Cardiovascular Systems Inc (CSII) 2013 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Third Quarter 2013 Cardiovascular Systems, Inc. Earnings Conference Call. (Operator Instructions.)

I would now like to turn the presentation over to Mr. Larry Betterley, CFO. Please proceed.

Thank you, [Stephanie]. Good afternoon, and welcome to our fiscal 2013 third quarter conference call. During the course of this call, we will make forward-looking statements. These forward-looking statements are covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and include statements regarding CSI's future financial and operating results, or other statements that are not historical facts. Actual results could differ materially from those stated or implied by our forward-looking statements due to certain risks and uncertainties, including those described in our most recent Form 10-K and subsequent quarterly reports on Form 10-Q. CSI disclaims any duty to update or revise our forward-looking statements as a result of new information, future events, developments, or otherwise.

We'll also refer to non-GAAP measures because we believe they provide useful information for our investors. Today's news release contains a reconciliation table to GAAP results.

I'll now turn the call over to Dave Martin, CSI's President and CEO, for comments. Dave?

Thanks, Larry, and hello, everyone.

On the heels of our solid second quarter, we delivered another quarter of strong financial results and compelling clinical data. Our focused sales strategy and educational initiatives drove adoption of our easy-to-use technology with peripheral arterial disease, or PAD. We drove adoption with physicians in both the hospital and the office-based settings.

The medical community is very excited about the data we presented from our ORBIT II study of severely calcified coronary lesions at the 2013 American College of Cardiology conference, or ACC. Coronary calcium is an extremely underserved problem. Our 30-day ORBIT II results in this very challenging patient population demonstrate the outstanding potential of our technology.

Moderate-to-severe calcium is present in nearly 40% of those treated for coronary artery disease, or CAD. Moreover, it is present in about 65% of the 2.5 million people diagnosed annually with PAD. Calcium can lead to poor outcomes and higher treatment costs when traditional therapies are used. Our mission is to conquer calcified arterial disease in both legs and the heart. This is a large opportunity for CSI.

Building on our success at ACC, we submitted a pre-market approval, or PMA, application to the FDA for our Orbital Atherectomy System to treat calcified coronary arteries. This marks another major coronary milestone for CSI, as we drive for an application in this $1.5 billion market opportunity.

Briefly, I'd like to reiterate the three goals that drive us as a company - expand the use of our Stealth system as the first option for treating arteries, including calcified arteries, in the peripheral market; build on our base of scientific data that supports the safety, effectiveness, and economic benefit of our products; and obtain approval for a coronary application, which would allow us to address a large unmet need in treating calcified coronary arteries.

The CSI team further advanced these goals during the fiscal quarter. Specifically, revenues rose 25% year-over-year and 5% sequentially. Stealth 360 revenues grew to more than 96% of the total device revenues. Most of our customers are now converted to the new system. Office-based- lab revenues continued to grow, demonstrating success in both hospital and office-based lab settings.

The ORBIT II data that we presented at ACC showed that our technology exceeded the trial's two primary safety and efficacy endpoints, and by a significant margin. We completed our PMA submission to treat coronary artery disease on March 15th. This was really a monumental effort from our entire team. Special heartfelt thanks to each and every CSI employee, and every physician partner and their teams. And we successfully closed on a $38 million public stock offering, providing the funds needed to implement our growth strategies.

Now, Larry will provide more details on our financial results, and then I will come back to recap additional clinical and research activity before we take your questions.

Thank you, Dave. As Dave said, CSI reported a strong quarter. For the third quarter of fiscal 2013 compared to a year ago, revenues grew 25% to $26.5 million. This was at the top end of our guidance that we provided last quarter. Device revenues were 87% of the total. We sold more than 7,300 devices, bringing the life-to-date total sold to nearly 110,000.

Reorder revenues remained high at 96% of total revenue compared to 97% last year. We added 50 new accounts compared to 41 in the year-ago period. Our Stealth 360 customer base grew 10% from the second quarter this year to nearly 1,000 accounts. Stealth now comprises 96% of our total device revenues.

Other product revenues rose at a higher rate than total revenue to $3.3 million from [$2.4 million] (corrected by company after the call) last year, primarily due to strong Asahi wire sales. Gross profit margin was 76%, similar to both last year and to the second quarter of this year. The positive effect of higher production volumes was partially offset by the Stealth's higher unit cost and additional costs incurred this year to ramp up CSI's manufacturing facility in Texas for additional future capacity. The margin was also affected by a slightly lower ASP.

