Affymetrix's (AFFX) CEO Franklin Witney on Q2 2014 Results - Earnings Call Transcript

Aug. 1.14 | About: Affymetrix, Inc. (AFFX)

Start Time: 17:00

End Time: 17:32

Affymetrix, Inc. (NASDAQ:AFFX)

Q2 2014 Earnings Conference Call

July 31, 2014 05:00 PM ET

Executives

Franklin R. Witney - CEO, President and Director

Gavin H. J. Wood - CFO, PAO and EVP

Andrew J. Last - COO and EVP

Doug Farrell - VP of IR and Treasury

Analysts

Bryan Brokmeier - Maxim Group LLC

Tejas Savant - JP Morgan Chase & Co.

Ryan Weikert - Goldman Sachs Group, Inc.

Rafael Tejada - Bank of America Merrill Lynch

Operator

Greetings, and welcome to the Affymetrix Second Quarter Conference Call. At this time all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

I’d now like to turn the conference over to your host, Mr. Doug Farrell, Vice President of Investor Relations for Affymetrix. Thank you, Mr. Farrell. You may begin.

Doug Farrell

Thank you, operator. Good afternoon, everyone. Welcome to Affymetrix's second quarter 2014 conference call. At the close of the market today, we released our operating results for Q2. Joining me in the call today are our President and CEO, Frank Witney; our CFO, Gavin Wood; and our COO, Andy Last will be joining for the Q&A session.

I'd like to remind callers that our discussion may include forward-looking statements about future expectations, plans and prospects. We believe these statements are based on reasonable assumptions but actual results may differ materially from those indicated. Important factors which could cause actual results to differ materially from those in the forward-looking statements are detailed in our filings with the SEC.

It is our intent that these forward-looking statements be protected under the Safe Harbor created by the Private Securities Litigation Reform Act of 1995. We encourage you to review these documents carefully as forward-looking statements are made as of today's date, we make no obligation to update this information. Additionally, we will be discussing GAAP and non-GAAP measures. A full reconciliation of the non-GAAP measures to GAAP can be found in today's press release or on our website.

As a reminder, today's call is being recorded and the audio from the call is being Webcast over the Internet on our homepage at affymetrix.com.

With that, let me turn the call over to Frank.

Franklin R. Witney

Good afternoon and thank you for joining us. Before I review some of our commercial and operational highlights for the second quarter, I’d like to remind you of the overall goals for the second phase of our three phase strategic plan. Our primary goal is to return the Company to consistent growth; our second goal is to achieve a sustained and acceptable profitability; our third objective is to strengthen our balance sheet and increase our strategic flexibility.

We’re pleased to tell you we continue to make steady progress in all three of these objectives. With regards to growth, our second quarter revenue of $85.4 million represents an increase of more than 7% over the prior year. After adjusting for the divestiture of our Anatrace product line last fall, revenue grew 9.5% over the prior year.

More importantly, this was the fourth consecutive quarter in which we generated year-over-year revenue growth, demonstrating that we’re executing against our top objective.

Our non-GAAP EBITDA for the second quarter of 2014 was $13.9 million, or 16% of sales. In addition, during the quarter we significantly reduced our senior debt and strengthened our balance sheet. Gavin will provide details later in the call.

Now, I’d like to give you a little more color on each business unit, beginning with our primary growth driver Genetic Analysis, which includes revenues from both our cytogenetics and genotyping product lines. We are very pleased to report another strong quarter in Genetic Analysis, which grew by approximately 45% over the prior year.

During the second quarter, our cytogenetic revenue grew by approximately 14% over the prior year. This product line continues to benefit from expanding our customer base in all geographies, increasing our market share in key accounts and expanding our customer base for research-use-only applications in reproductive health and oncology.

As most of you’re aware, in the first quarter of 2014, we received 510(k) clearance from the FDA as well as CE/IVD clearance in Europe for our CytoScan Dx product. We believe these regulatory clearances will strengthen our competitive advantage in the market and will help us continue to convert new accounts and increase our overall market share.

In the third quarter we began shipping CytoScan Dx and we’re now able to actively transition customers to the approved clinical product. We are also working with consultants and payers to optimize reimbursement which we believe will provide us another important advantage of our alternative research-use-only products.

