Emergent BioSolutions Inc (EBS) 2008 Q2 法說會逐字稿

Good day, ladies and gentlemen and welcome to the Second Quarter 2008 Emergent BioSolutions, Inc. Earnings Conference Call. My name is Katina and I will be your coordinator 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 this conference.

(OPERATOR INSTRUCTIONS)

As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to our host for today's call, Mr. Robert Burrows. Please proceed.

Thank you, Katina. Good morning, ladies and gentlemen. Thank you for joining us today as we discuss Emergent BioSolutions' financial results for the second quarter and for 6 months of 2008. As is customary, our call today is open to all participants. In addition, the call is being electronically recorded and is copyrighted by Emergent BioSolutions.

Joining me on the call this morning is Fuad El-Hibri, our Chairman and Chief Executive Officer, and Don Elsey, our Chief Financial Officer. Additional members of our senior management team will be present on the call for purposes of the Q&A session, if need be.

The agenda for today's call is as follows. After my brief introduction, Fuad will provide comments on corporate accomplishments from 2Q 2008 and key objectives for the remainder of 2008. Don will then discuss the 2Q and first 6 months of 2008 financials as well as comments on our 2008 financial guidance. We will finish the call with the customary Q&A session.

Please note that any statements about the company's prospects or future expectations are forward-looking statements. As you know, forward-looking statements involve potential risks and uncertainties and actual results may differ materially from expectations. Please refer to the press release issued earlier today, and importantly, to our filings with the SEC for more information on the risks and uncertainties that could cause actual results to differ.

Also, Emergent BioSolutions assumes no obligation to update the information in today's press release or as presented on this call except as may be required by applicable laws or regulations. Today's press release may be found on our website at www.emergentbiosolutions.com under "Investors/Press Releases." And with that introduction, I would now like to turn the call over to Fuad El-Hibri, Emergent's Chairman and CEO. Fuad?

Thank you, Bob. Good morning, ladies and gentlemen and thank you for joining us today. This morning we reported financial results for the second quarter of 2008. I'm very pleased with our financial results for the second quarter and first half of 2008.

Our revenues for the first half of the year are a record for our company and we continue on a path for our seventh year of operational profitability. In a moment, Don will take you through a more detailed review of our results for the second quarter and first 6 months of 2008. On my portion of the call this morning, I will provide an update on our operational accomplishments including marketing and sales, product development, manufacturing and business development.

But first, for those investors who are new to Emergent. Let me briefly tell you about our mission and business focuses. In short, we are dedicated to one simple mission; to protect life. To develop, manufacture and commercialize vaccines in biotherapeutics that assist the body's immune system to prevent or treat infectious and other life threatening diseases, and we consider ourselves as a leading biopharmaceutical company that is focused on immune-related biologics. Within immune-related biologics, we are currently focused on infectious diseases but we'll continue to opportunistically consider other immune related candidates.

As we continue to develop Emergent's leadership position in the biopharmaceutical space, we believe that our business focus will lead to building long term value for our customers, partners and shareholders. With that introduction, let me know turn to our operational accomplishments for the second quarter. I will begin with an update on our marketing and sales efforts.

During the quarter, we continued to deliver BioThrax to HHS for inclusion in the Strategic National Stockpile under our current multi-year contract. As a reminder, this is the $448 million contract that includes the procurement of a total of 18.75 million doses of BioThrax over a 3-year period.

We anticipate delivering approximately 7 million to 8 million doses under this contract this year and the balance in 2009, ahead of schedule. We expect to complete delivery under this contract sometime during the second half of next year.

The Department of Defense requirement for BioThrax is projected to remain at a historical level due to a continued need for doses under the existing mandatory anthrax vaccination program. These levels are historically ranged between 1.5 million to 2 million doses per year. By the end of this year, we anticipate entering into a separate contract with the U.S. government for the procurement of BioThrax to meet the requirements of the military active immunization program.

Also separately, we have begun discussions with HHS regarding additional dose requirements for the SNS, above and beyond the 18.75 million doses under the current HHS contract. As you may recall, we have applied to the FDA to extend the expiration dating of BioThrax from three years to four years.

In the event the FDA approves this extension of dating, HHS has agreed to increase the price per dose under the agreement for 13.25 million doses sold under this contract. The aggregate value of this price adjustment is $34 million, of which approximately [$60.0] million could be recognized as 2008 revenue, if approval is received this year.

