Artivion Inc (AORT) 2003 Q4 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the CryoLife year-end financial release conference call. At this time, all participants have been placed on a listen-only mode and the floor will be open for your questions following today's presentation. It is now my pleasure to introduce your host, Mr. Steve Anderson. Sir, you may begin.

Good morning, everyone. This is Steve Anderson, CryoLife's CEO. I would like to welcome you to the Company's 2003 year-end conference call. With me today is Ashley Lee, the Company's CFO and Vice President of finance. The agenda for today's conference call is as follows -- Ashley will go over this morning's press release and will break out the numbers by productline. He will discuss the recent corporate financing and how we have strengthened the Company's balance sheet and general financial position. He will also discuss the recent successful resolution of many of the product's liability lawsuits. We feel that the recent financing and the successful resolution of many of the product's liability lawsuits have reduced the risk and uncertainty that surrounded the Company prior to November '03. As we have previously announced, we are processing and distributing all cardiac vascular boned and non-boned tissues.

I will discuss SynerGraft model No. 100 A-V access device international implant results. I'll also discuss SynerGraft human heart valve implant results and SynerGraft human vascular implant results. I'll also discuss the current status of FDA issues and new product submission timetables. I will close with discussing the timetable for validation of the Clearant gamma radiation technology that we recently licensed.

We are extremely pleased with the 33 percent year-to-year growth of BioGlue Surgical Adhesive and later I will provide you with an update on some of the new products we are developing that also use our protein hydrogel technology. After my comments, Ashley will return and address the corporate guidance that we gave in early January. After Ashley's guidance comments, we will open up the conference call to questions. At this time, Ashley will comment on today's press release.

Thanks, Steve. To comply with the Safe Harbor requirements of the Private Securities Litigation Reform Act of 1995, I would like to make the following statement. Comments made in this call which look forward in time, involve risks and uncertainties in our forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements include statements made as to the Company's or management's intentions, hopes, beliefs, expectations or projections of the future.

All statements made during this conference call that do not reflect historical results or information should be deemed to be forward-looking statements. It is important to note that the Company's actual results could differ materially from those projected in such forward-looking statements. Additional information concerning risks and uncertainties is contained from time to time in the Company's SEC filings including the risk factors section of our Form 10-K for the year ended December 31, 2002, and subsequent SEC filings.

This morning CryoLife reported financial results for the fourth quarter and year ended December 31, 2003. Total revenues for the fourth quarter and full year ended December 31, 2003, were 12.8 million and 59.5 million, compared to 12.2 million and 77.8 million in the corresponding periods in the prior-year. Revenues in the fourth quarter of 2003 increased 5 percent compared to fourth quarter of 2002.

BioGlue revenues were 7.8 and 27.8 million for the fourth quarter and year ended December 31, 2003, compared to 5.6 and 20.9 million in the corresponding periods in 2002. BioGlue revenues in the fourth quarter increased 16 percent over the third quarter of 2003, and exceeded the upper end of our full year guidance of 27 million.

Tissue processing revenues were 4.9 million in the fourth quarter of 2003, compared to 6.3 million in the fourth quarter of 2002. Revenues during the fourth quarter were adversely affected by limited tissue availability, the discontinuance of the shipment of SG process tissues, and lower than expected orthopedic revenues. There are currently no restrictions preventing the Company from processing and distributing any tissues that we have historically processed and distributed.

Cardiac revenues were 12.8 million for the fourth quarter of 2003, compared to 3.3 million in the fourth quarter of 2002. Vascular revenues were 2 million for the fourth quarter of 2003, compared to 2.9 million in the fourth quarter of 2002.

Orthopedic revenues were 166,000 for the fourth quarter of 2003, compared to 108,000 in the fourth quarter of 2002. As we have previously communicated, we resumed shipping boned orthopedic allografts, with the exception of osteochondral grafts, in early December of 2003. We believe that orthopedic tissue processing revenues bottomed in the fourth quarter of 2003 and we are already beginning to see an improvement in this area in the first quarter of 2004. However, we believe that this will be a gradual improvement over the next few quarters.

Net losses for the fourth quarter and year ended December 31, 2003, were 7.2 million or 37 cents per share and 32.3 million or $1.64 per share. This compares to losses of 5.7 million or 29 cents per share and 27.8 million or $1.43 per share in the corresponding periods in the prior-year.

