Heska Corporation Price & Performance (HSKA)

Thank you, and good morning, everyone. Welcome to Heska Corporation's Earnings Call for the Q4 and Full Year of 2022. As a reminder, today's conference is being recorded. I am John Agard, Head of Investor Relations at Heska. And with us this morning, we have Kevin Wilson, Heska's Chief Executive and President and Catherine Grassman, Heska's Chief Financial Officer. Mr. Wilson and Ms. Grassman will provide details surrounding the results reported and then we will open the call to questions. Prior to discussing Heska's results and before I turn the call over to Kevin, I would like to remind you that during the course of this call, we may make certain forward looking statements and involve known and unknown risks and uncertainties, which may cause actual results and performance to be materially different from that expressed or implied by those forward looking statements. Factors that could cause or contribute to such differences are detailed in writing in this morning's earnings release Heska Corporation's annual and quarterly filings with the SEC and elsewhere. Any forward looking statements speak only as of the time they are made and Heska does not intend and specifically disclaims any obligation or intention to update any forward looking statements to reflect events that occur after at the time such statements were made.

Also during this call, we will be discussing certain financial measures not prepared in accordance with Generally Accepted Accounting Principles or GAAP. A reconciliation of these non GAAP financial measures to the most directly comparable GAAP measures is provided in our earnings release, which may also be found by visiting the In reviewing our Q4 and full year 2022 results, please note all references to growth Before I turn the call over to Kevin, I want to mention Earnings presentation found on the Investor Resources page of the company's Investor Relations website. Please view this slide as a supplement to today's earnings release. And with that, it is now my pleasure to turn the call over to Kevin Wilson, Heska's CEO and President. Kevin?

Hey, thanks, John, and good morning, everyone. Before I begin, I'd like to encourage participants to review this morning's release. It's detailed and helpful, and I'll try to refrain from unnecessarily reading it to you now. As usual, Catherine will cover the financial results from the quarter, I'll be brief with my own thoughts this morning, some of which will echo our last call. To begin, I'm smiling this morning. We have a great release basically across the board and we like our outlook. We had a solid Q4 execution We got an amazing amount of investment, good work and preparation done in 2022 for good momentum entering 2023. Heska again gained market share, greatly improved gross margin and delivered 15% to 18% growth in key subscription metrics. Supporting the subscriptions growth, Heska had another great year placing analyzers into competitive accounts and into our subscriber base With a particularly wonderful performance in premium chemistry analyzer placements, which were up 28% in the Q4 year over year. We also hit our stride on LM and A. After working through supply chain and in person team training delays and bumps in the road in our international corporate accounts launches, In the Q4, we finally got to rolling momentum and finished 2023 with over 370 analyzers in operation, over 40 of which were activated in the month of December alone.

Customer feedback is positive. Utilization in both urine and fecal consumables is growing steadily, systems are working as designed, margin profiles are great and Element AIM's economic contribution is growing nicely. We continue to view Element AIM as a significant contributor to our growth for years to come and as a visible and important differentiator for Heska in a very competitive market. Other key differentiators that are proprietary to Heska are now also making a market difference for Heska. Heska's proprietary highlights now include the Element I plus immunoassay platform, which is now wholly owned by Heska following the completion of our acquisition of LightDeck, With a new state of the art manufacturing plant in Longmont, Colorado coming online this year, We will have the ability to manufacture up to 1,000,000 tests per month on this exciting platform for key immunoassay tests And for our soon to launch Heska Nu. Q Vet Cancer Screen and Monitor, available exclusively at the point of care on Element I plus in minutes With a very small blood sample and for under $50 this menu innovation is revolutionary in the battle against pet cancers. Just in the United States alone, over 6,000,000 dogs are diagnosed with cancer each year, with nearly 50% of all dogs Over the age of 10 developing the disease.

