BIOLASE Inc (BIOL) 2020 Q4 法說會逐字稿

Good day, and welcome to the BIOLASE 2020 Fourth Quarter and Full Year Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Todd Kehrli of the EVC Group. Please go ahead, sir.

Thank you, operator. Good afternoon, everyone, and thank you for joining us today to discuss BIOLASE's financial results for the fourth quarter and full year ended December 31, 2020.

On the call today from BIOLASE is John Beaver, President and Chief Executive Officer. John will review the company's operating performance for the fourth quarter and full year before opening the call for questions.

Before we begin, I'd like to remind everyone that a number of forward-looking statements, which are statements that are not historical facts, will be made during this presentation, including forward-looking statements regarding the company's strategic initiatives and financial performance. These forward-looking statements are based on BIOLASE's current expectations and are subject to a variety of risks and uncertainties that could cause the company's actual results to differ materially from the statements contained in this presentation. Such forward-looking statements only represent the company's view as of today, March 25, 2021.

These risks are discussed in the company's filings with the Securities and Exchange Commission. A replay of the conference call will be available on the BIOLASE website shortly after the completion of today's call. When listening to this call, please refer to the news release issued earlier today announcing the company's 2020 fourth quarter and full year results. If you do not have a copy of the news release, it is available in the Investors section of the BIOLASE website at www.biolase.com.

BIOLASE's financial results can also be found in the company's report on Form 10-K, which will be filed with the SEC. The tables we've provided in today's news release are for additional financial information, so we encourage you to review them. The tables include the reconciliation of unaudited GAAP net loss and net loss per share to non-GAAP adjusted EBITDA loss and adjusted EBITDA loss per share, as well as the details of the company's non-GAAP disclosures.

With that said, I'll now turn the call over to BIOLASE's President and Chief Executive Officer, John Beaver. John?

Thanks, Todd, and thank you, everyone, for joining us this afternoon. We appreciate your continued support and interest in BIOLASE.

Before reviewing our quarterly performance, I want to address the recent management change and how honored I am the Board has entrusted me to guide BIOLASE as its President and CEO during its next growth phase.

Since joining in 2017 as CFO, my goal has always been to position the company to succeed. I work closely with our customers, our team and our Board to help write the next chapter of the BIOLASE narrative as we focus on driving profitable growth through the commercialization of our industry-leading dental lasers.

As President and CEO, my vision for what BIOLASE can be has not changed, and I will continue to be at the forefront to ensure we have the resources to achieve our goals. This is made easier because our industry-leading products provide a new and proven and better standard of care for dental procedures while ensuring a safer environment for dental practitioners and patients by reducing aerosolization to mitigate the spread of infectious pathogens such as COVID-19.

I'm especially pleased with our efforts, particularly during this past year when in-person meetings were restricted to educate and train dentists and dental specialists on the benefits of laser dentistry, which is driving the increased adoption of our dental lasers.

Our strong fourth quarter performance demonstrates the business momentum and traction we are gaining and our continued success in navigating this challenging business climate. We delivered total revenue of $8.5 million, representing a sequential quarterly increase of 31%, our second consecutive quarter of sequential revenue growth.

Some other operating highlights for the fourth quarter include U.S. revenue exceeded the prior year's fourth quarter despite COVID-19 headwinds, signaling the resumption of some of the pre-COVID momentum we were experiencing as a result of our growth plan.

78% of our fourth quarter U.S. laser sales came from new customers, continuing a positive trend we have seen take shape over the past couple of years. The average selling price in the U.S. for our Waterlase iPlus increased 22% in the fourth quarter versus the prior year.

Several dental service organizations, or DSOs, purchased BIOLASE products in the fourth quarter, reflecting early success with our strategy to penetrate those large institutional organizations. And lastly, 40% of our U.S. laser sales came from dental specialists during the quarter represented a significant increase over prior periods.

Over the past 6 months, we have made several improvements to our go-to-market strategy, including 4 main specialist academies focused on expanding the reach of our dental lasers into the dental specialist communities. As a result, during the fourth quarter, we launched the Waterlase Endo Academy, an exclusive community of leading endodontists dedicated to improving patient outcomes and profitability with new technology. The academy opened all Waterlase endodontists was created to foster peer-led learning, best practice sharing and optimal integration of Waterlase technology into their clinical practice. As endodontists continue to seek more advanced solutions, the academy serves as a resource for disseminating best practices for integrating advanced technology like our Waterlase dental laser.

