ICU Medical Inc (ICUI) 2010 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the ICU Medical fourth-quarter 2010 earnings conference call. (Operator Instructions). As a reminder, today's call is being recorded. At this time, I would now like to turn the conference over to your host, Mr. John Mills of ICR. Sir, you may begin.

Thank you. Good afternoon, everyone. Thank you for joining us to review ICU Medical's financial results for the fourth quarter and fiscal year ended December 31, 2010. On the call today representing ICU Medical is Dr. George Lopez, Chairman and Chief Executive Officer, and Scott Lamb, Chief Financial Officer.

We will start the call by reviewing key operating and financial achievements for the year. Then Scott will discuss fourth-quarter financial performance and revenue and earnings targets for fiscal 2011. Dr. Lopez will wrap up the call with a review of current business trends. Then, we will open the call for your questions.

Before we start, I want to touch upon any forward-looking statements made during the call, including management's beliefs and expectations about the Company's future results. Please be aware they are based on the best available information to management, and assumptions that management believes are reasonable. Such statements are not intended to be a representation of future results, and are subject to risks and uncertainties. Future results may differ materially from management's current expectations.

We refer all of you to the Company's SEC filings for more detailed information on the risks and uncertainties that have a direct bearing on operating results and performance and financial conditions. With that, I'll turn the call over to Dr. Lopez. Go ahead, Doc.

Thank you, John. Good afternoon, everybody.

We are very pleased with our operating and financial achievements during the fourth quarter and full year of 2010, marked by record profitability for the quarter and record annual top- and bottom-line performance. Our results are beginning to reflect strong returns on the investments we have made in many aspects of our business during the past few years.

In 2010, our total sales increased 22.9% to $284.6 million, and net income was up 16.5% to $30.9 million, or $2.23 per diluted share. International sales for the full year of 2010 grew 32% and direct sales were up 54%, driven by strong demand for all of our products.

Keep in mind that this strong year-over-year growth was in comparison to strong results in 2009. Unlike many of our competitors that were adversely affected by the economy in 2009, we generated strong results in 2009.

From an operating standpoint, 2010 was a year of significant accomplishments, as well. We successfully transitioned the critical care business or operations we purchased from Hospira in late 2009, continued to heavily invest and expand our sales force, and implemented a marketing strategy to position the critical care business for further improvements.

During the fourth quarter, we began our operations at our new plant in Slovakia and started initial product shipments from the European facility this year. To further enhance our cost efficiency and product quality, we made important investments in our manufacturing facility -- facilities, quality controls, and research and development. We believe these strategic investments in our plants, direct sales force, and distribution partners will enable us to continue to expand our market share worldwide and increase profitable growth in 2011 and beyond.

Before I provide more details on the milestones and our future business outlook, let me turn the call over to our CFO, Scott Lamb, to review our financial results for the fourth quarter. Scott?

Thanks, Doc. Before I begin, let me remind all of you that the sales numbers we are covering, as well as our financial statements, are available on the investor portion of our website for your review.

We are pleased to report another year of record financial performance. As Doc mentioned, our total annual revenue increased 22.9% to $284.6 million, compared to revenue of $231.5 million a year ago. It was driven by double-digit improvements in all of our product lines.

For the fourth quarter of 2010, our sales were up 8.3% to $75.6 million, compared to $69.8 million for the fourth quarter of 2009. This growth was attributable to strong performance of our Custom Sets, CLAVE, and new products, which was offset by an expected decrease in critical care compared to the same period last year. Excluding critical-care products, our total sales for the fourth quarter increased 26.5% year over year.

For the full fiscal year of 2010, we earned a record $30.9 million, or $2.23 per diluted share, compared to net income of $26.6 million, or $1.77 per diluted share, for the full fiscal year of 2009. For the fourth quarter of 2010, our earnings totaled $10 million, or $0.72 per diluted share, compared to $7.4 million, or $0.50 per diluted share, for the fourth quarter a year ago.

Before we get into details on our sales by product categories, I believe it's important to point out that a few years ago, Dr. Lopez believed that growth in Custom Sets category was going to be the next, big, long-term opportunity for our industry, and for the full year of 2010 marks the first year our Custom Sets product line overtook CLAVE sales and became our largest-selling product line. We are the leader in this category, and our custom sales are approximately five times more than our nearest competitor. We believe this area shows continued strong growth potential for the years to come.

