ICU Medical Inc (ICUI) 2006 Q1 法說會逐字稿

Good day ladies and gentlemen, thank you for standing by and welcome to the ICU Medical Inc. first quarter 2006 earnings conference call. My name is Carlo and I will be your coordinator for today's presentation. At this time, all of our participants are in a listen-only mode, we will be facilitating a question-and-answer session towards the end of today's prepared remarks. (Operator Instructions).

I would now like to turn the presentation over to your host for today's conference, Dr. George Lopez.

Good afternoon. Thank you for joining us for a review of ICU Medical's results for the first quarter ended March 31, 2006. I'm Dr. Lopez, Chairman and President of ICU Medical and with me today is Frank O'Brien, our CFO. On today's call, I will provide an overview of our operating results and Frank will provide detailed financial information for the first quarter. I will wrap up our prepared remarks with an update on our 2006 targets and a discussion of current business trends before we go to the Q&A. As always, we will limit the length of the call to about 45 minutes.

Before we begin, in the event that we touch on forward-looking statements during this call, please be aware that they are based on the best information currently available to management and assumptions that management believes are reasonable. But such statements are not intended to be a representation of future results and are subject to risk and uncertainties. Future results may differ materially from management's current expectations. We refer all of you to our filings with the SEC for more detailed information on the risks that have a direct bearing on our operating results, performance and financial conditions.

Having said that, I will begin. We are very pleased with the strong financial results we achieved in the quarter as our sales growth and profitability exceeded our earlier expectations. First quarter revenue increased 80% to 48.8 million and net income totaled 6.4 million, or $0.41 per diluted share, as compared to 4.4 million, or $0.30 per diluted share in the first quarter of last year. During the quarter, we continued to gain better visibility into the long-term sustainable revenue and earnings growth for our CLAVE business and for our custom CLAVE product lines.

Also, we're becoming more confident about the additional opportunities in customizable therapy products. As we discussed on our fourth quarter call, because of the increasing demand for our existing products and the opportunities we're seeing in new areas, we began expanding our sales force domestically and internationally by approximately 40% in the third and fourth quarters of last year.

In addition, we continue to use our strong balance sheet and cash flow to invest in our business through R&D and manufacturing improvements.

In manufacturing, I'm pleased to report that the first phase of expansion of our facility in Mexico that we started last year is complete. This will enable us to complete the transfer to Mexico of most of the manual assembly currently done in Salt Lake City. We have already begun the move of some of the production processes to Mexico and expect most of the move to be completed in early 2007. In addition, we have begun to move all of the molding and automated assembly from our San Clemente facility to the Salt Lake City facility and expect this move to be completed by the end of this summer. We believe moving our manual assembly lines to Mexico and consolidating our automated products in Salt Lake City should significantly improve our manufacturing efficiencies and boost our margins in the future.

We continue to generate positive operating cash flows which totaled 8.7 million in the first quarter and we ended the quarter with a solid balance sheet of 95 million in cash and no debt. We're utilizing our strong balance sheet to enhance shareholder value by launching new products, improving manufacturing costs, pursuing strategic acquisitions and growing our market share. I believe we have the right people and resources in place to achieve these goals.

Looking forward, we're well positioned to capitalize on our product leadership and stay focused on operational efficiency and management of our capital. Also, we're beginning to experience encouraging results from the early stage introduction of the TEGO, and I will update you on the Orbit as well. But before I do, I would like to turn the call over to Frank to discuss our quarterly financial results in a little more detail. Frank?

Thank you, Doug, and good afternoon, everyone. Before I begin, let me remind you that all of the sales numbers we're covering as well as our condensed financial statements will as usual be available on our website before this call is over.

The first quarter was a very encouraging start for fiscal year 2006. We achieved strong top line performance, fueled by growing demand for our custom and critical care products. Our strong top line growth resulted in strong earnings which exceeded our expectations.

Additionally, we continued to generate positive cash flow from operations and strengthen our balance sheet. As Dr. Lopez mentioned, our revenue in the first quarter increased 80% to $48.8 million. Net income for the quarter totaled $6.4 million. This translates into $0.41 per diluted share for the first quarter of 2006 compared to $0.30 in the first quarter of 2005.

