Precipio Inc (PRPO) 2004 Q2 法說會逐字稿

Good day. All sites are on the conference line. At this time I would like to turn the conference over to Mr. Mitch Murphy. Please go ahead.

Thank you. I would like to welcome all participants to our second quarter 2004 conference call and also to any who may be listening on the webcast. I'm Mitch Murphy Vice President, Secretary and Treasurer and interim CFO for Transgenomic.

Hopefully you've all had the chance to look over the press release we issued early today. This conference call will be archived and accessible by telephone and internet. Please refer to our press release from August 9th over to our website at transgenomic.com for details. Take a couple of minutes here to take care of necessary legal issues regarding forward-lookinging information that may be given during this call. And then I'll turn it over to our C.E.O. Collin D'Silva.

Certain forward-looking statements may be made during this call that reflect management's currents views and estimates of future economic circumstances, industry conditions, company performance and financial results. Such statements are subject to certain factors, risks and uncertainties described from time to time in Transgenomic's report to the Security and Exchange Commission. Any change in such factors, risks and uncertainties may cause the actual results, events and performance to differ materially from those referred to in such statements. Accordingly, the company claims protection of the Safe Harbor for forward-looking statements contained in the Private Securities and Litigation Reform Act of 1995 with respect to all such statements.

With that, I'll turn the call over to Collin.

Thanks, Mitch.

I would like to take a few moments to give some top-line comments and then I'll be turning it over to Mitch to discuss the Q2 financials in greater detail and then come back for some questions. We're very pleased to have been able to report second quarter revenue that is in line with prior guidance. Yet we remain well aware of the work that remains to be done. Our BioSystems business continues to show signs of increasing strength with revenue from the segment posting its third consecutive quarter of sequential growth. Several factors contribute to this growth and also underlie prospects for future growth.

First, our installed base of WAVE Systems continues to expand. Importantly, the ongoing scientific advances described in [INAUDIBLE] publications which now number more than 1,000 underscore the value of our WAVE technology everchanging in the marketplace. While large scale genome sequencing efforts have subsided significantly and a variety of technologies compete fiercly for the large scale snip genotyping market, there still exists only a very limited number of solutions that address the need to analyze heterogenous samples with high sensitively at the molecular genetic level.

This capability is critical for the detection of [INAUDIBLE] mutations associated with cancer or in the analysis of complex and changing population of bacteria or viruses. We believe our WAVE technology is unmatched in its ability to detect rare mutations in settings such as these, and at high level of analytical sensitivity has significant implications. It is incumbent upon us to ensure the WAVE system strong value composition continues to drive penetration of new and emerging markets. And we are optimistic about ongoing opportunities to do so.

One such opportunity is provided by the recent launch of our new WAVE MD for [INAUDIBLE] instrument in the second quarter. This instrument provides simplified operational features and cost effectiveness of our original WAVE MD, coupled with additional enhancements. We believe that this system offers an attractive means for scientists in a variety of disciplines to incorporate our technology as they turn to genetic variation analysis as a component of their research programs. We placed several WAVE MD's in this past quarter in this past quarter of Q2 and early feedback is very positive.

In addition to propagation of our WAVE platform, we have continued to focus on achieving strong growth in our consumables revenues. While second quarter consumables growth dipped slightly for the prior quarter due to certain logistics issues, we nevertheless represented a 17% increase over the comparable quarter in 2003.

This year-over-year increase can be attributed to the benefits of an expanded WAVE user base as well as the introduction of additional consumer products, both WAVE dependent and WAVE independent that address a broadening range of customer needs. Our marketing activities surrounding recently introduced consumables are gaining traction and we anticipate continued introduction of additional new consumable products.

Finally, as our product portfolio grows and the accomplishment of our customers continue to test the value of our technologies, we remain well-positioned to capitalize on such trends with a broad geographic market reach. Our global sales and distribution network has enabled us to post strong sales in Europe and Asia Pacific when North American sales have proven challenging. We seek continued strength this Europe and Asia Pacific as well as increasing demand in other areas of the world. While North American sales continue to be challenging in the second quarter, we have seen the gradual build up of an improved sales pipeline in the U.S.

Turning now to our Nucleic acids business, this segment continues to post sequential revenue growth. Sales from our Glasgow, Scotland facility have benefited, from the unmatched capability to provide [INAUDIBLE] candidates the building blocks required for novel next-generation nucleic acid chemistry, in quantity, with sufficient quality to support drug manufacturer for critical clinical trials.

