Zynex Inc

NASDAQ:ZYXI

Earnings Call Analysis

Strong Revenue Growth and Increased Orders Mark a Prosperous Year

The company witnessed a momentous year with a record revenue of $184 million, a significant increase of 17% compared to the previous year, indicating robust revenue momentum. This notable growth was further bolstered by an impressive increase in orders, which soared by 43% over the full year. The fourth quarter continued this trend, marking the company's 11th consecutive quarter of profitability, underlined by the highest number of prescriptions in its history. These positive shifts underscore a thriving business, with extra cash generating from operations amounting to $17.8 million, setting a new company precedent.

Introduction of Groundbreaking Products and Expansion Initiatives

The company is gearing up for a robust future with the introduction of the M-Wave neuromuscular electrical stimulation device, designed to replace the E-Wave and bring advanced features to a broader market. The M-Wave has already received FDA clearance as the company continues to fill its nationwide sales coverage, moving closer to populating all 800 territories. Simultaneously, the company's diversified product range is showing promising signs, with initiatives to promote supplementary products in addition to their bestseller, the NexWave, contributing up to 25% of all orders, indicating strategic diversification.

Investing in Innovation: Patience Monitoring Division Shows Potential

The Patient Monitoring division represents a strategic long-term investment aiming at diversifying revenue and elevating the company's market position. Although the acquisition of FDA clearance for new products like the next-generation blood and fluid volume monitor features inherent delays, the management team is leveraging its experience to build a promising product line. The commitment to this division signifies a clear vision for growth and innovation for Zynex.

Financial Stability Paved by Effective Cash Utilization and Shareholder Value

Financial prudence has been demonstrated by ending the year with substantial cash and working capital. Operational cash flow showed a remarkable uptick of 29%. The company also continued to deliver shareholder value through aggressive stock buybacks, totaling $38.4 million in 2023 and reflecting the management team's confidence in the company's growth trajectory.

Fiscal Outlook: Anticipating Continued Prosperity

Looking forward, a revenue estimate of approximately $227 million for the next year, representing an anticipated growth of about 23%, sets an optimistic tone for the company's financial future. This forecast alongside a targeted diluted earnings per share of approximately $0.50 highlights the company's ability to balance capital allocation between business investment and rewarding shareholders, thus projecting an image of strong growth and financial health.

A Reflection on Profitability and Operational Efficiency

While the company experienced increased sales and marketing expenses, mainly due to headcount and wage inflation, net income came in at $9.7 million, translating to $0.27 per basic and diluted share. Without the receivables allowance adjustment, net income would have matched estimates at $0.40 per share. Despite a decrease in Adjusted EBITDA to $22.3 million from the previous year's $28.1 million, the overall outlook is positive, with financial performance in line with company estimates and an underlying efficient sales growth trend.

Earnings Call Transcript 2023-Q4

[Operator]

Good afternoon, ladies and gentlemen, and welcome to the Zynex Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Quinn Callanan from MZ North America. Please go ahead.

[Quinn Callanan]

Thank you, operator, and good afternoon, everyone. Earlier today, Zynex released financial results for the fourth quarter and year ending December 31, 2023. A copy of the press release is available on the company's website. Joining me on today's call are Thomas Sandgaard, Chairman, President and Chief Executive Officer; Dan Moorhead, Chief Financial Officer; Anna Lucsok, Chief Operating Officer; and Don Gregg, President of Zynex Monitoring Solutions.

Before we begin, I'd like to remind you that during this conference call, the company will make projections and forward-looking statements regarding future events. We encourage you to review the company's past and future filings with the SEC regarding or including, without limitation, the company's 2023 Form 10-K and subsequent Form 10-Qs, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include, without limitation, statements regarding product development, product potential, the regulatory environment, sales and marketing strategies, capital resources or operating performance. With that, I'll now turn the call over to Thomas.

[Thomas Sandgaard, executive]

Thanks, Quinn, and good afternoon, everyone. Thank you for joining us today for the fourth quarter and full year 2023 Earnings Call. 2023 was highlighted by ongoing revenue momentum, leading to a record revenue for the year of $184 million, up 17% from the prior year. The fourth quarter marked our 11th consecutive quarter of profitability and 7th straight quarter of record high order numbers. Once again, we received the highest number of prescriptions in company history, exceeding our previous record.

