Earnings Call Transcript - EBS Q1 2023

Operator, Operator

Good day, and thank you for joining us. Welcome to the Emergent BioSolutions First Quarter 2023 Financial Results Conference Call. All participants are currently in listen-only mode. After the presentations, we will have a question-and-answer session. I will now turn the call over to the company. Please proceed.

Bob Burrows, Vice President of Investor Relations

Thank you, and good afternoon, everyone. My name is Bob Burrows. I'm Vice President of Investor Relations for the company. Thank you for joining us today as we discuss the operational and financial results for the first quarter of 2023. As is customary, today's call is open to all participants and is being recorded and copyrighted by Emergent BioSolutions. In addition to today's press release, there is a series of slides accompanying this webcast available to all webcast participants. During today's call, we may make projections and other forward-looking statements related to our business, future events, our prospects, or future performance. These forward-looking statements are based on our current intentions, beliefs, and expectations regarding future events. Any forward-looking statement speaks only as of the date of this conference call, and except as required by law, we do not undertake to update any forward-looking statement to reflect new information, events, or circumstances. Investors should consider this cautionary statement as well as the risk factors identified in our periodic reports filed with the SEC when evaluating our forward-looking statements. During today's call, we may also repurchase certain non-GAAP financial measures that involve adjustments to GAAP figures in order to provide greater transparency regarding Emergent's operating performance. Please refer to the tables found in today's press release and in the slides regarding our use of adjusted net income and loss, adjusted EBITDA, and adjusted gross margin, and the reconciliations between our GAAP financial measures and these non-GAAP financial measures. Turning to slide five. The agenda for today's call will include Bob Kramer, President and Chief Executive Officer, who will comment on the current state of the company; Paul Williams, SVP and Head of the Products business, who will comment on the state of the NARCAN Nasal Spray franchise as we migrate to our nonprescription form of this key medical countermeasure; Eric Lindahl, EVP and Chief Financial Officer, who will speak to the financials for Q1 2023 and then pivot to our revised forecast for full year 2023 as well as Q2 2023 total revenues. This will be followed by a Q&A session where additional members of the executive leadership team are present and available as needed. Finally, and for the benefit of those who may be listening to the replay of this webcast, this call was held and recorded on May 9, 2023. Since then, Emergent may have made announcements related to topics discussed during today's call. And with that, I would now like to turn the call over to Bob Kramer. Bob?

