Earnings Call Transcript - MIR Q3 2022

Operator, Operator

Greetings. And welcome to Mirion Technologies Inc. Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Alex Gaddy. Thank you. Mr. Gaddy, you may begin.

Alex Gaddy, Host

Good morning, everyone. And thank you for joining Mirion's third quarter 2022 earnings call. A reminder that comments made during this presentation will include forward-looking statements and actual results may differ materially from those projected in the forward-looking statements. The factors that could cause actual results to differ are discussed in our annual report on Form 10-K and quarterly reports on Form 10-Q that we file from time to time with the SEC under the caption Risk Factors and in Mirion's other filings with the SEC. Quarterly references within today's discussion are related to the third quarter ended September 30, 2022. The comments made during this call will also include certain financial measures that were not prepared in accordance with Generally Accepted Accounting Principles. Reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the appendix of this presentation accompanying the call today. All earnings materials can be found on Mirion's IR website at ir.mirion.com. Joining me on the call today are Larry Kingsley, Chairman of the Board; Tom Logan, Chief Executive Officer; and Brian Schopfer, Chief Financial Officer. Now I will turn it over to our Chairman of the Board, Larry Kingsley. Larry?

Larry Kingsley, Chairman of the Board

Thank you, Alex and good afternoon, everyone. We're grateful for your continued support of Mirion and look forward to providing some additional color around our third quarter results and updated outlook this afternoon. To get started, I'd like to applaud the team's continued ability to generate strong order growth during the quarter. Demand for Mirion's product offerings remains robust, evidenced by the strong order performance in both operating segments. This performance paired with a strong backlog and continued strategic investment in our inventory position has given us confidence in our ability to deliver a good fourth quarter and a good start to 2023. Similar to what we've seen throughout the year, the third quarter presented a challenging operating environment, especially in our industrial business. Supply chain challenges were present throughout the quarter and there's no sign that these challenges will cease in the short term. However, the team has worked systematically to find creative and sustainable solutions, and we are confident in our position to serve the strong demand. As presented in our release, we've updated our outlook for fiscal 2022 to reflect the state of the macro environment and the underperformance of our industrial segment in Q3. The team is hyper-focused on operational execution while delivering on our longer-term strategic priorities. With that, I'll turn the call over to Mirion’s CEO, Tom Logan.