We expect engineering enhancements to Stealth and increasing production volumes to reduce unit costs in the future. However, manufacturing investments to prepare for our coronary launch are expected to offset these gains in the near-term.

Operating expenses rose 30% over last year, slightly less than planned. Approximately $4.1 million was for the ORBIT II trial and preparation for a coronary launch. We also made investments this year for competitive enhancements to sales and marketing, and an expansion of medical education programs to drive PAD adoption. All of these investments are geared towards generating higher future revenues.

The medical device tax also became effective on January 1. An expense of $466,000 is included in SG&A for the quarter. Net other expense increased $338,000 to $808,000, mainly due to costs associated with $4.5 million of debt conversions and valuation changes in the related conversion option asset.

The resulting net loss of $6.2 million, or $0.29 per share, was better than our guidance and compares to a loss of $4.2 million, or $0.23 per share, last year. In the third quarter, we raised approximately $38 million in a public offering of common stock and $4.5 million from redraws on our convertible debt line. Proceeds will be used to fund growth investments in coronary launch preparation, clinical studies and international expansion, as well as in sales and marketing professionals, clinical studies and education programs to further drive PAD adoption. The result was a cash balance of nearly $70 million at quarter-end, which is sufficient to fund our current growth strategies.

The number of weighted average shares outstanding rose to 21.5 million from 18 million last year. This is due to equity offering issuances of 1.8 million shares in the fourth quarter of fiscal 2012 and 2.3 million shares in the recently completed quarter, as well as the issuance of stock from debt conversion, employee stock plans and warrant exercises.

Adjusted EBITDA, calculated as loss from operations less depreciation and amortization, and stock-based compensation expense, was a loss of $3.3 million compared to $2.3 million last year. The increase was driven by a higher operating loss, partially offset by higher stock compensation expense. Excluding investments for the coronary application of about $4.1 million, adjusted EBITDA for the PAD business was positive for the quarter.

For the nine months ended March 31, 2013, compared to the prior year, revenues rose 26% to $75.1 million. Reorder revenues were 97% of total revenue compared to 95% last year. The gross margin was comparable to the prior year at 77% for reasons similar to the quarter. Operating expenses increased 31% to $73.4 million, again for reasons similar to the quarter, and included $12.6 million for the ORBIT II trial and coronary launch preparation.

Interest and other expense was similar to last year at $1.5 million. The year-to-date net loss totaled $17.2 million, or $0.82 per share, compared to a loss of $12.2 million, or $0.69 per share last year. The average shares outstanding grew by 3.1 million shares to 20.9 million due to the same factors noted for the quarter.

Adjusted EBITDA loss was $9.7 million versus $5.9 million last year, and again was positive for the PAD business, excluding the coronary investments of $12.6 million.

I will now turn it back to Dave for further comments. Dave?

Thanks, Larry. I'd like to detail the ongoing clinical progress we're making, and this really centers around two key events, the 30-day ORBIT II data we presented at ACC, and our recent PMA submission. First, ORBIT II.

As you all know, we completed ORBIT II enrollment of 443 patients at 49 US medical centers in November of 2012. The study itself is evaluating the safety and effectiveness of CSI's orbital atherectomy technology in treating patients with severely calcified coronary lesions.

This is the first investigational device exemption study in history to evaluate this problematic subset of patients. Past studies have not attempted to treat severely calcified lesions, and it's due to the challenge, particularly the challenge of meeting endpoints and overall treatment success.

At the American College of Cardiology meeting, lead investigator Dr. Jeffery Chambers of the Metropolitan Heart and Vascular Institute in Minneapolis, presented our ORBIT II data. This data showed that our technology achieved a 30-day freedom from major adverse cardiac events at a rate of 90%. We achieved less than 50% residual stenosis 99% of the time, and we achieved a successful stent delivery rate of 98%. According to Dr. Chambers, while treatment of severely calcified coronary arteries remains a challenge, 30-day ORBIT II results demonstrate that CSI's orbital atherectomy system may be a significant treatment advance for this patient population.

