CNMD - NYSE

Before the conference call begins, let me remind you that during this call management will be making comments and statements regarding its financial outlook, its plans and objectives. These statements represent the forward-looking statements that involve risks and uncertainties as those are defined under the federal securities laws. Investors are cautioned that any forward-looking statements are not guarantees of future events, performance or results. The company's actual results may differ materially from its current expectations. Please refer to the risk and other uncertainties disclosed under the forward-looking information in today's press release, as well as the company's SEC filings for more details on the risks and uncertainties that may cause actual results to differ materially. The company disclaims any obligation to update any forward-looking statements that may be disclosed during this call, except as may be required by applicable law. You will also hear management refer to non-GAAP or adjusted measurements during this discussions. While these figures are not a substitute for GAAP measurements, management uses these figures to aid in monitoring the company's ongoing financial performance from quarter-to-quarter and year-to-year on a regular basis and from benchmarking against other medical technology companies. Adjusted net income and adjusted earnings per share measure the income of the company, excluding credit or charges that are considered by the company to be special or outside of its normal ongoing operations. These adjusting items are specified in the reconciliation supporting the company's earnings releases posted to the company's website. With these required announcements completed, I will turn the call over to Curt Hartman, CONMED's Chairman of the Board, President and Chief Executive Officer for opening remarks, Mr. Hartman.

Thank you, Justin. And before I dive in, the forward-looking statements comments cut in and out a little bit. So I just want to point everybody to our investor website where the presentation has been uploaded. That also includes the comprehensive forward-looking statements, in case you missed part of that opening dialogue. With that said, good afternoon and thank you for joining us for CONMED's first quarter 2023 earnings call. With me on the call is Todd Garner, Executive Vice President and Chief Financial Officer. Today, we'll share with you our first quarter results and the overall outlook for our business. We'll then open the call to your questions. I'll start by reviewing our first quarter results. Total sales for the quarter were $295.5 million, representing a year-over-year increase of 21.9% as reported and 25.1% in constant currency. From an earnings perspective during the first quarter, our GAAP net income totaled $1.8 million. This compares to net income of $15 million in the first quarter of 2022. Excluding special items that affected comparability, our adjusted net income of $20.6 million decreased 12.3% year-over-year and our adjusted diluted net earnings per share of $0.66 decreased 5.7% year-over-year. Overall, I'm very encouraged by the quarter and the company's performance. We were able to ship the warehouse related backlog, benefited from increased surgical procedure volumes and staffing level improvements, saw incremental improvements to global supply chain constraints and participated in two exceptional industry trade shows that highlighted our growing product offering and evident innovation. During the quarter, we also saw additional smoke legislation pass, which now brings the total to 11 states with six active and five pending adoption through July of 2024. When all 11 are fully active, this will bring approximately 21% of the US hospital beds and 26% of the US population under some form of legislation. At last count, we also see 10 additional states working on legislation, including Texas and California. Finally, but importantly, we delivered solid results on both the top and the bottom line and are set up for continued strong 2023 performance. In closing, I'm pleased with our start to the year, excited by the broad underlying strength across the portfolio, and very encouraged by the positive engagement we are seeing in both of our 2022 acquisitions. While still early, both of these transactions have lived up to and exceeded our expectations, and we remain convinced it will be transformative to our overall revenue and margin performance in the years ahead. I will now turn the call over to Todd who will provide a more detailed analysis of our financial performance and take you through our full-year guidance. Todd?