Let me provide you with the sales mix for the first quarter. This will give you a better picture on how our diversification strategy contributes to the overall top line growth. As most of you are well aware, we have diversified our revenue by adding the critical care product line and strengthening our custom product line. During the first quarter of 2006, our product revenue mix was as follows. CLAVE products excluding custom IV systems were 33% of revenue in the first quarter of 2006 versus 58% in the first quarter of last year. Revenue dollars were 16.1 million for the first quarter of 2006 and 15.7 million for the first quarter of 2005. When you add CLAVE and custom CLAVE IV sets, combined sales were $22.6 million in the first quarter of 2006 compared to 20.4 million in the first quarter of 2005, or a 20% increase.

Custom products, which include CLAVE and non-CLAVE and critical care custom products, were 25% of total sales in the first quarter of both years. On a dollar basis, custom products increased 75% to $12 million compared to $6.8 million in the first quarter a year ago. Critical care products, excluding custom products, were 24% of total revenues, or $11.8 million, and that's the first quarter of 2006. Other products contributed 18% to total revenue in the first quarter of 2006 compared to 17% in the first quarter of 2005.

Now let's move to sales by distribution channels. Sales to Hospira increased 160% to 36.6 million in the first quarter of 2006 compared to $14.1 million in the first quarter of 2005. Domestic distributors generated $6.2 million in the first quarter of 2006, up 3% from last year. International sales for the quarter increased 65% to $4.3 million. We see international markets as a promising growth opportunity and continue to establish our positions in Europe, Latin America, the Pacific Rim and South Africa. The sales increase was led by strong CLAVE and custom IV system sales.

Moving to gross margins, because we've begun to move manufacturing processes out of our Salt Lake City facility and into Mexico, it is not meaningful to compare gross margins in the Salt Lake City facility to previous quarters. So going forward, we will discuss gross margins on a company-wide basis only. But right now, using that comparison is meaningless because we did not have the Salt Lake City facility in the first quarter of last year and its gross margins are much lower than our other manufacturing locations.

For the first quarter of 2006, our gross margins on product sales were 42%, which compares to 42% in the last quarter of 2005. We expect our overall gross margin to continue to improve throughout 2006 due to manufacturing efficiencies at our plants as we continue to move our San Clemente manufacturing to Salt Lake City and the manual processes to our lower cost facility in Mexico and continue to make other manufacturing improvements.

First quarter SG&A expenses were $10.6 million compared to $8 million in the same period last year. The increase was primarily due to expanding our sales force. As a percentage of total revenue, SG&A expenses were 22% in the first quarter of 2006, down significantly from 40% in the same period last year. The decrease was primarily attributable to increased sales.

Research and development expenses totaled $1.6 million for the first quarter of 2006 compared to $700,000 in the same period last year. We expect to increase our investment in R&D in 2006 as we focus on developing innovative critical care products and next-generation products.

During the first quarter, we continued to improve our balance sheet. As of March 31, 2006, we had $95.9 million in cash and investments and $132.8 million in working capital and no debt. Accounts receivable at the end of the first quarter increased to 26.6 million from 23.6 million at the end of December 2005. This increase is primarily due to new sales and the increase in receivables that comes from increased sales. Our DSOs were 50 days at the end of March, compared to 51 days at the end of December and 41 days at the end of March 2005.

Our inventory levels increased during the first quarter as planned to $16.7 million compared to $15.4 million in the previous quarter. This increase is primarily attributable to an increase in CLAVE products in preparation for the transfer of production to Salt Lake City. Of the 16.7 million, over 7.4 million was related to inventory from Salt Lake City. Our operating cash flow was $8.7 million for the first quarter even after our increased inventory position.

Now let me go through a few key numbers for the first quarter. Revenue, 48.8 million versus $27.1 million in '05. Operating cash flow excluding tax benefits from stock options, 8.7 million versus 6.8 million last year. Free cash flow, 7.1 million versus 5.3 last year. Operating income, 19%, up from 18% for the full year 2005. DSOs, this is receivables, 50 days versus 51 days at December 31, 2005. Day's sales in inventories, DSIs, 63 days versus 72 days at December 31, 2005, even though we're building a buffer inventory for the move out of San Clemente.

Finished goods turns 38 times, both from 44 times, less (indiscernible) reflecting the build of buffer inventory. Cash and investments, $95.9 million, up from $86.7 million at December 31, 2005.

Now I'll turn the call back over to Doc to discuss ongoing business trends in more detail and on the outlook for 2006.

