Emergent BioSolutions Inc (EBS) 2010 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Emergent Biosolutions, Inc., First Quarter 2010 Financial Results Conference Call. My name is Jasmine, and I will be your operator for today.

At this time all participants are in listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today from the Company. Please proceed.

Good afternoon, ladies and gentlemen. My name is Robert Burrows. I am Vice President of Investor Relations for Emergent. Thank you for joining us today as we discuss Emergent Biosolutions financial results for the first quarter of 2010.

As is customary, our call today is open to all participants. In addition, the call is being recorded and is copyrighted by Emergent Biosolutions. Joining me on the call this afternoon with prepared comments will be 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.

Before we begin, I'm compelled to remind everyone that during the call management may make projections and other forward-looking statements regarding future events and the Company's prospects for future performance. These forward-looking statements reflect Emergent's current perspective on existing trends and information. Any such forward-looking statements are not guarantees of future performance, and involve substantial risks and uncertainties. Actual results may differ materially from those projected in any forward-looking statements. You are encouraged to review Emergent's filings with the SEC on Form's 10-K, 10-Q and 8-K, for more information on the risks and uncertainties that could cause actual results to differ.

For the benefit of those you may be listening to the replay, this call was held and recorded on May 5, 2010. Since then Emergent may have made announcements relating to topics discussed on today's call, so again reference our most recent press releases and SEC filings. 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 Investor Relations/Press Releases. And with that introduction, I would now like to turn the call over to Fuad El-Hibri, Emergent Biosolution's Chairman and CEO. Fuad?

Thank you, Bob. Good afternoon, everyone, and thank you for joining us on today's conference call. For my prepared comments, I will review our financial performance for the first quarter of 2010, provide a reaffirmation of our financial forecast, discuss updates regarding our business and highlight key milestones for the year.

To begin, let me review our financial results for the first quarter of 2010. Our revenues are $47 million and net income of $2.5 million include the scheduled deliveries of BioThrax to the SMS as well as progress payments under development contract for the first quarter.

These financial results are in line with our projections for the year. As you all know, our quarter-to-quarter deliveries vary. I am pleased to report that we successfully completed all of our scheduled deliveries for the first quarter and remain on track to achieve our guidance for the year.

We therefore reaffirm our 2010 forecast for total revenues of $235 million to $255 million and net income of $20 million to $30 million.

Let me now provide an update on our business. First, the development contract for BioThrax scale-up. We are in final contract negotiations with BARDA for the funding of the development, scale-up and licensure of BioThrax in Building 55. As you know, Building 55 is our new large-scale, state-of-the-art, manufacturing facility on our Lansing campus. We anticipate that this award will be a multi-year development contract with potential funding in excess of $100 million. The revenue impact from this development contract in 2010 is not reflected in our forecast. We remain optimistic of an award in the next few months.

Second, the development contract for our rPA vaccine candidate. At the request of BARDA, we are in the process of submitting our final revisions to our proposal for an rPA contract award. We anticipate that this award will be a multi-year development contract with potential funding in excess of $215 million. The revenue impact from this contract for 2010 is also not reflected in our forecast. We remain optimistic of an award in the next few months. Note that these two development contracts represent potential financial upside for the year.

Third, the follow-on procurement contract for BioThrax doses. We have commenced discussions with representatives at both HHS and the CDC regarding a procurement contract for BioThrax that would begin in 3Q 2011 upon the conclusion of our current $400 million contract. We remain confident that the US government will continue to procure BioThrax for SNS or the long run. We anticipate securing the multi-year contracts similar to the last two contracts by the end of this year.

Moving on, let me now provide an update on our product development activities. For our anthrax franchise, in addition to BioThrax and our rPA vaccine candidate, we are currently working on both a polyclonal and a monoclonal antibody candidate as well as an advanced vaccine candidate neutralizing a novel adjuvant and a recombinant technology. We continue to perform clinical and non-clinical development work on these programs, all of which are largely funded by existing government development contracts.

For our TB candidate, enrollment continues in our existing Phase 2b field efficacy study of 2,700 infants in South Africa, supported by the Wellcome Trust and Aeras. In addition, preparations continue toward initiating a second Phase 2b study of 1,400 HIV-infected adults and adolescents. We anticipate the study will be concluded at two locations in Africa and will be funded largely by the European and developing countries clinical partnership, or EDCGP and Aeras and other European NGOs. We expect that this study will begin later this year.

