ICU Medical's (ICUI) CEO Vivek Jain on Q1 2014 Results - Earnings Call Transcript

May. 6.14 | About: ICU Medical, (ICUI)

ICU Medical (NASDAQ:ICUI)

Q1 2014 Earnings Call

May 06, 2014 4:30 pm ET

Executives

John Mills - Partner

Vivek Jain - Chairman and Chief Executive Officer

Scott E. Lamb - Chief Financial Officer, Treasurer and Secretary

Analysts

Chris Lewis - Roth Capital Partners, LLC, Research Division

Lawrence Solow - CJS Securities, Inc.

Michael Rich

L. Mitra Ramgopal - Sidoti & Company, LLC

Operator

Good day, ladies and gentlemen, and welcome to the Q1 2014 ICU Medical, Inc. Earnings Conference Call. [Operator Instructions] As a reminder, this conference may be recorded. I would now like to turn the conference over to our host of today's call, Mr. John Mills. You may begin.

John Mills

Thank you. Good afternoon, everyone. Thank you for joining us today to review ICU Medical financial results for the first quarter ended March 31, 2014. On the call today representing ICU Medical is Vivek Jain, Chief Executive Officer and Chairman; and Scott Lamb, Chief Financial Officer. Vivek will start the call with a brief overview, and then Scott will discuss first quarter financial performance and provide financial guidance for the second quarter and full year of 2014. Finally, the company will open the call for your questions.

Before we start, I want to touch upon any forward-looking statements made during the call, including management's beliefs and expectations about the company's future results. Please be aware they are based on the best available information to management and assumptions that management believes are reasonable. Such statements are not intended to be a representation of future results and are subject to risks and uncertainties. Future results may differ materially from management's current expectations. We refer all of you to the company's SEC filings for more detailed information on the risks and uncertainties that have a direct bearing on operating results and performance and financial conditions.

Please note that during today's call, we will discuss non-GAAP financial measures, including results on an adjusted basis. We believe these adjusted financial measures can facilitate a more complete analysis and greater transparency in ICU's ongoing results of operations, particularly in comparing underlying results from period-to-period.

With that said, I'll now turn the call over to Vivek Jain. Go ahead, Vivek.

Vivek Jain

Thanks, John. Good afternoon, everybody. Our first quarter results were largely as we expected. We generated strong cash flow and adjusted EBITDA, and we continue to be comfortable with our guidance for the full year of 2014.

We have a number of areas that are performing well, including, in order of priority: Our U.S. direct infusion business, our oncology business and our international sales channels. And we have 2 discrete areas that have to improve consistently.

I've been in the company now for about 3 months and have been quickly getting up to speed with the team. I've been able to meet many of our important customers, our channel partners around the world, have gotten to know our sales teams, held on-site reviews of our manufacturing platforms and quality systems and get into the details of our financial situation, about where we drive cash returns and ultimately, I've been able to test my hypothesis on the value drivers within the company that I mentioned on the last call.

With a little bit of time now under my belt, I feel like the core value drivers are solid and largely in line with what I outlined on the last call.

Just to go over it again, there were 3 main value drivers, I believe, when joining, and they all feel right today, and I wanted to quickly run through them again.

First, ICU is one of the world's most competitive manufacturer of infusion disposable products at the right quality and cost levels. With the ability to offer customization that the customer deeply values, which stem from a set of operational processes and capital investments that are difficult for others to reproduce.

Second, we participate in important sticky markets where macro tailwinds are pushing parts of the business forward. Examples of this are the handling of dangerous oncology drug products, where there's an expanding need for safer medical devices to take clinicians out of harm's way and a global recognition of patient safety in infusion therapy. We bring high clinical and economic value to these areas.

And lastly, we have a healthy financial profile, with good adjusted EBITDA and cash conversion and a strong balance sheet. The $20 cash per share is self-evident and growing. And even in the face of some discrete headwinds, we continued to generate good cash flow. I am deeply focused on our adjusted EBITDA and operating cash flows, which are due to an entrenched set of customers, where switching costs and training are significant.

In addition to confirming these views I had going in, I did find that we have a number of basic operational areas to improve our performance. We have inefficiencies and poor execution in spots. And I think some of these, certainly those that relate to inefficiencies in the way we run the business, with just some basic operational rigor, can be improved in the near to medium term.