Thanks, Frank. We are encouraged by our first quarter results and expect to continue to deliver strong revenue and earnings performance in 2006. Based on improving efficiencies and continued demand for our custom IV system and critical care product lines and the strength of our international markets for the remainder of 2006, we're raising our revenue and earnings targets from those provided on the last conference call in January. We now expect to achieve sales between 188 million and 190 million, up from 176 million to 180 million, and we expect diluted earnings-per-share to be between $1.56 and $1.59, up from the range of $1.46 to $1.49. The next three quarters are targeted to improve as compared to the same quarters in '05.

As I mentioned on our last call, these numbers do not include any upside for new products. We are investing more in R&D in 2006 and have several products that will be moving into full-scale production, including our TEGO Connector, which we soft-launched in late 2005, and the Orbit 90 Diabetes Infusion Set. We're encouraged by the initial feedback but are anticipating only small contributions from these products as they will take time to ramp up.

In addition, we have a new integrated CLAVE [Y-check] valve and a new line of oncology IV therapy products ready for launch later this year and we continue to make investments in our critical care arena. But we'll hold off on discussing anything until we have more concrete launch plans.

Specifically on TEGO. The TEGO is gaining traction, and therefore, we are beginning to invest more in sales and marketing for TEGO. And in the second quarter, we're going to be moving a few more salespeople to focus on this product. During the second quarter, we will order the automated manufacturing equipment for TEGO. This is an important step because before we can move to automation, we have to gather enough field data to ensure we would not have any major changes in the design of the product. The contribution for this product should be about $1 million this year, but that this normal course for a successful new product introduction in our field. That certainly was the case with CLAVE for many years and the case of many of our other custom CLAVE products as well.

Concerning our Orbit product, we have completed our field testing which has been going on for the past six months. Due to these tests, we were able to make important improvements and are now ready to begin initial shipping in the second quarter. This product addresses the Diabetes Infusion Set used to deliver of insulin through a pump. It has a 360-degree connector for easy rotation, a low profile so it does not snag on your clothes and can be activated by using just one hand.

Looking forward to new product introductions, we will also unveil a new revolutionary product in 30 days which will protect practitioners from the effect of toxic drugs used in oncology therapy. More on this after the launch.

Now let me say a few words about the relocation of the automated manufacturing from our San Clemente facility to Salt Lake City, and the manual processes from Salt Lake City to our facility in Ensenada, Mexico as we believe this will truly position the Company for long-term growth. Both moves are preceded by construction. The initial expansion in Mexico is complete and we have moved over 20% of Salt Lake City's manual assembly in Mexico -- no issues. We will move the balance of Salt Lake City's manual assembly, except for the highly skilled parts that stay in Salt Lake, gradually to Mexico with completion in early 2007. The significant redesign of the production floor in Salt Lake City and construction of improvements will be done in June.

We have started moving equipment out of San Clemente and the move from San Clemente to Salt Lake City will be complete by the end of summer. These moves have been carefully and intensively planned to avoid any order fulfillment or quality issues.

In order to minimize disruption to our sales and customer service, we are doing both moves in careful and measured steps. As Frank mentioned, our inventory is up because we're beginning to build up the inventory levels in preparation for the move. We have done extensive training. However, keep in mind that we do expect the move to have a small temporary effect on operating margins in 2006, under 1%, just until we realize the full benefits in 2007 and beyond for the move.

In summary, we are very encouraged by our long-term growth opportunities and expect our product innovation, customer satisfaction and operating efficiencies to enable ICU to deliver sustainable and profitable growth for years to come. ICU is the market leader in the growing custom IV submarket and we continue to see overall growth of our core CLAVE products both domestically and especially internationally. Our investments in research and development and sales and marketing have positioned us for the future and as we move our manufacturing to Salt Lake City and Mexico, we expect to achieve further operational efficiencies. In addition, we continue to generate positive cash flows and ended the quarter with a solid balance sheet to support future growth both organically and through acquisitions. 2006 should be a solid year for ICU Medical.

Now, I'd like to turn the call over to questions.

(Operator Instructions). Sean McKenna, Global Crown Capital.

Hey, guys. Nice job. I wanted to ask if you could detail a little bit more about why you're having success with the CLAVE. It looks like that number was good in the quarter. Also, if you could tell us what kind of revenues were done in Salt Lake City, including the critical care, and sort of give a little bit more -- give us a better idea of why those two product lines are working right now? Thanks.

