John Mills - Partner Vivek Jain - Chairman and Chief Executive Officer Scott E. Lamb - Chief Financial Officer, Treasurer and Secretary.

Thomas J. Gunderson - Piper Jaffray Companies, Research Division Chris Lewis - Roth Capital Partners, LLC, Research Division Jayson T. Bedford - Raymond James & Associates, Inc., Research Division L. Mitra Ramgopal - Sidoti & Company, LLC Lawrence Solow - CJS Securities, Inc. James Terwilliger.

Good day, ladies and gentlemen, and welcome to the ICU Medical Conference Call Second Quarter 2014 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to John Mills. Sir, you may begin..

Great. Thank you. Good afternoon, everyone. Thank you for joining us today to review ICU Medical's financial results for the second quarter ended June 30, 2014. On the call today representing ICU Medical is Vivek Jain, Chief Executive Officer and Chairman; and Scott Lamb, Chief Financial Officer.

Vivek will start the call with a brief overview and then Scott will discuss second quarter financial performance, and provide financial guidance for the third quarter and full year of 2014. Finally, the company will open the call for your questions.

Before we start, I want to touch upon any forward-looking statements made during the call, including management's belief and expectations about the company's future results. Please be aware they are based on the best available information to management and assumptions that management believes are reasonable.

Such statements are not intended to be a representation of future results, and are subject to risks and uncertainties. Future results ma y differ materially from management's current expectations.

We refer all of you to the company's SEC filings for more detailed information on the risks and uncertainties that have a direct bearing on operating results and performance and financial conditions. Please note that during today's call, we will discuss non-GAAP financial measures, including results on an adjusted basis.

We believe these adjusted financial measures can facilitate a more complete analysis, and greater transparency into ICU’s ongoing results of operations, particularly in comparing underlying results from period-to-period.

We have included reconciliations of these non-GAAP measures with today's release, and have provided as much detail as possible on any adjustments that are added back. With that said, I'll now turn the call over to Vivek Jain. Go ahead, Vivek..

improvement in our direct commercial operations; and driving operational leverage. As I dove deeper into ICU Medical in the first few months, it became increasingly clear to me that we lacked direct commercial scale in the U.S.

around our key product lines of needlefree connectors, sets and oncology products; that we lacked basic selling infrastructure in the international market and they desperately need feeding given the growth; and we diluted our efforts with a substantial amount of resources directed to either less value creating markets or products, whose channels could be managed more centrally.

And we had a number of non-value-added activities happening around the company, where resources could be deployed to more urgent needs.

I guess I'd call this the inevitable growing up of the company that we needed to do, as we tried to diversify our revenue sources and market exposure, and I understand it's a hard reality for homegrown companies, whose formula worked well for the first 90% of its -- of their existence.

A few weeks ago, we made a series of changes to our selling and corporate infrastructure. We redirected resources towards our core hospital customers in the U.S. with a combined single bag of all of our infusion and oncology products with a larger number of reps, with smaller territories, allowing for more focus towards our customers.

And we've been actively recruiting for our international markets, and new team members will be joining the company to help us expand internationally. Lastly, we put all of the assets, people infrastructure, into very separate measurable teams for infusion therapy, critical care and international, where performance and returns can be tracked closely.

We funded these changes largely through the elimination of about 15% of our nonmanufacturing headcount. On the last call, I talked about at least $10 million of SG&A improvement as our goal for fiscal year '15 versus fiscal year '14. These changes go a long way into meeting that goal.

On top of that, we see many additional operational improvements that come from just running ourselves wisely and being extremely, extremely careful how we spend. We're also heavily investing in R&D in fiscal year '14, and should see decreases heading into fiscal year '15.

These items are beyond the $10 million improvement, but we do not want to quantify them at this time. Because we think about these cost savings as the net improvement for fiscal year '15, if our OEM situation does not improve and as the funding sources to handle any additional revenue challenges or potential bumps for the balance of the year.

It's important to note, over the long term, cost savings are absolutely not the answer for ICU Medical, but they are necessary today to get us prepared for the future. We have to grow, and it's about trying to improve our commercial execution and grow our sources of revenue.

I've been involved with changes like this in prior experiences that have been very successful, but it is often bumpy for a while after the changes, so we wanted to make sure we got to them as soon as possible.

