Rob Gershon - CEO Jay Ewers - CFO.

Matt O'Brien - Piper Jaffray Charles Haff - Craig Hallum Russell Cleveland - RENN Capital.

Good afternoon, ladies and gentlemen. And welcome to the Second Quarter of 2017 Earnings Conference Call for Bovie Medical Corporation. At this time, all participants have been placed in a listen-only mode. At the end of the Company's prepared remarks, we will conduct a question-and-answer session.

Please note that this conference call is being recorded and the recording will be available on the Company's website for replay shortly.

Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including those identified in the Risk Factors section of our most recent annual report on Form 10-K filed with the Securities and Exchange Commission, as well as our most recent 10-Q filing.

Such factors may be updated from time to time in our filings with the SEC, which are available on our website. We undertake no obligation to publicly update or revise our forward-looking statements as a result of new information, future events or otherwise.

This call will also include references to certain financial measures that are not calculated in accordance with Generally Accepted Accounting Principles or GAAP. We generally refer to these as non-GAAP financial measures.

Reconciliations of those non-GAAP financial measures are the most comparable measures calculated and presented in accordance with GAAP are available in the earnings press release on the Investor Relations portion of our website. I would now like to turn the call over to Mr. Rob Gershon, Bovie Medical's Chief Executive Officer. Please go ahead, sir..

Thanks Emily. Good evening, everyone. And welcome to our second quarter of 2017 earnings call. I am joined on the call this evening by our Chief Financial Offer, Jay Ewers, and our Chief Commercialization Officer, Jack McCarthy. Let me begin with a brief agenda for this evening's call.

I'll start the call with a high level summary of our revenue results for the second quarter of 2017, along with the discussion of the items that contributed to the performance in each of our three business segments. Then I'll review our operational progress in the second quarter.

After those remarks, I'll turn the call over to Jay for a more detail look at our Q2 financial results and review of our financial guidance for 2017, which we reaffirmed in our earnings release this afternoon. I will then share some closing remarks before opening the call for your questions.

So now let's get started with an overview of our financial performance. For the second quarter of 2017, we reported total revenue of $9.8 million, representing 5.4% growth year-over-year.

We are pleased to see that our Advanced Energy segment was the largest contributor to our total company revenue growth in the second quarter, increasing over $1 million or 137% year-over-year to $1.8 million in Q2. This represents our largest revenue quarter for Advanced Energy since commercialization efforts of J-Plasma began.

Total company revenue growth also benefited from a $0.6 million or 9% increase in our Core segment in the second quarter. Unfortunately, the extremely positive growth performance we experienced in our Advanced Energy and Core segment this quarter was offset partially by a year-over-year decline in our OEM sale.

Let me expand on the primary factors that contributed to our performance in each business segment during the quarter. Starting with our Advanced Energy segment. As a reminder, Advanced Energy is the growth engine for Bovie Medical, which is fueled by our innovative J-Plasma technology.

Simply stated, the performance in our Advanced Energy segment this quarter certainly demonstrated how impactful improving J-Plasma adoption can be on our total company revenue growth performance. Specifically, the 137% growth in Advanced Energy this quarter was almost entirely driven by sales of J-Plasma.

Importantly, the impressive sales of J-Plasma this quarter came from the two markets where we are focused. Plastic surgery and surgical oncology. We saw strong generator sales in the plastic surgery market specifically, and we saw strong J-Plasma handpiece sales to both plastic surgery and surgical oncology customers.

We are pleased with the early evidence that our strategic focus on these targeted specialties is driving improving adoption and utilization trend for J-Plasma.

As previously noted during the first quarter of this year, we made the decision to refocus our sale force on selling J-Plasma into plastic surgery and surgical oncology market, which we believe to have favorable characteristics that positioned us well for future sustainable growth.

Most importantly, our surges in customers in this market are very excited about the technology and are using J-Plasma in a variety of procedures. We also believe that surgeons within these two specialties, typically tend to have more control over the decision making process when purchasing new capital equipment.

These favorable characteristics are specially pronounced in the plastic surgery market where we primarily sell into outpatient facilities.

Our sales reps are experienced a much shorter average sale cycle in plastic surgery in comparison to the acute care market for capital equipment purchasing is often required to go through the value analysis committee review process. Plastic surgeons are known to act quickly when it comes to purchasing a technology that will benefit their practice.