I'm proud to announce that we also produced $17.8 million in positive cash from operations in 2023, another all-time record for the company. With that, we are able to continue to invest in further sales growth, also in our monitoring division and aggressively be buying back stock on the open market.

During the fourth quarter, we [ played ] an allowance of $6.2 million on accounts receivables, which decreased our net revenue and profitability. We continue to analyze our receivables and collections from payers. This adjustment is an anomaly and a nonrecurring adjustment. Net of this adjustment, we [ closed to a ] negative revenue. Revenue increased to $184.3 million while producing $0.17 of earnings per diluted share. Dan Moorhead, our CFO, will expand on this adjustment during his portion of the presentation.

Significant credit goes to our team, who were able to drive revenue higher and deliver significant earnings per share and free cash flow as we expand our sales force, invest in our new business, [ signage ] monitoring and combat wage inflation like many others in the business. Our sales force has continued to expand the market each quarter, enabled by a strong team and great products.

Orders increased 43% for the full year compared to the year before, an increase of 29% year-over-year in the fourth quarter. We believe there is considerable runway for us to continue growing orders into the future, leveraging our current portfolio and growing pipeline of existing and new and exciting new products. To help drive this order growth, in the fourth quarter, we submitted a 510(k) application to the FDA for our new M-Wave neuromuscular electrical stimulation device. And already in February of this year, received the 510(k) clearance. The M-Wave is set to replace its predecessor, the E-Wave, which has been fundamental in NMES treatments across the U.S. since 1998. The E-Wave, which is a product we have been manufacturing for several decades, has helped over 17,500 patients with muscle-related issues such as [ drop foot ], [indiscernible], [ shoulder suppletion ] and hand rehabilitation.

The M-Wave is designed to improve the way patients manage their neuromuscular conditions and with advanced features and a user-friendly design. The M-Wave allows patients to be treated in a clinical or home setting with ease. The compact and lightweight design of the M-Wave ensures portability and easy integration into patient recovery routines. The user-friendly interface and ease of use when designing a custom elected therapy regimen will encourage an even broader adoption of our therapeutic products.

And as I mentioned, in February of this year, we received the FDA clearance for the product. And paving the way for launching the product, we expect that to be in the next month or 2. As you know, we have spent the past many years building nationwide sales coverage with 800 territories, and we are just shy of 500 of these being populated by now. We are focused on filling all 800 territories and making our sales reps fully productive. It takes up to 3 years before a new rep is typically fully productive. And at this point, only half of our sales reps has more than 1 year in terms of tenure.

Having built this strong pipeline to prescribers that see patients in pain in need of rehab, we are now putting an extra effort into diversifying our revenue stream. Our best-selling product, the NexWave, was [ netting ] 85% of all orders received a couple of years ago. And only 50% was from all other products such as low back support, pricing, products, cervical traction, [ proto-hot ] therapy equipment and compression. It is now up to 25%, and we have launched an initiative this month with incentives for our sales force to also promote these products more actively. We do not expect this to cannibalize our extra revenue, but rather be in addition to our revenue in the pain management division.

In addition to the impressive results from our profitable pain management division, our monitoring -- Zynex monitoring solutions, the monitoring division continued to move forward in the fourth quarter with further development of our blood and fluid monitor and our laser-based pulse oximeter. We were excited to announce FDA clearance last year for our second-generation blood and fluid volume monitor, a noninvasive and wireless technology targeted to improve patient outcomes with better fluid management in hospital settings. We continue to collect additional data in clinical trials, and Don Gregg will provide further updates on this product in his prepared remarks.

We have 3 additional products in the pipeline in our hospital monitoring products division: a laser-based pulse oximeter, NICO, a monitor for early detection of sepsis and a noninvasive laser-based monitor of total hemoglobin levels called the HemeOx. The monitoring division is pre-revenue, and we expect to submit an application to the FDA for our laser-based pulse oximeter midyear 2024. Overall, we're making great progress in the patient monitoring division, which we believe will have a game-changing growth potential for the company. Looking ahead, we are making significant progress, building on our holistic noninvasive approach with at-home pain management devices and diversifying with new products. We are rapidly expanding direct sales distribution channels that are delivering accelerating and high returning revenue -- high recurring revenue as we continue to execute operationally and strategically.

