Symmetry Medical Inc. Q2 2008 Earnings Call Transcript

| About: Symmetry Medical (SMA)

Symmetry Medical Inc. (NYSE:SMA)

Q2 2008 Earnings Call Transcript

August 6, 2008 8:00 am ET


Carol Ruth – IR, The Ruth Group

Brian Moore – President and CEO

Fred Hite – SVP and CFO


Ben Andrew – William Blair

Michael Matson – Wachovia Capital Markets

Eugene Paskov [ph] – Siddique [ph]


Good day, ladies and gentlemen. And welcome to the second quarter 2008 Symmetry Medical Inc. earnings conference call. My name is Lacey and I'll be your coordinator for today.

At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of this conference. (Operator instructions) As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the presentation over to your host for today's call, Ms. Carol Ruth, with Investor Relations. Please proceed.

Carol Ruth

Thank you, operator. Joining us on the call today are Brian Moore, President and Chief Executive Officer, and Fred Hite, Senior Vice President and Chief Financial Officer.

Statements in this conference call regarding Symmetry Medical's business which are not historical facts may be forward-looking statements that involve risks and uncertainties within the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are predictive in nature and are frequently identified by the use of terms such as “may,” “will,” “should,” “expect,” “believe,” “anticipate,” “plan,” “estimate,” “intend,” and similar words indicating possible future expectations, events or actions.

Such predicative statements are not guarantees of future performance and actual results and outcomes could differ materially from our current expectations. Factors that could cause or contribute to such differences include, but are not limited to, the loss of one or more customers, the development of new products or product innovation by our competitors, our product liability, changes in management, changes in conditions affecting the economy, orthopedic device manufacturers, or the medical device industry generally and changes in government regulation of medical devices and third party reimbursement practices.

We refer you to the risk factors and forward-looking statements sections in the company's most recent annual report on Form 10-K, filed with the Securities and Exchange Commission, as well as the company's other filings with the SEC, which are available on the SEC's Web site at

Before turning the call over to President and Chief Executive Officer, Brian Moore, I would like to emphasize the Symmetry Medical's policy of not commenting or discussing individual customers or their programs. Brian?

Brian Moore

Thank you, Carol. Thank you to everyone for joining us on our second quarter 2008 investor conference call. We're extremely pleased to report another record quarter with top-line revenue performance of $109.8 million, a 57.5% increase from Q2 '07, and an organic growth reached 31% year-over-year. As a result, we are increasing our full-year 2008 top-line guidance to a range of $410 million to $420 million.

These results demonstrate the increased momentum we have seen in the demand from our major customers and we continue to be very encouraged by the strength of the overall orthopedic market and our ability to be responsive to our customers in this very robust environment.

The Sheffield operation as expected, produced a loss in Q2 which reduced the overall group performance, but we do however remain confident that the many corrective strategies to improve performance at Sheffield will strengthen both their operational and financial results progressively from Q3 onwards.

Gross margins continue to improve throughout the company, and with the expected Sheffield performance improvements, we remain on track to exit this year with Q4 gross margins at 27% for the total company.

Turning to our core orthopedics business, we're continuing to experience new product launches, consistent with the first half of 2008, and we're now beginning to see customers book capacity for 2009. This strengthens our confidence that the momentum will fuel our growth through the remainder of this year and into next year.

We believe that our strategy of maintaining capacity during slower periods while strengthening our core orthopedic business with complementary acquisitions have further strengthened our global competitive position. We believe that Symmetry is in its strongest position ever to further increase our leadership as a global supplier to the orthopedic industry.

This second consecutive quarter record sales is extremely pleasing as we can see the many strategic initiatives we've been working on producing positive results. In particular, the development of a total solution relationship with our major customers plus the leverage from the volume on our fixed cost base.

While we normally do not discuss individual customers, we would like to mention our relationship with our largest customer, DePuy, which we view as being extremely positive. We do appreciate that some of our investors monitor customer concentrations, and with regard to DePuy, we would like to stress that this is a complex relationship involving many hundreds of programs and services across the whole global operations for both of our companies and it is of course enhanced by the recent acquisition of the New Bedford facility which both companies view as being of strategic importance.

In mentioning this particular relationship with our largest customer, I would also stress that our strategy is to create a balanced portfolio of customers and consequently, we work hard to develop strong relationships with all of our customers including the major orthopedic OEMs. It is a central part of our strategy to develop solid multi-functional relationships with several customers, both large and small.