The launch of OncoScan, our cytogenetic platform designed to make highly accurate measurements of copy number variations in solid tumor samples, is progressing well. We continued to build customer awareness about our OncoScan and we’re conducting a number of proof-of-principle studies for potential customers.

In addition, during the second quarter we sold instrumentation to both academic cancer research centers and major clinical reference labs, specifically for the adoption of OncoScan. The value proposition for OncoScan is it allows researchers to conduct comprehensive Whole-Genome Analysis of copy number variations from highly degraded FFPE sample.

Furthermore, the analysis can be completed in about 48 hours using only 50 nanograms of DNA sample, making it faster and more meaningful to biopsies within competing technologies.

The total adjustable market for OncoScan includes significant applications in translational research such as biomarker discovery and validation, or elucidating mechanisms of tumor genesis and drug resistance. There are also important clinical applications such as evaluating a relapsed, advanced, or metastatic solid tumor cancer patients.

These patients estimated to be about 750,000 per year on U.S alone, have already failed standard treatment protocols for such patients. Oncologists want to undertake comprehensive molecular profiling to identify actionable molecular aberrations that are associated with therapies that are either FDA approved or in clinical trials actively recruiting patients. Because OncoScan provides robust copy number data, particularly at low amplification levels, we believe that OncoScan will be an important compliment to NGS based single base mutation panels.

To help drive adoption of OncoScan, we recently partnered with two companies to offer enhanced analytical solutions for solid tumors. Last quarter we announced an agreement with CollabRx that will allow labs to use their Gene Variant Annotation service to combine copy number variation data from OncoScan with other types of genetics variations identified through sequencing. This allows CLIA labs to offer highly detailed analysis much like the approach utilized by foundation medicine, but do include comprehensive coverage of copy number variation.

This quarter we partnered with BioDiscovery to offer our customers access to their powerful Nexus Copy Number software. This is an easy to use application for analysis and visualization of Copy Number changes and includes best-in-class algorithms as well as the integration of major external databases that can provide rapid association of regions with knowing CNVs and disease. We will continue to focus on these kinds of market development activities to help expand our customer base.

In genotyping, we posted another record quarter of Axiom revenue driven by the continued success for our custom array programs and strong demand in both Biobanking and Ag-Bio applications. Our total genotyping revenue, including both products and service, increased by approximately 75% during the quarter.

Our service revenue benefited from the second full quarter of sample processing on U.K. Biobank initiative. We also recognized additional product revenue that was generated through the Million Veterans Program and the Kadoorie Biobank in China, which has been in collaboration with University of Oxford and BGI.

In addition to the Biobank initiatives that have been announced, we’re in active discussions on a number of other important projects and we look forward to providing more detail as the year progresses. We continue to see a strong pipeline of Biobank opportunities in both academic and government markets as well as increased interest from pharma and biotech customers that are building large data repositories.

The second driver of our growth strategy in genotyping is in Ag-Bio where customer interest in our Axiom platform continues to grow. We believe this was a market in the early stages of adoption with significant long-term growth potential across a broad range of customers for both project-based and routine-use applications.

During the second quarter, we achieved a milestone in our genotyping business with about 20% of our revenues being generated by Ag-Bio opportunities. We believe that the total addressable market in Ag-Bio now exceeds $500 million per year and represents an important growth driver for the Company.

Turning to eBioscience. Our eBioscience business grew by about 5% in the second quarter in line with our guidance for mid single-digit growth. This was driven by growth in our flow cytometry based single-cell analysis portfolio, as well as the contribution from new products.

As a reminder, in Q3 of 2013 we completed the transfer of Procarta and QuantiGene Plex product lines from Expression, eBioscience, where we can benefit from eBio's world-class antibody and immunoassay manufacturing and commercial capabilities. We are already seeing the benefit of this increased focus in commercial channel with our recently launched Procarta Plex, our Multiplex Immunoassay product line where revenues exceeded our expectations in Q2.

I’m happy to report; we’ve now successfully transitioned our Legacy Plex Immunoassay products to the Luminex platform, while maintaining double-digit revenue growth. Now we can leverage the extensive install base of Luminex instruments to drive our future growth.

In addition, we continue to make commercial progress with our QG Flow RNA product, the only commercially available product that measures RNA and protein Expression simultaneously in single cells. We are marketing this product to our extensive flow cytometry customer base for a variety of applications in immunology and infectious disease or surge.

