BIOLASE, Inc.
Q4 2015 Earnings Call Transcript

Published: 10 Mar 2016

[Operator:]

Ladies and gentlemen, thank you for standing by, and welcome to the BIOLASE 2015 Fourth Quarter and Year End Results Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the call will be open for questions. [Operator Instructions] For the benefit of those who maybe listening to the conference call replay, this call was held and recorded on March 09, 2016. I would now like to turn the conference over to Rene Caron of DresnerAllenCaron. Rene, please go ahead.

[Rene Caron:]

Ladies and gentlemen, thank you for standing by, and welcome to the BIOLASE 2015 Third Quarter and Nine Months Results Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the call will be open up for questions. [Operator Instructions] For the benefit of those who maybe listening to the conference call replay, this call was held and recorded on November 4, 2015. I would now like to turn the conference over to Rene Caron of DresnerAllenCaron. Rene, please go ahead.

[Rene Caron:]

Thank you. Good afternoon, everyone and I too would like to welcome you to the BIOLASE conference call to discuss the results for its fourth quarter and year ended December 31, 2015. On the call today are BIOLASE's President and CEO, Harold Flynn; and the Company's Chief Financial Officer David Dreyer. Harold will begin the call with a brief discussion and introduction, discuss the company's strategy for growth and provide an overview of the progress being made in a number of its key strategic initiatives. David will then review the company's financial results and provide additional background and color on those results, after which we will open the call up for your questions. Please be aware that a number of forward-looking statements will be made during this presentation, including forward-looking statements regarding the company's strategic initiatives and financial performance. Forward-looking statements are any statements that are not historical facts and can be identified by words and phrases including, will, may, believe, estimate, project, plan and similar words and phrases. These forward-looking statements are based on BIOLASE's current expectations and are subject to a variety of risks and uncertainties that could cause the company's actual results to differ materially from the statements contained in this presentation. These risk factors are discussed in the company's filings with the Securities and Exchange Commission. BIOLASE cautions you that any forward-looking information provided is not a guarantee of future performance. Any forward-looking statements represent the company's view only as of today, and should not be relied upon as representing our views as of any subsequent date. A replay of this conference call will be available on the BIOLASE's website shortly after the completion of today's call. When listening to this call, please refer to the news release issued earlier today announcing the company's results for its fourth quarter and year ended December 31, 2015. If you do not have a copy of the news release, it is available in the Investors Section on the BIOLASE website at www.biolase.com. The company's results for the year ended December 31, 2015 can also be found in the company's Annual Report on Form 10-K, which the company plans to file with the Securities and Exchange Commission on or about March 11, 2016. With that, I'm pleased to turn the call over to the BIOLASE's President and CEO, Harold Flynn. Harold?

[Harold Flynn:]

Thank you, Rene and thank you all for joining us on the call this afternoon. I'm pleased to begin today by reporting that we closed out 2015 with a strong fourth quarter. Unit sales of our flagship WaterLase iPlus during the quarter were the highest in three years which is even more noteworthy as we also achieved the highest U.S. quarterly average selling price of the year. Even though the dental capital equipment markets are seasonally the strongest in the fourth quarter, and BIOLASE sales follow a similar pattern, we are still quite encouraged by the improved sales execution and the resulting growth in our core laser franchise. We continue to strengthen our U.S. and international sales teams and at the same time we improved our demand generation process by implementing a constant and co-ordinated program of marketing and promotional activities and events supported by regular follow up. We need to continue the hard work ahead of us to sustain year-over-year sales growth even in the light of quarterly seasonality and year-over-year comparison differences. We also made real progress towards the continuing transformation of BIOLASE and key parts of our business, including our active product development pipeline, our customer education and support services and our overall commercial execution. A couple of recent important accomplishments include establishing a new multiyear strategic plan and an integrated 2016 operating plan. It’s important to note that the initiatives and programs we are discussing today are key elements of those plans. We’ve created a DPL [ph] product roadmap for research; engineering and commercialization that we believe will generate incremental and new revenue streams that will drive sustained market and company growth over the next several years. Our product pipeline is leveraging internal and external capabilities, resources and opportunities to develop and deliver technologically advanced laser systems that will have a meaningful impact on the dental market place. As an innovator and engineer myself, I am taking an active and direct role in new product development and introduction. We continue to focus on innovations built to enhance and upgrade existing products, including apps that will expand and improve the capabilities of our current dental laser systems as well as develop new systems that will expand the all-tissue dental laser market and BIOLASE’s market share within it. I’m very optimistic about our new products given that recent market research we conducted indicated that our next internally developed all-tissue system will deliver a value proposition that is very attractive to key segments and will allow greater penetration and expand the market. A good example of an important value added upgrade is the new app we developed for the WaterLase iPlus 2.0 called the REPAIR Implant Protocol which we introduced last November. The REPAIR Implant app provides the clinical protocol to help effectively manage Peri-Implantitis, a destructive inflammation affecting soft and hard tissues that surround dental implants which is a growing problem in dentistry. Er,Cr

