Trinity Biotech PLC

NASDAQ:TRIB

Earnings Call Transcript 2024-Q3

[Operator]

Greetings. Welcome to Trinity Biotech's Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce Eric Ribner, Investor Relations. Thank you, Eric, you may begin.

[Eric Ribner, executive]

Thanks very much. Before we begin, we begin, please note that statements made during this presentation may be deemed forward-looking statements within the meaning of Federal Securities Laws. These statements are subject to known and unknown risks and uncertainties that may cause actual events to differ from those expressed or implied in such statements. These risks include, but are not limited to, those set forth in the risk factor statement in the company's annual report on Form 20-F filed with the SEC. Trinity Biotech undertakes no obligations to publicly update or revise these forward-looking statements to reflect events or circumstances after today or the occurrence of unanticipated events.

I will now hand you over to John Gillard, President and CEO of Trinity Biotech, who will give an overview of Q3 performance and a business update. John will be followed by the company's Chief Financial Officer, Louise Tallon, who will give further details on third quarter financials.

John, I turn it over to you.

[John Gillard, executive]

Good morning, everyone, and thank you for joining today's call. It has been an exciting time for our company. I have a lot to share with you today. Our company has been significantly transformed over the past year, and we are now looking to the future and the growth drivers that will create meaningful value to our shareholders.

On our call today, I want to focus on 3 key elements: one, planning for long-term growth, which we believe will be driven by our continuous glucose monitor or CGM for diabetes management. As we progress towards commercial launch of our next-generation solution, we are incredibly excited about the opportunity our innovative and pioneering approach presents in this vast market, a market that is already worth over $10 billion a year and projected to grow rapidly.

In addition, in order to provide shareholders with more opportunities for value accretion, we are building out our pipeline of high-growth potential products through the acquisition of innovative prostate cancer and preeclampsia test technology, plus a strategic investment in asepsis diagnostic technology.

Moving on to 2. I would also update you on our continued strong execution of our comprehensive transformation plan, which is establishing the profitability infrastructure for our existing and future business lines. This will support R&D for growth and balance sheet strengthening as well as increasing the value of many of our existing business lines. And finally, three, I would speak to how we have strengthened the company by successfully addressing NASDAQ listing deficiencies removing an important overhang from our stock.

Before I address each of those 3 areas, let me first speak to our Q3 performance. As you saw in today's press release, we are continuing to grow our revenue base, while at the same time reducing cost. We saw a 3% year-on-year revenue growth driven by TrinScreen HIV revenues.

Our TrinScreen revenues were lower in Q3 compared to Q2, but this is only as a result of different ordering patterns quarter-on-quarter, which are a feature of the rapid HIV test market.

We expect higher revenues in Q4 of this year for TrinScreen HIV. And as set out in today's press release, we are reiterating our guidance of 2024 sales revenue for TrinScreen HIV of approximately $10 million.

Our Q3 2024 hemoglobin revenues from A1c testing products were lower than Q3 2023, primarily due to Q3 '23 having unusually high revenues compared to the normal run rate, due mainly to an even ordering patterns from certain customers during 2023.

Continued disciplined execution on our profitability enhancing initiatives contributed to a decrease in the operating loss before restructuring and impairment charges to $2.2 million from $4.5 million in Q3 2023, a 51% improvement.

As I will speak to later, while we have spent this year planning and executing on the many profitability initiatives in our comprehensive transformation plan, most of them were scheduled to be completed at the end of this year or early in 2025, and as such, are not yet very significantly adding to our profitability.

However, I am happy to confirm that in line with our plan, many are due to be executed by the end of this year or very early 2025. And as such, we expect that we are on the cusp of a near-term step change in our profitability performance. Louise will bring you through our Q3 financial results in more detail later on the call.

Now let me walk you through some of our key achievements and provide more details across the 3 main priority areas for our new leadership team. Beginning with driving long-term growth from our CGM solution and recently acquired lab-based innovative diagnostic tests.

With respect to our next-generation CGM for diabetes management, as I mentioned, we are incredibly excited about the progress we are making in the design of this breakthrough solution. The opportunities this innovative solution presents for the company in this vast and rapidly growing market are game changing.

Having consulted with a broad range of commercial and clinical stakeholders globally, we know that reducing the cost per day of CGM solutions is a critical need in both established and developing markets. This is a need that the current main products do not satisfactorily address given their products are built around entirely or mainly disposable components. We are specifically designing our next-generation solution to address this market need.

