Merit Medical Systems Inc (MMSI) 2006 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the 2006 first quarter earnings call and discussion about recent acquisition and cost containment plan. At this time, all participants are in a listen-only mode. Later we'll conduct a question-and-answer session, and instructions will be given at that time.

[OPERATOR INSTRUCTIONS]

As a reminder, this call is being recorded today, Thursday, April 27th, 2006.

And I would now like to turn the conference over to Mr. Fred Lampropoulos, CEO of Merit Medical. Please go ahead, sir.

Thank you, and good afternoon, ladies and gentlemen. This is Fred Lampropoulos with members of my staff. We're broadcasting from South Jordan, Utah. Thank you for joining us this afternoon. As we had previously indicated, Merit today reported revenues for the first quarter of $45 million. And we'll go into all of the specific details, but first, we'll go through and have [Rashelle Perry], our General Counsel, read a Safe Harbor provision.

Thank you, Fred. In the course of our discussion today, reference may be made to projections, anticipated events, or other information which is not purely historical. Please be aware that statements made in this call which are not purely historical may be considered forward-looking statements. We caution you that all forward-looking statements involves risks, unanticipated events, uncertainties and other factors that could cause our actual results to differ materially from those anticipated in such statements.

Many of these risks, events, uncertainties and other factors are discussed in our annual report on Form 10-K and other reports on filings with the Securities and Exchange Commission. To the extent any forward-looking statements are made in this call, such statements are made only as of today's date and we do not assume any obligations to update any such statements.

Rashelle, thanks a lot. I appreciate that. As I had indicated, we reported today revenues for the first quarter of $45 million, versus 40.3 million for the first quarter of last year, a 12% increase. Net income was 2.4 million or $0.09 per share. That took into effect the 250,000, net of tax, for the adoption of 123(R).

As you can see, of course, our income was down from the previous years, and this was in line with our discussion that we had with you just a few weeks ago. We continue to believe that our business is on track. We believe that our revenues will accelerate as we go through the year. And as you know, we had talked about a range of 1.81, I believe, to 1.85. And as far as we're concerned, we are on line with those particular projections.

A couple of things that will be of interest to you is that as we discuss in our release, we are doing -- making a change regarding how we categorize our products. We have moved the custom kit business and the procedure tray business, the Richmond business, into one category. Let me give you a reason and an explanation of why we've done that. As you know, that general area is the lowest area of gross margins for the Company. We have, however, transferred a small amount of product that will transfer several million dollars -- a couple of million dollars worth of additional trays that are being produced here, which we believe can be produced in Richmond much more efficiently in a business that's aligned to do that.

And so, you would have revenues leaving here and going to that other area, and we believe that it would be better represented to show the overall growth in that area. If we would have pulled that back in this quarter, we would then have, actually, a reduction in custom kits, and then a substantial increase in custom trays. So we believe that the fairest and most logical way to present this in the future, starting this year, will be to combine those two together because of the movement of this particular product.

Catheter sales, as you can see, increased 29%. We believe that that trend will continue and, in fact, grow stronger. Inflation devices rose 14%. That was pleasing to us. Stand-alone devices grew at 9, and when you combine the custom tray and the kit sales, and combine them together, it grew 7%. Gross margins were down from the 43.4% last year, down to 37.9. And as we've indicated in previous conversations, we believe that we are at the bottom of the trough here in terms of our gross margins, particularly, as we now start to produce product in higher quantities of new products that have been released and other new products with high gross margins. I'm going to share with you a few ideas on that in just a moment.

Research and development expenses as part of our restructuring expense were 4.6% of sales versus 3.8. But the exciting part about that is that new products are rolling out at an unprecedented rate. In fact, as I've indicated in the past, we're really loaded with new products. I'm going to briefly share with you a story that we're very excited about. These are kind of breaking events.

As you all know, we've been very excited about a product called the Revolution. We released that product several weeks ago to do some in-service training, to learn some more things about packaging, and have now released it to 16 of our salespeople. We'll release it to the entire sales force in about two weeks as we're now ramping production. I can tell you that this is the most enthusiastically received product, a product that has nine US patents pending, a product that's going to get 70% gross margins. We are selling and taking orders today, all of that 70% margin level or thereabout.

