend to maintain our leading market positions, open up additional revenue streams, and unleash our operating leverage as market demand grows. We will complement this with seeking strategic collaborations throughout the year. We're confident that we have taken steps necessary to implement our growth plans and to reach our objectives of positive adjusted EBITDA during 2025. This concludes my prepared remarks, and now I'll ask the operator to open the lines for your questions.

Thank you. [Operator Instructions]. Your first question comes from the line of Anna Snopkowski from KeyBanc Capital Markets. Please go ahead.

Hi, good afternoon. Thank you for taking my question. This is Anna on for Paul Knight. Maybe to start on the significant and impressive 37% increase in commercial revenue you saw in the quarter. Could you walk through some of the drivers there and whether this was broad-based or maybe one commercial therapy that drove this? Thank you.

I think Mark Sawicki can best answer that question.

I'd be happy to answer that question. A couple of factors. Number one is, it was a broad-based increase. It wasn't focused on one or two clients. Some of the key drivers here are, we've seen the advancement of earlier line approvals with some of our commercial clients. We've seen additional companies get approved. We had five commercial approvals last year, and we're starting to see contribution with multiple of those programs as well. As well as our historical programs continue to expand on a geographic basis as well as they're pushing for line extension into different therapy classes. All of those have contributed to that strong Q4 performance.

That's helpful. Then switching to the MVE side of the business, it seems like you saw some stabilization there in the fourth quarter. Do you feel confident that this will continue to stabilize or maybe even recover in 2025?

We are seeing the order patterns beginning to show some signs of stability at MVE, and we feel that that will continue throughout 2025. It may be uneven, but we think it will continue to progress.

Thank you.

Thank you. Your next question comes from the line of Puneet Souda from Leerink Partners. Please go ahead.

Hi, guys. Thanks for the questions. First one, on around the guide for 2025, can you elaborate your expectation for service versus product and maybe, what are the growth assumptions you have for biologistics and also the Cryogene and the MVE business within the context of guide?

In the context of guidance, I think Robert will add to what I have to say, Puneet, and thank you for that question. Obviously, services will be a bigger portion of our guidance and it will grow faster than life sciences products. With that, I will turn it to Robert to elaborate more.

Yes, maybe just a few things to put it in context. We typically do not guide on business units directly, but what I can say is if you look at the revenue growth in bio-storage, bio-services, which was double-digit, the bio-services growth, which was 7% year-over-year, but then in particular on the cell and gene therapy side, the storm growth on the commercial therapy side, that obviously drives the services business growth. For product, we certainly have to take a more conservative view, just based on the comments that Jerry had earlier on this call, to really look at very modest increases in product revenue for guidance purposes. It's really driven by the services side.

Okay. That's helpful. Then there's quite a bit of discussion on tariffs. I'm just wondering, is there any impact on the cost of the doers or freezers from any of the steel or aluminum tariffs, Canada, Mexico, or otherwise? I'm just trying to understand. I'm sure you've thought through that, but are there any tariffs on the freezers from the China plant or anything that is getting serviced from US?

We have thought through that. We do have, Puneet. However, tariffs impact us and we can't tell for sure on all of them except the direct things that we hear about the tariffs on aluminum and stainless steel. We will pass on tariff impacts through surcharges for the period of time that they exist. We don't expect impact on our margin. Would you like to comment on that further, Robert?

I think that covers it. I think what we have demonstrated even in the past with some of the supply chain issues that we've had in prior years, that the management has been able to really maintain solid gross margins. I think we have quite good control over the cost structure and the ability to ensure that we maintain gross margins for the MDE, for the products business.

I'd just like to make one thing clear. This is Tom, Puneet. The freezers for the US market are made in Ball Ground, Georgia. Cryogenic freezers and the cryogenic doors are also manufactured in Minnesota. There is no impact that way for our US business.

Got it. That's helpful. Then when I was looking at your clinical trial growth, just the last question on this. That appears to be about net clinical trial growth of about 6% in 24. Wondering what's your expectation here for 25? Then any impact from NIH indirect cuts? A number of these trials get started in the academic setting in medical schools. Wondering if you're seeing any updates or impact that you're contemplating from any of those institutions? Thank you.

