Misonix, Inc.
Q3 2020 Earnings Call Transcript

Published: 12 May 2020

[Operator:]

Good day and welcome to the Misonix Third Quarter Fiscal Year 2020 Earnings Call. Today’s conference is being recorded.At this time, I’d like to turn the conference over to Mr. Norberto Aja, Investor Relations. Please go ahead, sir.

[Norberto Aja:]

Thank you, operator, and good afternoon, everyone. Thank you for joining the Misonix fiscal 2020 third quarter conference call. We’ll get started in just a minute with management’s comments. Before doing so, let me take a minute to read the safe harbor disclosure language.Today’s call and webcast contain forward-looking statements within the meaning of the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995 and can be identified by words such as anticipate, believe, estimate, expect, future, likely, may, should, will and other similar references to future periods. Examples of forward-looking statements include statements regarding guidance relating to our financial results.Forward-looking statements are neither historical facts nor assurance of future performance. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances. Therefore, you should not rely on any of these forward-looking statements. And the company undertakes no obligation to publicly update any forward-looking statements that may be made from time to time, whether as a result of new information, future developments or otherwise.Today’s call and webcast will include non-GAAP financial measures within the meaning of the SEC Regulation G. When required, a reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in today’s press release as well as in the company’s website.With that, I’d now like to turn the call over to Mr. Stavros Vizirgianakis, President and CEO of Misonix. Please go ahead.

[Stavros Vizirgianakis:]

Thank you, Norberto, and good afternoon, everyone. Thank you for joining us on the call today to review our fiscal 2020 third quarter results. Joining me on the call is Joe Dwyer, our Chief Financial Officer.Before commenting on the quarter’s performance, I want to start by recognizing that this is an extremely challenging time for all of us. And our thoughts are with those most affected by COVID-19, in particular, those whose health has been impacted by the pandemic, and those on the frontlines of the crisis.Despite the significant headwinds during the second half of the quarter, and many difficult decisions we’ve had to make, we are pleased with our results for the third quarter and first 9 months of fiscal 2020. In particular, regarding the ongoing growth in our domestic surgical division, which saw 41.4% growth.On a pro forma basis, with TheraSkin sales been included for last year, I’m pleased to report total revenue growth of 8.6%. As a reminder, we are now reporting our results across 2 separate sales channels, our surgical division and our wound division. While January was largely spared from the impact of the COVID-19 pandemic, we did experience a decline in sales in February, particularly in international markets, and then saw a much more pronounced slowdown domestically in March, which intensified throughout the month and continued into April.International markets including China, Italy, Spain and the UK showed signs of distress early on and have continued to be challenged. On the domestic front, the U.S. market is beginning to show some signs of stabilization. And we hope that trend continues into June and going forward.Overall, the revenue increase for the third quarter reflects the strong growth in our domestic surgical market, driven by an extremely strong adoption of Nexus, followed by healthy growth in our wound division supported by SonicOne and TheraSkin. I’m pleased with the direction the surgical division is headed in and excited about the opportunities, as we get through the current challenges, and begin once again to have regular contact and interactions with healthcare professionals.Nexus is a key component of our growth strategy, as this all-in-one platform will help us cross-sell into multiple division specialties, and leverage our consignment business model to drive recurring business revenue. In addition to the early success of Nexus and the value proposition we bring with our handpieces and disposables, I’m also very encouraged by the results from our recent evaluation with a large [IDM] [ph].The feedback was very positive and we look forward to discussing the added detail over the coming months as things return to normal. As it relates to our wound division, we have a great success with the integration of our sales-force. And we are now doing additional training to get newer sales reps more comfortable with the OR-focused selling outreach for SonicOne.I intend to remain to further leverage the opportunity that exists in the fast-growing wound market. One of our biggest opportunities in the wound division lies within our existing surgical customers, along with opportunities for cross selling that will help drive incremental revenue in the wound division for both TheraSkin and SonicOne.As it relates to NeoPatch, we will continue to work with CryoLife to bring the product into our wound care offering and to implement our go-to-market initiative in the coming months. Given the need to constrain costs at this time, we’ve had to pause all clinical trials we had initiated or intended to initiate for TheraSkin and SonicOne, except for the RCT for diabetic foot ulcers to gain further evidence for expanded TheraSkin coverage by payers.With regard to China, the situation has been challenging. And we are actively engaged with our partners to find a mutually beneficial solution in the coming months as revenues return to normal.Moving on to our sales resources, because our intent is largely to preserve as many jobs as possible, in particular, our sales-force, members of the management team and senior team members took significant compensation cuts, and we’ve implemented various other costs and expense cutting initiatives in order to do all that we could to minimize the disruption to our sales team.We still have over 150 domestic field resources across both divisions

