InfuSystem Holdings Management Discusses Q1 2013 Results - Earnings Call Transcript

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 |  About: InfuSystem Holdings, Inc. (INFU)
by: SA Transcripts

Operator

Good morning, everyone, and welcome to the InfuSystem Holdings First Quarter 2013 Conference Call. This is your operator, Dawn. On the call today is Mr. Eric Steen, Chief Executive Officer; Jonathan Foster, Chief Financial Officer; and Jan Skonieczny, Chief Operating Officer. First of all, let me get some administrative matters out of the way.

The company issued a press release yesterday evening. The release is available on most financial websites. Additionally, a web replay will be available on the company's website for 30 days. Except for the historical information contained herein, the matters discussed in this conference call are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. These risks and uncertainties include general economic conditions, as well as other risks detailed from time to time in the InfuSystem's publicly filed documents. The company has no obligation to update the forward-looking information contained in this conference call. While discussing the company's performance, the company will refer to certain non-GAAP measures, such as EBITDA, which is not considered a measure of financial performance under the Generally Accepted Accounting Principles.

Now, I'd like to turn the call over to Mr. Eric Steen, Chief Executive Officer. You may begin.

Eric K. Steen

Good morning, everyone, and thank you for joining InfuSystem Holdings First Quarter Conference Call. This is Eric Steen, Chief Executive Officer, and with me on the call this morning are Jonathan foster, Chief Financial Officer; and Jan Skonieczny, Chief Operating Officer. First, let me address a filing made last night. After the market had closed and the company had released its first quarter earnings, the Executive Chairman, Ryan Morris, filed an amended 13D, which contained a letter expressing his interest in pursuing a take-private transaction. I will be discussing this letter with the Board of Directors later today and the company will respond to the letter appropriately. Since this is my first InfuSystem conference call, I wanted to take a moment and share a few things about why I'm here. I had the opportunity to work for InfuSystem as a consultant for the last year, and I saw the opportunity for success. The IV business is a business that I know well. I have over 30 years of experience in the IV therapy space, and I'm excited about this opportunity. InfuSystem has a provider business and a supplier business. There are a number of ways to bring value, not only to integrated health networks and provider networks, but also to independent physicians that want to keep a direct relationship with their patients.

InfuSystem is a leader in IV oncology, and oncology is the fastest growing segment in IV therapy. The population is aging, cancer rates are increasing, IV chemotherapeutic agents are a proven treatment method, and I find it a privilege to dedicate my professional energies to helping people return to healthy lives.

InfuSystem's third-party payor contract position is strong, including several important national payor contracts. InfuSystem is adept at acquiring previously owned infusion pumps, and we have an ISO-certified service department to keep them running as new.

In the Affordable Care Act environment, well-conditioned and well-functioning used equipment will become increasingly important to help providers keep their capital expenditures low. InfuSystem has some outstanding patient satisfaction scores, and these scores will become increasingly important to integrated health networks. I see this as an area of opportunity for the organization. Our focus going forward will be electronic connectivity with our customers. By electronic connectivity, I mean things like interfaces between our IT system and our customers' IT systems. Electronic connectivity will be important to InfuSystem, by allowing us to grow without adding human capital.

One of the things that I have done in my first 30 days as CEO is to hire a Chief Information Officer. Mike McReynolds has broad and deep experience connecting organizations electronically. For example, he worked with HealthSouth to develop electronic integration with their customized system to handle procurement and invoicing. This is an opportunistic hire that positions the organization for growth.

We have a launching pad, through existing relationships with over 2,000 provider sites and 247 payor contracts. I know the IV therapy business, and I intend to find new ways to bring value to our customer base by introducing new services. John will now review the numbers for the quarter, the third consecutive profitable quarter.

Before he does, I want to acknowledge the employees of InfuSystem. The first quarter numbers were achieved with the efforts of the management team focused on strategic alternatives and debt refinancing for the last 12 months. It was indeed a strong effort, and I thank them for their work and contribution to the organization.

Starting in the second quarter, we have turned the corner, from a company that was looking for strategic alternatives to a company that is looking to take advantage of the changes in the healthcare landscape, through IT innovation and using our existing customer base as a platform for organic growth. With that said, John, please take us through the numbers.

