GenMark Diagnostics' (GNMK) CEO Hany Massarany on Q4 2015 Results - Earnings Call Transcript

| About: GenMark Diagnostics, (GNMK)

GenMark Diagnostics, Inc. (NASDAQ:GNMK)

Q4 2015 Earnings Conference Call

February 23, 2016 4:30 PM ET

Executives

Jenn Manship – Senior Accountant-Financial Reporting

Hany Massarany – President and Chief Executive Officer

Scott Mendel – Chief Financial Officer

Analysts

Brian Weinstein – William Blair

Doug Schenkel – Cowen and Company

Patrick Donnelly – JPMorgan

Mark Massaro – Canaccord Genuity

Operator

Good day, ladies and gentlemen, thank you for standing by. Welcome to the GenMark Diagnostics 2015 Fourth Quarter Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded today Tuesday, February 23, 2016.

I would now like to turn the conference over to Ms. Jenn Manship of GenMark. Please go ahead.

Jenn Manship

Thanks, Shenelle. And thank you all very much for joining us today. Before we begin, I would like to inform you that certain statements made by GenMark’s during the course of this call may constitute forward-looking statements. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are forward-looking statements.

For example, statements concerning our 2016 financial guidance, the development and commercialization of new products, plans and objectives of management and market trends are all forward-looking statements. We believe these statements are based on reasonable assumptions. However, these statements are not guarantees of performance and involve known and unknown risks and uncertainties that may cause the actual results to be materially different from any future results expressed or implied by such statements. Important factors, which could cause actual results to differ materially from those in these forward-looking statements, are detailed in GenMark's filings with the SEC.

GenMark assumes no obligation and expressly disclaims any duty to update any forward-looking statements to reflect events or circumstances occurring after this call or to reflect the occurrence of unanticipated events.

I will now turn the conference call over to Mr. Hany Massarany, President and CEO of GenMark. Hany?

Hany Massarany

Thanks, Jenn and good afternoon, everyone. I am joined on the call today by our CFO, Scott Mendel. And as usual, today we have a few prepared comments and then we will be happy to response any questions that you might have.

Our prepared comments will cover the following topics. First, I will provide an overview of our performance last year and expectations for 2016. Then Scott, will walk us through our operating results for the fourth quarter and full year of 2015. And finally, I will update you on the progress of our ePlex program and 2016 objectives and milestones.

So starting with a high level review of our 2015 performance and 2016 expectations. Our U.S. commercial team delivered excellent results in 2015. Despite a light flu season, we grew our revenues by 29%, compared with 2014 and expanded our installed base of XT-8 analyzer to 633. Our FDA cleared RPV test and research use only, HCV genotyping test continues to be the main driver of XT-8 placements and revenue growth.

As recently communicated, following the positive results generated from initial internal and external studies. We successfully completed the transfer to manufacturing of our ePlex respiratory pathogen panel and initiated formal analytical studies in support of our upcoming European launch.

Based on significant data has generated on thousands of ePlex cartridges across multiple manufacturing lots, we believe we are close to achieving the required level of reliability to support the upcoming launch of ePlex in Europe.

Despite this strong progress, we have seen lower than expected reliability with a few recent manufacturing lots of cartridges. We believe that this has been primarily caused by some remaining variability in our manufacturing process, which became more evident with the recent doubling of our manufacturing volume. As we ramp production to support European launch and key regulatory study.

We are working hard to fully understand and address the remaining aspects of our manufacturing process, to achieve our high reliability standard. Nevertheless, we acknowledge that completing these activities will likely extend beyond the end of March. To be clear, we continue to be very pleased with the superior quality of ePlex results, which has now been demonstrated on thousands of test cartridges both internally and also in collaboration with key opinion leaders in the U.S. and Europe.

In addition, we are driving to complete the final stages of analytical studies and have already installed several ePlex systems in European early adopter sites, in anticipation of the imminent launch of ePlex in Europe. And as previously communicated, we expect to initiate U.S. IVD clinical studies shortly after European launch.

2016 will be a pivotal year for our commercial teams, as we continue to grow and support our XT-8 business, while also shifting more of our focus toward launching ePlex in the European and U.S. market.