Cost of human tissue preservation services and products as a percentage of human tissue preservation service and product revenues, were 85.4 percent for the fourth quarter of 2003, as compared to 30 percent for the fourth quarter of 2002, and were 53.3 percent for the year ended December 31, 2003, as compared to 85.2 percent for the year ended December 31, 2002.

Cost of human tissue preservation services for the fourth quarter and year ended December 31, 2003, include an increase to cost of preservation services related to lower cost or market write-downs of 3.7 million and 6.9 million respectively, and includes a favorable effect of shipments of tissue with a zero cost basis of $114,000 and $4.3 million respectively.

Cost of human tissue preservation services for the year ended December 31, 2002, included a $32.7 million write-down of deferred (ph) preservation cost, partially offset by a $1.1 million decrease in cost of preservation services due to the estimated tissue returns.

Cost of human tissue preservation services as a percentage of revenues increased over historical levels primarily due to lower processing throughput due to the usage of tissues in connection with validating certain human tissue processing operations, changes in processing methods, and higher overhead cost allocations associated with the decreased volume of tissues processed. We have begun a comprehensive process improvement program designed to increase yields and are beginning to see an improvement in yields that we believe will be reflected in lower unit cost of processing tissues and improved tissue processing gross margins over the next few quarters.

General, administrative and marketing expenses were 7.9 million for the fourth quarter of 2003, compared to 15.4 million for the fourth quarter of 2002. For the year ended December 31, G&A expenses were 53.6 million, compared to 47.5 million in the corresponding period in the prior-year. Selling, general and administrative expenses in the fourth quarter of 2003 includes a reduction of $2 million and accruals for uninsured product liability losses relating to reported cases.

These expenses in the fourth quarter were also favorably affected by cost savings and lower selling expenses associated with lower sales and decreased consulting expenses associated with FDA compliance issues, offset by increased insurance premiums and other internal costs associated with FDA compliance. For the full year, SG&A expenses include $12 million related to both uninsured product liability losses and accruals for incurred but not reported product liability losses as determined by our actuaries.

Now that I've commented on the financials I'd like to comment on some other matters. First, litigation. Overall, we believe that we have significantly reduced the risk associated with product liability litigation. Since we last reported to you on January 7, 2004, we have settled or had dismissed four additional lawsuits. That makes a total of 22 product liability lawsuits and matters from the '02/'03 policy year that have been settled and additional three product lawsuits or matters which have been dismissed.

We have five product liability lawsuits outstanding that are covered by insurance which we believe to be sufficient. We have four product liability lawsuits outstanding that are not cover by insurance. There are other matters of which we are aware that have not resulted in lawsuits. We have set aside unfunded balance sheet reserves of 5.5 million for uninsured product liability losses and matters. Additionally, we have an unfunded reserve of 7.9 million for incurred but not reported losses. These reserves will be reviewed periodically and may decrease or increase in the future based on our experience.

On January 26, we announced that we completed a private placement of 3.4 million shares of the Company's stock, resulting in net proceeds to the Company of approximately $20 million. Piper Jaffray & Co., one of the premier healthcare investment banking firms in the country, acted as our exclusive placement agent on this transaction. The shares were issued at $6.25 per share which was a 15 to 20 percent discount to the average closing price of the stock for the two and three weeks just prior to closing the transaction. This discount range is comparable to the discount of similar transactions. This cash infusion has greatly strengthened the financial position of the Company and at the same time reduced our liquidity risk. Now I'll turn it back over to Steve.

The SynerGraft model No. 100 A-V access device is CE marked in Europe and has been undergoing a limited clinical trial in Italy and the UK since November of 2001. The model 100 A-V access device is made from a bovine ureter that is treated with our antigen reduction technology. The antigen reduction technology, or ART, ART for short, removes antigens from the graft with a series of washing steps. These steps remove the host cells from the tissue, leaving only the tissue's collagen matrix. They are xenographed implants that do not appear to require immunosuppression therapy. We have about 125 human implants of this device now.

The limited clinical study that we have been conducting in Italy and the UK since November '01 indicates that the primary assisted patency of these grafts is 91 percent at six months and 81 percent at 10 months. Since these grafts have no synthetic materials in them, they may have a greater potential for infection resistance. Based upon an analysis of the few explanted model 100 grafts, it appears that they have the potential to recellularize in vivo with the patient's own cells. It is our intention to file an IDE with the FDA for this device by the end of this year.