Sean, on the CLAVE, the biggest piece of the increase in CLAVE was because of the custom products. CLAVE by itself showed good strength internationally. But then across the board, both domestically and internationally, it was good all channels. International CLAVE, combination of CLAVE and custom CLAVE was 2.1 last year, 3.6 this year, domestic distributors were up to 3.4 to 3.6, and Hospira was up from 14.7 to 15.4. So the total last year was 20.4; this year, it was 22.6. So we're looking good there.

The Salt Lake City revenue by itself accounted for 39% of -- the Salt Lake City products -- accounted for 39% of the top line revenue. I don't have the dollar number here, but it was 39% of the top line. And that, we just had a good quarter there. I think things are starting to look up there.

Great. And then, you mentioned a bit of weight that might be on gross margins because of your move. I was wondering if you could talk a little bit more about that. Is that going to be kind of spread out evenly, or are we going to see that more in one quarter because of some --?

I don't know if you caught it, Sean, but I mentioned less than 1%.

Okay.

The temporary effect when you're running two factories, we're running two overhead systems, two -- double everything, but that of course will stop when we're fully integrated into one plant. Do you want to say anything more about it I guess spread it out?

Sean, what we're hitting there specifically, other than just this running two plants, is some personnel costs in connection with the relocation, as well as the physical move costs themselves. And they are coming pretty evenly. They're not that much, and they're being spread out pretty evenly.

The build ought to be done in June, so it's finite, Sean.

One more if I may. Can you just kind of give us a little bit more detail on what the response has been exactly to TEGO and what are customers saying? And sort of the first part. And then the second part is going back to CLAVE. Could you maybe address the research done by Johns Hopkins and how that is affecting CLAVE sales?

I will take John Hopkins, first of all. Glad you brought it up, because the Johns Hopkins study, which was -- had nothing to do with ICU Medical, but compared the Alaris product to the CLAVE product. And what they found was a significantly higher infection rate with the Alaris product, significantly to the point where they stopped using the Alaris SmartSite product. Remember, the Alaris is a product that we claim infringes our patents, but it does it in a different -- it does it in a torturous way. So that study has gotten a tremendous response in the marketplace for us and we are addressing it, fielding the questions that are coming in and we've actually converted hospitals over that article. And we expect to convert many more hospitals over that article. That's the Johns Hopkins study, but it's a completely independent study, well-recognized and the physicians that wrote the article -- and it was well done. So a significant difference in infection rates.

Now the other part of your question had to do with what?

Sorry, I asked about TEGO?

TEGO, yes, you had me thinking about the CLAVE there.

Yes, that's great. TEGO now.

If you would like our copies of that article, we would certainly send it to you or certainly tell you where to obtain the article. No problem there, just call our marketing department.

The other issue on TEGO -- remember, TEGO has no reimbursement. We're converting accounts -- and accounts. We're converting accounts without trials. It's gaining traction for an empty market, which is the only markets I really want to go into. I do not like competitors, I like empty markets because I can create and control my margins. For an empty market, we're getting good traction across the country. Sales are still small, but they're doubling each month so far as we roll the product out. We moved to a multi-cavity from single cavity to an eight-cavity tool within eight weeks and things are looking pretty promising on that product.

Remember, keep in mind with TEGO, we only look at it as a moneymaker. It potentially can make more money for us than the CLAVE makes for us, on a dollar per dollar basis because it potentially sells for a much higher price than the CLAVE, and yet it's only two components to the product as opposed to three. So that's the way we see the TEGO.

Now it's still early, things could change, but so far everything looks good. We did a soft launch on the product and we have very, very strong patent coverage on the TEGO; very strong patent coverage, just like we do on the CLAVE. But dollar for dollar, it could potentially generate many times the revenue. For example, when we sell to Hospira, we could make more dollars to the bottom-line and gross more dollars than in CLAVE. Does that answer your question?

It does answer it very well. Are you guys going to send the revenue breakout, or is that on the website?

It should be on the website.

It should be there.

Thanks so much guys, I will hop back in the queue, great job though.

Remember, Sean, it's still early in product lines, but I'm really encouraged.

Mitra Ramgopal, Sidoti.

Good afternoon, guys, just a few questions. In terms of the new guidance with revenue, what percentage do you think the critical care line will account for?