The Waterlase dental laser offers various benefits for endodontists from faster procedures to new treatment options. In addition to improving efficiency, the Waterlase also provides improved patient-reported outcomes.

Waterlase's unique approach allows for success in conservative endo treatment, while the overall technology delivers more predictability, reduce patient discomfort and improve patient care. Top thought leadership is quickly establishing Waterlase as the new standard of care in endodontics.

There are approximately 5,000 endodontists in the U.S. If an additional 10% of these endos adopted our laser, we believe it would be equal to an additional $25 million in laser sales for BIOLASE and drive follow-on consumable sales.

Leveraging the same recipe for success, we recently launched an innovative and first of its kind program in the periodontal community to foster peer-led learning with ongoing mentorship from leading clinicians featuring online meetings and case reviews by experts in the field. The Waterlase Perio Academy is open to all periodontists utilizing the Waterlase technology.

Launching the academy devoted to supporting the growth and timely needs of periodontists directly aligns with BIOLASE's mission of advancing dentistry. Periodontists have seen a significant increase in peri implant disease due to the significant number of new dental implants being placed each year and the existing aging dental implants currently found in millions of patients.

periodontists also are actively seeking ways to manage both periodontal and implant diseases as the incidence of gum disease with bone loss has increased in the adult population. There are approximately 5,000 periodontists in the U.S., and 65 million Americans are suffering from perio disease.

At the end of 2020, the Journal of Periodontology published a landmark study performed by the McGuire Institute on the clinical efficacy and patient-reported outcomes of Waterlase-assisted treatment of periodontitis. The McGuire study, unequivocally confirmed that patient-reported outcomes were significantly better than after laser procedures. This was a first-of-its-kind study designed to meet the stringent American Association (sic) [Academy] of Periodontology best evidence consensus standards. We believe this study establishes new protocols for perio surgery and will drive further adoption of Waterlase in our target markets.

Also, the International Journal of Perio & Restorative Dentistry recently published a study that evaluated the reestablishment of bone-to-implant contact on infected dental services following decontamination using Waterlase and reconstructive therapy, which highlighted the ability of Waterlase dentists -- lasers, excuse me, to detoxify surface and assist in saving implants.

We are equally excited about the pending release of another clinical implantitis management study involving 32 patients that has been completed by the Periodontists Department at Columbia University and is being submitted for publication. Preliminary data demonstrates incorporating Waterlase treatment for implantitis involving single implants as the statistical and clinical improvement over conventional mechanical debridement. With so many Americans suffering from perio disease, these studies' findings are significant in determining the best course of treatment for these patients.

Also, studies continue to suggest that periodontal health is essential for overall health, and specifically as it relates to susceptibility to infection, including COVID-19.

Putting those opportunity in dollars, if only an additional 20% of periodontists adopted our laser in the U.S., that would generate $50 million in laser revenue for BIOLASE, not including the follow-on consumable revenue that would follow. We are experiencing high demand for our products from these dental specialists as they look for safer, more advanced alternatives to grow their practices, and our advanced dental lasers provide them this opportunity. Our laser safety benefits put us in a perfect position to advance the industry and treat patients in the safest way possible.

In addition to creating the specialist academies, we bolstered our go-to-market strategy during the quarter with an exclusive collaboration with BMW as part of our Waterlase exclusive trial program. Dentists who participated in this exclusive trial program receive a free 2-day training that provides an in-depth understanding of dental lasers. They are then able to use the Waterlase in their office for up to 45 days at no charge with an experienced Waterlase clinician available to help. Participating dentists who purchased a Waterlase during the trial period are invited to a complementary Waterlase weekend, which is exclusive for our event at the BMW Performance Center West here in California. In addition, participating dentists will be entered to win into a sweepstakes to win a 1-year lease of BMW M5. The Waterlase weekend promotion kicked off at the end of 2020 with the first Waterlase exclusive trial program training event being held on October of 2020.

We anticipate hosting 8 to 10 such events per quarter through 2021 with between 4 and 8 dentists participating in each event.

As I noted earlier, another highlight from our fourth quarter was our progress in penetrating the DSO market. There are approximately 1,300 DSOs in the United States, representing about 16% of the total U.S. demo market.