Now let me discuss our financial results for the fourth quarter in more detail. Sales by product category were as follows. CLAVE represented 34% of our fourth-quarter total revenues, and increased 15% to $25.6 million from $22.3 million a year ago. As we already discussed on our previous conference call, this growth was primarily attributable to higher shipments to Hospira as they were preparing for potential increased business due to market conditions and the switch of their IV tubing that uses our CLAVE products as one of the components from DHP to non-DHP material, which was completed during the fourth quarter.

In 2011, we expect orders to return to normal long-term growth levels of mid- to high single digits, excluding the additional sales to Hospira of approximately $5 million in the later half of 2010, as we continue to benefit from the product efficacy and our industry-leading distribution agreements and relationships.

Custom Sets, which include custom oncology, custom infusion, and custom critical care, represented 38% of our total fourth-quarter revenue and increased 28% to $28.6 million, compared to $22.3 million a year ago. Similar to CLAVE, performance of Custom Sets was positively impacted in the fourth quarter by increased orders from Hospira, due to conversion from DHP to non-DHP material in their IV sets. Custom oncology and custom infusion sets were up 103% and 34% year over year, respectively.

As our business continue to move towards custom solutions, we believe that in 2011, sales from all of our custom products will grow in the 10% to 15% range, excluding the additional sales to Hospira of approximately $7 million in the latter half of 2010.

As we explained on our fourth-quarter call a year ago, some of our critical-care customers built their inventories during the third and fourth quarters of 2009, immediately following our acquisition of this product line from Hospira, and we anticipated some gradual destocking to occur during 2010. As a result of this, our custom critical care sales were down about 25%, compared to the same period a year ago.

Sales from our standard critical-care products also decreased 33% to $11.8 million, compared to $17.6 million for the fourth quarter a year ago, due to the same reason I just described. Critical care represented 16% of our total revenue. For the foreseeable future, we expect critical-care products to grow 2% to 3%.

Standard oncology grew 52% to $2.5 million year over year, representing more than 3% of our total sales. As we discussed on the previous call, we implemented certain performance improvements into our Spiros and Genie products during the third and fourth quarters, and we'll soon be back in full sales and marketing efforts. Based on the current business trends and strong demand, we expect to double oncology sales in 2011 to approximately $15 million, compared to 2010.

Now moving to our fourth-quarter sales by distribution channel, U.S. sales to Hospira were up 29% year over year to $31.4 million. The increase was driven by strong contributions from CLAVE and Custom Sets, due to the reasons I discussed earlier. For the fourth quarter of 2010, U.S. sales to Hospira represented 41.5% of our total revenue, compared to approximately 35% for the same quarter of 2009.

Our domestic direct sales, combined with our specialty distributors, were down 5% to $26.9 million year over year, as strong performance of Custom Sets, CLAVE, and new products was more than offset by a decrease in critical care. Similarly, international sales increased only 1% to $16.5 million year over year, representing 21.9% of our total revenue, compared to 23.4% a year ago.

Now, excluding critical care, our fourth-quarter domestic direct sales, combined with our specialty distributors, increased 32%, while international sales were up 21% year over year. I would like to reiterate that the critical care de-stocking is well behind us, and we expect normalized growth in 2011.

Our gross margins expanded 460 basis points year over year for the fourth quarter and 470 basis points on the consecutive basis to 49.6%. This improvement was attributable to a favorable product mix, improved manufacturing efficiencies, and the elimination of costs associated with the critical-care transition.

SG&A expenses decreased 2.9% to $19.3 million, or 25% of sales, compared with $19.8 million, or 28% of sales, for the fourth quarter last year. This decrease was due primarily to lower legal expenses, which were partially offset by higher costs related to our investments we made in the sales and marketing initiatives and building our direct sales force.

Our research and development expenses increased to $1.7 million, compared to $0.6 million for the fourth quarter of 2009. The increase was primarily due to investments in development and improvement of our critical care and new products. Going forward, we remain committed to expanding our R&D initiative to enhance and diversify our product portfolio.

For the fourth quarter of 2010, our operating income increased 50.7% to $16.5 million, or 22% of total sales, compared to operating income of $10.9 million, or 16% of total sales, a year ago. This reflects the leverage we are beginning to achieve from investments in sales and marketing and new product development.

