Robert Jones - Senior Managing Director Joseph M. DeVivo - Chief Executive Officer, President and Director Mark T. Frost - Chief Financial Officer, Executive Vice President and Treasurer.

Thomas J. Gunderson - Piper Jaffray Companies, Research Division Jayson T. Bedford - Raymond James & Associates, Inc., Research Division Charles Haff - Craig-Hallum Capital Group LLC, Research Division.

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the AngioDynamics' First Quarter Fiscal 2014 Financial Results Conference Call. [Operator Instructions] This conference is being recorded today, Thursday, October 10, 2013. And at this time, I'd like to turn the conference over to Bob Jones, Investor Relations.

Please go ahead, sir..

Thank you, Vince. Welcome, everyone, and thank you for joining us for AngioDynamics' conference call this afternoon to review the financial results for the fiscal 2014 first quarter, which ended on August 31, 2013. The news release is available on AngioDynamics' website at angiodynamics.com.

A replay of this call will be archived on the company's website. Before we get started, during the course of this conference call, the company will make projections and forward-looking statements regarding future events, including statements about revenue and earnings for the fiscal year 2014.

We encourage you to review the company's past and future filings with the SEC, including, without limitation, the company's forms 10-Q and 10-K, which identify specific factors that may cause the actual results or events to differ materially from those described in forward-looking statements.

[Operator Instructions] We appreciate everyone's cooperation with this procedure. And with that, I would now like to turn the call over to Joe DeVivo, Chief Executive Officer..

execution of continual operating efficiencies, execution of our growth initiatives and execution of our international channel build-out strategies. This quarter, we've delivered operating results at the top end of our guidance, which is a good start to the year.

Mark and I anticipate that as we progress through the year, we will see improving growth, gross margin expansion and cash generation. While progress is being made, there are still areas in the business we are focusing on. It's not time for a victory lap yet. And today, we're pleased that the integration year of '13 is behind us.

We're off to a good start to this new fiscal year. We have many highlights this quarter. Our Peripheral Vascular business started the year with momentum. We delivered over $1.4 million of AngioVac revenue, up 30% over last quarter and ahead of the plan that we've set for ourselves during the slowest procedure quarter of our year this first quarter.

We see this accelerating to over $2 million in sales in the second quarter in the U.S. alone. Many of you have seen the coverage of the UCLA case, which chronicled a 2-foot long clot that was removed from the inside of a patient's heart and inferior vena cava.

This patient had no other course except for major surgery as every other therapy had failed, and then they choose AngioVac. Exciting procedures like this are happening now every day as doctors become aware of the possibilities. This is truly an exciting and disruptive technology.

We did, though, expect CE marking for AngioVac earlier in the calendar year, but our notified body reclassified AngioVac, raising the bar on its clearance. We've conducted animal studies in order to meet their needs.

That said, we are expecting CE clearance shortly, which will allow us to broaden the market opportunity for AngioVac in the second half of '14. The other PV products also did quite well, primarily due to the improving productivity of our Peripheral Vascular sales force.

Prior to the integration, we had double-digit growing EVLT business and a stable Fluid Management business. Both were affected by a learning curve this time last year, resulting in some loss of share in Fluid Management and almost elimination of EVLT growth through '13.

Today, our sellers feel more comfortable with the whole bag, and we're seeing the results. Our average daily sales have been increasing for the last 3 quarters in a row, and we're regaining share.

Our Fluid Management growth, I believe, is ahead of the negative 1% to 3% interventional cardiology market, and I'd not be surprised to see the full year Fluid Management business grow in what we are seeing as an overall declining market.

EVLT had a nice rebound this quarter, buoyed by increased procedure growth in a favorable time of the year for EVLT, plus a more effective sales force, coupled with pretty significant market share gains.

Overall PV growth should continue through the year, and this is all before we launch the NAMIC Duet automated power injector in early fiscal year 2015. When we do, in my view, our PV franchise should be killer. Vascular access is still a work in progress.

BioFlo has proven to be everything we had hoped for, and the clinical data is better than we expected. At this past AVA meeting, many clinical experiences were presented, which consistently, hospital to hospital, experience to experience, supported the clinical effectiveness and economic impact of BioFlo.