As you'll recollect, last fall the FDA asked us to file a 510(k) for the SynerGraft processed human heart valves that we preserve. We filed the 510(k) during the first week of November '03. The FDA put this 510(k) on an expedited review and provided us their comments in a letter we received on February 4th. That letter requests more patient implant data. We expect it will take a few months for us to acquire this data. We will request a meeting with FDA officials regarding other requirements the FDA set forth in their letter.

A review of the SynerGraft processed human valves implanted before the FDA requested the 510(k) filing, shows that over the 40 months that this type of tissue was implanted, that there were a total of 2899 SynerGraft processed cardiac tissues implanted in humans, 1558 of these were pulmonary valves, 565 were aortic valves, and there were 776 cardiac patches. 63 percent of these implants were in pediatric patients for right heart reconstruction. Many of these implants were in patients who had rejected prior allograft valves and really had no better treatment alternative available to them. Most of the 2100 SG processed valves were used in surgeries that may have been lifesaving in nature.

Based on data from our annually published multicenter clinical experience registry, five CryoValve SG heart valves have been reported to be explanted out of 291 implants, for an explant rate of 2.1 percent per patient year. This compares quite favorably to the explant rate of 3 percent per patient year for standard processed CryoValve heart valve allografts. Based upon these results, we will continue to make obtaining regulatory approval a priority.

On February 5th, the FDA informed us by letter that they had made the decision that SynerGraft processed human vascular tissues should be regulated as devices and not as banked human tissues and asked us to submit a 510(k) for that tissue also. We will request a meeting with the appropriate people at the FDA as we don't agree with this decision.

We have been accumulating and collating data on all of the human implants that we have had over the past three years for SynerGraft processed human vascular tissues. A review of the SynerGraft processed vascular grafts shows that from about January 2001 to May '03 there were 822 vascular implants of this tissue. Much of this tissue was used for revascularization of lower legs. There really are no synthetic grafts that work well below the knee and therefore these vascular grafts were indeed limb saving for these people. Cryopreserved vascular grafts have limb saving potential. Given the benefits of this technology, we will continue to make regulatory approval a priority.

The FDA completed an inspection of our laboratory on February 17th. They issued a new 483 facility inspection report. We are addressing their latest observations and will submit our written response in two weeks.

During the past year we have continued to be busy with the development of new versions of present products and the development of new implantable devices. We have developed a new completely disposable single use syringe for the delivery of 2 ml and 5 ml BioGlue cartridges. The new disposable syringe will be more easily stored and eliminates the resterilization cycle that was required for the initial delivery device. We expect to introduce this new delivery device sometime this summer. The 10 ml cartridge of BioGlue will continue to be delivered by the present dispenser.

We are working on a new variation of BioGlue Surgical Adhesive. This new formulation is BioFoam that we believe will be used for nearly instantaneous hemostasis for trauma like penetrating wounds. This formulation causes BioGlue to instantly expand by about five times and can be used to fill voids and holes.

In April, we plan to begin animal trials of our new biological stent that is made from our protein hydrogel technology. The potential advantages of this stent are considerable. Present stents are made from various metals that may elicit excessive cell and tissue growth as a result of the body's response to foreign object. The stent manufacturer's response to this problem has been to coat the stent with drugs to minimize or eliminate the excessive tissue growth response. Since our stent will be made from a protein hydrogel, we expect it to illicit little if any unfavorable response from the body.

We also expect that the edge effect that is common with mechanical stents will be minimized or eliminated. The edge effect refers to a thickening of tissue or stenosis which occurs at each end of the stent due to the fact that the vessel is more flexible than the stent is and the stent ends up irritating the tissue and causing a callous type tissue growth at each end of the stent. The animal model that we will be using in the trials is porcine and will consist of carotid artery stenting over periods of one and six months.

The spinal disc nuclei replacement project, i.e. the injectable spinal disc replacement that is an offshoot of our protein hydrogel technology, continues to make progress. We recently completed the mechanical testing phase that is required for FDA submission. By the end of February, the spinal disc nuclei replacement will have completed its compression testing of 10 million cycles. The next step in the development of the spinal disc nuclei is to request a pre IDE meeting with the FDA that is designed to agree to an outline for the appropriate human testing of this device.