To remind you, our next-generation solution capitalizes on our proprietary glucose sensor technology to reduce down the amount of nonreusable components. As a result, our new breakthrough design, both a reusable applicator and transmitter paired with a simplified low-cost disposable sensor patch, all designed to give a great user experience. This modular approach significantly reduces both cost per day and waste.

Our new design also allows our solution to capture additional physiological data points beyond glucose, similar to many of the data points captured by smart watches and other wearable devices. We believe these data points will provide key insights to users, and further strengthen and differentiate the value proposition of our solution.

I suppose you could say rather than trying to get a smart watch to accurately measure glucose as we understand some companies have tried, we are developing an accurate continuous glucose monitor that incorporates many of the data collection functions of a smart watch and other wearables. We believe this is a much more achievable solution. We are moving quickly to capitalize on this incredible market opportunity. And as we previously reported, we successfully completed the first pre-pivotal trial of our updated sensor technology.

This week, we are starting a second larger pre-pivotal trial, which will provide extensive data on further developments on the sensor technology which would feed into our sensor design choices.

We are confident that the steps we are taking, supported by our impressive partners, with an emphasis on; one a great user experience; two, enhance data capture and insights; and three, reduce cost through more reusable components will lead to a differentiated product and a higher value proposition. We believe this will allow Trinity Biotech to take a leading position in the globe of CGM and diabetes management markets.

Additionally, as we have mentioned previously, we are receiving significant inbound interest in our CGM technology for both commercial and strategic partners alike. We continue to build and nurture these solutions to create strategic optionality for our assets as well as create shareholder value.

Finally, I'm pleased to report that we are establishing strategic manufacturing and supply chain relationships with large-scale premium market players to prepare for efficient and rapid scaling across the globe upon launch.

Now let's turn to our recent new lab-based technology acquisitions, which form an additional vertical to our long-term value creation and growth strategy. The catalyst for these acquisitions is the recent set of changes by the U.S. Food and Drug Administration, the FDA, to the rules regarding the introduction of new lab developed tests or LDTs.

We expect that these recent FDA changes will limit the ability of reference laboratories that are not New York State Department of Health certified to bring new laboratory developed tests, such as EpiCapture's prostate cancer test and Metabolomics' preeclampsia test to the market in the U.S. As our Immco lab is New York State Department of Health certified, this provides us with a competitive advantage, which we have sought to capitalize on with these 2 acquisitions.

Trinity Biotech strategy was to leverage our New York State laboratory to attract new innovative technologies and products and combine those with Trinity's established capabilities to address large-scale, urgent and important clinical issues. We believe that this FDA rule change provided us with attractive and capital-efficient opportunities to acquire companies with new technologies and products and support their route to market.

As we evaluated these new opportunities in this area, our criteria were focused on; one large and important disease areas; two, diagnostics that lead to differentiated treatment path for patients; and three, utilization of sophisticated next-generation technology platforms. For example, prostate cancer is the most common nonskin cancer among men in the U.S. with about 1 in 8 men diagnosed during their lifetime. And the cost for diagnosis and treatment is estimated at over $100 billion annually.

The ability to accurately monitor prostate cancer progression is critical as the disease can often be slow growing and unnecessarily invasive interventions such as prostate biopsies can lead to significant complications.

The EpiCapture test could significantly reduce the frequency of these intervention, thereby improving the quality of life for patients. The EpiCapture test offers a breakthrough approach to monitoring disease progression by using epigenetic analysis. This technology is innovative and new to Trinity Biotech, thus allowing us to move up the technology and value curve in a large-scale disease area and introduce our company to the high-value oncology market.

Similarly, our other new acquisition, Metabolomics Diagnostics addresses the large scale issue of preeclampsia, which impacts up to 5% of pregnancies in the U.S. and which can cause serious illness or death in affected mothers and babies. The Metabolomics Diagnostics proprietary PrePsia technology has been shown to deliver improved prediction of preterm preeclampsia risk at week 12 of pregnancy.

Early detection of preeclampsia would allow for the prescription of effective medication, which can significantly reduce the risk of often serious health issues for mothers and their babies. The Metabolomics test uses mass spectrometry, combined with machine learning powered bioinformatics, which again is a new and innovative technology to Trinity Biotech. This increases our exposure to and capabilities in machine learning, which is increasingly becoming a critical aspect of modern health care and, in particular, diagnostics.