Going forward, we will be providing our EBITDA metric to help you understand the strength of our business model and the cash we are generating from our business. For 2010, we generated approximately $68 million in EBITDA.

It is important to note that we achieved our strong year-over-year increase in net income even after our tax rate increased 520 basis points year over year. The rate increase was due to less tax credits and an increase in deferred tax liabilities from our foreign subsidiaries.

Now moving to our balance sheet and cash flow, as of December 31, 2010, our balance sheet remains strong with $93.4 million in cash, cash equivalents, and investment securities. This equates to approximately $6.73 per outstanding share. We also had $182.1 million in working capital.

Additionally, we generated $33.1 million in cash flow from operating activities for the full year of 2010. Our capital expenditures totaled $23.2 million during the year, and primarily included the investment to build a new factory in Slovakia, expanding our production facilities in Mexico, and new tooling and equipment in our U.S. operations.

Days sales outstanding for the fourth quarter were 67 days, which is in line with our past four quarters. The slight increase during the past four quarters is due to an increase in direct sales and our sales expansion outside the United States. We expect DSOs to be approximately 70 days in the foreseeable future.

Now, let me discuss our financial outlook for 2011. Based on the current business trends and strong global demand, we believe that all of our product lines will post growth during the year. As a result, we expect our total revenue to be in the range of $295 million to $305 million. These revenue expectations do not include any additional sales to Hospira above and beyond our normal shipments. As a reminder, in the third and fourth quarter of 2010, we had over $12 million of additional sales to Hospira related to CLAVE and Custom Sets, due to market conditions and the switch of their IV tubing from DHP to non-DHP.

We estimate our gross margins for fiscal-year 2011 to be approximately 46% to 46.5%. As the critical-care transition process is now behind us, and due to improved manufacturing efficiencies, we expect our gross margins to gradually improve throughout the year.

However, this improvement will be negatively impacted during the first quarter by our product mix, the normal closure of our manufacturing facilities during the holidays, and related absorption costs that occur in the first quarter. Also, we will begin shipping products in our Slovakia plant in the first quarter, and this will affect margins until the plant is more efficient.

Therefore, our earnings per share will be lower in the first quarter, due to the temporary decrease in gross margin, and then improve, beginning in the second quarter. Our SG&A for fiscal-year 2011 are expected to be approximately 27% to 27.5% of total sales. We believe we have a very robust and cost-efficient infrastructure in place, which will enable us to better leverage our operating expenses and improve our operating margins.

Our R&D expenses as a percentage of sales are expected to be approximately 2%. During 2011, we will continue to invest in our new and existing products to improve their quality and value proposition to our customers. We expect to achieve diluted earnings per share in the range of $2.25 to $2.45.

For modeling purposes, our tax rate is expected to be 36% for 2011. Our operating cash flow is expected to be approximately $45 million to $50 million in 2011, and we believe capital expenditures to be $16 million to $19 million in 2011.

Now, I would like to turn the call back over to Dr. Lopez.

Thanks, Scott. We are very proud of our achievements during 2010 and remain confident in our ability to improve profitable growth.

You will notice in our guidance that we are starting to see improved margin performance and strong bottom-line growth. This is partly due to the leverage we are beginning to achieve from investments we have made in sales and marketing personnel and manufacturing over the past few years.

We have streamlined our Mexican and Salt Lake City plants and expanded into Europe with our Slovakia plant. We have built a global 130-person sales force over the past few years, and in 2011 will be the year we begin to show improved leverage from these investments.

One of our key strategic milestones for 2010 was completion of the construction of our new manufacturing plant in Slovakia. During the fourth quarter, we obtained ISO certification and have started product shipments. This investment was necessary to support momentum of our custom products in the European markets. Favorably located in the heart of Europe, the plant provides us with significant distribution and cost advantages, further expanding our presence in the European market and enhancing our international operating efficiency. We look forward to ramping up our newly-established operations in Europe and updating you on our progress on our future conference calls.

During the year, we also implemented several important initiatives at our Mexico and Salt Lake City facilities. More specifically, we expanded our manufacturing facility in Ensenada, Mexico, where most of our manual assembly is done. We believe these steps will be essential to continue delivering high-quality products and improving our cost structure.