And importantly, this dynamic has evidenced itself in J-Plasma adoption to date. So, the advanced Energy segment is our growth engine and it was the largest driver of total company growth in the second quarter.

And as implied in our annual guidance, we expect the Advanced Energy segment to be the largest contributor to total company revenue growth this year. Moving to our Core business segment. Sales increased 9% year-over-year to $7.5 million.

Growth in our Core business was primarily driven by sales of electrosurgical generators with contributions from our products in our cauteries and lighting categories and was primarily and it was partially offset by a decline in sales of our products classified in our other category which as a reminder is comprised of a wide variety of products.

And lastly, with regard to our OEM business segment, OEM sales declined $1.1 million, or 70% year-over-year in the second quarter.

80% of the year-over-year revenue decline was driven by unique generator demand from a large OEM customer which occurred during the first, second and third quarters of 2016, in essence the tough comp we discussed last year. This decline was expected and was discussed this part of our full year 2017 guidance which we introduced last quarter.

The balance of the year-over-year revenue decline in OEM was driven by lower production demand from two OEM customers. As we've stated in the past, the OEM segment is somewhat volatile quarter-to-quarter as we navigate the changes in production demand from OEM customers that we candidly don't control.

Turning to an overview of our operational progress during the second quarter. We continue to make progress in two important areas, which we believe will fuel the future growth of our Advanced Energy business segment. The first area is the development and commercialization of new Advanced Energy products.

And the second area is pursuing new specific indication for our J-Plasma technology. In terms of new product development. On May 8, we announced that FDA 510(k) clearance of our J-Plasma Precise Flex handpiece.

J-Plasma Precise Flex is designed with robotically assisted surgery in mind and can be controlled entirely from the console of a device such as intuitive da Vinci Surgical System using the device's robotic grasper.

The Precise Flex also features our cool collect Cool-Coag technology which offers standard monopolar coagulation and helium spray coagulation in addition to our J-Plasma technology, providing surgeons with the capabilities of three separate devices in a single handpiece.

This announcement follows the FDA 510(k) clearance of our newly redesigned J-Plasma open handpiece that also incorporates our Cool- Coag technology. And we continue to anticipate the commercial launch of both of these products in the second half of this year.

We also continue to track the early commercialization of our PlazXact Ablator, another new product in our Advanced Energy segment. In January, we entered into a global sales channel partnership agreement with CONMED to market PlazXact for use in arthroscopic procedure and they began commercializing the product in March.

As of our most recent meeting with a CONMED team in July, the early commercialization of the product is proceeding smoothly. We recorded modest sales of PlazXact under this channel partnership during the second quarter which was consistent with our expectations.

And we continue to expect that the product will become a meaningful contributor to our Advanced Energy segment growth in 2018. In addition to our development and commercialization of new advanced energy products, our team is also focused on expanding the clinical indication for our J-Plasma technology.

In connection with our focus on the plastic surgery market, we are pursuing specific indication that will allow us to market J-Plasma, produce a new procedure area with dermal resurfacing as our first procedural area of focus.

In order to pursue this specific indication, we intend to demonstrate the clinical efficacy of J-Plasma in dermal resurfacing procedures by conducting a multi center clinical study. During the second quarter, we submitted our design for this study to the FDA.

And I am pleased to announce that we just recently received an Investigational Device Exemption or IDE approval to move forward with the clinical trial. Our clinical development team has identified the selected sites for the study and is currently focused on completing the necessary administrative processes to engage each site in the study.

In summarizing our second quarter, we are very pleased with our strong growth in our Advanced Energy segment, fueled by positive adoption and utilization trends for our J-Plasma technology.

We believe our strategic shift to focusing on the plastic surgery and surgical oncology market is the right one and with an expanding portfolio of new products, we believe we are well positioned for the continued, sustainable growth in both the near and long term.

With that let me turn the call over to Jay for a detail review of our financial results. And a summary of our 2017 financial outlook which we introduced in this afternoon's press release.

Jay?.

Thanks Rob. Total revenue for second quarter 2017 increased $0.5 million or 5.4% year-over-year to $9.8 million, compared to $9.3 million in the second quarter of 2016.

Total revenue growth was driven by a 136.7% increase in sales from our Advanced Energy segment and 8.8% increase in sales from our Core segment, which was offset partially by a 69.8% decrease in sales from our OEM segment.