Regarding Novus Diagnostics in which we have made a 12.5% strategic investment, our strategic rationale is to leverage our existing capabilities to support the development and commercialization of Novus' groundbreaking technology. This is a rapid 15-minute sepsis test that can provide life-saving information to physicians to enable faster diagnosis and time line treatment.

Novus' platform addresses key limitations in current sepsis diagnostics, such as the delay in results. This rapid point-of-care solution is expected to significantly improve sepsis outcomes by enabling faster diagnosis and timely treatment, potentially saving lives and reducing the over $50 billion estimated annual cost of sepsis-related hospitalization in the U.S.

Now turning to the second of the 3 key areas I want to focus on today. Our comprehensive transformation plan, on which we continue to make significant progress and remains on track. Our aim with these initiatives is to enhance the value of our existing business lines by transforming operations to address the root causes of historical inefficiency and pave the way for profitability growth on a larger scale.

Under this plan, we have several objectives to accomplish. First, reduced costs through consolidation and offshore of manufacturing. In this regard, we have now successfully completed the transfer of our second rapid HIV product manufacturing process to our offshore manufacturing partner. In a significant milestone, we have made submissions to the relevant international regulator to permit commercial production of both rapid HIV tests with our offshore partner.

We expect offshore production of both products to begin in Q1 2025. We expect this shift will be gross margin accretive and provide meaningful working capital benefits. We are also beginning to transfer some of the more technical aspects of production of both of our rapid HIV test to our offshore partner. In fact, we already have a team on site for the next 2 weeks with our partner. Once in place, this change to support further gross margin and profitability enhancements.

We have continued to make significant progress in consolidating our main hemoglobin manufacturing activities currently carried out at our Kansas City plant into 2 of our other existing plants. We remain on track to cease the main manufacturing activities at our Kansas City site by the end of 2024.

We have recently also informed staff at our autoimmune test manufacturing site at Buffalo, New York, of our intention to consolidate its main manufacturing activities into our Jamestown, New York plant. We expect to cease main manufacturing activities at our Buffalo site by the end of Q1 2025.

We are also focused on optimizing our supply chain. In this regard, we've continued to identify further material saving opportunities in our rapid HIV test supply chain and expect to have them in place by the end of Q1 2025.

Lastly, we plan to centralize and offshore many of our corporate services to drive both efficiency and agility. As planned, our offshore corporate services site is now live, with a number of functions operating from the site. We expect to add additional functions through the end of 2024 and into Q1 2025. These changes will support improved profitability.

Our comprehensive transformation plan is ambitious and wide-ranging, impacting almost every aspect of our business. I would like to take this opportunity to thank our staff, including those that are set to leave the business as part of the transformation for their support and cooperation during this important journey. Once completed, I believe we will have a much more efficient and modernized operating model. With just 2 main manufacturing sites focusing on the more complex aspects of our products, 1 in the U.S. and 1 in Ireland, with less led complex manufacturing activities either offshore or outsourced. This simplification is expected to drive significant efficiency and profitability enhancement. In addition, our centralized and offshore corporate services site should give us a more efficient and effective platform to support the business.

Given our continued strong execution on our wide range of comprehensive transformation plan, we are today reiterating our guidance to achieve approximately $20 million of annualized run rate earnings before interest, tax, depreciation and share options costs or EBITDASO, excluding impairment charges and once-off items and annualized run rate revenues of approximately $75 million by Q2 2025, and we will continue to execute towards this.

Finally, and thirdly, I'm extremely pleased to be closing out a difficult period for the company over the past year. One of my top priorities when I took on the CEO role in December 2023 was to address the company's pre-existing NASDAQ listing requirement deficiencies. We have now regained compliance with NASDAQ listing requirements and removed an important overhang on our stock. We are grateful for the continued support of our shareholders, partners and employees during this process.

So to conclude, overall, I am very satisfied with the significant progress we have made over the past few months on our ambitious priorities. We will remain focused on disciplined execution in our comprehensive transformation program so that we as rapidly as possible, transition to profitability, while at the same time, preparing the company for significant future goals, with our exciting programs in CGM, prostate cancer and pre-cancer.