On December 15, 2003, we announced that we had license technology from Clearant, Inc. that is designed to eliminate pathogens from orthopaedic tissue. A committee made up of Clearant and CryoLife scientists is working through the validation procedures for this technology in preparation for its installation here at CryoLife. We feel that it will take up to six months for the process validation to be completed, so it is reasonable to expect that this technology could be in our orthopedic processing of some tissues by the end of the year.

We are looking at other technologies as well including a fungicidal bacteriacidal and viracital technology that we believe will be affective when used with cardiovascular tissues. In early feasibility and proof of concept testing, the compound has been shown to kill many pathogens on contact without harming the tissues or their collagen matrix.

The Company filed its application for accreditation with the American Association of Tissue Banks on October 13, 2003. We were inspected by the AATB accreditation inspectors on January 26th through the 28th. We expect to hear from the AATB board sometime within the next six months regarding our membership in the AATB. That concludes my comments. At this time, Ashley will provide some forward guidance.

I'd like to give some guidance for the first quarter and full year of 2004. For the first quarter we believe that total topline revenue will be in the range of 14.9 to 15.5 million. We believe that revenues for the full year will be approximately 66 to 70 million. The second half of the year will be stronger than the first.

We believe that we have experienced a bottom as far as tissue processing revenues are concerned and we feel that these revenues will increase going forward. We expect first quarter human tissue processing revenues will be slightly below our previous guidance of $7 to $7.5 million, but our full year guidance of $33 to $35 million remains unchanged.

Our human tissue processing revenue guidance for 2004 does not include SynerGraft processed human tissue. BioGlue revenues are expected to be within or slightly above our previous guidance of 7.8 to 8 million for the first quarter and 32 to 34 million for the full year of 2004. As we have communicated previously, we expect that gross margins will begin to improve during the second quarter of this year.

We expect general and administrate expenses to be between 42 and 46 million for the full year and between 10 and 11 million for the first quarter. These amounts do not include any favorable or unfavorable adjustments that may be made to product liability or other litigation reserves. R&D expenses are expected to be approximately $4 million for the year and approximately $1 million for the first quarter. That concludes my comments and I'll turn it back over to Steve.

At this time we'll open up the conference call for questions.

(OPERATOR INSTRUCTIONS)

If there are no questions we'll bring the conference call to a close.

Tim Nelson of Piper Jaffray.

Hi, Steve and gang, and Ashley. Can you give us some greater clarity on the fourth quarter tissue processing margins? I missed the detail you provided there. What was the lower to cost of market write off and what was the ongoing gross profit level for your Cryo business?

The lower cost to market write down during the fourth quarter of 2003 has amounted to approximately $3.6 million. By and large, that write down was driven by the yields that we're currently experiencing. Overall, the tissue processing business right now is experiencing negative gross margins, but as we commented a little bit earlier in the conference call, we've got a comprehensive program in place that we have just begun to implement over the last -- I would say month, month and a half, and will continue to implement over the first six months of this year. And we're already beginning to see some improvements in our tissue yields, so we expect that this program is going to have a very favorable impact on our cost of processing tissues and our gross margins going forward. Although at this time we really can't give you any specifics as to what to expect over the near-term.

Okay. So you can't in terms of the first half versus second half, you can't sort of tell when those margins turn positive? Do you expect positive margins for the year?

We expect that by the end of the year that our margins will be positive in the tissue processing business. We expect them obviously to turn at some point this year. But we're in the process of implementing a very comprehensive program, and until we get a little bit further into that process we're not going to be able to give you any definitive dates as to when we expect that program to turn gross margin positive, although we do expect it to happen by the end of the year.

And as far as yields go, you mentioned you see them improving. Can you sort of scale that for us relative to the last quarter? How much better are they tracking in this quarter?

That's really hard to say, Tim. The first thing that we've done as part of this comprehensive program is working with our tissue procurement organizations to reduce incoming bio burden, and we're doing that with a pilot group right now of 14 to 16 groups, and we're in the process of rolling that out to our barter group of tissue procurement organizations. We're in the process of doing that pretty soon and the actual yields that we're going to experience in the first quarter and in the second quarter by and large is going to depend upon the timing of when that's rolled out. So again, I really can't give you any specifics as to where we're going to end up from a yield standpoint, although I can tell you that they are improving.