We have not broken that out separately, Mitra. It's hard to break it out. It's really, really difficult to break it out, Mitra.

Okay, any ballpark?

One of the problems with being so diversified, it gets harder and harder to separate.

I think, Mitra, it's going to be in the vicinity, just critical care products excluding custom, 23 to 26%, in that range.

Thanks. Also, I don't know if you mentioned it earlier, but if you can give us an update in terms of the improvement in the gross margin in the Salt Lake City facility. I believe in the fourth quarter, it was about 27%.

Yes. As I mentioned, Mitra, we can't really talk about the separate Salt Lake City margin because the production has been moving out of Salt Lake City and we're just losing any ability to track that as a separate facility. It's different now than it was when we built it.

I'm not too sure that they heard you on the gross margin. You said our margins, our gross margins, (indiscernible) our gross margins (indiscernible) 43% from 42.

42 to 42 in total. But that's consolidated, Mitra.

Okay. I guess if you could just comment again, you're building your cash balance very nicely. I think you've spoken in the past of maybe looking at some small acquisitions, especially on the international front. I assume none of that is in your guidance, and maybe if you could give us an update in terms of what you might be seeing anything at all?

We're actively, actively searching and looking for qualified companies that would be accretive and would be positive for our shareholders. We're going to be very selective on what we take on, but we're on an active full-time basis search forum. And we have 50 candidates, but it's a question of, you have to kiss a lot of frogs before you get a prince. So we're still in the process of kissing.

Okay, thanks again.

Let me just add, that none of that's in the target numbers that we mentioned.

No, nor are any new product launches.

Okay, thanks, again guys.

(Operator Instructions). Dan Owczarski, Belmont Harbor Capital.

Yes, thanks, good afternoon and very nice quarter, guys. Just on the critical care unit on those products, is there opportunity to build that portfolio? Do you have new products in mind for that pipeline? Or at one time, did you think about or did you talk about custom units, being able to take some of your custom expertise into that product line?

Absolutely. We are moving the product line over to custom products, that's number one. One of the other inputs you can get is, I recommend that you listen to Hospira's earnings conference call and perhaps ask them the specific questions about critical care. Because critical care is certainly the negative slide that they had when we acquired them is over. It's going in the other direction now. It's gone from neutral to positive. So as far as new products go, we are actively -- actually, I didn't mention anything about the new products that we are launching for critical care, but we are launching new products for critical care that are in the prototype stage or early stages of development. But we think we have some new ideas, some new products and also some ways to change catheters to make them much more appropriate for the marketplace. So the answer is yes, we're spending money in R&D and we have a full R&D staff there, and their full-time job is to come up with new products. We should have some new products to announce later this year, not early but later this year.

Okay. And then for the custom in the critical care, is that something --?

We see it all going custom, just like CLAVE. We used to be an OEM manufacturer of CLAVE. I think CLAVE OEM sales are probably 20% (indiscernible) sales now?

No, a little more than that.

Can't be much more than 25 or -- somewhere in the neighborhood of 25, 30% of our sales is OEM CLAVE. We see the same thing happening with critical care. It was basically a standard product we're converting to all the custom. And specifically that is part of the reason for the new product for critical care is to give the customer exactly what they want in such a way that -- because of our systems, even when we're building inventory, we're still turning our inventory 38 times versus an industry norm of four times a year. So that is all customizable again because of our custom capabilities. But we see the whole market going that way. We do not see standard is sustainable. It's like everybody wearing the same size shirt -- I don't think it's appropriate for everybody.

Is the custom something that you're doing right now in critical care, or --?

Right now. We've already moved 20% of the manufacturing from Salt Lake City to Mexico -- that is all custom so far. Everything is custom, and not one blip in the marketplace. I have noticed not one issue between making it in Salt Lake City versus making it in Mexico.

And then for the TEGO, you had talked about moving to automation. Could you go over that again and maybe talk about time lines -- how does that play out?

Right now, they're all made by hand assembly, and by hand, multiple steps by hand. And the next step now is this next quarter, we are ordering automation that gives us the capability like CLAVE capability of [ticking] them out by the millions. Right now, it's all done by hand. But we couldn't do that until we got out in the marketplace and tested it. We came back, made changes based on customer feedback. And now we think the product is exactly where we want it to be. There's no change -- the sales force says don't change a thing, so we're now ready to go to automation, which means eliminating all the labor involved in getting the cost of goods sold down.