As we mentioned on previous calls, we believe that our cost structure at this facility is now much better aligned with anticipated market opportunities. Revenues from our Boulder, Colorado, facility grew for the sixth consecutive quarter. But current levels of business still do not fully leverage or fixed cost. Due to differences in the maturity and dynamics of the markets served by our nucleic acids and our BioSystems business segment, we have begun to consider numerous strategic alternatives for our nucleic acids manufacturing segment.

While we cannot provide specifics at this time, we anticipate conclusion of this process in the near future, after which time we'll be able to discuss further details. We believe our core business areas that leverage areas of expertise where we have and continue to expand our intellectual property will benefit from increased focused resulting from such action. With increasing focus on our most promising areas of opportunities, we look forward to capitalizing on these opportunities to generate continued revenue growth, coupled with continued attention to cost containment to further progress towards the objective of becoming cash-flow positive.

With that, I would like to now turn it over to Mitch Murphy for a detailed review of the financials for the quarter. As I said earlier, I will return with Mitch to answer any questions. Mitch?

Thanks, Collin.

I'll start out with here with a few high-level comments regarding our second quarter results.

The second quarter of 2004 was the third quarter of sequential revenue growth for the company. This is true for both the BioSystems and the Synthetic Nucleic Acids business unit as well. The BioSystems unit continues to produce consistent results. The Nucleic Acids business continues to show the promise of a growing revenue stream. But at current levels, the unit still has a negative contribution to gross profit. More importantly, it continues to require cash contributions to fund its operations.

Gross margin percentages are improving as the level of revenue increases. And this is also true of the nucleic acids unit. Our sales general and administrative, and research and development expenses are continuing to be controlled as they are either flat or reduced year-over-year and sequentially. Total operating expenses this quarter include significant noncash charges resulting from the write-down of Synthetic Nucleic Acids unit assets which was triggered by the exploration of strategic alternatives for that unit.

Now, we'll go into some more detail regarding our second quarter results.

Revenues in the second quarter were 9 million versus 8.5 million the prior year. This represented a 6% increase year-over-year. And in breaking down those total revenues, the BioSystems segment revenue was 6.6 million during the current quarter versus 6.7 million during 2003, which is a 2% decrease. But the 6.6 million was a 3% increase over quarter one, making the second quarter, the third consecutive quarter of growth for BioSystems revenue.

Within the BioSystems segment instrument revenues were 4.5 million versus 4.9 million in 2003. A decrease of 8% year-over-year. But it was also a 7% increase over the first quarter of this year. Conversely, the bioconsumables portion of the BioSystems revenues had strong year-over-year growth but a slight decrease from the first quarter. The 2.1 million was an almost 17% increase over 2003's 1.8 million. This growth is due both to our growing installed base of WAVEsystems and introduction of new consumable products such as Optimase, Polymerase, and SURVEYOR Nuclease as well as various product line extensions that target specific uses of these products.

Going forward, as it relates to instrument revenue, we continued to see strength in Europe and Asia Pacific coupled with indications of expanding demand in other areas of the world. North America, instrument sales continue to be challenging, but our sales pipeline is gradually improving. Revenues in the nucleic acids segment increased by over 34% to 2.4 million in 2004 from 1.8 million in 2003. This segment's revenue also increased sequentially by 9%, marking the third quarter of sequential growth.

Revenues from our Boulder facility's nucleic synthetic acids products grew for the 6th consecutive quarter as Collin mentioned earlier, and that's every quarter since the facility's products were first sold. Its revenues of approximately $711,000 represented an increase of more 250% over the prior year and almost a 5% an increase over the prior quarter.

Our Glasgow nucleic acids building blocks revenues also increased both year-over-year and sequentially by almost 9% in both cases. Sequential growth for the Glasgow revenues reached three quarters in this second quarter. Sales visibility for our Glasgow chemical building blocks products is solid over the short term.

Turning to gross margins overall, gross margins for the quarter were 35%, compared to 30% in the prior year. Although improved year-over-year, our margins continue to be adversely impacted by the high, mostly fixed manufacturing costs associated with excess capacity at our Synthetic Nucleic Acids plants. The Boulder facility alone has negatively impacted our gross margins by approximately 800,000 in each of the first two quarters of this year.

BioSystems margins remain consistent and within historical averages. This portion of the business had gross margins of 55% in the second quarter of this year.