It's the real deal, and I think few who attended walked away from AVA thinking otherwise. Today, BioFlo represents now 30% of our global PICC revenue and climbing. This quarter, we announced the partnership with Medcomp, who's been a long-term partner of AngioDynamics in many of our product segments.

And our new relationship is for their excellent, recently approved in Canada, Celerity system, which is a tip location system. And our hopes is that we will see a U.S. market soon. Celerity is an EKG-based system in an open platform, which can be used with anyone's PICC product. It gives hospitals choice while being very cost effective.

With Celerity in our seller's bag, combined with BioFlo, we believe it levels the competitive landscape from a technology perspective. We currently expect Celerity to be approved in the U.S. prior to the end of the calendar year and full commercial launch by January of 2014.

In my view, at that point, future PICC conversions will more greatly value thromboresistance. Tip location, while a necessity, will no longer be proprietary to our competitors artificially who force them -- force customers to use one or the other.

The launch of Celerity tips the scale to open systems, giving freedom to the customer to purchase what they wish. Bundling will be seen in the future as a negative, greedy tactic. Also this quarter, we were pleasantly surprised to see how quickly we received approval from the FDA for BioFlo on our complete Xcela portfolio.

This competitive offering should be launched by December 2013 in the U.S. On the dialysis front, we expect now BioFlo to be cleared for use with our dialysis catheters by March of calendar 2014.

Having a complete vascular access offering following integration, coupled with BioFlo in each of our product segments by the end of this year and early next year and enhanced with the Celerity system, our Vascular Access franchise, I believe, will transition from a business in decline to one beginning to grow again in the second half of the fiscal year.

Also going forward, we are pleased that we secured the rights for BioFlo for, now, the entire CVC catheter category worldwide, as we are developing some new products there to launch in the future.

Lastly on Vascular Access, I've mentioned to you in the past that a key rationale for our acquisition of Navilyst was to have a full breadth of product offering in the combination of Navilyst with AngioDynamics. Today, we are a more valuable player in vascular access, and we will grow simply through the creation of new contracts and relationships.

Now what I've mentioned to you in the past, today, is working. Moments ago, we announced a major sole-sourced IDN win in the U.S. for our core products that will go into effect this November 1. A subset of the purchasing group Premier, called Large Integrated Delivery Network, LIDN, is comprised of 8 independent chains with 130 members.

This LIDN does approximately $4 million in port sales annually. We received approval today to publicly discuss the agreement, and the names, if you are interested in each of the networks, are in our press release.

Today, we are seeing clear execution of our GPO and IDN strategy, which is core to the business, and look forward to letting you know of other major wins that will come. So now let's shift to oncology. We made positive strides with our Oncology franchise as well this quarter.

We enrolled our first patient in the European CROES safety study, which is the clinical research office of Endourological Society for the treatment of focal prostate cancer. This commences an important effort to validate the safety of NanoKnife for focal prostate ablation.

In the U.S., we are setting up our sites for the prostate safety IDE we announced earlier and are readying for the initiation of enrollment. Also, several investigator-initiated studies for NanoKnife's use in the prostate are currently underway internationally. We look forward to the reported data.

Overall, procedures are progressing, and we are consistently selling new capital, establishing new centers worldwide. Until we complete many of these clinical efforts, I do not see NanoKnife accelerating above current levels. I do see it maintaining the current contributions to the business.

Our microwave launch of Acculis is meeting all of our expectations also, as we now have the most competitive ablation offering in the world. Thermal ablation, we anticipate, will be a positive growth driver for the company throughout the year and into the future. Shifting to international.

International sales were a bit slower than we expected for the first quarter. I'm not really concerned as we have a great team who closed last quarter quite strong. Capital for us normally in the first quarter of the fiscal year, given the summer period, is usually a bit fickle, and we recognize that. Our pipeline is still rich.

In the U.S., we are launching an internally branded financing plan to help our domestic capital sales, while we're architecting a similar plan for certain international markets later in the year, and that should help.

Regarding EVLT, an exciting development for the thermal varicose vein ablation market internationally was a decision made by NICE, which is the National Institute of Clinical Excellence in the U.K., that was their guidance decision that they recently sent to recommend thermal ablation therapies as standard of care over vein stripping.

We think that's a pretty big deal. We expect, over time, for this to increase the market size for thermal vein ablation and growth for our international EVLT business in those markets who heed NICE guidelines.