Bob Kramer, President and Chief Executive Officer

Thanks, Bob, and good afternoon to everybody. Thank you for joining the call. My comments this afternoon begin on slide six. Our first-quarter performance was generally in line with expectations as revenues came in above our guidance range but were offset by higher-than-expected operating costs that had a bearing on our profitability for the period, and Rich will provide more detail in his prepared remarks. We continue to strengthen our core businesses and build the foundation for sustainable long-term growth. And today, I'd like to walk you through some of the progress since the beginning of the year and where we're going to go for the rest of 2023 and beyond. First, we expect the sale of our travel health business to Bavarian Nordic to close as planned in the second quarter of this year. Upon closing, the deal will provide an upfront cash payment of approximately $270 million and a potential additional $110 million in sales and development-based milestones. As I said, when we made this announcement earlier this year, this deal sees two significant outcomes. First, it allows us to further sharpen our focus on our core products and contract manufacturing services businesses while allowing continued supply of these important vaccines to patients and customers. Second, and before discussing NARCAN nasal spray in more detail, I'd like to mention that today is Fentanyl Awareness Day. Every day, the opioid epidemic cuts short innocent lives. This epidemic shows no signs of abating, and we remain committed to working with federal, state and local governments and advocacy groups across the nation to ensure more naloxone reaches communities, patients, and those in need to help reverse the trend of increased opioid-related overdose deaths. That's one reason why we view the FDA's approval of our application to make NARCAN Nasal Spray, the first and only opioid reversal treatment approved for over-the-counter use, as a significant step forward in our efforts to expand access and availability of this life-saving medicine. Since acquiring the product in late 2018, we've consistently supported efforts to expand awareness of and access to naloxone. We've also maintained our commitment to affordability and support for public interest partners who often are responsible for responding to opioid overdose emergencies. We believe greater access to NARCAN nasal spray as a result of the OTC designation will help save countless lives. As we said following approval, we're targeting a late summer launch for the OTC product and are in discussions with potential retail partners to support this critically important initiative. We continue our commitment to making NARCAN nasal spray affordable while pricing the OTC product in a sustainable manner to support our continuous manufacturing and unique distribution capabilities. As a result of the ongoing epidemic, we're seeing continued growth in demand from the US public interest channel as well as in Canada. Paul Williams, our Senior Vice President of the Products business, will join us today to provide more details about NARCAN following my remarks. Third, we continue to sustain a strong partnership with the US government focused on preparedness and response and to helping provide medical countermeasures for the public health threats it has identified and prioritized. With respect to our smallpox franchise, we recently received a notice of intent to procure ACAM2000, our smallpox vaccine for delivery in 2023. This follows a similar notice of intent to procure for IGIV therapeutic product. The exact details are not yet final, but the values for each are reflected in our guidance for smallpox. Similarly, we've also received a notice of intent to procure our boxelisen and ataxin BAT product, which is reflected in the other products guidance. These notices demonstrate our continued support of and partnership with the US government as they seek to address potential public health threats. These would be the second, third and fourth contract awards in the last six months following the January contract announcement earlier this year with the US Department of Defense to procure RSDL. With respect to the Biologics License Application for anthrax vaccine candidate AV7909, we continue to have constructive engagement with the FDA and believe that we remain on track for the PDUFA date in July. We're working closely with the government to transition this product to post-exposure or post-approval procurement. As a reminder, in 2019, AV7909 was the subject of a pre-emergency use authorization package submitted to the FDA. And since then, the US government has been procuring this product for placement into the strategic national stockpile. These actions are consistent with the repeated comments and budget recommendations from the Department of Health and Human Services and specifically the Assistant Secretary for Preparedness and Response about the necessity of maintaining America's preparedness and response capabilities. As we have noted previously, government contracting does not always work on the schedule private industry sets or suggests. Understanding that, we remain confident in the value placed by the US government in maintaining domestic medical countermeasure manufacturing capabilities and the important role of public-private partnerships in addressing known and unknown public health threats. Fourth, we continue to implement our strategy of improving and strengthening our quality and compliance infrastructure and culture. While not largely visible externally, this work is fundamentally critical to our success in delivering for our current customers and ensuring both our products and services businesses are positioned for sustained growth well into the future. And finally, we're actively managing our business and the balance sheet to improve efficiencies while securing and maintaining sufficient liquidity and access to capital. We've completed the organizational changes announced in January, which are expected to result in approximately $60 million in annualized savings. The anticipated sale of the Travel Health business will provide an additional $270 million in cash proceeds, and we're actively working with our lenders to restructure and extend our debt obligations. We expect to have an agreement in place by May 17 of this year. I've said it before, but it bears repeating, while our strategy is already driving improvements, the full benefits of the actions we have taken and the plan will not be realized overnight. For 25 years, Emergent has been at the forefront of helping protect Americans from serious public health threats. Our intention is to continue doing so for another 25 years and more, and the actions we're taking will help make that a reality. With that, I will now turn the call over to Paul to speak briefly about our plans for NARCAN NASAL spray before Rich shares more on our financial performance for the first quarter of this year. Paul?