During the quarter, we sold BIOLASE lasers to 4 different DSOs, including Heartland Dental, Dental Care Alliance, Aspen Dental and Virginia Family Dentistry. At the end of the fourth quarter, we signed a significant collaboration with Dental Care Alliance, one of the largest DSOs in the U.S. with more than 320 affiliated practices in 20 states. This collaboration excludes expanding their laser adoption, including our hands-on training programs into targeted geographies in the next few quarters. We expect this collaboration to lead to a rollout to DCA offices by the end of 2021. We also continue to have active trials with Heartland, the largest DSO in the U.S.; Aspen, the second largest DSO; and ClearChoice, the eighth largest.

Last but not least, there are approximately 200,000 hygienists in the United States. With our Epic Hygiene laser, BIOLASE allows hygienists to perform gentler, highly effective treatments for bacterial reduction and managing periodontal disease without using water. The new BIOLASE laser system has the only FDA-approved preventative perio treatment protocol and has an ROI of only 3 months. The Epic Hygiene also meets guidance from the CDC, which recommends not using ultrasonic scalers so as to prevent the transmission of COVID-19. If our market penetration in the hygiene market increased only 5%, that would increase -- that would equal an increase of an additional $70 million in system sales for BIOLASE, which again does not include consumable sales that would follow.

During the pandemic, we continue to make adjustments to our go-to-market strategy, and we are starting to see the benefits of these changes. The positive sequential growth we have seen over the past 2 quarters and the continued momentum we are experiencing in our current 2021 first fiscal quarter gives us greater confidence we're nearing a resumption of pre-COVID momentum in our growth strategy.

The opportunities in the endo, perio, hygiene, DSO markets highlight our path for growth in the years to come. Today, the all-tissue market penetration in the U.S. dental market is only about 7%. But every 1% increase in the adoption of laser technology in the U.S. equates to approximately $50 million in revenue opportunity for BIOLASE.

With a clinically proven product portfolio that reduces the potential risk of infectious pathogens, Waterlase is a significant growth opportunity ahead as dental professionals seek safer technologies to treat their patients.

Despite the ongoing impact of the pandemic, we expect to report total revenue growth of approximately 65% for the current first quarter compared to the year ago period.

Before we open the call for questions, let me update you on our significantly improved balance sheet. At the end of the fourth quarter, our cash and cash equivalents totaled almost $18 million. However, as of today, our cash and cash equivalents have increased approximately $40 million due to the exercise of Warrants associated with our rights offering in July 2020 and the completion of a $14.4 million bought deal in February of 2021. Today, our balance sheet is as strong as it's ever been and gives us the confidence to fully execute our growth strategy despite the current environment.

While we all continue to deal with the impact of COVID-19, we are confident that our actions to strengthen BIOLASE are working. With the many positive changes we've made over the past year, we've created a healthier company. We now have the commercial infrastructure in place to capitalize on the growth opportunities in front of us, and we are confident on our business plan and continuation of the progress we are making towards returning to growth.

Our long-term prospects for growth are significant as dentists and patients worldwide look for solutions that allow them to provide and receive dental treatment in the safest way possible. We believe our laser safety put us in a perfect position to help them achieve this goal.

I'm proud of the BIOLASE team, who have rallied without question to deliver the technology products and services that our customers need and value during these very unusual times.

This concludes our prepared remarks. I'll turn the call back to the operator to open the call for questions.

(Operator Instructions) Our first question will come from Kyle Bauser with Colliers Securities.

Thanks for all the updates here. Maybe first, just wondering how your efforts are going to educate and train specialists on Waterlase for repairing implants. As we learned from several KOLs, there's really nothing else out there like Waterlase in saving implants. How has growing adoption of this indication gained some traction?

Right. So as -- I think, Kyle, as you'll hear me say this a lot, it's a surround sound approach to this, right? For us to really increase adoption, and this goes beyond periodontists and treating implants to everything else we do.

I think dentists probably have to hear it more than once. So we're doing a number of things on the implant side. One is the Perio Academy very much talks about perio-implantitis and how to treat that. So the things that we're doing in the academy, getting key opinion leaders, having constant webinars around that, sharing cases, doing things on social media to get the message out as well, all leads to that.

And certainly, with our U.S. field sales team, they are very focused on not only specialists as a whole, but in particular, periodontists.

Got it. I appreciate that. And in terms of the number of sales territories, I know it kind of was ratcheted back a little bit through COVID. How do you envision that evolving? Do you think it stays flat for a while until we get back to baseline? Just any color there would be helpful.