And as I shared with you not long ago, as we went to the SIR Meeting, the Society for Interventional Radiology, we were told and it was demonstrated in our booth that it was the most exciting product there, at least, one of the most exciting. We took more leads than we'd ever taken before. That product is now being confirmed in the marketplace, not just to the show, but real live orders and enthusiasm from the marketplace. So we're looking at making sure that we can meet the demand. We're quite excited about it, and as we now rollout the next several weeks into these quarter, we believe that that's going to be a substantial opportunity for the Company in the fixation device market.

Let's see here. We also want to make you aware of two acquisitions that we've made. We've made very brief comments about them. One is an acquisition of a hemostatic valve from Millimed. You will recall in our previous conversations that we discussed that the [Honor] hemostasis valve was subject to an agreement. The essence of it is, is this product was in Europe. It was similar to the product that we were going to release in the United States. We had rights to sell at the United States under patent agreements and licenses, and we were the only company to the best of my knowledge that had that. And we had an opportunity to make this acquisition, but we didn't want to introduce two products.

And so, we were a little bit patient. It all worked out for us. That product will be available for sale beginning on the 5th of May. And we believe that it is the best -- not the best -- it is the best, but it is the only product of it's type to be introduced to the United States. It's been used by US physicians. We believe that it is in the product category that's our highest gross margin. We think it will enhance inflation device sales, and we're quite excited about that. So the product is now being produced in our Irish facility, and as I mentioned, will be rolling here in just a week.

Another acquisition that we made is an acquisition of a safety scalpel that fits both in our stand-alone, our kit business and our tray business, another -- an extension of Merit's large portfolio of safety products. That product is in inventory and is being sold. We are transferring and moving the production facilities from India, where it was being produced, to a facility in North America. And we are in the process of doing that. We're receiving sales as we speak. And again, it's a nice little piece of the puzzle. I'm sure I'm going to asked does this change anything in terms of our forecast, and all that sort of thing. The answer is no. We're sticking with our forecast. And we just want to make sure these products get launched properly and we have adequate inventories. We're not changing any of the numbers at this particular point.

Now on cost containment. One of the other things that we have done is instituted some pretty substantial cost containment and cost savings opportunities of the Company. The reason we're discussing this with you is because we believe, as we've indicated in the past, that we are at a point much like we were in 2000, where there were substantial opportunities for cost savings for running our business better and better efficiencies. They are part of our corporate goals. I'm not going to go into a whole lot of numbers other than to say that the numbers and the opportunities are substitutive and substantial. So we hope to be able to have the value of those types of programs, which will be put into place over the year for years to come.

All-in-all, I believe that this call and this discussion today, I am -- don't want to say at much more ease than I have been in the past, because I know that we've disappointed you in the past. But I believe that everybody in this room, if our sales force were here, they would tell you the same as confident and resolved to put our plan together and to deliver the results that will help to change the fortunes of the price of our shares, which our shareholders the most are interested in.

We continue to search and are having ongoing discussions with other opportunities that we think will enhance the Company. Our cash position has increased from yearend, even though we've paid cash for these transactions, it'd be even greater, had we not done that. And one other expense that we haven't talked about, that there's an expense that we've had for some staff changes and so those things amounted to --

$320,000

$320,000. So those are severance situations and we haven't broken them out as one-time charges, but they're in there and expensed, but they are kind of one-time events as you know.

So all in all, we'll be announcing next week the launch of some more new products. We have the ones that we've talked about. We will be launching the [inaudible] Prelude, we'll be launching the triple play. We'll be launching the Honor hemostasis. We'll be doing a full launch on the Revolution extensions to our [PAL] line. The -- I've lost my thought, but anyway, we are loaded. We have our cost under control. We have knowledge of what we're doing and we have the commitment to perform better.

Let see, MCTec continues to perform at the level we expected. And our Impress Radiology Catheter, which is the one that I have left out continues to receive rave reviews. So everything is in place. The sale force is motivated. They are also incented and we have cost containment programs and everything that we had set out to do is in place. So now we just have to continue to perform. Kent, do you want to add anything, before we turn the time over for questions?

Yes. A couple of things, I'm encouraged by this -- for example the Revolution and the opportunities not only to -- in the fixation devices that we sell directly, but where this product could go. I think there is some really interesting opportunities that we're discovering I think that will come along and there is some upside there that's interesting as we just begin to market this product.