Paul Williams, Senior Vice President and Head of Products

Thanks, Bob, and hello, everyone. My comments are summarized on slides nine and ten. As Bob noted, the ongoing call of the opioid crisis remains top of mind for all of us at Emergent. We take seriously our responsibility to work with all stakeholders in developing solutions to help those who experience an opioid overdose get a second chance. That is why we see the approval of NARCAN nasal spray to be sold over the counter as a historic milestone in the fight against the opioid crisis. It allows Emergent to make NARCAN nasal spray available through pharmacies, convenience stores, vending machines, online retailers, and anywhere else OTC products can be found. This is a significant opportunity to expand access and build on our continued commitment to our public interest partners across the country. With our FDA approval, we can now move forward confidently with our plans. First, we are meeting with retail partners to finalize contracts and distribution plans. While I'm not in a position to share specifics at this time, suffice it to say these are the partners you'd expect. As we announced in April, we are targeting a consumer out-of-pocket price of less than $50 for a box of two, four milligram doses. This is significantly lower than the currently available prescription wholesale price of $125 per box of two. Second, currently, our supply chain manufacturing efforts are focused on supporting the new OTC configuration with the goal of having the product on shelves by late summer. We are confident we have the capacity to fulfill demand across all channels. Importantly, as we transition our existing packaging and manufacturing to support OTC use, the 4-milligram NARCAN nasal spray will remain in readily available supply through current channels. Third, we remain committed to working with our public interest partners, including providing innovative solutions for organizations lacking large-scale logistical support to ensure NARCAN is available to the underserved communities that need it. Public interest partners are critical to maintaining broad access to NARCAN nasal spray. And lastly, we continue to seek new ways to serve markets outside the United States, namely in Canada, where the need for opioid overdose treatment continues to grow. This is reflected in our revised guidance for 2023. As Bob stated, NARCAN nasal spray is the first and only opioid overdose reversal medicine approved for over-the-counter use. While we expect competitive entrants in the market, we don't expect those until early to mid-2024. Since its introduction in February of 2016, more than 44 million doses of NARCAN have been distributed in the US and Canada, and as a result, are giving countless people a second chance. Sadly, the need for naloxone continues to grow. We believe Emergent is in a strong position to continue meeting that need based on our record of reliable service to our customers. We are excited about the opportunities to expand awareness of and access to NARCAN that the OTC designation creates. We look forward to providing additional details regarding our pricing and our go-to-market strategy closer to launch in late summer. With that, I'll turn it over to Rich.

