Obalon Therapeutics, Inc.
Q4 2017 Earnings Call Transcript

Published: 7 Mar 2018

[Operator:]

Good day ladies and gentlemen and welcome to the Obalon Therapeutics' Fourth Quarter and Full Year 2017 Audited Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Mr. Bill Plovanic, Chief Financial Officer for Obalon. You may begin.

[Bill Plovanic:]

Thank you, Ashley. Good morning, or actually good afternoon. Welcome to Obalon Therapeutics' fourth quarter and full year 2017 Audited Financial Results Conference Call. With me on today's call is Andy Rasdal, Chief Executive Officer of Obalon. Today the company issued a press release detailing financial results for the three months and full year ended December 31, 2017. This release can be accessed through the Investor Relations section of the Obalon website at obalon.com. You can also access the webcast of this call from there. Before we get started, I would like to remind everyone that any statements made on today's conference call that expresses belief, expectation, projection, forecast, anticipation or intent regarding future events and the Company's future performance maybe considered forward-looking statements as defined by the Private Securities Litigation Reform Act. Forward-looking statements in this release include Obalon’s financial guidance for full year 2018 and its expectations regarding the near and long-term growth potential of its business. These forward looking statements are based on information available to Obalon management as of today and involves risks and uncertainties, which include but are not limited to the risk factors disclosed in the periodic and correct reports by the company filed with SEC from time to time including the form 10-K for the fiscal year-ended December 31, 2017. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those projected in the forward-looking statements. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Obalon specifically disclaims any intent or obligation to update these forward-looking statements except as required by law. The archived webcast will be available for one year on the company's website obalon.com. For the benefit of those who may be listening to the archived webcast, this call was held and recorded on March 5, 2018, since then Obalon may have made announcements related to the topics discussed, so please reference the company’s most recent press releases and SEC filings. And with that, I’ll turn the call over to Obalon’s CEO, Andy Rasdal.

[Andy Rasdal:]

