Marrone Bio Innovations, Inc. (MBII) 2020 Q1 法說會逐字稿

Good day and welcome to the Marrone Bio Innovations First Quarter 2020 Earnings Conference Call. Today's conference is being recorded. And at this time, I'd like to turn the conference over to Linda Moore. Please go ahead, ma'am.

Good afternoon, everyone, and thank you for joining our call. Welcome to the 2020 First Quarter Earnings Conference Call for Marrone Bio Innovations. On the call today are Founder and CEO, Pam Marrone; President and CFO, Jim Boyd; and Chief Commercial Officer, Kevin Hammill.

If you would please refer to Slide 2. I would like to remind you that this conference call may contain statements regarding management's expectations, hopes, beliefs, intentions or strategies regarding the future as well as projections, forecasts or other characterizations of future events or circumstances. Such statements are based on management's current expectations and beliefs concerning future developments and their potential effects on the company. There can be no assurance that future developments affecting the company will be those that management has anticipated. Such statements involve a number of risks and uncertainties, some of which are beyond management's control, or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these statements.

Important factors that could cause differences are contained in the reports filed by the company with the Securities and Exchange Commission, including under the heading Risk Factors and elsewhere in the company's annual report on Form 10-K for the year ended 2019, and in our earnings release posted on the company's website. Should one or more of these risks or uncertainties materialize or should any of management's assumptions prove incorrect, actual results may vary in material respects from those discussed today.

Any guidance that management may offer in this conference call represents a point-in-time estimate. The company expressly disclaims any obligation to revise or update any guidance or other forward-looking statements to reflect events or circumstances that may arise after the date of this call. After our remarks, we will hold a question-and-answer session.

I will now turn the call over to our President and CFO, Jim Boyd. Jim?

Thank you, Linda. And thank you to everyone for joining us on this call.

If you would turn to Slide 3. Sales in the first quarter were $9.7 million, our largest quarter ever and our seventh consecutive quarter of year-over-year revenue growth. Margins came in at a record 57.7%, also our largest quarter ever and our sixth consecutive quarter of gross margins greater than 50%.

We saw continued momentum in the demand for our products in the specialty markets for fruits, nuts, leafy greens, hemp and cannabis as growers are preparing for the critical spring season in the United States. Our largest products in the quarter were Regalia and Venerate, which continue to see increased adoption. Momentum was particularly strong in California despite one of the driest Februaries on record. Sales in California were driven by our BioUnite program in almonds. Sales to our top 6 specialty crop distributors grew 35% year-over-year, representing the effectiveness of our investment in our commercial team that we have been talking about over the past few earnings calls.

As you may recall, in our last earnings call, we said expect greater growth in 2020 than we had in 2019. We continue to expect this, notwithstanding the COVID-19 pandemic. Therefore, we do not think 2020's first quarter year-over-year revenue growth is representative of our revenue growth for the balance of 2020, which we expect will be higher. This is because the first quarter 2020 had a larger percentage of our total annual seed treatment sales for 2019 than we expect in 2020.

We are also seeing a seasonal shift in our sales pattern as row crops become a more significant part of our portfolio. We benefited modestly from the addition of Pro Farm's seed treatments in the first quarter. But seasonally, we would anticipate a greater contribution from our Pro Farm portfolio starting in the second quarter as distributors and seed companies prepare for the growing season in Europe.

I am particularly pleased that we continue to realize record gross margins with the first quarter coming in at 57.7% driven by our continuously improving product-level gross margins as well as a favorable product mix. While we achieved record revenues and record margins in the first quarter, we are taking a very cautious approach to operations as we navigate the effects of working through a global economy ravaged by the COVID-19 pandemic. The health and safety of our employees, customers and suppliers are our first priority. However, as a result of these uncertain economic times, we have taken several steps to reduce our operating expenses. We have done so in a manner that preserves jobs as we remain primarily focused on serving our customers and supporting farmers through these difficult times. We are very conscious and concerned than anyone who is suffering in the current environment, and we think the best way we can help is continuing to support food and agriculture with the products and services we provide.

For the first quarter, operating expenses were $11.2 million, an increase of $2.6 million year-over-year. Of that $2.6 million increase, $900,000 were noncash expenses. $600,000 of which was an amortization charge and $300,000 of which was an increase in stock compensation. Finally, $1.1 million of the increase was due to the addition of Pro Farm's operating expenses, which we consider reasonable for the value that this acquisition represents to Marrone Bio shareholders. The integration of Pro Farm is progressing well, and we are realizing meaningful operational and commercial synergies from the acquisition.