I think that it -- I'd like to note that our cash flow has strengthened. We are up to 9 million by the end of the third -- first quarter. And so we're starting to see that improve. We've seen our DSOs improve a little bit. Our days average receivables is down at 45 now, that has improved from the end of the year. And I think that we're beginning to see the whole company come together and starting to work on efficiencies and how to really use these capacities we've got. How to -- we've got some work to do to put all of the spaces into use, but we're -- I can see the efforts going into it, and I'm encouraged by what I think the future will be in improving efficiencies and reducing costs.

So that's it. I think everything is in line what we had indicated and we have brought to pass some of the acquisitions, we have the cost containment in place and I think it's going to be an existing time, particularly because what all you want to see is not just this dialog and I don't want to call it rhetoric, but just that you want to see -- that you actually to see performance in gross margin, you actually start to see the leveraging of the topline and so on so forth. And I think that those things will take place.

Now, I don't want to overstate this by saying, it's all going to happen this quarter, because you recall, we've given you our story and we're sticking to it, that is, it's not going to change in this quarter. But as we now roll this out and put these products in play, concentrate on the operating efficiencies and leverage this topline, we should have several years of substantial growth and record growth going forward which will be able to leverage to the bottomline. And consequently, I believe that as we go forward, we'll see a higher stock price.

I'm disappointed as you are at where the stock is today, I should address one further thing, I've been asked the question, did some of the decisions on Medicare's payments, and that's sort of things for some of the cardiovascular companies affect Merit? The answer is no. I think like many of the other cardiovascular companies have been affected by that and are sitting at 52 week lows, that is not a product that Merit should be affected by reimbursement. So those are for defibrillators and for stents and other types of products, which Merit is -- doesn't sell.

But I don't think that's going to have an influence on the usage. In addition, we are involved in the number of other market areas outside of these, like interventional radiology, EVLT procedures and others that are having and continue to see good growth for us. I think that pretty well sets it forth.

Now, we'll go ahead and open the lines up now, and have our operator make the lines available for questions.

[OPERATOR INSTRUCTIONS]

And our first question comes from the line of Ross Taylor from CL King. Please, go ahead.

Hi. Just two or three questions. I wondered what might be behind some of the high growth in the inflation devices that you saw during the quarter, is the first question.

Let me answer that some of it was from orders from -- our continued orders from one of our OEM customers, and they don't like us to talk about them, but they're having a conference call right now, as well. That's part of it. And it is, as you know we are talking about 7, 8 and 9. I think you'll continue to see that in the second quarter. And there were some problems with a couple of large merging companies, recently where they had forgotten to order some of these products and put their customers in back order. And we opened up 18 new inflation device accounts, over the last couple of weeks. So we're certainly continuing to see a strong demand for our inflation devices and we should see that in the second quarter as well. Kent?

We saw most of it, by the way , as a subset of that in kit. So we're seeing our inflation device sales be accompanied by other devices in that area of our sales has increased the most with kits, [inaudible] that.

Fred Lampropoulos Yes. And then also, I think this new hemostasis valve would be another thing that helped to be a catalyst. Since, we were the only guys in the US, and the only company, even in Europe that is able to combine both in inflation device and a hemostasis valve that is manufactured by the Company. So we'll have a major advantage over there, and we expect to see sales firm up and get stronger in this area, going forward, which again is, as you know is our highest level of profitability.

Okay. And is there any chance, can you breakout what the [tray] sales were during the quarter and you know, I also wondered if the MCTec sales, are they going to be identified as a separate line item or category?

Yes. One of things that we had talked about is whether ought to break it out. Right now, it's in stand-alone devices. One of the things we want to do is probably, next year. We will breakout into a technology group, MCTec and Merit Sensor Systems once those facilities are both online. As you know, we are transferring our facility from California on our Sensor line. And I think that we want to show -- because we think we're going to see substantial growth in that particular area.

MCTec has met and exceeded everyone of our expectations with record sales and profits. And so it's a nice -- but right now, it's in the standalone products area because we don't have a comparison for the year before in Merit's numbers. And so -- excuse me, it would be difficult for us to do that. But now, in terms of the tray sales, Kent you want to address that?

There is a couple of million dollars for the quarter, to give you the numbers, and that's a little ahead of what we projected, but pretty close.

That was about $2 million. But I think it was up 248% from the year-ago quarter. And -- but again, even though those tray sales have been strong, it's not something that has a strong emphasis. And an interest -- I'm sitting here and saying this, and yet, it's something that strategically -- I believe everyone of us still feel that it's ability to lever ourselves in accounts and to be able to add all the products and be defensive and offensive is still a correct strategy.