And we believe that with a more inclusive total supply arrangement, we're able to work closely with the customer and significantly improve the efficiency and overall cost of that customer's supply chain. And logistic support, supply chain Management, third party procurement, are all becoming increasingly important parts of our service capability.

Total business we believe is benefiting from our total solutions approach, and with continued success with integrating our acquisitions, particularly New Bedford, our business structure and operating model we believe to be an excellent strategic platform to further strengthen our position in the orthopedic and wider medical device outsourcing market.

Now I'd like to turn to our progress on improving the financial and operating performance of Sheffield. Following on from our initial actions in changing the Sheffield management team, and assessing the situation, we have now moved to a very aggressive execution phase. Our European team, led by John Hines, has succeeded in completing most of the major initiatives that we believe will get Sheffield to the targeted profitability and operating efficiency levels.

We have cleared all past due orders. We've restored customer confidence. We've increased management visibility and we substantially raised morale at the facility.

During the second quarter, we've also introduced a lean manufacturing philosophy and established all the key metrics that will determine performance evaluation. The next step is to implement an ERP system which we believe will further improve the facility's overall performance.

Our new specialized material supply chain manager, Lee Garcia [ph], has already made progress on identifying several profit improvement opportunities within the area of raw material procurement. The benefits of which will start to impact in Q3. As a result of our work in this area, our control of the supply chain at Sheffield is getting stronger and more efficient.

We have unfortunately had to reduce our headcount and this is largely been completed and we consider the current team as currently sized correctly to meet the anticipated needs of the business.

In addition to these, what we would describe as specific tactical profit improvements, we're also working to improve the overall operational efficiency of all aspects of the business. We're extremely encouraged by not only the actions and approach of the local management team, but also the responsive and inclusive attitude of everyone at the facility. Morale is good and the local team remains confident of achieving the rapid return to profitability that is reflected in our guidance.

The customers at Sheffield continue to support our actions and we expect to receive more work from them as the service levels improve and the operation becomes more cost efficient. We remain confident that all these actions at Sheffield will result in improved margins that will produce a smaller loss in the third quarter and achieve profitability in the fourth quarter.

This operational profit improvement will be helped by the continuing decrease in professional fees related to the Sheffield investigation, which totaled $1.4 million in Q2. We continue to anticipate that these costs will reduce significantly in the future.

So in summary, the momentum of our top-line performance continues and we feel extremely confident about continued growth in the second half of '08 and into '09. We believe that we're in the strongest competitive position in our corporate history. Our acquisitions have strengthened our business, resulting in a strategic platform that not only strengthens our core orthopedic focus, but also provides some diversification and wider customer reach.

We plan to build on strong operational platform that we have by further strategic and highly focused acquisitions, similar to those completed historically. We're always seeking ways to enhance our relationships with our customers, and with our commitment to achieving profitability at Sheffield in the fourth quarter of 2008, with the initiatives we've done, we feel that the company profitability will continue to ramp up of the remainder of the year, and we expect fourth quarter gross margins for the total company to be at 27%. And all of our forecasts are indicating that this momentum should continue into 2009.

So with that I'd like to hand over to Fred who will give you a more in-depth analysis of our financial performance.

Fred Hite

Thanks, Brian. We are again very pleased with our strong top-line performance for the quarter and look forward to further increasing our bottom-line in the second half of 2008. As Brian mentioned, we are encouraged with the amount of customer demand that we're experiencing across the board.

During the second quarter of 2008, we achieved record revenue of $109.8 million, up $40.1 million or 57.5% from the second quarter of 2007 revenue, of $69.7 million, and up 7.8% from the $101.9 reported in the first quarter of 2008. This includes revenue of $6 million from SSI and UCA, which we acquired in August of 2007, and $12.2 million from the New Bedford manufacturing facility which we acquired from DePuy Orthopedics in January of 2008.

Excluding acquisitions, revenues grew by $21.9 million during the second quarter, representing organic growth of 31.4% year-over-year. This growth is driven by many large projects from our major OEM customers, as well as continued demand for our business by all of our customers.