Puneet, I'll answer the last question first and then turn it to Mark for trial expectations. In terms of the NIH, we have very little exposure to the situation with the NIH, so we aren't directly concerned about that at this point. Mark, would you answer the second part?

Yes, happy to. As you can see with the data itself in Q4, Q4 was the best performance that we've had in, I would say, over the last eight quarters on new trial acquisition. I think that's a manifestation of the improvement in the overall cell and gene space as it relates to clinical trial activity. I do anticipate that we will see a continued strong performance, so I would expect that 2025 will be stronger than 2024 on a new trial acquisition basis.

Puneet, as you'll see in the review document, there's another 23 possible filings in 2025, so on the commercial side, there's a lot of activity as well. Three filed already in January. We expect another 10 possible approvals, of which five are new therapies, so it's a very robust pipeline of activities within the cell and gene therapy space.

All right, thank you.

Thank you, and your next question comes from the line of Tejas Savant from Morgan Stanley. Please go ahead.

Hi, this is Edmond [ph] on for Tejas. Thank you for the time. Switching back to MVE, can you guys elaborate a little bit more on what you guys are seeing from your customers across your geo regions in terms of seeing early signs of stability?

Well, the signs of stability are in the order patterns, and that's a collective thing, so that's as far as I can actually go in answering that question. We do see signs of stability. This doesn't say that everything is stable and rosy, but we are seeing those signs of stability that we like to see in the market.

Got it, and appreciating that your presence in China has gotten smaller over the past few years to about less than 3% of your total, but given the concerns on Chinese retaliations on tariffs, even if nothing has happened yet, to what degree are local substitutes available in the region, and do you continue to think that for China, in China strategy is sufficient in securing a position in the market here?

Yes, I mean, local sources in China certainly are available, and there are other sources throughout Asia, and we're implementing our China strategy as we speak, and we'll unveil that later on.

So, yes, and outside of China, again, this is where Tom mentioned that we have our manufacturing facilities here in the U.S. that manufacture the cryogenic freezers and doers for the U.S. market, for the European market. So, in some ways, we mitigate some of that risk that a lot of other companies have in the space with regards to China.

Maybe one last thing to add there is that in our guide, there is no assumption of a recovery from China.

Got it. That's helpful. And then one last one for me. How are you guys thinking about revenue contributions from the five new therapies that were approved of in 2024 for your 2025 guidance? And with the recent layoffs at the FDA, are you starting to hear customers' concern about longer approval timelines for cell and gene therapies?

Mark, I don't know that we can give guidance on those five therapies, but I'll let you speak to that question.

No, you're absolutely right. We don't break out individual contribution, although we do anticipate that multiple of the new therapies that were launched in 2024 will contribute meaningful revenue to the commercial totals for 2025. That's about as far as I can delineate on that. Regarding the FDA, no, we do not anticipate the activities within the FDA from a governmental standpoint to have an impact on cycle time. In fact, we've seen very robust approval activity, and we continue to see progression there, so I wouldn't anticipate a meaningful impact on the 2025 portfolio.

As a matter of fact, one of our customers today announced that their BLA received and have a PDUFA date in August, so things keep moving forward.

Great. Appreciate the time and the answers, guys.

Great. Thank you.

Thank you. And your next question comes from the line of David Saxon from Needham. Please go ahead.

Great. Good afternoon. Congrats on the quarter, and thanks for taking my questions. Maybe I'll start with Robert. Sure. Just on profitability, the PR notice or noted expectations for getting to profitability in 2025. Can you just help us around specificity? When might that be, either by quarter, like first half, second half, and then kind of directional expectations for the year? Should we be thinking break-even or any better or worse? And then I'll have a follow-up.

Yes, maybe just to frame it a little bit, when we talked about some of the cost measures that we took starting in Q2, we've made good progress. We implemented the majority of those activities, and that really drove that consistent improvement of adjusted even over the last three quarters, moving from a negative 6.6 million to now negative 1.3 million for Q4. On an annualized basis, that equates to about 22 million, so that is in line with what we were targeting, actually a little bit better than what we were targeting. We are, of course, focusing on expanding gross margins and driving profitable revenue growth, and you've seen significant enhancement of our gross margins year-over-year, both for services revenue as well as for the product revenue. So I think we're well on track to continue to execute. At the same time, we are driving certain initiatives that we have that we believe will drive revenue growth in the near future, so that's another aspect to consider. So I think in terms of timing of reaching adjusted even, positive adjusted even, we can't give you direct timing, but it is our stated goal to reach that during 2025, and the time of it really depends on some of the ramp that we expect to see on the services side, and particularly on some gene therapy side.