Jonathan P. Foster

Thank you, Eric. Now, I'll discuss the numbers for the quarter. Total revenue for the first quarter of 2013 was $14.7 million, up 2% compared to $14.3 million for the quarter ended March 31, 2012, primarily in rental revenues. The increase in revenues is primarily related to the addition of larger customers, increased penetration into existing customer accounts being offset by the continuation of the revision by major group of third-party payers in their claims processing guidelines and a onetime delay in the billing caused by the requirement by certain payors of additional paperwork.

Gross profit for the 3 months ended March 31, 2013, was $10.4 million, which was consistent with the same period in the prior year. It represented 71% of revenues in the current period compared to 73% in the prior period. The decrease in the gross margin as a percentage of revenue in 2013 was primarily related to an increase in connectivity cost with our customers. For the quarter ended March 31, 2013, our selling and marketing expenses were $2.4 million compared to $2.7 million for the prior period last year. As compared to the same period in the prior year, these expenses decreased from 19% to 16% of revenues. The decrease in selling and marketing expenses is mainly attributable to lower travel, entertainment and salaries and commissions.

During the 3 months ended March 31, 2013, our general and administrative expenses were $5 million compared to $6.3 million for the same prior-year period. General and administrative expenses have decreased from 44% to 34% of revenues for the first quarter of 2013 compared to the same period in the prior year. The decrease is primarily attributed to prior-year cost of $1.5 million pertaining to the special meeting changes in the members of the Board of Directors and retention payments to key employees during this period of major change in senior management. These prior-year charges were offset by $300,000 of expenses during the 3 months ended March 31, 2013, due primarily to fees related to the CEO search, the final severance payment made to the former CEO and onetime payments to a board member and -- called the transition costs.

During the quarter ended March 31, 2013, we recorded interest expense of $0.9 million compared to $0.6 million for the same period in 2012. These increased amounts are mainly attributed to the higher interest rates in our new debt agreement entered in the fourth quarter of 2012.

In addition, during the first quarter of 2013, we received $0.3 million in cash proceeds from the mutual insurance company where we maintained a policy, with -- was acquired in cash payments for disbursed eligible members.

As of March 31, 2013, we had cash and cash equivalents of $0.5 million and $7 million availability on the revolving line of credit. This compares to $2.3 million and $4.7 million, respectively, at the end of 2012. During the first quarter of 2013, we paid down $2.8 million in total debt. Cash provided by operating activities for the quarter ended March 31 was $1.6 million, compared to cash used in operating activities of $0.1 million for the prior-year period. The increase is primarily attributed to decreased general and administrative costs of $1.3 million for the 3 months ended March 31, 2012, primarily related to the professional fees of $0.9 million related to the special meeting, the change in members of the Board of Directors and the retention payment. The decreases were -- partially offset by an increase of $0.3 million of expenses during the 3 months ended March 31, 2013, due to the aforementioned transition cost. The remaining increase is primarily attributed to better management of the payment terms and accounts payable and other current liabilities.

Adjusted EBITDA for the first quarter of fiscal 2013 was $3.7 million compared with $3.4 million in the year-ago period. We use adjusted EBITDA as a means to measure the company's operating performance, with a full reconciliation of adjusted EBITDA, a non-GAAP measure, to net income, loss in our press release issued yesterday evening. The company defines EBITDA as earnings before interest, taxes, depreciation and amortization.

Net working capital days increased to 64 days from 57 days, mainly due to the increase in accounts receivable being offset by better management of accounts payable. The detail's broken down as follows: We ended the quarter with accounts receivable days outstanding or DSO of 59 days compared to 47 days as of year end. Our days sales in inventory or DSI increased from 7 to 8 days. Our days sales for the medical equipment held for rental or sale increased from 15 to 16 days due to increased levels in anticipation of new business. Day sales and accounts payable increased from 12 to 19 days due to the tighter cash management to vendor terms.

That concludes the formal part of the call. We will now open it up to questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Joe Munda from Sidoti & Company.

Joseph P. Munda - Sidoti & Company, LLC

First off, a few questions on the P&L and then on Mr. Morris' letter. Can you guys -- what is the current size of the pump fleet?

Eric K. Steen

Pardon?

Joseph P. Munda - Sidoti & Company, LLC

The pump fleet size?