[Joseph Dwyer:]

Thanks, Stavros, and good afternoon, everyone. As mentioned in today’s press release on September 27, 2019, Misonix acquired privately held Solsys Medical. The actual results for the current quarter reflect the operations of both Misonix and Solsys, while the comparable period for the prior year reflects only Misonix. For the 9-month period, the current year reflects only 2 of 3 quarters of the combined operations with Solsys in the prior year exclude Solsys, just you’re on the same page as we are.Fiscal third quarter revenue increased $17.9 million compared with $9.6 million for the third quarter of the last year. By geography 83% of revenue was from domestic sales with 17% coming from international markets. On a pro forma basis, assuming Misonix had acquired Solsys for the full third quarter of last year, Q3 revenue increased 8.6% over last year, including a 19.7% rise in domestic revenue and 24.7% decline in the international revenue.The gross profit margin on sales for the quarter was essentially flat 70.3% compared with 70.7% in the prior year. Total operating expenses increased to $17.9 million compared to $8.4 million in the prior year period, primarily reflecting the acquisition of Solsys. The $17.9 million represents about the same level of operating costs with our second quarter, which was $18 million.For the third quarter, selling costs were down around $200,000, primarily from a lower commission and the restrictions on travel in March. G&A costs were down about $700,000 in the second quarter, resulting from the write-off of our contract asset of $960,000 in the December quarter. R&D expenses were about – were up about $800,000 for the quarter – the second quarter, principally resulting from the cost of our ongoing diabetic foot ulcer study.The tax line includes an income tax benefit of $455,000, which relates to an adjustment of the purchase price accounting for the Solsys acquisition. We reported that third quarter net loss of $5.6 million or $0.34 per share, compared with a net loss of $1.6 million or $0.70 per share in the prior year period. The quarter-over-quarter increase in net loss was primarily attributable to the acquisition of Solsys and the acute challenges associated with COVID-19 during the current quarter. We reported Q3 adjusted EBITDA loss of $3.8 million compared to an adjusted EBITDA loss of approximately $90,000 in the prior year period.Moving on to cash flow and balance sheet, we had $39.7 million in cash on March 31, 2020, largely as a result of gross proceeds of $34.6 million related to the equity offering, we completed at the end of January. We ended fiscal Q3 with approximately $40 million in debt, and we are in compliance with our debt covenants.Working capital of March 31, 2020, was $55.2 million, up from $28.7 million at December 31, 2019. Cash used in operations for the third quarter was $7.9 million about the same is $8.1 million we used in the second quarter. For the third quarter, cash used in operations consisted of $4 million, for the net loss, less non-cash items, and $4.5 million of uses to working capital.The working capital used consisted of an increase in inventory of $3.3 million, and an increase of accounts receivable of $1.2 million offset by a decrease in payables. We recognize our need to preserve liquidity and to manage the cash flow positive operations with our existing cash and debt facilities.Accordingly, we have implemented the following cost reduction plan. We have reduced the base salaries of all staff and the title of director and above, the reductions range from 15% to 50% of base salaries. Our Board of Directors has also reduced their cash compensation by 100%. We reduced our headcount by around 8% through reduction in force at the beginning of April. Our hiring fee is put in place in March. We’re not hiring new sales personnel, but we’re focused on keeping the current sales force in place. Take advantage of selling opportunities when the markets open again.We restructured our international sales organization to reduce commissions. The travel restriction is in place for all staff, and definitely except the local travel of sales reps to customers. Additionally, principally all company events has been put on hold or canceled including trade shows. Marketing activities have been significantly reduced. Much of the company’s discretionary spending has been canceled or postponed. This includes wound studies and certain product development efforts.We do, how our plan to finish the first phase with our DFU wound study in the fourth quarter, and then put the other phases on hold. By their nature, variable selling expenses will be lower based on lower revenue levels. And finally, we continue to trim and conserve wherever we can. Overall, we expect these actions to reduce quarterly operating costs in the 20% to 25% range.We applied for and received a $5.2 million PPP loan from the SBA in early April. While we were in full compliance with the eligibility requirements with the loan, when the program was first enacted, the SBA has changed the eligibility requirements several times since then. Our Board of Directors continued to evaluate this changing landscape, and we’re waiting to see the new SBA guidance on this topic, which is expected to be published this week.Accordingly, we’ve not yet made a decision as to whether or not to repay the loan by the new May 14 date set by the SBA. Despite the challenges ahead, Misonix has committed to using every resource available to support our liquidity position and to reduce our cash burn, as revenue is reduced through pandemic. With a strong balance sheet reflecting over $39.7 million in cash and the aggressive actions we’ve taken to reduce their overall costs. We believe Misonix is well positioned to scan this challenging environment given our current expectations of hospitals beginning to allow electric surgeries will resume during the next several quarters.Regarding guidance, for Misonix is well on track to meet our fiscal 2020 revenue growth goal through the first half of fiscal 2020. The onset of COVID-19 materially impacted the industry and our business in the third quarter of fiscal 2020 and continues to impact our operations in the fiscal fourth quarter.As a result, on April 2, the company formally withdrew its previously issued guidance and is not currently publishing guidance. With that, I’d like to open the call for questions. Operator?