The net loss of $7 million in the first quarter of 2020 compares with a net loss of $3.9 million in 2019, an increase of $3.1 million. $1.4 million of the increase was a noncash adjustment from our 2019 warrant transaction. $600,000 was a noncash amortization of intangibles associated with the Pro Farm acquisition, and $300,000 was a noncash increase in stock compensation expenses. The remaining $800,000 increase is largely due to the addition of Pro Farm's previously mentioned operating expenses, offset by increased gross profit during the quarter.

Adjusted EBITDA, a non-GAAP measure, increased to a $3.7 million loss in the first quarter of 2020 from a $2.6 million loss in the first quarter of 2019, a $1.1 million difference. The increase was primarily due to the addition of Pro Farm's operating expenses.

Cash used in operations decreased to $6.3 million in the fourth quarter of -- first quarter, rather, of 2020, an increase of -- or a decrease, rather, of 17.8% from $7.7 million in the first quarter of 2019. The decrease was primarily driven by changes in working capital partially offset by the addition of Pro Farm's operating expenses.

Turning to our balance sheet. As of March 31, 2020, unrestricted cash and cash equivalents were $10.1 million compared to $6.3 million as of December 31, 2019. The increase was due to a $6 million draw under our early warrant facility and the initial $3 million draw on our new inventory line of credit. Backing out those 2 items, we had a cash burn of $5.2 million in the quarter or approximately $1.7 million per month, in line with our expectations.

Before I discuss my last 2 topics, I would like to state, in my career, I have been set through several crises, including Black Friday, 9/11 and the 2008 recession. And in my opinion, you do not want to underestimate the seriousness of any one of them. We recognized early the potential severity of the worldwide COVID-19 pandemic, and we moved quickly to adjust our operating budget to reflect that uncertainty, including a voluntary 10% salary cut for our executive team; a freeze on raises during 2020; and a cut in our regulatory budget, among other serious cuts. But we are maintaining everyone's job.

With that in mind -- and turning to Slide 4. Subsequent to the end of the quarter, we took 2 more actions to significantly reduce our company's business risk and strengthen our balance sheet in the new COVID-19 economy. First, in May, April -- in mid-April, we applied for and received $1.7 million loan under the Paycheck Protection Program as part of the Coronavirus Aid, Relief, and Economic Securities (sic) [Security] Act, or CARES Act, that was signed into law on March 27, 2020. Criticism has been leveled at public companies for participating. But the fact of the matter is that act helped us maintain our workforce in the face of economic uncertainty. Our people are our most valued asset, and the PPP loan allowed us to maintain our workforce during this time of crisis.

Second, we moved quickly to sign a warrant exchange agreement with existing institutional investors that provided $2.5 million in financing earlier this month and may result in up to $20 million in additional proceeds if the warrants are exercised in full over the next 2 years. The amount and timing of each tranche is designed to take us to an adjusted EBITDA breakeven level of operations given our current outlook and plan. It therefore also gives you insight as to how we see our path to breakeven. This transaction immediately reduces our total number of outstanding warrants by approximately 31%. Specifically, this transaction plus other normally expiring warrants will result in a 73% reduction in warrants outstanding by the end of this year and a 99% reduction in warrants outstanding by the end of 2021, therefore, effectively eliminating any warrant overhang. We believe this transaction is very positive for the company and its shareholders, removing the question of funding risk and significantly reducing potential dilution.

In conclusion, like everyone else, we are taking a cautious approach to the remainder of the year. Farmers are entering a critical period for their business, and it is imperative that we deliver a strong balance sheet as part of our plan to support them safely and cost effectively. We had a good first quarter that continues the sales momentum we saw in 2019, and we expect that momentum to continue into the balance of 2020. 6 quarters of margins in excess of 50%, tight control of our operating expenses and our newly strengthened balance sheet give us confidence during these uncertain times as we look forward to the remainder of the year.

With that, I would now like to turn the call over to Pam for her comments.