As I said in the last call, I thought ICU was a company that was big enough to be big and small enough to be small. We're a big player in the category and can expand our global reach, but we have an income statement that is able to be influenced quickly. Just some basic operational improvements can make a meaningful impact on our P&L.

As we talked about in the last call, the company's been in what we call the prolonged transition period. It's likely not a surprise during these transition periods, companies don't make the marginal investment when they're unsure about the long term. We need to solidify some areas, so there will be a period of reinvestment and reallocation into certain must-do areas to keep us competitive and create additional value. The other key issue in this transition has been the volatility in the U.S. infusion landscape. I continue to view that situation as temporal. After having spent time with our OEM partners, I believe our partners are doing everything they can to win. But the short-term impacts of the issues are real, and it's important to be realistic about them on our P&L.

So with all of that said, I wanted to try to bookend the 2 basic scenarios as I see the range of plans unfolding for ICU Medical in 2015. In the best case, we will have better execution to improve our top line performance, responsibly deploy capital, drive operational improvement and explore returning capital to shareholders to the extent it makes sense. In the worst case, we'll continue to fight headwinds on the top line, but we can still drive operational improvements and more actively explore returning capital to shareholders.

There's no question to me that either one of those cases is value-creating relative to where we are today. It is just too soon to know where the pieces are going to fall to perfect this scenario. I believe either scenario will drive more cash flow generation and returns to shareholders than we have to date. We're keenly aware of when we need to start these activities to make sure they're fully in our 2015 results. We're not going to want to get into the specifics of those activities today, as they're not fully flushed out, but we will provide more color as the year progresses.

I will say our goal is to have at least $10 million of improvement in our cash flow or roughly 15% in 2015, assuming flat revenues, and that's based on a series of small individual operational improvement projects.

While there's much work to be done, I think there are a lot of positive drivers and some tailwinds pushing parts of the business, and the -- forward in the range of plans are starting to come together. I have a lot of confidence in the long-term value-creation due to the confluence of our platforms, increasing global reach, ability to renovate and re-prioritize and strong balance sheet power.

In the short term, we will have some bumps, we will overcome them, we will emerge stronger. I look forward to working with you and all of my colleagues at ICU over the next number of years. On our next call, we will provide you with more color on the near-term operational improvements and how they will improve our overall returns.

With that, I'll turn it over to Scott.

Scott E. Lamb

Thanks, Vivek. Before I begin, let me remind all of you that the sales numbers we are covering, as well as our financial statements, are available on the Investor portion of our website for your review.

On our last conference call, we explained how we will begin to provide additional metrics to measure our current and future results. On today's call, we will discuss non-GAAP financial measures, including results and guidance on adjusted earnings per share and adjusted EBITDA basis. We believe these adjusted financial measures provide a more complete analysis of cash flow performance and greater transparency into our results of operations.

Our management team utilizes adjusted financial measures internally to run our business. We have included reconciliations of these non-GAAP measures with today's release and plan on providing as much detail as possible on any adjustments that are added back.

We have studied comparable medical device companies and saw the majority of these companies that we're providing adjusted financial measures. We feel that it is important to provide these measures as we begin to exit our transition period. Specifically, there were certain reasons why we believe this change made sense.

First of all, the company had not made a senior officer level hire from the outside in over 5 years, and the majority of the senior team is homegrown, which is not -- which is a good thing, but we did and do need some roles filled from the outside.

With Vivek's hire and the potential for others, for the first time, we have unique upfront stock issuance that we did not have in prior periods. In addition, it's important to note the majority of these options are and will be performance-based and only realized if the company achieves value-creation for the shareholders first.

Second, as we seek to improve operating performance, it is likely we will have one-time costs to reduce inefficiencies. We have never had those types of situations here.

Lastly, we have never significantly pursued deployment of our capital. We want to make sure we responsibly deploy capital. And while nothing is imminent, we have never had significant expenses in prior periods. Again, going forward, we will provide as much detail as possible on any adjustments. Those key adjustments we're talking about include stock compensation expense, restructuring and transaction-related costs.

So on to reporting our Q1 results. During the first quarter, we achieved growth in all areas, except our OEM business. Our first quarter 2014 revenue was $73 million, down approximately $1 million from last year. First quarter 2014 adjusted EBITDA was $17 million compared to $19 million in the same period last year. The decline was primarily due to a decline in revenue and an increase in R&D expenditures. Adjusted EBITDA is excluding approximately $2 million in stock compensation expense in the first quarter.

