Codexis Inc (CDXS) 2011 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2011 Codexis, Incorporated Earnings Conference Call. My name is Stacy and I will be your conference moderator for today. At this time all participants are in a listen-only mode. We will conduct a question and answer session towards the end of the conference.

(Operator Instructions)

As a reminder this conference call is being recorded for replay purposes. I would now like to turn the presentation over to your host for today to Mr. Doug Sheehy. Please proceed.

Thank you and good afternoon. Today after the market closed, we announced our fiscal fourth quarter 2011 financial results. The press release is available on the Investor Relations page on our website at codexis.com. With me today are Alan Shaw, our President and CEO, and Bob Lawson, our CFO.

During the course of this conference call, management will make a number of forward-looking statements. These forward-looking statements include our projected full-year 2012 revenue, adjusted EBITDA and cash burn, the number of fully-funded FTEs for 2012, and our expected performance against Shell 2012 technical milestones, whether our CodeXol detergent alcohols will be a lower-cost replacement to currently marketed detergent alcohols, the timing of when Codexis and Chemtex will pilot production of CodeXol detergent alcohols, our ability in 2012 to supply Chemtex with larger volumes of CodeXyme cellulase enzymes, and to supply customers with pilot-scale samples of CodeXyme cellulase enzymes, the initial sale timeline, average selling prices, expected production capacity, and product revenue opportunity for CodeXol detergent alcohols, the expected price of cellulosic sugar produced by our CodeXyme cellulase enzymes, the commercial-scale production timelines, average selling prices, and market opportunity for our CodeXyme cellulase enzymes, our ability to improve first-generation ethanol processes in Brazil, potential FDA approval for a new manufacturing process for one of our pharmaceutical customer's products, and expected growth in our pharmaceutical product sales in 2012.

These forward-looking statements are based on assumptions and are subject to risks and uncertainties that could cause actual results to differ significantly from those projected. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Please refer to our Form 10-Q filed with the Securities and Exchange Commission on November 7, 2011 for some of the important risk factors that could cause actual results to differ materially from the forward-looking statements made on this call. Except as required by law, we disclaim any obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that occur after this call.

During this call today, we will discuss certain non-GAAP financial measures for comparison purposes only. The non-GAAP amount of adjusted EBITDA is calculated by adding depreciation, amortization, net interest expense, income taxes, warrant-related costs, and stock compensation to our net loss. This non-GAAP measure is an addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. Please refer to our press release today for a reconciliation of non-GAAP financial measures to GAAP. Now, I'll introduce Alan to discuss the quarter.

Good afternoon, and thank you for joining us. Today we are pleased to announce another year of strong financial results, and more importantly, continued progress toward our commercial objectives. On today's call, I will discuss our plans and outlook, and Bob will provide more details on our 2011 financial results, and 2012 forecast.

But let me begin by giving you some key highlights of our accomplishments in 2011. It was a transformative year for Codexis marked by the launch of our CodeXyme cellulase enzyme platform, and CodeXol detergent alcohols, the two most important product launches in our history and 49% year-over-year growth in sales of pharmaceutical enzymes and intermediates.

As we said in our first ever Analyst Day in December, Codexis is an enzyme company. We began as a developer of enzymes to enable the production of pharmaceutical products, and have for nearly ten years served some of the world's most demanding customers with Codexis enzymes and intermediates that are used in some of the world's best-selling and fastest-growing drugs.

We're applying the same CodeEvolver technology platform to enable the biofuels and the bio-based chemicals market with CodeXyme cellulase enzymes, our enzymes that unlock abundant, cheaper, and more sustainable sugars from agricultural biomass. As recent events have proven, the need for sugar from biomass have never been more profound. In Brazil, ethanol demand continues to outstrip supply, while new export opportunities are beginning to emerge.

As crude oil prices continue to trade near historic highs, capital is starting to be deployed for the construction of cellulosic ethanol production facilities. Chemtex, our partner for delivering CodeXol detergent alcohol, is commissioning a 13 million gallon cellulosic ethanol facility in Crescentino, Italy, that will come online this year. And recently, it was announced that a new cellulosic ethanol facility in North America will commence operations in 2013 with 25 million gallons of production capacity.