The other item we talked about on previous calls was the prolonged transition period that the company was in during fiscal year '12 and fiscal year '13, and some of the downstream effects when the company didn't make the marginal investment, as it was unsure of its long term.

I hope we can stop talking about that, as we head into fiscal year '15, as the company moves much more to a culture of accountability and urgency.

But I wanted to remind everyone, as I have said in previous calls, there are remaining core areas that we need to solidify with investments and onetime costs into quality, certain technical competencies, and a little bit of infrastructure to be able to deploy capital. I've not yet fully flushed out all those areas, and I need to.

The last comment in this transition period is that it likely reached its peak during Q3 of fiscal year '13 and as a result, our Q3 revenue year-over-year comparisons will likely look the most skewed. I hope on the next few calls, we can begin to talk about the other parts of the plan.

We believe we will see a reduction in capital expenditures for next year, helping to continue strong free cash flow generation. We know we need to address capital deployment and/or capital return and we would like to be able to spend time to of those topics.

And ultimately, we want to be talking about new products, and the returns we desire on our R&D investments. But we're not ready to do that for another few quarters. Shifting back to the current quarter, we're pleased on all of our direct operations. Obviously, we have talked on previous calls about the landscape in U.S.

infusion being a temporal situation, and we saw encouraging steps regarding our partners product status announced publicly recently, and are qualitatively pleased with the focus our partner is bringing. That said, we continue to be appropriately cautious, and we did see a divergence in the oncology product line.

As a reminder, our oncology products are sold on a direct basis and through our OEM partner. And in Q2, our direct oncology business grew 9%, while our OEM oncology business declined 14%. This is not a metric we intend to disclose regularly, but felt it was worth mentioning now.

To be clear, our direct business is approximately 65% of our oncology total. And today, we have a much larger sales force calling on it, as we effectively doubled the number of reps focused on these products, with our recent changes.

As a result of the recent divergence and the changes in our sales force, broadly, we are not going to provide quarterly revenue guidance by market segment. Rather, we're going to provide segment guidance annually, and update total revenue guidance quarterly, unless other significant changes occur.

As I've said on previous calls, there are a lot of positive drivers, and the scenarios are coming together as we now enter the execution stage. I have a lot of confidence in the long-term value creation, due to our increasing global reach, our ability to renovate and reprioritize, our strong balance sheet and our willingness to make change.

We are trying to take responsible action and break some of the inertia that many companies in our position face. In the short term, we'll have some bumps and we will overcome them and emerge stronger for fiscal year 2015.

On our next call, we will provide you with more color on the additional parts of the plan, and how they will improve our overall returns. With that, I'll turn it over to Scott..

our adjusted diluted earnings per share for 2014 to be in the range of $1.95 to $2.15. We are raising our adjusted EBITDA for the full year to now be in the range of $63 million to $68 million compared to the previous range of $58 million to $65 million.

We expect GAAP diluted earnings to be in the range of $1.30 to $1.50 compared to the previous range of $1.15 to $1.45. And you can find a reconciliation of these metrics in our press release and on our website. We expect gross margins to be approximately 49%, and we expect SG&A to be approximately 32% of revenue, excluding any restructuring charges.

We also expect research and development spend to be approximately 5% of revenue. And for modeling purposes, we expect our tax rate to be approximately 34%. In addition, we expect our CapEx spend to be $16 million to $19 million this year and to start declining in 2015.

Now before we open up for questions, I would like to say that I've been CFO here now for 6 years. And the changes over the last 3 months and how we are examining our cost infrastructure, and how we are developing and executing on long-term plans, has been the most activity that we have had in my tenure.

Overall, our team is very excited about the positive changes we are implementing throughout our organization. And with that, I would like to turn the call over to your questions..

[Operator Instructions] And the first question is from Tom Gunderson of Piper Jaffray..

I just have 2 questions, I think, 2. One is the direct sales revenue were up -- or revenues were up in that sector, and you attribute it appropriately, but there's a lot of things that go into that, especially when you're realigning sales forces and assignments, et cetera.

Was there anything among that bag of things that can contribute to higher revenues through direct sales that you saw come out more forcefully than the others?.

Tom, do you want both parts of the question? Or you want us to answer the first one first?.

Oh, and --yes, -- now the second part the question is smaller and that is the sales force realignment. We've seen a lot of these, investors have seen a lot of these in the last 12, 24 months. Sometimes they go well, sometimes, not so well.