Okay, that was helpful. Thanks for that. And then I wanted to ask on NPE, so you're noting order patterns are stable. The quarter was pretty strong at 20 million in dollar terms, so is that a good starting point against the backdrop of order patterns being stable, or is there any, like, mixed dynamic that we should, you know, be aware of that would, you know, materially change kind of quarterly expectations? Thanks so much.

There's no mixed dynamic, David, that we can point to right now.

Okay, great. Thanks.

Thank you, and your next question comes on the line of Subbu Nambi from Guggenheim. Please go ahead.

Hi, guys. Thank you for taking my question. One question, once a therapy is commercial, what are the drivers of revenue growth to Cryoport on that therapy? Is it just volume ramp for the therapy and indication of stamping, or are there opportunities to increase your wallet share with the manufacturer?

Yes, we pursue both avenues, so both ramp in volume from a patient's treated standpoint, as well as revenue diversification. So, in many of the cases, we're seeing that both of those occur.

Thank you for asking that, and it's, yeah, you see that in the BioServices, BioStorage starting to grow, and hopefully this year, as Mark will probably talk more later on, is that IntegriCell initiative. So, these are the projects that we've invested in for years that are now starting to get some traction.

Thank you for that, guys, and you did mention that you expect 2025 to be better, but what have you been seeing with respect to biopharma, biotech funding, and 4Q, and what trends are you expecting to see in 2025?

Yeah, so I think there was, I think it was $15.2 billion for all of 24, which was the best year in a number of years, in fact, for cell and gene investment. 2025 is going to be a little bit more challenging from an expectation standpoint. I think it'll be a strong year, but we obviously have to see what happens with the federal government and what's happening there. So, I'll couch that with just a caveat, but the markets themselves are very positive. In fact, a lot of the activity that we were at from a trade show standpoint and from a market standpoint, the sentiment overall is much more positive than it has been in a long time. I'm not sure if Tom wants to add anything to that?

No, other than on our quarterly review document that's on our website, Subbu, when you have a chance to download it on page five, you'll see the Cell and Gene therapy investments by year, and it was a really good year in 2024.

Until you are assuming the similar levels of funding for 2025 in your guide?

Yes, I mean, we obviously, you know, based on the sentiment that was expressed at some of the JPMorgan facilitating others, it looks like it'll be a year that we believe will be positive. So I would expect, hopefully, that we'll see activity that's at par or even a little bit stronger than '24.

And just to maybe clarify, Subbu, that when you think about our guide, especially when you think about our commercial revenue and how we're factoring that in, that has nothing to do with funding. These are from large pharma or public companies that aren't dependent on money coming in the door for their commercial ramps.

I was just asking that because many of the smaller biotech funding, biotech companies saw some struggle during their 2023 phase. So, that is what I was hitting on, not so much. I completely understand, though, you come more on the commercial and probably late-stage clinical stage.

Yeah, and most of what we saw, you know, as it relates to that, those activities in 2022 and 2023 have already shaken out. You know, if you followed our clinical trial activity over the last four to six quarters, you know, we saw higher-than-average attrition of programs, and that was the culling of non-productive programs, as well as the tightening of the clinical trial environment. But that's been winding down over the last two quarters, and I think you see that, you know, as evidenced by a strong increase in clinical trials supported in Q4, much higher than we've seen in the last eight quarters.

Super helpful, guys. Thank you.

Thank you.

Thank you. And your next question comes on the line of David Larson from BTIG. Please go ahead.

Hi. Congratulations on the good quarter. It looks like you're turning the corner here. Can you talk a little bit about the gross margin expansion? I think it was up over 500 basis points year-over-year in a quarter, both product and service. Was that more cost-reduction efforts, or was it really top-line growth? Just any thoughts there would be helpful. Thank you.