Second quarter sales by product line was driven by a 22.2% increase in sales of electrosurgical products, along with increase sales of cauteries and lighting products, which grew 8.9% and 18.5% respectively. This growth was offset partially by a decline is sales of other products which decreased 54.5% in a period.

By product line, sales of electrosurgical, cauteries, lighting and other products represented 63%, 19%, 10% and 8% of total revenue respectively. Revenue in the United States increased $1million, or 12.3% year-over-year, to $8.7 million, and international revenue decreased $0.4 million, or 29.1% year-over-year, to $1.1 million.

International sales represented approximately 11% of sales in the second quarter compared to approximately 17% of sales in the prior year period, driven by two significant tenders in our Core business segment which benefited our international revenue results in the second quarter of last year and did not recur in 2017.

Gross profit increased $0.3 million, or 7.3% year-over-year, to $5 million, compared to $4.7 million for the second quarter of 2016. Gross margin increased approximately 90 basis points year-over-year to 51.5% for the second quarter of 2017, compared to 50.6% last year.

The increase in gross margins was attributable to higher margins in our Advanced Energy segment, driven by higher volume and pricing mix and higher margins in our Core segment, which was due to improved product and pricing mix.

The overall increase in margins was partially offset by lower margins in our OEM business segment, which resulted from a one time order that occurred during the second quarter of last year. Operating expenses for second quarter 2017 increased $1.1 million, or 21.8% to $6.3 million, compared to $5.2 million for second quarter 2016.

The increase in operating expenses was driven primarily by a $0.9 million increase in selling, general and administrative expenses related to marketing, sales commission and travel and entertainment over the comparable period last year.

Loss from operations for the second quarter of 2017 was $1.3 million, compared to a loss from operations of $0.5 million for the comparable period last year.

Net loss attributable to common shareholders for the second quarter of 2017 was $1.3 million, or $0.04 per diluted share, compared to a loss of $0.5 million, or $0.02 per diluted share, for the second quarter of 2016. The Company had working capital of $18.5 million as of June 30, 2017 as compared to $21.3 million as of December 31, 2016.

Our days of inventory outstanding increased by 12 days to 179 days in the second quarter, compared to 167 days in second quarter of 2016. Total cash used in operations was $1.1 million, compared to cash used in operations of $0.1 million last year.

The change in cash flow used in operations was driven primarily by our net loss of $1.3 million in the period. As of June 30, 2017, the Company had cash of $11.1 million, as compared to $15.2 million as of December 31, 2016.

Turning to a review of our 2017 financial guidance, which we reaffirmed in this afternoon's press release; for the 12 months ended December 31, 2017, we continue to expect total revenue in the range of $38.3 million to $40.3 million, representing growth of 5% to 10% year-over-year, compared to total revenue of $36.6 million in fiscal year 2016.

Based upon our performance in the first six months of the year, we are updating our expectations regarding the contribution of each of our business segments to our total revenue guidance range.

We now expect total revenue growth in fiscal year 2017 toe be driven Core sales growth in the range of approximately 5% to 11% year-over-year, and increase in growth expectations versus a range of 4% to 8% previously.

Advanced Energy sales growth in the range of approximately 90% to 95% year-over-year, which is an increase in growth expectation versus a range of 60% to 80% previously. And OEM sales decline in the range of approximately 50% to 55% year-over-year, compared to a decline of 25% to 35% previously.

For consideration when evaluating our reported growth expectations this year, we've provided additional color on nonrecurring contributions to our OEM sales, our result in 2016 that we believe are masking the underlying growth of our total company growth expectations this year.

Excluding sales of $2.3 million in fiscal year 2016 related to unique generator demand from a large OEM customer, total sales in fiscal year 2017 are expected to increase in the range of 12% to 17% year-over-year.

In addition to reaffirming our 2017 total revenue guidance, we also continue to expect adjusted EBITDA loss in a range of $1.2 million to $1.4 million, compared to adjusted EBITDA loss of $2.2 million in fiscal year 2016.

As a reminder, we've included a full reconciliation from GAAP ton non-GAAP adjusted EBITDA in our earnings press release this afternoon. And lastly for modeling purposes for the full year 2017 period, we expect gross margins in the low 50 this year compared to 49% last year.