Can you give us a sense of the percentage of territory disruption with all the changes that you talked about?.

Sure, sure. So let me take those in kind of reverse order. On the direct sales impact of the changes on the quarter, these activities went into place after the quarter ended, hence our call actually being a little bit later than I'd ideally like. So I don't know if there was any impact of that on Q2. There are really changes to set up for the long-term.

So there was nothing in it that affected Q2. And just to be more granular about it, international has been actually the fastest-growing part, not domestic. All of these changes are really domestic. We're going to be adding to international, but that hasn't happened yet. So it's been o U.S. that's faster.

I've been through some of these sales force redefinitions in previous lives. I think this was more marginal here. We had a sales force focused on what -- when I was in the script talking about lower value segments, a lot of stuff in places where it's hard to cover with a direct sales force, alternate site, et cetera.

We just eliminated a lot of those territories and their -- added a few new territories. So on the margin, it's not a wholesale revamping, it's more on the edges of each person’s territory..

Got it.

And on the components of growth, was there large customer focus? Small customer focus? Reorders? What kind of things where you looking at that gave you the extra boost?.

On the direct business, there are no large customers, so to speak, right? Our direct business is -- in the U.S., 450 different IDNs make up 90% of our business, so there's not one particular customer that's out of line, and the same thing's true for international, whether we're direct or using a local distributor, no one person accounts for a disproportionate amount of sales, unlike the OEM relationship that we have..

But was there anything that surprised in the quality of the quarter? On the sales of what you had that give you a little bit larger number than....

Again, I think, if there -- I'm sorry, I should have answered that more specifically. I think the critical care number was a bit of a surprise on the upside for us on a direct basis. That's also been true for the previous quarter. I'd say year-to-date in critical care..

The next question is from Chris Lewis of Roth Capital Partners..

I think you mentioned 15% headcount reduction.

Can you just talk about where those cuts were made across the organization?.

Sure. I don't want to get into too many specifics.

I would say a lot of the changes came out of -- kind of these lower market opportunity selling organizations that we had, that just address kind of smaller markets than our core hospital market, as well as a number of kind of corporate in-between-the-business kind of jobs that don't necessarily need to exist if we run ourselves in more vertical-oriented businesses.

So I'd say the majority out of smaller sales teams and the remainder out of the corporate center..

Okay.

And then on the OEM channel, can you just maybe walk us through in a bit more detail what you're seeing from Hospira now? Has that improved? Stayed about the same? Or potentially declined since, I think, maybe, you came on board and going forward? It sounded like some of your prepared remarks were a little more positive than they were 3 months ago.

So maybe just talk us through your expectations for that segment over the next 12 months?.

Sure. Again, in the beginning of the year, right when I got here, the trend with our OEM partner was not great. They're really working hard on improving where they are. I think the rate of decrease has been substantial in the first 2 quarters of this year. You can see that in the year-over-year comps.

I think what I care about is are they -- is the curve flattening out sequentially? Is it becoming more normalized? It is becoming a bit more normalized, but we are being cautious. I mean this thing on oncology was a bit of a divergence than we thought. And you heard maybe that -- in the last quarters' comments that we were taking another look at that.

I think it's appropriate for what we've seen. You can look at the publicly reported pump companies' results.

I think just as we said at the beginning of the year, we are planning for it to potentially be bumpier in the back half, and I think that's the right kind of frame of mind, and the right way to price out our own infrastructure as a company, if we make that assumption today..

And then, for your revenue guidance, I think if you just annualize the first half of the year, it gets you above the high-end of the guidance.

So walk us through the expectations for the remainder of this year, and why you didn't bring that expectation up?.

Really, 2 reasons. One is the question you just asked on what's going on with our OEM partner, right? We want to make sure we're being appropriately cautious there. The changes over the last 2 or 3 years really surprised ICU, for lack of a better word, and I want to make sure we're thinking about that right.

And the second reason is we just tinkered with our selling organization, and that always leads to a little bit of bumps, and I want to make sure we are being mindful of that too. I don't think there's any other science in it behind that. As I said when I got here, I really cared about cash flow and we're focusing on what drives cash in the short-term.

And over the long term it's absolutely about revenue growth, that's what we should be talking about. We're just not quite there yet..

