Theragenics Q4 2008 Earnings Call Transcript

Feb.19.09 | About: Theragenics Corporation (TGX)

Theragenics Corp. (NYSE:TGX)

Q4 2008 Earnings Call

February 19, 2009 11:00 AM ET

Executives

M. Christine Jacobs - Chairman, Chief Executive Officer and President

Frank J. Tarallo - Chief Financial Officer and Treasurer

Analysts

William Johns - Smith Barney

Brett Reiss - Janney Montgomery Scott

Operator

Good morning. My name is Connie and I would be your conference operator today. At this time, I would like to welcome everyone to the Theragenics Fourth Quarter 2008 Year Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions). Thank you.

Miss Christine Jacobs, you may begin your conference.

M. Christine Jacobs

Thank you, Connie. Good morning and welcome to Theragenics fourth quarter and year end 2008 conference call. In a few minutes I'll provide my comments, but first I'd like to turn it over to Frank Tarallo, our Chief Financial Officer for a recap of the financial results. Frank?

Frank J. Tarallo

Thank you, Chris and good morning everybody. This morning, we release our consolidated financial results for the fourth quarter and year ended December 31, 2008. If you did not receive this news release or if you would like to be added to either our fax or e-mail distribution list, please contact our Investor Relations department at 800-998-8479 or 770-271-0233.

Before I begin my review, please be aware that some comments made during this conference call may contain forward-looking statements involving risks and uncertainties regarding our operations and future results. Please see our press release issued today and our filings with the Securities and Exchange Commission, including without limitation our Form 10-K and Forms 10-Q which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.

Also, please note that in this call, we will refer to certain non-GAAP financial measures. Non-GAAP financial measures are not intended to be used in place of GAAP reported results. But we do believe certain non-GAAP financial information is helpful in understanding our operations.

Please see our press release issued this morning for more information on the use of non-GAAP financial measures and a reconciliation of GAAP reported amounts to the non-GAAP measures.

Now on to our results. We acquired NeedleTech Products on July 28, 2008. Our fourth quarter and year-end results include the results of NeedleTech subsequent to this acquisition.

Consolidated revenue for the quarter was $18.1 million, an increase of 19% over last year. For the year, revenue was $67.4 million, the highest annual revenue in our history and an increase of 8% over 2007. The increases over 2007 were due to the inclusion of NeedleTech. We also had organic growth in the surgical products business offset by decline in the brachytherapy business.

Before I discuss earnings per share, I want to comment on the significant impairment charge we recorded in the fourth quarter. Last week on February 11, we announced that we expected to write-off all or substantially all of our goodwill and a portion of other intangible assets. Our impairment charge of $70.4 million did in fact include all of our goodwill, which totals 67.9 million. It also included impairment of $2.5 million of our trade names intangible assets. Net of tax, the impairment charge we recorded was $62.9 million.

The goodwill was previously recorded mainly in connection with our acquisitions in the surgical products business. The decline in our share price in the fourth quarter, and into the beginning of 2009 was the primary driver of this impairment charge. Our market capitalization, which is determined by share price, was less than the value of our net assets. When this circumstance exists for an extended period of time, Generally Accepted Accounting Principles are such that goodwill impairment charges are inevitable, regardless of the outlook for the business.

Chris will comment further on this. But in light of the current market dynamics, I think it is fair to say that impairment charges for goodwill have become fairly common place.

I'd like to emphasize two important points here. First, these impairments charges are non-cash, and do not affect our liquidity, cash flows from operating activities or future operations.

Second, the impairment charges have no effect on our $40 million credit facility or our compliance with the financial covenants in that credit facility.

Now on to EPS. Our loss including impairment charges was $1.89 per share in the fourth quarter and $1.77per share for the year. Excluding impairment charges, earnings per share was $0.01 in the fourth quarter compared with $0.03 last year. For the year, EPS excluding impairment charges was $0.13 compared to $0.17 in 2007. The NeedleTech acquisition diluted 2008 EPS by $0.01 in the fourth quarter and $0.02 in the year.

Turning to segment results. Fourth quarter revenue in our surgical products business increased 56% over last year. For the year, surgical products revenue increased 34%. The 2008 periods include the results of NeedleTech, subsequent to acquisition. So, on a pro forma basis, as if we included NeedleTech results for the entire period in both years, our surgical products revenue decreased 3% in the quarter, and increased 7% for the year.

