Heartbeam Inc (BEAT) 2008 Q4 法說會逐字稿

Good afternoon. Thank you for joining us for the CardioNet fourth quarter and full year 2008 earnings conference call.

Certain statements during the conference call and question-and-answer period to follow may relate to future events and expectations, and as such, constitute forward-looking statements within the meaning of the Private Securities and Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties, and other such factors, which may cause the actual results, performance or achievements of the Company in the future to be materially different from the statements that the Company's executives may make today.

These risks are described in detail in our public filings with the Securities and Exchange Commission, including our latest periodic report on Form 10-K or 10-Q. We assume no duty to update these statements.

At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments following the presentation.

It is now my pleasure to turn the floor over to your host for today, Mr. Randy Thurman. Sir, you may begin.

Thank you very much, and welcome to the CardioNet fourth quarter and year-end investor conference call. I am Randy Thurman, Executive Chairman of CardioNet. With me this afternoon is Marty Galvan, Senior Vice President and Chief Financial Officer; Anna McNamara, Senior Vice President of Clinical Operations; and Phil Leone, Vice President of Managed Care.

In addition to providing detail on '08 and '09, our objective today is to outline for you the opportunity that we believe CardioNet has to gain significant share in the $2 billion cardiac monitoring market, and how we plan to leverage that opportunity for the benefit of all of our stakeholders.

As outlined in the press release issued earlier today, we see 2009 as a transformational year for building this marketshare to a series of operational and strategic initiatives that will strengthen our sales and marketing efforts, enhance our infrastructure, and position CardioNet for higher growth in 2010 and beyond. These operational and strategic initiatives will benefit all CardioNet stakeholders and we believe will drive long-term shareholder value.

We are pleased to report fourth quarter and full year revenue growth of 44% and 65%, respectively. Gross margin increased to 69.4% in the quarter and expanded 190 basis points to 66.9% for the full year.

Our adjusted operating margin increased 18.9% in the quarter, leading to diluted earnings per share of $0.35. For the full year, our adjusted operating margin grew from breakeven in the prior year to over 12% of sales, contributing to full year diluted earnings per share of $0.59. Both quarterly and full year earnings exceed consensus expectations. Marty, of course, will provide you with a more detailed financial review in his remarks.

We firmly believe that our strong financial and operational performance in '08 is indicative of the true potential of our technology, not only in cardiac monitoring, but beyond. As such, '09 will be a year in which we invest and position CardioNet to achieve our operational and strategic imperatives.

Our first imperative is to build marketshare in our existing business. Estimates are that the cardiac arrhythmia monitoring business is $2 billion per year in the US alone. As a wireless leader in this space, there is no greater opportunity for us than to capture in the existing market. As such, we will be expanding our sales force this year by approximately 70% and entering new associated segments of the market. In so doing, we must also invest in IP and sales-related support functions.

Our second imperative is to separate ourselves from any perceived competition by reinforcing in the market what we believe is our superior technology and demonstrated clinical advantages, as well as to be recognized by physicians and patients as the unquestioned leader in supporting their requirements. As such, we intend to invest to develop new applications, to expand the output from our algorithms, to expand clinical programs, and to ensure our customer service and monitoring operations are state-of-the-art. As part of this second operational imperative, expect us to seek acquisitions that will accelerate achievement of these goals.

The third among our imperatives is continual operational excellence, or as we call it internally, BEAT excellence. This means achieving world-class status in the professionalism of our account executives, the quality of our customer service and monitoring centers, and setting the highest standards of product quality and reliability. In 2008, we made considerable strides in each of these areas. '09 will build upon this early success.

The clear focus this year is on the first three operational imperatives. We estimate this investment will be in the range of $0.08 to $0.10 per share, and will provide a foundation for accelerated growth above current expectations for revenues and earnings in 2010 and 2011.

Beyond '09, we've set goals that will expand the scope of our current business. Our fourth imperative is more strategic in nature, and is to expand our current focus in cardiac arrhythmia to related cardiac industry segments where our current technology and infrastructure can be leveraged. We expect that these related businesses will add new sources of revenue beyond the scope of the current product offering.

Long-term, our fifth strategic imperative includes entering new geographic markets, and new therapeutic and diagnostic modalities. We believe the 2009 investments, in combination with our continued focus on research and development, clinical programs and expanded payor coverage, will position CardioNet to be the undisputed leader in our industry, while also delivering strong revenue and earnings growth in '09.