Nucleic acid gross margins were a negative 18% as compared to a negative 70% in 2003. The improvement in these margins reflects the growth of our Nucleic acids revenues. Our facilities have high fixed costs and additional revenues will result in significant improvements in gross margins, but current levels of business and skill under utilize our facilities and result in negative margins. This is particularly true of our Boulder Synthetic Nucleic Acids manufacturing facility.

Now I'll turn to our operating expenses. Total operating expenses excluding $12 million in non noncash charges which I'll talk about a little bit later were $5.9 million in the second quarter. This compares to total operating expenses of 7.1 million in 2003, which included 474,000 of restructuring charges. Aside from the noncash charges breaking our operating down sales, general and administrative expenses were roughly flat compared to the prior year at 4.3 million. Research and development expenses were 1.7 million, as compared to 2.4 million in the second quarter of 2003.

Now, I'll explain a little bit of the background on the noncash charges recognized during this quarter. At the direction of our board of directors we recently began to explore strategic alternatives for the Nucleic acids operating segment. In March we engaged a third-party advisor to assist in this endeavor. Through June 30 of this year, significant progress was made including due diligence by management, our advisors, prospective independent buyers and other interested parties. This process is ongoing and management continues to examine numerous options.

Based upon information obtained through this process, we determined that it was more likely than not that the operating segment was impaired. We hired an external evaluation firm to help with the completion of a mid year impairment test. Based on that test, we recorded a noncash charge of $12 million related to impairment of our Nucleic acids segment assets. The charge consisted of 9.9 million related to the impairment of goodwill associated with that business segment and 2.1 million related to the impairment of other tangible assets of the Synthetic Nucleic Acids business.

With this write-down, all good will associated with our Synthetic Nucleic Acids business has been written off. We want to emphasize, we've made significant progress in reducing our ongoing operating expenses and will continue to challenge ourselves to further control and reduce these expenses.

Moving down the income statement, our net other expense for this second quarter of 2004 was $379,000 compared with $115,000 expense in the prior year. This increase is due mainly to increased interest expense associated with increased debt. The second quarter 2004 amount includes noncash financing costs associated with accounting for warrants issued and the beneficial conversion premium aspect of our revolving line of credit facility and a convertible term note with Laurus Funds These values calculated are recorded as a debt discount and a credit to paid in capital. The discount is amortized over the term of the facility or as the warrants are exercised or the debt converted into common stock, thereby increasing the effective interest rate on the facilities.

Additional borrowings under the credit facility may result in additional beneficial conversion premiums to be amortized, depending on the market price of our stock at the time we borrow additional amounts.

Coming to the bottom line, our loss for the quarter, which includes the noncash asset impairment charges of 12 million was 15.1 million or 52 cents per share, as compared to 4.7 million or 20 cents per share in the prior year.

Now, I'll comment briefly on the year-to-date results. Year-to-date revenues were $17.6 million in 2004 compared to $18 million in 2003. That's a 2% decrease. BioSystems segment year-to-date revenues decreased 5% to 12.9 million, from 13.6 million the prior year. While Synthetic Nucleic Acid segment year-to-date revenues increased over 7% to 4.7 million from 4.4 million the prior year.

Year-to-date gross margin percentage for the business as a whole was 34% for 2004 versus 35% in 2003. BioSystems gross margins remained consistent hitting 56% in 2004 as compared with 57% in 2003.

Synthetic Nucleic Acid segment margins improved in 2004 to negative 25% compared to negative 35% in 2003.

Operating expenses including the 12 million noncash impairment costs were $4.1 million compared with 14.3 million the prior year. The prior year amount includes $738,000 in restructuring charges. Sales, general and administrative and research and development costs for 2004 are both reduced from 2003 levels.

Net loss, the year-to-date net loss for 2004 is 19 million compared with $8.3 million in 2003. This net loss in 2004 included as I've said before the 12 million in impairment charges and noncash finance charges of approximately $622,000. This compares -- comparing this with the 8.3 million loss in 2003, which included restructuring charges of $738,000 approximately. I'll move on to our cash and liquidity situation. We ended the quarter with approximately 2.1 million in cash and short term investments. Additionally we had approximately cash balance was $6.6 million [INAUDIBLE] outstanding on our line of credit.

Our cash balance was 1.6 million less than at the start of the quarter. In the second quarter, we used approximately 3.3 million to fund operating activities, half a million in investing activities, and that was primarily to purchase a fixed asset. And we brought in 2.2 million through borrowings on our revolving line of credit.