While our surgical business is always affected by the ordering patterns of our larger OEM and dealer customers, revenue in the fourth quarter was also affected by the general economic slowdown and recession.

Operating income excluding special items in our surgical business was $49,000 in the quarter compared with $1.2 million last year. For the year, operating income excluding special items was $4.3 million compared with $4 million in 2007.

In the fourth quarter of 2008, we invested in new R&D programs which eroded operating margins. We also introduced four new product extensions in the fourth quarter, incurring testing, training, promotion and other costs related to these product launches.

Finally, in 2008, we also recorded certain non-cash charges related to the NeedleTech acquisition. These non-cash charges totaled $295,000 in the fourth quarter and $885,000 year-to-date. These NeedleTech acquisition-related charges will not recur in 2009.

We do expect to continue to invest in our surgical products business to support infrastructure and capacity, including our new R&D program. Our surgical business has always been subject to fluctuations because of the ordering patterns of our larger OEM and dealer customers. We also expect the recession and other uncertainties in the general economy to affect our operating results in 2009. So the current economic conditions may increase the volatility we have always seen in this business.

In our brachytherapy business, fourth quarter revenue declined 16% and revenue for the year was down 14%. We believe the industry-wide decline in procedures continued. The performance of our main distributor in this area also continue to decline. Sales to this distributor were down 18% in the quarter and for the year.

Operating income excluding special items in our brachytherapy business was $980,000 for the quarter compared to $568,000 last year. Profitability in the fourth quarter of 2008 was up as a result of lower overall operating expenses, including the elimination of our Oak Ridge carrying cost, lower advertising and lower compensation-related expenses in the quarterly period.

For the year, operating income excluding special items was $2.6 million compared to $3.9 million in 2007. In the annual period, operating expenses were more comparable to 2007. So the decline in operating income for the year is primarily from the fixed nature of our manufacturing cost, which has a direct effect on margins and profitability.

The 2008 periods also included a reduction in depreciation expense due to a change in the estimated useful lives of our cyclotron equipment from 10 years to 15 years. This change cause 2008 depreciation expense to be $243,000 lower in the fourth quarter and $1.4 million lower for the year that it would have been using the old lives.

A non-GAAP metric we believe useful in monitoring our business is earnings before interest, taxes, depreciation, amortization and stock compensation which we refer to as EBITDA. EBITDA excluding special items was $3.1 million in the quarter and $13.9 million for the year. This slight decline from '07 is due to the reduction in operating income from the brachy business and our investment in R&D to support growth in the surgical products business.

Our capital expenditures in 2008 were $1.5 million. You can expect our CapEx to run at a higher rate in 2009.

In our surgical business, we expect to move one of our manufacturing facilities to new leased space in 2009 and to continue to invest in capacity. We also expect to invest in updating and standardizing our information technology systems in 2009.

Looking at liquidity, we ended the quarter with $40.6 million in cash and investments. We had $32 million outstanding under our credit facility, giving us a net positive cash position of $8.6 million. We generated $12.2 million in cash from operations in 2008.

A final note on our liquidity. Last quarter, we reported that our cash and investment balances included $8.5 million in auction rate securities. In the fourth quarter and through January 2009, we successfully liquidated all $8.5 million of our auction rate securities without incurring any losses. As of today, we have no auction rate securities in our investment portfolio.

That concludes my comments and I'd now like to turn the call back over to Chris.

M. Christine Jacobs

Thank you, Frank.

Well, 2008 has been quite a year. Theragenics, like many companies has been impacted in a significant way in 2008. Unprecedented macroeconomic events put pressure on our operations and our balance sheet.

On the flip side, we put strategies in place over three years ago that made us strong today than in any time in the company's history. I'm going to comment on this, 2008 and our expectations for 2009. But first, I want to address two issues.

First, the impairment charge. Frank mentioned that these are non-cash charges, which do not affect our liquidity or cash flows. Our goodwill impairment charge was triggered primarily by the decline in the share price in the fourth quarter.

We believe that this decline in our share price was caused at least in part by macroeconomic events of the last several months. This includes the recession, meltdown in stock markets and a very difficult credit environment, the conservative behavior of most investors due to all of these uncertainties. The impairment charges that we recorded were not reflective of the opportunities for growth, the cash flows that we believe we have. We continue to be enthusiastic about the long-term opportunities and the outlook for our diversified company.