Thank you, Jim. Turning to Slide 5. The first quarter was highlighted by continued commercial progress in a tough economic environment. Farmers around the world are working tirelessly to ensure a safe and adequate food supply as they adjust to the changes brought on by the COVID-19 pandemic. Like growers, the team at Marrone Bio has been hard at work with significant year-over-year increases in our specialty crop accounts. Since last earnings call, we have gotten some insight into our market penetration by crop. Treated acres in 2019 with Venerate/Grandevo increased by 50%, driven by almonds, strawberries, leafy greens, pistachios and stone fruits. We saw strong results with our launch of the BioUnite program for almond test in California. Venerate/Grandevo used in combination with the top 2 insecticides for navel orangeworm and mites reduced pest damage above the growers standard program, providing a 3:1 return on investment.

Also in a push-through our BioUnite program in 2019, Regalia, our oldest product, was sprayed on 11% more acres in California and on 80% more almond acres.

This quarter, we launched Pacesetter in the United States, our foliar biological plant health product for row crops. This plant health product is the newest addition to our BioUnite portfolio. Pacesetter acts synergistically with conventional fungicides to improve plant health and vigor, resulting in increased yields above the chemical alone by up to 7 bushels per acre in soybean and 13 bushels per acre in corn.

We are also excited about our geographical expansion with Stargus biofungicide with our first sales into lettuce and strawberries in California and imminent sales in Mexico and Canada. Additionally, our Jet-Oxide 15% industrial disinfectant product was recently approved by the U.S. EPA for use against human coronaviruses to sanitize industrial food and agricultural hard surfaces. Not only is this timely, but presents an exciting new application for our Jet-Ag and Jet-Oxide product suite as we've seen a nice boost in awareness along with increased sales for both hard surface and direct crop sanitation for food-borne pathogens, including E. coli and Salmonella.

On the field trial front, we continue to expand seed treatment trials in the U.S., Europe and Latin America, particularly with our seed-treatment partners for our next-generation insecticide/nematicide as well as a new liquid formulation of Grandevo for seed treatment and foliar applications.

Even with the disruption caused by the COVID-19 pandemic, where possible, we are not slowing our field evaluation efforts for our products in development, including our Pro Farm products.

From a regulatory perspective, we have continued to make progress, recently submitting Stargus biofungicide registration into Europe, the second-largest fungicide market in the world after Brazil. We also submitted an expanded disease and crop list to the Stargus California and Canada labels. Also of note, we received approval in Canada for REGALIA MAXX on both indoor and outdoor cannabis and hemp, the first approval for any product for these uses in Canada.

We are pleased with the progress we have made with the Pro Farm integration and the opportunities to cross-sell and expand geographically. We continue to find exciting synergies where both Marrone Bio and Pro Farm benefit from leveraging our existing partner relationships to expand field testing of each other's products and create new product combination. For example, we have an integrated Pro Farm and Marrone Bio R&D and field testing program in both North and South America and Europe with major seed and agrichemical company customers.

Our international growth and diversification opportunities continue to expand, where the use of biologicals is growing more rapidly than the United States market. To this end, we recently signed a commercial agreement with Anasac Chile, a leading Chilean agricultural inputs provider with significant market share in the export-driven fruit, vine and nut market. Also, we signed an agreement with UPL in South Africa, where REGALIA MAXX is currently registered for grapes. Grandevo and Venerate have shown strong performance in field trials against devastating tests such as false codling moth and mites of citrus.

Now turning to Slide 6. I'd like to provide an update on COVID-19 and how it affects both Marrone Bio and the industry. It is still too early to know the full effect on food production and the ag input supply chain. Farmers are entering a critical period ramping up production to meet changing retail demand. For example, some segments are up significantly in the first quarter as they can more nimbly switch from food service to supermarket retail packaging, while others with more rigid supply chains are having a harder time adapting to the changing demand. For example, organic produce was up 25% in the first quarter, but canned fruit cannot as easily pivot up to meet additional supermarket demand. Processing potato acres are expected to decline 10% to 20% versus the original 2020 expectations. And conventional leafy greens in California are expected to decline 15% as compared to the original forecast due to the lower foodservice demand. Almonds are generally unaffected.

Farm access to labor continues to be very difficult and is exacerbated by the challenges of implementing new COVID-19 health and safety precautions. Farmer access to ag inputs has remained steady as distributors have pre-built inventories. We anticipate industry challenges throughout the year and have taken steps to retain our workforce, our most important asset, and ensuring we are safely meeting the needs of our customers and our employees.