Following the release of our pivotal ORBIT II data, we submitted our PMA application to the FDA. The FDA agreed to a modular PMA process that allowed us to submit the first two modules, covering preclinical data and manufacturing quality systems, while still collecting, compiling and analyzing the clinical data. We have now submitted the third and final PMA application module, as well as responses to FDA comments on the first two modules, which were submitted in late 2012.

The medical community and everyone at CSI is very excited about the ORBIT II results and our PMA application. We look forward to working with the FDA on a potential coronary indication for this most challenging, underserved and large patient population.

We're frequently asked when to expect FDA approval and when we can launch our products into the coronary market. If the FDA does not require a panel, we may have approval by the beginning of calendar 2014. In the meantime, we are hard at work readying the organization for this important move, and we're educating physicians on the dangers of arterial calcium for patient outcomes.

Now, I'd like to detail our outlook for the fiscal fourth quarter ending June 30, 2013. We anticipate revenue to be in the range of $26.7 million to $27.7 million, representing year-over-year growth of 17% to 21%. CSI's gross profit as a percentage of revenue should be similar to the third quarter of fiscal 2013. While we expect to see improvements in Stealth 360 component costs and increased utilization of our manufacturing facilities, these improvements will be offset by costs to prepare for the coronary launch. We anticipate operating expenses to grow 7% to 8% over the third quarter of fiscal 2013. We're investing about $4.5 million in ORBIT II trial and preparation for the coronary launch. We're also investing in physician and sales education.

Interest and other expense should be about $325,000, excluding the effect of debt conversions or valuation changes of the related conversion option asset. The resulting net loss is expected to be in the range of $6.8 million to $7.4 million, or a loss per common share ranging from $0.28 to $0.31. This assumes 24.2 million average shares outstanding. And again, this excludes the potential effect of conversions or valuation changes related to our convertible debt.

To conclude, we continue to make growth investments in the quarterly launch preparation and the studies, as well as the clinical programs and educational programs to further drive peripheral adoption. Investing in these opportunities will help us realize the full potential of our technology, support ongoing attractive revenue growth, and will lead us to profitability over the long-term.

Thanks for participating in today's call. Operator, we would now like to take questions from the participants.

Thank you. (Operator Instructions.) Danielle Antalffy with Leerink Swann.

Hi, guys, can you hear me okay?

Sure can, Danielle.

Sure can, Danielle.

Great. Thank you so much, and good job on another great quarter.

It might be a little bit early to ask this, but I thought I'd try anyway. I'm just trying to think about the fiscal 2014 outlook, understanding that you can't provide guidance yet, but obviously 2013 has been a year of very strong growth. For at least half of fiscal 2014, you're unlikely to have the incremental indication approved. So, just directionally speaking from a growth perspective, can you walk us through the drivers for 2014 growth and how we should be thinking about it versus 2013?

Sure. I'll start, and maybe Larry will finish. We've got a really healthy peripheral business. Our execution in the field, our delivering our value proposition, our easy to set up technology, the ability to treat multiple lesions per device, including the most difficult lesions, and calcium and small vessel, treating those vessels that are critical to outflow and a great result. And then, most of our safety profile, driving those technology attributes with education of both our sales force and physicians, and continued clinical proof sources. That'll be the driver for 2014 while we invest in coronary.

So, we do have some timing risk with the coronary, but we're very confident that we'll have strong double-digit growth based on peripheral alone in 2014.

Okay. Okay, that's great. And then, my second question is related to coronary. If you guys were to have a panel, are you -- how much incremental cost would that be, and how do we think about timing for a panel? Any sense in sort of FDA conversations to date whether you're leaning one way or another? Because I know we've talked in the past. You said you didn't think that there would actually be a panel. Thanks.

Yes. We aren't expecting a panel, but we don't know that for sure. There's a 100-day meeting with the FDA scheduled for the end of June, and we should get an indication then whether we'd go the panel route or not. As far as costs go, we'll have to see what the questions are and what we need to do to prepare for that, so I don't really have an estimate at this point. Panel could take longer. I think on average, with panel is 320 days versus the 180 that we've been discussing without panel. But, of course, those are averages, and there's quite a variation in those numbers.

Right, okay. And sorry, one last question. When you're thinking about the coronary indication, the only other competitor in that space would be the Rotablator, a cheaper device. How do we think about the Stealth versus the Rotablator? Obviously the data itself is better, but from a competitive positioning standpoint, how do we think about that? Thanks.