Given that the critical-care transition process is complete, we believe that all of the product lines are positioned for profitable growth in 2011. We are especially excited to see our existing and new products continue to gain momentum in the global markets.

2010 marked the first year our Custom Sets became our leading sales product line, overtaking our CLAVE sales. CLAVE continues to be a strong product line for us and will continue to enjoy mid- to high single-digit growth for the foreseeable future.

A few years ago, I saw the opportunity in custom IV sets as a great opportunity. As many of you on this call have heard me say over the years, we prefer to go into new markets with little or no competition and establish the market. The Custom Sets market was exactly that type of market.

Today, I see the same great opportunity for our oncology products, going after empty markets and creating a new market with these new products.

As another example, fourth-quarter sales from TEGO connector, specifically designed to be used by in dialysis, more than doubled year over year to $1.4 million. For the full fiscal year, sales from TEGO were up 44% to $4.4 million. Recently, we landed a national account operating major dialysis centers, and expect this product to continue to grow and make solid contributions to our top line in 2011.

Our success with TEGO validates the growing recognition of our Company as a world leader in NeedleFree connection devices, delivering best-in-industry products.

Our oncology products also continue to gain momentum in the market. We're entering 2011 with an expanded and well-trained sales force focused on the oncology field. Based on the recent product improvements we made and strong demand, we expect sales from oncology business to double in 2011 to approximately $15 million in sales. This is up from minimal sales in 2009.

We have new products we plan to introduce during the later half of 2011 that are not factored into our revenue and earnings expectations right now, and we will provide additional information on these products later in the year.

Looking forward, we believe that our industry-leading portfolio of products, innovative sales and marketing initiatives, and established cost-efficient operating infrastructure positions us well for continuous market expansion worldwide and success in 2011 and beyond. Now, I'd like to turn the call over for your questions.

(Operator Instructions). Matt Dolan, ROTH Capital Partners.

Congrats on another good quarter. Wanted to look maybe at the revenue guidance, if we could. Two questions. First, you mentioned your expectations for no more orders or incremental orders from Hospira. Can you maybe talk about what you've embedded in terms of their ability to sell through the products that they've already ordered, and therefore the impact on the patterns that you've seen as they look to gain pump share?

And the second component is, Scott, how do you see revenue playing out throughout the year relative to what we've seen here in Q3 and Q4? From a run-rate standpoint, it would be flat sequentially, but maybe you could give us kind of the flow throughout the year. Thanks.

Sure. First of all, on the additional sales to Hospira, approximately $7 million of that was in Custom Sets. All that is direct sales sell-in and sellthrough.

As far as the $5 million in additional CLAVE sales, a portion of that is going to help with the additional DHP to non-DHP build of IV sets by Hospira. These are components, CLAVE components, used in those sets. And then, an additional amount would be used to go after additional business by Hospira, and that amount I can't break out for you.

As far as sales going forward, again, we talked about CLAVE being in the mid to high single digits, custom being in the 10% to 15% range. That does not include the additional sales to Hospira that we just talked about, and we should see some ramp later on in the second half of this year.

So ramping throughout the year. And then, secondly, on the gross margin, that was an impressive number in Q4. Was that purely a mix issue and why would that number not be sustainable in 2011?

It's attributable mainly to two items. One is product mix and the other is efficiencies. The product mix will not be as favorable, especially going into the first quarter of 2011. And then, of course, there is the pressure being put on the margins by the Slovakia facility basically opening up, beginning shipments this first quarter.

Jeffrey Cohen, C.K. Cooper & Co..

Thanks for taking my question. Fantastic numbers. Two questions. One on international sales for 2011. I guess it was 21.9% for Q4 at $16.5 million. So, is it safe to say that this will continue to grow at this rate, up toward about $20 million for 2011?

Certainly, we expect international sales as a percentage to grow -- continue to grow significantly.

Obviously, it's a smaller number than our domestic, but if you look over the past few years, we have grown by a few hundred basis points every year as far as international being the total percent of overall sales. And that's obviously one of the reasons why we built the factory in Slovakia, to support that type of growth.

And what type of capacity levels is the plant projected to be at over the course of 2011?

By midyear, we are looking at around 30%, and then we'll just continue from there.

One more quick one. Any commentary -- you had mentioned a follow-on newer CLAVE version. Could you talk about that at all?

Not really. We -- if you're talking about our press release from a few months ago, is that what you are referring to?