Internationally, we completed another meaningful sale of BioThrax to an allied foreign government and we continue to pursue license [for BioThrax] in select foreign markets which we believe will facilitate sales to governments in these markets for both military and civilian stockpiling purposes. We remain confident that demand for BioThrax will continue to come from both the U.S. government and from other international governments.

Let me now turn to our key product development accomplishments for the quarter. First, with respect to our biodefense portfolio, for our licensed product, BioThrax, we remain on track with the various enhancement programs for our anthrax vaccine, namely the dose reduction study and a new route of administration, intramuscular, and the expansion of the product label to include post-exposure use. We expect to conclude these initiatives over the next two years.

Our other key BioThrax initiative is our program to extend the shelf life to four years from the current three years, which I mentioned earlier. We filed an application for four year dating with the FDA in 2007 and anticipate we will receive approval either later this year or some time next year.

During the first half of the year, we completed two key acquisitions that further bolster our biodefense portfolio. First, we acquired the recombinant anthrax vaccine candidate, rPA 102 from VaxGen. Recent improvements to the formulation of the rPA vaccine were made to enhance the product's ability.

As a result of these improvements, we believe that it is well positioned to be a leading candidate for an award under and RFP recently issued by HHS to procure up to 25 million doses of a recombinant anthrax vaccine for the SNS.

As we announced last week, we submitted what we believe to be a strong proposal in response to the HHS RFP. The government has stated that they will make up to two awards by the end of the year. Importantly, our rPA candidate has the potential to become a complimentary product to BioThrax, the world's only FDA-licensed anthrax vaccine. We believe that the U.S. government will continue to buy BioThrax in addition to an rPA vaccine, including ours when available for the SNS over the long run.

Also, earlier this year, we acquired a promising anthrax monoclonal therapeutic from [Avinex]. This product is a fully human monoclonal antibody that blocks toxin activity through a novel mechanism of action compared to other monoclonal candidates. We have submitted a development proposal to the U.S. government in response to an RFP that would fund advanced development of this candidate.

If granted, we expect this advanced development award to be in the tens of millions of dollars, and with respect to future procurement contracts, and based on an existing HHS procurement contract with another company, we estimate the current market opportunity from anthrax monoclonal therapeutic to be in the hundreds of millions of dollars.

Finally, in rounding up our anthrax franchise, our anthrax IG therapeutic continues to advance under the $9.5 million development contract we were awarded last year from BARDA. Specifically, we continue to conduct the necessary non-clinical trial in advance of initiating the pivotal human trial which we expect to commence by the end of the year.

Based on an existing HHS procurement contract with another company, then, we estimate the current market opportunity for an anthrax IG therapeutic to also be in the hundreds of millions of dollars.

In summary, with our multi-product offering for the anthrax threat, we're well positioned to provide both the U.S. government and other governments internationally with a full complement of medical countermeasures to protect both military and civilian populations.

With respect to our other biodefense franchise, botulism, we recently received an NIH grant of approximately $2.0 million to further develop our novel recombinant trivalent botulinum vaccine candidate. In addition to the development of a botulinum vaccine, we are looking at opportunities for development of a potential botulinum therapeutic. Now with respect to our commercial portfolio, let me briefly comment on our clinical program.

For our single dose oral typhoid vaccine candidate, we initiated a Phase II b trial in the United States following a successful Phase II trial in Vietnam which was completed last year. Importantly, this product would be the world's first single dose drinkable typhoid vaccine which would provide significant advantages over the two currently licensed typhoid vaccines in the U.S.

In terms of market opportunity, we see significant potential market growth in providing a differentiated product for typhoid. Analysts estimate the market to be near $200 million annually within five years.

However, as our product candidate would be a single dose oral product with potential effectiveness in young children among other attributes, we are confident our product offering could expand the market, not only in the U.S. and the EU but also within endemic regions, and specifically, the growing populations in India and China.

Economic conditions are increasingly improving in both India and China and even a small percentage uptake from these countries would provide a substantial additional market opportunity for our oral typhoid [vaccine].