Yeah, absolutely. Look, I think a lot of it is related to the cost measures that we've implemented in the second half of the year. So we've seen, you know, a significant improvement in the cost structure based on the actions that we have taken, and that really has helped drive the gross margins to where they are. You're absolutely right. On the service side, we moved for Q4 into 46.2% from 40.8% last year, and from the product side, from 40.4% last year to 45.1% this year. So both on the service side, as on the product side, we've seen a good bounce back of gross margins. You know, our targeted gross margins in the longer term are 55%, and in that model, we're looking at about 30% adjusted EBITDA margin. So those are our targets, and we're certainly going to continue to take the actions to drive gross margins. There's still some room on the cost side, but obviously we do expect, you know, the revenue growth to contribute to the gross margin as well going forward.

I guess without getting too specific, Robert, would you be expecting like a mid-40% gross margin in 2025? Like, is this a good steady state, the four key results?

Yeah, I think there's opportunity for increase, you know, throughout the year. I think if you look at, you know, the year of ‘25 and the guidance we've given, we expect overall to see kind of sequential improvements in our financial metrics. So I think there's still some upwards mobility on the gross margins. At the same time, I also want to remind everyone we do have some new initiatives that just came online, like IntegriCell, where we brought up two facilities in Liege, Belgium, and in Houston, Texas, and obviously there's also going to be a little bit of a drag on that margin until they start seeing more substantial revenue come through the door. But I do expect there's some upward mobility on the margins over time.

David, we have not veered from our targets that we've talked about for years, 55% gross margin, 30% adjusted EBITDA, and those are fully in sight. We simply have the drag of some of these projects that we have underway, and they will, as they come online, as Robert just mentioned, they will unleash operating leverage and that will help drive our gross margin up substantially and thereby our adjusted EBITDA. So we're confident in our plan and in the way we're implementing it. The cost adjustments that we did were simply reprioritization. Some cost management required cutting where we could, and it's showing extraordinary results, and we intend for that to continue.

Great. And then just one more quick one for IntegriCell. Is that generating revenue right now in any sense for what the revenue contribution will be in fiscal '25?

Well, It is and Mark could comment on that.

Yes, so the bottom line is, yes, we have signed our first contracts with the IntegriCell platform in Q4 and continue to sign contracts in this quarter. We will see some revenue contribution in Q1, although very modest. I don't anticipate significant contribution for 2025. We'll start to see notable contribution in 2026. It just takes time because there's a lengthy audit validation process to onboard starting material manipulation as it relates to FDA regulatory considerations, so it takes a little bit of time, but we have signed our first contracts in that space, including some top five pharmas that have bought into the platform and we'll start to use it in their portfolio, which we're very excited about.

That's great. And then for MVE, any comments on large freezer, small freezer, dewars? I've heard the word stabilizing. Is it stabilizing across all three of those categories and large freezer in particular?

What you heard is order patterns are beginning to stabilize, and it cuts across the company.

Okay. Thanks very much. I'll hop back in the queue.

Thank you.

Thank you. And your next question comes from the line of Richard Baldry from Roth Capital. Please go ahead.

Thanks. On the IntegriCell side, can an existing clinical trial protocol be altered to adopt the IntegriCell or do you think this will be strictly on sort of new clinical launches?

This is not an alteration. This is an improvement in process. It's a revolutionary improvement. And, Mark, do you want to comment further?

Yes. So, obviously, it's being written into quite a few new programs that are starting, but it does not preclude the ability to transition. If they have an established cryopreservation paradigm that's written into their BLA, yes, they can transition that into our platform. They may have to do an addendum to that, but it is doable, and, in fact, we are seeing that type of activity as well.

Okay. And as commercial cell and gene therapy becomes more material to the overall business, can you talk about any underlying seasonality to that specific segment that we should be concerned about, whether strength or stronger quarters, weaker quarters, whether that's based on numbers of days, holidays, things like that, that we should take into consideration?

Nothing out of the ordinary that we can comment on there.

Yes. There's nothing specific from a seasonality standpoint. The only impact you'll ever see is facility shutdowns, where most companies will do a shutdown for the manufacturing for a week or two a year, but they're all different based on companies, so it's impossible to predict those elements.