As stated in our press release, we expect greater than 40% revenue growth and more than 75% earnings growth in '09, after the $0.08 to $0.10 per share of incremental investments that I have just discussed.

In 2010 and 2011, we expect to report significant returns on these investments. We estimate that revenues and earnings in 2010 will be 50% and 100% higher, respectively, than the '09 guidance. And we will potentially reach $2.00 a share or more by 2011. As you can see, we believe there is a robust opportunity related to our current base business that we can capture over the next several years.

Marty will now comment in greater detail on '08 results and the future outlook. After Marty's comments, I will make some concluding remarks, and then we will take your questions. Marty?

Thank you, Randy, and good afternoon, everyone. Now that Randy has provided a review of 2008 and our expectations for 2009, I will review our financial results for the fourth quarter and full year 2008, and the factors that contributed to these results.

I want to remind everyone that unless mentioned otherwise, all of my comments will refer to financial results on a non-GAAP basis. There is a reconciliation included in the press release, that we issued earlier today, that describes in detail how we have calculated these non-GAAP figures.

In the fourth quarter, revenue increased by 43.8% to $34.4 million compared to $23.9 million in the fourth quarter of 2007, driving the growth for CardioNet System sales of $29.5 million, up from $18.4 million in Q4 of 2007, for an increase of 60%. Revenue from the CardioNet system continues to grow as a percent of revenue, representing 86% of revenue in the fourth quarter compared to 84% in the third quarter of 2008, and 77% of revenue in the fourth quarter of last year. Offsetting this growth are declines in event and Holter revenue, as we continue to convert physicians to the new technology.

During the quarter, approximately 6% of our referrals were due to PDSHeart conversions, an increase over the prior quarters, which continues to provide validation of the acquisition. With the integration of the sales forces and the continued growth over the two years since the acquisition, we no longer differentiate between CardioNet and PDS sales efforts. Therefore, it is not our intention to continue reporting conversions.

With respect to full year -- revenue grew 65% to $120.5 million. If you adjust the prior year, as if the PDSHeart acquisition was completed as of January 1 of 2007, revenue increased by 56.3%. During this same period, CardioNet system revenue grew to $100.2 million compared to $54.6 million in the same period last year, an increase of 83.4%.

For the full year of 2008, revenue from the CardioNet system represented 83% of total revenue compared to 71% of adjusted revenue per 2007. Consistent with the trend in the first three quarters, our payor mix in the fourth quarter was 34% Medicare and 66% commercial.

Turning to gross margin. In the fourth quarter, gross profit increased to $23.9 million or 69.4% of revenue compared to gross profit of $15.3 million or 63.7% of revenue in the fourth quarter of 2007. Gross profit continues to improve, due to operational efficiencies, primarily in our cardiac monitoring center and related areas, cost reductions negotiated with some of our largest suppliers, and because many of our prior generation C2 devices in the field are fully depreciated or close to fully depreciated.

An additional benefit in the fourth quarter resulted from extending the depreciable life of the C3 devices from two years to three years. This change was based on an internal review to determine the expected life of this current generation device. [We] increased the depreciable life, resulting in a 123 basis point improvement in gross margin in the fourth quarter.

For the full year of 2008, gross profit increased to $80.5 million or 66.9% of revenue compared to gross profit of 65.0% of revenue for the same period last year. If you adjust the prior year to include PDSHeart, as if the acquisition occurred on January 1, 2007, the gross profit for 2007 would have been 64.7% of revenue.

With respect to gross profit going forward, we expect gross margin in 2009 to improve slightly as a percent of revenue, as we continue to institute operational improvements. Additionally, our gross margin will be favorably impacted by the change in the C3 depreciable life from two to three years. However, as we phase out the C2 devices for our current generation C3 device, we expect that the increased depreciation from the additional number of new devices will offset some of this favorable effect.

Moving on to operating income. In the fourth quarter, we achieved adjusted operating income of $6.5 million. This compares favorably to the $1.9 million operating income in the fourth quarter of 2007, and to the $4.3 million adjusted operating income in the third quarter of 2008. As a percent of revenue, our operating margin in the fourth quarter of 2008 increased to 18.9% compared to 8.0% in the fourth quarter of 2007.