In tandem, we are focused on ramping our hospital monitoring division, which represents a large and growing market opportunity. We expect consistent growth and strong financial performance in 2024, following the double-digit growth we have produced year after year. We also expect additional catalysts and regulatory milestones during the year as we work to execute on our strong pipeline of new products. We look forward to additional updates in the months to come as we build our sales force and execute on our growth objectives to improve the quality of life for patients suffering from debilitating pain and illnesses and bring long-term value for our shareholders. With that, I will now turn the call over to Anna Lucsok, our Chief Operating Officer, for a more detailed business update on the pain management division.

[Anna Lucsok, executive]

Thank you, Thomas. Zynex's Pain Management division had another impressive quarter with 29% order growth and 43% order growth for the full year. As Thomas mentioned, we also received FDA clearance for our next-generation and NMES device. NMES treatments have several uses, including aiding recovery from surgery, managing chronic conditions and even enhancing exercise performance in healthy individuals. The M-Wave replaces its predecessor, the E-Wave, and is the next evolution in NMES devices, allowing for more customizable treatments within clinical and home settings.

We continue to target filling 800 sales territories, while diligently ensuring the right individual is matched to the right territory. We ended the fourth quarter with approximately 475 sales reps. And year-to-date, revenue per rep on an annualized basis, not including the receivables write-off was approximately $415,000, an increase of 5% over 2022. We edit a net of approximately 60 sales reps during the year, which decreases the growth in revenue per rep in the near term as those reps ramp up. Our direct sales force is relatively new with an average tenure of 18 months. As our team continues to mature, we expect to drive sales efficiency higher. I look forward to another profitable year for the Pain Management division and updating you all on our market expansion in future calls. I'll now ask Don Gregg, President of Zynex Monitoring Solutions, to provide updates related to that business division.

[Donald Gregg, executive]

Thank you, Anna. Our Patient Monitoring division is truly a ground-up growth effort and a long-term investment for Zynex to diversify our revenues toward becoming 1 of the largest medical technology companies. We are looking to leverage this management team's past success at building businesses to grow a second line of products with a much larger market opportunity at comparable profitability. Zynex has the technologies and strategies necessary to make a successful entrance into the new product line and market. But the process of acquiring FDA clearance can be somewhat lengthy with occasional delays. The fluid monitoring product via our CM line of monitors is a precursor technology for sepsis monitoring. Our CM technologies introduced to operating rooms, entirely new capabilities that could alter the standard of care and ultimately improve the welfare of patients. We continue to consult with experts, key opinion leaders and thought leaders in the space to refine the capabilities of our products and ensure maximum uptake by potential customers.

We expect that building a successful stand-alone fluid monitoring market will take longer than other new monitoring products, but we believe strongly in the benefits patients will experience and the value proposition provided by the technology. Our noninvasive laser pulse oximetry line, including NiCO and HemeOx, continues progressing positively. We expect to submit NiCO to the FDA in mid-2024. We are working diligently to engage experts, key opinion leaders, professional societies to raise awareness of the science of laser pulse oximetry.

We recently finalized our go-to-market strategy in this space, along with developing marketing execution strategies. Considering the competitive dynamics in the space, we will refrain from detailing our initial go-to-market until closer to product launch. I will now turn the call over to Dan Moorhead, Chief Financial Officer, for a more in-depth look at financial performance for the quarter.

[Daniel Moorhead, executive]

Thanks, Don. Please refer to our press release issued earlier today for a summary of our financial results for the fourth quarter and full year 2023. After commenting on our financial results, Thomas will review our guidance for 2024.

Before we get into the financial results, I wanted to provide some brief color on the fourth quarter adjustment. During Q4, we placed an allowance on $6.2 million of slow collecting accounts receivables. When our expected collections are adjusted, they are recorded through revenue, not bad debt or G&A expense. As Thomas mentioned, this is a nonrecurring adjustment. We continue to have strong relationships with our payers. It's important to consider our cash from operations increased 29% in 2023 and was a company record despite the adjustment, and our DSO decreased during 2023 unrelated to this adjustment, both of which are great indicators of how the business is performing. The adjustment net of taxes affected our diluted earnings per share by $0.13.