We're not trying to defend it. We just -- I think Marty feels that way Larry feels that way, our sales and marketing guys and Todd feels that way. So I think we still feel strongly that that was -- in the long run, will pay off for us. So I hope that answers your questions.

Yes. And last question is, regarding some of the cost saving initiatives, I mean is there any way you can quantify how much those might amount to or --?

Yes, here is the question. We talked about that before in the call. And one of the things we were concerned about is, do you have to do those to make these numbers or --? And I'll say in this and dance around it a little bit. We believe that there are millions of dollars of cost savings initiatives. And in part of our corporate goals, is to have those implemented, so that we may not get those millions of dollars this year, but we will implement several million dollars worth of opportunities that are on the table that [are] focusing -- and have Kent's attention and my attention and Leigh Weintraub's attention to make sure that those get implemented. And , we're talking several million dollars. But we didn't think it would be wise, since not all of them -- in fact, there are so many of them. In any situation, businesses, they have to be prioritized, because you can do anything but can't do everything.

So we just think that the Company will benefit, and our shareholders. But I think the point we want to make, when we went through this several years ago, we looked at cost savings and efficiencies and product development. Inventory, that's another part of our internal corporate goals, as we have limitations on where we think. And I'll just say it is kind of briefly, that we believe that even with the sales growth that we're going to see, that we can do it at half of the growth that we did last year in inventory, as some of these new products roll out. That we can limit the amount of inventory growth, which means you're going to have less obsolescence. You're going to have more cash and more return on that and the ability to deploy it.

So I think the message that we want our shareholders and investors to understand is we have our eye on the ball. Now, that doesn't mean there isn't going to be one that's going to slip by us. You know, even the great batters sometimes stand there and look at one. But in terms of R&D, we've never done it better in this Company, ever, in terms of the capabilities, all the systems and buildings and facilities are in place. And so, we just have to keep the level of intensity and our eye on ball. And everybody in this room is committed to do that.

Okay. Thanks, very much.

Thank you for you question.

Thank you. And our next question comes from the line of [John Riley] with [ACK Asset Partners]. Please go ahead.

Good afternoon. The question I have is related to some of your legacy products excluding the products you have introduced, and the acquisitions that you made. Can you talk about price points, and where they were versus prior year? How much price degradation have you seen in some of your key products?

You know, we're really not seeing a lot of price degradation, as we have in the past. I mean there was times when you get more heat than others, but we -- you always get some because every hospital wants to be able to reduce their material costs. And you also, have some fees that are associated with national accounts.

So you might be looking at 2%, I'm going to say that's the number, and it would be foolishness to say it's not there because it is. But candidly, Merit has such a portfolio of products that our competitors that cannot combine, the real issues for us are just to be able to combine those in the best manner. So we don't see a lot of pressure. I think that, I mean, I get calls everyday on it, don't get me wrong.

But it's not like if you don't do this, we're going to go see another company or some like that. And we're also candidly, we realized that we're responsible for our bottomline. And we know where we have to be to survive, and to build our business. And we're, kind of, at the end of our rope too, so we're not in the mood to make to many concessions. I'm not trying to sound arrogant, but that's the reality of it.

So you haven't seen much competition in any of your segments or any of your key products?

You know we really haven't, I mean, we really haven't seen that, people are competitors. You know who they are, they are Medtronics, they are Cook, they are Boston, have so many other things to worry about that we see pressure everyday. But I'll give you an example of the situation; when I was talking to my top salesman in the country last night, he was up in Concord, New Hampshire.

A company who had -- promised a lower price, the hospital went with them, he got an emergency call after four months and they said, "It was the biggest mistake we ever made." He is now getting $10 more for that product then he was when they left, because he added in our labeling system and the couple of other new products. And he is getting higher margins than he was when they left, and they are begging for forgiveness. We actually see things like that. And that tell us that the products, the service that we provide to our customer means more than just price.

And then, focusing on the number of these new products, which you have introduced and which we should also hear in our next week are also introduced. Can you -- I know you're talking about the gross margin expansion. Do these products have the same gross margin potential as your prior products?

That's a good question and I'm happy to answer it. Let's, kind of, go from and I'll answer one-by-one.

Sure. Yes.