Okay. And it sounded like you're largely done the operating expense cuts and got a little bit ahead of your own plan in terms of how much was realized. We look forward, do you feel like you're in more of a sideways spending pattern until sort of the top line begins to come back up, or are there some things that come in early, whether it's the two new facilities launched that bring the overall spending up maybe earlier in the year and then sort of plateaus as the revenues come through to get you back to profitability? Thanks.

Yes, Rich, we'll have some CapEx expenditures related to the new facilities in California and in Paris. That's certainly the case. But I think maybe two items. One, we don't expect any significant increase in OpEx. Two, as a CFO, I can say that there's always opportunity for additional review of how we do things and where we can potentially take additional cost actions. So I do expect us to really continue to look at ways we can improve efficiency, ways we can reduce cost without changing the growth initiatives that we have.

Great. Thanks.

Thank you. And your next question comes from the line of Kyle Crews from UBS. Please go ahead.

Thank you for taking the question. Taking a step back from cell and gene therapy and looking kind of at the broader market and the non-cell and gene therapy part of your services business, can you expect how you expect that market to evolve over next year?

Mark, do you want to take that?

Sure. Yes. I mean, obviously, we support multiple verticals within life sciences. Cell and gene is our focus, but we also do a lot in direct-to-patient. We do activity on, different vaccine activities or other biopharma space. I expect to see those to grow, but nominally or modestly, because that, the non-cell and gene market is a little bit softer, but we should still see some growth in that space. On the transportation side, I think we'll also see growth, continued growth, as it relates to non-cell and gene pharmaceutical product distribution. So…

So, just as a growth part, maybe in IVF as well.

Yes. So, reproductive medicine, we continue to see, and play a dominant role. We're making very good headway as it relates to expansion of our service platform, ex-U.S., and I do think we'll see contribution from that this year in the reproductive medicine space and as well in the animal health space. We're seeing an acceleration of clinical trial activity for companion animal cell therapy products, and we should anticipate seeing quite a few clinical trial starts in support of the animal health space for companion animal cell therapy in 2025.

Great. Thank you.

Operator, are there more questions?

Your next question comes from the line of Matt Stanton. Please go ahead.

Hi, thanks. Maybe just to go back to the '25 guide, I appreciate you guys obviously don't give color at the specific, therapy line item, but just if we think about the commercial basket overall, trying to get a better feel, I think it was up 20% for the year, high 30s for the quarter. So, kind of which of those two is better for that bucket for 2025? I think, Mark, historically you've talked about maybe 30% plus type growth over the next few years. So, is something in the 30% plus range fair for the commercial revenue bucket here in 2025? Thank you.

I think that's fair, Mark, but you want to comment on that further?

Yes. I mean, I think we'll be stronger than 20%, which was this year from a growth standpoint with a number of new launches in the therapy expansions. I think getting into the mid 30s is probably a hair aggressive. So, I think we'll probably be in the high 20s is my guess at this point in time based on what we're seeing.

Super. Thank you.

Yes.

Thank you. There are no further questions at this time. I will now hand the call back to Mr. Jerry Shelton for any closing remarks.

Thank you, operator. Thank you all for your questions. I think we had some constructive discussions and we appreciate your interest in Cryoport. We finished this year with solid fourth quarter results that were consistent with our expectations. The results reflect the continued growth of our Life Sciences business, which included the revenue growth we achieved from the support of commercial cell and gene therapy. For our Life Sciences Products segment, we're seeing what appears to be a stabilization of orders as we talked about in the question and answer period. And we have said before our Life Sciences product business is solid and continues to provide positive cash flow. Our results also show our significant progress in improving our business economics. Market conditions in 2024 were difficult and we took actions to address this. As a result, we're beginning to see the effects of these initiatives, most notably in our gross margin improvement. We continue to anticipate that these actions will guide us to a return to a positive adjusted EBITDA during 2025. We thank you for joining us this afternoon. We appreciate the conversation. We appreciate your continuing support and your interest in our company. We look forward to updating you on our progress again as we report the first quarter of our financial results at the next call. Thank you very much and have a good evening.