Yes.

Our press release on the Neutron from a few months ago.

The new product, yes. We really don't speak about these products very much until we've had market traction and we'll get back to you when we reach a certain level.

Junaid Husain, Soleil Securities.

Scott, so just to -- I had another follow-up question on the gross margins. Given your plant shutdowns in Q1, and then the manufacturing ramp-up in Slovakia, so I'm guessing sequentially down gross margins for Q1, then. Can you quantify that for us?

I can't necessarily quantify it for you, but it will be down significantly compared to the fourth quarter. Keep in mind that last year, our gross margins for the first quarter of 2010 were 41.8%. And we have similar issues in the first quarter of 2010.

And then, Doc or Scott, relative to large hospital group purchasing contracts, I believe some Novation contracts were recently announced in IV therapy. Are there any other Novation contracts that might've gone your way, or alternatively, any other large GPO contracts, ex the TEGO contract?

No, not at the present time.

Thanks so much, guys. Nice quarter.

Edward Han-Burgess, Raymond James & Associates.

Congratulations, guys. Scott, just can you break down some of the components in gross margin again? It seems like in the last quarter, the DHP orders from Hospira were actually unfavorable to gross margin. If you could quantify that, as well as FX impact in 4Q, as well as 2010, and are you still expecting 75 basis-point impact from Slovakia in 2011?

I'm glad I wrote down all of those questions. Let's see, the first question on -- there might have been misunderstandings. The additional sales to Hospira did not have a negative impact on our gross margins.

Number two, as far as -- let me start with number three. Number three, the FX impact for both the quarter and the year was about 40 basis points on the margin. If you're talking top line, it had a negative impact of about $1.9 million in revenue.

And then, as far as question number two, remind me which that was.

Slovakia impact in 2011. Is it still 75 basis points?

Probably now closer to 100 basis points for the year.

Okay. And I think exactly a year ago you also gave potential FX impact in gross margin as well.

For last -- I can't tell you what I told you for last year. It was more significant than just 40 basis points for this year.

One last question. Are you -- so do you read -- you are back on the market with Genie and Spiros, or you are planning to in the first quarter. Are you building backlog now?

We never left the market. What we had done, Ed, is we pulled back a lot of our sales and marketing efforts. We continued to ship Genie and Spiros until we got them dialed in. And so, going forward, we believe that through these fixes, we'll be able to double our oncology sales, along with just the strong demand that we continue to see out in the marketplace.

James Terwilliger, Duncan-Williams, Inc..

First of all, congratulations on a very good quarter, and also congratulations on some strong guidance for 2011.

My first question is focusing on manufacturing. Scott, did you say Slovakia mid-2011, you're going to be approximately around 30% capacity utilization for that facility?

By midyear, yes.

By midyear, and could you -- so then that leads me to, what's the capacity utilization from your facility in Italy, and does that change at all with Slovakia coming online?

No, it will not. In fact, Slovakia will be as -- even with the built-in initial plant inefficiencies within any new startup, you're looking at cost neutral at worst.

If you would give a percent -- in terms of a capacity utilization percentage for Italy, would it be 60%? Higher than that?

I can't really give you an exact number for that. It's never been a significant manufacturing facility for us. We have about -- anywhere from 10 to 15 direct manufacturing folks in that plant at any given time. The quick order (multiple speakers)

And then, you did an expansion in Mexico as well. Is that behind us?

Yes. There are 22,000 square feet.

And how much additional capacity do you have down there for utilization?

We have a very big piece of land, and plans on our building to expand it whenever we need to. But the idea is to transfer a lot of the product over to Slovakia. It's -- especially the product that serves Europe, and then that opens up more capacity in the Mexican facility.

And then, critical-care transition in terms of your Salt Lake City facility, that's all behind you as well, correct?

All behind us, and -- absolutely. Yes. And that affected both Salt Lake and Mexico facilities.

Okay, and then, lastly, I know during 2010 and during the transition of critical care, you've been investing a lot of resources into your sales and marketing infrastructure. Do you feel that's well positioned to move into 2011? Is the majority of that investment behind the Company at this time?

Yes, yes, it is. (Multiple speakers). And also, the risk of the integration is over and past, now that it's fully integrated.

It's probably a lot easier at this time.

You bet.

Congratulations on a good quarter, guys. Thanks.