Thank you, Kurt. All sales growth numbers I reference today will be given in constant currency. The reconciliation to GAAP numbers is included in our press release. As usual, we have included an investor deck on our website that summarizes the results of the quarter and our updated guidance. For the first quarter of 2023, our total sales increased 25.1%. Revenue from the recent acquisitions was $13.6 million in the quarter, putting our global organic growth for Q1 at 19.4%. AirSeal, In2Bones, Buffalo Filter and BioBrace together represented over 30% of our total revenue in the quarter. As Curt said, the reduction of the warehouse related backlog, strong performances by both In2Bones and BioBrace and strong organic demand around the globe drove the revenue growth in the quarter. Our results also benefited from one extra selling day compared to the prior-year quarter, which we estimate contributed between 100 basis points and 150 basis points of growth on a consolidated number. For Q1, our sales in the US increased 25.4% versus the prior-year quarter, and our international sales grew 24.7%. Worldwide orthopedics revenue grew 26.0% in the first quarter. In the US, orthopedic sales grew 29.0% and, internationally, orthopedic sales increased 24.3%. Total worldwide general surgery revenue increased 24.4% in the quarter. US general surgery revenue grew 24.0%, while internationally general surgery revenue increased 25.5%. Now let's move to the expense side of the income statement. We will discuss expenses and profitability in the first quarter excluding special items, which include charges for acquisitions and contingent consideration, restructuring and software implementation costs, amortization of intangible assets and amortization of deferred financing fees net of tax. Adjusted gross margin for the first quarter was 54.0%, a decrease of 210 basis points from the prior-year quarter. This was the result of 110 basis point FX headwind, consistent with our projection a quarter ago, with the remainder coming from inflation. Research and development expense for the first quarter was 4.2% of sales, 20 basis points lower than the prior-year quarter. First quarter adjusted SG&A expenses were 37.9% of sales. Leverage gain on the higher sales drove 180 basis points improvement over the prior-year quarter. On an adjusted basis, interest expense was $8.7 million in the first quarter. The adjusted effective tax rate in Q1 was 25.3%. First quarter GAAP net income was $1.8 million. This compares to GAAP net income of $15.0 million in Q1 of 2022. GAAP earnings per diluted share were $0.06 this quarter compared to $0.47 a year ago. Excluding the impact of special items discussed earlier, in the first quarter, we reported adjusted net income of $20.6 million, a decrease of 12.3% compared to first quarter of 2022. Our Q1 adjusted diluted net earnings per share were $0.66, a decrease of 5.7% compared to the prior-year quarter. Turning to the balance sheet. Our cash balance at the end of the quarter was $26.5 million compared to $28.9 million as of December 31. Accounts receivable days as of March 31 were 65 days compared to 69 days at the end of 2022. Inventory days at quarter-end were 215 compared to 251 at December 31. The return to normal shipping levels during the quarter as we work through the warehouse related backlog drove the reduction in inventory days. Long-term debt at the end of the quarter was $995.3 million versus $985.1 million as of December 31. Our leverage ratio on March 31 was 5.4 times. Consistent with what we told you last quarter, we expect the leverage ratio to drop below 5 times in Q3 and below 4.25 times by the end of 2023 and be in the low 3s by the end of 2024. Cash used for operations in the quarter was $3.8 million compared to cash flow from operations of $0.3 million in the first quarter of 2022. The cash flow in Q1 was better than we expected. The decrease compared to the prior year is a function of the lower reported GAAP net income in the current quarter. We continue to expect operating cash flow to be around $130 million for the full year of 2023. Capital expenditures in the first quarter were $4.3 million compared to $3.7 million a year ago. Now let's turn to financial guidance. We now expect reported revenue for the full year to be between $1.205 billion and $1.250 billion compared to our previous guidance range of between $1.170 billion and $1.220 billion. This continues to include currency headwinds of 150 basis points to 200 basis points. As a reminder, Q2 will be the last quarter we disclose In2Bones revenue as inorganic, and that will only be up until the anniversary of the close of the acquisition on June 13. As a reminder, we sold $2.1 million of In2Bones products in June of 2022. We now expect full year adjusted EPS in 2023 to be between $3.30 and $3.50 compared to our previous range of $3.20 and $3.45. This continues to include estimated FX headwind between $0.20 and $0.25. As discussed previously, the full year of 2023 will have one less selling day compared to 2022. The way our calendar falls, Q1 had one extra day and Q3 will have two fewer days. As we look at the second quarter, we expect reported revenue between $300 million and $310 million. That includes approximately 200 basis points of FX headwind. We expect adjusted EPS in Q2 to be between $0.77 cents and $0.82. As Curt said, we're very pleased with the Q1 performance and we're focused on executing as we move through 2023. And with that, we'd like to open the call to your questions. And I'll hand it back to Justin.

[Operator Instructions]. And our first question comes from Rick Wise from Stifel.

Great to see the strong performance and the excellent guidance. Just to start on the guide. You beat the guide by – the midpoints due to a variety of factors and you're touching on some of them. Curt, maybe help us understand, we've heard from obviously some of the larger companies over the last week and a half, but how did the quarter progress? Did volumes or orders return more aggressively at the end? Was it sort of steady? How did you exit? How have you started this quarter? But what's driving the, whatever it is the math is, $4 million or approximately increase at the midpoint? Is that the new products? Is that the environmental? Just help frame you know what you're seeing and how we should be thinking about the setup for the rest of the year.