Stock based compensation expense of approximately $0.7 million, depreciation and amortization of approximately $0.7 million, and weighted average diluted shares outstanding of approximately 31 million shares. With that I'll turn the call back to Rob for closing remarks.

Rob?.

Thanks Jay. In light of our revenue performance during the second quarter, as well as the continued operational progress achieved by our team, we are reaffirming our guidance for the fiscal year.

Looking ahead, our confidence in the growth of Advanced Energy business in 2017 is supported by the continued focus of our sales force on our two target market, plastic surgery and surgical oncology, as well as the contributions from our new product launches in the second half of 2017.

We intend to build upon the commercial progress that we've seen this quarter by bringing our transformational J-Plasma technology into the hands of new surgeon users while supporting increased utilization within our installed base.

We'll also continue to further enhance the long-term growth prospects of our Advanced Energy business by one, expanding our product portfolio with new applications and support for our existing products. And securing 510(k) clearances for new products. Two, growing our portfolio of clinical evidence. And three, pursuing new indications and new IP.

Ultimately, we believe that our continued execution on this strategy in 2017 will generate strong returns for our shareholders over time. And we look forward to updating you on our continued progress throughout the year. So with that Emily we will now open the call for questions. .

[Operator Instructions] And our first question will come from the line of Matt O'Brien with Piper Jaffray..

Good afternoon, thanks so much for taking my questions. Just sort of on advanced energy business which is really strong in the quarter.

Rob or Jay whichever one, if you could talk a little bit about the bump that you got on the generator side versus what you saw in underlying utilization of these handheld which I know in one segment of the business was quite strong. I think that would be helpful. .

Absolutely. Thanks Matt for your question. The bump on the generator side came very much from our focused on our two target segment, plastic surgery and surgical oncology but specifically the bump on the generator side came mostly from plastic surgery.

Now with respect to utilization of handpiece sales, we had very strong increased utilization in handpiece sales from both the plastic surgery side and the surgical oncology side. And it was more heavily weighted on the surgical oncology side which is exactly what we expected. .

Sorry about that just a little bit more clarification there.

As far as the generator bump that you saw this quarter, was it several hundred thousand dollars I mean the utilization that you got-- utilization trend, if you can provide any kind of quantitative metrics as far as what you saw there specifically in plastic and surgical oncology that's really what I was getting after.

And then I have a couple of follow ups. .

Right. So to answer the first part of your question with respect to generator sales. I'll just reiterate one thing. The vast, vast majority of the generator sales which were up quiet significantly, that's what drive the revenue quite significantly came, the lion share really came from plastic surgery.

So you were asking with hundreds and thousands of dollars, it's absolutely was, it was -- it certainly made up given the ASP of the generator relative to handpieces as you would expect the bigger bump comes from the generator. And given the very short sale cycle for generator sales in the plastic surgery market, this is exactly what we expected.

So when we described in Q1 that we are going to take a step back in Q1 to take two steps forward in Q2 and beyond, this is what we were expecting to occur. Now as far as utilization and I know you are looking for quantitative numbers.

We don't report very specifically on utilization trends on the handpiece side, certainly a significant as you would expect, a significant sequential uptick quarter-over-quarter, which is what had actually experienced since the onset of commercialization and it was more pronounced in Q2 as expected it to be than in previous quarters. .

Got it.

And so then as far as -- excuse me Advanced Energy goes again, it was increase to the guidance it was great to see but it's essentially kind of midpoint what you just delivered here in Q2 versus what we were modeling so is there anything to read into that as far as the back half of the year goes in terms of the -- again the utilization trend because what I am really trying to get after is the reorder rate that you are seeing the proliferation and utilization you are seeing within account after they start on your -- after they order generator.

.

So per our guidance Matt, so I'll start and see if Jay wants to add any more color by if I missed anything out here. But as implied in our guidance, we are taking it up to the 90% to 95% range. And we do expect what that translates to in the back half of the year to occur. I don't Jay if you want to expand upon the specifics of the guidance. .

No. I think, sorry Rob, we are guiding to 90% to 95% growth in the second half. And I would say Matt if you look at in 2016 about 60% of our revenue came in the second half. So the growth rate for math would be lower than what it is. .