Mitra Ramgopal, Sidoti & Company.

Could you give us an idea how -- at the end of 2010, what was the size of the sales force, and do you have any additions or expansions in the 2011 guidance?

Yes, as Doc mentioned on the call, we have approximately 130 global direct sales folks. We're looking to add not just in sales, but also marketing and sales support.

Excuse me, Scott. Mitra, wasn't your question how many we had in 2009 or two thousand and -- the ramp-up?

(Multiple speakers). Both. Yes, if you can give us an idea how much you added in 2010, and also what we should expect for 2011.

Scott and I need to discuss that for a second. Mitra, we are not exact on this, so, but we've approximately 30, 35 people, approximately. And then, going forward, approximately 20 additional in sales, marketing, and support. They are budgeted in the SG&A already.

I don't know if it's possible to get an update as it relates to Premier, how that's progressing and sort your expectations for this year.

Scott, you'd know more about it than I would.

It's progressed every quarter, Mitra. We stopped giving out specific numbers related to Premier a few quarters ago. But I can tell you that we continue to see a lot of success coming from not only Premier, but through MedAssets and through our other GPO agreements around critical care.

Okay, and finally, again, international and Europe in particular seems to be just a huge opportunity for you. I think you ended the year in terms of revenues about 23%. That's grown a lot over the last couple of years. Any sense as to how -- the potential for 2011 and beyond?

We think Europe is going to be a big market.

So we should see that easily becoming at least over a quarter of your revenue?

I think so. Especially with the new products because -- especially with the new products we've developed.

And we'll get a lot of new business, Mitra, just because of the proximity. Before we had to make it in Mexico, ship it by ship for 16 days, and deliver it to a customer. Very difficult to do. Now we can make it in Slovakia, ship it in as little as 24 hours because we have our own e-beam sterilizer, ship it in 24 hours, and repeat the model we did in the U.S. on Custom Sets and custom kits.

And I believe, Doc, you mentioned sometime later this year we should probably get some announcements or updates on new products. Is it possible to potentially just give us an idea as to what areas you're looking to sort of maybe get into?

Yes, strictly oncology. And catheter patency devices. But the big one is oncology, and when I get about -- a run rate of about $1 million, I will pick up the product and bring it to you, do a roadshow with you on that. I'd be happy to.

Thanks again, guys.

Gregory Macosko, Lord Abbett.

Nice quarter. Just with regard to, you mentioned first-quarter earnings would be lower. You're meaning that sequentially, as well as year over year?

Sequentially.

And the -- you talked about the destocking being done. Do you see, because of the Hospira sales that you mentioned, the various categories there, does that kind of imply that sort of the run rate on Hospira over the next -- over, say, in the first and maybe the second quarter of it will be somewhat less, and then kind of recover after that?

Certainly, if you back out those additional sales, Hospira's run rate will be its normal run rate that it has been over the past few years. And we don't see any change from that. Obviously, there are some market opportunities out there, and hopefully we're -- we'll see some success from that.

But in the first quarter, obviously, there will be some impact from that.

Certainly, if you're comparing it sequentially, absolutely.

Yes, okay. But that's because of the earlier situation there.

Yes.

Okay, and it sounds as if everything is complete in Slovakia at this point, really, other than ramping it up and running?

Everything is complete. We are producing product and we're just in the process of transferring product from Mexico to there. But everything is complete. It's behind us.

By having Slovakia online, has that allowed you to sign any new customers or were any customers in the wings waiting to say that they would sign in or come on once you were there?

We're way too early to do that right now. We're -- our hands are full just transferring the product from Ensenada to Slovakia. But soon, we'll make that transfer and we'll market that afterwards, but nothing -- it's just too soon to say that.

And I'm assuming that there was no buyback during the quarter. Is there any intentions for the cash at this point?

I always get that question. The answer is when we find the -- when the stock goes on sale, that's one opportunity to buy it. And the answer is, no, there's nothing else we could think of to do with the cash.

There are no further questions online. I will now turn the call back over to Dr. Lopez.

Thank you very much. John, do you have anything to say?

I just wanted to thank everybody for participating on the call today, and I wanted to remind everyone we will be going to a number of conferences in the next few months, and also, we'll be updating you on 2011 progress and first-quarter results in April. Thank you very much.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Everyone, have a great day.