I'll give a short answer and then a long answer. Better markets, better performance. The markets are better, the procedure volumes better, the staffing levels continue to incrementally improve, they're not back where they were pre-COVID. And in fact, I had some dinners not too distant past where the surgeons I was having dinner with were commenting that they had not yet seen improvements in their staffing levels. And that was in certain geographies and other doctors in different geographies had/ So, it's still not by any stretch back to what it was pre-COVID. And better performance. As the quarter progressed and as we caught up with our backlog, it turns our teams more on to offense and we put our customers and our sales force through the wringer with the warehouse related backlog and that consumed a lot of their time. And we know that. And that's why our focus was on execution and catching up, to allow them to get back on offense. We do have a lot of new products, both organic and inorganic, obviously. In2Bones was not impacted by the warehouse issue and neither was Biorez. But everything else we sell was impacted around the globe. So, getting those products moving and getting our teams back on offense, that's the better execution. So those things together are what allow us to put up the quarter we put up and increase the guide. I don't know, Todd, if you have other comments on the guide more specific.

No, I think that's right. It was a good start to the year and we're happy with it.

Maybe there's so much to unpack here, but let's keep it to the two. Maybe, Todd, you could give us some more color on gross margins. Adjusted gross margins at 54%, a little less than we thought, but help us understand how that's going to flow through over the course of the year. What are the drivers that are maybe especially related to supply chain, raw material trends, resin costs, all that stuff in the context of your thinking of full year guidance.

I think margins were just slightly lower than we thought too. What I said was, they should be close to what they were in Q4. And Q4 was 54.2% and we came in at 54.0% this quarter. From our perspective, the reason it was a little lighter than we thought was because the revenue overachievement, a lot of it was in Asia. So, Asia had a really strong revenue performance versus expectations. And they do come with a little lower margin mix. So from our perspective, it was simply an issue in the first quarter with geographic mix of where the overperformance came from. So we're not concerned about it. Still very, very close to what we said. And we're sticking with our full year gross margin guidance for the year. The way that plays out, we talked about FX is heavy in the first half of the year, the FX headwind. And so, I would expect Q2 margins are in kind of the mid 504s. And then it gets meaningfully better in the back half of the year to get to our full year guide that we said in January. So that's kind of how I think you should think about margins. Supply chain, I think it's true that it's moderately better. It's still a big issue. I think it is for everybody. It certainly did not get worse and it probably got better over the last three months. But I certainly wouldn't want to overstate that. The fact that it's better than it was is still challenging. So that is still out there. But on the margins, better than it used to be.

And our next question comes from Robbie Marcus from J.P. Morgan.

Hi, this is Lily on for Robbie. Can you talk a bit about the sales that you lost to competitors from the warehouse disruption and how much progress you've been able to make in recapturing that? And do you think that you can get back to your historical levels at some point? And how should we be thinking about that progression?

I think, in January, on the call, what we described occurred in the fourth quarter, when customers were doing procedures and we could not get them the product they needed or an alternate that would work in the procedure, they clearly went to competitors. And there may have been some competitors who said we're happy to help you out, but we need some ongoing volume to help you out. And in other cases, it was simply a singular transaction that occurred. We think as we proceeded through the first quarter that those customers that switch some of their volume, we've recovered greater than 50% of them back and we see the remainder occurring over the next couple of quarters. Inevitably, there'll be some on the edges that may never come back, but we're not we're not seeing any hesitation at this point in time. It's more about us having product available for the cases when they want to do the cases, and we've made great strides there. Again, as our team gets more on offense, as the product was moving out quicker as the quarter unfolded, those things come back, tend to come back. And then, obviously, it really didn't have a lot of impact on the capital side of the business, which is 20% of our revenue, give or take a little bit. So it's more about the single use consumables that we sell across general surgery and orthopedics where customers were doing a procedure and they might use an alternate product or competitive product and getting them back onto the main product. So we think we've made good progress on that.

Maybe just one on the cadence. How should we be thinking about the progression of revenues and EPS over the course of the year, just given the disruption from the warehouse issues? Should we expect normal seasonality or will it be more of a back-end loaded year?