Second quarter 2008 revenue by business segment was as follows. Implant revenue was $31.2 million, up 14.8% from the second quarter 2007 revenue of $27.1 million. This implant revenue includes $2.2 million from the New Bedford acquisition. Instrument revenue was $45.1 million, up 191.8% from the second quarter 2007 revenue of $15.5 million. Instrument revenue includes $10 million from New Bedford, and $5.9 million from SSI. Excluding acquisitions, we achieved 88% organic growth. Case revenue was $23.4 million, up 24.7% from the second quarter 2007 revenue of $18.8 million, and this was all organic growth. Other revenue was $10.1 million, up 21.2% from the second quarter 2007, of $8.4 million, and this was also all organic growth.

Segmented by geography, second quarter 2008 revenue breaks down as follows. Revenue to the United States was $77.3 million, up 90.5% from the second quarter 2007. Revenue to the United Kingdom was up 20.3% to $14.7 million compared to the second quarter of '07. Revenue to Ireland was $8.4 million, up 13.2% compared to the second quarter of '07. And revenue to other foreign countries decreased 1% to $9.4 million, as second quarter 2007 was very strong.

Our top 10 customers represented 68.9% of our revenue for the second quarter 2008, up from 68.5% in 2007. Our two largest customers accounted for 32.6% and 10.4% of our second quarter 2008 revenue, while they accounted for 20.1% and 11.7% of our second quarter 2007 revenue. This increase was primarily as a result of the New Bedford acquisition.

Gross profit for the second quarter 2008 was $27.4 million, an 86.3% increase from the gross profits of $14.7 million in the second quarter of 2007. During the second quarter, Sheffield reported a negative gross profit of $2.1 million. The negative gross profit was larger than the first quarter amount of $400,000, due to decreased revenue.

During the first quarter, we focused on reducing past due orders, which increased revenue for the first three months of the year and generated $15.5 million of revenue. While the revenue in the second quarter was $13.8 million, the cost structure remained consistent, which generated a larger amount of negative gross profit.

With that being said, we do anticipate our ongoing initiatives to improve management oversight and operational performance, and to improve profitability during the second half of 2008 and into 2009. During July, we reduced headcount by over 60 people. We implemented corrective pricing and we took steps to renegotiate our material supply agreements.

Gross margin for the second quarter 2008 was 25.0%, compared to 21.1% for the second quarter of 2007 and 23.5% for the first quarter of 2008. Gross margin for the second quarter of 2008 was unfavorably impacted by negative gross margin incurred at Sheffield. However, I am very pleased to report that excluding Sheffield, the business achieved 30.8% gross margin as volume continued to increase in the second quarter. This compares to 28.4% gross margin in the first quarter of 2008, excluding Sheffield.

Second quarter 2008 selling, general and administrative expenses were $14.9 million, compared with second quarter 2007 SG&A of $8.0 million, and $14.4 million for the first quarter of 2008. The year-over-year increase was primarily driven by the inclusion of $2.5 million of ongoing expenses from our recent acquisitions, a $2.5 million increase in employee related expense, including non-cash stock-based compensation, and $1.4 million in professional fees and expenses incurred from the review of accounting irregularities at Sheffield operating unit. SG&A expenses were also higher due to the ongoing initiative to improve management oversight and operational performance in Sheffield.

Going forward, we still expect a reduction in professional fees related to the Sheffield investigation. However, this reduction will be offset by the Board's recent approval of performance based restricted stock which will increase expense by approximately $1 million per quarter. All of which is non-cash.

Operating income for the second quarter 2008 was $12.5 million, an 86.8% increase over operating income of $6.7 million for the second quarter of 2007. Income before taxes for the second quarter 2008 was $11.1 million, compared to $6.1 million for the second quarter of '07 and $5.8 million for the first quarter of '08.

Second quarter '08 includes a non-cash gain of $1.4 million from a valuation increase of the interest rate derivative due to the higher interest rates, compared to a non-cash gain of $700,000 in the second quarter of 2007.

Income tax expense for the second quarter 2008 was $4.9 million, compared to $1.4 million for the second quarter of 2007. Our overall corporate tax rate in the second quarter increased over the second quarter of 2007 due to a net loss at Sheffield which carries a lower tax rate than the US statutory rate. We also incurred a $700,000 increase to tax expense related to our ongoing assessment of reserves for uncertain tax positions as required by FASB FIN 48.