Thank you, Bill. Good afternoon everyone. Thank you for joining us today. On this call, I will discuss highlights of our commercial progress, product performance, product pipeline and clinical performance including data from our commercial registry. After me Bill will then review our fourth quarter and full-year financial results and provide annual good revenue guidance for 2018 as well as some specific metrics we would hope to provide on a quarterly basis going forward. We will then answer questions. 2017 was a transformational year for Obalon and I'm very pleased with the success we have achieved in our first year of U.S. commercialization. Launching a first of its kind product into a developing market is a demanding endeavor. I'm most pleased with the dedication and passion of the team at Obalon to methodically build the foundation to establish an important new therapy for weight loss and create a sustainable business franchise. We've grown the business meaningfully on many important metrics. Total revenue, starter kit sales, which approximate new sites, reorder sales from existing accounts, new patient treatments and total balloons placed. From Q1 2017 to Q4 2017 total global revenue grew 151% and U.S. revenue grew 95%. U.S. reorder revenue from existing accounts was 11% of Q1 2017 U.S. revenue and grew 925% to 57% of Q4 2017 U.S. revenue. Based on the data entered into our commercial registry from Q1 2017 to Q4 2017 quarterly new patient treatment grew 110% and quarterly total balloons placed grew 214%. The number of total cumulative starter kits sold again, which approximate new sites grew 278% from Q1 2017 to Q4 2017 and we ended the year having sold 189 new starter kits. We finished our first full year of U.S. commercialization strong in the U.S. Q4 2017 was our highest quarter ever for the number of new accounts sold, reorders from existing accounts were the highest of any quarter-to-date and for the first time reorder revenues exceeded revenues from new account sales. According to our commercial registry Q4 2017 had the highest number of new patients starts, the greatest number of balloon placements and the largest number of accounts treating patients of any quarter to-date. As we've previously stated on our last call January 5, we are running a New Year's weight loss promotion that began in Q4 and was intended to drive continued growth into Q1 in new patient treatments and the number of accounts treating. Based on the data from our registry in the U.S. this trend continues with the first two months of Q1 each recording the highest number of new patients start since launch. We are pleased with the impact of this program thus far. However as we previously cautioned although patient demand has continued to grow into the first part of Q1 2018, we believe that some accounts may have purchased ahead in Q4 2017 in anticipation of higher patient demand associated with the new year promotion. Additionally our quarterly revenues have become increasingly backend loaded. Thus at this time we are not able to project what impact these dynamics will have on new account sales reorder volumes for revenues in Q1 2018. Top line patient interest metrics also grew from Q1 2017 to Q4 2017 unique visits to our website grew 112% visits to our Find a Doctor site grew 377%, video views grew 320% and ad views grew 326%. For the full year of 2017, we had approximately 1.1 million unique website visits, 36 million social media engagements 404,000 visits to our Find a Doctor site, 5.2 million video views amounting to 39,000 patient hours and 31 million ad views. Our efforts generated more than 46,000 patient leads to physician, which is in addition to any leads created directly by accounts. For our public relations efforts we are in 126 placements resulting in over 570 million media impressions. This data continues to reinforce our belief that people are very interested in the Obalon treatment for weight loss. However, as we have said previously, this top level patient interest does not immediately translate to patient treatments. There are a number of leaks and lags in the patient interest to treatment funnel and we are continually working to optimize the funnel and more efficiently convert patient interest to the treatment. We continue to be pleased with product performance and the clinical outcomes of our unique swallowable gas filled balloon in actual commercial use. Based on our registry data we have increased confidence that we have a novel technology solution that is performing as intended. Today I would like to share some of the commercial registry data. Please note that the data reported in the registry is self reported by sites and does not have the same rigor and validation of the data by Obalon that we would have in a formal clinical study like our pivotal trial. Participation in the registry is not required and as we continue to expand we have less visibility to the rate of participation. From a purely scientific perspective it is also important to note that the data from the registry is not directly comparable to the results from our pivotal study or to trials conducted with liquid-filled balloons. However, we believe that the data in our registry represents results in actual commercial use. The following data is based on the first 190 patients at 35 centers in our registry database who have completed the therapy and had the balloons removed, which is the same number of patients, a 198 who received balloons in the treatment arm of our pivotal trial. Registry data for the group within those 198 patients that were within the labeled range of 30 to 40 BMI that would have been included in the primary endpoint of our pivotal trial as per protocol patients or patients with at least two balloons completing at least 18 weeks of therapy showed mean weight loss of 20.6 pounds in 9.4% of their initial bodyweight or TBL. Registry data in the group of patients within our labeled range of 30 to 40 BMI that would have been included as completers in our pivotal trial analysis, patients with three balloons completing at least 22 weeks of therapy showed mean weight loss of 21.8 pounds and 10% of their initial bodyweight or TBL. The upper quartile are 25% of the completers group showed mean weight loss of 30.1 pounds and 14.5% total body loss or TBL with a maximum loss reported of 56 pounds and 25.5% TBL. The reported rate of serious adverse events in all 198 patients was 0.5%, the rate of reported non-serious events was 22.2%, vomiting was only reported in 3% of those patients. We're very pleased with the Obalon balloon continues to demonstrate such a strong safety and efficacy profile in actual commercial use. Finally, we still hope to have a larger complete dataset from the registry presented in a scientific forum and do not believe that providing this initial limited set of data compromises the integrity of the data set for such future presentation. We are continuing to collect data in the registry in Q1 2018 but we have not made any commitment to continue our registry program past Q1 2018, which could limit our ability to accurately update certain metrics such as changes in new patients treated. Based on the performance of the product and many of the sales and marketing metrics, we intend to modestly expand our commercial footprint including expanding our sales force and increasing our manufacturing capacity. This expansion will be less than if we had completed our financing in January, we intend to begin implementing this plan over the coming months and would not expect to see results from those efforts until the second half of this year at the earliest. We continue to believe the introduction of new products will help drive market development and adoption. We are making progress in our R&D pipeline specifically on our navigation system, which is intended to eliminate the need for X-ray during balloon placement. And our new touch inflation dispenser, which is intended to be easier to use than our current inflation dispenser and to improve safety and reliability of balloon inflation. As previously announced, we received a major deficiency letter on our PMA supplement for our navigation system requesting additional human clinical data. We have also received a major deficiency letter for our touch inflation dispenser requesting additional human factors testing but no human clinical data was requested in that letter. We have met with the FDA, in forum we submitted our plan to address the request related to navigation and touch deficiency letters, neither of these deficiency letters was a rejection and once we provide a complete response that accepted by the FDA, we would expect to be back on the review clock. We will not comment further on the FDA status or timing of these two projects until our responses have been accepted by the FDA as complete at the earliest. The current market for the Obalon balloon system remains in its infancy in terms of size and development. We're encouraged by our product performance, clinical results and commercial progress to-date. As it continues to reinforce our belief that there is a significant interest in the unique Obalon swallowable gas-filled balloon because it solves a very large important problem, we plan to continue to make the investments we believe are required to grow the market to its potential and to create a valuable and sustainable business franchise. I continue to be very optimistic about the future of Obalon technology. I would now like to hand the call over to Bill Plovanic, Obalon’s CFO.