The makeup of the flows from the operating activities consisted of a net operating loss of 3.2 million and noncash depreciation, amortization and financing cost that roughly offset the net changes in other working capital items. On a year-to-date basis, our cash is about $600,000 less than at the start of this year.

So far, in 2004, we have used approximately 7.3 million to fund operating activities. Our investing activities net to a use of $100,000 and include the use of approximately 1.1 million to purchase fixed assets offset by inflows of 1.2 million from reductions in other assets and sale of investments.

Our year-to-date financing activities have resulted in an inflow of 6.7 million. These activities include borrowings under our line of credit and convertible term note with Laurus Master Fund net of payment of the mortgage debt on our Glasgow facility. At the current time, we have as we speak, have approximately $2.2 million available on our line of credit.

Based upon our current financial projections, we expect to meet our liquidity needs with the current cash we have a continued focus on converting accounts receivable and inventory cash, additional advances on our line of credit and positively impacting cash flows from operating activities through execution of strategies resulting from our exploration of strategic alternatives for the Nucleic Acids operating segment. Our projections may or may not be realized based upon actual operating results, changing in working capital and our ability to execute on the strategic alternative chosen with regard to our SNA business unit.

Thus during or after this period, if our existing cash and short-term investments, cash generated by operations and available borrowings under credit agreements is insufficient to satisfy our liquidity requirements, we will take appropriate action as needed.

Now, I'll talk a little bit about our outlook for the future. It remains difficult projecting revenues, particularly in the Nucleic Acids business segment. We are encouraged by the consistency in our BioSystems business and expect this segment will remain solid.

In the third quarter of 2003 at our conference call, we noted that we believed revenues from our Nucleic Acids segment had bottomed out and had begun to rebound. While revenues from the segment have expanded in each of the last three quarters, we remain cautious in regard to projecting our Nucleic Acid unit revenues for 2004. We believe there is potential for expanding revenues in 2004. But we also believe we may see continued fluctuations from quarter-to-quarter, driven by the degree of success our pharmaceutical and biopharmaceutical customers have with their product development.

Gross margins on the BioSystems group remain strong and we believe will continue in historic ranges. The average sales price of our WAVE System remains consistent. The Nucleic Acid business gross margins will continue to be adversely impacted by excess manufacturing capacity mostly in our Boulder operations. Improvements in these margins will be largely dependent upon increases in revenues for other strategies executed as a result of our strategic initiatives exploration for the Nucleic Acids unit. We continue in our efforts in reducing operating expenses and believe we will continue to see year-over-year declines.

In conclusion, on our outlook, we have sufficient confidence in our visibility for third quarter of this year to project sequential revenue growth with continued improvement in margins.

At this time, I'll turn the call back to Collin.

Thanks, Mitch.

With that, I would like to turn the floor open to questions.

At this time, if you would like to ask a question, please press the star and one on your touch-tone phone. If you would like to withdraw that question, please press the pound sign. Once again, if you would like to ask a question, please press the star and one on your touch-tone phone now. And we will take our first question from Christopher Martlet from MDB Capital Group Please go ahead. Your line is open.

Hi, guys.

I was curious, you talk about evaluating the Nucleic Acid unit. I'm curious if you were to extract those operations from the overall company, are they, as a segment, cash flow negative, neutral, positive? Can you give some sort of visibility into that unit?

Yeah, I can answer that. This is Mitch Murphy.

The Nucleic Acids unit itself contributes negatively to our margins. As I said earlier in the call, it has required cash -- continued cash investment in there to keep the operations going forward.

Our challenge is to grow the revenues to match our capacities, or again as we mentioned to explore other alternatives to see how we can otherwise impact that.

When I'm looking at the overall operating numbers and seeing the cash utilization rate, I get concerned. But it appears from your comments that you're not all that concerned in the short run. So I gather that -- that the cash flow negative situation from that operation could be in theory shut off. And if -- you know, under a last resort and mitigate substantially the cash burn. Is that a correct assumption?

Yes. Again, the S & A unit is our large cash user, the BioSystems unit itself is -- if it were by itself would be fairly cash neutral. And yes, with what we've -- projections we've put together for the balance of the year, we see we have the wherewithal to manage and execute the business plan. Again, we have the various alternatives we're considering that will help us get there.