For the full year 2023, net revenue increased 17% to $184.3 million from $158.2 million in 2022. Orders increased 43% in 2023 compared to 2022. Adjusting for the receivables allowance, net revenue would have been $190.5 million, a 20% increase compared to 2022 and in line with our estimates. Device revenue increased 35% to $58.8 million compared to $43.5 million in the prior year. Supplies revenue increased by 9% year-over-year to $125.5 million from $114.7 million in the prior year. Gross profit for the full year of 2023 increased to $146 million or 79% of revenue as compared to $126.2 million or 80% of revenue in 2022.

Sales and marketing expenses were $86.7 million in 2023 compared to $67.1 million in 2022, primarily due to increased headcount of our sales force and increased commissions and incentive pay related to improved order volume and higher than normal wage inflation. G&A expenses were $48.5 million in 2023 compared to $36.1 million last year. Approximately 16% of the increase in G&A is related to investments in our Monitoring Solutions division and related headcount to launch our new products. The remainder is primarily due to compensation and benefits expense driven by headcount growth associated with the growth of the company and increased order volumes.

Net income was $9.7 million and produced $0.27 per basic and diluted share in 2023 compared to $17 million or $0.44 per basic and diluted share in 2022. Adjusting for the receivables allowance, net income would have been $14.4 million net of tax or $0.40 per basic and diluted share, which was in line with our estimates. Adjusted EBITDA for the year ended December 31, 2023, was $22.3 million compared to $28.1 million in the year ended December 31, 2022.

Now I'll look at our fourth quarter results. In the fourth quarter, orders increased 29% year-over-year to the highest number of orders in company history for the seventh consecutive quarter. Net revenue was $47.3 million compared to $48.8 million in the fourth quarter of 2022. Adjusting for the receivables allowance, net revenue would have been $53.5 million, a 10% increase compared to the Q4 of last year. Device revenue was $16.3 million compared to $15.9 million in the fourth quarter of last year. Supplies revenue was $31 million versus $32.9 million in the fourth quarter last year. Gross profit in the fourth quarter was $37 million or 78% of revenue as compared to $39.4 million or 81% of revenue in 2022.

Sales and marketing expenses were $21.7 million in the fourth quarter of 2023 compared to $19.2 million in the same period in 2022. And G&A expenses were $13 million in the fourth quarter of 2023 compared to $10.1 million last year. Net income was $1.2 million and produced $0.04 per basic and diluted share in the fourth quarter of 2023 compared to $7.5 million or $0.20 per basic and diluted share in 2022. Adjusting for the receivables allowance, net income would have been $5.8 million net of tax or $0.17 per basic and diluted share in the fourth quarter and in line with our estimates.

Adjusted EBITDA for the 3 months ended December 31, 2023, was $9.9 million compared to $11.4 million in the quarter ended December 31, 2022. We ended the year with $44.6 million in cash on the balance sheet and working capital of $69.3 million. Cash flows from operations in 2023 increased 29% year-over-year to a record $17.8 million. In the fourth quarter, we continued our stock buyback and repurchased $14 million of common stock, bringing the total repurchases in 2023 to $38.4 million. And over the last 24 months, we've purchased $65 million. We continue to balance deploying cash generated between investing in our business and returning cash to shareholders. We believe both offer attractive return profile. The continuing buyback reflects our belief in the management team, the growth opportunities for both divisions, and we remain committed to creating shareholder value in the near and long term. With that, I'll turn the call back over to Thomas.

[Thomas Sandgaard, executive]

Thank you, Dan. We've had a strong start to the first quarter. And with the continued growth in orders in the first quarter, I can tell you we're off to a good start. In January, we grew 23% year-over-year. And in February, we're looking at 29% year-over-year growth. And in terms of revenue for the quarter, we expect revenue to come in at $47.5 million, which is approximately 13% higher than the first quarter of 2023 and diluted earnings per share of $0.03.

As for 2024 outlook, we expect total revenue to be approximately $227 million, representing growth of approximately 23% over 2023 and diluted earnings per share of approximately $0.50. We are incredibly proud of the growth that we have consistently demonstrated in the past several years. Top line revenue has produced high levels of profitability and free cash flow, which has allowed us to expand our sales force, launch a new business line to diversify our revenue stream and continue repurchasing our shares. The business we have created and the profitability we're able to generate allows us a high degree of flexibility to allocate capital in several ways. We have the ability to continue investing in our business and return cash to shareholders simultaneously. We believe both these avenues will produce substantial shareholder value. With that, operator, please open the call up for questions.