Yes, it's completely different. There has never been an orbiting technology with the utility of our device and the safety profile. And that's the reason that, over a very long period of time, over a couple decades, that old device, which has entirely different attributes and a different safety profile, hasn't been able to penetrate this market in the way that we will.

Okay, perfect. Thanks, guys.

Jose Haresco with JMP Securities.

Hi, guys, good afternoon.

Hey, Jose.

Hey, Jose.

Can you hear me okay?

Yes.

Yes, we can.

Okay. A couple of housekeeping questions. You added 50 new accounts in the quarter. That's up from 48, but again, higher than we had thought of. Is that 50 -- should we think about 50 as kind of the new run rate here for new accounts added in any given quarter?

Yes. We still target around 40. And with the office-based labs, we are generating a few more than we had in the past. But, I'd say somewhere in that 40 range. And as you know, we've had anywhere from something in the 30s to the 50s, so I wouldn't say this is abnormal. It's just a little more on the high end of our normal range.

Okay. Larry, you mentioned that ASPs were down a little bit in the quarter. Could you give us a number, and then how does that compare to last quarter?

Yes. Our ASP for the quarter in total was $3,163, and that's a 1% decline from where it was last year this time. We gained -- earlier this year, we had been gaining because we're getting a higher mix of Stealth, which was premium priced. Now, we're substantially all stealth, so you're going to see some variability in that quarter to quarter, so it should be fairly constant.

Okay. But -- and the second quarter was also around $3,100?

It actually increased about 1% from the second quarter. It was $3,139.

Okay. Let's see here. The other product revenue was higher than expected because of Asahi wires. What led the strength in the quarter, and is there some sort of growth initiative there that we need to start taking into consideration for that line item?

That's a great question. It's market expansion. Asahi makes great wires. They go a lot of places, and there's more physicians doing tibial and outflow work that work in small vessels below the knee that, previous to our Orbital technology, just wasn't being done. So, that's what we see as expanded usage of our device behind that great wire in the tibial and outflow arteries.

Okay, got it. Let's see here. Again, recognizing you're not giving guidance for next year, how should we think about the SG&A spend for '14 as you start to build up that infrastructure?

Will you repeat the question, Jose? I didn't hear it.

Sure, sorry about that. How should we think about the SG&A line for next year?

I got a little interference there. Will you try one more time?

Sure. Sorry about that. Okay, let's try this again. How should we think about the SG&A expenses for next year?

I don't know if it's our line or yours, but I think you said how should we think about expenses for next year.

Yes, the SG&A, so the sales and marketing.

Yes. We're going to have a little ramp-up, maybe even increased over this year in that period before coronary clearance. And what we're doing is hiring those 20 individuals that will start us off in the limited coronary launch post-clearance. We'll also be working on the follow-on study, the technique optimization study. In addition, on the peripheral side, we'll be starting the Liberty study, which has been a long time in planning, and we're very anxious. We've actually selected the first 10 sites for that, as well as other education, both physician and employee, in advance of the coronary clearance.

Okay, great. Thank you.

(Operator Instructions.) Deepak Chaulagai with Dougherty.

Good afternoon, guys, thank you for taking my questions. So, the growth in the PAD business, that has been pretty strong the last four or five quarters. Has it still continued to be on the office-based lab side? What's the segmentation there?

Yes, it's both. It's both the hospital -- we've got great utility and a great story there, where we can treat a great expanse of vessel runway, and that's good for clinical outcomes. And because we can treat multiple lesions and those most difficult-to-treat lesions, and we can do that safely, we just have a fantastic economic story.

So, we had significant growth in the hospital. And then, the office-based lab, which is just a tremendous opportunity for patients and their families to get treatment in different sites and more local sites in a really friendly environment, we're behind that 100%. We had growth in that segment again. We'll continue to have growth. And over time, you'll see CSI focus on programs specific to that site and the needs of that site in patients who go to the office-based labs, as well as new products and other streamlined things to enable more treatment of peripheral arterial disease at the office-based lab.

Okay. And on the CAD side, you said -- obviously you're hiring a dedicated sales force. Are you still focused on select accounts to begin with and go from there? If you could just give us any thought on sort of the rollout strategy post approval?