I would like to thank you all for your attention. And I will now hand you over to Louise Tallon, our Chief Financial Officer, to discuss the Q3 financial results in more detail.

[Louise Tallon, executive]

Thanks, John. I'm glad to go through our Q3 results and highlight some of the progress the company has made during the last quarter. Starting with our revenue. Our revenues for Q3 2024 were $15.2 million, which is just over 3% higher than Q3 2023.

Our point of care revenue continues to have a large impact on growing our business, increasing by $2.7 million to $4.3 million. This is an increase of 60% compared to Q3 2023 driven by our TrinScreen product, which had sales of approximately $2.4 million. We have reiterated our guidance for TrinScreen sales of approximately $10 million for the full year 2024.

Our clinical laboratory revenues were $10.8 million, which is a decrease of 9% compared to Q3 2023. Included in these revenues was a strong performance from our clinical chemistry portfolio, which grew by almost 80% year-on-year. This increase in revenue was offset by a revenue decrease in our hemoglobin business, which was 70% lower year-over-year. This occurred due to decreased instrument sales during the period, combined with higher consumable sales in Q3 2023, which, as John noted, was influenced by the phasing of hemoglobin revenues from certain customers throughout the prior year.

Moving on to our gross profit for the quarter, which was $5.3 million and represented a gross margin of 35%. This was broadly consistent with the margin for the comparative quarter in 2023 when you exclude the stock obsolescent costs that were included in 2023 results.

Within our gross margin, there are 2 pieces of key businesses that affected the result. Firstly, we have positive margins with our hemoglobins business. We're now manufacturing costs through supply chain initiatives and from our revised in-house manufacturing process.

Secondly, and offsetting this, the TrinScreen HIV sales are currently diluting our overall gross margin percentage, but we're expecting this to improve incrementally over the next 3 quarters due to the increased operational efficiency through automation and expect to transfer of assembly activities to a lower cost location, which begins Q1 2025.

We have some favorable movement in expenses year-on-year. Within research and development expenses, they were $200,000 less in the comparable quarter. We also capitalized $2.1 million for the quarter in relation to our biosensor development as we continued our development activities post the Waveform transaction we completed in January.

Our SG&A expenses were $6.5 million in the quarter, compared to $7.7 million in Q3 2023. This is a substantial decrease of $1.2 million and is a clear indication of our journey on cost reduction, where we've lowered overall employee remuneration costs.

This quarter, we've also incurred restructuring costs of approximately $300,000 related to the comprehensive transformation plan, which John described earlier. This brings total costs year-to-date to $2.3 million, with further costs expected in Q4 as a result of our ongoing transformation plan. These costs mainly comprise of termination payments, factory closure costs and costs associated with the transfer of activities to the offshore service provider. The majority of the cash outflow related to these restructuring costs will happen in Q4 2024 and Q1 2025.

Overall, we then report an operating loss of $2.6 million in the quarter compared to an operating loss of $4.5 million in Q3 2023.

Our net financial expense in the quarter increased by approximately $200,000. This increase is due to our term loans a result of the additional loan drawdowns related to the Waveform transaction earlier in the year. This brings us to a net loss post-tax and interest position of $4.8 million in the quarter, compared to $6.7 million loss in the same quarter last year.

The adjusted EBITDASO was one of our primary KPIs and represents the loss before depreciation, amortization, impairment charges, restructuring costs, tax, interest and share-based payments. For the quarter, we reported adjusted EBITDA sale of $1.4 million loss, compared to $3.5 million loss in the equivalent period last year, while our basic loss per ADS was $0.46 compared to $0.88 in Q3 2023.

Finally, I'll talk about our cash for the quarter. The cash balance decreased from $5.3 million at June 30 to $2.8 million at the end of September. Cash used by our operations was $3.6 million in the quarter, an improvement of $1 million compared to Q3 2023. Although there was improvement on the prior year, I note the working capital out-flow in the quarter.

Trade and trade receivables have increased relating to large receivables associated with our TrinScreen product. We expect to show improvements here in quarter 4. We had investing cash outflows of $3.1 million, which mainly related to our R&D capital expenditure for CGM and hemoglobin products as well as cash related to the acquisition of Metabolomics Diagnostics.

Cash inflow from financing activities were $4.2 million in the quarter. During the quarter, the company entered into an aftermarket offering agreement, which resulted in a positive net cash flow of $7.1 million.