Regarding our hepatitis B therapeutic vaccine candidate, we have been conducting a Phase II study in the UK and Serbia to evaluate the safety and immunogenicity of this oral vaccine as a standalone monotherapy for chronic hep B carriers. While we have completed recruitment for the first of three study cohorts, enrollment of appropriate subjects into the remaining two cohorts has proven to challenging, given the standard of care in the [developed] world.

As a result, we have ceased recruitment for this trial and will be concluding the study as soon as feasible. Data collected from all enrolled subjects will be analyzed in full accordance with the study protocol; however, given the type of chronic carriers vaccinated to date as well as the small sample size, we do not expect the data to be sufficient to show human proof of concept from this trial.

With that said, we are in the process of identifying alternative trial sites in the endemic areas of the world where we hope recruitment of suitable chronic carriers will be simpler and that will allow us to adequately test the effectiveness of this therapeutic candidate. As a result, we are reducing development spending for our hepatitis B vaccine candidate until immune human proof of concept study is initiated in an endemic area in the near future.

And finally, let me address the status of our group B strep candidate. As we have outlined in the past, we rigorously evaluate all of our candidate programs in an effort to optimize the allocation of resources in future periods. As a result of this review and in light of additional new programs we have acquired, we're exploring out licensing and other alternatives for our group B strep vaccine candidate.

Considering the long timelines of clinical development and the complexity of multiple protein candidates, we have concluded that other development candidates in our pipeline are of a higher near term priority. Accordingly, we expect that the associated development costs for our group B strep candidate will be reduced for the foreseeable future.

Let me now turn to our manufacturing accomplishments for the quarter. With respect to our new state-of-the-art large scale manufacturing plant in Michigan, we're currently conducting facility, equipment and utility validation activities. We're also performing engineering runs to support process development work in preparation of manufacturing consistency [logs] in 2009.

Remember, this facility is [containable]. It has been designed and constructed to enable us to manufacture on a large scale basis, BioThrax as well as other vaccine products including our recently acquired recombinant [rPA] anthrax vaccine candidate. With respect to our existing facility, we plan to continue to manufacture at capacity. Our output target for 2008 remains at around 7 million to 8 million doses.

Lastly, let me review key accomplishments with respect to our business development activity. Consistent with one of our strategic goals of growth through selective acquisitions, we have pursued a two-pronged approach to expanding our product pipeline. As mentioned earlier, on the biodefense side, we acquired both an advanced recombinant anthrax candidate for our anthrax vaccine portfolio as well as a human monoclonal antibody candidate for our anthrax therapeutic portfolio.

On the commercial side, we have recently announced an exciting joint venture with Oxford University to develop a novel, next generation tuberculosis vaccine. This is the world's most advanced next generation TB candidate. The Oxford Emergent consortium is working with the Aeras Global TB Foundation to evaluate the efficacy of this candidate in infants in a Phase 2b proof of concept trial anticipated to begin in early 2009. As you know, TB is a major global health problem. Over 2 billion people worldwide have been infected with the bacterium that causes TB and 1.5 million to 2.0 million people die from TB every year.

This meaningful joint venture was formed specifically to support manufacturing and clinical development of this candidate. The University of Oxford has exclusively licensed this candidate and related technology to the Consortium. We are pleased that the Consortium has already secured approximately $60 million from the Wellcome Trust and the Aeras Global TB Vaccine Foundation to fund this Phase 2b proof of concept trial.

Under agreements with the Consortium, Emergent BioSolutions has the exclusive rights to commercialize the [MBA] Phase 2b vaccine candidate in the developed world and in selected developing countries. The Aeras Global TB Vaccine Foundation will have distribution rights in the rest of the developing world to ensure availability and access to the vaccine to those who need it.

The other commercial initiative for which I would like to provide you an update is our proposed transaction with Protein Sciences Corporation and the acquisition of their model flu vaccine, FluBlok, which we announced in May. As you may be aware, bringing the transactions closure is taking longer than expected. We have filed a lawsuit against Protein Sciences and we continue to pursue our legal options in this suit.

At the same time, we will continue to engage in discussions with the Protein Sciences Board of Directors and it is important to note that we are continuing to explore ways to find a positive manner in which to complete this transaction.

FluBlok would be in excellent addition to our infectious disease vaccine portfolio and would benefit from the application of our core expertise and product development, manufacturing and government contracts. Lastly, we continue to devote time and attention this year to securing additional NGO and government grant funding to advance multiple products in our pipeline.