In 2016, we expect revenue to be in the range of $47 million to $51 million, representing growth of 20% to 30% over 2015. Most of this revenue will be driven by XT-8 with modest contributions expected from our ePlex system both in Europe and in the U.S. We also expect gross margin this year to be in the range of 53% to 55%, down slightly from 2015 as we launch ePlex.

And since, we have already begun to shift our U.S. commercial focus to preparing for the launch of ePlex in the second half. This year we expect a modest expansion of our installed base of XT-8 analyzers in the U.S. market. Accordingly, we are not providing guidance on XT-8 placements for 2016.

With respect to ePlex, we are planning controlled initial launches shortly in Europe and later this year in the U.S. We will regularly report on ePlex performance including installed base expansion, and we will evaluate if providing placement guidance later in the year will be useful for investors, as we gain more knowledge from early experiences and progress.

And with that, I will now hand over the call to Scott Mendel. Scott?

Scott Mendel

Thank you, Hany and good afternoon everyone. We issued our financial results prior to this conference call and will be filing our Form 10-K shortly after the call is completed. During the fourth quarter of 2015, our revenue increased 34% to $13.2 million compared to the fourth quarter of 2014.

The annuity for analyzer in the fourth quarter was approximately $83,000, up 9% versus prior year. Our average annuity per analyzer over the last four quarters is in the mid $60,000 range.

Gross profit for the fourth quarter of 2015 was $8.5 million or 64% of revenue versus $6 million or 61% of revenue in the fourth quarter of 2014. Total operating expenses were $17 million for the quarter, an increase of $2.3 million compared to the same quarter of 2014.

Marketing and sales expenses increased $290,000 to $3.4 million, primarily driven by increased employee-related expenses. Research and development expenses were $10.2 million, an increase of $1.7 million as we completed transferring the ePlex system to manufacturing. And finally, general and administrative expenses increased $360,000 versus the prior year period to $3.4 million primarily driven by employee-related expenses.

During the fourth quarter, we recorded $270,000 of interest expense related to our debt facility. Our net loss per share for the quarter was $0.21 with weighted average shares outstanding of approximately 42.4 million. Net loss per share in the same quarter of 2014 was also $0.21 per share, while our weighted average shares outstanding were approximately 41.6 million.

For the full year, revenue grew to $39.4 million, an increase of 29% compared to 2014. Gross profit for the full year was $24.1 million or 61% of revenues. Our total year operating expenses were $65.6 million, an increase of $9.1 million mainly driven by development costs of our ePlex system. And net loss per share for the full year was $1.

We ended the year with $45.5 million in cash and investments and we plan to continue utilizing our cash balances primarily complete the analytical and clinical ePlex studies required for the European launch and FDA submission as well as expanding our global, commercial organization.

In addition to our existing cash balances, we currently have access to up to additional $30 million on the debt facility we put into place at the beginning of 2015. We believe our cash balance and the remaining amounts left under the debt facility are more than adequate to successfully launch ePlex.

During 2015, we also maintain our focus on minimizing working capital requirements resulting in DSOs of 43 days and DSI of 72 days. While, Hany already communicated high level of 2016 revenue and gross margin guidance, I’ll provide a little, additional detail. Our revenue profile in 2016 will reflect two important factors. First, we will continue to feel the impact of a very light flu season in the first quarter of this year. And second while we have only included a modest amount of ePlex revenue in the guidance provided, the majority of that ePlex revenue is expected in the fourth quarter.

Therefore, we expect a larger percentage of revenue in the fourth quarter of 2016 than we have specifically seen. Beyond revenue, it is also important to think about 2016 operating expenses relative to 2015 results, while we don’t expect much change in R&D and only a modest increase in G&A during 2016. Sales and marketing expense will increase as we expand our commercial organization with the launch of ePlex.

We’d expect our commercial team to grow to approximately 35 to 40 accounting executives by the middle of the year, with most of the growth driven in the U.S. And as a result, we expect sales and marketing expense of 2016 to be in the low to mid $20 million range.

With that, I’ll now turn the call back over to Hany, to provide additional details regarding ePlex.

Hany Massarany

All right. Thank you, Scott. I would now like to review our progress and expectations towards the launch of the ePlex system. And as you know by now, ePlex is a multiplex molecular sample-to-answer system, which integrates sample preparation steps, including extraction and amplification, together with our proprietary eSensor detection technology, and enabled by proprietary digital microfluidics to allow the detection of multiple molecular targets on a single test cartridge.