Now I'll hand you back to Eric for any questions.

[Operator]

[Operator Instructions] Our first question is from James Sidoti with Sidoti & Company.

[James Sidoti, analyst]

It's nice to see earnings coming out and before the quarter -- the next quarter has ended. So it seems like you're back on track that way, which is nice to see. So regarding the third quarter, you said you still expect the TrinScreen sales around $10 million. So it sounds like you're looking for a little over $3 million of revenue from that in the fourth quarter. Does that sound right?

[John Gillard, executive]

Jim, good to talk to you, and thanks for your question. Yes, I think that's fair. And as we've seen over many years, with HIV rapid sales, there can be quarter-on-quarter variation in ordering patterns. Because the order sizes for TrinScreen are much larger typically than we would have for Uni-Gold that leads to, I think, was a higher overall impact in terms of our revenue. And yes, we would expect about $3 million for quarter 4.

[James Sidoti, analyst]

Okay. And with regard to the premier instruments, it sounds like those sales were a little lower this quarter as some customers waited for the new column to come out. Do you think that business comes back in the fourth quarter? Or do you think that business is lost? Or do you think it comes back in 2025?

[John Gillard, executive]

Yes. I think the core revenue for consumables there is broadly consistent quarter-on-quarter, which we would expect, right, given the nature of that business where you've got typically instruments placement and a consistent level of throughput in terms of those instruments.

I think that variation was more really got to do with 2023. And there was some high variation in ordering patterns across particularly one customer. And we took steps earlier this year to kind of normalize their demand because it creates operational challenges where you're having very high spikes in demand over particular quarters. So we've kind of more smoothed it out.

In terms of the other differential in revenue predominantly down to instrument placement sales being reduced. As we've been consistent, I think, throughout the year, we're not pushing them as hard as we will be in the past because we think the new column proposition is a much better proposition given the higher level of test that those columns do and the lower level of calibrations, et cetera, required for customers.

So why we're rolling out the new columns and bedding in that value proposition we're not pushing instruments as much as possible because as you know, instrument sales for us typically have been quite gross margin dilutive and in some cases, significantly cash flow negative. So we think that the value proposition is better with the new column, and we prefer to sell on the basis of that.

We also have made some significant supply chain changes in our supply chain for instrumentation, which allows us to have a much reduced cost of instruments. And we are also waiting for that to fully come through before we start pushing again.

So a temporary reduction, I would say, Jim, but in terms of our instrument placement revenues but overall, our level of throughput and consumables revenues is consistent.

[James Sidoti, analyst]

Okay. And it sounds like you're making some pretty significant progress on the cost reduction side. Did I hear you say you think that the first phase of initiatives they should be complete by the end of the first quarter of 2025?

[John Gillard, executive]

Yes, Jim. Look, I appreciate completely that it is somewhat frustrating for investors hearing about these initiatives, but not seeing a huge, huge impact in terms of financials as yet. We operate in a highly regulated environment, as people know. And changes in terms of our operating structure requires significant planning and execution, right? And I do believe, and I know from other people who are very experienced in the industry, we are moving at a very fast pace, a controlled but very fast pace.

There is nobody beyond myself and Louise that would like to see this happen much quicker. We would like this to be done as quickly as possible. But the truth is, it just takes time in this industry for all the various steps with checks and balances that are properly there to be carried out.

And so for that reason, we had always expected most of these changes to be affected by the end of quarter 4 this year or very early in 2025. And that's where we expect the real profitability and cash flow benefits associated with those to come on stream.

So as I mentioned in my prepared remarks, we do expect we are on the cusp of a step change in financial performance and that should build throughout the rest -- throughout primarily 2025 towards the end of the year.

[James Sidoti, analyst]

Okay. And then just a couple more. What's the time line for the 2 tuck-in deals you did, the PSA test, the preeclampsia tests. What's the time line do you think to commercialize those tests? And will they be sold throughout the United States? Or are they just New York test?

[John Gillard, executive]

Yes. So if I'll take the Metabolomics test, the Preeclampsia. We'd expect that to be revenue generating in the second half of 2025. They will be sold initially as lab-developed tests. We would expect that we will be able to provide that testing service all around the U.S. because our lab is New York State certified, which basically gives us the right to be able to provide testing services to people in 50 states. And so that is the way that we will initially roll out the test is as a service.