Great. And then, just on the M&A front, can you talk about the appetite there, potential markets or products you think would be most attractive and the best fit for the company..

I would generalize that answer and just say, "Look, you feed what is working" and what is working for us is the international opportunities right now.

And to the extent there's an opportunity to put capital to work to keep broadening that, I'm not a big believer in jumping 3 steps up the stairs at once, right? It has to have some value with what we do as a manufacturing company or some value to what we do from a channel perspective.

And if it fits with one of those and it's international, I think we're more interested in looking at it. I think the odds of finding an attractive deal that fits those parameters domestically is probably pretty low, to be candid..

The next question is from Jayson Bedford of Raymond James..

I guess maybe, Vivek, can you just talk about the changes in the U.S.

selling team? I guess, can you frame what the organization looked like from a number of reps and a focus versus what it looks like today?.

Sure. We had 4 or 5 different U.S. sales forces, all organized in different parts of infusion therapy. So that's kind of what it was at the highest level. We had a number that I felt was woefully subscale on oncology, and a number of heads that was woefully subscale in core hospital, so regular old, up the middle U.S. hospitals.

By combining that group of oncology and hospital people and adding some funding to it -- create new positions, we get to a headcount that I find more acceptable to call on U.S. hospital with.

I don't know what the end state looks like, but it's some number that's 40-ish, 40-plus people doing that -- I would say, in oncology or in core hospital, we had on the range of 20 people or less than 20 people calling on some of those markets. And that's just -- it's too small to cover the country effectively..

I'm sorry, on a net basis, did you add to the U.S.

team? And if so, by how much?.

On a net basis, we will be down in heads because we removed some of our smaller sales forces to U.S. hospitals. We will have more people calling on core IV products and oncology products than we've had before. So we will have, as I said in the prepared remarks, in oncology, we'll literally have double the amount of people calling than we had before.

But some of those people were with the company already, right, a part of the hospital team..

And just, I guess, from a market perspective, in oncology, how quickly do you think that category is growing?.

I think it's a different answer, depending on where you are in the world. Europe and certain part -- the high-value parts of other geographies have actually been ahead of the U.S. on a value of closed-system transfer devices. And so, I think the fastest growth is actually Europe, and then certain parts of Asia. The U.S. is probably behind that.

I think the U.S. is easily a 5% to 10% growth market, if not better, and the international markets are double-digit growth markets..

Okay. That's helpful. And then maybe, Scott, can you comment on gross margin? I realize there's probably a mixed dynamic here with critical care, but just even looking at the business -- and this maybe too shortsighted, but looking at it sequentially, revenue was up, critical care was a bit more, but gross margin took a step back.

And I'm just wondering, if you can just walk us through the weights on margin this quarter?.

Yes, again, it was primarily driven by -- you already mentioned. We were down in infusion therapy, 2%. We were up in critical care. And as we've said on previous calls, our critical care has an average gross margin that's south of the corporate average.

So that, in combination with a very small, one-time charge in the second quarter, that brought our gross margins down. And I think that mix going forward for the remainder of this year will help keep margins at approximately a 49% range..

The next question is from Mitra Ramgopal of Sidoti..

First, Vivek, you mentioned one of the things you identified was the international markets sort of lacked the infrastructure that it needed.

How a long of a process do you think that will take in terms of getting it up to where you would like it to be?.

It depends how much we can do with organic investment, and that's why we have to free up P&L dollars to make those investments. It's the one thing we control in playing the cards that we have. The other thing that can accelerate it is if you can allocate and deploy capital to do some of the international opportunities.

So let's leave the second one off for the time being, say we can't find good areas to deploy capital. I don't believe that's the case, but for arguments sake. Just to get some people and a team ramped up and effective in a country, it takes 6 months, 9 months, some amount of time.

So again, I wish it was running and ready to go tomorrow, but if we don't start today, it's only more time wasted. So I think we're really trying to set up the world for the future growth, '15, '16 and beyond. We've got to get the people that we need in here today, just like we've got to fix and give the U.S.

teams the best chance to execute commercially today, all right? And then if we could supplement within organic, we'll do it. But we can't count on that..

And again, the focus is mostly Europe or is it also Asia?.

Asia is actually the fastest-growing region for us by a long way. It's amazing to me what the team here has been able to cultivate [indiscernible] distribution relationships and a very small direct operation with a limited number of people in Asia. It's really amazing..