[Bill Plovanic:]

Thanks Andy. Today, I would like to share details on our final audited financial results for the fourth quarter and year ended December 31, 2017. As a reminder, we began U.S. commercialization in January 2017. And in the third quarter of this year, we began shipping our current generation six-month product to our Middle East distributor. My following commentary, first, we'll compare Q4 2017 to Q3 2017 financial results. As we believe this is the most relevant, given we are in the first year of U.S. commercialization and we're only selling to international markets in 2016. Final audited fourth quarter revenue was reported at $3.7 million, compared with $2.8 million in the third quarter 2017. An increase of 32% sequentially. U.S. revenues of $2.9 million were up 43% sequentially, compared with $2.0 million in Q3 2017. As a reminder, we preannounced unaudited preliminary revenues for Q4 2017 of $3.9 globally, $3.1 million in the U.S. and full year 2017 revenues of $10.1 million. The difference between our preannounced preliminary unaudited revenues and our final audited Q4 2017 and full year 2017 revenues primarily consists of an additional revenue deferral from Q4 2017 to 2018 that was an addition to our original revenue deferral estimates at the time we provided unaudited preliminary revenues. Although, the difference in our final audited versus preliminary unaudited revenues was only approximately 5.6% of Q4 2017 revenues and 2% of full year 2017 revenues. And these types of adjustments are not unusual in the final year-end audit. I want to provide the full detail of all adjustments. We have deferred $147,000 of revenue from Q4 2017 to 2018. We expect to recapture most of that deferral in Q1 2018, $144,000 of that deferral related to our commitment to deliver a minimum of 100 leads to accounts participating in our Q4 2017 new year's promotion. Although, we have delivered a similar number of leads to accounts in each quarter 2017 in conjunction with the input from our auditors during the year-end final audit, we decided to make this additional adjustment. We have also made an adjustment to reduce our unaudited preliminary Q4 2017 and full year 2017 revenues by an additional $30,000 to our original revenue reduction estimates based on the data related change in our calculations for promotion. Finally, we have made an adjustment to reduce our unaudited preliminary Q4 2017 and full year 2017 revenues by $33,000 related to our decision to extend the expiration of a sales promotion. That decision was made after we preannounced our preliminary unaudited revenue results but before our final audited results were complete. Finally, there are no restatements to our financial results previously reported results from Q1 2017 to Q3 2017. Getting back to final 2017 results, for U.S. revenues in Q4 2017 reorders from existing accounts help drive sequential growth. Reorders comprised 57% of fourth quarter U.S. revenues and exceeded sales from starter kits for the first quarter since U.S. launch. Our strategy has been to create a sustainable revenue stream from existing accounts rather than just initial stocking orders and we are pleased with this result. International sales were $826,000 in Q4 of 2017, up slightly from $788,000 in Q3. We continue to believe our greatest opportunity for creating value is meaningfully executing in the U.S. and we plan to continue to make the U.S. our highest priority for 2018 and beyond. At this time our plans do not have us expanding beyond our established distributor in the Middle East. Cost of revenue increased to $1.7 million in Q4, up from $1.3 million in the third quarter 2017. And gross profit for the fourth quarter was $2 million, up from $1.5 million in the third quarter. Gross margins increased 100 basis points sequentially to 54% from 53%. Gross margin improvement was primarily the result of improved absorption of fixed overhead of more units produced in the fourth quarter as compared to the third quarter 2017. Gross margins in Q4 were negatively impacted by approximately 177 basis points due to the deferral of Q4 revenue to future quarters in 2018, while still taking the full cost of goods for those units in Q4 2017. R&D expense for the fourth quarter totaled $2.7 million, which was in line with $2.8 million of R&D expense in the third quarter. We have continued to make investments to support development of our new product pipeline primarily intended to make the Obalon balloon system easier to use more convenient, more economically attractive to help expand our overall market opportunity. SG&A expense for the fourth quarter totaled $9.2 million, up from $7.8 million in the third quarter 2017. You may recall that partway through the third quarter 2017 we increased our U.S. field force to include product development managers to better support our customers were driving patient flow at the practice level. In the fourth quarter of 2017 we bore the full cost of our expanded sales force. Operating loss for the fourth quarter was $9.9 million and that compared to $9.1 million