For the full year, adjusted operating income increased to $14.6 million or 12.1% of revenue compared to $200,000 or 0.3% of revenue in the same period last year. Our operating income continues to improve, as we gain leverage, due to our higher revenue and from operational efficiencies that we are achieving.

Regarding income taxes. During the quarter, we completed the study with our tax consultants that concluded that we were able to utilize $22 million of net operating loss carryforwards in 2008. As a result, we recorded a true-up of our full year effective tax rate, which resulted in an income tax benefit of $200,000 in the fourth quarter. Consequently, our effective tax rate for the full year 2008 was 13.9%.

Additionally, the utilization of the NOLs in 2008 resulted in the avoidance of a cash payment for taxes of $8.8 million. We still have approximately $40 million of NOLs and other tax-related items that we anticipate utilizing in 2009 and beyond. I will address this further in my 2009 comments coming shortly.

Adjusted net income, excluding integration, restructuring, and other non-recurring charges, in the fourth quarter, increased to $8.4 million or $0.35 per diluted share compared to adjusted net income of $2.1 million in 2007 or $0.12 per diluted share. Excluding the impact of the NOL utilization, fourth quarter 2008 adjusted net income would have been $3.7 million or $0.16 per diluted share.

Adjusted net income for the full year increased significantly to $13.4 million or $0.59 per diluted share compared to an adjusted net loss of $400,000 or a loss of $0.12 per diluted share for the same period last year. Excluding the impact of the NOL utilization, full year 2008 adjusted net income would have been $8.7 million or $0.39 per diluted share.

With respect to share count -- the adjusted EPS of $0.12 per diluted share for the full year 2007 was calculated using diluted weighted average shares of 16.8 million, as opposed to the 3.0 million shares that you see in our earnings release. As we incurred a net loss for the same period on a GAAP basis, we were required to use the basic share count for the calculation of EPS.

This is because using the higher diluted share counts would have had an anti-dilutive impact on EPS. Therefore, because we had positive earnings on an adjusted basis for 2007, we are providing this diluted share count for reference.

Now to touch briefly on the balance sheet and cash flow. At the end of the quarter, cash and cash equivalents were $58.2 million. Operating cash flow for the quarter was $5.8 million. Capital spending was $4.5 million and free cash flow was $1.3 million.

Debt accounts receivable were $39.4 million compared to $35.9 million at the end of Q3, with DSO at 98 days, an increase of four days from the end of Q3. As we stated in our third quarter earnings call, we experienced a slowdown in our cash collections when we diverted our collectors to focus on patient support activities, after the fire that impacted our Conshohocken facility.

We're not able to fully transition all of these resources back to collections until the latter part of the fourth quarter, which was much later than we had expected. As a result, we experienced additional deterioration of our DSO. Our collections effort now is one of the Company's highest priorities, and we expect our DSO to improved to the mid-80s by year-end.

Turning to 2009 guidance, I would like to provide some additional detail around our outlook for 2009, which Randy has provided. Our outlook of $0.69 to $0.73 per diluted share excludes a $2.1 million restructuring charge that we will record in the first quarter relating to the recent executive management changes.

With respect to the quarters in 2009, we expect revenue to be slightly more weighted to the second half of the year than we experienced in 2008, primarily due to the benefit of the new sales representatives who start in the second quarter. The first quarter will continue to be our slowest, and Q3 will be impacted by the summer slowdown, as physicians and patients go on vacation. We expect a strong fourth quarter as the new account executives gain traction.

As for the pace of earnings across the year, we anticipate that our quarterly flow in 2009 will be very similar to that which we experienced in 2008. In the first half of 2009, we have increased expense due to the new sales reps coming onboard, with limited productivity until the latter part of the year.

Regarding the impact of the NOLs and other tax-related items on our future results -- in 2009, we expect to fully realize the remaining P&L benefit of the NOLs, resulting in a favorable impact on earnings of $1.00 to $1.30 per diluted share.

On a cash basis in 2009, we anticipate a favorable impact on cash, due to the avoidance of cash payments of approximately $4.6 million. A similar cash impact is expected in 2010 and 2011. We believe that we will have substantially exhausted all of the NOL cash benefit by the end of 2011.

With respect to our effective tax rate -- for 2009, we expect the rate to be 41%, excluding the impact of NOLs and other tax-related items. We also expect a similar rate in 2010 and 2011.

Thank you, and I will now turn the call back to Randy for some additional comments.