[Operator]

Thank you. [Operator Instructions] Your first question is from Jeffrey Cohen from Ladenburg Thalmann.

[Jeffrey Cohen, analyst]

I've got a few, some are brief ones. So firstly, on the receivable allowance, perhaps a little more commentary. I know that there's been some naysaying in the past about 1 account specifically [ at United ] and I want to know if this stems from that account or 1 account or it stems from multiple accounts? And is the effect both on devices and supplies?

[Daniel Moorhead, executive]

Yes. So the adjustment, Jeff, is related to receivables that we're collecting slowly. We placed an allowance on them. As we said, it was a bit of an anomaly because current accounts receivables have improved with cash flow and DSO improving both in 2023. And going forward, it's really a nonissue. We're not going to get too detailed on it, but I would say it's not related to a specific account that you're thinking about, I don't believe, but it is a payer that we continue to work with.

[Jeffrey Cohen, analyst]

Okay. Got it. That's super helpful. Maybe, Don, could you comment a little bit? So it seems like CMS is about $8-ish million of G&A operationally currently? And what's the plan for launching the blood volume monitor? What's the plan for any public readouts as far as some of the data that you've been collecting?

[Donald Gregg, executive]

Yes, Jeff, this is Don. I just want to clarify, we're about $9 million G&A. And we -- the [indiscernible] platform is a long-term play for us. We're very focused right now on our noninvasive oximeter, essentially our [ laser pulse ] oximeter, and we're very focused on the organization completing that and getting that to the FDA and into commercialization. That will be our first product at this point that we will actually commercialize and take to the market.

Our blood volume, fluid volume platform has been in clinical trials, and we continue to run clinical trials on that to refine that technology. That technology is also very important for our sepsis monitoring platform. And so therefore, some investment goes into that. But largely, we're very focused on the pulse oximeter platform right now. Does that answer your question?

[Jeffrey Cohen, analyst]

Yes. That's perfect. Just to reiterate, you're planning on a submittal for the pulse ox mid-2024?

[Donald Gregg, executive]

That's correct. Yes.

[Daniel Moorhead, executive]

And I'd just clarify, Jeff, they had -- they spent about $9 million in 2023. We're looking at closer to $13 million, if you're looking at your forecast for 2024.

[Jeffrey Cohen, analyst]

Got it. That's super helpful, Dan. And then I guess, lastly, some questions on M-Wave. If you could just remind us as far as the target audience and the payer environment and the channels to market, that would be helpful.

[Thomas Sandgaard, executive]

Yes, maybe I can answer that one. This is Thomas. So neuromuscular electric simulation is a market that is used for reeducating muscles. Typically, it can be after surgery or sports injuries. And it is -- in terms of payers, it's the same as we have for all the other products. There's a billing code for NMES that's different than the other billing codes that we know or often used. Sometimes the NexWave actually is on a patient where it's helping here. But the M-Wave is more versatile. And when it requires specialty settings, for instance, it's much better to put that device on. Would be billing for that code and all payers just like [ Butantan internal ], pretty much pay for it. It plays very well. So therefore, it makes sense to have a dedicated product for these particular applications. But it's -- as always, it depends on what medical conditions, what indications we get on the paperboard from the clinic that then decides, again, what product that goes to the patient and what billing codes we are using.

[Jeffrey Cohen, analyst]

I got it. And Thomas, does that expand your TAM as far as the target audience as far as the physicians out there, which the sales force is targeting? Does that tack on additional physicians in additional geographies?

[Thomas Sandgaard, executive]

No, because we were selling the E-Wave, a product we also manufactured, an older generation of -- it's actually 1 of the very first products that developed a couple of decades ago. So it doesn't expand it, but it gives the sales force a much easier to sell and more versatile and easier-to-use product rather than the E-Wave. That will be phased out here over the next couple of months as production has ramped up and we start supplying the E-Wave.

[Jeffrey Cohen, analyst]

Got it. Okay. Super.

[Operator]

Your next question is from Shagun Singh from RBC.