Our Life Science Reagents business unit, comprised of our molecular biology and biochemistry product lines, represented about 8% of our total revenue in the second quarter. After adjusting for the divestment of our Anatrace product line in October of 2013, LSR revenue was flat with the prior year. We anticipate this business will continue to be relatively stable over the next few quarters.

I'll close our commercial comments with an update on our Gene Expression business unit. In Q2, our Gene Expression product line declined by approximately 16%, slightly outside the range of our expectations for the year. During the second quarter, Gene Expression revenues represented about 20% of our total, down from about 26% for the second quarter of 2013.

In addition to our research-use-only Expression franchise we’ve a number of diagnostic partners that are enjoying significant technical and commercial success based on our industry leading GeneChip technology. We’ve several examples were RNA Expression patterns detected on our arrays approving to have diagnostic or theranostic utility. Going forward, we believe that the growth in such Expression based clinical applications will help us sustain our overall growth.

In summary, I’m very pleased with our operating results for the second quarter and the first half of the year. In Q2, we generated top line revenue growth of 9.5% on a like-for-like basis, exceeded a consolidated 60% non-GAAP gross margin, maintained tight control of our expenses and generated 16% EBITDAO margin for the quarter.

Based on our year-to-date performance and improved visibility in the balance of the year, we’re raising our full-year guidance to total revenue of $340 million and EBITDAO in the range of 14% to 15%.

Now, I’d like to turn the call over to Gavin to review details of our operating results.

Gavin H. J. Wood

Thank you, Frank, and good afternoon, everyone. In the second quarter 2014, the Company reported total revenue of approximately $85.4 million as compared to $79.5 million for the same period last year. Our total Q2 revenue increased by $6 million or approximately 7.5% primarily due to strength in our Genetic Analysis business unit.

As Frank noted earlier, adjusting for the divestment of the Anatrace product line from our Q2 2013 comparatives, revenue increased by $7.4 million, or 9.5% year-over-year. Product sales were $75.1 million, up $3.1 million or 4.3% on a like-for-like basis.

Instrument sales for the quarter were around $3.3 million compared to approximately $4.2 million in the prior year, a decrease of 22%. Service and other revenue was $9.5 million in the second quarter as compared to $5.3 million for the prior year, an increase of 80%. This includes field and scientific service revenue of $8.6 million and royalty and other revenues of around about $500,000. Our scientific services revenue is project driven and this [ph] [course of] results include revenues from the U.K. Biobank.

Turning to the gross margin, for the second quarter of 2014, the total GAAP gross margin was 57% as compared to 53% in the same period of 2013. Excluding non-GAAP adjustments, total gross margin for the second quarter of 2014 was 61%, compared to 60% in the same period of 2013. Non-GAAP adjustments for Q2 2014 include $1.8 million of amortization of step-up in inventory fair value and amortization of acquired intangible assets of $1.4 million.

I’d like to remind you that this as of this quarter, we’ve now fully amortized the fair value inventory step-up associated with our acquisition of eBioscience two years ago.

Turning to operating expenses, total operating expenses in the second quarter of 2014 were approximately $49.1 million compared to $45.5 million compared to the last year. R&D expenses for the second quarter of 2014 were $12.9 million, as compared to $12 million in the second quarter of 2013, an increase of $900,000. This increase was primarily due to cost associated with the development of our next generation of instrumentation.

SG&A expense was $36.3 million for the quarter, as compared to $33.5 million in 2013. The increase of $2.8 million was primarily due to high litigation costs, as well as higher variable and stock related compensation costs, together with incremental headcounts in the commercial organization.

Interest income and other net was approximately $200,000 in the second quarter, due primarily to interest expense of $1.6 million, offset by a realized gain on disposal of part of our portfolio available to sell securities. This compares to an interest expense and other net of $2.6 million in the second quarter of 2013, which include an interest charge of $2.7 million.

The reduction of $1.1 million in interest charge year-over-year has been driven by significant repayments of our senior debt in the last 12 months combined with a lot of coupon rate following our refinancing last year.