Lily, so you have the results for Q1 and I just guided for Q2. So I said revenue for Q2 between $300 million and $310 million and EPS between $0.77 and $0.82. So that gives you the first half of the year. We're not going to break out Q3 and Q4 here today, but obviously you'll see that that is kind of a gradual progression as we move through the year, things get better. FX. And I'll remind you that the way FX falls for us is essentially all of the FX headwind that I've talked about for the full year is all in the first half of the year. So that becomes relatively neutral in the back half of the year. So that helps.

And our next question comes from Ian Tolle from Bank of America.

This is Ian on for Travis. Just wanted to ask about Buffalo and AirSeal. Last quarter, I think you mentioned they grew below 20% just given the warehouse issue. Looks like the new slide deck no longer references the Buffalo, AirSeal growing above 20%. And apologies if I missed this earlier in the call, but did those grow over 20% in the quarter and then just expectations moving forward for those two specifically.

They definitely did grow over 20% in Q1. We did take that out of the slide deck because now as we move through 2023, we've added In2Bones and Biorez who are going to be big contributors to that growth profile and the margin mix shift as well. And so, it kind of didn't make sense to just isolate those two product lines. And so, what I said in my prepared remarks was I did disclose that those four product lines, product families now represent over 30% of our revenue in Q1. There's no change in our expectation that AirSeal and Buffalo will continue to grow at that 20% mark or better. And we've talked about the growth rate we expect for In2Bones, which is kind of mid to high teens essentially. And then, obviously, Biorez, which is starting at a very small number in 2022, we've said will be single digit millions in 2023 and then double-digit millions in 2024 and beyond. Obviously, the growth rate on the Biorez number is well north of 20%. So, we're going to get away from that specific disclosure that we gave you through last year, and now we're going to talk about all of these high growth technologies that are contributing to our growth and margin profile improving.

I would just add to that. If you've attended any of the trade shows here recently or perhaps last year, the extent of our portfolio and the innovation that we're trying to put through, the refreshes and the next generations is all part of the evolving mix and margin enhancement story that we're building and have been building at CONMED. And it's important that investors have full awareness of that story, that it's not isolated to one or two products. It is the work of the company. It's the work we've been undergoing for a number of years now. And we'll keep adding to that whether it's organic or acquisition driven.

I know you were just asked about it a little bit, but maybe asking in different ways. Does the warehouse issue impact sort of the normal Q2 to Q3 seasonality that you've seen over the last few years, just sort of that few millions step-down? Are you expecting sort of a bit more of a bump, just given sort of recaptured sales growth later in the year?

I think the way I would describe it, the markets we serve and broadly, at least for my time in the world of medtech/med devices, the second quarter is bigger than the first quarter. The third quarter is a little below the second quarter and the fourth quarter is the big quarter. And the industry does that. What CONMED does through those quarters is driven by new product cadence. And in this case, we had an interruption in the fourth quarter because of WMS. But I think as long as we are executing, back to execution and focused on execution, we should fall in line with those type of trends. Todd gave you the second quarter. We're not commenting on third and fourth quarter at this point in time. But our goal in 2023 is to get back to fundamental basic execution, whether that's on the fundamental of delivering a product to innovating on products and taking care of customers.

And our next question comes from Vik Chopra from Wells Fargo.

Congrats on a great quarter. Just two for me here. First, can you maybe talk about some of the trends that you've seen on the capital side, and then I have a follow up?

I would say no change. There's still money available for capital purchases. There's still budget cycle planning. There's still open evaluations, I have not seen any change in the external market need for capital. And just as an ongoing reminder, our capital is on the lower end of the price point of capital in the world of med tech. So I think the capital cycles remain fairly consistent with what we saw last year and generally for the last couple of years.

You had said in your presentation deck that the backlog is now back to normal levels? Can you perhaps quantify that for us or give us some color on that?

Yeah, that's correct. As we announced earlier in the first quarter, during the quarter that we had worked through the backlog. Now, keep in mind, there's always backlog. There's customers who give us orders that are future dated. They don't want them right now. They want them in weeks. There's things like product backorder created by supply chains that create backlog. What we were specifically referring to was warehouse system implementation related backlog. That is behind us. And we're at our normal kind of typical working backlog levels for the business and the growth that we're putting on.

And our next question comes from Matthew O'Brien from Piper Sandler.