Early screening and detection is key, especially in pets that otherwise appear to be in good health and Heska is leading the charge. In recent peer reviewed published papers, Nu. Q detected canine Lymphosarcoma at a 77% rate and detected canine hemangiosarcoma at an 82% rate. And there's more to come. This is a big, important and urgent need that veterinarians with Element I plus and Nu. Q from Heska can meet For screening and monitoring, affordably and quickly, at the point of care and with high clinical confidence. Rounding out our growth drivers for 2023 are Heska's new TrueRapid series of single use tests Heska's upcoming release of new cloud based Practice Information Management Software and Related Software Products and our other announced and unannounced projects, which together we see driving profitability, Differentiation, scalability, share gains and competitiveness in 2023 and beyond. As I mentioned on our last call, to the extent that we are doing a forward probability exercise, many of the delays, Headwinds and oddities in prior year comparables that Heska experienced in 2022 are now set to flip into neutrals and positives in 2020 Pricing dynamics and our cost inputs are favorable. Year over year patient hospital visits and foreign exchange currency trends are expected to moderate or improve.

Our new growth drivers are exciting and we have momentum over the competition in long term lines like chemistry and hematology. And the timing is good. For nearly 5 years, we've invested heavily. We have planned, worked and publicly communicated that Heska was targeting to transition from our 5 year build phase to our 5 year Win at Scale and Win at Innovation phase in 2023. 2022 is behind us, 2023 is here, and we have assembled an amazing and very unique So with that, I'll turn the call over to Catherine to detail our quarter and the full year before we move to our Q and A time.

Catherine? Thanks, Kevin, and good morning, everyone. I'm pleased to take you through our Q4 and Full year 2022 results, along with an overview of our outlook for 2023. Heska finished the year strongly with 4th quarter and full year reported revenue of $66,300,000 $257,300,000 respectively. Our reported annual revenue for 2022 grew 5.4% when adjusting for currency headwinds of approximately $10,000,000 and was slightly ahead of our updated outlook. Our North America segment revenue was in line with the prior year in the Q4 and grew 1.8% for the full year. For both periods, increased subscriptions, including placements of Element AIM, drove POC Lab instrument double digit growth. Net price gains on our consumable portfolio as well as newly launched products contributed to consumable sales growth of approximately 9% in both periods. Offsetting growth were declines in contract manufacturing, revenue and sales of POC Imaging products. Excluding FX impact, Our international segment revenue grew 2.8% in the quarter and 10.9% for the full year. The acquisition of VetZ in January 2022 was a significant driver of growth as were increased subscriptions as we continue to execute on our RESET program transition in Europe. Consumables were slightly improved from prior year on a constant currency basis, even as the macro environment in the European region impacted vet visits and consumer spending.

Additionally, throughout 2022, we continue to focus on transitioning existing customers to the subscription program in which we share price discounts in exchange for longer term contracts, which has a dampening impact to revenue initially. This effort is succeeding and can be seen in improved gross Margin. 4th quarter consolidated gross margin improved approximately 100 basis points to 41.9 percent and 150 basis points to 43.2 percent for the full year. While the 4th quarter gross margin expanded to 46.5 percent our North America segment, full year gross margin was in line with prior year at 46.7%. Net price gains were offset by increased instrument Placements and other variations among lower margin products. International gross margin expanded In both the quarter and the year to 33.4% and 37.3%, respectively. 2 key drivers in this expansion were 1, the transition of customers to the RESET program, which includes Heska's work on product rationalization and subscription transition, yielding full year expansion of And the year was negative 4% and negative 7.9%, respectively. The decline versus the prior year of 7.50 basis Quarter of 2022 for an exclusive agreement to develop the Heska Nu. Q Vet Cancer Screen Test, the point of care cancer screen and monitoring test Kevin spoke about just a moment ago.