Another question on the new 483, can you give us any more details on what was involved with that and what it will take to respond, how it might affect your operations?

It will have no affect on operations. We will be responding in two weeks.

And what was the nature of the 483?

The nature of the 483 were questions they had about post processing cultures, USB 21 testing, and organ procurement organization surveillance that they've asked us to do.

So it won't involve any meaningful changes in your processing?

None at all. I think by and large, Tim, too, that a focus of the inspection was all of the previous validation information that we had sent in. So they've now reviewed all of that and we don't expect that the new 483, as Steve indicated, is going to have a meaningful impact on the business.

Good. And then on the -- I'm going to turn attention a little bit to product liability reserves. You obviously wrote some of those off here in the fourth quarter, is that what I understand? You reversed some of those?

That is correct. Our settlement experience for some of the cases that we settled during the fourth quarter and the first quarter of this year was better than we had initially anticipated, so those litigation reserves for known cases decreased by $2 million.

Okay. So, you reversed them -- did you pay any off? Were there any actual outflows of cash to --?

There were. In the fourth quarter of the year we contributed approximately $2.5 million into an escrow fund to help in the resolution of some of these lawsuits.

So 2.5 went out, overall liability came down by that amount plus whatever it is you felt was justified in terms of future liability?

That's correct.

So you're now at 13 some versus 17 some?

Correct. And as I've stated, too, that a large part of that 13 7.9 million is an amount determined by our actuaries and we're in the position of whatever they determine is what we're recording. Hopefully that number will prove to be conservative, but only time will tell.

And what's the prospect for having actually paid those, the ones that have been settled? What's the timing likely to be?

We've already paid for -- all lawsuits and matters that we have settled have already been paid. As I've stated there, there are currently four lawsuits right now for which we have no coverage, and there are some other matters that had not resulted in claims, and in the aggregate we have an accrual of $5.5 million for those four lawsuits, and the other matters of which we are aware.

But the $7.9 million accrual, those are settled?

No, the 7.9, those are for issues that we know nothing about at this point. The actuaries determined that just based on our experience over the last year, year and a half, you could have this much in potential exposure in the future. There are -- that 7.9 does not specifically relate to anything that we're currently aware of.

What I'm trying to get to here is over the course of 2004 how much money is going to go out the door relative to these cases from what you know right now?

It's too early to say at this point. We don't know.

Okay.

Obviously it would just be determined by any settlement discussions that we enter into.

And then last question is simply can you give us a handle on your current outstanding shares? Share counts to use going forward?

Let's see. Approximately 23 million shares.

Okay. And then finally, the $400,000 tax issue in the quarter that was a reversal of a prior benefit? Can you explain that a little bit? Does that go against that 2.4 you're expecting this year?

I'll have to get back to you on that, Tim.

Alright. I'll get back in queue. Thanks.

Rob Housey (ph) of BlackRock.

Thank you. Actually my question has just been answered.

Bernie Anderson of Robert W. Baird.

Steve, last year there was some news out about a subsidiary that you were involved with that had early reporting on a vaccine. Is there any update on that?

No, it wasn't a vaccine. It was some technology that we had for linker technology and it's a subsidiary called Orazyme (ph) and we have no news on that at this time.

Okay. Another question was is there any progress on getting BioGlue approved here in the U.S. for soft tissue tears, or is that something you're expecting to do with the BioFoam?

BioFoam might be used for something like that, although I think that we would prefer that the present formulation be used for soft tissue tears. We do have a program going forward for approval of BioGlue for other uses, and I think that you should look for us to direct it towards the sealing of dura mater, and that would be something that we would be doing before we would be doing it for soft tissue tears. I think there's a real need for a sealant for dura mater holes after brain surgery or spinal surgery and we're looking at that area very closely.

Thank you.

Mary Yost (ph) of Sage Group.

Good morning. I have several questions on several different topics. One, on the BioGlue syringe, the new syringe, how does the price of that compare to just plain BioGlue?

It'll be comparably priced.

It would be comparably priced. So it would not have a beneficial impact on margins?

No, a lot of our surgeons have requested something that is maybe a little bit easier to use and that is disposable after a single use, so we're really responding to some surgeon requests to make the procedures easier. And then some of them actually -- we look at this as potentially an opportunity to expand some of the markets that we haven't been able to penetrate yet in the vascular repair area.