I guess one for Todd and then one for Curt. Todd, as far as organic growth goes, and I know there's a bunch of moving parts here with FX and acquisitions, et cetera. But it looks like the organic growth of the business in Q1, when adjusting for everything and days and all that was more like 6% or maybe 7%. Is that math about right? And it would just seem like in this quarter of really strong procedural trends, that number could have been a little bit better. I don't know if there was something on the orthopedic side that was a little slower than you were expecting as the general surgery did so well. Just a little bit of commentary about the math there.

I definitely get a higher number than that, Matt. Now, I'll remind you, when you come to try to adjust for the warehouse issue, right, if you're calling that not organic, I'll remind you a couple of things. First of all, we're giving you big round numbers, right? So we start at 30, that's a round number. And it's not zero, right? As Curt just explained, there's a normal level, I would call it a day, less than a day because not every order that comes in goes out within minutes. Right? And so, there's some number of what's a normal level. And so, you wouldn't reduce that by $30 million, first of all, even if you were looking at it that way. The other reason you shouldn't deduct all of that from your organic number is that, as Curt explained, those were procedure or disposable type products that were supposed to ship in Q4 to satisfy a procedure, but did not. They shipped in Q1, right? Well, that procedure that happened in Q4 didn't get delayed to Q1. It was done with a substitute product. And so, when our product And so, when our product arrived in Q1 instead of Q4, it satisfied a procedure in Q1. So that is real business. Right? So, some of that catch up to the backlog served current demand. That old demand from Q4, to the extent that it was about single use or disposable products, which was most of it, it's gone, right? It doesn't come back. And so, catching up on all those shipments provided for procedures in Q1, so it would be inaccurate to try and assess the organic growth of our business by just subtracting out all of that from the organic number.

Maybe for Curt, or Todd for that matter, the In2Bones and Biorez contribution in the quarter was much higher than we were modeling. It's usually a seasonally softer quarter in those markets, and it wasn't affected by the warehouse at all last quarter. What are you seeing? I think this is most likely In2Bones driving the upside. What are you seeing as far as the foot and ankle market and your position in that market and ability to grow that product, knowing that Biorez is probably a little bit more a little bit more 2024/2025 kind of loaded at this point?

I think I would start out going back to my scripted comments. Both acquisitions are ahead of where we thought they would be. And we had the opportunity, big trade show in the quarter, AOS, and we went an entire day on BioBrace. And it was arguably, in my experience of going to AOS, one of the most well attended series of surgeon presentations I've ever been a part of. And the revenue model for that when we put out the announcement on that transaction, we said kind of single-digit millions in 2023. And I would tell you on this call that we're ahead of that. We think it'll be on the high end of single digit millions at the end of Q1. The trends point us in that direction. In2Bones, which is foot and ankle, that is not a big foot and ankle tradeshow, Academy is not a big foot and ankle trade show, they have their own specialty trade shows. But the attention we got at the booth was really encouraging. And part of that is driven by the new products, PCR plating and the ankle and the extent of the portfolio, so really good customer traction and interest and enthusiasm. And part of the acquisition was buying a standalone company with a dedicated sales force and our ability to help grow that sales force. So we feel really good about the acquisition of what they're doing in the marketplace. And we're getting more traction outside the US, leveraging our infrastructure. So both transactions working well at this point in time and we're encouraged for the future. So we think we found good targets. We'll see what the rest of the market does, but we feel good about what we were able to accomplish in the quarter.

And our next question comes from Mike Matson from Needham & Company.

I guess last one about kind of OpEx leverage in the quarter. So I understand what happened with gross margin, you kind of addressed that. But it looks like the kind of SG&A and R&D grew almost similar levels to revenue. So just wondering – if you told what the revenue was going to be, I would have kind of expected more EPS upside, I guess, than what you delivered. So…

We got good leverage with those increased sales, I thought, Mike. I'll remind you that the acquisitions, they're dilutive in 2023. They both come with higher levels of SG&A and R&D. So, we had about a 10% beat roughly on the top and a 10% beat on the bottom. As I look at where this where the Street was, I think the real change is in the below the line items where interest expense for some reason was a little low in the consensus and your tax rate was low. So we said tax rate was going to be around 25%. We came in a little bit above that, 25.3%. That's kind of what the taxes are looking like so far. We'll see how that plays out during the year. But as I look at where expectations were and where we landed, I think the gaps are in interest expense being loaded to the beginning of the year because that's going to go down as the year goes on. It looks like the analyst models had it somewhat flatlined, and we have it higher in the beginning and lower at the end. And then I think you guys were a little optimistic on the tax rate. So, that's the difference I see as I look at the performance.