Yes and so a final question then would be are those two units depending upon each other in any way? Would it be through common customers? Are they dependant upon each other? Could you shut the one unit down and not affect the other unit?

There is some commonality. And Collin, I'll let you speak to it, too. Because that might speak to the markets. Go ahead, if you want to, Collin.

Actually, the only commonality is certain resources. But from a market perspective and customer perspective, they are totally ind independent.

Okay. Thank you.

Thank you. Once again, if you would like to ask a question, please press the star and one on your touch-tone phone now. And we'll take our next question from Matt Arens from Kopp Investments Advisors. Please go ahead.

A couple of questions if I could.

The first one is, I know in some recent years you've seen a sequential decline in revenues from the June quarter to the September quarter.

Can you speak a little bit to what you're seeing with current business a little more specifically as to why you think that we should see sequential growth between June and September?

Sure, Matt. I'll take that, Mitch.

Okay.

With the visibility that we have currently Matt in terms of Q3 speak specifically on the BioSystems side first. We definitely see sequential growth on the instrument side and consumables side year-over-year. And it is really, I think, goes back to -- we really saw a bottoming out. If you look at the numbers in Q3, '03 last year. And if you look at Q4, Q1, Q2 on the BioSystems side, we've got consistently increasing top line revenues.

On the S & A side, at least on the Glasgow facility because a lot of that business is longer lead time business, we've continued to see that build up. And we consistently say now that for Q3 basically, on the building block side, we definitely have incremental revenue quarter-over-quarter and sequential growth there, too. Our only lack of visibility is only on the Boulder facility.

That's helpful. Thank you.

Moving to the S & A side of your business -- and I know you're looking at strategic options there. But I know one of those options would be an outright sale of that business. I don't want to look at this too narrowly. But if you would choose to go that route, from Mitch's comments about essentially cash flow neutral position you're in for the BioSystems business, is it reasonable to believe that if you would choose to sell the S & A business, looking in the very near future that you could be cash flow positive as an overall business?

Want to take that Mitch, or I can take that this.

That's fine either way, Collin. Whatever you want to do.

Definitely, Matt if you look at the two different groups and you split it up between the different operations, currently with BioSystems and with the Glasgow facility being cash flow neutral to slightly cash flow positive, with the other side of the business going away, you definitely see cash flow neutral to cash flow positive very quickly.

I know it is a bit of a difficult question. And you may choose not to answer it. But is there a specific time frame that we should look at for you making a decision as to what strategically you want to do with that business? Should we be looking for something this quarter or this year or what is the best way to think about that?

I would say -- I'd say to qualify it, in the near future, I would hate to want to put a definite time line on it as we look at the different alternatives and things. It is appropriate to see that we've picked the best timing to execute on any strategic alternative that we have.

Okay. All right. Thank you.

Thank you, Matt.

Once again, if you would like to ask a question, please press the star and one your touch-tone phone now. And we do have a follow-up question from Christopher Martlett from MDB Capital Group. Please go ahead. Your line is open.

We originally started to take an interest in your company, a position in your company as a result of your significant R & D spending and commitment to creation of intellectual property, especially in relationship to your total market value.

Can you comment on this investment and where you could see it paying off in the future? I mean, I don't know how you -- how well you know your position relative to your peers.

But you spend an enormous amount of money in the patent area relative to your peers. And I guess I'm just trying to figure out from your perspective, what are you looking to protect? What areas of future growth are you staking out with this IP? Is there something that perhaps we're not reading in sort of the public statements that are out there?

Sure.

We continue to invest in research and development as it really applies to our core business segments.

Our intellectual property as we've focused on in the past continues to grow. And contrary to other companies in the space, we've always been proud to say that we have no litigation, with respect to any of our intellectual property at Transgenomic. Going forward, we'll continue to focus on R & D spending as it relates to commercializable product revenues going forward. We really do not have any kind of a "nontargeted research and development efforts at the current time." All of our research and development is focused on revenue generation and key markets especially as they apply to the research and diagnostics market going forward. And in support of oncology and infectious diseases also.

I guess perhaps to follow-up then, do you see any potential new markets developing that could have a real impact on your growth in the future? In other words is there some sort of paradigm shift you can see in the marketplace that could cause a greater demand for your products or services?

Right. We definitely see some significant new market opportunities developing. And we'll be discussing those in the next few months as we unroll some new product platforms. And both on the consumeable side and on the instrument side.

Got it. Thank you.

You're welcome.