Sales to distribution is usually a combination of working with distribution staff and assisting them in calls with growers. Distribution rules around COVID-19 have made it such that our sales and product development staff have been increasingly active with electronic communication via phone, video conferencing and webinars. In-person visits are only made when the rules will allow and social distancing practices can be strictly followed. Marrone Bio management is doing as much as possible to support these activities as creatively as we can during this difficult time.

In addition to our PPP loan and our warrant restructuring, as you heard from Jim, we had implemented a reduction in spending to further extend our runway. We reduced our 2020 operating budget by approximately 10%, including a voluntary 10% reduction in senior management 2020 salaries. Our top 2 management levels are not getting cash bonuses this year, and we have also put a freeze on salary increases this year. In addition, we reduced toxicology and field trial budgets. With this smaller toxicology testing budget, we are prioritizing Super Majestene first and our 015 bioherbicide as resources permit. We believe these efforts will help us fight through these uncertain times on our path to becoming the leading ag biologicals input supplier.

Turning to Slide 7. As a result of the uncertainty in the market and our recent balance sheet strengthening, we want to provide investors an idea of how we view revenue growth going forward. As you know, since 2015, we've successfully grown revenue at a compounded annual growth rate of approximately 32%, far outpacing both the biologicals and agrichemical industries. In 2019, revenue growth accelerated to 38%. And due to the strategic steps we have taken, going forward, we are expecting our revenue growth to further accelerate, barring complications from COVID-19.

In summary, we are excited about the company's progress and trajectory. While COVID-19 has presented challenges and uncertainties, the company is in the strongest position it has ever been to continue our momentum to profitability. I am privileged to be at the helm 1 more quarter with such excellent and dedicated employees who step up no matter what the challenges they're facing now.

With that, I'd like to turn the call over to the operator to begin our Q&A session. Operator?

(Operator Instructions) We'll now take our first question from Laurence Alexander at Jefferies.

Could you give a feel for how you're sort of dealing with bad debt management? And what -- how your position has changed in this environment compared with the ag downturn a few years ago? And secondly, can you characterize how you need to attract the supply chain for the anti-coronavirus applications? What will be the difference in the selling channel? Or do you need to hire extra staff to manage that channel?

Okay. The first one on the bad debt. Jim, do you want to take that one?

Yes. Laurence, we've never had a bad debt. We've never had anybody not pay a bill even on time, I believe. And I wouldn't anticipate that will change going forward even in this new COVID environment.

And the second question, it was a little hard...

We're dealing with large distributors who are typically large companies, and so they're reliable suppliers. So -- and the second one was about...

And the second question was with regard to supply chain, I believe.

Of the new COVID -- the new coronavirus product, have we had to change our distribution strategy for that one?

Exactly.

Kevin, you want to take that?

Yes. No. Overall, the -- just as a comment, the Jet-Ag and Jet-Oxide sales are going well. Traditionally, second and third quarter sales are strong for these products. From the Jet-Oxide, specific to an industrial market, we're going through a traditional distribution. Also, what we have done is we set up some alternative distribution. We typically service that market outside of our traditional distribution. And the great thing about that, other than some opportunistic sales, is that it's going to be an important way to just reinforce a strong brand image of both Jet-Ag and Jet-Oxide.

And then with respect to the row crop application, did you build up more years of data showing the yield in -- are you seeing a difference in your pricing for value? Or what -- how you -- or in the adoption curve?

Kevin, you can take that.

Yes. So you're talking about our Pacesetter product, I assume? So just a little bit of background on Pacesetter before we get into. We just recently got our state registrations. So we received our first sale of Pacesetter into row crops like corn and soybeans last week. So for this year, 2020, we'll see this as a ramp-up year with channel and growers as we build on their 2019 great performance from our internal field demonstrations. The other thing we're going to do in 2020 is we're going to field test Pro Farm's GDP product with our Pacesetter, and we expect some really good results. So we're expecting a great year in 2020, and we're going to continue to build on the success we have in 2019 and 2020 with greater -- more growers and on broader acres as we go forward.

And then just lastly, with respect to the bridge to EBITDA breakeven. Can you sketch out the biggest swing factors that you see for getting to there?

Well, this is Jim. Obviously, sales growth and margins improvement, I think we've got pretty tight control over our operating expenses. The other variable with our cash is, of course, working capital needs, but we've got some pretty good lines of credit in place to handle those.

We did say during our prepared remarks that the tranches and the timing of the tranches in our warrant give you insight as to how we view that path to breakeven. Did that answer it, Laurence?