Sure. Pre-COVID, we had roughly 30 sales territories in the U.S. As COVID hit, we reduced that. And today, we have 24 field sales territories.

We are adding a couple more now that we're seeing geographies open up, allowing us to actually talk to the dentists face-to-face. But I think overall, we'll be at probably 26, 27 territories. I think that's a constant state as we look ahead right now.

I will say that -- for a number of reasons. I know that the COVID situation had an impact, probably a positive impact on this for us as well. But we have had less turnover in the sales group in an account manager sales group in 2020 than any time since I've been here, which I think is a testament to the training that we're giving them. We revamped the comp package to be more competitive. And the fact that they believe that they're really working for a company that is about ready to take off.

Sure. Agreed. And nice to see a lot of new users and so we saw a significant increase in installed base of systems. How should we think about gross margins kind of going forward? I know that the U.S. mix was trending higher. But maybe if you could provide a little color on kind of the difference in gross margin for consumables versus laser systems, maybe just an updated ballpark number would be helpful.

Yes, Kyle. So I won't talk specifically about product lines, but I will give you some general guidelines. As you know, traditionally, our sales revenue have been split about 60% U.S., 40% international. I think we can get back to that, though we will take a few quarters to do that.

Certainly from a COVID situation, the recovery in the U.S. has been quicker than many other countries around the world. And so as I mentioned in my prepared remarks, we actually had higher U.S. laser sales in Q4 of 2020 than we did in 2019, which is pretty remarkable. We would have hit, I think, the total revenue number for 2019 if it wasn't for the slowdown in the international markets.

So with today, in the next couple of quarters, U.S. making a higher percentage of our -- component of our laser sales, then you would tend to have margins higher because of the direct sales model we have in the U.S. versus the distributor model we have internationally.

Longer term, our goal is to get to EBITDA positive, and we have really put in place a lot of the cost savings and I think the discipline in the organization over the last year or so that are going to allow us to get that easier than it would have been 4 years ago.

Having said that, now we have to focus on revenue. And our revenue needs to be around $45 million to get us to EBITDA breakeven. That's a significant decrease over the $75 million that it was 3 years ago. And to do that, gross margins need to be around 50% at a $45 million level. With typical 65%-35%, let's say, split U.S. international, we can achieve the 50% gross margins, given our current cost structure.

Got it. Really helpful. I appreciate that. And then just lastly, on guidance, I appreciate Q1. And I know you're not going to talk about full year guidance, but I'm just trying to get a sense, if I look back historically, maybe with the exception of the last couple of years, we tend to see a sequential uptick in Q2 from Q1. Can you talk about seasonality at all? Any sort of projections here? And maybe how much pull-through from Q4 we might see into Q1?

I'm just trying to get a sense of how things might shake out from a cadence standpoint this year?

You're right. I'm not going to give guidance past what I already said for Q1 but -- and the reason for that is there are still unknowns. The large international market, which is a big deal for us, we don't know really what that looks like even next quarter because there's a lot of moving pieces moving very fast. .

Having said that, historically, you're right, we did have a seasonal business. Q4 was our best quarter, followed by Q2, followed by Q3, followed by Q1. Obviously, if you do the math on our Q1 guidance, you'll see that Q1, in comparison to Q4 of 2020 is going to be relatively similar.

And so I'm kind of -- the way I look at this call, I'm a little bit off of the seasonality in looking at prior years because coming back off COVID is such a big factor and how quickly our guys can get in front of dentists, and those are all moving. So what I am optimistic about is the sequential growth that we had in Q4. I would have expected that because Q4 is, as I said, our strongest quarter.

It's too early to tell what Q2 and Q3 and Q4 will do for 2022. I am once again, optimistic, but I'm not going to give guidance simply because of the uncertainties.

Understood. And the guidance for Q1 is certainly higher than expectations.

(Operator Instructions) We will take our next question. This will come from Anthony Vendetti with the Maxim Group.

John, just a little more follow-up on the international side. U.S. has obviously recovered faster. As best you could tell at this point, would you say the international side is a few months behind? Or is it hard to gauge in terms of the recovery there? And what particular countries are you seeing the most impact still?

So I would say we're about 6 months behind internationally versus what we've seen in the U.S. It's interesting. It's a different market strategy internationally for us than it is in the U.S.