The story is no different in bio-based chemical. In Brazil and in the US recent developments have shown that bio-based chemicals from first-generation sugars are economically challenged. Meanwhile, we have seen new alliances formed to produce commodity chemicals from biomass.

We believe that cellulosic sugars from abundant biomass are the most effective solution to boost production capacity, reduce costs, and enable viable bio-based fuels and chemicals production. First-generation sugar, corn starch, or sucrose sell today for about $400 per ton. We believe that with our CodeXyme cellulase enzymes, we'll be able to produce a ton of cellulosic sugar for approximately half that, and potentially less if feedstock costs decline.

Feedstock costs represents 60% or more of the total cost of bio-based fuels and chemicals. Cellulosic sugars not only reduce costs, we expect them to enable products that are economically challenged with first-generation sugar.

We've been developing cellulase enzymes for nearly five years with Royal Dutch Shell, and 2011 was another year of significant progress for our cellulases. For the fourth consecutive year, we achieved our key technical milestones with Shell. The performance of our CodeXyme cellulase enzymes has been extremely impressive, matching the performance of competing commercial enzymes. In 2011, we successfully demonstrated the effectiveness of our CodeXyme cellulase enzymes on ethanol-producing yeast at Iogen's 500,000 liter demonstration plant in Ottawa. We also independently scaled production of CodeXyme cellulase enzymes at 20,000 liter scale.

2011 also marked the launch of CodeXol detergent alcohol, a lower-cost sustainable replacement for detergent alcohol currently produced from palm kernel oil or petroleum. We produced CodeXol at laboratory scale and have sent samples to customers, and the feedback has been positive. We believe CodeXol is representative of the future of chemical manufacturing in what is being called the new sugar economy. We expect CodeXol will be one of the first widely-adopted chemicals manufactured from cellulosic sugars.

We continue to see a tremendous opportunity for our technology in Brazil. Shell and Cosan formed Raizen, Brazil's largest sugar and ethanol producer, and the joint venture became our largest shareholder. We were fortunate to have Pedro Mizutani, Raizen's Chief of Upstream Business, join our board of directors.

In 2011, we also established our Brazilian subsidiary Codexis do Brazil. In pharmaceuticals we saw US FDA and European approvals for three new on patent drugs utilizing our enzymes. We now have more than fifth customers using our enzyme screening surfaces and kits. Fourteen patent applications were filed in 2011 by pharmaceutical customers using Codexis enzymes, up from nine in 2010. Before I turn to our strategic objectives and milestone for 2012, I'll hand the call over to Bob to discuss our 2011 financial results and 2012 guidance.

Thank you, Alan. Revenue for the fourth quarter was $33.5 million, up 12% versus the fourth quarter of 2010. Sales of pharmaceutical products were $15.5 million for the quarter, up 80% over the prior year quarter. Growth in the quarter was driven by deliveries of intermediates that received US and European regulatory approval in 2011, and by increased demand for atorvastatin related products versus fourth quarter 2010 with the expiry of Lipitor's patent in November. Pharmaceutical product gross margins were 16% in the quarter, up 11 points from the prior year quarter due to higher sales of innovator products.

Before I talk about our collaborative R&D revenue, I'd like to remind you that Shell is no longer a related party as a result of the transfer of our share ownership from Shell to Raizen. As such, the former category related-party collaborative R&D revenue no longer applies. All R&D funding is now reflected in the revenue line collaborative R&D. We'll continue to discuss Shell R&D funding, but we will no longer report it as a separate line in our financial statements.

Revenue from collaborative R&D was $17.3 million in the fourth quarter, down $3.5 million or 17% from the prior year quarter. Shell Milestone revenue in the fourth quarter was $2.4 million versus $4.5 million in the prior year quarter reflecting our achievement of milestones earlier this year than last year. We also saw a reduction of about $1 million in Shell FTE funding, and a reduction of about $300,000 due to the completion of our carbon-capture award with Alstom.

As a reminder, our collaboration with Alstom was for the development of carbon-capture enzymes to economically capture carbon dioxide emissions from coal-fired power plants. In the fourth quarter of 2011, Alstom notified us of its decision to discontinue this program.

Total operating expenses for the quarter were $25.3 million, up $3.3 million versus the prior year quarter. The year-over-year increase is primarily attributable to CodeXol detergent alcohol development. Of the $3.3 million increase, $2.2 million is from higher R&D spending. The remainder of the increase is primarily from higher legal costs related to intellectual property, and higher audit fees related to Sarbanes-Oxley compliance.