Jonathan P. Foster

The pump fleet size. This is John Foster. With our new presentation in our balance sheet and our cash flow that we did at the end of last year, I think there's some really good information out there for the investors in Note 2. You'll actually see medical equipment and rental service broken out and from just medical equipment held for sale or rental, so you can see the detail. Our rental fleet went up by $800,000 for the quarter and medical equipment held for sale or rental basically stayed flat on a historical cost basis.

Eric K. Steen

Joe, this is Eric. The way I understand your question, the total size of our pump fleet for both our provider and supplier businesses is approximately 50,000 pumps and ambulatory and large volume.

Joseph P. Munda - Sidoti & Company, LLC

Okay. And then you had spoken about 247 payor contracts, but I was wondering the size of the client base, the customer base, that's not -- can you give us some...

Eric K. Steen

On the third-party payor side, we have roughly 1,600 facilities in service. That number is a little fuzzy when you start talking about the definition of a customer. Is it the facility or is it 1 hospital system that has 3 facilities underneath it? But we truly define it as 1,600. That number did increase for the quarter.

Joseph P. Munda - Sidoti & Company, LLC

Okay. And then as far as Medicare revenue, I didn't -- I saw the Q, but I didn't see your breakout there and we mentioned -- is it still around 30%?

Eric K. Steen

It's about 30% of our provider business. But then since we have a provider and a supplier business, it's a smaller percentage of total revenue.

Joseph P. Munda - Sidoti & Company, LLC

Okay. And John, on the last call, you guys mentioned a 2% decrease in Medicare payments beginning right around April 1. Does that still hold true?

Jonathan P. Foster

I'm going to hand that question off to Jan.

Janet Skonieczny

Yes. That cut to the payments that we receive on the provider side of the business from CMS took effect April 1. And it is 2%.

Jonathan P. Foster

Of the payment.

Janet Skonieczny

Of the payment amount, not the fee-schedule amount, but the payment amount or the fees being received from Medicare directly.

Joseph P. Munda - Sidoti & Company, LLC

Okay. And then John, one last question on P&L. You said gross margin went down in the quarter because of the increased connectivity costs for customers. Can you give us a little bit more color on what exactly...

Jonathan P. Foster

Sure. As Eric mentioned, we're making investment in our IT infrastructure. We did increase the iPads that we have out to our customers. We just purchased a new batch of those, so those that went through the P&L.

Joseph P. Munda - Sidoti & Company, LLC

Okay. And then in regards to what's going on with Mr. Morris and reading some of the events that occurred in the quarter. I see a lot of fees being paid out to directors and independent directors. And then the lead independent director, John Climaco, resigned. I'm just trying to get a sense of what's going on with the board structure and the fees that are being paid out. It says Mr. Morris was given $100,000 retainer fee, and he's looking to possibly taking the company private. So I'm just trying to get a sense of why, if any reason, did the lead director, independent director, resign and some clarity on some of these fees that are occurring.

Jonathan P. Foster

Well, for board size, it's a $60 million company and having a 5-person board makes us nimble, easy to get everyone together, makes us responsive. And so that's why -- that's my opinion of why the board has shrunk in size.

Joseph P. Munda - Sidoti & Company, LLC

Okay. And then as far as Mr. Morris' letter last night to the board, I mean, how much -- what can we look at as far as timing. I know it just occurred last night, but how long do you think it will take to review and provide some of the information that he's seeking?

Eric K. Steen

I wouldn't expect it to take long to review. That's one of the positives of the leaner board is that it will be easy for us to get together. It seems pretty straightforward and I would expect a response quickly.

Joseph P. Munda - Sidoti & Company, LLC

Okay. And has he indicated that he has committed financing in any way, or is this just a testing-the- waters type of situation?

Eric K. Steen

I saw the letter the same time you did, and I saw the same information that's in the letter that you did.

Operator

[Operator Instructions] Our next question comes from Boris Peaker from Oppenheimer.

Boris Peaker - Oppenheimer & Co. Inc., Research Division

I have kind of a general long-term business question and that is -- I mean, certainly over the last year, there's been a lot of onetime expenses and then you've hired a lot of people, and so there's a lot of moving parts. But I just want to get a sense of -- in terms of the overall cost structure, I mean, where do you see the stable net income margin for this business? And I guess, how do you plan on getting there from the current situation regardless of what happens with the top line?