If we go to, let's see here, let me sure I get them off. If we go MCTec, which is the acquisition, operates to the higher overall gross margin in the company. The Honor hemostasis valve is a product, its better then a 65% gross margin in production. The Safety Scalpel is going to probably be somewhere in the 40% to 50% range and that's a Safety Scalpel. It is a patented device.

The Revolution is going to be in the 65% to 70%. The Triple Play, which is a new safety device, a patented safety device is going to be in the 50% range. The Impress radiology catheters, is probably the only product that's not in that area and that's going to be in the area of probably 35%. So it's one because of the large amount of players and the maturity the market doesn't get those.

But almost every one of these new products that we're involved with, and then, we also have the ShortStop Advantage coming, we have the [inaudible] Prelude that's releasing next week, and many of these products by the way are also been introduced in Europe. They have essentially been introduced in the United States, but we have a national sales -- or a European sales meeting next week in Europe and many of these products will also be introduced there. So we expect that we'll see a lot of movement in our sales in Europe as well.

Okay. And could you tell me the average length of time with the Company Your sales people have been there? I know you turned over a lot of the sales force and added a lot of people.

Yes, I don't know if we have turned over a lot of the sales force, and I'm not going to speculate what the average time. I will tell you that we hired 17 people, new sales people, which would represent about 30% of the sales force, have all been brought on in the last year. I think we did it in the third and fourth quarter of last year.

So they've been on six to nine months and they're now getting into their stride. So I don't have a number for the average. But I can tell you this. If we take a look at our sales guy in Boston, he's been with us for 15. We take a look at our sales person in Dallas; they've been with us for 14 years. We take a look at one in Houston -- we haven't had a high turn over. I think this -- in the last 12 months, we may have turned over three or four sales people and it's all been candidly at our discretion, not theirs.

Great. One last question is, what is senior management's position towards purchasing shares for their own account?

We have been in a course a lockout period. And I'm going to answer it candidly. Most of the wealth of the people that are sitting in this room is tied up in their stock.

We are a bunch of country boys and girls, and whether it be through donations to our church or to the community, we have not been big buyers because most of the stuff we have is in the stock. And the only stock I own as of this -- I only own Merit stock. I will tell you this, that I would keep an eye on however, senior people in this Company purchasing stock as soon as we come out of our blackout period in 48 hours and that's the best way I can answer.

That's great. Thank you.

[OPERATOR INSTRUCTIONS]

And our next question comes from the line of [Craig Perringham] from [Wealth Capital Management]. Please go ahead.

Hello Fred. How are you?

Craig.

Good to speak to you.

Nice to hear your voice Craig. How are things up in Portland?

Very well. In fact I'm trying to track down [Jim Caliva] to have a discussion with him.

We'll have him call you as soon as we --

No I have spoke to him. Thank you.

Okay.

In terms of this new cost savings initiatives, I mean the purge element from Seal King adds to that the magnitude. What about the timing? I mean you sighted 2000 when the Company was basically going through some debt pains if you will, owing to the ERP implementation and some of the steps there. Of course there are some similar situations now. Is it just a refocusing and why hasn't this been going on all along, i.e. not magnitude but timing?

It's a good question. Thanks Craig. I'll give you an example of one of these issues. As you know, Merit was in the pangs of a capacity issue last year where our injection molding facilities and capabilities were maxed out. And so to start up, our Introducer sheath and a number of other products, we had to take them to other manufacturing companies to do the molding for us.

We think there are hundreds of thousands of dollars and millions of dollars, as we go down the road. For instance, just in our Introducer sheath which has been molded and produced -- we do the finishing and a number of the critical steps here, but we simply didn't have the capacity or the buildings to do it in. We had no place to do it. And so, a part of it is to move those particular facilities and now -- and put them into our new molding facility and bring them here. That would be an example one. Let me give you another one.

We worked with various situations and there are things that at sometimes out of our control. I will give you example. Recently, or within the last six months, with the consolidation of the freight industry, one of our vendors that move freight around the world was acquired. After they were acquired, they raised our rates 35%. You can't instantly respond to that, but you can over a reasonable period of time.

We again believe that there are hundreds of thousands of dollars worth of opportunity and in fact we have bets and discussions on the table to reduce our international freight and in fact our domestic freight by hundreds of thousands of dollars. What precipitated that as many times you will get situations where people will raise rates, because they think that there is an opportunity, because of higher gas rates.