And coming back to the critical care segment, I know it exceeded expectations a little.

Are we seeing the new products having an impact yet? Or is that without new products?.

Nothing, no new products. I mean those are what -- a lot of the big R&D spend is going on right now. And candidly, as I said in the last call, we haven't really tinkered with critical care very much.

So I'm glad that we've found kind of the natural state here for at least 2 quarters in a row, but part of the question -- the previous question as to why we are still being cautious on the back half of the year, is we just don't necessarily see the underlying demand trends in critical care footing up to what's going on, so it's probably better to be cautious about that right now..

And finally, I think you had mentioned R&D, we should see the spending sort of come down a little starting 2015.

That's really a sense that you feel comfortable that the investments you've made this year, you'll be pretty much able to roll out the products, et cetera, and you just don't need to invest as much?.

Well, I think in the dream world, right, you'd love to have as much money as you'd like to invest there. I think the company has invested heavily last year and this year, and we've kind of taken stock of the programs that are in right now.

How much can we push through and get done as fast as we possibly can? And that's kind of the mentality that, that team is running with right now. And so we are not putting any constraints, candidly, on what they're doing. We want to see stuff get finished this year, if possible.

Even if that means they don't properly launch, get into the market, et cetera, to the middle of next year, the bulk of the spend items, the testing, the trials, et cetera, let's get them done right now. I'm not a huge one to kind of worry about what's the right percentage of sales in R&D.

I mean, I can make the argument our OEM revenues ought to be excluded from that calculation to get to the right metric. But I don't think this is -- like, the company is not big enough where those percentages matter, it's just the absolute amount of dollars to keep infusion therapy or oncology going once the critical care spend comes off..

[Operator Instructions] And the next question is from Larry Solow of CJS Securities..

Vivek, last quarter you mentioned it may be necessary to build a little of your infrastructure out in terms of readying yourself to have a better ability for integration of acquisitions.

Have you made any steps to -- on that front?.

I think we've made the internal operational steps, in terms of getting our handle on the systems, finances, infrastructure, the way we analyze, look at the business, report on it, talk to each other monthly about it. That was -- those all may seem like routine things, they were big changes from -- to a certain degree what went on here.

In terms of adding heads, a little bit in IT and some other areas, there's been some infrastructure added. We need to get that stuff at a level where I feel like we can handle capital deployment. There's still probably a few roles I would need to add. That's not done yet. I would say it's in process..

Okay.

And I know you don't -- we touched on oncology, and I know you don't want to necessarily give guidance on product line, but in terms of the sort of flat sales year-to-date, is it just a function of the issue, Hospira and the OEM, or is there -- or is it also just timing and other slower adoption in the market? Or other things that cause you to, obviously -- perhaps you were under covered and you realigned your sales force, but it just -- all of a sudden, just coming to a head today? Or is this something that's been building?.

I think oncology has been underserved in both dimensions. And so, look, I don't think we should be, like, angry at ourselves in a direct basis. It's still been around 8% or 9% growth year-to-date. I think it should be better than that, but -- that's not a terrible number in today's health care environment.

There's a big difference between that and Hospira. I don't think we fully appreciated [indiscernible] that's why we're changing it up a little bit.

I do think on a Hospira level or an OEM level, excuse me -- again, last year was a pretty transition year for the company, and we need some of those items to get lapped and cleaned up to make sure there's a right amount of product sitting with everybody, et cetera. And I think you'll see a rebasing over time.

I think the macro trends around oncology are still really, really positive. And the guidelines are moving more and more in the areas of driving safety, which is great. And we sit at the intersection of that. So for me, I want more people at this company focused on it, not less.

And I think we need a little time, from an OEM basis, for it to look normal there. Two, that partner is a great oncology company, right? So I feel like that product sits well there..

Got you. And just lastly, just to confirm, so essentially, you -- in your prepared comments, I missed the very beginning, you said you're net of the 15% cut, and then the increase and realignment of sales force and the expected R&D cuts, you're running modestly or are somewhat ahead of the -- your goal of reducing expenses $10 million in '15.

Is that correct?.

I think we said it a little bit differently. I think we -- on the last call, we said we held ourselves to at least $10 million. The actions we've taken should get us a long way away to $10 million. On top of those actions, there is decreasing R&D spend, most likely next year over this year.