The second issue is the listing of our common stock in the New York Stock Exchange. If you read our press release this morning, you read about our non-compliance with one of the listing standards on the NYSE. Let me explain. A company with a market cap below $75 million is required to maintain at least 75 million in shareholders' equity. Our market cap has been below the $75 million threshold and because of the impairment charge; our shareholders' equity is now just under the $75 million minimum.

Our shareholders' equity is 74.1 million. We expect that the NYSE will formally notify us of non-compliance within the next 10 days. We then will have 45 days to submit a plan that demonstrates how we're going to regain compliance with the minimum shareholders' equity requirement within 18 months.

As investors, please note that part of the fourth quarter we have reported 11 consecutive quarters of profitability and increases to our shareholders' equity. In the fourth quarter of 2008, we were profitable excluding the impairment charge. If in fact we receive such a notice from the NYSC, we expect to be able to prepare and submit a plan within the 45 days.

Lastly and more importantly, we expect this plan is going to show our ability to comply with a minimum shareholders' equity requirement within the 18-month compliance period.

Now, let's move on to my comments for 2008 and our expectations for 2009. We recorded record revenue of $67.4 million this year. That's our highest annual revenue ever. And 57% of that revenue was generated by our surgical products business, a business that we were not even in until May of 2005. The growth, the cash flows and the opportunities that this provides is a direct result of the diversification strategy that we implemented a little over three years ago.

Yes, 2009 is difficult to predict right now. You know we can't predict, in fact nobody can. But we expect the recession, economic uncertainties and continued difficulties in the credit markets to affect all industries. While the medical device industry may have a better outlook than some, it won't be immune to a slowdown. We're aware of these uncertainties. Yet, don't want to look past opportunities to grow our business.

So in 2009, we expect to continue to invest in our businesses. Our investments will be modest and designed to position ourselves to take advantage of opportunities not only in 2009 but to be at the ready when the economy begins to turn around.

Next, I'd like to comment on our surgical products business. We intend to position this business for the long-term organic growth in a number of ways. First, with the acquisition of NeedleTech in July of 2008, we have new avenues for growth and an A-list of medical device companies as customers. NeedleTech also provides us with opportunities to cross-sell across all of our assets. They bring access to new markets such as orthopedics and pain management.

Second, we established a new R&D group for product development late last year. This group has access to all of the assets across the company, including surgical products and brachy operations.

Our current product portfolio in vascular access, specialty needles and wound closure addresses relatively small portions of significant overall markets. What this means is that we have plenty of room to grow. Our new R&D group will be focused on product extensions, next generation products and new products that are complimentary to our current product line.

Some of these new products are being requested by customers. We plan to focus this group on 5, 10-K products that can be brought to market quickly. We don't intend to compete with our customers; rather we want to better serve them with sophisticated experienced engineering with the intent of feeding our manufacturing base with new product opportunities and growth.

Third, we expect to increase our physical capacity. We need more capacity in the specialty needle manufacturing business. We expect to move this plant into a new leased facility sometime in 2009.

So what about the demand side of the equation in this business? Well, as Frank mentioned, fourth quarter revenue was soft in the surgical business. Here's what we believe happened. Scheduled shipping dates for orders were farther out than we have typically experienced. We believe the lengthening lead times have been our customers' response to their end users, such as hospitals, who want to reduce inventory to conserve cash. Naturally, this affects all companies in the supply chain including our own.

We also believe our customers are taking a wait and see approach to investing and expanding their businesses. Now if this is true, the lack of available credit exacerbates the situation.

But on a positive note, our products are not the large ticket capital items that hospitals and other end users are expected to cut back on. Also, orders remain strong. At December 31, our open orders sometimes referred to as backlog were up 15% from the end of the third quarter.

Open orders are not guaranteed shipments and they are subject to cancellation or delay, but they are actual orders received from customers that we have in our pipeline. This is an indication of the prospects for this business.

Fourth, we introduced four product extensions in the fourth quarter. Most of this work had been underway prior to the addition of our R&D group. While these new products did not add significantly to our revenue in 2008, we expect them to support growth going forward.