Additionally, we continue to invest in other growth opportunities that are deemed recurring such as the ongoing development of a cloud based PIM solution And expansion of our TruRapid portfolio. Adjusted EBITDA for the quarter was $6,200,000 and adjusted EBITDA margin was 9.4%. Adjusted EBITDA for the full year was $27,200,000 and adjusted EBITDA margin was 10.6%, a reported decline of 110 basis points. The ongoing investment and future growth I just spoke about compressed the margin in the current year. Our balance sheet is strong with cash of Approximately $157,000,000 On January 3rd this year, we closed the acquisition of LightDeck utilizing approximately $22,000,000 in cash. Now for our financial outlook for 2023. We expect consolidated revenue within the range of 2.78 $288,000,000 which reflects reported and constant currency growth of 8% to 12%. Our guide includes growing our subscription base twenty continuation of favorable underlying fundamentals relating to price gains, moderation in vet visit trends anticipated in the second half, Continued successful placement of approximately 400 Element AIM analyzers, expanding menu to include canine cancer screening and monitoring tests, as well as other rapid assay diagnostic test expansion, all resulting in a POC lab range of $165,000,000 to $175,000,000 We are estimating a range of $60,000,000 to $70,000,000 for POC Imaging.

We continue to see macro headwinds relating to capital sales of imaging related products, which will net against growth of our PIN solutions in POC Imaging. We expect some growth in PVD Products Group, while OVP products are expected to remain relatively consistent with 2022 levels. From a cadence We anticipate acceleration of revenue beginning late in the Q2 and ramping throughout the remainder of the year. This is based on the current macro environment, expected moderation of industry trends in the second half, timing with certain product launches, the impact of the We expect North America to comprise approximately 60% of total revenue, which includes an estimated POC lab consumable growth rate of 12% to 15%. The remaining 40% of total revenue in our International segment includes an estimated reported POC lab consumable growth rate of 12% to 14%, with currency impacting the range by approximately 300 basis points. Our focus in 2023 will be a continuation of reset subscription transition, Placement of new offerings in existing customer locations as well as new customer acquisitions. We expect to expand our gross margin between 100 to 200 basis Not including the impact of the LightDeck acquisition. Our 2023 adjusted EBITDA margin expectation without the LightDeck acquisition is to expand 100 basis points to 200 basis points as well.

The acquisition of LightDeck We'll compress Heska's adjusted EBITDA margin to be in line with 2022 at or around 10%. Lydec It's a long term strategic investment, expanding Heska's research and development capabilities as well as our manufacturing capabilities. New product pipeline planning is underway as we look to further develop proprietary technologies. Plant utilization and cost Depreciation and amortization expense of approximately $19,000,000 to $21,000,000 stock compensation expense of approximately $13,000,000 to $15,000,000 interest expense of $3,000,000 and we expect to generate a tax benefit of 5% to 10%. In 2023, Heska plans to utilize cash for a number of initiatives, including operations specifically relating to the LightDeck acquisition, Investment in CapEx projects such as our new headquarters and the other improvements as part of recent acquisitions. Additionally, we will continue to make other investments in growth all approximating to about a use of $60,000,000 to $70,000,000 of capital. To close, as Kevin mentioned, we are pleased with our performance in the final period of 2022 and we are confident in our position and outlook as we begin 2023. With that, we would like to open the call for your questions. Operator?

Thank you. And at this time, we will be conducting a question and answer session. Our first question comes from the line of David Westenberg with Piper Sandler. Please proceed with your question.

Hi. Thank you for the question. So Incredible guidance. It caught me off guard. I probably should follow my questions on that because it was Quite good. I'm just I want to kind of just be in on confidence in seeing that, particularly around the international. I know there's a lot of economic weakness in Europe, I think there has been. The double digit constant Currency growth, I thought was a really, really good number. And this is particularly, given that you're discounting on switching to subscription and at least What I'm seeing in the press release is it implies that you can get a lot of switching to the subscription. So I guess it's Hey, David. So I'll start broadly. We've been working to convert customers to subscriptions. And as you point out, we share roughly A 10%, 15% price discount in a lot of cases in exchange for 6 year contracts. A couple of Positive things happen. We get price increases based on CPI and CPI throughout most of these European regions has been running hotter than even in the United States. So you can look at those at kind of like 8%, 10% price increases. And so we're lapping some of those and they're getting price for the first time.