And for Typhella, we continue to make preparations for a human challenge study of our typhoid vaccine candidate in the UK. In addition, we continue to pursue a business arrangement with a suitable manufacturing partner for Typhella.

Moving on, let me now provide an update on our manufacturing operations. Today I will focus on the status of our newest manufacturing site, the Baltimore facility.

As you know, in late 2009, we acquired a multi-product manufacturing site, which was previously used to manufacture FDA and EMEA licensed products. This 56,000 square-foot facility houses multiple manufacturing suites that are flexibly designed to support the production of both viral and non-viral materials for our growing product pipeline.

Currently, we are in the design phase of the facility's buildout and have begun to assemble an experienced team to lead the modification and re-commissioning of this facility. Planned facility modifications allow for the utilization of disposable manufacturing technologies. These technologies should result in lower capital investments, lower operating costs, and accelerated process development timelines. We anticipate that the re-commissioning of the modified facility will be completed by the end of 2011. We expect that this facility will support the clinical and commercial manufacture of our rPA anthrax monoclonal and TB candidates among others.

Finally, let me review the key milestones for 2010. We expect to secure a multi-year follow-on procurement contract for BioThrax doses through 2014. We expect to secure a multi-year development contract for the scale-up activities of BioThrax in Building 55 in excess of $100 million. We expect to secure a multi-year development contract for the advanced development of our rPA candidate next of $250 million. We expect to complete the ongoing clinical trial for AIG. We expect to initiate the Phase 1 study for anthrax monoclonal. We expect to initiate an additional Phase 2b study of our TB candidate in HIV-infected adults and adolescents, and we expect to complete an acquisition or in-licensing transaction to broaden our late-stage product pipeline.

In conclusion, the first quarter of 2010 was a success. We met our internal plan, and we remain on track to achieve our stated annual forecast. Over the next three quarters, we anticipate significant news flow as well as strong financial performance with a potential for upside associated with the achievement of certain milestones.

That concludes my prepared comments, and I will now turn it over to Don, who will take you through the numbers in greater detail. Don?

Thank you, Fuad. Good afternoon, everyone. As Fuad mentioned, following the close of the markets today, we released our financial results for the first quarter of 2010. I encourage everyone to take a look at the press release, which is currently available on our website. We plan to file our quarterly report on Form 10-Q with the SEC by the close of business tomorrow, Thursday, May the 6th. The 10-Q will also b available on our website.

Now let me briefly discuss the financial results. For the first quarter of 2010, total revenues were $46.8 million comprised of $38.8 million of product sales and $7.9 million of grants and contracts revenue. Product sales revenue compares to revenue of $64.6 million in the first quarter of 2009. Product revenues were 37% less than 2009, due to fewer doses being delivered in first quarter 2010 related to the timing of scheduled deliveries under our contract with HHS. Grants and contracts compared to revenue in first quarter 2009 of $2.8 million, an increase of 180% year-over-year.

For first quarter 2010, net income was $2.5 million, or $0.08 per share. This compares to net income of $11.1 million for first quarter 2009. The decline in net income was a direct consequence of the period revenue being less year-over-year. I want to recognize that these results are less than last year's comparable period as well as less than some of the analyst estimates. However, the quarterly results are in line with our internal expectations. They support the annual guidance we are confirming and, again, they provide an example of the limited value of looking at our quarterly results as an indicator of our overall annual performance.

With that said, let me move to gross profit and gross profit margin. For the first quarter 2010, our gross profit was down year-over-year on an absolute basis, again due to the reduced number of doses shipped. However, the gross profit margin for the first quarter 2010 was 81% versus 75% in the 2009 period. This improvement reflects improved yields during the periods in which the doses sold were produced. On an ongoing basis, our expectation for gross profit margins continues to be between 70% and 80%.