Okay, thank you.

(Operator Instructions). Bruce Cranna, Leerink Swann.

Hi, good afternoon guys. Frank, as usual, I'm a little bit confused with the numbers to the extent that you broke them out, the sales dollars for the quarter. I think I had critical care at 11.8 and 12 million custom. Is that right?

It sounds about right.

Yes, I had 16 million for --.

Yes, critical care was 11.8, and what was the other one?

And so CLAVE, a little north of 16.

16.1 or something -- 16.1, exactly.

And custom was somewhere around 12.

It was 12, yes.

I'm kind of fishing for some other pieces. Can you give us any other pieces?

The only other one is other, which is a -- kind of the catchall category, it has 18% of the total in there.

And just remind me, that would include, for instance, CLC and Punctur-Guard and --.

And some products we're making in Salt Lake City that are not part of the critical care line.

So I think your math -- so for the critical care for the year, it sounds like 48 to 50 million or something like that, based on 25% of your guiding top line. Is that right?

Yes, if you were to annualize it, yes.

So how would you contrast that to prior year as a run rate? I'm trying to get sort of an apples-to-apples on the critical care business, which I know you --.

Okay, you have critical care customs on top of that, which is 3.2 million for the quarter.

That would give me 15.

Right. And then you have some other products which I wouldn't put in there on an annual basis, but were $4 million for the quarter coming out of Salt Lake.

So the 15, roughly 15 million for the quarter, and what was that sequentially? What was last quarter? Can you remind me?

Well, all of Salt Lake was about 17 for the quarter, and this year for the quarter, it was about 19. And those numbers are rounded.

What I'm trying to get at is, I'm looking at the guidance for the year on the revenue side, 188 to 190. And with the quarter you just put up, it kind of looks like you guys are being a little on the conservative side. Because, if I sort of straight-line you from here, I come up with a larger number than that. Maybe what I'm missing --.

You cannot draw a straight line, though, in our business, because as you know, we only do what we absolutely -- this is Doc -- we only tell you what we know we're 100% confident in. You can't draw a straight line in our business because if you did, there is no reason to have CFOs and CEOs and such. Sales don't work -- it doesn't work that way. Quarters change, especially in our business. Second and third quarter can be down, fourth quarter could be the highest quarter, and then from year to year, it changes. So you cannot go do that Bruce. You cannot go quarter to quarter and draw a straight line. It doesn't work.

Generally, you guys would show a little bit of a flattish 2Q, down 3Q, and then up Q4.

You know, it has changed though, and I suspect if we had done our job right, it should -- those bumps should flatten out and change a little bit because we're so much more diversified now than just the CLAVE business. So I don't know if that's going to hold -- we will see by the end of this year, but you can't just take two quarters and draw a straight line. It just won't cut it.

Well, that's clearly not the case.

Our guidance is, if anything, it's conservative. We think it's accurate. We think it's accurate and to go outside these numbers would be not accurate. So we're bumping our earnings forecast up $0.10 a share. We're taking our revenue up how many million?

10.

$10 million -- we think it's accurate. And I think we're confident in these numbers; that's why we're bumping them up. Next quarter, we'll look at them again.

Sounds like you're being a little on the conservative side Doc, that's all, but that's fair.

No, I think we're being on the accurate side, Bruce.

Okay. And then, just so I understand it, the guidance, that's the total sales, not including the other line, right?

It's total revenue, Bruce, sales and other.

Any idea how we should model the other line, Frank, as kind of a going forward?

It's pretty much I think 700 a quarter, and then the balance is in the first quarter.

And Q1 is always bigger?

Yes, 7 or 800 in the other quarters.

And I have to ask this question, as much as your friends at Hospira don't want to touch it. But, can you guys comment at all about what you have seen in the field on the infusion pump side with respect to obviously another competitor having some issues? I'm wondering if you guys are seeing any positives.

We certainly know something, but you really have to ask our partner. You would have to ask Hospira.

I have; they won't give me much, Doc.

It's not my product and it's not my company. So with respect to them, you have to ask them.

Alright, thanks.

You know how positive we feel about Hospira.

Alright, Thank you.

You're welcome.

Sir, we have no further questions. Back over to the group for any further comments.

Okay, no more questions. Thank you all for joining our conference call. We will see you next quarter and appreciate your participation.

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