So that's helpful. The second thing is, we moved through the larger volume users Already. And so as we look to tackle that second half, each of those new subscriptions will use Less consumables than and not across the board, but in the aggregate, we'll use less consumables than the first half of the that we've already switched to subscription, so it will have a less of a dampening effect. And then the third thing I would point out is, We think we'll have better execution in things like our TrueRapids launch going into the selling season kind of April, May. We didn't really execute on that last year and so that becomes a tailwind and our product rationalization. So We've lost or walked away from certain products over the last couple of years as we rationalize some of those products and some of those headwinds are now fully baked in and that they don't happen again. So yes, Europe is more difficult on a macro basis. It's a little harder to see through. But we do have some of those helps that I just called out. I don't know, Catherine, I don't know if I got them all.

Yes. I think you had all of them.

I guess switching I mean switching to U. S. And I guess switching to total market here. I don't know if you give contribution for new products in that guidance, but is there any kind of way for us to What some of the new products might be doing, whether it's AIM, Rapid. And I'm noticing you're breaking out premium versus non premium. What exactly do you mean by that? Is that the legacy skill versus the Element versus an Element Chemistry Analyzer? And I'll stop there since you have other analysts.

No. So I think when we say Premium, it's a little bit in line with kind of how the industry looks at it. You have kind of main anchor products on a point of care lab and then you'll have kind of what I'll call satellite So virtually all of our subscriptions will look to kind of main testing segments. So that would be Chemistry, hematology, we would call urine and fecal, so kind of the bigger monthly commitments. And then you'll have things like blood gas, Coagulation, kind of smaller utilization analyzers. And so we just don't want to necessarily conflate Chemistry, hematology, kind of a core piece of lab with a small unit, a satellite piece of lab like a coagulation analyzer That has a much lower utilization. So I think that's what we mean by that.

Sorry. And on the new product contribution?

Yes, I don't think we're calling that out as specifically and a lot of it is we have a lot of them. So We called those out. So yes, there are a lot of new products and we've been investing pretty heavily in bringing them to market and now they're coming to market. So those are definitely tailwinds But I don't know that we want to discreetly break those out at this point.

Got it. And congrats on the great print.

Thank you, David.

Our next question comes from the line of Chris Chapp with JPMorgan, please proceed with your question.

This is Ekaterina on from Chris. Thank you so much for taking your questions and 2, if I may. So the first kind of building on your previous comments around prices in Europe, just want to ask the same question kind of in North America. So out of that 12% to 15% point of care in North America Consumables growth number, how much price benefit is embedded in that? And how should we think about pricing dynamics as we move through the year You kind of lap some of the price increases from last year versus what you're seeing now with CPI. So that's the first question. The second question is just around vet visits. So what are you assuming on the vet visit front in your guidance, in terms of just like, that visit growth? And perhaps more generally, what you're seeing in the market when it comes to And some of the labor shortages we saw last year. Thank you.

You're welcome. Catherine, do you want to take price? And I'll take visits.

Sure. Sounds good. Hi, Katarina. Yes, we expect price to contribute about 7% to 8% in North America and fairly evenly distributed throughout the year based on how we increase our prices relative to our Contractual agreement.

And so on price, I'll just add one more thing. There's Positive there for us as well. So if we get 7% to 8%, we think our competitors have taken more In the last year, which improves that value bridge, that value gap, just in terms of pricing, we think we show more value. So we think that's a net positive for us just in terms of competitiveness. In terms of vet visits, The comps are much easier. Things are normalizing. I can't wait till we get to a world where we're not talking about the effects of the pandemic and some of those types of things. So Some of that is normalizing. We do see getting to neutral year over year, and we do see getting to positive in the back half. And I don't think we're inconsistent with some of the other market participants in that regard. There are still labor constraints, We're also seeing de novo clinics, more than I've seen in many, many years. So brand new clinics starting up. And we're seeing acceleration in technician hiring, technician training, technician schools opening, one opened in San Diego and just graduated Their first class in the last quarter.

So we're solving it. And then I think efficiency is something that's good for the industry as well. So we're all starting to push, especially through the practice software and faster testing, we're pushing efficiencies. So I think the market works and 2022 was more difficult in that regard than we think 2023 will be.