Our adjusted EBITDA loss was about $150,000 in the fourth quarter compared to a gain of $4.4 million in the prior year quarter. The decrease was driven primarily by the decrease in Shell Milestone revenue, and higher spending on CodeXol R&D. In late December two high-margin pharmaceutical product shipment delays impacted our fourth quarter and full-year EBITDA by about $900,000.

Turning to the balance sheet, we ended the year with cash, cash equivalents, and marketable securities of $63.8 million versus $72.4 million at December 31, 2010. Capital expenditures were $10.7 million, higher than last year as a result of expansion of our laboratory space in Redwood City.

For the full year, total revenue was $123.9 million versus $107.1 million in the prior year, an increase of 16%. Product sales were $49 million, an increase of 49%. Product gross margins were even year-over-year at 15% with improved innovator margins offset by growth in lower-margin atorvastatin product sales.

Shell related revenue was $63.2 million, down $3 million versus the prior year. Recall in 2010, we booked $1.4 million in revenue related to milestones achieved in late 2009. This type of prior year milestone recognition did not repeat in 2011. The remainder of the decrease is due to Shell's reduction from 128 to 116 FTEs.

Full year grant revenue of $3.5 million was down 15% over the prior year, due to lower collections form the Singapore Economic Development Board. Full year operating expenses were $98 million, a 14% increase over the prior year. R&D expense was $61 million, up $8.6 million on increased CodeXol detergent alcohol spending, and increased amortization expense related to our October 2010 purchase of Maxigen's intellectual property.

SG&A expense was $36.9 million, up 9% on expanding staffing and related costs for our CodeXol and CodeXyme business development activities. Full year adjusted EBITDA was $4.3 million, down from $9.9 million a year ago reflecting the decrease in Shell R&D and grant revenue, increased R&D spending, and the pharmaceutical product shipment delays in late December.

Now, let me turn to our outlook for 2012. Recall that our guidance policy is to give annual guidance which we will update each quarter. For the full year 2012, we expect revenue in line with, or exceeding, our 2011 results. We expect strong growth in pharmaceutical product sales, in the continuation of 116 fully-funded FTEs throughout the year, either by Shell or through a combination of Shell and new bio-based chemicals funding partners. We expect to achieve 80% of our regular Shell Milestones, and 50% of our stretch milestones in 2012, the same as we did in 2011. We expect a decline in carbon R&D funding as a result of the discontinuation of our work with Alstom, and the 2011 reduction in funded FTEs from Shell.

For the full year 2012, we expect adjusted EBITDA to be positive as we continue to manage our balance sheet carefully with cash burn at levels similar to 2011. With that, I'll turn the call back to Alan.

Thanks, Bob. With our strong balance sheet, low cash burn, industry-leading partnerships, and clear commercial road map, we're confident in the future. We are in a unique position at Codexis. We have tremendous commercial opportunities with our CodeXyme and CodeXol product lines, yet our capital needs are modest. I believe our portfolio, and indeed our company, represents the most capital efficient path to creating shareholder value in the bio-based fuels and chemicals space.

As we enter 2012, we're focused on four things. One, delivering world-class CodeXyme's cellulase enzymes to Shell and Chemtex. Two, piloting CodeXol production with our partner Chemtex and developing new CodeXol customer and manufacturing agreements. Three, delivering continued growth in sales of pharmaceutical enzymes and intermediates. Four, managing our resources wisely by offsetting our increased CodeXol spending with efficiencies elsewhere in the business. We have designed our 2012 corporate objectives around these goals.

Let me tell you more about our plans for the year starting with CodeXyme cellulase enzymes. In the fuels market, we are working with our exclusive partner Shell on a set of agreed 2012 CodeXyme Milestones. These milestones are designed to measure the demonstration skill readiness of CodeXyme's cellulase enzymes in combination with Iogen's pre-treatment platform.

Our work with CodeXyme for the chemicals market is showing great progress. Earlier in the call, I told you that we and Chemtex are making excellent progress with several feedstocks, including sugar cane bagasse. In 2012, we are planning to supply Chemtex with their largest ever sample of CodeXyme. This sample will be used to pilot the scarification of sugar cane bagasse, using CodeXyme cellulase enzymes and Chemtex's PROESA pre-treatment process. We are also excited to extend this sampling program to new customers n the chemical space in the second half of 2012.