For the second quarter 2008, we reported net income of $6.2 million, or $0.18 per diluted share, compared to net income of $4.7 million or $0.13 per diluted share for the second quarter of 2007. Included in the second quarter 2008 results was the $1.4 million pretax or $0.03 per diluted share in professional fees and other expenses incurred in the connection with the review at Sheffield operating unit, and the effects of a net loss at the Sheffield operating unit of $3.2 million or $0.09 per diluted share. As we outlined in our press release, the wider net loss at Sheffield is due to decreased volume at the facility as compared to the first quarter of 2008, with a consistent cost structure.

The weighted average number of diluted shares outstanding during the second quarter of 2008 was 35,323,000. The FX impact during the second quarter was a positive $2.5 million on revenue, primarily driven by the Euro, and a positive net income of $300,000.

We're also very pleased to report that we're fully compliant with our latest bank covenants which allows a 50 basis point drop in our interest rate as well as access to an additional $25 million line of credit. In addition, we're reporting our second quarter results on time and we're planning to submit our 10-Q tomorrow which is in line with the required filing dates. We are now on a normal reporting schedule for our financials.

Now I will briefly discuss our guidance for the full-year 2008. Our guidance is based on current order flow and customer demand that we are seeing at our facilities. As it states in the press release, we are increasing our full-year revenue guidance to a range of $410 million to $420 million from the previously stated range of $395 million to $405 million. On the bottom-line, we are reaffirming our expected full-year 2008 earnings per share of between $0.75 and $0.77.

While we did increase the revenue based on our strong first half, the increased total year revenue does not convert to more EPS because of three main reasons. The first reason is Sheffield and the losses that were incurred primarily in the second quarter. The second reason is taxes, the $700,000 tax charge in the second quarter for our FIN 48 tax reserve and the increase in our effective tax rate driven by the mix between US versus Sheffield income. And the third is stock-based compensation, an increase in the non-cash restricted stock expense in the second half of the year.

I would also like to reiterate that we still expect exiting the fourth quarter of 2008, a gross margin of 27%. The increase from the 25% that we saw in the second quarter will come from improved operational and financial performance at our Sheffield facility as we focus on reaching profitability by the fourth quarter of 2008.

I will now turn the call back over to Brian.

Brian Moore

Thanks, Fred. Well, first of all, it's a very good job by Fred, his team, the financial advisors who support us to have got us back on schedule. I'm told that that is a pretty impressive timetable we adhered to, considering the gravity of the Sheffield situation so that's a big well done. And with that, I'd like to hand over to any questions, please.

Question-and-Answer Session


(Operator instructions) And our first question will come from the line of Ben Andrew with William Blair. Please proceed.

Ben Andrew – William Blair

Good morning, Brian, and just wanted to ask a couple of questions about the booking activities. You mentioned that you're seeing good activity out into 2009. Is this a typical pattern when you're in a kind of more bullish cycle to see activity out six to 12 months or is this unusual?

Brian Moore

It's fairly typical, what tends to happen, Ben, is that as the activity levels increase, capacity gets filled, so customers give you more visibility because that effectively reserving downstream capacity to ensure they get their products. So it's fairly typical. And the other thing that's fairly typical when you're on a rising market is that every time we do a forecast, you tend to increase it. And when we're in a fairly strong run earlier on about four years ago, we did that for several months, one after the other, and that's been the characteristic for the last several months as well.

Ben Andrew – William Blair

And maybe a quick question for Fred on the gross margin. The 27 seems conservative, given that the core business was north of 30%. I know Sheffield is certainly having an impact. Do you think Sheffield gets back to even half that 30% by the end of the year or are we looking at a longer process and that's why the guidance at that level?

Brian Moore

Very pleased obviously with the 30.8% we saw in the second quarter, increased volume with the volume leverage helps us plus some increased efficiencies that we saw across the US site. The Sheffield situation there probably won't – I wouldn't think would be back to that 15% by year-end, so if you have them at slightly profitable in the fourth quarter, with the business that same 30.8 type of a number, that gets us to that 27 type of a range for the end of the year, and as Brian mentioned, we've got aggressive actions that are being implemented as we speak and have been implemented in the last four weeks since we talked last time. But really, the efficiencies that are going to get us from that breakeven back to a reasonable profitability level is going to come from efficiencies from an ERP system that we're putting in place in the second half of this year and we're really not going to see the benefits of that until out into 2009. So it get profitable here by the end of this year and then get it back to a reasonable profitability level in 2009.