Great. Thank you so much. You're welcome. Our next question comes from the line of Erin Wright with Morgan Stanley. Please proceed with your question.

Great. Thanks for taking my question. So is 40 AIM placements a quarter the right way to think about placement trends From here for AIM, and I'm just trying to reconcile what the runway run rate that was implied with the 500 placements that you were originally targeting. I guess, should placements accelerate from here in the coming quarters? Or how should we think about that quarterly cadence? And Also the mix of international versus North America in terms of the installed base on AIM. Thanks.

You're welcome. So less international installed certainly than North America. We didn't really get good activity in our international launch really until the Q4 Of this year, which was as we called out was certainly part of not getting to that 500. I think the total number we said over 40, I think it was 44. I'm trying to be precise, so if I missed by 1 or 2 in either direction, give me some grace there. But, so on an evidence base, We look at that and we say the entire sales cycle, meaning we can engage with customers that are in our pipeline, we can pitch the product, We can get them to commit to the product and then we can install the product. That entire sales cycle was in full effect in the Q4, both internationally and domestically. And so we know without presales, without backlogs, without those types Of things in the number, we know in the Q4, in December, we can get to 44. So if you annualize that, I think That's more than the 400 that we're guiding towards for the year. So we feel good about it. We think it's evidence based. We see little bright shoots.

I think I saw a nice report of 14 committed in Australia, which is a very small market relative to some of our other markets. So those are things that we just didn't have the ability to get earlier in 2022 that are now fully released in all of those markets. And so we've got the benefit of those as well. So I think I answered your question, Erin.

Okay, great. Yes, thanks. And what does guidance assume now in terms of Nu. Q test contribution at this point? Can you remind us of the economics around that test for Heska and pricing thereon? Thanks.

You're welcome. So I'll let Catherine do quantity guide, things like that. Pricing, we think will be under $50 To the veterinarian, we think that compares favorably to reference lab options that are higher. And then the economics on that are good. They're in line with our better consumables numbers, which tend to be kind of high margin gross margin numbers. So Catherine, I don't know if we're calling out discretely what Nu. Q contribution is?

Yes. No. Yes. We haven't called it out specifically. It is a contributor to consumable growth, but not overly meaningful in this guide for I think we're going to based on Element A launch, we're going Okay. Thanks. And if I could just sneak one in, more of a housekeeping question. But I think you mentioned $10,000,000 in licensing spend that You're excluding from adjusted profits. Was that what's that related to? Is that R and D investment or what is this something more operational in nature? Thanks.

Yes. So the $10,000,000 that we're excluding from adjusted EBITDA was a payment that had to be immediately Expense from an accounting standpoint in the Q1 of 2022, but it is in relation to the Nu. Q cancer screening and monitoring test And licensing of that product, but it's just from an accounting standpoint, couldn't be capitalized and amortized.

Okay. Thank you.

Our next question comes from the line Ben Haynor with Alliance Global Partners, please proceed with your question.

Good morning, guys. Thanks for taking the questions. First off with me, just Kevin, is there any color you can provide on kind of the Nu. Q reception of the initial launch? I know it's early days. And then on the announced products, can you refresh our memory what those are beyond kind of Nu. Q and the TrueRapids? And then the timing What should investors expect on the unannounced projects? When might those be disclosed or You bet. So Nu. Q, we just got done with the Western Veterinary Conference, 1 of the top Two conferences in Las Vegas and several talks on Nu. Q attended Extraordinarily well, and it was one of our focuses at our booth. And so we had 100 and 100 of veterinarians So we think the reception is fantastic. The peer reviewed published data is good. Additional peer reviewed data is coming and being published. And so, it's we think it's an extremely Important product, not just financially, we just think screening for cancer is One of the most important things you could technologically be able to do, and if you think about the size of the screening market, which is what tends to drive a lot of veterinary care for things like heartworm, screening for things like kidney function And those types of things, we think cancer is so prevalent and so important that it's a very big opportunity.