in the third quarter of 2017 and higher gross profit helped offset this sequential increase in operating expenses. Net loss for the fourth quarter 2017 was $10.1 million or $0.60 per weighted deluded average common share outstanding as compared to $9.2 million or $0.55 in the third quarter of 2017. We utilized $9 million in cash in the fourth quarter 2017. I will now compare select 2017 and 2016 financial results. Final audited full year 2017 revenue was reported at $9.9 million. That compared to $3.4 million in 2016 and an increase of 192%. U.S. revenue was $8.3 million in our first year of U.S. commercialization and reorder revenue accounted for approximately 40% of full year 2017 U.S. revenue, and account revenue accounted for approximately 60% of full year 2017 U.S. revenue. International revenue was $1.7 million in 2017 and that compared to $3.4 million in 2016. As a reminder, we see shipments of our prior three-month duration balloon at the end of 2016 and did not begin shipping our six-month duration balloon system to our international distributor until mid-2017. Gross profit increased to $5.1 million in 2017, up from $584,000 in 2016. Gross margins increased to 51% from 17%. That was mostly result of improved absorption of fixed overhead as more units were produced in 2017 versus 2016, as well as higher average selling prices for 2017. R&D expense for 2017 totaled $10.6 million and that was up from $9.9 million. As stated previously, we will continue to invest in new product development that we believe may help increase adoption, expand the market for the Obalon balloon system. SG&A expense for 2017 was $28.8 million. That was up from $10.2 million in 2016. Investments in the U.S. sales and marketing organization, stock based comp and public company expenses were attributed to the year-over-year increase. Operating loss for 2017 was $34.4 million and that compared to $19.5 million in 2016. Higher revenue gross profits did not offset the increase spend on U.S. commercialization efforts in 2017. Net loss for 2017 was $34.8 million or $2.08 per weighted average diluted common share outstanding, as compared to $20.5 million or $4.85 in 2016. We utilized $31.1 million of cash in 2017. We ended 2017 with $44.4 million in cash equivalents and short-term investments and approximately $10 million of debt. Our top priority for use of cash is to support our U.S. commercialization efforts as well as continue investment in our new product pipeline. I’ll now provide some guidance to metrics. Now that we have completed our first full year of U.S. commercialization, we believe we have a history upon which to potentially provide some level of financial guidance and specific metrics. Today we will be providing guidance for an annual revenue range for 2018. At this time, we do not intend to update or revise this annual guidance range in future quarters of 2018. We do intend to update certain metrics during each quarter of 2018, however, some of these metrics which maybe dependent on our commercial registry made these to be available if we discontinue the registry in future quarters. Please note, the data reported in the registries self reported by sites, participation in the registry is not required, and as we continue to expand we have less visibility to the rate of participation. Additionally, most of our metrics still have a wide range and variability from period to period and we cannot warrant that they will be predictive of future performance. The following financial guidance for full year 2018 and our expectations regarding the near- and long-term growth potential of our business, our forward looking statements, are subject to the risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2017 and other filings we make with the SEC. Today we are providing annual global revenue guidance for 2018 in a range of $14 million to $18 million. For the U.S. we are targeting revenue in a range of $12 million to $16 million, and for international we are targeting revenue in a range of $2 million to $4 million. At this time we hope if possible to provide the following metrics on a quarterly basis. Percent mix of U.S. and no U.S. revenue, number of starter kit sold, percent mix of reorder and starter kit revenues in the U.S. and percent change in new patient starts in the U.S. This is in addition to the top line patient interest metrics we have been previously providing. This time I'd like to provide those metrics for each quarter of 2017. The percent of U.S. revenues to total revenues in 2017 was 100% in Q1, 98% in Q2, 72% in Q3 and 78% in Q4. The number of starter kit sales in 2017 was 50 in Q1, 46 in Q2, 38 in Q3, and 55 in Q4. The percent of total U.S. revenues for reorder kits in 2017 was 11% in Q1, 32% in Q2, 43% in Q3 and 50% in Q4. The percentage change and new patient starts in 2017 was 55% Q2 versus Q1, 15% Q3 over Q2, and 18% Q4 over Q3. To go back, the percentage of total U.S. revenues for reorder kits, it was 57% in Q4. With that my comments are complete. Operator, will you please now open the line for questions.