Ben Andrew – William Blair

That makes sense. Brian, maybe talk a little bit about the acquisition environment and where you see your opportunities and what sort of capacity you have now and what we might look for the, larger, smaller, core, non core?

Brian Moore

Our main focus is focused on niche and our number one target at the moment is in the area of high precision spinal sort of activities. As we discussed with you, Ben, have a sale that we're starting internally to do high precision work in Warsaw, but we are looking for an acquisition that we can use as a platform to not only develop further existing internals, but also address a wider market and some of our larger customers are encouraging us to do that, so we feel confident that with the right targeted acquisition to help us, we could grow quite quickly in the spine area. Apart from that, we don't look at things just for capacity reasons and our focus will be on a size that is not too big to be extremely risky but large enough to give us some synergies and benefits and not run the risk of having to look after it all the time. So number one focus is high precision and spine and we're now back on the circuit, if you like. We had a little step out because of Sheffield and the banking arrangements and we feel reasonably confident we'll be back doing acquisitions in a matter of months.

Ben Andrew – William Blair

And then and again, your capacity is – is it $100 million, $50million types of opportunities in terms of additional debts you could take on for such activities?

Fred Hite

Yes, we've got – as tough as the banking environment is right now, we have great relationships with the lenders and there's money to be lent to do these types of acquisitions. So we're pretty confident in that.

Ben Andrew – William Blair

And last question, the instrument growth, 88% organic, that's remarkable. Can you talk a little bit more about where that's coming from specifically and how sustainable – obviously not that rate, but where you see that settling in over the next 12, 18 hospitals?

Brian Moore

First of all it is remarkable. Any of you understand operational sort of performance will take your hats off to our team that has managed to get to an 88% year-on-year increase and there's some pretty heroic people in our company that have done that. So that's a big thank you to them. It's mainly coming from launches and launch activities and one of the strengths of this business is that we can respond and deal with that and that means customers come to us and we are not seeing any backing off of that, though being sensitive and cautious there will come a time, of course, when launch activities reduce and this is why we're doing all the other things in the business to ensure that when and if that slows down, the impact on total business levels will not be too dramatic.

Fred Hite

I'd also add that, that's half of it. The other half of it is just returning to a normal order pattern and in the second quarter of last year, as we talk, most of the customers were living off of their inventories and so we get a double benefit here. We get a normal return of the core demand and then we also have the launches on top of that which were very weak in the second quarter of last year. And to Brian's point, it's a good thing that we kept the capacity in place, which enabled us to respond to this level of demand and increase revenues like that. So little painful during the time, as margins got squeezed, but you see the benefit of it now as we're able to respond.

Ben Andrew – William Blair

And is there any pattern to be read as from instruments or cases for that matter in terms of a leading indicator to other parts of the business or is this again just that part of the business is doing very well because of the launches?

Brian Moore

It's not entirely launches. We have two driving forces in our business, one is procedure growth which is linked to demographics, number of elective surgeries, aging population, and that's correlated to the depending which research you choose to accept, between 8% and 12% 13% and launches drive the peek on instruments, if you like, the swings from – I would have said plus 20 to minus 20, but now it's plus 88% to minus 20 but within there, there like parts and there are instrument sets that are replaced and used. And with our activities, instrumentation areas like SSI and some of the more strategic areas in New Bedford, we feel that we've got a bit more strength in terms of just being exposed to the whims of entirely launch-driven activity.

Ben Andrew – William Blair

Great. Thank you.


And our next question will come from the line of Michael Matson with Wachovia Capital Markets. Please proceed.

Michael Matson – Wachovia

Hi. I guess I was just – I know you kind of answered this in the question that you just addressed, but, just looking at the orthopedics market, by my math it looks like the hip and knee market has slowed some from last year. So I was wondering if you're hearing anything at all from any of the bigger recon companies out there about maybe pulling back a little from purchasing a lot of implants and instrument sets and things like that in any of your discussions with them, because last time it seemed like your slowdown was really precipitated by a slowdown at your customers into the mid-single digits and now I think we're seeing maybe growth slightly ahead of that, but not too much ahead of that.