In conclusion, we are building on our past achievements and are making further progress towards achieving our goals for this year. Such momentum is the reason why I remain confident that we will continue on a path to achieving our key goals in the near and medium terms. That concludes my prepared comments. Don will now discuss our financial results for the second quarter and first six months of 2008. Don?

Thank you, Fuad. Good morning, everyone. As Fuad mentioned, we released our second quarter 2008 financial results this morning prior to the opening of the markets. The press release is available on our website. Today we will be filing our quarterly report on Form 10-Q at the SEC. The 10-Q will also be available on our website and on the SEC's website once it has been filed.

Our financial performance for the second quarter and the first half of 2008 reflects significant progress toward attaining our financial goals for 2008. We continued to deliver doses of BioThrax for inclusion into the Strategic National Stockpile pursuant to our current multi-year contract with the U.S. government. We are also expanding our manufacturing and product development infrastructure and we are investing in strategic acquisitions of partnerships that serve to further bolster our product pipeline.

Our acquisition of both a human monoclonal antibody as a therapeutic for anthrax infection and an advanced recombinant protective antigen anthrax vaccine during the first half of this year strengthens our anthrax franchise and enables us to offer solutions to all three phases of anthrax infection.

Now I'd like to give a summary of our financial results for the second quarter and the first 6 months of 2008. And I'll start with product revenues. Second quarter 2008 product sales increased by $19.8 million, or 88%, to $42.3 million, up from $22.5 million for the comparable period of 2007. The increase was primarily due to a 98% increase in the number of doses of BioThrax delivered.

Product sales for the second quarter of 2008 consisted of BioThrax sales to HHS of $41.9 million and aggregate international and other sales of $0.4 million. For the six month period of 2008, product sales increased by $35.9 million, or 75%, and $83.8 million, up from $48.0 million for the comparable period of 2007. This was primarily due to an 82% increase in the number of doses of BioThrax delivered.

Product sales for the six month period of 2008 consisted of BioThrax sales to HHS of $83.1 million and aggregate international and other sales of $0.7 million. Turning to contracts and grant revenues, second quarter 2008 contracts and grant revenues increased by $4.5 million or 74% to $1.2 million, up from $0.07 million for the comparable period of 2007.

Contracts and grant revenues for the second quarter of 2008 consisted of $0.8 million from the Sanofi Pasteur collaboration related to the company's meningitis B vaccine candidate and $0.4 million from NIAID.

For the 6 month period of 2008, contracts and grant revenues increased by $0.7 million, or 42%. The $2.4 million, up from $1.7 million for the comparable period of 2007. Contracts and grant revenues for the six month period of 2008 consisted of $1.6 million in revenue from the Sanofi Pasteur collaboration and $0.8 million from the NIAID

Moving on to the cost of product revenues and gross margins. Second quarter 2008 cost of product sales increased by $2.8 million, or 49%, to $8.7 million, up from $5.8 million, a comparable period of 2007.

For the six month period of 2008 cost of product sales increased by $5.3 million, or 47% to $16.7 million, up from $11.4 million for the comparable period in 2007. The increase for both the second quarter and six month period of 2008 was primarily due to significant increases in both areas in the number of doses of BioThrax delivered.

Turning now to research and development expense. Second quarter 2008 R&D expenses increased by $3.9 million, or 29%. The $17.2 million, up from $13.3 million for a comparable period of 2007.

This increase reflects higher contracts, service costs and technology/acquisition costs and includes increased expenses of $2.6 million on product candidates that are categorized in the biodefense segment, $9.0 million on product candidates that arise in the commercial segment and $0.4 million in other research and development expenses which are in support of technology platforms and central research and development activities.

For the six month period of 2008, R&D expenses decreased by $0.2 million, or 1%, to $28.7 million from $28.9 million for the comparable period of 2007. This decrease reflects lower contract service costs and includes decreased expenses of $3.2 million on product candidates that are categorized in the biodefense segment, partially offset by increased expenses of $2.3 million on product candidates categorized for the commercial segment and $0.7 million in other research & development expenses. As in the second quarter as the first, technology platforms and central research & development activities.