The international sales, in large part, are driven by events. And large events that we get a lot of the cells from that, where you get a bunch of international dentists together at some annual event. And that really drives a lot of leads for us and a lot of sales for our distributors. I don't expect that to happen until the second half of 2021. And so that's holding us back somewhat.

I mean we're trying to mitigate that with Zoom, webinars and different things, but they're just not as effective internationally for whatever reasons they are in the U.S.

Okay. And then you mentioned a number of DSOs in the fourth quarter press release from today. Can you talk about sort of their purchase patterns during this fourth quarter? Is there any one of these particular DSOs that have stood out as being more aggressive in terms of purchasing the BIOLASE products?

Yes. I think in terms of level of aggressiveness, Virginia Family Dental, DCA probably had that with Heartland somewhat behind, and that may have to do with just the size of the organization.

Heartland, we're still very excited about the opportunity there. But yes, I was excited 2 years ago and things did not go as quickly as I had hoped. And a lot of it was COVID-related. I understand that.

But with Heartland, it seems like every time that we step up and meet their expectations, they throw another challenge to us, which is fine, and we're happy to meet that. But it just takes longer to go through that process than it does with some of the smaller DSOs.

And then because of that, we're really focused on some of the, I'll call it, micro DSOs, if you will, but the 5 to 10 dental offices that may not necessitate or really be to the level of a press release, but we're getting some traction there. And from a strategy standpoint, we're certainly spending a lot of time in that area.

Okay. And Heartland Dental is the largest potential service organization you're working with right now, correct?

Correct.

Okay. And then you mentioned the academies. Seems like a great way of other industries in the device area I follow. When they put together these academies, they notice adoption improve sometimes dramatically. Can you talk about the expectation there for how that's going to roll out and the opportunity in terms of growth? What's your expectation for how many of these particular specialists can get enrolled in these academies and see exactly what it is BIOLASE has to offer?

So what we're trying to do, the academies, is create that learning group camaraderie, almost cult-like. I don't want to use the word cult, but following of what we're doing, and give them opportunities for education and learning and bettering their practice.

The reason it's important to us is as we look at just the overall number of specialists, I mentioned 5,000 endodontists and 5,000 periodontists in the U.S., just a fairly small adoption rate, increased adoption rate of that means big numbers to us, as I mentioned in my remarks.

But in addition to that, Anthony, as we get more and more specialists to embrace and adopt this technology, we believe there will be a trickle-down effect on the general practitioners. Once they see that a lot of specialists are adopting it, that will get their attention as well. So I see the opportunity, not only -- the reason we did the academies wasn't only to promote our technology to the specialists, but also the ability to get that message and attention of the general dentist.

Okay. Excellent. And then last question is just on the gross margin side. It looks like there was a inventory obsolescence expense, which obviously impacted the gross margin this particular quarter.

Was that related to any particular product? And do you think that, that's -- that charge is now all encompassed here in this fourth quarter? Or is there going to be any spillover here into the first quarter?

As you may recall, we moved offices and manufacturing facilities in the middle of the year. And what we found was, with that move -- and we've been in that facility for, I believe, 12 or 13 years. You can imagine when you live in a house and you lived there that long and moved, you find a lot of stuff that you may have known you had, but you no longer needed. I think most of the stuff that we wrote off or reserved for fell into that category. There was really no surprises other than we just had to do the work to dig through it after the move and figure out what it was. And I am very comfortable that we got everything taken care of in Q4.

We can take our next question. This will come from Bruce Jackson with The Benchmark company.

If we could start off with the second part of the McGuire study, any idea when that might be published?

And then second part of the question is, is that going to be used to seek guideline inclusion? Is that still something that the company is working on?

So as far as the timing goes, we are getting close. Certainly expect it to be this year for it to be published. I think it could actually be published online as early as this summer. But I feel comfortable that it could be this year.

One thing we learned with the first McGuire study, we kept on thinking we knew when it was going to be published, but it's out of our control. And so we were wrong, right? It took probably 3 or 4 quarters over what we thought, but feel good about that being published this year.

And I didn't catch your second question, Bruce.

So with the positive data that you've been able to generate so far, is that something that you can use to get included in some of the society guidelines?

Well, we certainly will -- have been trying and will continue to try. That is not easy. Let me just say that. It really needs to not be driven by the manufacturer of the equipment like us. It needs to be driven by clinicians, practitioners and the leaders in those societies. We hope that -- one of the reasons we love having the Perio academy is that gives us a forum for having those discussions.