With CodeXol detergent alcohol, we have nearly completed our 650-liter pilot facility in Redwood City for fermentation and downstream processing. Building on our successful lab-scale sampling program from 2011, we intend to provide pilot-scale samples to customers in 2012. These samples will be a key factor in closing new customer agreements we are currently pursuing for CodeXol.

Finally, with sugar cane bagasse integral to many of our customers' feedstocks strategies, we will be active in Brazil in 2012. We will continue to work with bagasse feedstock for conversion to sugar using our CodeXyme cellulase and Chemtex's PROESA pre-treatment. We also look forward to further collaboration with Raizen on improving yields in their gen-one ethanol production process.

Our pharmaceuticals order book gives us confidence in another great year. As Bob mentioned, we continue to expect strong product sales growth in 2012. In addition to the three new products that were approved in 2011, we expect the FDA to approve a manufacturing process using our enzymes for a block-buster drug that is approaching $4 billion in annual sales.

We also expect demand for our atorvastatin related products to continue to climb as generic volumes increase. And as we announced late last year, we now have more companies using our technology in process development than ever before. I am very pleased to say that this business is poised for strong growth for the foreseeable future.

Before I conclude my remarks, I would like to remind you of our anticipated commercial timelines and the size of the markets we are addressing. We anticipate initial commercial-scale CodeXyme's cellulase production using CMOs in late 2012, scaling to commercial production in 2015. We expect ASPs of $0.35 to $0.45 per gallon of fuel produced using our enzymes within Shell and Raizen ethanol alone, we project is cellulase enzyme market opportunity of $1 billion by 2020.

Turning to CodeXol detergent alcohol, we anticipate initial sales ramping through 2015. We expect average selling prices of $2,400 per ton, and our business plan calls for the build out of 180,000 tons of capacity. This presents a total product revenue opportunity of well over $500 million.

As you can see, we are poised to capture significant value in the near future. Our capital requirements are modest, and our balance sheet is strong relative to our capital needs. We have the resources, the technology, the talent, and the plan to turn Codexis into a world-leading provider of enzymes to unlock a cheap and abundant cellulosic sugars for our customers.

The world needs our products and we will deliver. I am very much looking forward to an event filled 2012. I look forward to updating you throughout the year on our CodeXyme and CodeXol commercial progress, the growth of our pharmaceuticals business, and our progress in Brazil.

Before I turn it over to questions, I would like to acknowledge the news we reported a couple of weeks ago. Bob Lawson, our Chief Financial Officer, has decided to leave Codexis to accept a position at a private software company. Bob came from this industry, joining Codexis from Intuit in 2009. It is not unexpected that someone with Bob's talent, who played a critical role in getting Codexis successfully through our IPO in 2010, would be noticed in the industry. We are very sad to see him go, but remain grateful for his leadership. We wish him the best as he returns to the software industry. Bob, on behalf of all of us here, thank you for your valuable service. Thanks for your attention, and now to your questions.

(Operator Instructions)

Your first question comes from Mike Ritzenthaler with Piper Jaffray. Please proceed.

Good afternoon, guys. I apologize for any background noise. I did the best I could. During our meetings this afternoon with government officials in Brasilia, it seemed to me as though the industry-wide focus on growth in electricity generation pares down Codexis' opportunity to the tops and leaves left on the field, which I realize you mentioned many times in the past, is still a sizable opportunity. Can you characterize for us what new machinery and other types of infrastructure has yet to be invented or implemented in order to collect the tops and leaves, and to what extent would you say government officials are interested in building out this infrastructure?

It's Alan here. Firstly, regardless of whatever you heard in Brasilia, I'm not so sure I agree with that statement. I actually believe that there is significant value to be created from bagasse itself. The important thing about bagasse is that it's already at the site, the location where we would produce cellulosic ethanol or cellulosic bio-based chemicals. It's already been collected. So there is significant value add in converting it into a higher form of [useful] carbon, and burning it in reactors, not reactors, but boilers that are on average over fifty years old, is not in my opinion the most economic use.