Rich Lindahl, Executive Vice President and Chief Financial Officer

Thank you, Paul. Good afternoon, everyone. We appreciate you joining the call. I'll start on slide 12 and touch on a few key financial highlights before walking through the first quarter details. First, as Bob noted, we anticipate closing on the divestiture of the Travel Health business in the second quarter, which will provide an infusion of upfront cash while furthering our stated objective of sharpening our strategic focus. The impact of the sale is now incorporated into our updated guidance for 2023 and enables us to better align our cost structure with our current revenue trajectory. Second, as you heard from both Bob and Paul, we continue to see robust demand for NARCAN nasal spray in both the US public interest and Canadian markets, and that is reflected in our first-quarter results. These trends are leading us to significantly increase our NARCAN revenue guidance for this year. In addition, our NARCAN guidance also continues to reflect our assumptions regarding the impact of over-the-counter sales, which we are planning to initiate beginning in late summer. Third, the US government has recently provided us with notices of intent to procure quantities of ACAM, BAT and BIG that all align with our prior expectations. Fourth, we are adjusting down our CDMO revenue guidance driven principally by recent changes to customer requirements for COVID-related products we were manufacturing. These impacts, along with continued remediation costs and other investments to improve quality and compliance across our entire manufacturing network, negatively affected first-quarter adjusted gross margin and have a corresponding ripple effect on our updated full-year adjusted gross margin forecast. Calendar 2023 will continue the process of rebuilding this business, readying our manufacturing capacity, and positioning it for growth in the future. Lastly, we are in the final stages of reaching agreement with our bank group to amend certain terms of our credit facility, including an extension of the October 2023 maturity date. We anticipate closing this amendment on or before May 17, and we'll provide additional details at that time. With that, let's now turn to a review of our financial results, which can be found on slides 13, 14, and 15. Highlights include total revenues of $165 million, a decrease over the prior year, driven by lower sales of our key medical countermeasure products and substantially reduced CDMO services revenue offset by better-than-anticipated NARCAN sales in the quarter. And as expected, our key profitability measures declined versus the prior year with a net loss of $183 million, adjusted net loss of $159 million, and adjusted EBITDA of negative $101 million. Notable revenue elements in the quarter include: Anthrax MCM sales of $22 million lower than the prior year due to timing of deliveries of AV7909 and BioThrax to the US government's Strategic National Stockpile, offset by increased sales of Anthrasil. NARCAN sales of $100 million higher than the prior year, demonstrating the continuing durability of this product driven by consistently strong demand from the US public interest channel and the growing market in Canada. Smallpox MCM sales of $7 million lower than the prior year due to timing of ACAM2000 international sales. Other product sales of $14 million, slightly higher year-over-year, reflecting increased sales of Vaxchora and Vivotif as well as the timing impact of several other products and combined CDMO service and lease revenues of $15 million, significantly lower than the prior year due to lower production activities in certain of our sites as we continue to support existing customers and rebalance the business following our COVID-19 response. Turning to operating expenses. Cost of product sales in the quarter were $103 million, higher than the prior year and driven primarily by lower overhead absorption, combined with higher allocations of product COGS at our Bayview facility, offset by lower period costs at our burn facility and lower NARCAN royalty costs. Cost of CDMO was $52 million, significantly lower than the prior year due to reduced production across the CDMO network, partially offset by higher costs at the Camden site, resulting from additional investments and quality improvement initiatives. R&D expense of $41 million lower than the prior year due primarily to lower spending on the CHIP program and SG&A spend of $101 million higher than the prior year, largely due to professional services supporting transformation activities and one-time costs related to the previously announced employee reductions. With that, let's move to slide 16 and review segment performance during the quarter. In the Products segment, revenues were $143 million, a decrease in the prior year as strong performance from NARCAN was offset by lower contributions from both anthrax MCM and smallpox MCM sales. And adjusted gross margin was $44 million or 31%, both decreases over the prior year, reflecting lower sales volume, a less favorable product mix and the higher cost of product sales I just discussed. As for the services segment, revenues were $15 million, a significant decrease from the prior year, and adjusted gross margin was negative $37 million, a decrease versus the prior year driven primarily by declining services revenues related to the COVID-19 response, coupled with incremental costs associated with facility remediation efforts and investments in quality and compliance across our manufacturing network. Moving on to slide 17, I'll touch on select balance sheet and cash flow highlights. We ended the first quarter with $430 million in cash, down sequentially from December 31. Operating cash flow was negative in the quarter due primarily to lower MCM and CDMO revenues. As we said previously, we expect the contribution of revenues, earnings, and operating cash flow to be weighted to the second half of the year. Capital expenditures in the period were $15 million. And as of March 31, our net debt position was $975 million. Please turn to slides 18 and 19 for a review of our 2023 forecast and associated assumptions. As announced in our press release this evening, we're updating our guidance for full year 2023 as follows; importantly, our revised guidance reflects the impact of the previously announced sale of our travel health business to Bavarian Nordic, which we anticipate to close in the second quarter. Total revenues of $1.1 billion to $1.2 billion, unchanged from prior guidance. Anthrax MCM sales of $260 million to $280 million, also unchanged from prior guidance. NARCAN nasal spray sales of $360 million to $380 million, an increase over the prior guidance primarily reflecting robust demand from the US public interest channel and the Canadian market. Smallpox MCM sales of $235 million to $255 million, unchanged from prior guidance. Other product sales of $120 million to $140 million, lower than prior guidance, primarily reflecting the removal of travel health products following the anticipated completion of the divestiture. CDMO services revenue of $90 million to $110 million, a decline from the prior guidance range for the reasons I highlighted earlier, adjusted net loss of $85 million to $35 million, slightly lower versus the prior range, reflecting the impact of higher NARCAN sales and the impact of the Travel Health divestiture, offset by lower CDMO revenues and an increase to our tax valuation allowance. Adjusted EBITDA of $100 million to $150 million higher than the prior range, primarily reflecting the impact of the Travel Health business divestiture as well as the upward revision to NARCAN, offset by the ongoing process of re-baselining the CDMO business and adjusted gross margin of 39% to 42%, slightly lower than the prior range and reflecting the impact of overall revenue mix. Finally, we are guiding to second quarter revenues of $210 million to $230 million, further emphasizing our anticipation that revenues and profits in 2023 will be more heavily weighted towards the second half of the year. To conclude, please turn to slide 20 for some summary comments. Our results in the first quarter once again reflect a mix of strong performance in certain core areas of our business, offset by ongoing challenges in other aspects of our business. We are committed to sustaining revenue growth and improving profitability, and we are addressing near-term challenges to our credit profile. Finally, as always, we remain confident in the impact we are having on patients and customers focused on health security and pandemic preparedness. That completes my prepared remarks, and I'll now turn the call over to the operator so that we can start the question-and-answer session.

Operator, Operator

Thank you. At this time, we will begin the question-and-answer session. Our first question comes from Jessica Fye of JPMorgan. Your line is now open.