Lastly, on the PV front, we closed the acquisition of a Netherlands-based company called Clinical Devices, a small deal, who is also our Netherlands-based distributor of our Fluid Management business, and owner, interestingly enough, of a very novel, next-generation wireless tip-location system.

This system, which is currently in development, empowers AngioDynamics beyond our current tip location distribution relationship, which we're very happy to have, to develop next-generation technology across a broad range of vascular access products. We are pleased to welcome the Clinical Devices team to the AngioDynamics family.

So with that intro, I'd like to turn it now over to our Chief Financial Officer, Mark Frost.

Mark?.

Thank you, Joe, and good afternoon, ladies and gentlemen. As you can see from our first quarter fiscal year 2014 results, we continue to take steps forward to drive improvement in our business. The quarter's financial results came in at the high end for both revenue and adjusted earnings per share.

In addition, we delivered strong EBITDA and cash generation in a quarter which has been traditionally the weakest of our fiscal year. Now before I start my performance discussion, after being in my role for 9 months, we have made a couple of changes to how we present the business, which we think enhances the clarity and focus of the discussion.

On the revenue side, we will present revenue by franchise and geography and then highlight key drivers versus providing all the product family detail.

The reason for this change is the product family revenue is not linear by quarter and there is significant volatility because of the seasonality, so every quarter, there'll be a number of anomalies, which we think distracts from the key business messages. In addition, there is a competitive element.

We are more comfortable to provide just franchise-level detail. On the forward earnings side, we will only be providing adjusted EPS without the amortization as we think this is a better measure of our operating performance, cash generation potential and value as a company.

But turning to revenue, total revenue was flat, but excluding the impact of the planned wind-down of our supply agreement, we were up 1% compared to prior year. Consistent with our strategy, our growth drivers continue to ramp, with AngioVac delivering $1.4 million in the quarter, which puts us on pace to reach our goal for the fiscal year.

BioFlo continued its expansion, with 30% of our U.S. PICCs now sold with this disruptive technology, leading to improved sales performance in our Vascular Access business. Microwave sales doubled in the quarter and continued its strong momentum entering the fiscal year. Now turning to product performance.

Peripheral Vascular increased 5% to $45.5 million, reflecting double-digit results in U.S. EVLT and the positive contribution of AngioVac. U.S. EVLT results were driven primarily by the conversion of a competitor's customer and the impact of the new NeverTouch product. Fluid Management came in flat, which was above our expectations.

Looking at Vascular Access, which was down 5% to $25.3 million compared from last year's first quarter. However, this was a significant sequential improvement from the 10% erosion from the prior fourth quarter. PICC continued to be impacted by a lack of tip location. However, BioFlo wins offset some of this issue.

As Joe discussed, our new Celerity tip location device, which was showcased at AVA last month, was positively received and will help our competitive position. This is an exciting development, and the product will be available in Canada this month.

Dialysis was down 5%, and ports reversed its prior year erosion to flat results, driven in large part by new product introductions. Oncology/Surgery, as projected in our fourth quarter 2013 conference call, was flat for the quarter at $11.2 million.

As communicated, we faced a tough comparable, particularly in NanoKnife, and as a result, experienced negative performance, although we did add 5 NanoKnife Systems, bringing our installed base to $0.82. RF cannibalization increased, offsetting some strong microwave results, with overall thermal ablation up about 5%. From a geography perspective, U.S.

revenue increased 2%, while the international market declined 5%. International was a disappointment, was caused, in part, by a strong fourth quarter as we initiated some new distributor market relationships, as well as some timing adjustments. Growth would have been in the mid-single digits for the quarter without these impacts.

In addition, although our equipment pipelines are strong, capital has continued to become more difficult to close. Now in response to this challenge, as Joe mentioned, both in the U.S. and globally, we are launching an AngioDynamics private-label finance offering, focused on making it easier for our customers to acquire capital equipment.

This will primarily focus on Oncology/Surgery, but we do anticipate benefits for our laser and tip location products. We expect to have this service offering up and running by the end of the second quarter in the U.S., and we'll then expand the programs to other countries.

Now continuing down the quarter's income statement, gross profit totaled $42.5 million or 50.8% of sales. This was a sequential improvement from the fourth quarter's 49.1%, reflecting a revenue mix benefit from our new products, as well as improved productivity.