Yes. So let me -- I am sorry let me just take a quick step back for a moment. First of all, to take a step back we are very happy with the first half year performance. And as you kind of just do the math, the back half of the year does certainly have more revenue than the first half of the year. It has to.

So, yes, we will have growth in the second half of the year for sure. But if you are looking at the actual growth rate which is what Jay was just alluding to, certainly the growth rate will slow. But we are expecting the strong second half of growth.

Does that help?.

Okay, got it. Yes, that's very helpful. And that's kind of what I was trying to get after specific way. I mean it just seems like the trends are quite good and there maybe a little bit of conservatism in there along with what's still very robust growth. Jay, specifically on the EBITDA guidance. The sales guidance for the year hasn't changed.

Maybe we start skewing little bit more towards the higher end of that. The EBITDA outlook has improved a bit so I am wondering what -- I am looking at SG&A stepping up sequentially and I am wondering what the source of the -- and I know it's modest, but modest EBITDA improvement really would be for the company. .

Sure. It's a couple of things. The higher revenue margins in the low 50s and then OpEx leveling out. We expected our OpEx in the first half to be higher as a percentage of sales, our revenue is increasing, margin will increase as we see improved Advanced Energy sales, and we see the pick up from that.

OpEx will flatten out and that's where we'll pick up our EBITDA or adjusted EBITDA..

Your next question comes from the line of Charles Haff with Craig Hallum. Your line is open. .

Hi, guys. Congrats on the nice quarter. I had a couple questions here so first on guidance.

So of the three components that you broke down, the three business segments, 90% roughly of the revenue mix you are raising your expectations and for 10% of your revenue mix, you are lowering expectations and yet you are still keeping your revenue guidance the same in terms of dollars.

I am wondering if you could kind of help me understand that a little bit because it seems like you should be raising the guidance. .

So why don't I start with one comment and then ask Jay to profile the guidance in a little bit more detail. So Charles and first of all thank you for your opening comment and it is -- the way you characterize it is exactly right.

And the reason why -- so I just leave with the punch line the overall guidance remain on balance the same is because we do see downside, we are lowering our guidance in the OEM business to one that is so volatile and unpredictable.

But given the production forecast that we see for the balance of the year, we are bringing that down but we are seeing that offset by the uptick in primarily Advanced Energy but also in Core. .

Okay. And then for non OEM electrosurgical you produced revenues quite a bit higher about $1.8 million, higher than our estimate. I am wondering if you could drill down a little bit more what pockets of strength in the errant products or elsewhere that you saw in the non OEM electrosurgical. .

Sure. I can -- I'll go ahead and start just kind of in general. And it is actually the reason why we picked up guidance slightly in core. We are seeing an uptick in electro surgery generator sales specifically in the animal health market and that's where that growth is really coming from.

And importantly it's also plays to an important strategy that we have in the core business which is to drive -- we alluded to it in our prepared remarks, to drive product mix.

And what we mean by that very specifically is drive product mix to higher margin product, so the higher margin is actually for core business is contributing to the higher margin as well, certainly not the same as advanced energy. But it is a product mix play. .

And I'd add to that Charles that when we are looking at the electrosurgical product lines, that also includes J-Plasma. It does. And it includes J-Plasma where we had a big uptick in the quarter. .

Got it, okay, that makes it more clear. Thank you.

And then for Precise Flex, are you still on track for second half 2017 full commercial launch?.

Indeed we are..

Okay.

And what type of expectations do you have for Precise Flex? I mean how material do you think it could be over the first couple of years? How should we think about that?.

Yes. I mean I'll start -- I'll see if Jay wants to add any more color. It's certainly embedded within our guidance. We do consider it a headwind in the second half of the year. So it's in there. A little modest for the early innings of the implementation. It's certainly a product that is designed for broad based adoption.

And we'll have more visibility after we have a better quarter or so of sales before it becomes a material contributor. We don't expect it to be in overly material contributor to J-Plasma sales even in 2017. But certainly we expect it to be significant in 2018. And we'll have more visibility to that and provide more clarity when we have them. .

Okay.

And you said a headwind for second half 2017, did you mean a tailwind?.

Oh my goodness, I meant tailwind, sure, I am sorry, thanks for that clarification. Yes, I mean tailwind, I did not mean headwind. [Multiple Speakers].

And then on dermal resurfacing. Congratulation on the IDE there. I'm wondering if you can kind of give us some specifics of that clinical study.