Yes, the rollout strategy -- yes, that's a great question. It's going to be focused. We're going to -- focus on the top institutions in the U.S., 75 or less over the first couple of quarters. We're going to do that with a dedicated team of 20 individuals to start. At least half of those will be some of our top guns from our current, very successful peripheral team. We'll be looking to optimize techniques and to have a real quality experience out of the gate. We'll have follow-on studies in mind, so it'll be a very focused but high quality launch strategy in the first four quarters, with some intensity on those first two.

And so, will you replace the half that you bring from your current team, or--?

--Yes.

Okay, sounds good. One last -- when you think of the timeline, based on your meetings with the FDA, if there wasn't a panel meeting, do you still expect to go to next year, or you think that could be an approval late this year?

Well, we'll be ready for approval late this year. That would be good news that we're all anxious to get. It's a range, as you know, and we don't really know, but we would love to get approval, and calendar 2014 we'll be ready for that. We're warming up and investing right now in every which way. And if it comes a little bit later, the good thing about our focus strategy is that we won't be over our ski tips with expenses. So, we think we've got a measured approach that allows for good news, and even a little bit of a delayed good news.

Okay. I guess one last one. When you launched your PAD business, obviously you didn't have the sales structure of the caliber that you have today, the maturity, et cetera. And I believe you had more than $5 million quarterly revenue. Now that you have identified the target market, which is sort of 70% of your existing clients, and you have a professional sales force, how should we think about the revenue ramp? Whichever quarter you get approval, how should we think about revenue ramp in the first four quarters?

Yes, Deepak. We did go quite broad when we launched PAD. We're going to -- as we've said, we're going to focus on fewer accounts and drive adoption in those accounts. So, I would say initially the ramp would be slower than it was when we launched in PAD. I think it'll grow quite rapidly after the first few quarters. But initially, rather than going broad, we are going to take the time, drive deep in accounts, get good outcomes, and make sure we understand any nuances to the procedure before we broaden it out to a broader customer base.

Sounds good. Thank you.

Thanks, Deepak.

Ben Haynor with Feltl and Company.

Good afternoon, gentlemen.

Hey, Ben.

Thanks for taking the question. I guess I only have one left, a lot of ground already covered. But, following on on your response to the, I guess, Asahi question with regard to the (inaudible) and tibial artery access, does it seem like this is becoming a much bigger deal amongst surgeons, existing new accounts, of late?

Yes, it does. We've really seen progress with vascular surgeons. They know their anatomy. You can imagine those vascular surgeons have seen it, touched it, manipulated it. They've got a really unique and strong appreciation for calcified plaque and what it does to prevent great outcomes. So, we've had great uptake with the vascular surgeon in particular and the vascular surgeon in the office-based lab. So, it's been really super.

Now, the cardiologists, too, have seen the benefit, and I do think that there's some confidence that comes with our ACC announcements with the safety of our device in the coronary arteries. There's a bit of a [glow] certainly that supports our large, 3,500 patient study population. And you add in what we've done with the coronary both in the ORBIT I, 50 patients, and the ORBIT II, 443 patients, and I think people are getting increasingly comfortable with taking our device into those outflow vessels that are so critical to getting a great result.

Great. So, during ORBIT II, were a number of those done radially, or not?

Well, that's a good question. Certainly there would be nothing to prevent it, because our profile of our device is so wispy and uniquely low profile But, I'd have to go back and check the statistics to find out if and how many were radial approach. It's a great question.

Well, thank you, and that's exciting. That's all I have. Thank you, gentlemen.

Thank you.

James Terwilliger with Benchmark Company.

Yes, hey, guys. Can you hear me?

Sure can, James.

Sure can. Hi, James.

Hey, guys. First of all, thanks for taking my question. Great quarter, great guidance for the next quarter. But, I've got a couple questions. They've kind of been asked prior, but I'm going to ask them in a different way.

For both of you, is it fair to assume a coronary launch in fiscal Q3 of 2014? Is that a safe assumption?

Well, we don't control the FDA, but everything that we've got control over is super-high quality, and we've worked at pace. And I think we've given ourself a great chance to be cleared in the early part of the window, which might start in this calendar year, but we just don't know, right, with the FDA.

But, that would be a safe -- one would say that would be a safe assumption with how long the FDA takes to review a process, and in (inaudible)--.