Now as stated last quarter, we expect a larger positive productivity impact in the upcoming quarters. Now if you back out the onetime charges in the prior year, gross margin was down 1.5% from the prior year first quarter.

Now these lower gross margin results were caused primarily by timing on absorbing negative variances in the current quarter, as well as an investment we initiated last year in additional quality resources.

Last year, we did not absorb the unfavorable variances until quarter 2 to quarter 4, reflecting cost accounting rules, where you capitalize variances in the initial quarter and then amortize them over inventory turns. Now turning to our expenses.

Operating expenses totaled $41.2 million, including $2 million of acquisition, integration and restructuring items, of which $1.3 million is associated with the Navilyst and Microsulis acquisitions.

We have initiated a second phase of our operational integration and are assessing product rationalization opportunities, which are the driver for further one-off charges related to Navilyst. An additional $0.3 million is related to our acquisition of our Netherlands distributor, Clinical Devices.

Sales and marketing expenses increased $1.5 million from last year as a result of a planned increase in sales territories, as well as our investment in AngioVac clinical specialist teams, which we have previously discussed in past quarters. The GAAP loss per share was $0.01 versus of $0.02 loss per share in 2013.

Pro forma adjusted EPS was $0.04 per share versus $0.10 in 2013. Adjusted EPS without amortization was $0.12 versus $0.16 last year. Now adjusted EPS without the amortization was impacted by $0.02 of the medical device tax, as well as the unfavorable variances we previously discussed.

We are on track for our gross margin improvement and continue to believe we will generate 75- to 100-basis-point improvement for the full year over fiscal 2013. The GAAP-to-non-GAAP reconciliation items are detailed in the schedules included in the release.

EBITDA was $7.4 million or $0.21 a share versus $6.6 million or $0.19 a share in the prior period. Adjusted EBITDA was $11.3 million or $0.32 a share versus $14.3 million or $0.41 a share.

We have made a change in our adjusted EBITDA recording to be more consistent with current recording practices, as well as aligning this financial measure for our new debt facility covenants basis, which is to add back stock-based compensation. A detailed reconciliation is also provided in our news release.

We generated $7.3 million of operating cash and $4.4 million of free cash flow in the first quarter compared to a cash use of $5.6 million in the prior year.

As communicated in the last call, our cash flow did decrease from fourth quarter, as we built [ph] inventory, both for new product launches and for higher revenue -- for the higher revenue anticipated in the second quarter.

During the quarter, we utilized $3.2 million of cash to acquire our distributor, as well as we made a $1 million Microsulis contingent payment. We ended the quarter with $24 million in cash and investments and $142.5 million of debt outstanding.

So as Joe mentioned, we acquired Clinical Devices primarily to obtain the rights to a next-generation tip-location technology that we plan on developing for global commercialization. The acquisition also included the small Netherlands-based distributor of Fluid Management products, which allows us to be fully direct in that market.

The terms of the acquisition included $3.2 million upfront and an additional contingent consideration of $6 million based on revenue performance and regulatory milestones. The transaction will be neutral on an EBITDA and adjusted EPS without amortization basis and additive by the second year.

I will now turn to the discussion of our guidance for fiscal 2014. For fiscal year 2014, we are raising our revenue guidance to reflect the anticipated contribution of our distributor acquisition and now expect revenue to range from $347 million to $353 million, representing 3% growth at the top end of the range.

We continue to anticipate growth to gradually increase over the fiscal year, as our growth drivers become more significant contributors and therefore, have a larger impact in the back half of the year.

On the earnings side, we are raising our adjusted EPS without amortization from $0.61 to $0.65 to be $0.63 to $0.67, primarily reflecting the benefit of the debt refinancing, which we recently closed in September.

Similar to the revenue profile, we anticipate earnings will progressively improve each quarter because of the higher revenue and the stronger margins of our new products. In addition, productivity improvements should be more significant as we progress throughout the year.

I mentioned earlier that we have initiated a second phase of operational integration activities, which is a potential upside to this year -- to this fiscal year's results. However, it is more likely we will realize these benefits in 2015. We will provide more color on these activities on our next earnings call.

We will now also add cash guidance to our outlook and expect full year operating cash to improve by 45% to 50% from $26 million last year and free cash flow to double to approximately $28 million to $30 million based on lower one-off charges, lower CapEx investments and improved operating results.