How many patients? How many sites? What are the endpoints? Treatment period, follow on period and maybe an approximate cost and how much this might cost you?.

Sure. I'll give you a high level view and let you know that all of the specific will soon be available on cliicaltrial.go when it is posted. So we'll get extremely granular but it is not there yet so it's in draft mode. So I can only really comment at the highest level until it is filed and approved by the IRB and so forth.

So I know you are familiar with the process. But in general, it's a multi site study and it includes -- we haven't published the number of patients. So I'll just state for the sake of providing a high level overview. It's over 50 patients and it will be over -- it will be around five sites or so.

And as soon as it gets cleared by the IRB, all of the information will be published. The one thing I can share with you with respect to the IDE which I think is publicly available is that the follow up period post op is three months. .

And Jay what do you think this may cost you approximately?.

I know they are expensive but it's expensive and where we put it in of course in our budget and our projections for the year. It's several hundred thousands dollars. .

Our next question comes from the line of Russell Cleveland with RENN Capital. Your line is open..

Hello, fellows. Great quarter especially in advanced energy and it's a shame that the tremendous progress we are making in advanced energy, it seemed to be offset it is kind like lost in the wilderness here when we have something that seems to be really taking off.

I know the dermatology at least if you go on the website it is tremendous what we can do in the plastic area. And I know looking at some of the test, the face lift and all that before and after, is really startling and the comments we are getting. So the 7% or 8%, 10% growth has been obscured by a tremendous growth in dermatology.

One of the questions I was going to ask is when is this new study going to be completed and that will help us -- the question is that with the market place seeming to be ahead of the test and so forth with all of the adoption, that if we look out a year or so in just the derm area, it seems like the growth there while you are saying 90% could be even more so.

Could you comment on the dermatology area, plastic surgery in particular? And we are talking about numbers here but I think we are forgetting somewhere in here is just how good this process seems to be. .

Yes. Russell thanks for your question. You said a lot and you asked a lot of questions. So I am going to break it down and try to cover all of it. If I miss any of it please ask. First of all, the offset from the OEM business. It's frustrating.

It is frustrating that the OEM business which is the one piece of the business we have the least amount of control over because we are subjected to the demand of other customers and their production schedule.

So that's why we've been saying for the past three years, that our goal is to keep that business between 8% and 12% of our overall revenue to decrease its impact, the volatility of that business to decrease the impact on the overall business.

So it's frustrating when it happens especially in the quarter like this where you've seen tremendous growth in advanced energy. So certainly I'll leave it to others to do the math, if you omit the growth of OEM what that real growth looks like which is certainly well over 20%. So you can do the math on that.

With respect to your question on plastic surgery and dermatology. Plastic surgery and cosmetic dermatology, we lump that into one category. So when we made the pivot and focused our sales force on plastic surgery and surgical oncology that was done to focus on where we believe the biggest growth areas area.

And without question those of the two in our mind. One is in the outpatient setting with plastic surgery and cosmetic dermatology. And the other is in the inpatient setting with surgical oncology. And as we reported, we are very pleased with traction in both areas. But it's certainly the most pronounced in plastic.

The new study in terms of when that will be completed, it's a 2018 event. The clinical study take time to enroll patients in and then that three months follow up period and then of course writing up the clinical results and then filing for the 510(k) clearance. So it's a process. It's 2018 event.

And we are doing everything that we have control over to make that as efficient and complete it as quickly as practical. So we are doing everything that we can from that perspective. With respect to the marketplace, we are certainly getting an awful lot of feedback that's quite positive.

And you alluded to some of the research that you've been doing independently. And we are focused on areas just to be very specific; right now currently we are focused on areas that are within our current general indication. And that is using J-Plasma as a sub dermal coagulator as part of our general indication. And that's what we are focused on.

And what I was referring to in our prepared remarks is what we are doing in terms of filing for specific indication; it's for those that we don't have right now that we want. And we don't get granular on those for competitive reasons but we are pursuing those in aggressively as well. So with urgency is what I mean by aggressively.

So we see this as a very good market. A wonderful fit for J-Plasma and a key focus for our strategy and a key reason why we are seeing the growth that we are seeing and why we are providing the guidance for the balance of the year that we are providing. .

That does conclude our conference for today. Thank you participation. .

Thank you..