Turning now to spending -- first, looking at product development, our first quarter 2010 development spending was $19.9 million versus $15.9 million for first quarter 2009. We continue to advance a development of our product pipeline, which includes programs that will enhance the usability of BioThrax in various trials to advance our clinical stage candidates and our pre-clinical programs focused on anthrax, tuberculosis, typhoid, and flu. R&D spending will continue to fluctuate quarter-to-quarter, driven by the development stage of the various pipeline candidates.

With respect to SG&A spending for first quarter 2010, SG&A was $16.2 million, an increase of $200,000, or 1% over the first quarter 2009. We remain focused on managing the growth in our general and administrative expenses.

Turning now to the balance sheet, for the first quarter 2010, we continued to be cash flow positive and ended the quarter with cash, cash equivalents and an accounts receivable balance totaling $149.8 million comprised of $116.4 million in cash and cash equivalents, and $33.4 million in accounts receivable.

Finally, let me address our 2010 financial forecast. As Fuad noted earlier, we reaffirm our 2010 forecast. Specifically, our financial forecast anticipates total revenues of $235 million to $255 million, and net income after tax of $20 million to $30 million. And as Fuad mentioned, this guidance does not include the potential financial upside from either a BioThrax scale-up development contract or an rPA development contract.

I would like to conclude with the same remarks I made during our last earnings call. We continued to deliver on our government contracts, progress the development of our product candidates and pursue qualifications and validation of our large-scale, state-of-the-art vaccine manufacturing facility in Lansing.

Also, as Fuad mentioned, first quarter 2010 was a success. Our business remains strong. We are on track to achieve our 2010 forecast, and should we achieve certain of our milestones for the year, we could experience potential upside to our current forecast.

We look forward to building on this current success throughout the remainder of 2010. That concludes my comments. I will now turn the call over to the operator so that we can begin the question-and-answer portion of the call. Operator, please proceed.

(Operator Instructions) Eric Schmidt, Cowen.

Fuad, it seems like you have a fair bit of detail and greater certainty on the Building 55 expansion support that you might get from the government. I was wondering if you could share with us a bit more detail, specifically of this $100 million in contract. What kind of profits you might be able to have on that whether any of that $100 million would go toward funding work that you've already done, et cetera.

Thanks, Eric, for asking this question. I will gladly answer that. Let me start by giving you some update on where we stand in the process. We have now submitted our final scope and pricing to the government. We believe that has been accepted, and we are in final contract negotiations. So we feel quite confident that very soon, in the next few months, a contract will be awarded to us.

As I mentioned in my prepared remarks, we expect it to be in excess of $100 million, and that is -- and let me highlight that. That is development work. Meaning, you know, process development, some non-clinical, potentially clinical development work. So it's not brick-and-mortar. It's development, just like any of the rPA contract and any of the government development contracts that we have.

And that, as you know, usually has a profit margin allowance of anywhere from 6% to 10%, and there are certain -- and allows allocation of overhead to be allocated to the project. So -- what it translates into in terms of a gross margin on the contract is a different issue and depends on how the project progresses. But it is profitable, it is expected to be profitable, and it is, you know, very similar to many of the other development contracts that we have.

And would the $100 million contract -- would that cover the entirety of your costs needed to bring the facility to licensure?

We expect that it would because, you know, typically the government doesn't reimburse or fund brick-and-mortar type of investments, which we have already done. So now we're talking about process development, clinical studies, et cetera, which we believe that the funding is pretty much complete.

So, Eric, this is Don. Just a footnote to that on your question. While the contract is still in negotiations, and there is a lot of details that we're not at liberty to discuss, the proposal, as it's put together currently is a cost-plus proposal as opposed to fixed price contracts that have been contemplated in the past.

Okay, got it. Thank you for that. Last question on the potential rPA contract -- I'm just wondering if you can, given you, again, seem to be making some progress here. Perhaps we can just rewind the clock a little bit, and you can talk about what happened last year to the best of your knowledge, and why you think this time around it's different?

Okay, so under Project Bioshield for procurement contracts, procurement of unlicensed products, there is a provision that the government needs to feel reasonably confident that a developer can actually bring a candidate, a vaccine candidate or a countermeasure to licensure within eight years. And it appears, and the government did state that -- that they believe that neither our or our competitors' candidate could, with reasonable assurance, could be licensed in eight years.