Thank you, Marty. Before turning the call over to questions, I'd like to comment specifically on three areas of importance -- reimbursement, clinical programs, and the economic environment in which we compete.

We made significant strides in '08 to improve the reimbursement environment for the CardioNet System and believe the outlook for additional coverage is very promising. In October, we received category 1 CPT codes and reimbursement rates for the professional and technical components of the CardioNet System. These reimbursement codes provide strong validation of our technology, remove major obstacles for commercial payors, and establish a simplified and stable reimbursement environment.

Looking to '09, this coverage enhances our ability to attract new physicians and payors, while also increasing business with existing customers. Also related to reimbursement, during '08, we secured payor contracts with two major commercial payors, Aetna and Humana, and more than 30 smaller providers. CardioNet now has contracts covering more then 190 million lives. We are highly focused on securing contracts with the remaining major payors to further improve our coverage.

Another area that has been and that will continue to be key to our success is clinical programs. CardioNet supports independent clinical trials that utilize the CardioNet system as a diagnostic tools. We also initiate clinical trials that are designed specifically to demonstrate the superiority and advantages of utilizing our systems, in place of existing technologies or in novel indications.

The first approach allows us to support the academic investigations of leading researchers or the commercial efforts of drug development companies, providing strong validation of our product and of CardioNet's leadership position in cardio/cardiac monitoring.

The second approach allows us to focus on demonstrating the benefits of our system to patients, physicians and payors, to clinically-validated superior outcomes, and reduction of cost versus alternatives.

We are also approaching a greater number of key opinion leaders with an expanded program to raise our profile among thought-leading physicians, and broaden the community of influential advocates of the CardioNet system. This provides another avenue to reach new physicians on a peer-to-peer basis with clinical benefits of our system.

We are frequently asked about the impact of the current economic and political environment on CardioNet. To date, we've seen no evidence that the recession is impacting our performance. However, most of us would say that we are in unchartered economic waters. As such, we will be constantly monitoring enrollment rates, as well as reimbursement and co-pay dynamics, to see if we are impacted. But as I've said, to date, we see no impact.

Politically, it seems clear that some form of healthcare reform is likely. This reform is likely to provide expanded coverage to the uninsured and under-insured, which some people quote as having the potential to bring $40 million or more new covered lives into the system. One thing we know for sure about CardioNet is that we bring far superior clinical and cost benefit dynamics to physicians, patients, and payors. We believe we are very well-positioned to be a winner in any healthcare reform.

I would also like to announce today two important items. First, we have reconstituted our Medical Advisory Board. We will be providing the specifics in the next few days, but it is fair to say that some of the most influential thought leaders in our business have joined the CardioNet Medical Advisory Board.

Second, we learned today of a new payor joining CardioNet, which will add over 3 million new lives.

In closing, CardioNet seems uniquely positioned to leverage our growing leadership and expertise in wireless cardiac monitoring. We are developing a true platform technology, addressing what we see as one of the most impactful opportunities in healthcare for at least the next decade -- wireless medicine.

The convergence of healthcare, information technology, and the ascending dynamics in wireless medicine has the potential to transform many diagnostic and therapeutic segments. CardioNet is at the center of this convergence and uniquely positioned to lead this transformation in healthcare.

Your questions.

(Operator Instructions) Amit Bhalla, Citi.

I have -- my questions are going to be around the guidance, both the longer-term and the near-term. Starting with the long-term guidance. I appreciate that marketshare is going to be the key driver for you to reach the 2010 and 2011 goals, but I was wondering, what kind of assumptions do you have built in, in terms of acquisitions that may help get to those goals, if there are any assumptions for acquisitions? As well as your assumptions on competitive new entrants and sales force for the long-term. Start there.

With respect to acquisitions, there are no assumptions in that outlook with respect to acquisitions. So, any acquisition that we did would have to stand on their own merits in terms of contribution to earnings.

With respect to competition, our assumptions there are that the field in which we compete will have currently the existing players that are in the market, some of which are moving into wireless. And that in the timeframe between now and 2011, there certainly could be a new competitor; but of course, we're very well -- we're very knowledgeable within CardioNet in terms of the infrastructure required to really satisfy the needs of our physician customers and the patients that we serve.

The important point with respect to competition, though, refers back to the investment priorities that we've set this year. It's my view that in the future, our position as the leader is going to be most secured by being viewed as our -- by our physician customers and the patients we serve, as the unquestioned quality leader in the industry.