As you can expect, our entire organization is extremely focused on the global launch of ePlex, starting with Europe in the near-term, followed by the U.S. market later this year. Since our last update, considerable progress was made across multiple fronts. As stated earlier, following the positive results generated from initial internal and external study, which were presented at the Association of Molecular Pathology Congress last October.

We successfully completed the transfer to manufacturing of our ePlex respiratory pathogen panel. We also initiated formal analytical studies and made significant progress towards the completion of these studies in support of our upcoming European launch. Our technical ops and manufacturing team have continued to optimize the ePlex cartridge manufacturing process and line. As well as develop additional quality control methods to further required levels of production, reliability and scale up.

And finally, I’m pleased to inform you that we have already installed our first ePlex analyzers in multiple European early adopter customer sites. We believe that we are very close to launching ePlex in Europe. Nevertheless, we acknowledge that some additional time beyond the end of this quarter will likely be required to consistently manufacture ePlex cartridges at the level of reliability we expect.

We have already manufactured multiple lots and thousands of cartridges since completing transfer to manufacturing of our respiratory pathogen panel. And with many of these manufacturing lots, we have been able to demonstrate our ability to produce consumables that meet our reliability targets, as well as perform as or above market requirement.

In addition, we have significantly increased cartridge production volumes well beyond our expected daily levels to support the European launch. Our ability to produce large quantities of cartridges at the required level of reliability reinforces our confidence that we are very close to European launch. However, as previously noted, we have seen lower than expected reliability with some recent manufacturing lots of cartridges and you can all rest assure that driving this remaining variability out of our manufacturing process is now our top priority.

We are very encouraged by the continued enthusiasm of customers about the ePlex system and their personal experience with the system. And we remain committed to bringing to market the highest quality system we can. Finally, as previously communicated, we are planning an extensive test menu for the ePlex platform based on the strong progress we have made towards the launch of the ePlex respiratory pathogen panel we are now adding more focus to drive the next wave of ePlex menu expansion including our blood culture IV panels for gram-positive and gram-negative sepsis pathogens, the fungal pathogen panel and the gastrointestinal infection panel.

After the initial launch of the ePlex system and RP panel, we expect some of the other assays to launch in Europe, in late 2016 and in the U.S. in 2017. And of course, going forward we expect to bring to market additional assays at a rate of several per year and look forward to updating you on our assay road map at a future date.

In conclusion, 2015 was another year of some performance for our company and we are very optimistic about 2016 and beyond. Our North American commercial team continues to deliver excellent results and with sustained sales execution, we believe we will achieve the projected growth of our revenues, market share and installed base of XT-8 systems over the next several quarters.

Furthermore, our sales force, both domestic and international, continues to lay the foundation and prepare the most important market for the imminent launch of our ePlex sample-to-answer system. Our R&D regulatory clinical affairs and manufacturing organizations are laser focused on the whole ePlex deliverables relevant to this year’s launch plans in Europe and the USA. And of course, we will continue to focus on organizational talent, infrastructure and processes to scale up our business and support future growth.

We will now open the call to questions, thanks.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] And our first question comes from the line of Brian Weinstein of William Blair. Your line is now open. Please go ahead.

Brian Weinstein

Hi, guys thanks for taking my question. Obvious where I think we are going to go with this. So Hany, you talked about some additional manufacturing variability. How close are you, we talked about a 95% reliability. How close are we to getting there at this point and let's just start with that. Any kind of quantitative metric that you can help us?

Hany Massarany

Yes, thanks for the question, Brian. Look as you know, we have been working very hard to improve reliability from the low 90% to 95% or better. And we have actually been making very good progress toward achieving that level of reliability. This is as you know is very consistent with market requirements for IVG tests. So in other words, customers don’t expect a test repeat rate of greater than 5% or so.

Brian Weinstein

I’m sorry.

Hany Massarany

Yes, go ahead.

Brian Weinstein

No, this is how we make, I don’t want to put words in your mouth, unless I’m hearing you right. So you are somewhere between 90% and 95% today, and so just to make sure that I heard you say that right.