And we do have a follow-up question from Matt Arens from Kopp Investment Advisors. Please go ahead. Your line is open.

A couple more, if I could.

The first one, could you explain a little further if there will be -- if you're being advised that there will be an impact on the possible sale of the S & A business by the impairment charge you're taking? I'm wondering if the timing of the announcement, given your statement that you're looking to make a decision and having something done here in the near term, if the timing of this impairment charge in front of that would have any impact on a possible transaction.

Mitch you'll answer that?

I'll take that Collin.

I guess the thing I can say about that, Matt, is that we're following generally accepted accounting principles to conclude that we needed to record that or do that additional impairment analysis and record this impairment based on the analysis, it doesn't require any kind of a conclusion to any of the events that were going on. It kind of falls back on the term more likely than not.

So I mean it speaks to the fact that there was a trend that could be seen and a possibility of an impairment. But it doesn't necessarily mean that there is any -- has been any conclusive transaction that we may not have announced. But just, again, is more likely than not that it has occurred. And we don't feel it will have any bearing again. There are still multiple alternatives that we're still exploring and haven't arrived at what we feel is the best one.

Does that answer your question, Matt?

And am I understanding you correctly that what's triggering this charge is you bringing in a third party in the evaluation of strategic options?

No. It is not necessarily that, that alone.

It is simply the combination of all information and evidence being gathered in terms of what we're seeing, what we're hearing as we explore the different alternatives. And looking at that in relation to the value of our S & A assets on the books. And it had nothing to do simply because we engaged a third party.

Okay. The question on the BioSystems side of your business, Collin, could you give us a little more detail about the MD 4000 and you said you had some placements on that in the quarter.

Could you tell us if there is a particular geography where you're having success with that and what exactly it is that researchers like about this new version of the product that you think will help you in placements going forward.

Sure. I would be glad to Matt.

The MD 4000 basically in Q2 was placed in no particular geographical concentration. We've had placements around the world. We have not introduced it effectively in most Asia Pacific yet but we have introduced it in Europe and North America.

In terms of where the MD 4000 model sits in terms of the various models of the WAVE platform we have, it fits in specifically in a couple of different areas. One, it is a model that has only a single plate, auto sampler. And as such is more suited towards lower through put applications or a particular lab situation. So if you have an individual researcher, in a research setting that does not require a lot of sample through put, it is an ideal situation for that researcher to have a model that they may run one plate a week of 96 samples rather than four plates a day with some of our other platforms. So it is a lower through put application for certain research groups.

Two, we've also seen that in certain diagnostic screening situations in some of our European customer labs, they now have a platform at a lower price point that could be dedicated to screening a particular disease of interest where they have, again, lower sample needs. So, for example, in some of our diagnostic labs in Europe, they may have four or five WAVES dedicated to diseased areas where they have a lot of sample through put in a given week. Whereas they might have a WAVE MD 4000 position to just focus on one disease because samples for that disease come in on a irregular basis during the week. And they accumulate samples basically and run it on the MD 4000 at the end of the week or at the end of a two-week period.

So it is basically in those two settings, either a more limited research setting where they have limited sample needs. Or, again, diagnostic setting, where they dedicate a WAVE MD 4000 to a particular disease because they are accumulating patient samples as they come in during the weekly period.

Okay. That's helpful. Thank you.

You're welcome.

Once again, if any participant does have any final questions, please press the star and one on your touch-tone phone now. And there are no further questions at this time.

Okay. I would like to thank everybody for joining us on this call. And Mitch, anything else for you to close up with?

I should probably just mention one more time that the call is being archived and will be able for listening to either over the internet or on a dial in basis. And information on how to do that is contained in our August 9th press release. You can refer to that or also visit our web site at transgenomic.com.

And one last thing I'll mention is, for the benefit of any who may have joined after the call was already in progress, I'll reiterate that certain forward-looking statements may have been made during this call that reflects management's current views and estimates of future economic circumstances, industry conditions, company performance and financial results. These statements are subject to certain factors, risks and uncertainties described from time to time in our reports to the SEC. Any changes in these factors, risks and uncertainties may cause the actual results, events and performance to differ materially from those referred to in such statements. Accordingly the company claims protection of the Safe Harbor for forward-looking statements with respect to all such statements.

Unless you have something else, Collin, I think we can conclude the call.

Okay. Thank you.

That does conclude today's conference. Thank you for your participation. You may now disconnect.