Tom Logan, CEO

Larry, thank you, and good afternoon, everybody. Before I dive into results, I'd like to take a moment to commend the hard work that took place across the enterprise during the quarter. I spent much of that time working in the trenches with different teams across the company, and I'm tremendously proud of the progress that has been made to set us up for future success. There are few areas I'd like to address regarding our third quarter performance and the updated outlook we shared this afternoon. First, our order performance during the quarter was outstanding. We generated 23% year-to-date order growth, reflecting strong vertical market conditions coupled with our broad category leadership. Normalizing for the effects of foreign exchange, our order intake is up approximately 29% with meaningful contributions from all major verticals. As a reminder, this excludes the impacts of Honey Kevie, the NBD reversal in 2021 and both recent acquisitions. Second, the company achieved 9% organic growth during the quarter led by 21% in medical and 2% in industrial. Foreign exchange continues to be a headwind principally in our industrial segment. To help mitigate FX and related interest rate exposures, we recently implemented a fixed cross-currency swap on a portion of our debt that Brian will address later. Third, we're experiencing a trend in the industrial side of the business where order cycle times have been nominally longer than anticipated. This pattern is impacting both our nuclear power and defense end markets. Finally, we are updating our 2022 guidance to reflect recent business trends. We believe that we have positioned ourselves well in the form of inventory and operational preparedness to meet elevated demand across our end markets and are expecting a strong fourth quarter. Our focus is on executing and delivering strong results in Q4 and into 2023. Now before getting into our quarterly results, first I'd like to formally welcome Michael Rossi to the Mirion team. Michael joined the company in October as the President of Mirion Medical and brings with him a wealth of domain experience. His appointment allows me to dedicate more of my time to key areas of focus, such as the industrial business, digital conversion and other strategic growth drivers. Now, let's get into more detail on our orders’ performance. Please turn your attention to Slide 4. The favorable dynamics across our end markets continue to support robust order intake for Mirion. What is amazing to me is just how broad-based the activity is. This inspires great confidence for the future as we convert this order flow to revenue in the coming quarters. I'd like to share a few quick anecdotes with you to provide insight into what we're seeing in the marketplace. First, on the medical side: order flow and organic revenue growth are strong across all three end markets. We're seeing positive trends both internationally and domestically within the radiation therapy quality assurance business. In fact, we booked our largest ever quarter for international orders in RTQA, despite the challenging FX environment. Within occupational dosimetry, there are two encouraging dynamics that are worth noting. First, we booked our first order for Instadose as an open platform during the quarter. We continue to see digitization as a positive growth engine for the business, and we're encouraged by customer engagement trends. Next, as discussed in Q2, we had a billing timing issue in the first quarter of 2021 that adversely impacts the year-over-year performance comparison. If you normalize for this and the previously mentioned Instadose order, we enjoyed order growth of approximately 4% year-to-date. Now turning to the Industrial segment: we've generated 28% year-to-date order growth on an as-reported basis. Excluding or correcting for the impacts of foreign exchange, year-to-date order growth is approximately 36%. Moreover, we have seen a meaningful increase to NTM industrial backlog coverage as we exit 2022. I'd also like to mention that we have a growing pipeline of defense orders that have been under discussion now for the last few quarters that we had hoped to receive in the third quarter and are still waiting to convert. We also booked an order in a developing market, the international mining industry during the third quarter. Our customer will use Mirion detection and sensing instruments to identify, locate and extract precious metals more efficiently. This order is a great example of how Mirion's core technology can be leveraged across a wide array of industries and applications. So to recap, our end markets are healthy. Our order pipeline is robust and we're expecting elevated engagement to continue both from nuclear power and defense customers. Now let's turn to Slide 5 to begin to our third quarter results. Looking at the total company, we delivered 9% organic revenue growth compared to the same period last year. On the medical side, the third quarter was another exceptional quarter of growth as we delivered over 20% organic revenue growth compared to the same period last year. Integration work continues to pay off in the nuclear medicine business as adjusted EBITDA margins are now trending in line with overall Mirion levels. Within RTQA, we have garnered a strong return from our investment in a national account strategy in our new European Service Center. On the industrial side, organic growth was 2%, underperforming our expectations for the quarter. Challenges in the period included unfavorable customer timing, foreign exchange headwinds and a continuation of supply chain friction. We are pleased with the early results from our recent acquisition of the Collins Aerospace Critical Infrastructure business, which we renamed Secure Integrated Solutions or SIS and which closed in August. We are seeing better than expected performance from the business and are excited about the software capabilities and cybersecurity offerings that it adds to our solution set for nuclear power customers. The acquisition also brings our total software engineering headcount to approximately 145 people globally. This is a prime example of the type of M&A activity that has been core to Mirion's inorganic growth strategy over the course of our history. With that, let me pass the call now to our CFO, Brian Schopfer.