Adjusted diluted earnings per share for the first quarter 2014 was $0.72 compared to $0.81 for the first quarter of 2013. GAAP net income for the first quarter was $6.7 million or $0.43 per diluted share as compared to GAAP net income of $8.7 million or $0.58 per diluted share for the first quarter of last year.

Our first quarter net income was also impacted by a higher tax rate of 34% compared to the same period last year rate of 28.8%, which included discrete items. Please refer to our press release for a detailed reconciliation table comparing our adjusted EPS to GAAP EPS.

Now let me discuss our first quarter revenue performance by business segment. You can also view our detailed business segmentation in our earnings press release.

For the first quarter, sales in infusion therapy decreased 5% to $51 million and represented 69% of our total sales. Direct infusion therapy grew 3% and was offset by a decrease in our OEM sales of 13%.

In order to improve and streamline our reporting process, we have combined our products previously reported under the other category into infusion therapy. Our Other category is now less than $500,000 and represents items such as royalties.

Sales in oncology increased 10% year-over-year to $9 million compared to $8 million a year ago, and oncology represented 12% of revenue. Sales in critical care increased 4% to $13 million and represented 18% of our sales. This increase was attributable primarily to volume outside the U.S.

Our first quarter sales for domestic and international were as follows: Domestic sales were down 6% to $49 million for the first quarter when compared to $52 million for the same period last year. The primary reason for this decline was our U.S. OEM business. International sales were up 10% to $24 million compared to $22 million last year, and the increase was driven by infusion, oncology and critical care across most of our sales channels.

Our gross margin for the first quarter was 49.2% compared to 49.5% last year, primarily reflecting higher freight costs and less favorable product mix.

SG&A expenses decreased to $22.5 million compared to $22.9 million last year. Our research and development expenses increased 91% year-over-year to $3.6 million, as we continued to invest in organic growth opportunities in all our primary business segments. As we stated on our fourth quarter call, we continue to invest in innovation and new products throughout 2014.

Moving to our balance sheet and cash flow. As of the end of March, our balance sheet remained very strong with no debt, and we increased our cash, cash equivalents and investment securities to $304 million. This equates to approximately $20 per outstanding share.

Now let me update you on our second quarter and full year guidance for 2014. For the second quarter, we expect revenues to be in the range of $73 million to $75 million. We expect our adjusted diluted earnings per share to be between $0.54 and $0.58, and GAAP earnings per share to be between $0.32 and $0.36, lower than our first quarter results, due largely to the cost of additional resources and a full quarter of higher stock compensation expense.

We are reaffirming our previously announced annual guidance and expect to generate revenue in the range of $285 million to $300 million. Our guidance takes into account expected continued growth in our direct infusion, oncology and our international business. But we believe this growth will likely be offset by continued weakness in our U.S. OEM business and in the back half of the year, as we mentioned on our last call.

We continue to expect our adjusted fully diluted earnings for 2014 to be in the range of $2.45 to $2.75, and adjusted EBITDA to be in the range of $58 million to $65 million. We expect GAAP fully diluted earnings to be in the range of $1.15 to $1.45, and you can find a reconciliation of these metrics in our press release and on our website.

We expect the overall infusion therapy sales to decrease 7% to 12%. We expect critical care sales to decrease 7% to 14%, and we expect oncology sales to grow above 10%.

We expect gross margin to be approximately 50%, and we expect SG&A to be approximately 34% to 36% of revenue. We also expect research and development spend to be slightly more than 2013, and for modeling purposes, we expect our tax rate to be approximately 34%. In addition, we expect our CapEx to start declining in 2015.

We are pleased with our results in the first quarter and some of the improvements we are seeing in our business, as we stated already. 2014 will be a transition year for our business, but we are confident that we will return to profitable growth.

And with that, I'd like to turn the call over to your questions.

Question-and-Answer Session

Operator

[Operator Instructions] And our first question comes from Chris Lewis of Roth Capital Partners.

Chris Lewis - Roth Capital Partners, LLC, Research Division

First, Vivek, I appreciate the color just on your kind of initial takeaways from the review of the business. I was hoping you could talk a little bit more on your takeaways with the OEM channel partners, what gives you the confidence that, that is going to -- end up working out over the longer term? What have you learned about the partner there in your 3 months? And then, what are you doing to support that partner to help accelerate improvements in that area?