Unidentified Analyst, Analyst

Hey everyone. This is Nick filling in for Jess. Thank you for answering our questions. I have a clarification question about the guidance for NARCAN. You mentioned the increase in guidance from $290 million to $310 million and then to $360 million to $380 million. I know you discussed some factors that contributed to that increase. Can we delve a bit into whether this surge is mainly due to heightened demand from the public interest market in Canada? Or is there also potential for more growth when considering over-the-counter options as well? I'm curious about what factors collectively influenced that increase.

Bob Kramer, President and Chief Executive Officer

Yes, Nick, this is Bob. Thanks for the question, and thanks for joining the call. I invite in a minute here, Paul, to weigh in. But as we announced our guidance initially for 2023, we made it clear that our plans included an OTC switch sometime in Q3 of this year. So, the guidance that we initially provided at the $290 million to $310 million number already had kind of consideration for the OTC switch in it. I think what you see in our upgraded guidance now of $360 to $380 is primarily driven by what we see as increased demand in the two channels that we're distributing the product today, primarily driven by, again, the public interest market in the United States and Canada, but Paul can weigh in for additional color.

Paul Williams, Senior Vice President and Head of Products

Yes. Thanks, Bob. And the increase in guidance is directly attributable to both the US public interest segment as well as the Canadian segment. I think for the public interest segment in the US, obviously, given they serve many vulnerable at-risk populations with the obviously continued increase of the opioid crisis, the demand flowing through that channel continues to grow and expand. Similarly, in Canada, we're seeing expanded access to meet the demand in Canada as well. So obviously, the update in the guidance reflects the trends that we are seeing as we start the year this year.

Unidentified Analyst, Analyst

Great. Thank you. And just maybe a quick follow-up. Can you provide a bit of color on some of the conversations you've been having regarding potential insurance coverage for Medicare and Medicaid patients for OTC NARCAN?

Bob Kramer, President and Chief Executive Officer

Yes. Paul, do you want to take that one?

Paul Williams, Senior Vice President and Head of Products

Access is essential for us. Moving NARCAN over the counter will significantly aid in this effort. We are engaged in discussions with both CMS and private payers to explore how they view potential coverage for NARCAN OTC. While we have not finalized any agreements with specific payers at CMS yet, we recognize that it is a priority for them. We are continuing to collaborate with them and other stakeholders to ensure that we achieve a balance between access and affordability as we introduce NARCAN OTC to the market.

Unidentified Analyst, Analyst

Great. Thanks so much.

Operator, Operator

Thank you. Our next question comes from Brandon Folkes of Cantor Fitzgerald. Your line is now open.

Brandon Folkes, Analyst

Hi, thank you for the update and for taking my question. I wanted to ask about NARCAN. What are your thoughts on the possibility of a nonprofit entering the OTC market, particularly regarding pricing and supply capabilities? If they do enter the market, do you see it as a move to establish a stronger presence in the retail first responder sector? Additionally, could you provide insight on the difference between the four milligram and three milligram formulations? Is there any data indicating differences in absorption or efficacy between the two?

Bob Kramer, President and Chief Executive Officer

Yes, thanks Brandon. So again, I'll start and then invite others to join in there as well. So, as it relates to your question about a potential nonprofit player in the nasal naloxone mix, I'm not going to speculate on who might be out there and what they might be doing. Again, our focus continues to be, as it has for the last five years, to continue looking for opportunities to expand awareness, expand access, and as Paul indicated, continue to work with both public and private insurance companies to make this as affordable as possible. So, I think the moves that we're making will make a big dent in that. In terms of the nonprofit, again, I think we won't speculate on what they might do. In terms of the four milligram formulation, I don't know that there are any exact studies comparing three versus four milligram. I think it's pretty widely accepted that given the work that the FDA did on this product to approve it back in February of 2016, the four-milligram presentation is widely accepted as a very safe and effective dose. So, Paul, if you want to add some more additional color, please do so.

Paul Williams, Senior Vice President and Head of Products

I think you got that and Bob.

Brandon Folkes, Analyst

Thank you. If I can count that as one question, I'd like to ask one follow-up. Regarding the intent to procure ACAM2000, could you clarify what that means in comparison to actually exercising the contract option? Are there any additional steps required before exercising the contract option? That's all from me. Thank you very much.