Lastly, we added 18 new OEM customers in our surgical business in 2008. An OEM customer is not like selling to a single doctor or a single hospital. An OEM customer gives us an opportunity to sell across all of the assets. This too is a positive indicator.

So while the macro economic events going on around us tend to cloud the picture, the underlying fundamentals of our surgical business remains strong indeed. You will have to excuse us, because we're bullish about our potential in this sector.

Yes, macro events dictate that we present dire negative outlooks, and we will. But our surgical products business competes in markets that are varied and viable. We're no longer a one industry company with one product and limited potential.

Now, I'm going to go on to the brachy business. We continued to experience industry-wide decline in procedure volume. We believe competing technologies especially those with favorable reimbursement levels are affecting the number of brachy procedures.

We've been saying for sometime now that we expect competitive changes to occur in the marketplace. Or just last week, it was announced that one of the remaining brachy companies had sold its operations to another competitor. Well, it's too early to tell what effect or opportunity this may have in the brachy market for us, yet remember, our brachy business was profitable in 2008 with strong cash flows. So let's just say that we're well positioned to take advantage of any opportunities that makes sense for us in this sector.

On the reimbursement front, the current CMS passed their reimbursement for our brachy seeds will be effective for all of 2009. We've already started working in Washington to seek another extension of our pass-through reimbursement.

Our new administration in D.C. poses both an opportunity and a challenge. The opportunity is that perhaps this administration will care about our cost effective treatment for prostate cancer. The challenge is getting someone to listen. So we'll keep you apprised.

To sum up 2008, it was a year of challenges and significant accomplishments. Most of the challenges were not of our making. This isn't an excuse, it's a statement of fact. Last year I told you we were going to spend our year on execution, in that I believe we delivered.

We continue to diversify. We have more customers, more opportunities and more avenues to grow than in anytime in the last 20 years. We have more macroeconomic pressure than we as a company have ever faced. But here's what we believe. We believe that there's going to be a recovery and we want to be at the ready for that inevitability. We believe in prudent cash management. This we have always demonstrated and delivered. We believe in prudent investments in our businesses, this too will continue.

So for 2009, we're going to concentrate on long-term cash flow, organic growth, high quality products and sustainable sales.

With that, I thank you for your attention. Connie, we will open it up for questions.

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from the line of William Johns of Smith Barney.

William Johns - Smith Barney

Hi, can you hear me?

Frank Tarallo

We can hear you, hello.

M. Christine Jacobs

We can hear and hi Bill.

William Johns - Smith Barney

How are you?

Frank Tarallo

Good.

William Johns - Smith Barney

So, with that one of my questions was going to be on the company that did sell their brachy business, did you bid on that?

M. Christine Jacobs

No Bill. We were aware that there were. I mean obviously, we watch the documents that are out there from a disclosure point of view. And we are aware that there has been movements and opportunities in this field. So other than that, I can't really comment further.

William Johns - Smith Barney

Okay. And let's see, the cash flow looked good for the year. In 2009, will the cash flow be used to pay down the debt or build cash?

Frank Tarallo

Bill, I think what we want to do is going back to some of Chris's earlier comments is to try to continue to operate like we always have, focused on long-term cash flow, yet also invest to be ready to take advantage of opportunities and to create some momentum heading into 2010. So from that standpoint, I think you can expect more of the same from our management of how our cash flows and our cash flow model.

In terms of paying down debt, as you know our current facility matures this October and so I can't really tell you right now if and when we will get a replacement, and if so will that or will that not require some principal payments. I can tell you that it would be unlikely for us to start paying down debt in a way that put undue pressure on our cash flows. And that would prevent us from getting ready to take advantage of opportunity.

M. Christine Jacobs

Yeah. And I just like to echo. I used the word prudent, Bill, if not once, two or three times in my statements and I hope that you all would pick up that's going to be the name of the game for us in 2009. There is a lot of moving parts, some internal and some external. Externally, we have the macro event which Frank has discussed. But we've got market dynamics going on in brachy, and we've got opportunities in our surgical business that we want to be able to take advantage of. So I think the activity will be prudent and we don't want to do anything precipitous that doesn't let us play in several sectors in '09 and '10.

William Johns - Smith Barney

And I know we're in a challenging environment, and when you mace the NeedleTech acquisition, I guess I had visions of $80 million in revenue and I think I should probably lower it to $70 million this year. Does that sound fair?