So, it's a great discussion, and I'd love to spend all day talking to you about it. As far as the tops and leaves are concerned, it is not practical to collect them today. You are absolutely correct. The focus will be on converting bagasse. Tops and leaves at the moment is causing real problem because, as you know, it's now illegal to burn the tops and leaves. But leaving them is causing issues all of its own. And I agree with you. This needs to be addressed, and I don't think there's a lot of infrastructure in place to collect the tops and leaves today.

Okay. Excellent. Bear with me one second here. On the guidance for 2012, obviously it's a little lighter than we had expected. But without getting into specific numbers looking out to '13, '14, can you just give us some qualitative sense where revenue and EBITDA is headed? Obviously, flat on revenue is the new guidance, and then slightly down on EBITDA, but maybe give us a sense for '13, '14, where the picture might be a little rosier.

Sure, Mike. It's Bob. As we look at 2012, as you know, our revenue really comes from two sources today, pharmaceutical, intermediate and enzyme sales, and R&D funding. We expect strong growth, as we said, in pharma revenue for the foreseeable future. What we're seeing in 2012 is an expected decline in R&D funding really from two things. The end of our program with Alston on development of carbon-capture enzymes, and that's really a function of the absence of climate-change legislation, and an economic incentive to capture and sequester carbon from coal-fired power plants. So, not a huge surprise.

And the Shell reduction from 128 to 116 funded FPEs that happened in August of last year. So the simple math says, based on that R&D funding is a bit down, and despite pharmaceutical revenue being up. As we look forward over the next couple of years, I think again, we expect to see good growth in pharma revenue, and then the other source of revenue is R&D funding.

We certainly, as we look forward with Shell, expect to receive R&D funding from Shell, and we are in discussions with a number of potential chemical partners for R&D funding for the development of CodeXol and other bio-based chemicals. So, 2013 and 2014 are really depending on what happens in those two areas.

Alright, great. Thank you, guys.

Thank you.

Your next question comes from Ben Kallo with Robert W. Baird. Please proceed.

Hi, thanks for taking my question. Congratulations on the move, Bob.

Thanks, Ben.

I want to draw on Mike's earlier question. What do you see what the risk in sugar prices and ethanol being elevated with your partners there in Brazil making changes to their operations, your capital expenditures to their operations, to introduce your next-generation enzymes to make ethanol out of the bagasse? Do you see that as a risk, so if sugar prices and ethanol prices are at highs, do they want to interrupt operations to make these changes? And then my second questions is, could you just give us an update on where you stand with Shell as far as re-upping the paid R&D? Thank you.

Absolutely. Happy to answer your question. Let's deal with the Raizen situation. (technical difficulty) Raizen is our partner and as we said they are Brazil's number one. I think there's an (technical difficulty) question that there would be significant down time (technical difficulty) plant. I'm not absolutely sure how significant that is. In truth, I don't think anyone really knows the answer to that, because (technical difficulty).

But what I can tell you is that the need for second-generation ethanol is greater now than it has ever been, and there is significant pressure on all Brazilian ethanol producers from Brasilia and from elsewhere to produce as much ethanol as they possibly can. It takes years to plant sugar cane fields. It's a significant investment. It's not just the field, it's the infrastructure to get to the fields. And to be honest with you, there just isn't that capital available in Brazil. And capital is very expensive in Brazil.

The most obvious way, the easiest, the path of least resistance is to use these polymeric sugars that are already at every single mill and convert them. So, I think the bottom line is that if there is disruption, it will have to be managed. But the prize is so large, I think it's inevitable.

Just to pile on, Ben, I think the other thing I'd say is Cosan had their Annual Analyst Day the end of November, and it included a briefing by Raizen, and they identified four strategic priorities of which one was cellulosic ethanol.

Now let me answer the second part of your question in reference to Shell. Our confidence remains very high that Shell will fund at the current rates of 116 FTEs through October 31, and I think everybody on the call understands the significance of October 31.

I'm also very confident that Shell will continue to fund R&D between October 31 and the point of commercialization. Their investment today is so significant, it's just illogical that they wouldn't see it through to completion. The precise number that is required to get us to commercialization is unknown today. Those plans are still being formed. But I'm confident because the plans are being formed, and I'm confident that we don't have to wait to October 31 to know exactly what it all means.