Hany Massarany

Well, we have making good progress toward the 95% level or greater. And as I mentioned on – during the prepared comments, we recently saw some loss that basically had lower than expected reliability. So insufficient reliability, we believe that this has to do with remaining variability in the manufacturing process that became evident, when we more than doubled our production volume. So that’s what we are focused on right now.

So we know that we can deliver the required level of reliability based on our design and our technology, but we have to be able to do it consistently Brian, across all laws, not just most law. So right now we are focused on better understanding, exactly what has caused the more recent lots, some of them to have lower reliability and put in place solutions that will ensure, we reduce variability and thereby increased reliability. So we are looking at things like, tightening up manufacturing work instructions, additional training as we’ve introduced more people to manufacture cartridges. We are looking at additional QC at various stages of the manufacturing process to ensure that as we scale up and produce more cartridges, we are able to consistently drive variability out of the process and thereby increase the level of reliability.

Brian Weinstein

I guess the question would be without really knowing specifically what the issues are even while recognizing that you are very close, how can we be comfortable in your timeframes for 2016 CE mark in some modest amount of contribution for ePlex in general including the U.S. this year?

Scott Mendel

Well, based on the progress that we have made recently, Brian, as I said on the – during the prepared comments we now have fully transferred ePlex to manufacture. All of the cartridges are made in manufacturing. We have produced thousands of cartridges, across multiple lots, we have very good results. We are very pleased with the quality of the results that we generated here, mostly internally as you can expect but also in collaboration with key opinion leaders in the U.S. and in Europe.

And really now it is a matter of consistency, we have to be able to produce consistent reliability, across all laws, not just most of them. We feel confident that we will be able to do that in the not too distant future. We wanted to communicate openly about the issues that we are dealing with and set the right expectations with all of you and our investors. We are working very hard to do this as quickly as we can.

Brian Weinstein

Okay, last question from me, Scott. What do you expect the cash burn to be. Maybe I missed that I don't know if you talked specifically about it but what do you expect the cash burn from operations to be in 2016? Thanks.

Scott Mendel

Sure, Brian. So in 2015, I would point out we burned including capital expenditures about $35 million to $36 million in cash. I wouldn’t expect anything radically different in 2016, maybe a couple of million dollars here or there based on the fact that we are building out a new facility but it shouldn’t be radically different from our 2015 results.

Operator

Thank you. And our next question comes from the line of Doug Schenkel of Cowen and Company. Your line is now open. Please go ahead.

Doug Schenkel

Hey, good afternoon. My first question is on the Q3 call you talked about. I think it was described the two components that were then causing some variability. Are these sustained components that are causing the lot, lot issues in manufacturing or is it something different?

Scott Mendel

Well, we don’t believe that the components are causing any variability. So this isn’t about product design. We have demonstrated with many cartridges across multiple lots, our ability to deliver high quality results. Really this is about manufacturing cartridges consistently as we scale up and increase the volume of production. And that’s what we are working on now.

Doug Schenkel

So this is a different issue, but would you characterize it as one that you feel is maybe more straightforward to address than some of the issues we’ve seen before that have led to delays?

Hany Massarany

Yes, Doug, that’s true. We’re not looking at redesigning anything, if you remember back then we have to redesign certain plastic components so that they can be manufactured reliably and consistently. We have to change the material as well as the geometry of a couple of different parts that go into our cartridge. We’re not looking at anything like that at the moment, but rather how do we consistently at scale produce the right level of reliability by taking variability out of the process. So, we are looking at things, like I said, additional QC testing, training, tightening up manufacturing work instructions, and so on and so forth, as opposed to changing the design of the cartridge.

Doug Schenkel

Okay. That’s really helpful, Hany. And maybe just one last one, based on your guidance it’s unclear if you expect to have ePlex ready for a full commercial launch in the U.S. by flu season. Can you confirm based on what you’re working through right now, yes or no, whether or not, you expect to be on the market for flu season with a full commercial launch or is it just too early to tell right now?

Hany Massarany

So, what we are really focused on, Doug, and what we believe we have much more control over is completing all the studies that are required to submit to FDA for U.S. IVD clearance. You know, to submit to the FDA by the end of Q2. And we believe that if we do that, we have a shot at having a product on the market in time for the flu season. We are doing a number of other things as well, of course. We’re working very closely with FDA and we have been all along to ensure that we are as ready as we can possibly be, to execute the studies and make good submission.