[Shagun Singh Chadha, analyst]

And I apologize for background noise at the airport. So I guess 2 sort of questions from me. Firstly, with respect to strategic alternatives, can you just provide us with an update on where you are with that review process? And if we should expect any news on that front in 2024? And then just with respect to your guidance, can you help us with the cadence for the year on revenue as well as margins? And then I'm just trying to figure out how should we think about your adjusted revenue guidance of 19% for 2024 in the context of the 43% order growth that you saw in '23 and 29% exiting Q4.

[Thomas Sandgaard, executive]

Strategic alternatives? Strategic alternatives? Sorry, I didn't have it, but -- so you're asking about the strategic alternatives, which to a large degree is us focusing on a going private transaction. And that is still continuing. We're talking to a couple of potential private equity firms that are pretty deep in the weeks and has done, I would say, probably most of the due diligence. Whether we get to conclude a transaction with any of those or if we decide to go in a different direction is obviously still to be seen. Some of that will depend on valuation and negotiating in regards to that. And if we have the right partner to move forward with. So it is looking very positive. However, we have nothing affirmative to report for probably another couple of months.

[Shagun Singh Chadha, analyst]

And then just on 2024.

[Daniel Moorhead, executive]

Yes. I would say, again, when you're looking at revenue growth versus order growth, you're always going to have some differences there. I would say we did 43% for the year, but a lot of the larger numbers were in the first half, I would just say the comps are a little easier. And as the sales force got more effective in the back half of '22, those got a little tougher. So the 20% revenue growth kind of is showing that and that continued growth. I would say margins, we expect to stay constant or slightly expand a little bit. Our production group has done a really good job with pricing here. So we would expect to continue to see those strong margins into '24 and beyond.

[Shagun Singh Chadha, analyst]

Great. Any color on cadence through the year on sales and margins?

[Daniel Moorhead, executive]

I would expect it. Obviously, we had a little higher comps this year as, again, the sales force continues to do better. But as far as order growth, I think we're looking at mid-20% growth, and I think we see that across most of the quarters. I don't think it's going to jump around too much. So it should be a little steadier this year than it was in the prior year, and that, again, should drive that approximately 20% revenue growth. And don't forget, right now, the forecast is EPS going from what would have been $0.40 this year to $0.50, so over a 25% increase in kind of pro forma EPS year-to-year.

[Operator]

Thank you. Your next question is from Yi Chen from H.C. Wainwright.

[Yi Chen, analyst]

Regarding the 23% expected growth in 2024, out of that, how much will be primarily driven by NexWave? Can you comment on that?

[Thomas Sandgaard, executive]

Yes. I would say that we don't expect the growth to slow down on the NexWave. So let's assume that is in the 20% range. We are pushing hard to see revenue growth from all the other products that we are selling through our sales force. And that's probably where the majority of it is going to come from. So all those other products will hopefully double in terms of orders and therefore, get us up to -- to more than 25% order growth and again spilling over to what we expect to be a 23% growth in revenue.

[Yi Chen, analyst]

So NexWave is -- will still be the main growth driver for -- within 2024, correct?

[Thomas Sandgaard, executive]

Well, ideally, we'll get that one below 50% while we really grow the orders. But the chances are that it will still be a little over 50% as we exit the year. And long term, we are hoping to have a much more diversified product portfolio also in the Pain Management division.

[Yi Chen, analyst]

Got it. Got it. And I'm also curious, are there any attractive opportunity out there that the company could look at that may involve fast-growing products on the market at the -- that Zynex could potentially acquire versus using the existing cash to buy back more shares?

[Thomas Sandgaard, executive]

We are evaluating about a handful of those that -- exactly making products that we either sell or similar to what we sell right now would be a great complement and also in a price range where we could afford it. We have not initiated any negotiating, but we are getting pretty good in our research there.

[Operator]

Thank you. There are no further questions at this time. I will now hand the call back to Thomas Sandgaard for the closing remarks.

[Thomas Sandgaard, executive]

Well, thank you for joining us today. We're pleased with our performance this quarter and the consistent growth our team is delivering. We look forward to leveraging that momentum throughout the rest of the year and speaking to you in upcoming investor events. We appreciate your time and interest in Zynex and have a great day.

[Operator]

Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect.