Good morning, everyone, and welcome to the STERIS plc Third Quarter FY 2021 Conference Call. I would now like to turn the call over to Julie Winter from Investor Relations. Please proceed.

Thank you, Jamie and good morning, everyone. As usual, on today's call we have Walt Rosebrough, our President and CEO; Mike Tokich, our Senior Vice President and CFO; and Dan Carestio, our Chief Operating Officer. I do have a few words of caution before we open for comments from management. This webcast contains time-sensitive information that is accurate only as of today. Any redistribution, retransmission or rebroadcast of this call without the express written consent of STERIS is strictly prohibited. Some of the statements made during this review are or may be considered forward-looking statements. Many important factors could cause actual results to differ materially from those in the forward-looking statements including without limitation, those risk factors described in STERIS' securities filings. The Company does not undertake to update or revise any forward-looking statements as a result of new information or future events or developments. STERIS' SEC filings are available through the Company and on our website. In addition, on today's call, non-GAAP financial measures including adjusted earnings per diluted share, adjusted operating income, constant currency, organic revenue growth and free cash flow will be used. Additional information regarding these measures including definition is available on today's release as well as reconciliation between GAAP and non-GAAP financial measures. Non-GAAP financial measures represented during this call with the intent of providing greater transparency to supplemental financial information used by management and the Board of Directors in their financial analysis and operational decision-making. For discussions, I will hand the call over to Mike.

Thank you, Julie, and good morning, everyone. It is once again my pleasure to be with you this morning to review the highlights of our third quarter performance. For the quarter, constant currency organic revenue increased 1.4% driven by 130 basis points of favorable price and 10 basis points of organic volume growth. Gross margin for the quarter was up 110 basis points to 44.2% and benefited from productivity, price and acquisitions. EBIT margin for the quarter was 23.6% of revenue, an increase of 250 basis points from the third quarter last year, due primarily to higher gross margin attainment and lower operating expenses for travel, sales and marketing, and compensation due in part from the business disruption from COVID-19. Our adjusted effective tax rate in the quarter was 18.4%, somewhat lower than anticipated due to favorable discrete items. Net income in the quarter grew 20% to $149.2 million and earnings increased to $1.73 per diluted share as compared to $1.45 per diluted share in the prior year. Our balance sheet is a continued source of strength for the Company. Our leverage ratio at the end of the third quarter is once again below 2 times as we continue to pay down debt post the key surgical acquisition. Considering our cash position of $253 million, access to available credit lines and a low leverage ratio, we are well positioned from a liquidity standpoint. During the third quarter, capital expenditures totaled $53.8 million, while depreciation and amortization was $56.8 million. Free cash flow for the first nine months was strong at $337.7 million, an increase of almost $100 million over the same period last year, primarily due to improvements in net income and working capital, somewhat offset by higher capital expenditures. With that, I will now turn the call over to Walt for his remarks.

Thanks, Mike, and good morning, everyone. It's a pleasure to be with you to discuss our third quarter results, which once again demonstrate the resilience of our business and the great work of our associates to serve the needs of our customers. Once again, we want to acknowledge the caregivers around the globe who are on the front lines of this pandemic and doing such a tremendous job. Looking back at the first three quarters of this fiscal year, the sequential improvement of our business is impressive. While we continue to experience the challenges of a global pandemic, the worst impact on our business appears to be in the rear view mirror. Despite significant numbers of new COVID-19 cases and some hospitals around the globe close to or at capacity, procedures continue to occur. Our most significant concern, healthcare capital equipment achieved a critical milestone, showing three straight quarters of sequential improvement and ending the third quarter with an all-time record order month. This resulted in near record backlog, which is greater than that before the pandemic at the end of Q3 last year. Even with pockets of slowdowns in procedures due to the COVID-19 uptick, we are quite pleased with our position at this point in our fiscal year. Constant currency organic revenue grew 1% in our third quarter driven by double-digit growth in AST which was offset by flat to slightly down revenue in life sciences and healthcare on a constant currency organic basis. Our strong growth in AST continues to be favorably impacted by demand for COVID-related single-use products such as PPE and COVID-testing materials as well as components used in vaccine manufacturing and packaging. The business has also seen steady demand from its core medical device customers. Life science revenue was flat in the quarter with mid-single-digit growth in consumables and services offset by a decline in capital equipment shipments. On the consumable side, we have been anticipating a return to more normalized growth for some time. It appears our customers are destocking the excess inventory that was built up over the last three quarters. With COVID vaccines now in production, we expect to see sustained high demand for our consumables offering, but not at the extraordinary growth rate of recent quarters as our pharma customers build inventory due to certain supply concerns for vaccine production. And as we have commented frequently, over the years, capital equipment shipments in life science can be lumpy. The decline in Q3 was strictly a matter of timing as capital equipment orders were strong in the quarter reflected in our life sciences record capital equipment order backlog. Healthcare benefited from the addition of key surgical during the quarter, which added about $15 million to healthcare consumable revenue. While it's still early days, we are quite pleased with our integration efforts and what we're seeing so far in that business. We continue to have high expectations for key surgical going forward. As I mentioned earlier, while the shipments for healthcare capital equipment declined year-over-year for the quarter, we did see sequential improvement from Q2 to Q3 and backlog ended above last year's levels. We are cautiously optimistic about our fourth quarter and the start of our new fiscal year regarding healthcare capital equipment as the risks appear to have declined throughout this fiscal year. Our profit overall has exceeded our expectations as we continue to see the benefit of continued efficiency gains along with lower operating expenses. The operating expense reduction is largely due to travel disruptions from the pandemic. As we've said all year, we do expect some of those expenses to phase back in as travel resumes, returning our operating expenses to more normal levels. We are committed however to evaluating opportunities to permanently reduce expenses as we have learned that some things can be accomplished virtually. Adjusted earnings for the quarter as Mike mentioned were $1.73 per diluted share or growth of 19% as we benefited from higher gross margins, reduced operating expenses and a slightly lower than anticipated tax rate. With just two months remaining in our fiscal year, we like where we stand today and the long-term positioning of our global portfolio. Our thoughts on the full fiscal year have not changed materially from what we discussed last quarter. Constant currency organic revenue excluding acquisitions should be about flat for the fiscal year. That's impressive performance in this environment. But it is safe to say that we all look forward to getting back to normal and delivering the revenue growth we know we are capable of in the longer term. Once again, I would like to thank STERIS' people for their commitment to our customers, those healthcare professionals who continue to do a miraculous job on the front lines of this pandemic. We also welcome the people of key surgical to our team. And we're working through the process to complete the acquisition of Cantel Medical and look forward to welcoming the Cantel people to the STERIS family as well. Now, before we open to Q&A, I want to comment on our announcements that I will be stepping down as CEO at the end of July. The Board and I have been working on my succession for years. And while we have other capable candidates, Dan Carestio, our current Chief Operating Officer is our unanimous choice. The Board and I have been working to prepare him for this transition. As the announcement said, I will be available through July of 2023 as an advisor to management and the Board. As you all know, I hold a significant amount of STERIS' stock and options and continue to be highly vested in our long-term success, both personally and financially. When I came to STERIS a little over 13 years ago, the preponderance of investors and analysts advised me to exit the life science and AST business due to their moribund performance. I worked with the executives of those groups to determine whether that was the way to go. The answer is now abundantly clear and we have Dan and his teams to thank for the improvements in those segments. Dan's early executive leadership role was running sales and marketing for the AST Group. He developed and implemented the strategy to improve that business. A few years later I asked him to take on life sciences as a General Manager, while maintaining the sales and marketing leadership for AST. He worked with that team and led the improvement in life sciences, while continuing the success at AST. He then successfully integrated the Synergy Health AST business as General Manager of AST and Life Sciences. Dan took on the leadership of our Healthcare IPT business several years ago, making him responsible then for all sterilization and disinfection products across the STERIS portfolio. Finally, he became responsible for all of our operations as Chief Operating Officer in 2018. STERIS' performance the past 13 years for which I have happily been able to take credit are significantly the result of the work done by Dan and his management teams. I am extremely confident that he is the right person to lead STERIS into the future. To add to that confidence, I could relate a similar story about many additional members of our senior management team. Especially, including our CFO, our General Counsel, and the leaders of the commercial operations of business units at STERIS. Almost all of those leaders have been with us or companies we've acquired for over 15 years, and have stepped up and made significant improvements in their operations, while taking on increasing responsibility as we have grown. They've done great work that is individually and collectively added to the success of our Company. The median tenure of our 27 members of our senior management team is over 15 years, longer than I've been with the Company. The median age is 53. Most should be here for a good long time. That talent and senior management team along with the 13,000 people of STERIS are the bedrock of our past success, and why STERIS' future is bright, and Dan and I both know it. I'm looking forward to having more time to spend with my family beginning this fall. I am blessed with a wonderful wife of over 40 years, and have two fantastic adult children and their spouses who have given us nine young grandchildren. But I'm not stepping down until the end of July and will be fully engaged as CEO until that time. After that, I will be available to our management team and the Board of Directors for an additional two years. We believe that STERIS is stronger and better positioned than ever. With STERIS teams standing ready to capture additional opportunities, we continue to be confident that the future of STERIS is bright. With that, I will turn the call over to Julie for Q&A.

Thank you, Mike and Walt for your comments. Jamie, if you would please give the instructions and we could get started on Q&A.

Ladies and gentlemen, we will now start the question-and-answer session. Our first question today comes from Dave Turkaly from JMP Securities. Please go ahead with your question.

Great, thanks. So Walt, I just want to get this timeline straight here. So you do a bunch of big strategic and accretive deals, but put a feather in your cap, and then you step down and leave it to Mike and Dan to make it all work. I understand your explanation, but I'd love to just say what gives. How do you do that?

Yes, you know, a great question. In my experience, there's always something going on and usually something big going on in the life of companies. Whether it's an opportunity, an acquisition, a problem, a crisis. There's always something going on. So the question really is, what's the perfect time for a transition? And the perfect time in my opinion for a transition is just before a successful CEO is ready to go. And just after the incumbent CEO is ready to takeover. That's the perfect time for a change and that's where we are right now.

Thank you for that. I know you'll be missed as you become less actively engaged. As a quick follow-up, you mentioned Key Surgical and the $15 million figure. I'm curious if you have any insights on its performance compared to your expectations and if there have been any pleasant or unpleasant surprises so far. Thanks a lot.

We're generally on track with what we thought with Key Surgical. The timing of the transaction, we're happy to get it done in November, but that's right before the Thanksgiving holidays and the Christmas holidays. So, actually we, I think we said to do about $15 million and we beat it by a bit. So we're pretty pleased there.

Our next question comes from Larry Keusch from Raymond James. Please go ahead with your question.

Thanks. Good morning, everyone. Walt, congratulations on your successful career in creating significant shareholder value for investors at STERIS. I wish you well and look forward to speaking again before your time is up. I wanted to touch on a couple of points regarding the succession and then ask a few quick maintenance questions. First, Walt, you mentioned your future plans, but why is now the right time for you to step down? You also mentioned that you would be in a consulting role until July 2023. Additionally, I'd love to hear from Dan, as one of the key investor questions will likely be related to these changes coinciding with the acquisition of Cantel. I would appreciate Dan’s insights on how he is planning the integration and his thoughts specifically regarding Key and Cantel.

Sure, Larry, I believe I've addressed the first part of your question. There are always significant risks and opportunities in a company's journey, which is part of what makes it interesting. CEOs often put in long hours because there's always a lot happening. I don't think there's ever a perfect time for these transitions. That said, I remain very active and engaged in my role, though I do see the end approaching. Dan is more than ready to take over and might even be a bit anxious to move forward. The key consideration is the timing of my departure and Dan stepping in. However, anyone who knows me understands that I won't be retiring today. I plan to work around 60 hours a week until the end of July, and they'll be fortunate if I work fewer than 50 hours a week in the following months. I truly enjoy my work and the business itself. For the past few years, I've been giving advice rather than driving the business, and the senior management team is exceptional and quite capable. Dan, Mike, and the rest of the team can manage this well without me. I've not been heavily involved in Key recently, as Dan has really taken the lead there. I've been more focused on Cantel due to my historical connections. The team knows what they're doing and will perform well with or without me. Dan, I'll hand it over to you for the second part.

Thank you, Walt. Since we initiated our collaboration with Cantel, Mike Tokich and I have overseen the majority of the due diligence efforts, focusing on research and engaging with Cantel's leadership to identify the synergies we can achieve. We are confident in our leadership team's participation in this diligence process and are prepared to move forward once we navigate the necessary regulatory steps for this deal. The timing presents a significant opportunity for STERIS to explore the integration of Key, STERIS, and Cantel, and we see genuine synergies among the three companies that we believe will materialize in the future. We are already making substantial progress with the integration related to Key Surgical, and we are pleased with our current position and the business's performance. Our management teams have successfully completed around 50 transactions over the past six to eight years. This is certainly a major deal for us, without a doubt. However, we handled a similar large integration successfully about five or six years ago, so we are confident in our senior leadership's capability to execute this deal and ensure ongoing success for STERIS.

Okay, terrific. I have two quick questions regarding the AST margins, which are very impressive. Looking back, I don't believe we've reached this margin level in the past. First, how much of this performance can be attributed to opportunities stemming from COVID, and how should we consider the sustainability and durability of these margins in the business? Were there any one-time factors impacting the results this quarter? The second question, directed to Mike, is about the notable improvement in cash flow, with working capital being a significant driver. What is the best way to approach potential improvements in working capital going forward, and how should we think about capital expenditures in a broader context? Thank you.

Hi, this is Dan. I can address the AST question first. Currently, we are experiencing some benefits from COVID-related products such as testing kits and swabs, which are in high demand. Essentially, everyone with a 3D printer is producing swabs for test kits that need to be sterile. Additionally, we are observing increased demand from biomanufacturers, syringe manufacturers, and those supplying components for vaccine production, along with significant growth in bioprocess sterile disposables used in pharmaceutical manufacturing. This category has been on a strong growth trajectory for several years, but the need for vaccine production has accelerated that trend. However, we are still seeing lower than usual demand from our primary medical device customers, particularly those involved in more elective procedures like orthopedics and spine. Thus, our core business continues to be somewhat suppressed in terms of normal growth. We believe that these sectors will eventually return to normal, which will more than balance out the short-term effects of the COVID-related benefits. It's important to note that vaccines are not going away, and I don't foresee any decrease in the use of bioprocess disposable products or any of the materials used for vaccines in the future. Therefore, we expect that demand will remain at a high level.

Then Larry, I'll take the free cash flow. So obviously, very strong free cash flow for the first nine months of the fiscal year. As I stated earlier, the combination of increases in net income and working capital improvement specifically. When I'm talking about working capital improvements, we've seen fantastic efforts across our business in the collections of our outstanding AR balances. And actually have a DSO that has gone down about two days for the third quarter. We've continued to see improvements in those collection efforts throughout the whole year. And that's on top of elevated inventory levels, which we continue to maintain surety, supply and level. So if I look at longer term, obviously, I don't know if the levels of AR collections will be this good sitting here next year, but obviously the opportunity for us is to reduce the inventory. So hopefully over time, we continue and should continue to improve our free cash flow position. As far as our capital expenditures, year-to-date we're up $11 million compared to where we were at this point last year. We anticipate to continue to spend at elevated levels, not only for the rest of this year, but also as we look out for the next couple of years, specifically around our continued expansions into our AST segment. We spent roughly $100 million a year over the last couple of years on those expansions. And sitting here today, I would guess that we would continue to spend a couple of $100 million at least annually for the next couple of years going forward.

Okay, very good. Thank you very much. Appreciate it.

You're welcome.

Our next question comes from Chris Cooley from Stephens. Please go ahead with your question.

Good morning. And Walter, I just want to say congratulations on your upcoming retirement. It's been a true pleasure to work with you this last decade. And I just want to also call out what a gentleman you are, acknowledging this morning was always been an extremely strong and hardworking bench. I don't think has been appreciated as much by the Street, but also I want to acknowledge that you've always had a very steady hand throughout the entire time. And you're going to be missed, but look forward to working with Dan. Maybe just two quick ones from me here this morning. First, when we think about what you're seeing more so on the healthcare side with capital and that build, just trying to make it, to get a better understanding of what types of projects you're seeing there that drove that new record backlog in that segment. And then secondly, I would like to follow on to Larry's comment regarding the cash flow, which was extremely strong in the quarter, especially in light of what’s transpiring. Just want to think or maybe, this is for Mike or for Dan, if we start to step up our expectations for free cash flow generation when we look at the yield versus the sales line historically, you're trending up. And clearly AST seems to be supporting that with higher margin. So I just want to think about how we should think about cash flow on a longer-term basis as well. Thank you so much.

Yes, Chris. We've discussed healthcare capital, though perhaps not as much as we could have. The number of new products in this area is very strong right now. Almost all of our surgical line has been updated in the last 12 to 18 months. We have several new products in the infrastructure space, including booms, lights, tables, and ORI, and they are performing well. The surgical segment is currently doing very well compared to last year. IPT remains an exceptional part of our capital business. While we have some concerns about capital spending, hospitals tend to reduce their capital investments last in the areas that generate income for them, such as surgical. Historically, this segment has not declined as significantly during tough times and doesn’t rebound as quickly when conditions improve. However, there seems to be a return to normal in our Surgical and IPT areas. That's a high-level overview, and I'll allow the others to address the cash flow question you raised.

Yes. So Chris, this is Mike. Obviously, we are very proud of what we've accomplished this year from not only an earnings perspective, but also from a free cash flow standpoint. Although again as we are not giving guidance, the rest of this year, we hope to give guidance, I would think in the May time frame for the new fiscal year. But one of the other things that you got to be cautious about is, as we do, adjusted earnings on the P&L standpoint, we do not do adjusted free cash flow. So as we continue with acquisitions, especially the integrations and the cost of those integrations, especially around Cantel, we're going to be spending a significant amount of cash to get those cost synergies; so I'd be just cautious. If you were to back out and start doing an adjusted free cash flow, I would agree with you that it may be time to look at our step-wise change, but since we do not report that way, I would just be cautious of how you look at it.

Good morning, everyone. Walt, it's been great to witness the growth of STERIS over the past 5 to 10 years, and congratulations on your departure. In light of this, I'm going to pose some challenging questions for Dan.

Good man.

As an initiation, Dan, if you average out the last three quarters for life sciences consumables, it's about 25% growth off a solid base, which is positive. However, it's hard to comprehend that new vaccine demand is only up 25%. Can you provide insight into the mix of life sciences consumables related to vaccines? Also, when and where are your life science consumables typically utilized in production compared to the beta bags? I'm aware that it’s always been a challenging comparison, but I think it’s necessary to clarify for those trying to connect it with your 70% order increase.

Thank you, Matt, for the question. As we’ve discussed, our life science consumable business has seen about a 25% increase year-to-date. Currently, we're experiencing a slight decrease as our customers utilize the inventory they accumulated during the early pandemic phase due to supply concerns. At STERIS, we prioritized serving our existing pharmaceutical customers without diversifying into other markets, ensuring they were aware that we would continue to provide validated chemistries as vaccine demand increased. It’s difficult to quantify the exact percentage of our business related to vaccines since many vaccine manufacturers are also long-standing customers who use our products for bioprocess cleaning in their regular pharmaceutical production. Thus, we don’t track product applications at a granular level. However, we are noticing an increase in demand from the vaccine sector, particularly related to COVID, and we expect this trend to persist. Regarding our beta-bag products, they are a sterile transfer solution that includes integrated lifts and isolators, which isn’t our primary focus. Our expertise lies in sterility maintenance and assurance. Our carrier product solutions have performed well since the acquisition and continue to grow as opposed to the fluctuating growth we see in our chemistry segment. Specifically, in the chemistries area, we have two main offerings: critical environment products, which are disinfectants and sterilants used in aseptic manufacturing or regulated clean rooms, and bioprocess cleaners used to clean biopharma equipment during production cycles to ensure maximum purity.

Okay, excellent. And appreciate that answer. Well done, Dan, to start. So just going back to capital equipment. What was the impact on the backlog from the accounting change you made earlier in the year? Is it masking a higher year-over-year number? And then to continue with asking multiple questions, how should we think about orders versus shipments, especially as hospitals transition from the COVID surge to non-COVID surge through the course of the calendar year?

Matt, I'll address your first question about the impact. When we made the adjustment in the first quarter for the ORI deferral, we started recognizing that revenue as it is shipped instead of at install. This resulted in about a $15 million increase in revenue in the first quarter. Throughout this year, we've managed to eliminate the backlog, but last year’s figures are still reflected in that backlog. If you examine year-over-year, there's about $12 million in last year's backlog. To have an accurate apples-to-apples comparison, you'd need to adjust last year's backlog. If you do that, we would clearly be at an all-time record. This explains why we are close to our record backlog due to that impact.

We'd be $12 million to $15 million over last year and $12 million or $13 million over the best year we've ever had. The best spot we've ever had. And then the second question, sorry.

Yes. How should we consider orders in relation to shipments? Our hospitals are still managing the COVID surge. Are they placing longer-term orders, or are these orders primarily for replacements?

Yes. As you know, our typical pattern is kind of 60-40. We have been a little stronger heavier, would it be right to say in terms of the big projects recently. But in order for us to have record order months and record backlogs, they both have to be chugging along. So, it is running much more like normal than it was, for example, six months ago.

Okay. My last question is about how we should view the operating margin level compared to where we are today, as sales growth resumes, your mix starts to normalize, and you integrate two large acquisitions.

There are many factors at play, particularly in our higher margin products, which have shown strong performance. As we increase capital shipments, we may experience some changes in mix. However, we don't plan to keep our costs at the same level indefinitely. We're actively working on cost reductions that will allow us to maintain price stability for our customers, with some of those savings contributing to our bottom line. As we integrate other businesses, the mix will naturally vary depending on which parts we are bringing in. Despite that, we anticipate that the synergies we expect will counterbalance these effects. If we view these businesses on a pro forma basis today and combine them, we expect margins will improve since we plan to eliminate more than $100 million in costs from the acquisitions. We're optimistic about this outcome. As you know from our history, my focus is on growing profit dollars. Our goal is to achieve double-digit profit dollar growth. A slight increase or decrease in margin won't keep me up at night. Ultimately, achieving high single-digit revenue growth alongside double-digit profits requires margin growth, and that is our priority.

Yes, thanks. So just want to go back to the capital orders in the healthcare business, do you think any of the strength you're seeing there is because of pent-up demand sort of things that were deferred in 2020, because of the pandemic? And do you think that, if that's the case, I mean, is that something that you could be sustainable for some period of time?

Yes, Mike, this is Dan. I do think that we are experiencing some of that effect. And specifically, I mean we had really a tough time, the sales reps getting access for three, four months, give or take. And just that, don't ever underestimate the ability of the sales organization's ability to sell and being present is very important. So I think there is some catch-up in those numbers. But generally speaking, when we talk to customers and hospital systems, there is a concern about the surge after the surge. And that is, what's going to happen with all these backlog surgeries that are elective or semi-elective once we get back to a normal steady state in terms of COVID and operating. So I think that's also helping us in terms of the sustainability of the capital backlog and the orders we are seeing.

Thank you. I have a housekeeping question regarding the exclusion of certain COVID-19 incremental costs from your adjusted EPS. This isn't the first quarter you've made this exclusion, so I would appreciate it if you could clarify what those costs entail and how you determine the amount that falls into that category. Thank you.

Yes, certainly, Mike. We've been consistent throughout the year regarding this. The situation involves putting some employees on furlough, meaning they are not working at all for the company. We've taken the opportunity to capture those costs and have also received some government reimbursement for those employees, which we are reflecting in our adjustments. Additionally, we've had to implement training tools, enhanced cleaning protocols, and modifications to our facilities globally due to changing traffic patterns. We are capturing all these related costs and categorizing them as COVID incremental costs. So far, we have incurred just over $20 million for the first nine months, and that amount has significantly decreased from the first quarter. We expect it to continue dropping as most, if not all, of our employees return to work. We are proud to say that we did not lay off anyone during this period; our intention was to keep our team intact, and we were ready to support our customers when they returned to work.

Yes, Mike described it well. Just to clarify, all furloughed employees receive 100% of their base pay. Depending on the region, government support contributes to a portion of that pay, but never the entire amount. This has been a significant factor, and in most cases with government subsidies, it's clear that these employees cannot perform any work while on furlough. We have taken steps to ensure that those we have accounted for are not working and are being fully compensated.

And our next question comes from Michael Polark from Baird. Please go ahead with your question.

Hi, good morning. A question on the leadership transition, two-parter, number 1, would you expect to backfill for Dan's COO role or elevate somebody else in your organization? That's part one. And then part two, for Dan. Dan, how many direct reports do you have today and once you get up and running in the new seat, how many direct reports would you expect to have at that point?

Yes, Michael. Thank you. Regarding the backfill, I don't expect us to continue with the COO role. As for my direct reports, I currently have around eight or nine. With the upcoming acquisitions and changes in roles within the organization, I anticipate that the number of direct reports on the commercial side will consolidate under the existing leadership. So, I would expect the number to be around eight to eleven or eight to twelve. Over time, we will likely transition to something resembling that.

Tell me, if I comment on that, that's 8 to 12 is kind of what we think senior executives should have. And it's a heck of a lot easier to save money. If we all have 8 to 12, and we don't have 4 extra Chiefs running around. And so that's been a hallmark of one of the ways that we operate efficiently is virtually everyone on my staff, virtually all the time, except for me right now. I'm also on vacation. I think I have three or four left, but everybody else is 8 to 12, and that's just kind of the way we operate. It's still too early for any substantial updates on that. We are in the process of identifying the countries where we need to file and then preparing those filings. At this stage, it's too soon to provide any comments.

Thanks, everybody for taking the time.

Ladies and gentlemen, that will conclude today's conference call. We do thank you for joining. You may now disconnect your lines.