So we’ve already contracted with all the sites, we had agreement with FDA and the sites on the all clinical study designs including number of positive, samples and so on and so forth. We have already banked all of the samples that we need to bank. We have even started doing some method comparators with some of the sites, so that we give ourselves the maximum chance of submitting by the end of Q2. We believe that we should be able to do that, and as I said, with a bit of luck we would be able to have a product cleared in time for the flu season.

Additionally, we are working with some of our key opinion leaders and some customers in the U.S. to have them prepare ahead of clearance. We haven’t yet started doing any testing in the field. But once we submit to the FDA, we know that there will be an opportunity to work with certain customers to get their validations going, so that we are not waiting until clearance before we start the process. So that these are the sort of the assets that we have in place to prepare and give ourselves the maximum chance to participate with ePlex in the flu season. Of course, with XT-8, we already have significant market share and volumes for respiratory viral panel and we expect to do well, again, assuming we have a normal flu season. We will be participating with our ePlex product in the U.S.

Doug Schenkel

Okay. Thank you for all that detail.

Hany Massarany

Thanks.

Operator

Thank you. And our next question comes from the line of Tycho Peterson of JPMorgan. Your line is now open. Please go ahead.

Patrick Donnelly

Hi. Thanks, guys. It’s actually Patrick Donnelly in for Tycho. Hany, maybe just on the reliability issue, can you let us know when exactly it was discovered and maybe try to quantify, I know you said you made good progress to discover, maybe try to quantify the progress you have made since the discovery?

Hany Massarany

Well, the progress that I have described was – what we made since the last update. The observation that some recent lots have lower than expected reliability is – recent. So it’s really very recent as we started scaling up and doubling up on our capacity in preparation for the launch in Europe. And that work now is now ongoing, to better understand the issues and address them in a most effective way.

Patrick Donnelly

Okay. And then – on the 95%, I mean can you just kind of try to define, as clear as possible, what the threshold is to get there? I mean is it a certain number of cartridges that off to clear that number and then you feel comfortable, the issue is behind you? Or what exactly needs to be done to make you feel, things are resolved and you’re good to go.

Hany Massarany

We need to see consistent performance at that level or better with statistically significant numbers across multiple lots. So, obviously, we’re not going for perfection, we’re not going to wait until we have 100% reliability. But we know from our customers and what’s expected in the IVD sort of market, that repeating. Now, remember, we are not talking about wrong results, false positives or negatives, we’re basically talking about invalid results, where the system would have – would not report a result and the customer, the user would have to repeat that test. And anything sort of over 5%, 6% would really not be acceptable in the U.S. and that’s what we are working toward. We have to convince ourselves, obviously there are statistically valid ways of demonstrating that and we have to be able to show that we’re there.

Patrick Donnelly

Okay. And then how does the delay affect overall spend, I mean is there an unexpected increase to R&D to fix this issue. Scott, I know you said we shouldn’t expect much change on R&D from year-to-year. I mean maybe just help us think about how this doesn’t affect that?

Scott Mendel

Yes. As you recall, we completed the development and transferred all to manufacturing, so certainly some of the spend associated with developing ePlex has diminished. And the work that’s being done right now is being done mainly within the manufacturing operation. So it’s not really a big drag on R&D or costs associated from an R&D perspective. So we don’t – as I mentioned in the guidance, we don’t really see a big change in R&D in 2016 versus 2015 from a spend level perspective.

Patrick Donnelly

Okay. Thank you.

Scott Mendel

Yes.

Operator

Thank you. [Operator Instructions] And our next question comes from the line of Mark Massaro of Canaccord Genuity. Your line is now open. Please go ahead.

Mark Massaro

Hi, guys. Thanks for the questions. Hany, I was wondering if you could just communicate your confidence in the differentiation of your platform, when it gets to the market relative to some of the competitive platforms. In particular, Biofire announced the Torch submitting to the FDA. Presumably they think that they’ve provided an answer to their throughput limitations by stacking. Can you just remind us how you think you will compete effectively in the marketplace with ePlex relative to this platform?