So, that's why we are investing and, as I commented in my remarks, in IP infrastructure to support the growth of our business; the highest quality customer service and monitoring operations; and in developing our professional sales organization to ensure that they are the most capable in our field of endeavor.

So the real question is not whether there will be competition or increased competition; but it really comes back to an additional rationale for why we are investing in [substantive] ways behind our Company in '09.

And also, in terms of your sales force in the out years, your thoughts there?

Our sales force in the out years -- as we look to 2010, I think the key going out of '09 will be to see what kind of penetration that we have on a nationwide basis, some of the new adjacent markets that we're entering, where we are going to put some additional reps this year. And I think we're going to go out of '09 with a pretty full complement in our sales organization for nationwide coverage. But right now in our 2010 outlook, we've got approximately an additional 20 reps built into that; so, a number that's very manageable for us.

And if I could ask you a question on the near-term outlook for 2009. Maybe, Marty, could you talk a little bit about how the leverage on your bad debt expense is going to take place throughout the year? And if you could just provide us with where you ended 2008 in terms of sales force? And I'll stop there. Thanks.

We ended 2008 with the sales force -- with 88 individuals. And then, as Randy said, we see ourselves going up to 148 exiting 2009.

As far as the bad debt expense, we see that ratcheting down somewhat in 2009. We finished the year 2008 at about 11% of revenue. And we're expecting 2009 to bring that down 200 or 300 basis points. As we have said before, we think the more significant leverage in bad debt will come likely in 2010, because the efforts we're undertaking now to improve that profile in terms of collections, that will be more so -- you'll see that more manifest itself in our 2010 bad debt percentage.

Rick Wise, Leerink Swann.

This is [Danielle] in for Rick. How are you? A quick question on the CPT code. Have you seen any -- I know it's just been implemented at the start of this year, but have you seen any doc reaction to the new reimbursement code? And could you give any concrete examples as to how that could be changing referral patterns?

It's a great question, and we have with us this afternoon one of our really exceptional contributors to the Company in the last couple of years, Phil Leone, who runs our managed care operations. And I'm going to ask Phil to give you his perspective on your question.

You made a good point that it's early on. And so we're seeing it in the Medicare system, that adopted the code effective January 1, that the physicians have accepted it. It allows them to bill electronically a lot easier than they had in the past. It's predominantly for the Medicare population who billed with -- the physicians billed with a 93799 and a description. And it was laborious for them on the payments. So this actually helps them tremendously.

On the commercial side, they're just starting to migrate into that code. We've had some conversations as it relates to MCOT. We're hearing from the field that some of the payors are moving there, but more so towards the latter part of Q1 and into Q2. So, early indications are it's gone well, the code's gone well.

So again, I think that the key there is so far so good, but it's early on. And obviously, as every quarter -- as we move through every quarter, we'll have a better and better feel for it. But so far, so good. It should facilitate increased utilization of CardioNet System.

Okay, great. And then if I could ask one more question on the product pipeline. I know you're just rolling out your C3, nearing the end of that. What's coming behind that? I noticed in the press release you said you launched the A Fib application. Is that in full launch now? And anything else coming behind that to improve the product further? Thanks.

Yes, that sounded like about three questions, which is fair. We do have a product pipeline beyond the A Fib, which we recently introduced. And as we've said, it's our intention to continue to introduce enhancements and new applications -- you know, for competitive reasons, we're not going to get more specific about that. But we've seen tremendous results and positive feedback from our A Fib introduction.

Anna is here who runs our clinical operations. Do you want to provide a little bit more specificity to what I've said, Anna?

I think that essentially covers it. I mean, our pipeline has a number of things in it, but we would probably not want to share it at this time.

Right. But bottom line, expect a regular introduction of new products and applications that will be viewed by the physician customers as further indications of CardioNet's leadership.

Okay. And do you -- I'm sorry, I may have missed this -- do you expect regular introductions annually, bi-annually? Can you say?

We would think that there will be more than one or two introductions of new products or applications per year.

Okay, great. Thanks so much, guys.

George Dai, M.A. Weatherbie.

The first question is for Marty. Marty, you talked about the Accounts Receivable has not come down and you offer a good explanation. Just trying to understand -- what is the payment term from CMS? And also what is the payment term from the commercial side?