Okay. And then if we could just talk about the DSO valuations a little bit more. I know that it sounds like they're kind of an ongoing activity, but how far along would you say some of these organizations are in their evaluations? And is this something potentially where you could have a broader contract in the next quarter or sometime this year? Or is it just something where you can't really predict what's going to happen?

So you cannot predict it. Once again, we can move as fast as we want and can, and it still may not mean that the DSO on the other side of the table is moving at the same pace we are.

Having said that, I don't expect any significant incremental change on the DSO side in Q2. But I'm hopeful that in the second half of 2021, we'll see more and more.

The DSOs, they're coming out of COVID, too. And right now, they're seeing about 85% of the patient load. They're having more money that they're spending on PPE still. And so they're a little bit -- they're trying to figure out what their model is going forward as well and what their financials are. I think they will figure that out over the first half of 2021 and be in position to -- we will be in a position, and hopefully, they will be, to accelerate some of this stuff.

Okay. Then last question on gross margins. So you've got some overhead absorption that's going to have to take place before the gross margins start to expand a little bit, but if you could just give us maybe a rough idea of where the pivot point might be on the gross margin improvement from a revenue standpoint. And then are you still contemplating any sort of cost improvement on the lease themselves, for example, by moving to the subassemblies?

Yes. So some of the cost savings are occurring and did occur late in Q1 on the subassemblies that you mentioned. And so we'll see some of that benefit for a full quarter in Q2.

In terms of margin, the way I look at it is if you take $45 million as our revenue needed to be EBITDA breakeven, and I mentioned that the margin at a $45 million annual number is going to be about 50% to achieve that, then you can extrapolate between $12.5 million a quarter and whatever other number you expect for the quarter, kind of there's a -- it's not a linear, as you said, because of fixed cost dilution. It's not a linear formula, but 50% gets you to $12.5 million, gets you to EBITDA positive or neutral.

We can take our next question. This will come from Ed Woo with Ascendiant Capital.

My question is, as revenue ramps up as business stabilizes back at the dental office, you guys did a very good job managing your costs. How much of that cost do you think is going to come back once you -- your revenue gets generated back up?

Yes. So from a fixed cost standpoint, very little. In fact, I just had a meeting with our operations group this morning, and we feel very comfortable that with the resources that we have today, we can generate about $50 million of revenue a year. So that's kind of the demarcation for us.

As we see revenues start increasing over that $50 million, we will have to add some cost, but that certainly will be a good thing, right?

In terms of operating costs, we're in a pretty good position now. About the only thing that will move with increased revenue is sales and marketing, which will be reflective of the variable component of our sales team and variable comp commissions.

Great. Going forward, obviously, trade shows and conventions were pretty big parts of your line item now that people are talking about, well, maybe there's a new normal. Will -- do you anticipate if travel and conventions come back, that you guys will actively participate? Or do you think we're kind of -- you are comfortable at this new normal and be able to cut a lot of cost out of your fixed costs?

Yes. So on that one, I'll say it depends, and let me explain that. We have spent a lot more effort and resources on study clubs, for instance, webinars that's generated a tremendous amount of leads for us over the last 6 to 9 months.

Having said that, what we found historically is that in the large trade shows, conventions, that we do extremely well when we have podium presence. So we have somebody on the podium, speaking about lasers and the benefits of our technology. I would say that we will be opportunistic in supporting and participating in those events. But it really would mean that we need to have that podium presence or it's, in my view, a waste of money.

(Operator Instructions) We can take our next question. This will come from [Tony Marthaler] with -- he's a stockholder.

I was just curious, has there been any pursuance or any interest gates from, say, the U.S. military and/or government facilities, given the number of VA hospitals across the country that service guys like me?

There are some interest. We consider that part of our DSO strategy, and so we're certainly focused on it. That includes anything from the DSOs that we've mentioned before, to Native American reservation and tribes, to the prison system, to VA. Once again, most of those move very slowly. But we do have engagement with some of those communities.

(Operator Instructions) I would now like to turn the conference back over to the speakers for closing remarks.

Thank you, operator. We look forward to updating you again on our continued progress when we report first quarter results in May. Thanks again, everyone, for joining our call today. This concludes our call. Have a great day.

This concludes today's call. Thank you for your participation. You may now disconnect.