What we do know is that we're proactively, and quite aggressively, talking to non-Shell related parties for third-party R&D funding on a multitude of bio-based chemical opportunities, and this is more than sufficient to back fill any doubter between what Shell funds post October 31 and our baseline is 116 FTEs for the foreseeable future.

Okay. That's very helpful. Thank you.

Thank you.

(Operator Instructions)

Your next question comes from Edward Westlake with Credit Suisse. Please proceed.

Good afternoon, and thank you for taking my questions. Actually, Patrick Jobin on for Ed today.

Hi, Patrick.

I was hoping you could provide an update on the CodeXol pilot that's underway, and then maybe your view on how you can commercialize that ahead of 2015. Maybe the path for capital deployment.

Yes, okay. We're very excited about CodeXol. We're going to pilot it in our 650-liter facility here in Redwood City, and I'm please to say that that's a retrofit of a facility we already have that was built for our pharmaceutical business. So, it's essentially fully depreciated. So, again, it fits very nicely with our capital light model.

We also have the opportunity to in parallel pilot at our partner's facility in Italy, and through both of these mechanisms the objective is to get it to scale, get some samples, and get those samples in the hands of our development partners, and the ultimate customers. And hopefully conclude our manufacturing and commercial arrangements that are currently on the table and need to get closed.

Okay. And your view on when the first large-scale commercial plan might be operating. Was that 2015 or would that be some time before then?

No, we're saying 2015.

Okay. Alright, thank you.

Thanks, Patrick.

Your next question comes from Michael Klein with Sidoti & Company. Please proceed.

Hi, guys.

Hi, Mike.

Is there any type of update that you can provide us on the pricing and timeline for gen-one sales in Brazil?

Yes, Mike, I think it's early days, as we've talked about. I think we're working with Raizen scientists and Raizen engineers on a number of opportunities. Those are in process and we'll know more based on the findings over the next few months. We remain expecting to pilot at Raizen's Bonfim mill during this season, but I don't expect significant revenue from that this year.

Okay. And, as it relates to detergent alcohols, can you just kind of characterize how the discussions are going with potential customers, and sort of the feedback that you're getting from them?

I'd be happy to. It's Alan here. The feedback is very positive. The most important thing you need to know about bio-based chemicals is they need to be what is termed drop in. If the product is not identical in every respect to the product that is currently manufactured using conventional chemistry, in this case palm oil or petroleum, then there are significant delays in getting it to market, whether they be regulatory or just product adoption.

The most important thing, therefore, for us is that the products that we produce today in our laboratory-scale facilities have matched in every regard the testing that has gone on to date. And I'm pleased to say, that with our priority customers, one of the world's largest consumer goods companies, we cleared every hurdle. So that is very important for us and we're very pleased.

After the discussions with those companies, it is important that we get the right deal. And for us, the right deal is a quality deal. So we've been very careful not to rush to market with a deal that leaves either money on the table, or doesn't work for our partners, our manufacturing partners, or even the customer themselves. We're already a public company so it's not like we're a private company, we need a few deals to make us look real.

We're going to do this the right way, and it'll be a quality deal, or quality deals, and it'll be in the best interest of our shareholders. That said, these discussions are underway, and we're very positive there will be a favorable outcome for all concerned.

Sure. Understood. And is there anything that could possibly speed up the timeline to commercialization.

Candidly, not much. At the end of the day the reality is that the fermentation microbe has to be developed, it has to be piloted, and that, of course, is the most critical thing that has to happen next, and we're very excited that that will happen this year. And that's a big leap for us coming from the lab. But, once you've piloted, you then need to design the downstream processing. You need to put the -- essentially design the plans. And once all that's done, you have to construct the plant. A lot of that is physical and cannot be accelerated.

Where we can parallel track, where we can dual track, we'd love to build -- be working on more than one facility, more than one location, and leverage our technologies ability to be responsive to multiple feedstocks.

We will do that, but I think it's unlikely that you'll see anything of commercial scale sooner than the timelines we've already indicated.

Okay. Thanks a lot.

And at this time I'd like to turn the presentation back over to Mr. Alan Shaw for closing remarks.

Okay. Well, thanks for the great questions and thank you all for joining us today. We look forward to updating you in our key focus areas throughout the year. Goodbye.

We thank you for your participation in today's conference. This does conclude your presentation. You may now disconnect and have a great day.