Brian Schopfer, CFO

Thanks, Tom and good afternoon, everyone. To kick off my comments, I'll ask you to please turn to Slide 6, as we take a deeper review of our third quarter results. For the quarter, total company adjusted revenue was up 8.7% and adjusted EBITDA was down slightly compared to the same period in 2021. Total revenue in the quarter was $160.9 million with adjusted EBITDA totaling $30.8 million. On an organic basis, revenue was up 9% year-over-year. Adjusted gross margin was 50.4% in the third quarter, a slight contraction of 60 basis points from the same period last year. As expected, we were price cost positive in the quarter, which was offset by the impact of product mix and the acquisition of SIS. Adjusted EBITDA margin performance contracted 180 basis points to 19.1%. Excluding public company costs, adjusted EBITDA margins would have been flat for the quarter. Please note that we recently passed our first anniversary as a public company. So the third quarter is the last period we'll be comparing against a full quarter without public company costs. Adjusted earnings per share was $0.03 for the third quarter. I also want to highlight just how impactful foreign exchange dynamics were on our business. Foreign exchange negatively impacted adjusted revenue performance by 5.7% during the third quarter. We are now expecting an approximately 5% negative impact to the top line in 2022 compared to the 4% we stated previously. As Tom mentioned, we've begun actively hedging our foreign exchange and interest rate exposures and recently implemented a fixed-price cross-currency hedge on 14% of our third-party debt. Total savings expected is approximately $2 million on an annualized basis at today's rates. Flipping over to Slide 7 for a deeper look at the Medical segment. Adjusted revenue grew 23.3% and organic revenue was up 20.7% year-over-year. All three of our medical verticals contributed to the positive organic growth in the quarter with nuclear medicine and RTQA leading the way. Medical adjusted EBITDA margin was 29.7% in the quarter, a 100 basis point reduction compared to the same period last year. Adjusted EBITDA performance was principally driven by higher investment in sales and marketing and investment in our service center in Europe in the RTQA business and mix. As Tom highlighted earlier, we're seeing positive results to our order book from these investments already. Next, let's turn to Slide 8 for the Industrial segment. Reported revenue was flat compared to the same period last year with organic revenue growing 2%. Order cycle challenges coupled with ongoing supply chain effects negatively impacted organic revenue performance in the quarter and are expected to continue in the near term. Adjusted EBITDA for the Industrial segment was down 11% compared to the same period last year. Adjusted EBITDA margin declined 270 basis points to 21.9%, driven by a couple of key factors. We were price cost neutral within industrial for the quarter, which hurt us on a rate basis. Our cost inflation was higher this quarter than it had been due to some transitory costs impacting one of our defense products that sold large volumes in the quarter. This was a unique circumstance that we don't expect to repeat. Absorption continues to be a challenge, especially in our sensing business. Moving on to Slide 9, let's review our cash position. As of September 30th, we had $58 million of cash on hand and $140 million of available liquidity. Adjusted free cash flow was negative $6.9 million in the third quarter. As Tom mentioned earlier, we invested heavily in strategic inventory and completed the acquisition of SIS during the quarter. In fact, we've invested approximately $36 million into our inventory position year-to-date to de-risk our supply chain and support execution of the fourth quarter and 2023 expectations. We remain steadfast in our commitment to de-levering the balance sheet through execution and disciplined capital allocation. As of September 30th, our leverage ticked up to 4.8 times. This was principally driven by our investment in net working capital. With the achievement of the midpoint of our updated adjusted EBITDA guidance, we expect to finish 2022 with leverage of approximately 4.5 times. This is a bit higher than previously discussed in July, but is impacted by both the lower guide and our expectation of higher net working capital at year-end. Finally, I'll direct your attention to Slide 10 to review our updated guidance for 2022. First, we have reaffirmed our organic revenue growth guidance of 4% to 6%. However, we are now expecting a different mix contribution with double-digit organic growth from medical and low single-digit organic growth from industrial. Inorganic growth is expected to deliver 4% for 2022 after closing the SIS acquisition in August. Our revised adjusted EBITDA range of $160 million to $170 million reflects challenges in industrial timing and foreign exchange. We recognize our adjusted EBITDA guidance is broad at this point in the year. This is reflective of the strong year-to-date order volume, our opportunity pipeline, and the continuation of a difficult operating environment. To achieve the upper end of the range, it would require great execution coupled with the conversion of one or more of our significant defense opportunities, which are ready to ship within the quarter. Updated adjusted EPS guidance is now $0.37 to $0.41 and adjusted free cash flow is between $30 million and $45 million, reflecting the impacts of the previously mentioned headwinds combined with investments in working capital. Thank you for all your continued support of Mirion. I'll now pass the call back to Tom for some closing remarks.

Tom Logan, CEO

Brian, thank you. Before we open things up for your questions, I'd like to leave you with a few key takeaways from this afternoon's call. First, our order intake and momentum have been exceptional all year. Customer demand across our product portfolio remains robust. As I've said before, I've never seen our end markets more supportive of sustained growth than right now. Next, the third quarter presented a conversion challenge in the industrial segment and I'm proud of the way our team responded in due course. We exited the quarter with positive momentum across the business and are expecting to finish the year strong. Operational execution is my number one priority. Thank you again for your time and continued support. Let me now pass things over to Alex Gaddy to open things up for Q&A.

Alex Gaddy, Host

Thank you, Tom. That concludes our formal comments for today. I will turn it back to the operator for Q&A.

Operator, Operator

Our first question is from Joe Ritchie of Goldman Sachs.

Joe Ritchie, Analyst

So let's just start on where things maybe got a little bit worse this quarter on the supply chain side, in industrial, because I remember last quarter you guys had talked about building an inventory buffer, improving like some of your supply chain partners. But it seems like on the margin, things were worse than expected. So maybe just a little bit, let's just start with a little bit of color on that.