Next, SG&A expense. Second quarter 2008 selling general and administrative expenses increased by $2.4 million, or 19%, so 15.7 million up from $12.7 million for the comparable theory of 2007. This increase is primarily attributable to an increase of approximately $2.1 million, resulting from the addition of personnel and increased legal and other professional services related to the company's headquarters and staff organization to support the overall growth of the company and an increase of $0.2 million in the sales & marketing expenses related to the growth of staff in this area and then an increase in selling and marketing activities.

For the 6 month period of 2008, SG&A expense increased by $3.2 million, or 14% to $27.1 million up from $23.9 million for the comparable period of 2007. This increase is also primarily attributable to an increase of approximately $2.8 million resulting from the addition of personnel and increased legal and other professional services related to the company's headquarters and staff organization to support the overall growth of the company.

And to finish up on the P&L, we'll look at net income. For the second quarter 2008, our reported net income was $1.8 million or $0.06 per basic and diluted share, a significant improvement from our net loss of $5 million or $0.17 per basic undiluted share for the second quarter of 2007.

Through the first six months of 2008, our reported net income was $8.8 million or $0.30 per basic undiluted share, again a substantial improvement from our net loss of $7.7 million, or $0.27 per basic undiluted shares. In both instances, our average outstanding shares for the second quarter and first six months of 2008 increased by well over 1 million shares, or approximately 5% over the share count for the comparable periods of 2007.

Turning to the balance sheet, cash and cash equivalents at June 30, 2008 were $84 million compared to $105.7 million at December 31, 2007 and $92.7 million at March 31, 2008. The net decrease in cash and cash equivalents of the six month period resulted primarily from net cash used in operating activities and investing activities of $0.7 million and $22.5 million, respectively, offset by net cash provided by financing activities of $1.6 million. Of the $22.5 million of cash used for investing, this includes $10.0 million advanced to Protein Sciences under our asset purchase agreement.

Finally, I want to speak to our 2008 financial guidance. As of today, we are reaffirming our expectations for full year 2008 total revenues of between $100 and $195 million with a bias toward the low end of this range.

With respect to our revenue guidance, it is important to note that our projections are driven by a number of variables, some of which may drive revenues to the upper end of the range. In our projection toward the low end of the revenue forecast, we have not included the potential approval of 4-year dating.

While we remain confident that approval for 4-year dating is achievable, if received, it may be in 2009 rather than 2008. As I've mentioned, the impact of 4-year dating for 2008 is estimated at approximately [$60 million].

With respect to full year 2008 earnings, we reaffirm our expectations for continued profitability at a level of approximately $20 million in net income for the year. Additionally, our projections do not reflect the potential acquisition of Protein Sciences. That concludes my prepared comments.

I will now turn the call to the operator so that we can begin a question and answer portion of the call. I will take just one moment and it's been highlighted that I misspoke on our revenue guidance. I said between $100 and $195 million, which would be quite a range. It's between $180 million and $195 million as we have guided in the past. So with that, I will turn it back to the operator. Thank you very much.

Thank you. (OPERATOR INSTRUCTIONS). Your first question comes from the line of Eric Schmidt from Cowan and Company. Please proceed.

Good morning. Thanks for taking my call. Don, in terms of the operating cash used in the quarter, are you owed some payments from HHS for shipments you've delivered but haven't received cash for? Is that why the operating cash went down?

The operating cash went down on a number of reasons, but yes, our [AR] has increased to over what it was before. We're now at an AR level of $22 million.

And in terms of the subtle change to revenue guidance with bias toward the lower end of the previous range. Is the only change there that you're now not necessarily sure about 4-year dating or have you taken out any potential DoD revenues? I assume that's also --

Clearly there are a number of factors that play in the overall revenue projections. I'd say the primary influence is the 4-year dating and I would want to stress it's not that we're changing our view on the achievability of 4-year dating, it's strictly a timing expectation that instead of seeing that in this year, it might go out into the first quarter of next year.

Okay, and I take from Fuad's comments that you're basically planning to sell out your capacity this year, 7 million to 8 million doses, of BioThrax, to HHS. If you got some orders from DoD could you fill them or would they not be applicable to the guidance for 2008 either?

Currently, let me just answer that question if I may. We are confident that we will be delivering everything we produce this year. So whether that is under HHS or DoD, this is something the government will work out between them. So the point is that we believe that we will be able to sell all that we can produce this year.