Yes. Perfect.

We'll now take our next question from Sameer Joshi at H.C. Wainwright.

The first question relates to revenue growth. You're expecting even a higher growth rate in 2020 related to 2019 compared to 2019 or 2018. At the same time, you're also reducing costs in light of the COVID-19 crisis. Is it -- is the reason that you're doing this because you are also experiencing pressure on your gross margins from the supply side or any other factors?

This is Jim again. No. Actually, not at all. We just did that to be cautious. We're cutting expenses. And most of them -- it's not, as we said, cutting people, but cutting our own salaries, cutting our bonuses, cutting our raises and increases and some expensing in terms of registration fees, things that we can kind of push off. And it slows our growth a little bit, but I wouldn't say materially. It slows launch of new pipeline products. But we just thought that was cautious as none of us know how this is going to turn out.

With respect to margins, we have seen some supply chain disruption mainly along transportation lines, getting things through ports and truckers lined up. We -- our third-party supplier in Germany did not shut down, although we were concerned that they might get some sort of outbreak. Our knotweed supplier did shut down in China but is now open again and is shipping, but we had a year's worth of inventory backed up that we did for the tariffs, so we were in pretty good shape when the COVID-19 hit us.

So I think we're in good shape. I think our -- I would anticipate our margins to, over the long term, continue to improve. I expect them in the 50% to 57% range over the shorter term. But we've got lots of opportunity to keep improving those product-level margins through manufacturing efficiencies and formulation improvements.

Okay. And then this growth, is it -- how much of this growth is being driven by the Pro Farm acquisition? At the same time, what is the OpEx level increase because of that acquisition?

This is Jim. I'll take the first -- or actually, the last part of that about the OpEx increase. And then, Kevin, I'll let you talk about the sales opportunity with Pro Farm.

So first, on the operating expense side, I think our operating expenses have been rather stable. If you pull out financing and acquisition-related charges and all the noncash associated with those charges, I think you'll find that our -- we've managed our operating expenses very tightly. First, sort of pre-fourth quarter 2018, they were at 1 level. And we increased them about $1 million to $2 million per quarter, starting in the fourth quarter of 2018, really, through the acquisition of Pro Farm. And then I think starting this quarter with the first full quarter of Pro Farm's expenses, that their expenses that we announced in our prepared remarks are probably indicative of what they'll be for the balance of the year.

And this is Kevin Hammill here. Jim, you wanted me to speak about the revenue. Really, for the second, third and fourth quarter, we have about 3 revenue drivers. In the second quarter, the specialty business, and into the third quarter will be our key driver. And we expect acre stability in the permanent crops like almonds, but somewhat downside acreage in the perishable crops like lettuce. We're going to continue to build on a successful 2019 BioUnite strategy and expand geographically with products like Stargus into California, Mexico. The recent warm weather in California, we expect to see some increased insects prays.

You mentioned about Pro Farm. This is going to be our second major revenue driver. Although in the first quarter, Pro Farm had minimal contributions to the revenue line, but we see sales accelerating in the second quarter in anticipation of the fall planting season. We also expect a good third quarter next and fourth quarter from Pro Farm, but we have not seen it in the first quarter because of seasonality of their sales.

And the last big revenue driver for us will be our U.S. seed treatment business, which will start up again in the third quarter. We should be in good shape when we start seed treatment applications after harvest because of the projected rebound in the 2020 soybean and corn acres. This will help us overcome some of the challenges from the significant acre decrease in 2019.

A fourth bullet point, but is not as big a driver, is our continued growth in our international business.

Got it. Understood. And then just on a high level, now through the end of the year, what are some of the key catalysts or any approvals or anything that we should be looking for?

I didn't quite catch that. If somebody could repeat it?

Yes. Could you repeat that?

Oh. Yes, yes. Just key catalysts or key events that we should be looking for maybe. Yes.

Oh, key catalysts. Okay. Catalysts. Okay. Key catalysts for the rest of the year. I think Kevin alluded to some in his -- just in his previous answer to the question that seed treatment will kick in for Pro Farm in the second quarter, and then our U.S. seed treatment in the third and fourth quarter. Kevin, any other revenue catalysts you see?