I noticed that you were excluding some software implementation costs related to this warehouse issue, I assume, but is that largely over now, those costs? Or is that going to continue kind of beyond the first quarter here?

We continue to be very focused on that. We are not to the efficient levels that we need to be at or plan to be at. So there's still a lot of focus to get to the next level of granularity and efficacy. So we continue to spend extra money there. I would expect that that should largely be behind us after Q2.

And our next question comes from Matthew Mishan from KeyBanc Capital.

I'm not trying to get too cute here, but it looks like the revenue beat in the quarter versus your 1Q guidance is pretty close to the increase in the revenue guides at the midpoint? And I guess it just sounds like you guys feel better about the acquisitions, you feel better about the procedure outlook? My sense is like, do you feel better about the remainder of the year than you kind of did in January? And if you did, why not raise it by a little bit more?

Well, good start to the year. We're not going to get ahead of ourselves. It is one quarter. And we did raise the bottom of each range by more than the beat in Q1. Yes, we have increased confidence on the year and we have taken guidance out more than the beat, but I'll grant you not a lot more. So let's get another quarter in the book and then we'll talk after Q2.

I think fair enough. Just to just to clarify on the comment around BioBrace. Are you [Technical Difficulty] at the high end [Technical Difficulty]. Is that what that comment was, was basically saying like 1Q was somewhat – if you annualized, it was pretty close to the high end of that single digit millions. And then would you expect a level of sequential improvement, I guess, from here as more surgeons become more familiar with the procedure.

Curt did make a little bit of news there by saying that we're ahead of schedule. And so, what we said before was single digit millions without quantifying whether that was mid or high. Curt did say we're – after the first quarter, it looks more like high-single digit millions at a minimum. And then the second part of the question – sorry, Matt. Oh, sequentially. Yeah, we definitely expect the Biorez product line to grow sequentially.

And our next question comes from Young Li from Jefferies.

I guess to start, I think you mentioned that additional states are considering smoke legislation. I was wondering – you called out on California and Texas. Was wondering, in some of those states, especially between the two there, is there more enforcement language in either California or Texas' proposals?

Off the top of my head, Young, I do not know the answer to that question. I know that the states that are current – the 11 that are currently in place, they do run the gamut. I would say more legislation recently has had more kind of substance behind it. So, I would expect that as more states come online, their legislation would have substance behind it. I'll just remind you, it's not that people are not using smoke evacuation in states that don't have legislation. They are. Our sales force covers every state and the globe. And we're out there every day advocating the benefits of smoke elimination and filtration in every operating room that we enter. And surgical staff and surgeons know the value and the benefit. And we think the legislation just adds substance and enthusiasm, momentum, whatever the right word is to it, to move people along that journey a little bit quicker. So 11 states live, 10 more with some form of pending, don't have a good sense for when those things will go through and hesitant to comment on the substance of the legislation till you see the final version. So I'd probably leave it at that.

I guess, as a follow up, it seems like the warehouse issues are resolved for the most part. In the presentation, I think you mentioned ultimate impact remains unknown, but the 1Q orders were strong throughout. I guess any way to help us understand the potential near term or medium term impacts from that comment? Are your reps mostly or fully going back on offense now, given more confidence in supplier consistency?

Yeah, I think what we're trying to convey in that comment was, at some level, we may lose a customer or customers. At this point in time, to my earlier comment, greater than 50% of them have returned. And we think the rest or most of the rest will return over the quarters in front of us, including in this quarter. So, our goal is obviously to get them all back and be on offense and get new customers with the innovation in our portfolio. But I can't predict that we'll get 100%. Obviously, our sales reps, marketing teams, R&D teams are working on that every single day. And the goal is to get 100%. We'll see where it shakes out. But I think we're out of the gate with a good start in Q1 and we keep working on it.

And I'm showing no further questions. I would now like to turn the call back over to Curt Hartman for closing remarks.

All right. Thank you, Justin. And thank you everybody for your time today. We look forward to speaking with you on our next earnings call. And again, thank you for joining us. Good evening.