Okay. Then on the SG vascular graft, I have several questions on that. Could you give us some more color on the clinical data or the data that you have on that graft, particularly in the lower limb?

As you know, there isn't a synthetic vascular graft that works well below the knee. The flows are low and slow in that area of the body, and synthetic grafts occlude very quickly. We have about 822 implants of the SynerGraft processed vascular grafts that have been implanted below the knee, and they're working extremely well. Right now, we are not preserving SynerGraft processed vascular grafts because the FDA asked us to submit a 510(k). So, we are preserving human vascular grafts using our standard processing technology.

On the -- again, going back to the implants, is there any clinical data in the peer reviewed journals on that?

Yes. If you would send in a request we can get to some information. There are some publications that I believe that are out there that we can get you the information on.

And how is that priced versus the synthetic grafts?

It's more expensive.

Would that be comparable to your standard vascular graft?

When SynerGraft vascular grafts were on the market, they were priced at a premium to our standard processed vascular grafts. But, a human vascular graft that's preserved by us is considerably more expensive than a synthetic alternative.

And as we stated earlier, we currently have no provision in our 2004 numbers for any SynerGraft processed tissues be it heart valves or vascular grafts.

Right. I'm more interested in the science on that particular issue. Have you given any thought to going after a limb salvage indication?

A lot of our tissues are used for that indication by physicians. And they've been used with good results.

Okay. Then moving on to the extent, is this a bio absorbable or a permanent stent?

It will start out being a permanent stent, but the nature of the compound is that over time it will reabsorbed over time. But the tissue can grow through it over time, and so it will be a very effective -- should be a very effective method of handling lesions inside of vessels.

It sounds like a very interesting technology.

It also exchanges see '02 and oxygen. There are certain molecules that can go through it. We think that it's a very interesting concept. We do know from implantations of our hydrogel that it is very compatible with human tissues, and that endothelial cells will grow right over the top of it.

Would you be looking at other areas in the cardiovascular system if it works out in the carotid?

Yes. We can make it in different sizes. We can cast the material, it's really a bio material, and we can cast in different sizes. So it could be used for many different sizes of arteries or veins. You can use it in 2 mm, 3 mm coronary artery size, and then you can use it much larger like if you were going to use it in a 30 for instance which is very large. So, we can make it in different sizes, but we're going to start in the carotid area with the porcine model because that is a model that the FDA is familiar with.

Okay. Thank you.

Keith Markey of ValueLine.

I was wondering about the Clearant deal --.

We're having trouble hearing you.

You mentioned regarding the Clearant deal that you might be able to have this pathogen elimination process in use within about six months. I was wondering, don't you have to get FDA approval on that or is that something that can be done separately or has been done?

We're going to go through a validation process on the Clearant technology. When it is appropriate put it into our manufacturing process, at that time we would ask for the FDA to come over and review it.

What I was trying to get at is will that be in the manufacturing process within the six months (indiscernible) six months of this year?

We feel that we will have that process validated and in place for certain tissues -- certain orthopaedic tissues towards the end of this year.

Okay. That my that was my question. Thank you.

Tim Nelson of Piper Jaffray.

I forgot to ask one of my BioGlue questions. Could you give us an update on the market for the current indications for BioGlue? How big are you currently thinking it is? And if you were to assume that most of your current sales are for labeled indications, how penetrated is it?

We feel that the market for indications for which we're approved is somewhere between $500 and $700 million.

So you're vastly under penetrated at this point if you're sticking to the current label. And can you give us an update on the trials for new indications for BioGlue? And you talked about dura mater, I think there is an active or approved IDE there. Is there an ongoing clinical trial?

No, there isn't. We have to submit for that. We haven't submitted for a clinical trial for that.

Are there any active clinical trials under way to expand indications for BioGlue?

There no active clinical trials at this time.

And what is your projected timing to get some going?

We're going to try to get the clinical trial going for dura mater at the very end of this year.

So you're filing for an IDE somewhere in the third of fourth quarter?

Yes. Probably the fourth quarter.

That's it. Thanks.

Thank you. I will now turn the call back over to the speakers for any further or closing comments.

We would like to thank you for joining us today and we look forward to talking with you at the conclusion of our first quarter.

Thank you. This does conclude this morning's teleconference, you may disconnect your lines and have a wonderful day.