Vivek Jain

Yes, yes. But I think that's a -- it's a really important question. First of all, I think just at a urgency level, all of our partners and certainly our largest ones are deeply focused on the issues they may have. I spent some time with our customers, and they're adding a lot of resources and a lot of focus to improving themselves, and so that gives us some confidence. Ultimately, we don't control it. I think there's pretty good history and data out there when people have been in these situations, how long it takes to remediate oneself, and they're certainly along in the journey. And for us to support them, I think, it's just to make sure we can deliver the highest quality products and continue to innovate with the right amount of reliability that they can count on. And that's ultimately what we're trying to do. At some level, it is in their hands. For us, it's about making sure that they are doing everything that they can do to win. And certainly, what I've seen so far, I feel better about that today than the day I joined.

Chris Lewis - Roth Capital Partners, LLC, Research Division

And then on the guidance, first quarter, particularly on the GAAP number, came in quite a bit above, I think, where we were than most of the Street. So as we kind of look out, I think first quarter is typically kind of in the seasonally weakest quarter for the company. So if we just annualize that, it gets you far above the top end of your GAAP EPS range for the year. So maybe walk us through what is embedded during the rest of the year or kind of maybe one on this end, that revenue guidance number isn't ticked up.

Scott E. Lamb

Well, sure. That's a good question, Chris. So first of all, what's not in the first quarter, as I mentioned, a full quarter's worth of stock compensation expense. As we also mentioned on the call, there is additional resources that we're going to incur going forward. But we have a handful of additional people that we're looking to bring on. And so that's going to increase the cost. Second half of the year is looking maybe a little bit bumpy, and so that's built into the guidance as well. It's really that simple. There's not a lot more to it than that.

Chris Lewis - Roth Capital Partners, LLC, Research Division

All right. And then, can you talk about the oncology space? You brought down the outlook a little bit for the year. It's still growing double-digits, which is nice. But maybe just talk about the competitive landscape in that market. It seems it's getting a bit more crowded. So how should we think about that going forward as you move ahead?

Vivek Jain

I think what's really exciting about the oncology market is it is a conversion market and so the category is largely being created. And it is moving from -- away from people from legacy techniques to using safer products. And that is one of the few places that's still happening out there. And so it naturally attracts more competitors. I think we were very early. Dr. Lopez, the founder of this company, and the team here did a great job of figuring out oncology early and getting into the market. And so I think we are pretty entrenched there. I think if you actually look at the data on competitive shares, it hasn’t changed that much over the last year or 2, even with the new entrants. But I don't think we are naive or approach it with any hubris, because it is an exciting market, there are new people coming in. So when we talk about resource allocation and tilting our own investments, it is an area that we are likely going to try to deploy more resources towards overtime, not less, because it's deeply valuable.

Operator

And our next question comes from Larry Solow of CJS Securities.

Lawrence Solow - CJS Securities, Inc.

Just following up on Chris' question, Vivek. Maybe just a high-level type of question, whether it's Hospira or not, now that you've been there for a few months and you had a little bit of chance to look more under the hood. What would you say are some of the positive surprises that really excite you? And on the flip side, what are some of the negatives that maybe you weren't aware of or maybe that the company really needs to improve on most?

Vivek Jain

Sure. I mean, I think the positive -- it depends if it's a positive or a negative, right? The short-term operational positive, there are things the company hasn't done particularly well, just in the way we -- the complexity we have in the way we contract, we distribute our product sometimes, the amount of people involved between our product and the end customer. There's lots of different pieces that we can just run ourselves better on. So while that's a negative for me, I see it as an opportunity because it's basic operational stuff. Pricing is another one of those dynamics. And a lot of the things we do in the custom business truly are custom, and we make sure we get price more in line with value, so to speak there. And so I think there are some opportunities that just didn't have to be attacked because there's a lot of good things going on raising all boats, and now they do need to be attacked. I think, operationally, the additional surprise that I continue to like I find is really around the strength and quality of our manufacturing platforms and the efficiencies that they offer if we can drive more volume and more scale into them. So when I was trying to bookend the pieces of the puzzle, we were trying to bookend that with assuming flat revenues. And the worst case, what we can do from an operating perspective, if we can figure out how to drive more volume through our factory, the economic power that is really, really appealing. So how powerful it is, I guess, I would consider it incremental. [Indiscernible], I knew this company was very good at it. I didn't realize the economies of scale around that. And then from a -- I guess, jumping back a little bit to something more on the negative side is just the core operational processes and the core accountability around sales and marketing, execution and performance. We have great people with deep customer relationships. But as you grow up a little bit, the company used to run them in a bit formal -- more formal manner and keep rejuvenating things a little bit, developing marketing programs. So we got away from that. And that's an area I'm spending a lot of my time too, because that ultimately is how you drive the top line. Does that make sense?

Lawrence Solow - CJS Securities, Inc.

Yes, absolutely. And then just on Hospira, are they still losing share? I mean, is the -- can you give us any update on sort of where they stand with their Costa Rica facility? And does the back half of your sales guidance trickling down a little more? Is that because some of the contracts that they've already lost just take a little time to convert?

Vivek Jain

Yes. I mean, I think I really don't want to comment on somebody's market share. I think you should just review the publicly available information on their company and the other people in that space. I do think we are trying to adequately handicap if there have been losses of new pump placements of new deals only, what would be knock on -- we're downstream of that, just on some portion of the products. We're going to knock on the effects of that. It's a little difficult to triangulate because we're not sitting at tables. So this is our best attempt if that's what we're putting into the back half of the year. Exactly what it is.

Lawrence Solow - CJS Securities, Inc.

Okay. And then the oncology sales declined or a slower growth rate. Is that just a delay in conversions or is it competitive things? Or sales like that Hospira is supplying, is that an issue too?

Vivek Jain

I think it's much more than -- look, it's double-digits, whether it's 10 or 13, I felt is a little too granular...

Lawrence Solow - CJS Securities, Inc.

Yes, absolutely. It's kind of -- right, right, right.

Vivek Jain

In a very small line item. Just on the other hand, critical care is doing a little better than we put the guidance out. We're not overestimating that, that's because of everything we've done per se. On net, between critical care and oncology, I think it's a wash. I just felt like we're getting too specific giving prime numbers as our guidance on oncology.

Operator

Our next question comes from Jayson Bedford of Raymond James.

Michael Rich

This is Mike calling in for Jason. Vivek, you just touched on this briefly, but on the critical care business, a little better than expected in the quarter, guidance is still down double-digits at the midpoint. Are you just being cautious there? Or is there anything new competitive with your competitor in terms of price or volume share?

Vivek Jain

I think critical care so far is the area where kind of like I spend the least amount of time. I would not say the nice little bump-off the bottom here is because we've done anything differently. I think it was just some random ordering patterns and timing from international. So critical care is an area we still got to get to. I don’t think we have any different assumptions today around that.

Michael Rich

Okay, great. And then, Scott, when we saw you in December, ChemoLock was a new product you were releasing. Is that in the full launch yet? Or is that still sort of yet to be fully launched?

Scott E. Lamb

Mike, we've got a lot of great products existing in oncology. We've got some new ones such as ChemoLock that we've been talking about. It's being received very well. So it's just another one of the many very good products that we have within that space. So we look at it as one more piece to the puzzle, as far as our product offering goes. So I think that oncology we have some of the best products in that space, and ChemoLock is just another example of that.

Michael Rich

Okay. And then lastly, some housekeeping. I know that GAAP EPS guidance isn't changed, but it looks like there's a difference between the non-GAAP EPS guidance on last quarter's call and the guidance in the release. Can you provide the difference between those numbers?

Scott E. Lamb

Yes. If you remember on the last quarter call, that was the first time that we had come out with non-GAAP measurements, and we had not done a full reconciliation of the GAAP to non-GAAP in the first quarter. So what you're seeing here now is that full reconciliation.

Michael Rich

So is there another expense in there besides the stock-based comp that's been excluded from non-GAAP?

Scott E. Lamb

Last quarter, there were a few other items that was primarily stock-based compensation, but there are a few other items. And while we've seen that -- well, you see now on the reconciliation is the true line item reconciliation between the 2 measurements.

Operator

And our next question comes from Mitra Ramgopal.

L. Mitra Ramgopal - Sidoti & Company, LLC

Just a couple of questions. First, Vivek, I don't know if it's a little too early to talk about this, but as you've had your discussions with the OEM partners, et cetera, are you committed to the status quo in terms of dealing with exclusively, almost one OEM, or are you prepared to expand that?