Yes. On the -- from CMS, we're collecting in the 30 to 60-day range. That is the standard that we're collecting under. It's a bit longer on the commercial side. And what we've done now is because of the aging that we're seeing, [the ratio] as we reported, as I mentioned in the call, this has become a key priority for the organization going forward here.

I see. Now when you see the extension of the AR, where do you mainly see the elongation from? Is that mainly from the CMS side? Or is it mainly from the commercial side?

It's not the CMS side; it is on the commercial side. And really the comment I would make is to put folks at ease here -- it's not an issue of not being able to collect the money; what we've seen in the last couple of quarters now is directly related to the physical effort of people getting on the phone and calling people, for the most part. It's chasing down receivables like happens to any other company. I must admit I've been through this experience before, and it requires just -- it requires a specific focus. And that's what we committed to here.

I see. Does that really change the bad debt expense assumption with the longer DSO?

Well, it will -- well, in terms of going forward -- yes. I mean, if we bring in more cash, it's certainly going to reduce the amount that we have to provide for bad debt, because as you know, we do that provision for bad debt based on an aging of receivables, for the most part.

I see.

You know, as what happened in any company, essentially. So we're looking at our receivables to the extent more time passes from the date of invoice to the amount of time that we still have not collected it, that's what starts to -- that drives the higher bad debt expense.

Great. The follow-up question is, regarding the market size, you guys in your presentation as well as in today's conference call, talked about the $2 billion opportunity that is based on 1.4 million event monitors per year, plus the [$1,450] usage charge, so that gives you about $2 billion. I'm just wondering, could you share with us the source of your 1.4 million annual event monitor usage?

Yes, George, that comes right out of a Frost & Sullivan report from -- I think it's about -- from last year, in fact. Right out of -- I doubt that I could tell you the page number, but I forget it.

Is that a third party validated and confirmed number?

Well, it's Frost & Sullivan. So within healthcare, as you might know, Frost & Sullivan is one of the main leaders in terms of these sort of studies.

I see. Okay.

Frost & Sullivan; you have IMS, folks like that.

They are the third party validator of this kind of information.

All right, thank you.

(Operator Instructions). Alan Fishman, Thomas Weisel Partners.

Thanks for taking my question. My first question is simply to remember, you said that there were 88 sales reps average in 4Q? Or that's what you exited at?

No, that's what we exited at.

Is there an average number you can provide?

Average, we'll tell you, is 85 for the year.

85 for the year. Okay. Thank you very much.

And we do have a follow-up from Amit Bhalla. Go ahead.

Oh, thanks. A follow-up in regards to the CEO search, any progress there? And any other management level departures since you made the CEO change? Thanks.

Yes, the second one first -- there have been no other management departures since the change earlier this month, and none other expected.

With regard to the CEO search, we have been really inundated with people who have expressed an interest in leading CardioNet. And as you can imagine, this is an extraordinarily attractive opportunity to some of the very best people in the medtech industry.

As you know, I've committed to remaining as the Interim CEO until we find somebody better to do the job. And since we've only been at this really the last three or four weeks, there's nothing more specific to report than that.

Thanks, Randy.

As I show no further questions, I'd like to turn the call back over to management for any closing remarks. Please proceed.

Well, again, I would like to conclude by saying that 2008 was a year of great accomplishment by the management team here at CardioNet. Some of them you've been introduced to on the telephone today, like Anna McNamara and Phil Leone. There are some really other extremely talented people here who really have embraced the technology that our founder created, have really demonstrated terrific ability to commercialize this technology.

As I said in my concluding remarks, what most excites me about the future of CardioNet is that we are, truly, I think, in the middle of a convergence of a potential revolution in healthcare, that not only incorporates a lot of the dynamics of cost benefit in healthcare today, but also the intersection of information technology and the ascending dynamics, as I called it, in wireless medicine.

There are few companies today, I think, in any industry, that have the kind of potential that CardioNet has. So we are all extraordinarily pleased with the performance of our people in 2008. We believe '09 is going to be another year of equal achievement, and beyond that, we believe our potential is unlimited.

Thank you all very much for attending the CardioNet call. And we look forward to speaking with you in the future.

If you joined the conference late today, you may listen to the conference on digital replay, which will be available from February 17 to February 24, 2009, on dial-in number 888-286-8010 or internationally, 617-801-6888. You may listen under pass code 56293026.

Thank you for your participation in today's conference. That does conclude the presentation. You may disconnect. Have a wonderful day.