[Operator:]

Thank you. [Operator Instructions] And we’ll take the first question from the line of Kyle Rose with Canaccord. Please go ahead.

[Ian Tolle:]

Hi, this is Ian on for Kyle. Just hoping I could ask for some more detail on the ongoing Nexus rollout. I know that’s been a major area of focus for the company recently. Did COVID take away any efforts there?On the last call, I think you mentioned over 50 Nexus units have been consigned, and you probably exceed the 150 units by June. Is that still the case or has anything changed there? Thank you.

[Stavros Vizirgianakis:]

Well, thank you very much for joining. Nexus rollout was progressing extremely well. And in spite of the setbacks, we are on track to exceed the 150 units that we’ve given guidance to. So I think with the disruption, we’ll still exceed that number. There’s a lot of work in progress with Nexus, a lot of evaluation therefore ongoing. I think they’ve been paused really as a result of the COVID crisis.And we’re hoping to pick those up when things start normalizing. But I think we’ve demonstrated very early on that with a national rollout, that there’s a lot of pent-up demand for the product. The product has held up very well in competitive situations. So we’ve taken some good competitive accounts. As I said, we’ve had some success with a large [IBN] [ph] as well. So everything is indicating that Nexus will continue to gain momentum as we return to normal.

[Ian Tolle:]

Perfect, thank you. And then, just on handpiece ordering patterns, are you seeing any changes there from COVID or over the last few months? I think on the last call you mentioned most were buying 2 handpieces, neuro is around 10% of the total, just any color on that would be appreciated. Thank you.

[Stavros Vizirgianakis:]

Yeah, we still continue to see the trend continue. Every system has 2 handpieces purchased. Neuro constitutes about 10%. However, we see neuro as a significant opportunity. I think as the sales-force matures and gets more comfortable, and as we build the installed base, there will be the opportunity not only to sell neuro handpieces to neuro accounts, but also to go back to existing BoneScalpel customers and then up-sell customers on the neuro capabilities of the system as well.So, in terms of that, everything is on track. We basically had a couple of months to validate what we thought we’d seen in the early parts of the launch, and that has certainly continued.

[Ian Tolle:]

Terrific. Thanks for taking the questions.

[Stavros Vizirgianakis:]

Thank you.

[Operator:]

We’ll take the next question from the line of Ryan Zimmerman with BTIG. Please go ahead.

[Ryan Zimmerman:]

Hey, thank you. Thanks for having us. So just want to ask a couple of questions, Stavros and Joe. Number one, where did you end your sales headcount for the quarter? I appreciate your comments on holding off on hiring further. But, one, where did you end for the quarter? And then, I want to ask Joe, just on the cost basis, or your cost basis. What is your fixed costs look like relative to your variable, when you think about expense, savings going forward? Thank you.

[Stavros Vizirgianakis:]

Thanks, Ryan. Thanks for joining. In terms of headcount, I would say, the surgical ended on 70 field resources, that’s sales managers and sales representative. And on the wound side, we ended on 81, sales reps and managers, so a little bit less than the 153 that we had. But I think, you know, as Joe indicated, sales expenses and keeping the sales force intact has been one of our top priorities.I think when we see business return to normal, start accelerating, we’ll back fill the 2 or 3 positions that we’ve still got it back fill and then resume normal hiring when we see things stabilize in the market. So I think everything is on track around our thinking in terms of preserving the sales force.We’ve also – just an FYI, during the period done a lot of online programs, to keep the sales-force engaged on a daily basis. I think the marketing team has stepped up there quite nicely. Joe, over to you.