Vivek Jain

I think the answer is -- the simplest way I think about it is, it's really on a market-by-market basis. And so it's choosing where it matters in the right geography on a market-by-market basis. So where our products are delivered to a customer in an integrated fashion, where other products are sold alongside of it or contracted alongside of it, it makes sense to have the best partner in that particular geography. Where the products are sold individually and competed for on exactly their own 2 legs, we can compete very effectively without a partner. So I think what we're doing is really looking at it much more granularly on a market-by-market basis than saying if there is one partner that fits all sizes for all shapes and places. And if you kind of read our financial statements, you're seeing pretty nice international growth. And we're spending a lot of time trying to figure out in each individual market around the world what's the right way to get our products to market.

L. Mitra Ramgopal - Sidoti & Company, LLC

Right. That's great. That actually brings me to my next question. Given the strength you're seeing on the international side, and if you could give us some more color where it's coming from and maybe an update on what's going on with the Slovakia facility in terms of the capacity surrounding that. And again, in terms of the hiring, if it's going to be -- I know you talked about bringing in some senior people potentially. Is it going to be also for the international side?

Vivek Jain

Yes. I think, first of all, just to take on the expense side. I'm wording very cautious on any fixed-cost, long-term investments. And so we want to have a beat on making sure we know exactly what costs and operational improvements can be realized in 2015, the range of scenarios on the revenue. And when we feel like we have that locked down, then we'll take a little bit of more steps in bringing permanent cost in. And so I don't want to assume that's all happening right now. In terms of where the growth is coming from, it's pretty balanced. I've been pleased here at -- we obviously talk about just international versus U.S. Our international business is really a well-rounded portfolio between Asia, Europe and Latin America. And I think this little company has done a nice job of building those channels, frankly, without a lot of resources to try to mine them. And so that is an area that is earmarked for how do we invest a little bit to keep growing, right? Because a lot of our technology, just like we talk about market creation in oncology, in a lot of those markets, there's no basic core market creation of needlefree access connectors, right, and so we ought to participate in that. And given our manufacturing platforms are crossed advantages, we can make some hay there. So let's invest and make that happen. So I think it's actually very balanced to our international businesses around the world.

L. Mitra Ramgopal - Sidoti & Company, LLC

That's great. And finally, as it relates to the guidance and the deployment of capital, I'm assuming there are no acquisitions being factored in to the guidance.

Scott E. Lamb

That's correct.

Vivek Jain

Yes, I mean, I think the message we're trying to say on the bookends, on the best case and the worst guess, so on the best case, we are going to responsibly deploy capital and we kind of stand on the track as we have of doing those things. In the worst case, we recognize that we run a relatively inefficient capital structure here and sooner or later, that needs to be resolved. So I think we're very aware of kind of the situation.

L. Mitra Ramgopal - Sidoti & Company, LLC

And again, I know it's a little early, but as you look at deployment of capital, if you could remind us if the buyers are sort of strengthening your existing segments or is it sort of opening up some new channels potentially?

Vivek Jain

I think about deals in kind of 2 dimensions, right, both up and down the staircase a little bit. And I think it's very easy to imagine a scenario where we would spend a little bit of capital to possibly forward-integrate into our distribution channels and control how to get closer to the customer in some of these spots globally. And those are not big things. So they're small things, but they're very logical if a small company tries to grow. And then there's larger or midsize, or whatever the right word is for opportunities. And I think that we have to be very cautious for the same reasons we talk about on our last call, this company doesn't have a ton of infrastructure to handle that kind of work. And in some regards, we would have to probably look at things that are even more freestanding businesses. But it scares me to go to too far away from what is our core today of really manufacturing, while being a great OEM supplier, being a great direct sales company in certain markets around these devices. So 2 steps away, I feel like we may not bring a lot of value to the equation. So we're going to be patient and disciplined about that.

Operator

I'm showing no further questions at this time. I would now like to turn the call over to Scott Lamb, CFO, for closing remarks.

Scott E. Lamb

Great. Well, thank you very much for joining us today, and we look forward to updating you on our 2014 progress on the second quarter call in August.

Vivek Jain

Thanks, everybody, appreciate the interest.

Operator

Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day.

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