And as Immco has done for many, many years, we will then look to get traction for that test in the market through interaction with KOLs, so key opinion leaders, physicians, et cetera, Jim, and then assuming that we get the level of traction that we expect from providing that test as a service, we would then typically look to get an FDA approval as a 510(k), for example, on that test and then sell it as a test kit to other laboratories all across the U.S. and possibly internationally.

With regards to the prostate cancer test for Metabolomics, again, we're very excited with that opportunity and the opportunity to get into the oncology space. There is more work to be done on that in order to get us into the necessary kind of stage in order to start offering testing services out of our New York State certified lab and expect that would be revenue in 2026. But given the nature of the test and the market that it focuses on, I believe there's an opportunity for us to create very significant value in the short to medium term by further developing that test.

So our plan would be to roll it out in the same way, but I think we can add a lot of value. As I said, given the nature of the test, the type of technology, what it does for patients in line with its intended use and the space that it operates in.

[James Sidoti, analyst]

All right. And the last one for me is what do you expect the share count to be in the fourth quarter as a result of these 2 acquisitions?

[John Gillard, executive]

I don't have that number right now. We can come back to you on that, Jim. We can come back to you on that.

[Operator]

Our next question is from Paul Nouri with Noble Equity Funds.

[Paul Nouri, analyst]

I guess the -- looking at these goals for the second quarter of next year, I guess, pretty much calls for a sales increase of 20% and EBITDASO, quarterly turnaround of $6.5 million. So maybe -- I know all the initiatives you have, and it's great that you're drilling into the details publicly. But what are the biggest maybe 2 or 3 items that will get you there in the next few quarters?

[John Gillard, executive]

Yes. Thanks, Paul. Look, for commercial reasons, as you can imagine, we're dealing with partners. So I don't want to give particular details around the savings we get from different initiatives. But I think it's safe to say the ones that we have noted are the biggest ticket items that we have, right?

The drains on profitability for our analysis has been a significant number of factories operating not at full capacity. And because we're in a very highly regulated industry, that comes with a significant amount of overhead, right? So reducing down from 3 in the U.S. to just 1, will have a big impact, right?

And then offshoring some of the less complex aspects of our operations to a lower-cost location and to a partner who's also manufacturing other products allows effectively spread a lot of that overhead.

So they are each the biggest contributors. The offshoring and consolidation of Corporate Services has an impact, and it's probably in the lower side than the physical infrastructure ones in terms of manufacturing, but again, it does add. I think the key benefit around that would be modernization of our processes and further agility and ability to scale, particularly as we push out the CGM product. And so that is a cost save move, but also further agility focused as well. Does that make sense?

[Paul Nouri, analyst]

Yes. Thank you. I guess looking at TrinScreen and the revenues for next year, are most of the revenues for next year on TrinScreen expected to be from new tenders or building on the existing tender from this current year?

[John Gillard, executive]

Yes. Thanks, Paul. Good question. So a mix. So we are in a number of valuation processes for TrinScreen. I know as a long-time investor in the company, Paul, you know as well as anyone, there is uncertainty around the timing of those tenders and those evaluation processes and they can move from quarter-to-quarter, depending upon different priorities within the health organizations, government changes, et cetera, right? And that's something that we need to be agile on and ready to react.

And I think our outsourced manufacturing will allow us to be more agile and to react to shorter notice in terms of scaling up for big wins, right? And that was one of the drivers in addition to cost savings.

So we would hope to win and do expect to win additional tenders and evaluations for 2025. And when exactly they will come in, we don't know. We have an idea. That's not something we will go into publicly. But as you know, it can shift around. But we've done what we needed to do this year on TrinScreen, which was supply the market at a very, very big volume from the off. So we've proven that we can manufacture and supply a very high volume of product on time to the highest levels of quality.

[Paul Nouri, analyst]

Okay. Great. And then final question, how much capacity is remaining on the ATM?

[John Gillard, executive]

I think there's about less than $1 million on the current ATM filing.

[Operator]

We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing remarks.

[John Gillard, executive]

Thank you, Sherry. Thank you, everybody, for your attention. We appreciate your interest in the company and your support as we continue with this transformation journey, and we look forward to speaking with you over the next coming weeks.

[Operator]

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.