On the adjusted EBITDA front, we are increasing our range to $56 million to $59 million from $52 million to $54 million, reflecting the addition of stock-based compensation. Prior year adjusted EBITDA was $57.1 million.

Now turning to fiscal year second quarter guidance, we are guiding to a revenue range of $85 million to $88 million, 1% growth at the top end, 2% excluding the supply agreement. The range has incorporated potential closure timing on capital deals.

Now given the range of our revenue expectation, adjusted EPS without amortization is expected to be in the range of $0.12 to $0.15. As indicated on our last call, we have moved to providing guidance only on this financial metric. We anticipate amortization having an $0.08 impact in the quarter 2 and a $0.29 impact for the full year.

With that, I'll turn the call back to Joe for his final comments.

Joe?.

Thank you so much, Mark. So in conclusion, it was a good start to the year, which, I believe, will be a good year for the company.

We have a very capable management team in place, wonderful growth opportunities proving themselves every day and many internal initiatives which will help us lean out our business to becoming more efficient and service our customers better, while creating greater value for shareholders. Our core business has stabilized.

Our growth drivers are delivering, and our most challenged business, Vascular Access, is now seeing some momentum with BioFlo and finally, a set of tip-location solutions. While we are still operating in a difficult global environment, I believe AngioDynamics is poised for consistent future market and financial success.

With that, operator, I'm going to open it up for questions..

[Operator Instructions] Our first question is from the line of Tom Gunderson with Piper Jaffray..

So Joe, in Q3 and Q4 reports, you talked about the general tough environment out there, not only for procedures but for capital equipment and that, even in your Q4, where you did better than expected, you didn't think that the overall environment had gotten better. It was just execution.

Can you give us a sense of that for Q1 and maybe tie it in a little bit to, I don't know, an example of NanoKnife sales or something?.

Sure, Tom. I think it's consistent. I think the -- we don't see the market falling off, but we don't see it getting any better. We are -- I think, we are, as a selling organization, much more in command of our business today, and I think we are able, given our share position, to kind of determine our own future.

We do see capital sales, especially on the NanoKnife side, with -- looking for $0.25 million sale, for -- still an early procedure, without reimbursement, is definitely more of a challenge. And we are seeing institutions be very judicious with their capital dollars, so hence, this financing option we're looking at and other ways to free that up.

So from a market environment side, we think it's still a challenging market. We don't see it getting better than it's been over the last several quarters, but I don't think we could say it's getting much worse either than the increasing challenge of closing some of our capital..

Got it. And then, Mark, I'll use up my second question by looking for a clarification here.

Higher-than-expected gross margin, higher than we expected at least, in Q1, and that was with the last of the negative variances, right? So we should see a step-up in Q2?.

Yes. We should -- you should see continued gross margin improvement through the year, as the contribution, particularly like the AngioVac microwave, drive a better gross margin mix in our business and we start ramping faster some of the productivity projects we're working on now..

Our next question is from the line of Jayson Bedford with Raymond James..

So I guess, just to start, what's the expected revenue contribution from the acquired business in the Netherlands?.

It's going to be low, minimal, $1 million to $2 million. It's a low number, Jason..

Okay. And I think I understand some of the changes in disclosures, but I think I missed the growth in PICCs.

Did you mention that number, Mark?.

No, I didn't. PICCs did improve from negative 10% to about negative 5% in the quarter..

Negative 5%, okay. And then just lastly, a quick one on Clinical Devices.

Are you taking on the R&D of the tip-location project? And kind of what's the timeline around commercialization there?.

Yes, we've taken on the R&D, and timeline for commercialization's probably 1.5 years to 2 years..

[Operator Instructions] Our next question is from the line of Charles Haff with Craig-Hallum Capital Group..

Mark, I wasn't able to keep up with some of the numbers that you were giving.

When you said operating cash flow for fiscal '14, what was that growth rate versus fiscal '13?.

45% to 50% increase..

Okay, great. Hopefully, that's not one of my questions that I've used up. But on the Clinical Devices, B.V., can you -- I know for competitive reasons, you probably don't want to disclose too much on this next-generation tip location.

But is there anything you can say to kind of help us understand this a little bit more?.

Well, I think, we're very pleased with our partnership today. I think it's -- our Medcomp partnership with the Celerity system is going to provide great value to customers and a strategic asset for our sellers. We do see that there is opportunity to look at positioning systems that can benefit other products in our portfolio.