And there's a bunch of other operational stuff, of how we're cleaning up our distribution channel, the other people that we've decided to give money to over the years, to clean up some of those activities.

Those are above the $10 million but we're not putting a number on it, because we view those as the net number we'd ultimately like to give depending on where the OEM business also shakes out to next year. We're trying to shape the cards we have today, manage our own situation, then figure out how do we build on to it..

The next question is from James Terwilliger of Newport Coast Securities..

Scott, just real quick, I've got 2 quick questions. Some of us this has been answered but I did miss some of the call and I apologize. The first one, at a high-level, in the critical care business. I know you guys have worked hard historically to stabilize this business after the acquisition.

And in my opinion, it seems like you have achieved a stabilization effect here for the last 6 months.

Do you guys feel that you've stabilized this business? And how are the pricing trends in the U.S., because I know that this is an area where your competitors have cut price aggressively against ICU?.

Sure. It's Vivek, I'll give you my view of that. I don't think 2 quarters makes a long-term trend, so I'm pleased to see that we've had the same amount of sales I would say relative to where the business was 3 or 4 years ago. Stabilized is sort of a bit of a stronger word than I'd probably use.

Pricing is not really the issue to me in this business, I think the market structure is actually pretty attractive as an industry structure. [indiscernible] price is very much in line with value. I think that our challenge has been to execute well and sell well and innovate well. And we've made committed investments to do that.

They have not gotten over the finish line yet. I think the company's actually committed an amazing amount of resources to critical care from a P&L perspective over the last number of years, relative to what's going on in the revenue line..

Okay. And then very quickly, moving on to oncology. I know this has been discussed before, but just so I'm correct. To me, this seems to be one of the best or brightest future growth drivers for your company going forward. It's a division that I'm very -- and have historically been very excited about.

Do you continue to feel the same way about the growth outlook within oncology? And at the same time, could you remind me again of the changes in the sales force? I thought earlier in the call, you talked about maybe reallocating some of your sales and marketing capital to maybe better support oncology?.

We did, absolutely, and to try to do that globally. And so, oncology is absolutely a core growth driver for this company. Oncology is a bigger and faster growth opportunity for -- in our opinion, outside of the United States than it is inside of the United States, right now, from a growth rate perspective.

I think, certain legislation and awareness was adopted faster outside the U.S. In the U.S., it still remains a terrific opportunity, where the tailwinds of education, guidance, clinical, et cetera, all coming together. We were going to market with roughly 17, 18 people in oncology.

With the changes that we've made we're going to have about 35 people, plus a management layer exclusively focused on IV products to the hospital and oncology products. So we feel like we've added a lot more resources to it.

It may well be bumpy over the next quarter or 2, as this transition period laps itself, et cetera, and just the changes we've made on a direct basis, but it's an area that we're allocated. We have to make decisions and our decision is we're allocating more resources towards it for the reasons I just described..

And the next question is from Chris Lewis of Roth Capital Partners..

Just one thing.

On the adjusted EPS guidance number, did you change your methodology there? And if you did, can you walk us through the change?.

Yes, it's pretty simple, Chris. So what we did last quarter versus this quarter; last quarter, we had excluded depreciation from the adjusted EPS calculation and we've put that back in, we think that that's more relational to ongoing operations..

Okay.

And then going off of that, is there a reason you're taking out the stock-based comp, given kind of the recurring nature of that expense?.

Sure. That's because we had some inducement shares this year in bringing on the back. And so, that was an unusual granting of equity. And so therefore, we thought it best to take those out. That way, on a comparison basis, we're looking at more of a comparable EPS number..

I mean, 2 points of that. I mean, I think you can look at the historical proxies here, et cetera. It was largely a homegrown enterprise, where it was never an unusual outlier in terms of equity grants that changed with some new people coming into the company. And so, it doesn't necessarily make for a fair comparison this year.

And then, maybe philosophically, that equity grants here were held in a very small group -- that will probably change over time, as we try to be a little bit more mainstream. And we need to, in attracting people, et cetera, to the company..

And at this time, I'd like to turn the call back over for closing remarks..

Thank you very much for everyone's time today. And we look forward to updating you on our progress during our third quarter call. Thank you..

Thanks, everybody..

Thank you. Ladies and gentlemen, this concludes today's program. You may now disconnect. Good day..