That doesn't mean that they're not interested in continuing to develop a rPA vaccine. They, in fact, are. They have invited us and our competitor to continue to bid on the continuation of development of rPA, and -- but under now a development contract not a procurement contract. So as I mentioned on our last call, that originally, you know, the rPA contract would have a procurement component and a development component to it. The development component we had always estimated to be around $250 million, maybe $300 million. That part hasn't really changed. So that's why we anticipate that the development contract, if it is, indeed, a five-year contract, would be around $250 million, maybe in excess of $250 million.

Yes, we are making progress there. We remain confident that we have -- that the contract will be awarded in the next few months.

And I assume you continue to think it will be a two-party development contract and split roughly equally in dollar value?

No. It's $250 -- at least -- we can only speak --

I was thinking that maybe between the two parties that each would have about $250 million.

Yes. If the government would award our competitors a similar contract, and depending on their timelines and on their development cost, it would be of a similar magnitude, we would expect.

Cory Kasimov, JP Morgan.

Hi, this is actually [Karen Jay] for Cory. Thanks for taking their question. Actually, there's two. First, as the (inaudible) give us an update on AIG and whether or not there is a potential for a development contract and timing. And, secondly, an update on the litigation with Protein Sciences.

Okay, sorry, Karen, can you repeat the first question?

Yes, the first question -- just an update on the AIG product.

I see.

And then the potential for a development contract there, and the timing?

Yes, absolutely. Thank you for calling in. Let me start with the AIG question. We are in the process of completing our clinical trial for AIG. We anticipate that it will be completed by the end of this year. And so this program is advancing very nicely.

And regarding PSC, I am going to ask our acting general counsel to take that question and answer.

Sure. This is Jay Riley. Thanks for the question. As you know, we filed an action in Connecticut to foreclose on PSC's assets. PSC has moved to stay the action. The court has been fully briefed, and we are waiting for a ruling. We expect it soon, but no matter what the outcome of the ruling is, we remain confident that we're going to recover everything that we're owed, either through repayment or through foreclosure.

David Moskowitz, Madison Williams.

Okay, several questions. First of all, very, very high gross margin in this quarter. I think it's the highest I've seen other than when you guys got the additional payment from HHS. What drove that, please?

Well, we continue to work on improving our operating systems. And even though the manufacturing costs are variable, anytime you deal with a biologic that, overall, we hope to see a trend upwards. So we can't speak quarter-to-quarter or even year-to-year, but the trend is something that we can speak to. So we hope, over time, that that margin will continue to rise.

And for that particular quarter, David -- this is Don -- as I said in my comments, we expect gross profit margins to continue to remain between 70% and 80%. And most of the fluctuation is going to be due to the fluctuation in yields that are experienced in any particular quarter. And as, I'm sure you're well aware, what actually goes out the door could be that the product that was produced on the quarter previous, it could contain some product from even the quarter prior to that.

So, yes, this was a particularly strong gross profit margin, and a lot of it was due to some very nice manufacturing yields we were experiencing.

So just to be clear, could this -- 70% to 80% is a pretty wide margin. So could you just give us a -- are you on the higher end of that 70%, 80%, when it comes to your guidance?

We don't normally guide on this. I would tell you that no -- more -- I'd say middle of the range.

Okay, great. And in terms of the new contract you expect in third quarter for BioThrax, given that there could be capacity expansion being funded by the government, should we expect that that new contract could extend into the years when capacity expands? And I guess the other question is would we expect another price increase as we've seen in all the other previous contracts?

Are you talking about -- a follow-on contract, yes. Procurement contract, yes. First of all, it wouldn't be 3Q. We anticipate that by the end of this year, we would have finalized an agreement with CDC on that. And we expect it to be, as mentioned earlier, through 2014, so a three-year contract at a minimum, and would be similar to the contracts that we've secured -- the last two contracts we've secured in the last three, four years.

Okay, I appreciate that. The SG&A pattern that we've seen -- I guess the last three quarters of last year we had some litigation expense from Protein Sciences. In this quarter, we're seeing back down to what we saw in the first quarter of last year, around $16 million. What is the actual -- what is the rough rate on a quarterly basis? I imagine you have -- it should be pretty steady.