Just our continued growth in our specialty business. We have had great success with the BioUnite strategy and also just solar biological products. We're excited there. And we're getting new registration expansion into our international markets. So it's a combined effort. It's a team effort in terms of Pro Farm seed treatment, U.S. seed treatment, our specialty business in the U.S., and then international expansion.

Do we have more questions? What happened? Hello?

This is the operator. Can you hear me?

Yes. Okay. Now I can hear you. Okay. Are there any more questions?

Yes. We'll now take our next question. Please go ahead, Mr. Weinstein at Aegis Capital.

As you know, we're witnessing an evolution in ESG investing, including a recognition that ESG criteria can be used as a risk management tool and to help identify companies whose stocks could outperform in the future. So perhaps you could share your perspective on the evolving ESG landscape and how Marrone Bio fits into that landscape.

Great question. Last year, I attended a number of ESG conferences in ag and related to answer to that question. And we kicked into gear to see what kind of metrics that investors would warm up to. And we actually did a study of our products of the carbon footprint relative to chemical pesticides. And our products are -- can reduce the carbon load by 60% to 90% comparatively. So that was one of the first very powerful metrics. Our own products themselves are right in tune with something that an ESG investor are looking for.

And we're also, in the throes of a full company ESG audit, with the help of MZ Group, and to get even more granular on what we're doing, but suffice to say, everything we do in the company is something that is geared towards what an ESG investor would be looking for.

And this is Jim. I'd like to add. I think we've been receiving sort of a standard theme with some of the investors that we talked to. And that is, as one investor told me, when he talks to his investors in his fund, all they want to talk about is Marrone because Marrone -- while everybody claims to have ESG, Marrone really is -- their products are about it. Their culture is about it. They live it. And so there's a lot of interest in our company as an -- from the ESG investors.

We'll now take our next question from Ian Gilson at Zacks Investment Research.

A couple of financial questions. On the balance sheet, if you look at the percentage of revenue of inventory, it is a well below -- and I mean well below prior quarterly periods. And in fact, it was slightly below the fourth quarter level. But looking at correspondent quarters in prior years, it looks like you've cut inventories down to the bad bone. What happened there?

Yes. Yes. This is Jim again, and I'm glad you asked. I didn't talk about that in my prepared remarks, but I'm actually quite pleased with that also. It represents a couple of things. One, very tight supply chain management in the face of increased sales that we're expecting in the first half of this year. But it also does reflect that we were keeping about a year's worth of knotweed extract in inventory as a result of the tariff situation. And with the COVID-19 actually stopping potential inflow of that product, we then actually run those inventories down to about 4 months' worth. But our supplier in China is now back in operations, and the port is open. And we've received several new shipments on it since then. So I don't think those levels are anything of -- that I'm concerned about. But I do -- and I think they actually represent what we can do as we grow and have sort of economies of scale apply to our business, and rather, I think of them as good management, not any cause for alarm.

Okay. That's good. Could you go through again the big dollar increase in the SG&A line? .

Let's see. SG&A, a lot of that is those noncash charges that I alluded to in my prepared remarks. I believe there was -- well, first, there was the $1.1 million of operating expenses associated with Pro Farm. Then there was $900,000 in noncash charges, $600,000 associated with the amortization of an intangible associated with the acquisition of Pro Farm, and then $300,000 associated with an increase in stock compensation expense, also partially, because of the acquisition of Pro Farm. And if you take all that out, very little or it's flat in terms of our normal Marrone Bio stand-alone operations.

Okay. When do these basically end?

Well, that intangible amortization of $600,000 will go on for quite some time. It's a stable amount, though. You can build that into your models going forward. And it's noncash, as I mentioned.

The stock compensation expense took a step-up here with the acquisition of Pro Farm and other activities, and it will vary from quarter-to-quarter. But I think, and I believe I said in our last earnings call, to expect operating expenses to be in the $10 million to $12 million range. And as you're seeing now, a substantial amount of that increase is noncash.

We have -- currently have no further questions. I'd like to turn the conference back to management for any additional or closing remarks. Please go ahead.

Thank you for participating in our first quarter 2020 call. Our growth underscores the value of our BioUnite approach, which harnesses the power of biology with the performance of chemistry. We've built a strong company with the right products, the right science and the right people to drive growth and expansion opportunities as we lead the way to a sustainable world. I'm proud of the continued dedication of our employees. Our hearts go out to everyone impacted and suffering through this global pandemic. Stay safe, everyone.

This concludes today's call. Thank you for your participation. You may now disconnect.