Hany Massarany

Yes. Thank you for the question, Mark. I appreciate it. Look, we feel very, very good about the value proposition of ePlex relative to customer needs, and compared with alternatives. So, I don’t want to speak directly about any specific competitor, because I think it’s better that they answer questions to do with their platform. But I’ll say that we’re very pleased that there are other good competitors out there.

Because we believe that this is a significant market opportunity that’s really in its infancy compared to other areas of diagnostics in Immunoassay or other areas where there are multiple significant competitors with very developed markets, and really they’re almost all replacement markets. This isn’t what we are dealing with here. This market is just starting. It’s underpenetrated and most labs are not doing these tests. So it’s good to see that some of the competitors are validating that this is an unmet need.

Now, we believe that we will compete on two fronts. Certainly, based on technical and clinical performance and we know that from our XT-8 business. We’re leveraging the same technology, the eSensor technology allows us to detect DNA and RNA targets electronically and perform true multiplexing without dealing with the limitations of optical detections. So unlike other systems we don’t use fluorescence, we don’t have lasers and cameras. We have a much more simple, highly sensitive and specific, very rapid way to detect. [Audio Dip] we’re talking 50, 60 targets all at once with exquisite sensitivity and specificity in a very quick turnaround time.

And we’ve shown with ePlex that we compare very favorably when it comes to sensitivity, specificity, ability to pick and detect mixed infection. eSensor technology is superior when it comes to analytical and clinical performance. In addition, we will compete on testing efficiency. So when it comes to workflow in the lab, turnaround time, having the capacity of our system and the scalability of ePlex which, as you know starts with the capacity of six and goes up in multiples of six up to 24 really can handle the workload and the volumes in all labs that we’re targeting in the segments that we’re going after in the 200-plus bed hospitals and reference labs.

Remember that their volumes are sort of spread out nicely across an entire day, but they come in sort of in bumps and lumps if you like. And therefore, you need a capacity to be able to address the volume of a busy molecular lab. And we believe that with the sample-to-answer approach that we have with minimal hands on time. So that we know with our test, it takes about a minute, may definitely less than two minutes to load a sample on to our cartridge and put that cartridge on the ePlex system.

With other systems, you could spend up to 6, 7 minutes per cartridge, you add that up if you’re dealing with 50, 60, 70 samples a day and it becomes hours of hands on time, which obviously we don’t have to worry about, especially as the many you extend and now you’re dealing with multiple panels with volumes that would really be a challenge to a lab that doesn't have a high capacity system that scalable with very, very little hands on time to perform these tests.

Mark Massaro

Okay, great. That’s helpful. And then my follow-up question is on the gross margin guidance for 2016. Came in a little lighter than what we were thinking and was hoping that you could just walk us through some of the moving parts. Obviously, I assume your absorbing overhead on the ePlex platform but how should we be thinking about some of the puts and takes to the gross margin guide?

Scott Mendel

Hi, Mark, it’s Scott. I will handle that question. On XT-8, we continue to expect similar levels of gross margin, so that’s not what the driver – the driver is exactly what you said which is the absorption of all the ePlex infrastructure on across relatively low volume that we just pick off here this year. The impact of ePlex on gross margins will be in the back half of the year as – as a point of reference. And so that’s factored into our gross margin guidance. We have always said, we would be in the 4 to 6 percentage point headwind in 2016 and that’s basically what we’re guided to.

Mark Massaro

Great, thanks guys.

Scott Mendel

You’re welcome.

Operator

Thank you. And I’m showing no further questions at this time. I would now like to turn the call over to Mr. Hany Massarany, for closing remarks.

Hany Massarany

Okay, very good, thank you so much. And, look, thank you everyone for listening and for the questions. I really appreciate it. I want to assure you that we understand how important it is to launch ePlex as soon as possible. And also assure you that we are doing everything we can to bring to market, a very differentiated product that’s the highest quality that we can produce to meet and exceed customer expectations. Based on a lot of data that we have, a lot of work that has been done by us and our collaborations with customers in the U.S. and in Europe. All of this gives us tremendous confidence that we’re very close. And we’re working very hard to achieve this in a timely manner.

So, thank you, once again, on behalf of our employees and the Board. And, thank you for your ongoing support, and I look forward to reporting our progress in the future. Thanks, everyone.

Operator

Ladies and gentlemen, thank you for participating in today’s conference. This concludes today’s program. You may all disconnect. Everyone have a good day.

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