[David Dreyer:]

Well, thank you Harold. My review this afternoon will focus on five key financial areas revenue, gross margins, operating expenses, profitability and liquidity. Overall our fourth quarter 2015 financial results met our internal operating plan objectives for sales of $14.5 million growing 10% year-over-year; gross profit of $5.7 million was 39% of revenue and operating expenses of $7.9 million were down 11% year-over-year. Full year revenue of $48.5 million grew 2% year-over-year, gross profit of $16 million was up 33% of revenue and operating expenses of $35.9 million remained relatively unchanged from last year’s pending level. Full year results ultimately reflected a year turnaround efforts settling past issues, rebuilding and investing in our future including the strengthening and violating [ph] its existing product quality, rebuilding our customer facing organizations worldwide and investing in developing new and improved products. As previously noted by Harold and a point that I’d like to reiterate is that our fourth quarter unit sales at WaterLase iPlus were the highest they have been three years both globally and in the U.S. and in the U.S. we also achieved our highest quarterly average selling prices of the year 2015 during the fourth quarter. We continue to focus on building our worldwide leadership position in dental lasers during the fourth quarter with net revenue increasing $1.3 million compared to the fourth quarter of 2014. The growth was driven by quarter over quarter increases of $1.7 million in worldwide sales of WaterLase laser systems offset by a 400,000 decline in sales of imaging products. Net revenue for the full year increased 2% compared to 2014 with domestic revenues contributing $29.4 million with 61% of net revenue compared to 63% of net revenue for 2014. International revenues for the year were $19 million or 39% of net revenue compared to 37% of net revenue in 2014. The year-over-year increase in net revenue resulted from increases in both domestic and international laser system, consumables and license fees and royalty revenue partially offset by decreases in imaging systems and services revenue. WaterLase systems net revenue for the year was up approximately $3 million year-over-year with growth of 19% in the U.S. and 12% internationally. As can be seen by these growth rates in our WaterLase systems, we began to realize benefits from changes in our selling process that were implemented in the later part of 2015. Imaging net revenues decreased by approximately $2 million as compared to 2014. The quarter-over-quarter and the year-over-year declines in imaging systems revenue were due to our increased focus on our core laser system product lines. Consumables and other net revenue which includes products like disposable tips increased approximately 5% as compared to 2014. This increase was primarily a result of auxiliary sales to our growing laser customer base. Services net revenue which consist primarily of extended warranty service contracts and advanced training programs increased 5% during the fourth quarter but decreased 10% from the full year as compared to 2014, namely due to reporting of 700,000 favorable adjustment in 2014 relating to a change of accounting estimate for reporting the first service revenues. Gross margin for the fourth quarter was 39% compared to 38.6% in 2014 and 30.1% in the third quarter of 2015. Although the gross margin improvement was modest when compared to the prior year quarter, it was significant compared to the third quarter of 2015 due to a larger revenue base allowing the company to absorb more of its relatively fixed manufacturing and service overhead cost over the larger sales base. We believe that BIOLASE’s gross margin will continue to improve going forward as the cost necessary to maintain manufacturing and service operations of worldwide business will be more effectively absorbed over higher sales. For the full year gross margin was 32.9% compared with 38.1% for 2014. The decrease was primarily due to increased bundling and other promotional arrangements related to the launches of Epic X and WaterLase iPlus 2.0 earlier this year along with an increased concentration of our sales being international, which typically has lower pricing along with currency exposure. With that said, we believe the solid increase in gross margin experienced in the recent fourth quarter bodes well for our future gross margin. Total operating expenses in the fourth quarter decline 11% as compared to 2014. The quarter-over-quarter decrease was primarily driven by a $1.7 million reduction pertaining to a 2015 legal matter. Operating expenses for the year was $35.9 million, a small decrease of approximately $248,000 as compared to $36.1 million for 2014. When you look at the net spending between 2015 and the prior year, our G&A spending was lower by $4.6 million, mostly from a $5.7 million year-over-year decrease in legal expenses during 2015. However, we had increase spending in engineering and development of $2.7 million driven by increased product development spending on both new and interesting products. Sales and marketing expenses also increased by $2.3 million driven primarily from a $1.9 million of higher spending on commercial customer facing activities related to generating sales. Net loss for the fourth quarter was $2.5 million or $0.04 loss per share as compared to a net loss of $4.1 million or $0.08 loss per share for the fourth quarter 2014. The year-over-year decline in net loss was primarily due to the increased in sales and the decrease in operating expenses. Net loss for the full year was $20.3 million or a $0.35 loss per share, compared to a net loss of $18.9 million or a $0.45 loss per share for 2014. The increase in net loss in 2015 was primarily due to our lower gross margin rate as was reflected in the year-over-year declines we experienced in gross margins during the first three quarters of 2015. As Dreyer indicated in his opening comments we also continue to concentrate on improving cash flow during the quarter, and as anticipated we began to realize benefits from our cash flow and cost reduction measures implemented in the third quarter of 2015. At December 31, 2015, BIOLASE had approximately $19.7 million in working capital, $11.9 million in cash and restricted cash equivalents and $8.9 million in net account receivable. The company’s total cash and cash equivalents of $11.9 million reflected a $3.5 million of cash use during the fourth quarter which was a reduction and cash used compared to the $4.7 million used during the third quarter of 2015. Cash management continues to be a top priority for the company and we were pleased that our cash used in operating activities during the fourth quarter was $2.8 million which was our lowest level years during the past six quarters. While the company ended up using $3.5 million of cash during the fourth quarter, this amount also included paying out $1.5 million settlement. While we’re making progress managing our cash flow, we’re also very focused on developing new product which will require us to fund commercial launches in the future. As a result, we believe it’s prudent to ensure adequate liquidity going forward and our seeking to obtain a modest level of credit financing in order to help bridge our short term cash needs until we achieve cash flow neutrality. With that, I’d like to turn the call over to the operator for questions. Operator?

[Operator:]

[Operator Instructions] During the question and answer section of the call, we will limit each caller to one question and then one follow-up question. Callers are welcome to re-enter the queue to ask one additional question and one additional follow-up question as time permits. We will now pause a moment as we assemble the question queue. Our first question comes from Ed Woo with Ascendiant Capital. Please state your question.

[Ed Woo:]

Yes. Thank you for taking my question and congratulations on the quarter. You guys obviously made some very solid improvement, do you feel that going forward you should continue to show improvement across the board throughout 2016?

[Harold Flynn:]

Hi, Ed. Thanks very much for the question. Yes, we are pleased with the quarter and the way we demonstrated that we know some of the levers that we need to pull to execute commercially better, while still making some progress in our development areas and our product pipeline. So I think over the course of 2016 I would look to see additional growth and improvement as we stated during the call. But obviously we do have seasonality in the dental industry and the capital market, so we like to make sure that we focus on growth over the sustained period and make sure that we’re doing the hard work I mentioned earlier in pulling those levers effectively and investing in the right places that will show the returns we saw in the fourth quarter.

[Ed Woo:]

Great. In terms of where you see yourself right now, do you think that you guys are abnormal to restructuring and just focusing on just like you said the priority areas that you have or do you feel there is still areas that were -- are still part of the transitioning?

[Harold Flynn:]

I think if I understand your question kind of the organizational and structural elements, we did our best to really cut as deeply ones in my experience its far better to do the hard work once than have kind of a debt of a thousand cuts and continuing to restructure. So, we’re pretty pleased if you will with the results of that particular organizational structure and we wouldn’t expect to do any massive thing. It’s really focusing on this growth initiative and to leveraging of things like the lead generation pipeline and then as the new product introduction start that’s when we really should see pick up in speed. So, I don’t anticipate at this time any massive restructuring that would be noteworthy as the one we completed just after I arrived in September.

[Ed Woo:]

Great. One follow-up question is, so the run rate that we saw in the first one -- its definitely operating expense. Do you feel that that’s a pretty good run rate?

[Harold Flynn:]

I think I’ll ask David to comment after I start. We are noting that we picked up a lot of investments in our research and development areas, so it’s a little hard to run rate our operating expenses specifically and have that be a current baseline. But that’s part of as we look at funding the launches of the output of those product development efforts. I think it would be another place where you may see some movements, so it’s not easily run rated, I don’t know David, any addition to that.

[David Dreyer:]

I would agree. I mean, we’ve obviously change the mix of the operating expenses and we’re investing clearly in product development and we’ve invested in our customer facing activities. So that investments would probably slowdown a little bit as we achieve our goal. And as you’re seeing our G&A is going down considerably. Clearly we resolved our legal issues. So I think the annual rate isn’t the best indicator, but where we finished up in the fourth quarter is probably a better indicator, the kind of rates that we’re going to have going forward, but again we are investing in product development, so that’s going to continue certainly going forward.

[Ed Woo:]

Great. Thanks for the color. And I wish you guys best of luck. Thank you.

[Harold Flynn:]

Thanks very much, Ed.

[Operator:]

Our next question comes from Paul Bornstein with Black Diamond. Please state your questions.

[Paul Bornstein:]

Yes. I have a question on sales. Good day here to finally get your expenses in line and start to make a little progress and been a years of absolutely no progress. I’m just curious you started announcing some partnership on selling products. Have they – where do they stand? How quickly are they going to ramp-up versus another just announcement and they’ll follow through to generate a lot more sales beyond your kind of sale force that seem to be making a little progress in the dental market?

[Harold Flynn:]

Sorry, Paul, I do just want to make sure that I understand your question, are you referencing the IPG announcement.

[Paul Bornstein:]

Yes.

[Harold Flynn:]

Yes.

[Paul Bornstein:]

Yes. I still mean to have a couple more lined up, so I’m just wondering how do you get to that point? Are you really focusing on, what’s the organization can do and how quickly we’ll see some results from your spending time on the partnership?

[Harold Flynn:]

So, let me clarify, the IPG partnership is a development and distribution arrangement wherein we would expect to sell products as a result of that collaboration through our dental channels. If you’re referring to some of the opportunities in external markets or things outside of dental, I continue to work on those, but we really had to spend some time focusing the organizations efforts on getting the pretty big opportunity that’s still available in dental to actually start to be realized by the organization. So I want to make sure that I’m not mixing up a couple of different topics here. So the IPG we would expect to see results by commercializing at least one product during the course of 2016 that would have an impact, a positive impact on our sales. We also expect to be generating new product revenue from internally developed products and I’m not at the point where I’m making statements that we can’t support or backup what we think would be material in those other markets and I would say it’s too early to comment on any of the efforts that I’m making to look into alternative markets like veterinary, ear, nose and throat and/or dermatologic and plastic surgery.

[Paul Bornstein:]

Okay. All right. I know you like you played forward but then trying to get that movement, but you don’t want to lose some of the R&D efforts that’s already been put into the company and there’s been no modifying results from those….

[Harold Flynn:]

Yes, to build on that point somewhat there is intellectual property in ophthalmic and other things that have been discussed in previous years, but it’s important for us and it was important for me coming into stabilize and get the primary market wherein moving forward and creating meaningful sales growth and getting to cash neutrality while we investigate some of these other opportunities independently. And we are not financed at a level to build out channels or invest a great deal in sales and marketing in those areas, so it would be through partners and there’s nothing that we can publicly discuss at this time relative to anybody in any of those alternative channels.

[Paul Bornstein:]

Okay, all right. Thank you.

[Harold Flynn:]

You’re welcome. Thanks for the question.

[Operator:]

[Operator Instructions] Our next question comes from Lenny Bracken with Bracken Capital. Please state your question.

[Lenny Bracken:]

Hi guys. Just to follow on the IPG relationship, what is the ultimate goal of whatever product is going to be consummated by the end of the year, meaning is it supposed to target new markets? Is it supposed to be going into existing markets and what’s the overall goal? Is it to leverage new technology, to get to do cost levels for the dentists and performance or just can you outline those different things?

[Harold Flynn:]

Sure Lenny thanks for the question. I think there’s a little bit of all of the above in there. But take it from a high level as we announced, we have several projects that we are running simultaneously with IPG. Some of those may focus on technologies and components that will increase the capability, possibly reduce the cost or provide new indications in our core markets in dental. It also can be leveraging of some of their technologies that we can introduce into the dental area to achieve new indications more specifically and more of a distribution arrangement. So the projects and the scope of what we are doing with IPG has several different facets. I would characterize some of that as creating new markets that don’t exist today with novel indications, and I would characterize some of it as building out additional peers of value and price peers inside the ways and market in both our diode markets as well as our all-tissue markets. So it’s a bit of a complex answer, but hopefully I can touch on that maybe and if you have a follow up I can comment a little bit more.

[Lenny Bracken:]

Yes in one of the debates way when a few of your predecessors ago and I had conversations was the existing technology has limitations on cost because of the way it was manufactured, and I’m just trying to get out whether the use of semiconductor base lasers would resolve that. And I mean within a reasonable timeframe whether initially with the product coming out in 2016 or something in 2017, so I’m just trying to get at, because I know semiconductor basis -- the semiconductor based lasers, diode lasers have their limitations and they don’t – they’re not really on a performance basis up to snuff with your iPlus products using your wavelength, that’s my hope but I’m trying to -- pressure on my mind.

[Harold Flynn:]

Yes. And I can appreciate the complexity, unfortunately because of where we are in the products life cycles, I can’t be too detail without our plans because of the very competitively sensitive. But I would answer this way that our demonstration in Q4 of actually getting increased price with increase volumes compared to the last 12 quarters, demonstrates to me that we don’t only need lower price iPlus technology. It’s a lot about the commercial execution, the value proposition and being able to educate and train the user on the capabilities and the patient reported outcomes so they can get with those sorts of technologies. And that’s what I refer to when saying honing our value proposition which we’re seeing get some traction. There’s still ways to go to make sure that that’s crisp. But it is part of the improvement that we saw in the fourth quarter was that Lead Generation, that level of interest. So I’m not a person that says, we need an ultra cheap iPlus in order to significantly expand penetration in the market, it’s not only about that.

[Lenny Bracken:]

No, I didn’t mean to employ that but…

[Harold Flynn:]

Okay.

[Lenny Bracken:]

I mean just keep in contact, its 10% growth and 40% growth and all I’m trying to get at is the new technology that you’re going to work on, going to improve the price performance equation, which is the specific issue that I’m trying to getting at. It’s the level of performance with the given level of price and overall improving the value of the product, so dentist can say, hey at the price you’re selling it, it does a lot more than what I thought and I’m going to start buying it and thus grow your sales 10% to 40%. I think that’s always been the company’s problem and I’m trying to understand whether you guys have solved it with the new relationship. That’s all.

[Harold Flynn:]

I’d say, we’ll contribute some part of those several projects will contribute to that end.

[Lenny Bracken:]

Okay. That’s good to hear. And follow-up, I apologize for asking.

[Harold Flynn:]

No worries. Thank you.

[Operator:]

[Operator Instructions] Our next question comes from Brooks O’Neil with Wade Oaks [ph] Investor Relations. Please stat your question.

[Unidentified Analyst:]

Good morning or good afternoon guys. I was not been here since you have been there a few months. And my sense has always been that penetration of dental lasers within the dental industry is still in the, let’s call it early adopter phase. Maybe you could give us an update on what you observed, learned about the industry since you’ve been part of the company therefore help you achieve much greater penetration within the overall dental marketplace?

[Harold Flynn:]

Hi, Brooks. Thanks very much for your question. I had the opportunity to visit with the number of current customers as well as potential customers and in tradeshows around the world, including the world’s largest tradeshow in the Middle East in Dubai during the month of February and lot of the large tradeshows, the Greater New York dental show and recently the Chicago Midwinter. So you see at that time the entire industry if you will, the competitors are there, the customer are there, and I would characterize the industry is still having a lot of opportunities that based upon education and specifically understanding what lasers do and what their applications are. If you take dermatology as an example, dermatologists understand there are different lasers for different applications and they have different strength and weaknesses or shortcoming. The dental laser community and awareness is under developed relative to that and that’s part of the opportunity we have in working with not only out commercial organization, but with organizations like the Academy of Laser Dentistry and others to make sure that people are quite aware. What I’m very pleased about our – what I’m optimistic about is that when across the versatility, the tissue management and everything that’s required for a dental professional. If you well educated, our products become an obvious choice. And even at the value propositions, even at the prices that we have today. And we saw some of that first hand at the Chicago Midwinter, where I had a clinician come up and say, I’m working for solution to peri-implantitis. And I’m getting a lot of mix messages. And it was clear that the information wasn’t as readily available and that’s something we can help with and as they become more educated, they literally got all the way through to the end and ask for representative to come, visit him in his clinic to talk about the iPlus. So, the observations are that there is a good amount of runway when people understand the patients reported outcome impact of our procedures, the minimally invasive nature of it. And the ability for our technology to put in hands of not only specialist but general practitioners that look to develop themselves the capability to manage dental disease at an earlier stage with better effect. It’s eye-opening. I think the industry to-date has had a lot of marketing programs and I’d say we were even subject to it in the early days of laser, there are no sharp, no pain, no drill, but it’s really thinking through the procedures that make a real difference to patients and the patient outcome and the patient experience and pain, but at the same time allows the more procedures to be done at a better and earlier stage of the disease progression, so that everybody benefits. The patient benefits, the doctor benefits, and actually the insurance companies benefit by having more smaller, less costly procedures performed before they get to the large periodontal surgery that as an example. So I think there’s a lot of things that I’ve been able to learn, but familiar [ph] only with the dental business previously gave me quite a head start especially with respect to the impact and the growing important of peri-implantitis and the fact that people have periodontal disease which usually leads to tooth root and getting implant, the periodontal disease and the management of their oral hygiene doesn’t fundamentally change just because you put a titanium screw in the jaw. So there are lot of things there that I think bode quite well for laser dentistry to continue to improve. On top of that, the endodontic procedures and sterilization, the restored procedures and the number of other areas where are very eversible technology play quite well. So, that’s really part of what I’m talking about our honing our value proposition and really educating the larger masses to get beyond that early adopter phase that’s been discuss, and really move within to everyday practice and that’s where we’re focused on in our commercial execution as well as in our product development areas to make things more intuitive, to make things that are self-supporting and sustaining with user interfaces and resources for training and reinforcement on the procedures that are build in. So, I’ll stop there. Sorry.

[Unidentified Analyst:]

If I were to summarize that and I’m trying to put phrases in the form of a question, if I’m hearing you correctly, you haven’t learned anything that discouraged you about the opportunity in the dental laser market and in fact it’s been pretty reinforcing over the past few months in terms of the opportunity you have?

[Harold Flynn:]

Yes, so I am more encouraged today then I was when I started I think in our first own [ph] call you or one of your colleagues may have asked about things in the dental industry and I said I’d be able to answer in a couple of quarters but I am very encouraged about the prospects for the future and if we look at the United States our estimates are somewhere between let’s call it 8% and 10% penetration. Outside of the United States penetration still underperforms, and that’s a key area where I have to turn a lot of attention to take advantage of that opportunity outside of the United States, but that’s probably closer to 5 %. So blended, it’s in that call it sevenish percent penetration by our internal estimates. And I believe that something that the practice of the future will have in a very high percentage of clinics and we’ve got to do the work to have people understand that and then ultimately have patients understand that they need to seek dentists with laser capabilities specifically all-tissue laser capabilities. We’ve got to get out of somebody buying a $2000 pen laser and saying, I’m a laser dentist. And that’s part of what’s happening in the marketing of the dental practices themselves, so I think that we can help with that in some of our programs and finding a true laser dentist and the like.

[Unidentified Analyst:]

Okay, I think that’s it.

[Operator:]

[Operator Instructions] Thank you ladies and gentlemen, this concludes the question and answer session. I would now like to turn the conference back over to Mr. Flynn for closing remarks.

[Harold Flynn:]

Thank you very much. I’ll conclude today by saying we’re happy with the strong finish we had in 2015 and the progress we’ve made towards the transformation of BIOLASE. We completed a thorough analysis of the business that led to cost cutting, streamlining our operations and developed a strategic plan that I believe will deliver value to all of our key stakeholders, patients, clinicians, employees and ultimately the shareholders. We believe, we’ve taken the right initial steps to be successful recognizing that the key is going forward or they continue to innovate, execute and focus on serving our customers. I am very excited about what we are accomplishing and for the opportunity we have to dramatically increase our penetration and the size of the all-tissue dental laser market. I’m more convinced now than ever that we are on the right track and that 2016 will be the beginning of long term sustainable top and bottom line growth. Thank you for joining us on our call this afternoon, and I look forward to speaking with you again when we announce our results and discuss our progress for the first quarter of 2016. Have a great day. Thank you.