We see on the street that many of the freight companies and these things report record sales and earnings at the same time they talk about and we get surcharges. And yet they are reporting record sales and earnings despite those issues. So I think we have taken those situations and say, its nonsense, we won't put up with it, and we decide we are going to out and see competitive bids and go out and seek sources. Takes a little time to do it, but some of those things are -- things that are just moving through time. That would be an example of another one. There are number of - Kent go ahead.

I think the way to put it is, we really focus the last year and half, two years on two major issues, one was a whole bunch of product introduction. So we have to spend a lot in R&D, but we have to add to facilities and capacity and bring people in. And now we have sort of got all these things in front of us and focus is a little more internal and not just in capacity and product growth, but it's in utilizing these tools that we have acquired basically.

And so we are saying okay lets focus let's say, lets use our headcount, let's use our facilities, let's become more efficient with the extra space we have and relay things out, and try and cut the amount space, the amount of inventory and amount of labor it takes to build a product. And it's a cycle you go through it as a business that [inaudible] in the opportunity in front of us now because of all the changes we just been through in the last --

And Kent I think you said it very succinctly, and that is we can do anything, but we can't do everything. We are working on acquisitions. We are working on capacity. We are working on those things, and as that now are settled out and those things were in place, and we have those in place.

Now we look and say okay functionally we have to able to absorb because we don't like this anymore than you do as shareholders, we want now be able to leverage this. So now we are taking all of our focus -- now does that mean that somehow we may not have as many acquisitions, or we may not there is something else. Again I go back to, that we can do anything, but we can't do everything.

So I think it is fair to say it's a cycle, but one other things we are looking for that is we thought that we may never have to go through this again, but there is a cycle and what we are trying to do is to minimize it three or five years from now. But I think that's the best --but clearly, Craig has our attention, because we have all these products now we can take and say, how can we do it most efficiently. How can we utilize these facilities? Where can we best build these products? Where we can get the best labor rates? So it's to figure out how to maximize our profits, while we know that we are going to have several years of substantial growth and record growth. I mean we are going to have record growth for several years, and so we now want to squeeze the maximum amount of profitability out of this for our shareholders.

That's quite helpful. And I am glad you went into more detail rather than leaving it to us to guess. I hope the Company picnic is not on the chopping block.

Actually, Craig --

You cut that out one year.

No. Craig, there is no company -- we're not going to Lagoon this year. No, we're not. We're not going to Lagoon this year, but we'll go next year. So yes, it's got chopped this year. We're not doing it, but we'll do it next year.

Okay. Thanks, you guys. Good luck.

But Craig, you still owe me a dinner. You can take me. That's another thing. I am not buying you dinner; you're buying mine.

I forgot that, but okay.

Thanks, Craig.

Thank you. And I am showing that we have no further questions at this time. Sir, please continue.

Ladies and gentlemen, I think you can -- I hope you can hear and feel that we believe, as I said in our last conversation, that we really do have our hand around our business. And we believe that we've made the right investments. We have the capacities. We have the product flows. We have other opportunities in acquisitions. We have all of these things in front of us. And, I have asked you to be patient and you have been or at least some of you have been. We have been here before. Circumstances are a little bit different, but I know that I have the commitment of the staff. We feel like we have the products.

I have to tell you that this, Revolution is in fact a revolution. Some of these things have just never been seen on the marketplace before. I can tell that there was recently a company purchased that was a fixation device company for almost $200 million. And they had a fixation device for heaven's sakes. That's almost two-thirds of our market cap. And we have a product that they are terrified of.

So when we look at the Company and look at the future and look at these products and look at our capabilities, not just our capacity, but our capabilities, we're set. It's going to be another quarter or two before you see those changes in gross margins. But as we absorb, as we move forward and we move down the road, we're going to be able to get back to the kinds of leverage that we've had in the past, the margins. We're going to be able to get back to better operating profits and consequently, I believe, a higher stock price.

So now, we'll be out on the road talking to people about this. We'll be showing our products, and we'll be reporting to you new product releases and the success of our Company as we move forward. So I thank you again for all that -- your confidence, your questions. We are available if you need to call us. We'll be out on the road telling our story and attending several growth conferences. And I'll be over in Europe looking at some other business opportunities and being with my sales force.

So thank you again for your interest in our company, and we'll look forward to reporting to you in the future. We'll go ahead now and sign off from South Jordan, Utah, wishing all the very best. Good night. Thank you.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.