Frank Tarallo

For '09 you are talking about?

William Johns - Smith Barney

Yes.

Frank Tarallo

Yeah. Well, we don't forecast obviously. I think we do have some information in our press release, I don't know if you've had a chance to see the whole thing where we pro forma the revenue.

William Johns - Smith Barney

No I haven't looked at that yet.

Frank Tarallo

Yeah, there is a schedule in there that shows what the revenue would have been had we had NeedleTech for the entire year, and if I'm reading it correctly here, we would have had $77 million in revenue in '08.

William Johns - Smith Barney

Okay. And then, so the question mark is brachy and the economy?

Frank Tarallo

I think those are very fair questions, yes. I think those are very fair questions.

William Johns - Smith Barney

And the sale to this, what is it, an English company that bought the brachy business?

M. Christine Jacobs

No, an English company signed a distribution agreement with the company that supplies the cesium seed. No, it's a U.S. Company that bought the North American Scientific, that's a public company, yeah that's a U.S. based company.

William Johns - Smith Barney

Okay, so it's tough out there but you're still the market share leader?

M. Christine Jacobs

Yes sir.

William Johns - Smith Barney

Okay, that's' it for me right now. Thank you.

M. Christine Jacobs

Thank you Bill. Connie, any more questions in the queue?

Operator

Your next question comes from the line of Brett Reiss of Janney Montgomery.

Brett Reiss - Janney Montgomery Scott

Good morning.

Frank Tarallo

Good morning, Brett.

M. Christine Jacobs

Good morning

Brett Reiss - Janney Montgomery Scott

First question. The moving of the NeedleTech manufacturing to the leased facility, you lack capacity in the demand for NeedleTech is such that it's got to move to a bigger facility?

M. Christine Jacobs

Pretty much so yes sir.

Brett Reiss - Janney Montgomery Scott

Now, the facility where it's coming out of, are you selling that?

M. Christine Jacobs

No, that's rented space.

Frank Tarallo

We don't own that Brett, we just leased it.

Brett Reiss - Janney Montgomery Scott

Okay.

M. Christine Jacobs

I think it's actually rented.

Brett Reiss - Janney Montgomery Scott

All right, so you need more capacity?

Frank Tarallo

We need more space, correct.

Brett Reiss - Janney Montgomery Scott

Okay. The three component businesses that are surgical products, room closure, vascular and the specialty needle, you would characterize those businesses as relative inelastic demand because of price and what they do, when the hospitals are using this stuff?

Frank Tarallo

With what's going on that's tough to say, Brett. I think up and down the supply chain in these businesses, all companies are going to be feeling the effects. As Chris mentioned in her remarks a few minutes ago, they spent some pretty dire outlooks in healthcare and specially as it relates to the large ticket capital expenditure equipment type purchases by hospitals.

Brett Reiss - Janney Montgomery Scott

All right.

Frank Tarallo

The non-elective procedure driven products, there are still clearly going to be procedures done. But you also have the sort of contradictory effect if you will, if hospitals are trying reduce inventories to conserve cash, there are suppliers trying to reduce inventory. So we'll see a little bit of that effect up and down the supply chain. So at the end of the day, medical devices, certainly the outlook is not what it was today versus 24 months ago. But it's also not the worst industry to be in obviously today.

Brett Reiss - Janney Montgomery Scott

Right, right.

M. Christine Jacobs

And also, I'd like to add a couple or just another thought to your thought process where the medical device industry is concerned. Remember too that when you are supplying to an OEM, those are the larger players in the industry that have much larger challenges than a company the size of Theragenics and its surgical products. Meaning, these folks they have got... they have movement of their products, in many instances, they have gone to external markets because they followed the lead for cheaper labor outside the United States and have indeed found that blush is well off the rows, meaning, the labor cost might be lower but their reject rates and their pallet rates as they move their material is damaging to their profit.

And so, we're also finding is there is some opportunities that don't have anything to do with demand. They have to do with what's happened with U.S. jobs and exporting the manufacture of medical devices outside the United States. And I think our U.S. based workforce... I think that workforce and what we've put in place gives us some opportunities that are different than a standard demand.