Jonathan P. Foster

Great question, Boris. First of all, our apologies, we don't do forward-looking statements. However, I will talk about where we are for the quarter. As you've seen in the last 2 quarters, we've really focused on leveraging our selling force with the reduced percentage of selling cost of revenue. That is a focus of this board and of management. As you heard from Eric and as you heard from Dilip last quarter, management is still focused on the reduction of debt, strengthening the balance sheet and reduction of cost. Eric is 1 frugal guy and that is definitely got his eye. I can tell you, as the CFO, that he's very much focused on our cost structure, as well as investing and trying to grow our revenue.

Eric K. Steen

Boris, let me just add on to that. You said we hired a lot of people. A lot of people weren't hired last year and I've hired 1 person and in hiring that person, I've already cut other things to fund that position and to fund the investments that we're going to do in electronic connectivity. As I've stated earlier, that's going to be a focus and we're going to spend money there that will help position us for success, but other things will be cut to make those investments.

Boris Peaker - Oppenheimer & Co. Inc., Research Division

How big are these electronic connectivity investments, just ballpark, over the amount and the approximate timeframe for the cost to be incurred?

Eric K. Steen

It's a little early to tell. A previous business that I ran for 20 years, we went through and connected with our customers, our big customers, one at a time. It made us incredibly sticky, to use a marketing term, with those customers and some can go inexpensively and some can be a black hole, and I think what good management does is determine where you're going to get the most leverage for those investments and so some software systems are widely used and those are the ones where I'll invest the money first so I get more bang for my buck.

Boris Peaker - Oppenheimer & Co. Inc., Research Division

But any kind of just ballpark size? We're not looking for a specific dollar figure, but just something, talk about $10 million to $20 million, we're talking about $2 million to $3 million, $20 million to $40 million -- just something?

Eric K. Steen

No. Not in the -- certainly nowhere in those millions, smaller cost and things that we could amortize over time as well.

Operator

Our next question comes from Michael Potter from Monarch Capital.

Michael David Potter - Monarch Capital Group, LLC

Eric, we haven't had an opportunity to speak, and obviously, you just took over the reins of the company. I'm assuming you're going to try and get out there and meet with some of the investors in the near term. But I was curious if you could tell us in a little greater detail, what your plan actually is for this company to resume growth? And to get back to the prior caller's question, what type of margin targets are we looking for from this business?

Eric K. Steen

Thanks for your question. I think the things -- to look at growth, I get back to the electronic connectivity, will be very important. Once you create that interconnected channel with your customers, my past experience is you're able to do more with them. We have a broad customer base. John earlier mentioned 1,600 provider sites, which are primarily in the oncology space, but in our -- the Lathabase [ph], Kansas, supplier business, we have hundreds more customers in home infusion, especially pharmacy long-term care, and the first low-hanging fruit is just to sell everything we have today to all of our customers. In addition to that, there are several different product and service areas that I'm evaluating and have been evaluating in my first weeks here, looking at the market sizes, and I will look forward to sharing more details as I make the necessary decisions to roll those things out.

Michael David Potter - Monarch Capital Group, LLC

So how many of our 1,600 providers sites are currently connected electronically?

Eric K. Steen

Yes. I was just -- I was trying -- we have close to 1,000 iPads, but I was just confirming here with the team on how many of those are in the facilities. And so about 25% of those 1,600 have the iPads deployed to.

Michael David Potter - Monarch Capital Group, LLC

So 200 -- 25% of the 1,600 have iPads deployed, so about 400 providers sites?

Eric K. Steen

Correct.

Michael David Potter - Monarch Capital Group, LLC

And are they able to connect to InfuSystem without the iPad electronically? Are they able to use their own system to connect into us? Is there a gateway of some manner that we maintain?

Janet Skonieczny

Michael, this is Jan Skonieczny. I can probably better speak to this. They use iPads that are provided specifically from InfuSystem, so that we make sure that we black out all other features and that the iPads are used only for InfuSystem submission of documentation and they are then submitted to us through the web.

Michael David Potter - Monarch Capital Group, LLC

Okay. So the iPad is really just to help facilitate the connectivity through the web?

Janet Skonieczny

I'm sorry?

Michael David Potter - Monarch Capital Group, LLC

The iPad is being used just to -- specifically to connect the providers and InfuSystem through the web? Instead of them having to log on a computer themselves?