--Okay, yes, that would be safe, and we hope conservative.

Okay. And then, the second question would be, if that is true, then is it fair to assume that the coronary launch would be similar to the launch in the PAD market when you first came out with this device, or should we be looking at maybe a faster ramp due to the number of years it's been out there in the sales force and their relationship with doctors and hospitals?

Yes, we've got a ton of synergies, and everybody sees that. With a trained sales force and 70% of our customers overlapping, the critical need, the great results in ORBIT I, ORBIT II, you could see a fast result. But, we do understand the benefits of staying home and focused. Optimizing this technique is a great long-term strategy for great results and value creation. So, we're going to be measured. We want to capture all that can be captured in those initial six months to the benefit of patients and to the Company and to shareholder returns.

So, we will be measured. And with all those synergies that exist, we'll take advantage of them, including those manufacturing and our wonderful orbital devices. This coronary clearance will certainly put us on a great path to real profitability as well, but we'll stay home in those initial quarters in order to make this a sweet long-term story.

No, I -- excellent answer. I think, if you make a mistake, that sets you back much more than a controlled launch.

My next question, though, from a management perspective, would be how do you maintain your focus on the significant growth, 20%-plus, in the PAD market also with your focus on launching in the coronary market?

Yes. Well, one is we've been dreaming about this problem for a long time. So, you know what you do? You get great management. We've hired some spectacular management in every department, I mean, really across the board. One of the things that we've done with our investment opportunities is filled in that middle layer of management and that executive management with people who know what it looks like to scale and to scale of quality. I just can't say enough about the CSI team. And they're hiring phenomenal people, and the Company's backing up that hiring with employee training.

Just one example is we used to struggle to afford ourselves just one national sales meeting a year during the financial crisis, and now we're committed to two, and the quality of these two, I mean, people are educated in a high-quality way, and they're really delivering that impact to their physicians, and the physicians are talking about it. There has been a substantial upgrade at the Company.

We didn't have a clinical department headed by Katherine Kumar, and now we do, so that button went from off to on. And we've got a number of wonderful people doing great clinical work, and the physicians are really appreciating enlightening what they do on a day-to-day basis, and then supporting them with clinical proof sources and pearls.

So, it's been great. We're really looking forward to it. I would say, if anything, we're over-eager, and we manage that, right? So, we've been dreaming about this path to independence and this wonderful opportunity for such a long time.

And James, as we said earlier, we intend to have a small, specialized force to do the initial launch on it so that we don't distract the PAD sales force from their good work and the growth they've been doing in PAD initially.

Now, does that sales force come from coronary or cardiology specialists in the field, from other companies, or does that sales force come from current reps that are well trained on the PAD market?

The initial group will be split, but the good news is we've got a rich reservoir of talented individuals now in our own sales force. I'd say a very high percentage are qualified right now. With some training, an additional group of people would be qualified. So, we'll be able to enjoy that synergy over time, but in a very calculated way. We're going to specialize up front. Half will be from outside the Company, half will be from inside the Company, and that's the way we'll make our first step into the commercial operation.

All right. Then lastly, I'll jump back in queue, and thank you for all of your time. And again, congratulations on a great quarter. Is it -- and I know this is difficult to answer, but I'm under the impression that module one and module two has already been sent to the FDA. They've come back with questions. You've answered those questions. Would you feel comfortable that there's no open issues to a degree with module one and module two?

We feel great about it. Everything in our control we've surrounded with quality. We didn't think the questions were particularly tough. A lot of the answers were already in the document, and we pointed that out. We were happy to respond and help facilitate. So, everything in our control we just feel super about.

Excellent. So, we're just waiting on their review of module three. Is that fair?

Yes, fair.

Okay. That's enough for me, guys. Again, thanks for taking my questions. Great quarter, great guidance, keep it up. Thank you.

Okay, thanks.

Thanks, James.

Ladies and gentlemen, that concludes the question and answer session. I will turn the call back over to Mr. Dave Martin, CEO, for closing remarks. Please proceed.

Thank you. It's an exciting time at CSI, and we hope that you share our enthusiasm. We are focused on executing on the large opportunities in front of us and realizing the full potential of our wonderful Orbital technology. Thanks for joining us today, and we look forward to updating you on our progress next quarter.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect, and have a great day.