Tom Logan, CEO

In general, I think your summary is accurate. However, we have put significant effort into enhancing the robustness of our supply chain. I believe that the global supply chain has fundamentally shifted and will not return to its pre-COVID state. Our goal is to operate effectively in this new environment, and I am confident that we are succeeding. Throughout the year, our experiences have reflected the quarter's challenges, which are not due to widespread secular issues in the supply chain but rather specific episodic problems that have generally affected narrow product categories or lines. This quarter, we faced challenges with specialized tubing and metals within some segments of our nuclear business, which led to disruptions due to the specialized nature of that sector. Overall, we believe we have adapted our organizational approach to supply chain management, becoming more proactive in our strategies. This proactive stance is a key factor in achieving the 9% growth we experienced this quarter, driven by the improvements we've made in navigating this new landscape.

Joe Ritchie, Analyst

And I guess, the next logical question, right? If you kind of think through the updated segment organic growth guidance that Brian just gave, you're basically assuming still kind of like high teens, maybe low 20s type organic growth in industrial, is a pretty big step up in the fourth quarter. And so what can you do to kind of help us feel confident that you know, even in this supply chain backdrop you're going to be able to deliver on what seems to be pretty good backlog?

Brian Schopfer, CFO

I believe there are a few points to consider, Joe. You are correct that high 20s may be a bit optimistic. However, we have substantial inventory—$36 million has been built since December, and we do not anticipate a significant decrease in the fourth quarter. We expect to see that change sometime next year. Additionally, regarding our backlog coverage for both the fourth quarter and 2023, we are currently in the high single digits above last year's coverage number. The orders are indeed there. Our focus is solely on execution. As Tom mentioned, this is our top priority, and we have Mike in place on the medical side, ensuring that we get products out the door effectively.

Joe Ritchie, Analyst

Maybe one last one for me. I think historically, we've talked about a conversion rate in medical in that kind of like 50% plus rate. Obviously, supply chain is probably hampering some of that a little bit, but I think you guys put up like a mid 20s type incremental margin this quarter. And I'm just curious, like, just any color specifically on the quarter and then like getting back to that 50% plus rate over the long term?

Brian Schopfer, CFO

I think, first off in the quarter, like I mentioned on the call, we've seen a little bit of mix kind of between the businesses and just how the business has faired. The other thing, obviously, we just talked about was, we continue to have asked on the sales and marketing side and we've invested, and we've been doing this all year in our capabilities in Europe, and those are clearly paying off with the order rates. I think that business we will continue to invest in that business in those ways, as long as it pays off. But I think you see kind of the incrementals come back in probably next year. And I think we still end up with a very good print in the fourth quarter. And I think you don't see quite as much growth in the fourth quarter as we saw in the second and third quarter in medical. But I think we still think there's good growth there and good incrementals.

Tom Logan, CEO

Joe, let me just build on that too. I've been running our medical business directly now for the majority of this year, right up through the appointment of Mike Rossi. And that's a combination of both the medical group as well as our RTQA business. And it's the latter where we really saw the pickup in costs related again to our European Service Center, which principally flows through COGS, and then secondly in broader sales and marketing activities, which had been focused on really improving our commercial capabilities, and also just a simple reversion to more active travel tradeshow participation, et cetera. I made those decisions very deliberately. And as Brian noted, those are the direct genesis of the kind of top line order dynamics that we've seen, which again have been extraordinary, particularly in Europe against the headwind of a stronger dollar where we compete against strong, localized competition. Again, that is attributable to the investments that we've made here. These are kind of step function increments. This is not something that will continue to build on a ratable basis as we continue to drive organic top line growth, but rather we should see the leverage garnered from this materialize fairly quickly.

Chris Moore, Analyst

Could you start by discussing Instadose? You mentioned that you made your first sale this quarter. Can you provide more details about the commercial launch planned for the next 12 months? What specific milestones do you anticipate, and what are the major challenges you foresee at this stage?