Overall, our second quarter GAAP net loss was $900,000, or $0.01 per diluted share, compared to a GAAP net loss of $6.1 million, or $0.09 per share in the second quarter of 2013. Our GAAP net loss in the second quarter includes $6.1 million, or $0.08 per share in non-GAAP adjustments relating to the amortization of an inventory fair value adjustments and acquired intangible assets.

Subsequent to these adjustments, our non-GAAP net income for the second quarter of 2014 was approximately $5.2 million, or $0.07 per diluted share compared to a non-GAAP net income of $2.8 million or $0.04 per diluted share in the second quarter of 2013. Our net income in Q2 includes a realized gain of $1.3 million or $0.02 per diluted share relating to a realized gain on disposable across our portfolio of available [ph] [profile] security. For full details of the non-GAAP adjustments to net income, please see the reconciliation table in our earnings release.

Turning to review the balance sheet, during the quarter we made significant process in strengthening our balance sheet in providing future flexibility, firstly, by prepaying $11.3 million against our secured senior debt. At the end of the quarter, our senior secured debt stands at $25 million, achieving a year-end debt target six months ahead of plan. Going forward, we intend to continue to pay down our debt less aggressive pace.

Effective 28th of July we amended the terms of our senior secured debt further reducing our coupon rate from 3.5% to 2.5% over LIBOR. And in addition, the amendment includes an accordion or incremental feature which provides an uncommitted incremental term loan facility of up to $50 million. These funds are available to us under certain terms and conditions. This will provide us with additional strategic flexibilities we enter Phase 3 of our corporate plan.

Subsequent to making the $11.3 million prepayment against our debt, we ended the second quarter with total cash and cash equivalents of $51.5 million. This compares to $57.7 million in the close of the first quarter.

I'm pleased to report that in the last 12 months have reduced our senior debt by about $42 million or building our cash reserve by more than $7 million over the same period. While capital expenditures during the second quarter was approximately $1.9 million and depreciation and amortization was approximately $7.8 million, including the amortization of acquired intangible assets in the inventory step-up. The cash receivable $49.6 million, little change from $50.9 million as of the end of previous quarter.

Turning to inventory. Our net inventory at the end of the second quarter 2014 was $60 million, down from $63.4 million at the end of the first quarter of 2014. This was driven by the $1.8 million fair value inventory step-up expense amortization expense as well as the utilization of inventory produced in the first quarter of ongoing Biobank projects.

In summary, this pleases our results for both the second quarter and the first half of the year. In the first six months of this year, we’ve grown our total like-for-like revenue by 9% over the prior period generated a non-GAAP EBITDAO margin of 16% of sales. Inline with our Phase 2 goals, we’ve significantly strengthened our balance sheet and we’re on track to exceed the revenue and EBITDAO targets that we set out at the start of fiscal year 2014. Accordingly, we’re releasing our full-year guidance to total revenue of $340 million and EBITDAO in the range of 14% to 15% of the revenues.

At this point, I'd like to open the call up for questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) Our first question comes from the line of Bryan Brokmeier from Maxim Group. Please proceed with your question.

Bryan Brokmeier - Maxim Group LLC

Hi. Thanks for taking the questions. First, you beat Street expectations and raised guidance. Where did you see the greatest outperformance versus your own expectations?

Franklin R. Witney

Well, we’re feeling pretty good across the board versus how we set the plan up. We’re feeling the -- obviously the Axiom genotyping lines performing extremely well. And we’re not -- I’d say that it’s relatively modest increase in our guidance and I’ll say that we’re feeling good across the product line and with some probably a little higher than expected strength in the genotyping line with the Axiom product line.

Bryan Brokmeier - Maxim Group LLC

And the gene expression, last quarter was only down about 5% and this quarter it declined quite a bit more than your 5% to 10% expectations, but it still puts the average for the first half of the year down 10%. Are you planning to make any changes to your expectations of the 5% to 10% decline, or how should we think about the back half of this year?

Franklin R. Witney

We are still in that range. We don’t see anything fundamentally that’s different. We are launching some new products in the area, some new arrays, as well as software and we continue to investment lightly, but don’t see any fundamental change in the -- in how we’re thinking about the Expression business.

Bryan Brokmeier - Maxim Group LLC

Okay. And lastly, on the cytogenetic business, are you seeing the most strength or I guess most strength versus your expectations within the newborn screening business, or are you seeing it in -- starting to see the growth pick up in oncology or maybe off-label in prenatal screening?

Franklin R. Witney

We are -- our primary franchise is at postnatal.

Bryan Brokmeier - Maxim Group LLC

Okay. Thanks a lot.

Franklin R. Witney

Thanks, Bryan.

Operator

Our next question comes from the line of Tycho Peterson from JPMorgan. Please proceed with your question.

Tejas Savant - JP Morgan Chase & Co.

Hey guys, this is Tejas in for Tycho. Just sticking to the question on Expression, I mean, can you give us a break down of legacy products versus HTA and microRNA arrays?

Gavin H. J. Wood

We can’t. We didn’t give that as part of the prepared remarks. It would be probably be easier to take that offline. Last quarter it was roughly a 50-50 split. It wasn’t materially different this year -- for this quarter rather.

Franklin R. Witney

There wasn’t any fundamental difference in the mix, Q2 versus Q1. It was just the business was just a little bit softer on a comparative basis.

Tejas Savant - JP Morgan Chase & Co.

Okay. And then, any comments on the academic funding environment, I mean, a few people out there saying it’s definitely getting better. How does -- how should we reconcile that with what you saw in the legacy part of the Gene Expression business and then (indiscernible) as well?

Franklin R. Witney

Yes, I will say that we feel pretty good about the academic funding environment and I don’t think our Expression business will be a proxy for that. Obviously, other parts of our array business are growing very, very robustly and a fair amount of that is in the academic market. So we feel good about the academic situation much better than we did say a year and half -- year to year and half ago.

Tejas Savant - JP Morgan Chase & Co.

Okay. And how should we think about gross margins? Couple of quarters you’ve exceeded your 60% target. Should we think of 61% plus as now being the floor or could there still be some quarter-to-quarter volatility there?

Gavin H. J. Wood

Yes, I think that’s a fair comment. We certainly guiding to 60% and that’s how we’re looking at the second half of the year. In the first half of the year, we continue to be very, very focused on cost reduction and that’s helped drive up the margin, by a percentage point or so. But certainly the 60% is the way to look forward for the next six months.

Tejas Savant - JP Morgan Chase & Co.

Great. Thank you.

Franklin R. Witney

Thank you.

Operator

Our next question comes from the line of Isaac Ro from Goldman Sachs. Please proceed with your question.

Ryan Weikert - Goldman Sachs Group, Inc.

Hey, guys. This is actually Ryan Weikert in for Isaac, but thank you for taking the question. R&D as a percent of sales stepped up a little bit this quarter. I know that can actually fluctuate a bit quarter to quarter, but I was just wondering if you could give a little more color on what sort of projects you are spending on and how much of that goes toward new arrays versus everything else?

Gavin H. J. Wood

It was a very modest increase really quarter-over-quarter and that was largely driven by the initiation of spend on new platform, which we talked about the JPMorgan at the start of the year that the GeneChip system that we currently have is very robust, been with us for a while and we’re moving forward with a more automated instrumentation. So we will see a little bit of uptick in R&D spend on that. Turning to your question on [ph] [settlement] of arrays versus other products, there is a broad range of R&D and the majority of which is around clearly our Genetic Analysis business unit.

Ryan Weikert - Goldman Sachs Group, Inc.

Okay. Thank you. And then just a follow up, could you talk about the long-term array outlook? Where you see potential of take share from competing products versus new technologies?

Andrew J. Last

This is Andy Last talking. I don’t see any fundamental shift or change in where we’re going to be winning share versus where we’ve been winning share. We compete aggressively against other microarray platform providers. In the genotyping space, arrays continue to be extremely competitive for the large projects price competitive and they deliver the expected data. And in our clinical franchise, I think the economics and let’s call it the performance profile of arrays versus alternatives, be they the older FISH technologies or karyotyping continue to provide significant value to customers. So I think our story is consistent. I don’t see any fundamentally important changes there.

Ryan Weikert - Goldman Sachs Group, Inc.

Great. Thank you very much.

Operator

Our next question comes from the line of Doug Schenkel from Cowen and Company. Please proceed with your question.

Unidentified Analyst

Hi. This is (indiscernible) filling for Doug. Thanks for taking my question. So got the senior debt down to the mid 20s, reaching your target, you mentioned that you are going to keep paying down the debt, but how should we think about the rest of your cash and how are you going to allocate that?

Gavin H. J. Wood

We are going to, as we mentioned, continue to pay down debt in more modest rate. We cash then really that’s we’re going to continue to look to invest in a targeted way in the commercial organization. We are spending a little bit more on R&D that we’ve touched on as well. And then also to build our reserves to give us that strategic flexibility as we’re looking to the Phase 3 of the corporate plan.

Unidentified Analyst

Okay. Thank you. That helps. And also you mentioned last quarter some additional Biobanking deals in China and Taiwan and also this quarter, some more talk about the pharma companies and biotech with Biobanking. I was wondering if you could provide a little bit more color on how those are progressing?

Franklin R. Witney

Yes. We have a pipeline of pharma as well as academic government funded deals. We don’t generally talk about specific opportunities, but we’re tracking them all and feel very good that there are a number of opportunities out there that we’re going to execute on.

Unidentified Analyst

Okay, thanks. And then just one quick housekeeping one. Did you guys break out how much eBio grew, excluding the impact of QG Plex and Procarta?

Franklin R. Witney

No, we didn’t -- we’ve amended our comparative, so it’s a like-for-like basis, but that business becomes much more folded into the group as a whole. We are not breaking out that level of detail.

Unidentified Analyst

Okay. Thanks for taking my questions.

Operator

Our next question comes from the line of Derik DeBruin from Bank of America. Please proceed with your question.

Rafael Tejada - Bank of America Merrill Lynch

Hi. Good afternoon. It’s Rafael in for Derek and thank you for the questions. Just more high level question, so the FDA did hold the call today just regarding the regulation of LBT’s. I’m just thinking here longer term about some other future products that you’ve there, and whether this is accelerating the plan to potentially file additional products with the FDA. And additionally just -- any sort of exposure on the business and customers that you may have today? Thanks.

Franklin R. Witney

Yes, it’s a good question. We don’t -- since this is pretty early, pretty fresh stuff, we don’t have too much to say about particular announcement that came out today, this morning. And its really too early to say, to give much granularity to your question, but we certainly see this as a positive for our CytoScan product, which is the FDA approved. So that’s probably as far as we’re able to go today.

Rafael Tejada - Bank of America Merrill Lynch

Right. And I’m thinking about OncoScan as that product also evolves, whether there is going to be -- whether there is appetite there for some of the tests that your customers are building around it whether that’s going to need filing as well?

Franklin R. Witney

It’s just too early to -- until we get into the devil is in the detail of what actually comes out. It’s just too early at this point.

Rafael Tejada - Bank of America Merrill Lynch

Sure, okay. And just a quick one, I may have missed just the comments on eBio, just in terms of how the business is performing?

Franklin R. Witney

Yes, so we were -- we grew 5% in the quarter. We were a little higher than that in Q1, but we’re in this range of mid single-digits. As we’ve said before, our aspiration is to grow the business more aggressively. But its certainly inline with our expectations of mid single-digit growth. We were down primarily from last quarter, primarily due to the reduced sales of our QuantiGene product line during -- and we are in this transition of the Plex line into the eBioscience business. And we had a pretty tough quarter in Japan, which knocked about a point off our growth rate there. So, really fundamentally we -- where the business is operating about as we had anticipated and we’re certainly doing a lot of work to improve the growth rate over time. But we’re still very, very happy with the business and the kinds of opportunities if affords us.

Rafael Tejada - Bank of America Merrill Lynch

Okay. Thank you for the questions. I will jump back in the queue.

Franklin R. Witney

Thank you.

Gavin H. J. Wood

Thank you.

Operator

(Operator Instructions) There are no further questions in the queue. I’d like to turn the call back over to management for closing comments.

Doug Farrell

Thank you everyone for taking the time to join us in the call today. If you did miss any portion of the call, a phone replay will be available for the next 7 days beginning at around 5 o'clock Pacific Time today. To access that replay, domestic callers, please dial (877) 660-6853. International callers, please dial (201) 612-7415. The pass code for both is the same, 13585791. Alternatively, an audio replay will be available under the Investor Relations section of our Web site at affymetrix.com. So thank you again for joining us and have a great day.

Operator

Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.

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