Brian Moore

Well, surprisingly we're not seeing any adverse reactions, comments, slowdown from major customers and if you characterize what happened to Symmetry last time, it was almost entirely driven by the large OEM's inventory corrections. It wasn't a function of the industry slowing up or anything like that. It was just that the large OEMs had a bunch of inventory and then they suddenly stopped and had a year off, basically, while they burnt off inventory. Fred – he monitors inventory levels in customers and it's not a perfect correlation but it does correlate to what could happen and what we're seeing is that the build-up is nowhere near the levels that it was when we had the issues last time. So we understand the question, Mike, as sensible. Hopefully pragmatic businessmen, we ask our operating teams all the time, are there any signs of a slow-up, are you ready for it, what's happening and we're constantly getting back go, go, go, so, all the signs are that it's very good out there for the foreseeable future.

Michael Matson – Wachovia

And then just with regards to modeling the second half of the year, I understand you updated your guidance, but just seasonality, Q3 versus Q4, should we expect flat revenue in Q3, up or down, I guess?

Brian Moore

Well, what we've reflected in our guidance is I won't say it's conservative but it's fairly flat and the area that we always have a concern about, but we've got nothing to base that concern on so far, is Q4, because in the past the large OEMs have used Q4 to do inventory corrections and, again, we've been talking to them about is that likely to happen this year and one in fact said no, we're actually bringing stuff forward from next year. So we're just being a bit careful because we see the Q4 effect as random and while we can touch and see our guidance at the moment, we don't want to be too bullish until we can see Q4 starting to be forming in a sort of a 95, 100% level.

Michael Matson – Wachovia

But for modeling purposes, flat revenue for Q3 would be a reasonable assumption?

Brian Moore


Michael Matson – Wachovia

And then question for Fred, I know you talked a little bit about the tax rate hit that you guys are taking. Can you give us an actual tax rate guidance for the remainder of the year for the full year?

Fred Hite

Yes, it's – the effective tax rate will probably be closer to 35% for the rest of the year, just on a go-forward basis, until we can get the mix shift a little bit here with Sheffield. While you ask, the one other thing that is impacting us that I failed to mention is that they have not reenacted the R&D tax credit that was in place last year and so while we anticipate that being reenacted, and that would help us in the fourth quarter, that's not in the effective tax rate at this time because it's – and it's not being booked as we go throughout the year because it's not in place. So that would help us a little bit in the fourth quarter if that gets reenacted.

Michael Matson – Wachovia

And then the restricted stock in terms of where that shows up on the P&L, I assume that would be in SG&A?

Fred Hite

Yes, that's right.

Michael Matson – Wachovia

And then just one final question. On the ERP system, what is the exact timing of that and I know that those things can be kind of expensive so is that baked into your guidance and, you know, is there a risk that next year that could be $0.05 or $0.10 of EPS or something like that?

Fred Hite

No, it is the same system that we have in almost all of our facilities, so we have a lot of experience with it and we're leveraging that experience to help install it and get the thing up and running. It will be in place and functional before the early – probably the early to mid-part of the fourth quarter and the expense of that is not – a lot of it is just internal cost. The software itself will be capitalized and amortized over time so it won't be anything like a $0.05 EPS next year.

Michael Matson – Wachovia

That's all I've got. Thank you.

Fred Hite

Thanks, Mike.

Brian Moore

Thank you, Mike.


(Operator instructions) Our next question will come from the line of Eugene Paskov [ph] with Siddique [ph]. Please proceed.

Eugene Paskov – Siddique

Hi, guys, great quarter. Just a quick question for you. I don't know if I missed this. How much did FX contribute in the quarter?

Fred Hite

Yes, so revenue was benefited by $2.8 million and net income was $300,000 of a benefit and that was primarily driven by the Euro.

Eugene Paskov – Siddique

Thanks very much.

Brian Moore


Fred Hite

Thank you.


And at this time, we have no questions in queue. I would now like to turn the conference back over to Mr. Brian Moore for closing remarks.

Brian Moore

Thank you, operator. Really just close with a couple of thank yous. Our business is doing well at the moment. Everybody is very busy. I just like to take the opportunity to thank all of our worldwide team for their efforts and support, which is great. Everyone's doing a tremendous job. And secondly, just thank our investors, we meet regularly with most of you guys and we appreciate your support and hopefully we can look forward to a few more good quarters of talking to you. So thank you very much and appreciate everybody's support.


Thank you for your participation in today's conference. This concludes your presentation. You may now disconnect. Good day.

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