Tom Logan, CEO

Let me just provide a few high-level comments. Not everybody on the call or listens to the call may be familiar with it. But Instadose is a revolutionary technology that digitizes the field of occupational dosimetry. That field is really focused on protecting workers who are potentially exposed to a harmful or hazardous source of ionizing radiation, the vast majority of them are medical. The great advantage of Instadose is that it eliminates the need to send essentially these radiation detection badges or passive dosimeters back and forth. By eliminating that logistical load, it increases compliance within a clinical setting, it improves the safety margin as we find through experience, that again, clinicians are more likely to gain immediate feedback and to tailor their procedural behavior. Finally, it represents a significant cost savings to the fundamental sponsor of these various healthcare facilities. This technology is unique and it's offered in a global market that today is still very much in an analog mode, there is nothing like this technology. We have been at this now for about eight years, have built up a substantial book of business, really anchored to this technology. We're about to cross the threshold; we are currently in the process of preparing the launch of our third generation of the Instadose technology, which will be a breakthrough in performance and usability characteristics for our clinical customers. More broadly, we see this as the market-clearing technology that will allow us to drive a more sweeping conversion of the analog base overall. The fundamental choice that we have is whether to use this proprietary technology to drive our service business or rather to make it available to the world, recognizing again, that this is a superior technology. We chose to make this technology available to any and all qualified service providers around the world, in a way that will be a win-win. It will provide a superior customer experience for their direct customers, lower their costs on an aggregate basis, and in our view again, provide a net benefit to this critically important sector.

Chris Moore, Analyst

I know you're not giving 2023 guidance at this point in time. But can you maybe just talk a little bit about free cash flow expectations for next year in terms of normalization? What you're thinking? Sounds like Q4 inventory is not going to be down that much. Just kind of any thoughts you might have on free cash flow in 2023?

Brian Schopfer, CFO

I believe we will see improvements in our inventory positions and net working capital as we progress through next year. The first quarter is likely to be strong for cash flow, especially with a robust fourth quarter ahead of us. Throughout the year, I expect net working capital to normalize and decline. We've always recognized the potential for improvement in our net working capital, and we still maintain that belief. We've mentioned multiple times that now isn't the right moment to focus on optimization; instead, we need to ensure we are delivering results and executing effectively.

Chris Moore, Analyst

Could you provide an update on the impact of Russia? In the first quarter, it was indicated that approximately $35 million in revenue was lost due to Russian customers and projects involving Russian counterparts, with the possibility of recovering around $20 million from nuclear and defense sectors. Is the $35 million figure still accurate, or are you performing better than expected in that area?

Tom Logan, CEO

Chris, your numbers are a little high. Our number overall in terms of the lost revenue associated with these Russian technology projects was less than $30 million. But it's important to note that this was a significant headwind we faced early in the year. Essentially, we saw 4% of our revenue that was important kind of base load quarterly distributed revenue that evaporated at the drop of a hat. I'm incredibly proud of the way our team has rallied to overcome that. Recognizing that additionally, not to belabor the point, we have foreign exchange headwinds of nearly 10%. So we look at the overall order growth rate but more fundamentally, when we look at the top line growth rate of the business, in a world where we've seen that kind of dynamic change, we have continued to see the same headwinds that others have faced in terms of supply chain friction, inflation, elevated interest rates, et cetera. But I've never felt so positively about the end market dynamics we face, the likely tenor of those end markets, the quality and duration of our backlog as we exit 2022 and heading into 2023. We're confident in our ability to execute well and deliver strong results, especially on the industrial side. I feel very good about our ability to do that.

Brian Schopfer, CFO

Just one small comment. I mean, our FX impact this year is 5%. I think Tom is just talking about the change in the euro. I would just say that, as well, we've seen a little bit of Russian revenue kind of dribble in it, but it hasn't been super material overall. Maybe one last thing that is important to add is the backlog in the orders we're booking definitely churn faster. That doesn't mean one quarter out, that could mean two or three or four quarters out. And I think that's why our backlog coverage for the next year is high single digits year-over-year. I think that's really important, because we've taken a pause on those Russian projects while continuing to grow order performance and keeping our backlog steady.

Tom Logan, CEO

I'd like to tag on one more thing about the defense sector. We've been discussing this for much of the time, and recognizing the history of Mirion, which has always been a partner during nuclear crises. In recent events, we've seen heightened dialogue around our capabilities, especially in relation to NATO militaries. The combination of these dynamics and the elevated threat coming out of Ukraine has resulted in significant uptick in interest. An important component of the inventory we've built has been to address that need. We expect to see that demand translate into revenue soon. We've been cautious about timing, but feel optimistic about our prospects.