[Operator:]

Thank you. [Operator Instructions] Our first question comes from Kyle Rose of Canaccord. Your line is open.

[Kyle Rose:]

Hi, good morning, this is Kyle; or good afternoon, this is Kyle. Can you hear me all right?

[Andy Rasdal:]

Hey, Kyle, yes. So we’re used to doing these things like five in the morning our time. We’ll cut the slack. It’s afternoon.

[Bill Plovanic:]

Good afternoon, Kyle.

[Kyle Rose:]

Great, thank you. So I just wanted to ask a high level question. I mean, obviously, a lot happened since the preliminaries out – came out in the Q in early January. And I just – I know that that's not an easy process, but I just wanted to see when you – it sounds like the metrics you gave at least for the first two months of the quarter, January, February, the promotion seems to be going well. But when you take a step back and you think about having to go through the type of audit you didn't go through, any expectation for that to be disruptive event or potentially weigh on the results over the near-term? And I guess, how much of that is contemplated when you think about the guidance range you gave thus far?

[Andy Rasdal:]

Well, look, we're not going to provide as we said anything specific to expectations in Q1 related to revenues or financial performance, but obviously there's just no way an organization and the people involved in the organization going through this kind of investigation process that it can be somewhat disruptive and distracting. No question, there were customers that at least asked the question. So I think overall a lot of it was centered on a piece of the organization and a group of people and we did a nice job of trying to keep the rest of the organization focused. But you're exactly right, it’s disruptive and emotionally demanding build through that.

[Kyle Rose:]

Okay, great. And then, I understand you are not going to give a specific quarterly guidance; one, thank you for the full year guidance. But I was just wondering if you could speak from a high level, I think you talked about shipping the first units to Sono Bello in the Q3. Any expectations as far as the contribution or the type of early results you've seen as far as they [indiscernible] in and out across their 40-plus centers. I mean, just kind of how you think about them as a commercial partner and your ability to bring on additional larger chains longer term as well?

[Bill Plovanic:]

Yes, Kyle. I mean, at this point in time we would let Sono Bello make any comment as to their expectations or belief in how this will rollout and what the performance is for them. There are multiple – they are the largest chain out there. There are other smaller chains. But they're the largest we know in the plastic surgery space at this time. In terms of we did provide annual guidance and that annual guidance takes into account many different variables that can either go better or worse as the year progresses.

[Kyle Rose:]

Okay. And then last question and then I'll hop back in queue, is just, overall, I mean, expectations to expand the sales force, the commercial team. And it sounded like you still did have plans but those may have been changed a little bit, you’ve given the terminations of the financing. Sort of what we should expect as far as expansion of the commercial team over the near-term? And then dovetailing of that, I mean, what are your expectations for the financing means of the company over the course of I guess we will call the next 12 months?

[Andy Rasdal:]

I'll take the first piece. So I don't think we'll probably comment on exactly what that expansion will look like. In terms of numbers we have completed another study with the ZS Associates that we’ve regard highly to help quantify and to balance our experience to make sure we are as efficient as possible. Obviously, it would be a little bit more modest that if we completed the financing because we want to make sure that we are more correct before we take further bites of such an expansion but again we expect to begin with that here over the upcoming months. And it will to begin to have we hope an impact in the second half of this year at the earliest.

[Bill Plovanic:]

In terms of financing Kyle, we did end this year very strong balance sheet, we had over $44 million on the books. As we've said we've seen initial success in the marketplace. We believe this technology is valid and we intend to continue to commercialize it and invest in the business. But at this time we will not speak to timing or types of financings that we’ll look into which you can imagine where we’ve looked into many different types of financings over time.