And so we felt it important to have an internally developed R&D program that gave us control as the market moved from one technology to the other. We've been really scanning, ever since I've walked in the building, the entire landscape of technologies.

And we -- this provides us with -- we won't talk about what it's based on or what the platform is based on because we -- I think that's proprietary. But it is a wireless system. It is a system that can be developed for multiple applications, tremendously ergonomic and sexy.

And I think it's going to make up for years that this company has been out of this domain. I think it will not only transfer to catching up, but, at least from our view, we think we might even get ahead of it..

Okay, great.

And my last question, I'll jump back in queue, on BioFlo, price premium for PICCs, is that 15% premium still sticking?.

Yes..

[Operator Instructions] We have a follow-up question from the line of Jayson Bedford with Raymond James..

Just a couple of clarifications. Joe, I think you mentioned early on the international channel build-out. And so certainly, with this acquisition in the Netherlands, that seems to be the case there.

Are you looking at other smaller-type deals where you bring in distributors?.

Yes. It's a good question. Jayson, right now, I think we've done a pretty good job of bringing some disruptive technology into the company. I think we've done a pretty good job with filling the R&D pipeline with new opportunities. I do think that a part of our balance sheet going forward will be dedicated to developing out our international channel.

Where we can acquire those, we will. And so we've been very domestically focused over the last couple of years. I expect and we've had -- and we've been able to do so because we've had such a strong international operating team. We're going to be dedicating a lot of time now, with strong momentum in the U.S.

building, to focus on accelerating our international footprint..

Okay. And you mentioned the financing option that you'll put in place, and I think it includes tip location.

Do you know if Medcomp, which I'm guessing will be selling it as well, do they have a similar type of financing options available?.

I'm unaware if they do..

Yes. Jayson, I'm not aware of any of our competitors having. I'm sure they have some options, but this will be a complete program we're going to put in place..

Okay. And then last one for me. Mark, you mentioned microwave sales doubled in the quarter.

Is that year-over-year or quarter-over-quarter?.

That was year-over-year..

Our next question is a follow-up from the line of Charles Haff from Craig-Hallum Capital Group..

So we attended the VIVA meeting earlier this week and saw the AngioVac product, and there seemed to be a lot of physician interest there. Wondering if you've received any feedback from your sales guys there in terms of lead generation or anything that you've heard so far..

What's exciting about AngioVac is that it's still in the medical circles in a little-known quantity. We've been out talking about how the device works, and we've been a part of some really exciting and clinically meaningful operations. What's occurring now is the word is getting out.

We've just recently -- there's a paper in Endovascular Today talking about its application in -- clinically, that we were excited to see.

And I think we'll be entering a phase that the world will start waking up to the fact that they have an option to deal with, with this type of material and this magnitude of material in some of the worst places in the body.

So we do think the word is -- right now, at the early stage of the marketplace understanding, what it's got, and I think that bodes well for us in the future..

Okay, great. And then, Mark, a question for you around the gross margin.

What assumption do you think we should use for fiscal '14? And are there plant consolidations? Can you kind of outline that at all for us for fiscal '14, if there's some that are available?.

Yes. What I can talk to is we're very confident that we should be able to improve gross margin to 75 to 100 basis points versus fiscal year '13. We are evaluating now a next phase of operational opportunities. It will involve a number of different areas. And we're going to have more color on that as we progress through the year.

I think it's a little too early to talk to specifics on what we're going to do, Charles. But I'd say, probably, by the next conference call, we'll have a lot more detail on that..

[Operator Instructions] At this time, I'm showing no further questions. I'd like to turn the conference back over to Mr. DeVivo for any closing remarks..

Great. Well, thank you, everyone, for your interest and being on the call. I'm very pleased to see the amount of good news coming from the company. It's a testament of a lot of hard work from a lot of incredibly good people. And as I said earlier, we have great people, a lot of great opportunities.

And a lot of the uncertainty that plagued us in the last couple of years is behind us, and I think the keys to our success are purely in our hands. And we're going to put them in the ignition and turn -- hit that gas pedal. So we're pretty excited. So thank you very much for your interest. And we look forward to updating you through the quarter.

Thank you..

Ladies and gentlemen, that does conclude our conference for today. Thank you very much for your participation. And at this time, you may now disconnect..