Janet Skonieczny

Right. Their iPads are used just specifically to submit documentation to InfuSystem only.

Michael David Potter - Monarch Capital Group, LLC

Okay. So we purchased 1,000 iPads, we've deployed 400?

Janet Skonieczny

No, no, no. We said approximately 25% of the facilities that we do business with have the iPad solution that they're using, but many facilities require more than 1 iPad in order to get their documentation complete.

Michael David Potter - Monarch Capital Group, LLC

Okay. Understood. So what do you anticipate the CapEx will be for 2013 in order to, I guess, fully implement this iPad strategy?

Eric K. Steen

Michael, great question. Because the iPad is what they were doing before I got here. And so when I talk about electronic connectivity, what this does is allow your customers to use their own IT system and when I was giving the example of how the gentleman I hired, Mike McReynolds, and how he had helped HealthSouth connect into their system. So when you do real interfaces, it eliminates the need for iPad, so your CapEx, you don't have a lot of CapEx, it's programming and connectivity of the 2 systems between each other over the net. And we don't have any customers on that today, but with Mike here now, we will, going forward.

Michael David Potter - Monarch Capital Group, LLC

Okay. And will there be a further CapEx for that strategy?

Eric K. Steen

Yes, there will be expense. As I said earlier, we look to amortize that expense over time.

Michael David Potter - Monarch Capital Group, LLC

Okay. And what do you anticipate that number will be for 2013?

Eric K. Steen

I'm not sure yet. I think Mike has been here for a couple of weeks and we've done a lot of planning and we've already started to work on things and hopefully by my next call, I'll be able to give you some examples and have a better number for that. But it's a good question and it's something I'm working on right now.

Operator

Our next question comes from Joe Munda from Sidoti & Company.

Joseph P. Munda - Sidoti & Company, LLC

Just one follow-up to the other caller's question. So are you then moving away from the use of the iPad for connectivity and going in support of this new connectivity technology? And what are you going to do with the rest of these iPads?

Eric K. Steen

We're not going away from the iPad, we're giving the customer more choices. What we're going away from is paper. That's the goal. And so far in the call, we've talked about iPads, what the company has previously done, and we just have had some new features introduced on that. We'll be going toward more interfaces, and I can envision even other interesting digital and electronic ways to help make our customers more efficient, that we'll be going to in the future. So the goal for me is to get rid of paper and the iPads are an acceptable solution and because many of the customers like them, I assume we'll be in the iPad technology for some years to come.

Janet Skonieczny

This is Jan, again. Also, there's another feature with the iPads in that we use those and the clinicians use the iPads to present patient education videos to the patient, so they're also used for patient education. So that need will always be there.

Joseph P. Munda - Sidoti & Company, LLC

Okay. And are they integrated to the EMRs?

Eric K. Steen

Not at this time, but integrating to an EMR is one example of the electronic connectivity that I mentioned earlier that will be a continued focus of our go-forward strategy.

Operator

Our next question comes from Kyle Maurey [ph] from Grizzly Roth [ph] Capital.

Unknown Analyst

Just a quick question on the CapEx related to medical equipment and sort of, what is the run rate of that per year and is there a catch-up needed based off of anything regarding last year with the management transition and whatnot? Was the CapEx essentially underspent in terms of DME?

Jonathan P. Foster

Okay. You were a little low on the volume there, but I think what I heard was a question, did we underspend on CapEx last year. I guess one of the key points is, as we talked about in past conference calls is last year, we did take up some slack in our utilization and so that was one of the reasons we had a lower CapEx number for last year. One of the things that Eric mentioned, and we've mentioned before in prior conference calls, is that the managers and the management and employees of InfuSystem really kept its eye on operations when we're going through strategic alternatives, and we had phenomenal sales growth last year, and we only buy pumps on the rental fleet when we're certain that they're going to be deployed within the rental business. So from that standpoint, we buy on an as-needed basis. We have a great relationship with manufacturers and we can get pumps fairly quickly. So from my viewpoint, our pump fleet is extremely healthy and very well-utilized.

Unknown Analyst

So I'm looking at the Q here, and you have basically $1.8 million for the first quarter for purchase of medical equipment and you have sort of $1.1 million in cash coming in from sale, is that related to different units or do you look at that in aggregate or separate, maybe just help me understand here?