Andy Kaplowitz, Analyst

Tom, I wanted to follow-up on your last comment. Just simply are you starting to see industrial orders turn into revenue now in early November a little faster, or are you still seeing similar supply chain dynamics slowing order conversion at this point?

Tom Logan, CEO

I think there are two dynamics that work here. And so the answer is, in general, Andy, it’s faster. The two dynamics that work here are that firstly, the inventory position that we've built very deliberately supports that activity. We know we're going to have a big Q4. We are very focused on providing all the conditions precedent to make sure that is executable, and that's certainly a big factor, as is the investment that we made in inventory leading into this. Secondly, the commentary about the duration: we've often talked about the nuclear market being comprised of installed bases which represent about three-quarters of our nuclear power-related revenue, followed by new build activity, which is typically 15% to 20%, and then decommissioning activity making up the remainder. This year's order dynamics are largely geared toward the installed base and smaller projects, which tend to trade faster with shorter order cycle times. That gives us additional confidence and conviction about our year-end exit strategy.

Andy Kaplowitz, Analyst

Tom, maybe just to follow-up on that last point. You've got 20% order growth, 20% plus order growth without new nuclear. The conversations with customers, maybe give us an update, how they're going, given the energy crunch in Europe? Now how does this order pattern trend as you go into 2023?

Tom Logan, CEO

We see continuation, and fundamentally recognize that the world needs nuclear power. Political support for nuclear power has not been this high in years. The price of natural gas is at a near-term high, and this elevates profitability for nuclear operators globally. As a result, there is greater focus on improving capacity utilization and minimizing downtime. This drives demand for capital equipment that we sell into the industry, and that's precisely what we're witnessing. Furthermore, the new build activity globally remains significant with renewed interest from major markets. My fundamental view is that the nuclear sector is at a significant inflection point, ensuring a healthy installed base and strong prospects for new builds.

Andy Kaplowitz, Analyst

Tom or Brian, I think you talked about price versus cost being green in 3Q. I think you said it was 3.5% year-over-year growth in Q2. What was it in Q3 in terms of price? And I know it's supposed to accelerate. But obviously, gross margins are still under a bit of pressure from the things you've talked about. So can you give us an update on price versus cost and what it has been and what you expect it to be?

Brian Schopfer, CFO

So Q3, Andy, is about 4% on the bright side overall. I think historically, I'd said we'd be closer to 5% by the end of Q4. I don't see a reason to change that. We continue to put price into the market where we can. The challenge we're seeing is we are witnessing inflation, just like everybody else, which is impacting our rate a little bit. But on a dollars basis, we're for sure price cost positive. We continue to monitor this and take action. We're also very focused on the supply chain side about how we can design out value-add and value engineering. While some commodity prices have gone down, electronics remain a challenge but are a smaller piece of the overall economics of our products. I think we're in a spot where we will be able to attack the cost base more aggressively as we enter 2023.

Andy Kaplowitz, Analyst

Just one more question from me, Brian. Can you provide any details on the acquisitions and the expected EBITDA contribution from them in the second half of 2022?

Brian Schopfer, CFO

I don't want to be specific. This was a small deal we did on the SIS. So we’re coming up here on one year on SIS. That will begin to lap in organic. I think we're pretty pleased with how that's going. We've integrated it pretty holistically into the business. SIS, we're super excited. I think when it's all said and done, and you can see it in our leverage calculation, there's a couple of million, almost over $4 million on an annualized basis baked in. I think that will continue to prove to be very attractive and it's a sub 2 times post-synergy deal for us. We'll do these deals all day long. We continue to look for more like that out in the market and we'll go from there.

Operator, Operator

We have reached the end of the question-and-answer session. I would like to turn the call back to Thomas Logan for closing comments.

Tom Logan, CEO

Ladies and gentlemen, we appreciate your time, your interest and your support. Again, this is an exciting time for us at the company. We are excited by the momentum that we've garnered during the quarter as we exit the year and come into the New Year. Again, we're hyper-focused on execution and I look forward to updating you on our results in a few short months. So thank you and good day.

Operator, Operator

Ladies and gentlemen, that concludes today's conference. Thank you for joining us. You may now disconnect your lines.