This is Jay again. We obviously can't predict specific numbers, but last summer we had a particularly active piece of litigation in the bankruptcy court in Delaware. It was a one-time event. We don't anticipate a similar activity in the near future.

Yes, back to the point -- generally speaking, on SG&A overall, clearly, there are things that are going to influence it. I think if you look over the past quarters, you're going to see that the number has grown relatively modestly across quarters except for some extraordinary items -- deal expenses for deals that did include PSC litigation, noncash writeoff of some of the engineering expenses associated with the Frederick facility. So if you go back through all of our filings and take a look at what our going rate is, I think you can determine pretty closely a pattern. Is it, you know, going to be 1% year-over-year for every quarter? I'm not going to say that we're going to be that successful in managing SG&A, but we're clearly focused on it, and we wish to keep it at a fairly slow growth.

So I think if you go back through the past, and you get rid of some of the extraordinary items, you'll be able to see a pretty good trend.

But somewhere in the neighborhood of, call it, you know, inflationary type growth year-over-year off the base?

I'd say that's -- it's generally fair that we're going to try and keep the growth to a minimum. Now, as you heard, we've got some rather significant contracts that could be let. We've certainly talked about M&A in the future, things along that line. And as those things occur, you may see quarter-over-quarter jumps in SG&A as we have. Transaction expenses or advisory expenses, or even growth and infrastructure if, in fact, these contracts are so big that it generally grows the business.

Okay, and two last questions. I'll just ask them together. So number one, you've come in below the Street, below our expectations this quarter. It looks like, you know, on a -- if you stretch it out on an annual basis, it's a light quarter, and we know that business is lumpy based on deliveries taken by the government. So would you suggest that there is some sales that didn't happen this quarter that could happen in subsequent quarters?

And my second question, a completely different subject, relates to the deals on the Building 55 funding and potential rPA funding. Are those going to be capitalized on the balance sheet and not run through the P&L as we thought with the original rPA deal? So in other words, should we expect this to come in as cash as it comes in but not get disbursed through the P&L until you actually have a product or an operating facility? Thanks.

Let me first take it -- if you take our statement that we are reaffirming annual guidance, and take a look at your model or anybody is taking a look at their models, and first quarter was lighter than what was in the models, I think you can safely assume that the math says that we're going to have sales 2Q through 4Q that may exceed your models. So that's about the best I can do. We don't give quarterly guidance for that very reason. But we are expressing confidence in the guidance that we gave for the top line, and so I think you can say that the balance has to be made up in the next three quarters.

As you take a look at the rPA contracts and the Building 55 contract, again, they're not signed, they're not executed yet. But given the form of the contract as we understand it today, and being cost-plus, those would run through the income statement in a much more normal fashion than what we anticipated with the rPA procurement contract that was earlier being discussed where it would be capitalized and had some rather unusual accounting treatment surround it. So I think this one is much more standard.

So from an accounting point of view, actually, a development contract is much easier and flows through the income statement, where a procurement contract may be a little trickier?

Yes, yes. This you should see in much easier form.

And that's why I highlighted earlier that really the scale of contract for BioThrax would be a development contract, too. So that one would also go through the income statement. It's not a capital expenditure-type reimbursement.

(Operator Instructions) Jim Molloy, Caris & Company.

What confidence -- and right now you're selling everything you can make to the US government. What confidence do you have that when Building 55 comes online, all that will go over to the US government as well? And is that an answer we would get with the next contract to come in, if it, obviously, has in there, you know, language about having deliveries you can only make if Building 55 comes online.

Well, the follow-on -- you know, hi, Jim, thank you for asking this question. Jim, the follow-on contract is something that's I think will bridge the time between now and when actually licensed products will come out from Building 55, which I've said earlier, you know, we expect to be in about three years. So I doubt -- and, again, it's all subject to negotiations and then maybe the government is willing to give us a longer-term contract. But at this stage, we are looking to bridge until Building 55 is producing the licensed, larger-scale BioThrax product.

And in terms of -- what was your second question, sir?

Well, I guess it's sort of a question of, you know, you're selling everything you can make right now to the US government and, obviously, they won't ask you to sign a contract for more than you can make.

Right. So, again, once we come -- so with the current scale of production, the government has been purchasing our full capacity, and I think will continue to purchase our full capacity.