Bob Kramer, President and Chief Executive Officer

Yes, thanks Brandon. So, the notice of intent to procure is what the government typically uses as the next logical step after they do a request for information and after they do a request for a proposal and a contractor responds to that RFP, negotiations ensue. After those negotiations are pretty much done, you would typically see a notice of intent to procure. While the exact details of the potential procurement that we referred to under the notice of intent to procure, we're not detailing now. They have been heavily negotiated, and we expect that the contract modification to be executed in a fairly reasonable time period. And as such, it's now baked into our smallpox franchise guidance for 2023, which is unchanged from earlier this year. Can you go on to the next question, Jayda?

Operator, Operator

Yes, of course. Thank you. Our next question comes from Boris Peaker of TD Cowen.

Unidentified Analyst, Analyst

Hi. Thanks for taking my question. This is Nick on for Boris. Just a quick one for me. But how does the closing of the deal with Bavarian affect the income statement? Because I know that you guys raised EBITDA guidance without really changing too much else directly affecting it. So, I was just wondering how this deal with Bavarian will affect that.

Bob Kramer, President and Chief Executive Officer

Yes. Thanks for the question, Nick. Rich, do you want to take that one?

Rich Lindahl, Executive Vice President and Chief Financial Officer

Sure. We have included the impact in our guidance, assuming the deal closes in Q2. The main effects are that revenue from other products will decrease since the current Vaxchora and Vivotif products will transition out of our sales channel to Bavarian Nordic. Additionally, there will be a positive effect on adjusted EBITDA mainly due to reduced R&D expenses, as spending on the CHIP program will also move to Bavarian Nordic. These are the key impacts we expect. While we don't disclose the detailed components of adjusted EBITDA below the total company level or the breakdown of other product revenue, those are the affected categories.

Unidentified Analyst, Analyst

Got it. Thanks. Just a quick follow-up on that. Assuming the deal closes in the second quarter, will everything related to CHIP be transferred to them, meaning there won't be any more R&D costs from your side? Or will you still need to complete the Phase III trial at your expense before Bavarian takes over?

Rich Lindahl, Executive Vice President and Chief Financial Officer

They'll assume responsibility for the trial going forward.

Operator, Operator

Thank you. Our next question comes from Christopher Sakai from Singular Research. Your line is now open.

Christopher Sakai, Analyst

Thanks. This is Chris. I see that you have increased the guidance on NARCAN from $290 million to $310 million, to $360 million to $380 million. And maybe coincidentally, there is also a decrease in gross margins of 41%, 44% to 39%, 42%. And obviously, to understand you can give us color how much of the decrease in gross margin is due to NARCAN because I also see that another major development is the Travel Health divestment.

Bob Kramer, President and Chief Executive Officer

Yes. Thanks for the question. Rich, do you want to field that one?

Rich Lindahl, Executive Vice President and Chief Financial Officer

Sure. Yes. And you're right, there's several moving parts. I would say the biggest influence on gross margin guidance change is the change in CDMO revenue guidance and the impact there as well as, as I referred to on the call, just the impact in the first quarter itself of some of the activities there. So those are really the things that are driving the change to full-year adjusted gross margin guidance.

Christopher Sakai, Analyst

As a follow-up, between now and the fourth quarter call, based on your discussions with various channel partners and the factors affecting pricing and volume, it seems that your expectations regarding the retail price for NARCAN compared to what you would be able to charge have likely remained unchanged. Do you believe this assumption is correct?

Bob Kramer, President and Chief Executive Officer

So, Paul, do you want to weigh in on that one?

Paul Williams, Senior Vice President and Head of Products

Sure, and thank you for the question. As we've communicated, we are aiming for a consumer out-of-pocket price for OTC to be slightly under $50. This is in line with the pricing in the public interest segment as we move forward. We are currently finalizing our retail contracts with our partners, and all stakeholders are committed to affordability just as we are. Once those contracts are completed, we can give more specific details about the actual consumer out-of-pocket price. However, our goals regarding affordability remain aligned.

Christopher Sakai, Analyst

Thank you.

Operator, Operator

Thank you. We see no further questions at this time, and I will now turn it back over to the company.

Bob Kramer, President and Chief Executive Officer

Thank you, Jayda. And with that, ladies and gentlemen, we now conclude the call. Thank you for your participation. Please note an archived version of today's webcast as well as the PDF version of the slides used during today's call will be available later today and accessible through the Investors landing page on the company website. Once again, thank you, and we look forward to speaking to all of you in the future. Have a good night.

Operator, Operator

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.