Jonathan P. Foster

Sure, no problem and it's actually a very timely question. Last year -- I want to back up a little bit. With the 10-K and working with our auditors, we basically rejiggered our financial statements from the standpoint of separating pumps that were in inventory, and PP&E. Previously, we had pumps that were held for sale or rental in inventory, and we then had a rental fleet down in PP&E. I think we've done a great job in clarifying that, especially as I mentioned in Note 2, where we show our historical cost for medical equipment and rental service and our medical equipment held for sale or rental. One of the issues that we solved in the way we presented our financial statements is, when we buy a medical equipment, we put it into the rental service, we may end up selling it. So we may move back into cost of goods sold and so we reverse the depreciation and basically take the cost back through cost of goods sold. So as we mentioned, that was one of the main reasons we changed the way we presented our cash flow and also the pumps on our balance sheet, so it's quite clear. If you look in Note 2, we increased our rental fleet, which is both on a direct-payor model and a third-party payor model by over $800,000. And revenues went up as well for the quarter and for on the rental sales.

Unknown Analyst

Okay. So question then, I know you have a max CapEx covenant per your debt facilities of $5.5 million. Is that sort of net of equipment you sell or is that just straight up sort of gross amount spent on pumps?

Jonathan P. Foster

That's net. One of the things from our -- if you think of it as from a lender's point of view, if I sell a used pump and I replace it with a new pump, I just bettered their life. I gave them a better collateral than they previously had.

Unknown Analyst

Yes. No, that makes sense I just, I haven't...

Jonathan P. Foster

No. It's a great question and Wells Fargo and PennantPark, I can't say enough about them of how they approached the covenants, that they made sure that they were putting the carrot in the right place.

Unknown Analyst

So while we're on the debt, you basically paid down as much debt as you could during the quarter, which sort of makes sense given the cost, et cetera. Is it reasonable to assume that this would be a fair course of action going forward, and alternatively, what would cause you to deviate, i.e. spend in other areas? Are you thinking about it in terms of hurdles, in terms of return rate or maybe just talk about management thoughts?

Unknown Executive

I'll take it from the standpoint of the trees and I'll hand it off to Eric for the forest. From the standpoint, going forward, as I've mentioned, we will buy -- the only deviation, just want to be, the connectivity cost, which Eric will speak about, but from a standpoint of the pumps, we monitor it very, very closely. We will buy pumps as necessary. So if we increase our business, we will deviate from paying down the debt and buy more pumps because pumps equal revenue from the standpoint if we only buy pumps that we need. It's not [indiscernible] buy it and customers will come. We let the customers come first, then we buy the pumps. So that would be one way that we deviate from that and then from a standpoint of IT.

Eric K. Steen

Yes. Great question. I would say that the first thing that comes to my mind is, what's the internal rate of return of these new business opportunities we're going to look at. In the letter that Ryan Morris sent through the board, he talks about bringing in entrepreneurial leadership to look at doing new things, and I know I was brought in to diversify the revenue base and find new opportunities and that's what I'm going to be doing. If it makes more sense to pay down debt, we'll pay down debt. If we think we've got the opportunity to yank one out of the yard, we'll invest there.

Unknown Analyst

Sure. That makes sense. Is there a return hurdle you're looking at? Or is it just sort of more opportunistic?

Eric K. Steen

I just said opportunistic and John Foster said both. So there you have it.

Unknown Analyst

Fair enough. One last one and then I'll relinquish the line here. In terms of Mr. Morris' letter, he mentioned public company costs or whatnot, do you have and I know it's sort of maybe early, but do you have or would you be willing to provide an aggregate count of public-company costs, either right now or in subsequent communications with shareholders?

Jonathan P. Foster

That's a very fair question and one we'll consider. I look for there to be a lively discussion within the board and if there is that information available, we'll be sure that we'll file 8Ks as appropriate. But that's a very good question and one we'll discuss internally and we'll get back to you on that one.

Operator

I will now turn the call back to Eric Steen for closing remarks.

Eric K. Steen

Well, thank you, everyone, for joining us today. I'm looking forward to speaking to you over the coming months and elaborating more of our plans for electronic connectivity, organic growth and taking advantage of changes in the marketplace. Thank you and good day.

Operator

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.

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