Brett Reiss - Janney Montgomery Scott

Okay. Now, you mentioned four new products extensions which didn't contribute much in '08, but can contribute more in '09. Could you maybe pick one out and just describe to me what customer need was communicated, how the thing is filled and just a little color on what one of these things looks like?

M. Christine Jacobs

Yeah I can help in sort of a broad-brush pattern. This had to do with the vascular access and there were some in-house extension. I think it's safe to say, they were kind of a knock-off of an existing a vascular access set of materials out there. They involved some special coatings and now sort of getting very good at doing something new. And I'm actually quite excited about it. It went in the pipeline and they were doing it. As I said in my call, it did not come from our new R&D group that I've discussed. It came from within that particular institution and that plan. But they are knock-offs, they involve some specialty coatings and preliminarily I'm pretty excited about us being able to offer this.

Brett Reiss - Janney Montgomery Scott

I appreciate that answer. In a business overview on March 24th, you thought that growth in surgical products could be 14%. In the light of the changed world, what's a more realistic growth target in your view?

Frank Tarallo

Yeah. Brett, that's a tough one with what's going on right now. We don't forecast and so, let me answer it this way. I'm not going to try to guess what the growth target will be for '09. But what I can tell you is that over time our target is still double-digit growth top line. Does that --

Brett Reiss - Janney Montgomery Scott

Okay, okay.

Frank Tarallo

Is that fair?

M. Christine Jacobs

I concur, yes.

Frank Tarallo

'09 is there is just too many moving parts, most of which are outside our control to really try to zero in on '09 for you.

Brett Reiss - Janney Montgomery Scott

Okay. I've got one last question and it is in the brachy seed area. Can I without incurring Ms. Jacob's wrath, can I just ask one?

M. Christine Jacobs

I have no wrath today.

Brett Reiss - Janney Montgomery Scott

Okay. I'll stipulate, I'm a bit of an agnostic on this issue. But on the last conference call, I mean there is obviously a constituency that thinks the business ought to be sold. Could I ask Ms. Jacobs, or you, they must have a set of arguments as to why they think the business should be sold. Could you share with us why they think it should be sold and what are your counter arguments to that?

M. Christine Jacobs

Well, we're not proponents of selling the business. I think what you heard on the call were some folks that were expressing opinion, and I wanted to talk it out that you can make fun of this process. But I hear you and I listen and I take all the advice and all the opinions, and believe me, I get them from a lot of sectors. And there was no shortage on the last call of what to do with the brachy business. But there is a couple of points that I'd like to make about this business.

Brett Reiss - Janney Montgomery Scott

Okay.

M. Christine Jacobs

First is, they've got great margins. There were somethings in the financials that Frank read that were remarkable. I thought the profit this fourth quarter was, I thought it was fine. So the business still has great margins. We have paired down operations to take advantage of any upside. And there might be some coming with these changes and absorptions and moving of these businesses out there.

There is a good cash flow in this business. And we can't forget it. This business is the business that has supported our diversification effort, which isn't done. Next, it's a profitable business and lastly we are still the market leader.

Brett Reiss - Janney Montgomery Scott

Right.

M. Christine Jacobs

And so, I don't believe it is time to throw in the towel on this business. And Frank, you could add whatever you'd like.

Frank Tarallo

I think Chris made the same points that I would make. The biggest one being that we're still the leader in this industry and in this market. We've talked for a long time now about all the issues. There's reimbursement issues, there is other competitors, some of which are not very strong. There is a lot of competitive pressures and we expect more shake up to occur, and as the leader we think we're positioned pretty well to take advantage of these uncertainties.

Now Brett, we want to be clear, we're not sitting back here saying this is going to be a double-digit growth business over time, it is not. But when it does settle, we think it's going to continue to be a good cash flow business. It's going to be a good profit generating business. And just as importantly, it's going to fit really nicely in supporting our strategy. So those are what -- those are the positives that we think and the reasons that we're not ready to throw in the towel.

Brett Reiss - Janney Montgomery Scott

Fair enough. Thank you for answering all my questions.

Brett Reiss - Janney Montgomery Scott

Thank you, Brett.

M. Christine Jacobs

No thank you for your interest. Connie, are there any other questions queued in?

Operator

There are no further questions at this time.

M. Christine Jacobs

Well with that, I thank you very much for -- again for your time and your attention. We appreciate it and thank you very much.

Operator

This concludes today's conference call. You may now disconnect.

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