[Kyle Rose:]

Thank you for taking the questions.

[Operator:]

Our next question comes from Rick Wise of Stifel. Your line is now open.

[Rick Wise:]

Good afternoon Andy and Bill. Let me just come back to the guidance I appreciate you don't want to get into too much granular detail yet. But just again in the most simple minded way, at the low-end treating each quarter equally it is like 3.5 million a quarter, which below the fourth quarter run rate and I appreciate this can be seasonality. I appreciate that promotions play a role here. I appreciate you're working through a bunch of stuff but help us understand just any incremental color about you're thinking about the lower end, maybe upper end will take care of itself. I mean you have a great opportunity great product and the market is there but help us understand you're thinking about the lower-end

[Andy Rasdal:]

Well Rick I am not sure I've ever seen anything be linear especially in any development stage company. So I wouldn’t expect that either based on doing this for a while and as we said I think that certainly the addition of the sales reps, the more quickly we're able to do that and more quickly we will be able to get them up to speed and effective the more likely that has up side into the second half.

[Rick Wise:]

Perhaps Bill, you could talk a little about your expectations about 2018 cash burn rates. As you said $44 million cash burn I think $10 million fourth quarter cash burn. How are you planning and thinking about 2018 on the cash front and you mean is that are you – if you were feeling a little tighter on the cash front as the year progressed would that limit and really just trying to understand would that limit growth or make the second half outlook a little more cautious because you can’t promote. So trying to understand both aspects there.

[Bill Plovanic:]

Well actually Rick we said we had $9 million in cash burn in Q4. We've already said is we do plan to expand our sales force not as much as if we would have completed the financing and we would expect that to contribute to the back half of the year. The cash we have on hand and the guidance we provided takes into account the different variables that we see today. And as I said we are looking at different forms of financing and we'll continue to look at those different forms of financing and we'll continue to look at those different forms and we plan to invest in the business and do what's right for the business.

[Rick Wise:]

Yes. You made some comments about the registry and I couldn't tell whether those were just sort of pro forma kind of comments, whether the registry continues or doesn't – is it your intention to continue with the registry and why – would you or why wouldn't you? I guess just help – how you're thinking there?

[Andy Rasdal:]

Rick, we said that we're committed to continue having the registry at least through Q1 2018. And the answer as to why are we not is – look the most difficult thing to do I think in any company and certainly a development stage company is to focus on the things, which are driving in creating the most value and try to think the extraneous things off of the agenda. So they don't distract either ourselves, our people in the field or the customers and I think if we get to a point where we've reached what we think is an asymptotic level of learning and understanding from something like the registry then we would very likely discontinue it. If it continues to teach us new things and ways to manage the business then we would continue it. But at this time, the only commitment to formally in the market is through Q1 2018.

[Rick Wise:]

Yes, and just last from me. Andy, can you quantify how big the sales force is currently and where you'd hope it would be by year-end and where two months and change into the first quarter. Do you feel like just the whatever anxiety that – or disruption or confusion that might have surrounded the events are in the quarter. Is the sales force basically stable and sort of over it and back to business as usual? Thanks.

[Andy Rasdal:]

Yes, I think what we have said historically at the end of the year, we had roughly 30 direct field people in territories plus management and some customer support and things in-house. At this time, it would expand to – we would intend to expand both geographically to add additional territories, as well as additional people. But at this time, we're not commenting on the specific number of territories or the specific structure or the specific people. In terms of the sales force, look it's always difficult to go out and pioneer new market as I said in beginning comments, the thing I'm most impressed about is the passion, the dedication of those people both in the field and in-house to go through what's a difficult endeavor because when you're successful on a daily, weekly, quarterly basis of improving the lives of people who suffer from the effects of obesity and make life easier for physicians to be more able to treat those patients, it's very rewarding.

[Rick Wise:]

Thank you.

[Operator:]

[Operator Instructions] And I'm showing no further questions at this time. I'd like to turn the call back to management for any closing remarks.

[Bill Plovanic:]

Great. Thank you for participating in today's call. There will be a webcast available and we look forward to presenting again in the future.

[Operator:]

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.