[Joseph Dwyer:]

Yeah, right, on the variable expenses versus fixed, I don’t have that with me. I can get back to you at it, but we did, I guess, with revenue being down the variable costs are down also, but I can give you may be a better take on it a little bit later on.

[Ryan Zimmerman:]

No problem. And then, just broad strokes, Stavros, kind of how you see the wound market recovering over the coming quarters? I guess, I wanted to extract the wound patients to help – or wound business held up a little better, only because people want to – payers want to keep those patients out of the hospitals, given their ability to get COVID. I think it’s higher than others. So I just would love your thoughts on that. Thank you for taking the question.

[Stavros Vizirgianakis:]

Sure. I think what we saw on the wound business, is that the wound business actually decelerated a lot quicker than the surgical business. So we’ve seen a marked decline in the wound business already by the end of March, the numbers were significantly down. And I think that was related to a number of factors needs to be – administrators within hospitals in many instances are deeming that, all these wound patients were elective cases and that they could put them off and we saw that that turned around with a lot of pressure from the physician. So we’ve seen wound cases come back fairly significantly in the hospital outpatient market. We’ve seen pick up in other sites of care like physicians’ offices where they’ve been unable to treat the patients in the hospital.But we’ve also seen on the room side that you’re really chronic wounds where you essentially got it, look at limb salvage surgery, those cases have been there. And we’ve been fortunate that our sales people have still been engaged in difficult times we’ve been able to have access to the surgeons on those cases for the really in a difficult to heal wounds. I think, what we’ve also seen during this wound stabilize, that is improving in every week or lots of small improvements over here. The wound business is certainly less affected than the surgical one. And I think, we’ll see a more gradual steady recovery on the wound sideways on the surgical, we’re expecting something more dramatic, because you’ve got a lot of pent-up demand.Also, what we’ve seen is that in a lot of these HOPD settings, where the center are normally very congested. I think there will be very well positioned going forward, because there is – it’s really indicated to be used, every 2 weeks instead of weekly or bi-weekly, so I think, where physicians are looking at decreasing the load on some of these areas of the hospital that gives us increased optimism that will continue to be well with de-risking. But that’s early indication, what we’ve seen in the marketplace, surgical doesn’t come off as quickly as wound. But I think surgical will certainly take longer to recover spine in particular.

[Ryan Zimmerman:]

Thank you, Stavros.

[Operator:]

[Operator Instructions] We’ll take the next question from the line of Alex Nowak with Craig-Hallum Capital Group. Please go ahead.

[Alex Nowak:]

Great. Good afternoon, everyone. Just follow-up on that last question, Stavros. Could you help us quantify the impact you saw on both businesses and April, and what you’re starting to see here in the first 2 weeks in May? How much did volume get hit compared to pre-COVID levels at a trough level standpoint? And then in the past few weeks here in May, what have you seen from case volume starting to come back both in surgical and inward?

[Stavros Vizirgianakis:]

Yeah, as I said at the end of March, would have been pretty significantly hit. So we looked at it in April, wound volumes were still significantly declining. And then, I’d say, from about the middle of the month, they started increasing pretty nicely. So as a combined unit, we probably ended April a tad under 50% down versus plan. I would say that, wound was probably 35% upward and a surgical was more or like 70% drop, and I think there was in a particularly bad on the spine side of things. And in a pediatric deformity was still there, your routine spine surgery like laminectomy infusions. Those have all been put off pretty significantly. And what we’ve seen is a steady, daily increase, as we monitor sales orders, number of units shipped, et cetera. So wound has been steadily increasing and going up.On the surgical side, I think it’s plateaued over the last 3 weeks. What we’ve seen is certainly more activity in the field as hospital start opening up, but we haven’t seen a significant uptick in spinal cases yet. So it could be that hospitals are bringing physicians back, getting surgeons back, getting patients back and ready for surgery. But we haven’t seen that pump-up on the surgical side as we predicted, but I think that is coming. The encouraging thing is if you look at around the country, the northeast is still very, very dramatically affected. But all other places seem to be opening up gradually. So I think more of the surgical team active every week, but nothing remarkable on the sales, what I can say we’ve seen a 10% increase week-on-week on the surgical side yet.

[Alex Nowak:]

Okay. That’s really helpful. And then would you expect to see more wound cases shift out of the hospital kind of continuation of the trend here due to COVID? And how does that change the value proposition of SonicOne or TheraSkin under a new scenario?

[Stavros Vizirgianakis:]

Yeah, certainly I think that, the wound world is definitely going to change post-COVID, I think that people are going to, in particular, physician, look at treating wound patients and other settings of care. I don’t think it’s just going to be in the hospital or in the outpatient departments, I think, there will be more work being done in physicians’ offices. I think that in terms of the SonicOne value proposition at still a very – strong value proposition for limb salvage surgery is really complex difficult to heal wounds in the O.R. We’ve seen a good pickup in interest in using the 2 technologies and the combined basis in the O.R.So this feel that, there’s going to be a lot of focus from us on this – hard to heal wounds, whether using the SonicOne combined with TheraSkin, and on the outpatient and physician office side of things, we just see a shift away from traditional crowded hospital kind of environments over there. I think, physicians are now more open to having discussions around products that they don’t have to apply as frequently as they did in the cost. So I think that is more of an interest from physicians to look for solutions where they can treat people less frequently. That’s what we’re seeing for early days, we’re learning as we go, I think, this was something new for everybody, but it’s certainly going to provide new opportunities.

[Alex Nowak:]

And how are you thinking about the sales environment in this post-COVID world whereas spine and wound centers could be relatively more restrictive to outside vendors? How are you positioning the salesforce there to succeed under that potential scenario?

[Stavros Vizirgianakis:]

Yeah, I think, Alex, we’ve got a number of initiatives. I think it’s spreading the core point wider, before it was just really focusing on bigger centers, I think, we’re going – the sales teams are spending time on smaller centers as well. There is going to be a focus on the IACs. Neuro remains a significant opportunity for us to grow, given our low penetration rates there, so there’s certainly more focus from the sales team and the mirror side of the business. And then I think it’s also up to us internally to develop new products and solutions. So we’re hoping to have 2 new product launches before the end of the calendar year, one of the rooms size, which is going to be a more aggressive product for bigger, bigger surface areas for both agreements. And then we’re also looking at procedures like microdiscectomy, where we can offer a less invasive option that typically goes into a sector of the market that we’ve never really tackled before, which is really soft tissue management in the spinal arena.So answer your question, it’s wider core point, new products, new procedures that we’re going after. That’s how we’re looking at the market.

[Alex Nowak:]

That’s good to hear. And then just one more question if I could. Can you just provide some more detail on how Nexus really helped out the surgical business this quarter from a revenue growth, where there are just a lot of Nexus placements that went live in the quarter and that drove account growth? Or are there any one times to drive the 40%-plus revenue growth there?

[Stavros Vizirgianakis:]

Yeah, I think a combination, we certainly had, I would say, 2.5 month of written normal sales. I think, for the first time, we had the whole sales force with access to Nexus. So there was pent-up demand. But that being said, if we have to look at the placements that we’ve had with Nexus up to now, and we look at the pipeline down the road. I’m pretty enthused, not only the volume in the pipeline, but the quality that that’s filling in the pipeline that the salesforce has managed to put together. And we’re actually hopeful that post-COVID that our value proposition resonates even higher within the hospitals, because if we look at hospitals, one thing that we do now is capital, equipment, budgets are going to be more constrained than ever before.And if you look at our value proposition with Nexus, we’re freeing up money to be used elsewhere in the hospital. So I think that, we’ve actually surprised ourselves have been a lot of discussions with hospitals that we look forward to be less interested that – more interested in our whole model. We’ve had the validation with a significant audience that we’ve been able to displace one of the established players in the market, because it’s probably going to be a dual source contract. So it’s just a lot of things happening. There’s not – one thing that’s driving Nexus growth. I don’t think there’s anything that’s a one-time in those numbers. I think, numbers can always be bumpy quarter-to-quarter, especially when you have a 40% growth in the normal life circumstances.But I think there’s just a lot going on, I think, it’s the right product, you’ve now got a maturing sales force. The target team is being very good on this. So I think it’s just really about execution if we continue, quarter-in-quarter out to keep that sales force engaged, we execute – we have the supply to meet the demand. I think, we’ll continue to see good growth in Nexus. Be very bullish of it.

[Alex Nowak:]

That’s great to hear. I appreciate it. Thank you.

[Stavros Vizirgianakis:]

Thank you.

[Operator:]

We’ll take the next question from the line of Michael Kaufman with MK Investments. Please go ahead.

[Michael Kaufman:]

Hi, Stavros. Looks like you’re doing all the right stuff to get the costs streamlined in light of this pandemic problem. I’m sure you guys will handle it very well. I’m just wondering now what’s your cosmic revenue breakeven level is?

[Stavros Vizirgianakis:]

We’re not giving guidance, Michael. I think we’re working to make sure that we still use the existing cash that we have and available debt capacity to make sure that we can fund the operations to cashflow positive, that’s our goal.

[Michael Kaufman:]

But, no, the question is…

[Stavros Vizirgianakis:]

We’re not indicating how much that’s going to be as a percent of revenue from an expense point of view or breakeven.

[Michael Kaufman:]

Yeah, so you have no concept as to what you’re [indiscernible] in revenues or breakeven.

[Stavros Vizirgianakis:]

We do – we got a crystal clear concept, we just can’t give that to you, because we’re not going to be providing guidance on the call.

[Michael Kaufman:]

No, but guidance is what you’re expecting. But this is how you’ve restructured your expenses and your revenues, which are not clear from what you said.

[Joseph Dwyer:]

Right, okay. So here’s what we’re looking at, is we’ve got our own internal revenue plan that we’re working in adjusting all the time that we need to. I guess, as the business starts to take off and the growth starts to accelerate, we’ll be able to feed some of the expenses back into the operating expense line, if we need to, which we’re going to have our sales-force out traveling, trade shows continue. Maybe if the DFU, pull off certain projects, some of the investments, so now, we can run lean and mean and starve the business, if we want to.That’s not our intent. Our intent is to continue to run a healthy, so we do know that we need to operate within our cash constraints. So we are aiming…

[Michael Kaufman:]

…yeah.

[Joseph Dwyer:]

Yes.

[Stavros Vizirgianakis:]

No, I think, you can catch some comfort in the fact that we’re targeting that over the next 5 quarters, we want to be at breakeven. So I think we’ll manage the business and get there. But we can’t give you a hard number today. That’s – the goal as the organization, we think we’re 5 quarters away.

[Michael Kaufman:]

Okay, that gives me a nice warm feeling. I’m sure you guys can do it. Certainly, this is trial by fire. But nobody in the world ever expected this thing to be thrust upon us. But I know you’re not going to answer it.

[Stavros Vizirgianakis:]

Absolutely, look, there’s no playbook for it. But I think the team has really risen to the challenge. And we’ve really been very productive in all the measures that we’ve taken to manage the crisis. And I think we’ve continued to do that. So I’d really like to just commend the team, because in spite of a lot of hardship, and a lot of financial hardship on the people as well. They haven’t waivered. They’ve still continued doing what needs to be done. So I think that we will basically emerge out of this crisis as a stronger company. These things are brought along to test us. This has certainly tested us. But, you know, it’s made us look at becoming more efficient, smarter in terms of how we look at the business, how we look at running the business.So, I think you can take some comfort on that, that’s the team have done for the challenge.

[Michael Kaufman:]

Right. There’s also a positive impact of stepping on the brake a little bit. Since you’ve grown so much with so many people to really bring the people up to speed, so your efficiency gets better when you finally going to have less of a headwind. So there may be some tiny kernel of goodness in this whole thing.

[Stavros Vizirgianakis:]

Yeah, correct, correct.

[Michael Kaufman:]

Okay [indiscernible].

[Stavros Vizirgianakis:]

All right, okay, Michael.

[Michael Kaufman:]

Keep up the good work.

[Stavros Vizirgianakis:]

Thank you. Thank you for your support.It appears there are no further questions at this time. I’d like to turn the conference back over to management for any additional comments or closing remarks.

[Stavros Vizirgianakis:]

Thank you, operator, and thank you everyone for spending time with us today. I’d like to take this opportunity to thank you for the confidence you continue to place in us. I’d also like to extend a very special thank you to the extremely talented and dedicated Misonix team members for the contributions to make my Misonix a world-class company.Over the history of Misonix, we’ve had to overcome significant adversity from time to time. And in every instance, we have endured and then flourished, due in large part to their resiliency and dedication. We fully expect that to be the case again and look forward to once again partnering with healthcare providers to ensure the best patient outcomes.We’re proud of our contribution to improve the health and lives of patients across the U.S. and worldwide. We look forward to speaking to you again when we report our fiscal 2020 fourth quarter results. In the interim, should you have any additional questions or if you’d like to schedule a formal meeting with management, please contact our Investor Relations firm JCIR at 212-835-8500, and you can chat with Norberto or Jennifer. Thank you and goodbye.

[Operator:]

Ladies and gentlemen, this concludes today’s call. Thank you for your participation and you may know disconnect.