Okay. Thanks a lot.

The next question comes from the line of Cory Kasimov, representing JPMorgan. Please proceed.

Hi, good morning, guys. First question's on RPA. Can you expand a little bit on the stability improvements that have been made there over the issues that VaxGen had and the reasons for your confidence that these issues have been adequately answered?

Hey, Cory, this is Jim Jackson.

Yes, how are you doing?

Basically what we have done is that we have improved the final formulation of the vaccine compared to what it was that VaxGen was using in its initial clinical trials and we have animal and stability data now indicating that this stability profile will be much enhanced over what it was initially. So based on those data, we think we're going to be able to meet or exceed HHS requirements for a second generation stability product.

Okay, great. And then regarding this pending RPA contract that's out there. Can you talk a little bit about how large you think this could actually be, both in dose and dollar terms? I know it's the 25 million dose contract but we've heard rumblings that it actually could be larger or how this could potentially be split up.

Well, I think it's safe to say that the government has stated that there could be as many as two awards. The question is could they be two awards of 25 million doses each. That's a possibility. It could be that within the 25 million dose requirement that they split it in one way or another.

So that's one factor in terms of determining the size of a potential contract. The other factor, of course, is pricing, which is a very competitive issue. You know, in terms of looking at what a vaccine would cost, if you look at the former VaxGen contract, it was around $11.00 to $12.00 a dose but for 75 million doses.

So obviously there's some economy of scale built in there so we would expect that for lower quantities that the price would go up some. Again, you can use the price somewhere north of that and quantities could be anywhere from zero to 25 million doses per award.

Okay. And then, assuming this RPA contract is awarded, do you think that would have any potential downstream impact on government's requirements for the BioThrax vaccine beyond 2010 when the current contract goes to?

Well we believe not, because as I mentioned earlier in my prepared presentation, we believe that the government is committed to purchasing BioThrax in the long term. It's a licensed product and even if a second licensed product, as it becomes commercially available in five or more years, I think it behooves the government to continue purchasing from two suppliers, two products that are licensed.

Okay, and then lastly, wouldn't -- you also indicated in your prepared remarks that there's the potential that HHS extends this contract or goes above and beyond the current 18.75 million doses. Can you go into that a little bit more and talk about maybe the rationale there and when we could hear on something like that?

The rationale is that the government remains committed to purchasing BioThrax and to purchasing as much as we can produce in order to increase the supply to the Strategic National Stockpile. And given that, we project that by the second half of next year, we would have supplied the full 18.75 million doses that's -- we've already started discussions, preliminary discussions with the government, for an expansion of that contract above the 18.75 million doses.

Okay, great, that's helpful. Thanks for taking the question.

I'd like to remind you also that the government has stated and restated over and over again that they're requirement is 75 million doses so that's as far as we understand [their stand] and even the doses that we supplied into the F&S, some of them are or have expired or are expiring so it's -- it continues to be a requirement for rotation after that.

Thank you.

Thank you very much.

(OPERATOR INSTRUCTIONS). Your next question comes from the line of Tim Gray representing Potomac Capital.

Hi, there, good morning everybody. Just a quick reiteration on the guidance. Again, was the -- on the low end here it's because of the 4-year dating not being included into this fiscal year versus any reduced expectations on deliveries or even margin or pricing on the deliveries on the vaccine this year?

Good morning, Tim, this is Don Elsey. Yes, that's correct. That is -- we have decided in the guidance that it's more prudent to view it that 4-year dating occurring in 2009 versus 2008 but that's the primary influence.

Underneath that there certainly a number of much more minor changes that are moving in various directions but that's the primary one. I would say this: the pricing delivery schedule, everything else, with respect to HHS absolutely remains in place.

Okay, thank you very much.

Thank you, Tim.

There are no further questions in queue at this time. I would now like to turn the call back to Mr. Burrows for closing remarks.

Thank you very much. Ladies and gentlemen, that concludes today's call. Thank you for your participation. Please note that today's call has been recorded and the replay will be available beginning today through August 21.

Alternatively there is available a webcast of today's call. An archived version of which will be available later this morning. Thank you again. We look forward to speaking to you all in the future. Goodbye.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes your presentation. You may now disconnect. Good day.