Now, with respect to Building 55, which is beyond potentially this follow-on contract, it might be a subsequent one, we then, you know, have to negotiate, you know, pricing, how many doses. We hope to be able then to supply up to 25 million doses, since this facility is less labor-intensive and at a much larger scale. We anticipate that the price per dose is also going to go up. So it's going to be a negotiation process. It's really too early to give any views as to whether the government is going to take all the production or not.

I anticipate, given the 75 million-dose requirement that stands, you know, that they will try to get doses in as quickly as possible. And, in addition, we have -- we continue to work in the international arena, and over the next three years, we do believe that there will be some foreign countries who are going to step up their requirements in terms of building a national stockpile to where out of Building 55, we may have the extra capacity to address that (inaudible).

Yes, I'm just looking at your slide from the Cowen conference where, in 2013, obviously, you're up to 25 million doses. So I guess we'll see here at the end of the year, when the contract comes in, if the US government keeps coming along at 7, 8 million doses per year, then that will be -- then, in 2013, you'll need to find another buyer for the remaining capacity. And that will be when you look at OUS. Is that a fair statement?

Not really, because if you look at, you know, we've been delivering at capacity for several years now, and don't forget that doses expire, and the current level is somewhere between 20 million and 25 million doses in the strategic stockpile. So at 7 million a year, with every three to four years' product expiring, and some of it is used by the DOD, by the way. You know, you don't get to 75 million in the foreseeable future unless you buy larger quantities.

And so there are many moving pieces. Is 75 million just initial requirement? Could there be more? Second, you know, how quickly can we get to the 25 million-dose requirement? Third, what is the pricing? Because if the pricing is attractive, the government might buy the full 25 million doses.

So there are many questions. The one last thought I want to leave you with is that it gives us a lot of comfort that the government is willing to fund over $100 million worth of costs associated in bringing the Building 55 to licensure, because that indicates to us that they are committed to the product and are interested in what that facility offers in terms of capacity.

Okay, just a last question, then. I guess it seems pretty clear that at this juncture, you anticipate the government will keep buying as much as you guys can make in the 2013-2014 to get to the 75 million dose it would seem to do so.

Should the SNF get filled, and you are able to sell excess capacity to OUS, any restrictions you can see for selling BioThrax OUS, the US government putting away?

Outside the US government, we see a growing market. Realize that it's a -- there is a policy, national policy development needs to be considered. Stockpile management needs to be considered. Governments who usually come out with a tender, want to be assured that its product will be delivered and that, quite frankly, has been a little tricky at times, because they know that we are delivering basically everything to the US government.

So -- yes, once we have added capacity, we believe that the international demand is going to increase and take some of that capacity. And remember, again, coming back to the 75 million-dose stockpile requirement -- right now we have a four-year dated product. When the scaled-up product comes out of the facility, it may be at three years, it may be at four years. We will have to see how it performed, but -- and if you take 75 million -- this is very rough math -- and say that one-third of the doses expire, you could basically see how the government would rotate 25 million doses a year. And if it's four years, you take 75 million divided by 4, and it's almost 20 million doses a year. So no matter how you cut it, for that stockpile, you know, to be brought up to its required level and to maintain it speaks to our full capacity.

And then, you know, the next question might be, well, when does rPA potentially come into play? Well, first of all, it's still an experimental vaccine. We don't know whether it's ever going to get licensed. Second, you know, the government has already admitted that it might take more than eight years to get rPA licensed. We're certainly confident in our candidate. We anticipate that we can take it through licensure, but, you know, it is quite far out -- eight years.

At this time, there are no further questions. I would now like to turn the call over to Mr. Robert Burrows for closing remarks. Please proceed.

Thank you, Jasmine. Ladies and gentlemen, that concludes today's call. Thank you, everyone, for your participation. Please note that today's call has been recorded, and a replay will be available beginning later today through May 19th. Alternatively, there is available a Webcast of today's call, an archived version of which will be available later today, accessible through the Company's website at www.emergentbiosolutions.com and clicking on the "Investors" tab. Thank you again, and we look forward to speaking to all of you in the future. Goodbye.

Ladies and gentlemen, that concludes today's conference. You may now disconnect. Have a great day.