In terms of unannounced products, we got so busy and we have so many things happening That we just we don't want to gin up every single product. So we still haven't stopped On just basic menu expansion, on just our current product line. So you can think things like new features for hematology, you can think things like New menu for immunoassay that are a little bit more just down the middle of the fairway that they're definitely additive, but they're not They're not big spike movers. And so I'm going to avoid that one because I don't want to step in the we've tried to be a little bit disciplined. We're Just rapids, true rapids coming out. So we have a lot of needle movers that we just don't want to over message.

Okay. That makes sense. Fair enough. And then just this time for Catherine. When you look at the utilization levels of accounts and what their contracted level All utilization implies, let's say that in North America or whatever That number is X percent greater utilization than the contractual value. Is that figure, whatever it is, roughly similar in international? Or is there any kind of discrepancy there in terms of The utilization level versus the contracted level, Does that make sense?

Yes, I understand your question. And I think we don't have We're just now a year and a half really into the reset program in Europe, but I would say trending wise, it doesn't seem to vary Significantly at all, from North America. So, we tend to, yes, set contract minimums that are achievable And even can be exceeded by our customers. So, I think we're in a pretty good spot in both segments.

So the strategy is effective, let's say, between the 2, you don't want to set it too high or too close to the actual utilization. You want There would be a little bit of room there.

You really do. There are minimums. You don't want them to be scary And you don't want to force clinical utilization. So you're really trying to align yourselves with the customer. And the point is to align them So that we're friendly and we're partners and we're helping and we're growing alongside them for 6 years and ideally 10 or more, right, with renewals. And so getting out ahead of them and putting pressure on them through contract minimums is generally not the best strategy.

Okay. That makes sense. And then, if I could sneak one more in, the past couple of years, you've added 150 ish net new accounts In North America, it looks like that's kind of what the guide is for this year. What down the line do you think can accelerate that number? I know, obviously, Taken whatever a half point or so a share each year, but what could potentially accelerate that? And do you see that accelerating down the road?

Yes. So there are some constraints. Remember, the vast majority of the market is under contract with somebody. And so some of it's just mathematical constraint. You could come out with the world's best product ever and a large percentage of the population of available clinics are going to be in contract that has several years left with either Heska or with a competitor. So there's just a natural patience cadence That you do have to get around. So similar if somebody wants to switch a cell phone contract or they just can't just stop And switch, so that tends to be a moderator on some of that number. So that's part of why you see a slow grind forward. Corporate accounts and larger consolidators certainly are an opportunity because they go on contract and off contract In higher bulk, even those are not binary though, you don't get 100% day 1 in the vast majority of them. So that's just a natural limiter that people should be aware of. New product though, we think Element I plus especially With the Nu. Q point of care cancer test, we think that is so compelling that it can sit alongside just about anybody's Core Lab without impinging on their existing contract.

And I think that's a growth driver for us certainly, But it's also a nose under the tent, so to speak, for when that contract does come up to earn the rest of the business. So that's a little bit more of our strategy.

Okay, great. Congrats on the quarter. Thanks for taking the questions.

Hey, Ben. Thank you.

And our next question comes from the line of Jim Sidoti with Sidoti and Company. Please proceed with your question.

Hi, good morning. Thanks again for taking the questions. Quick one for Catherine and then a few for Kevin on LightDeck. Catherine, what was the Sorry, Jim. Can you hear me?

Yes, I can.

Okay. Sorry about that. Okay. So impact to currency for the quarter on top line, is that what you're Right, right.

It was about probably about a we're probably about flat unconsolidated For the quarter? When or about a little over 1% growth, yes.

So you would have been 1% growth on a constant currency basis?

Yes. If not for currency, yes.

Okay. All right. And then on LightDeck, Kevin, they had a lot of projects On the way that weren't vet related, human related water testing. What's the status of those projects? Are those things you'll continue?

On a case by case basis, Jim, but we're a veterinary company. And one of the reasons that we wanted To directly own that business was to focus and accelerate the product development of things like Nu. Q. And then we have other menu We want to accelerate that are we think are extremely compelling. So our focus is veterinary menu, and I would be doubtful that we get distracted from that. Now a way forward would be to find a partner interested in water, a partner Certainly in human. And that road has been trodden by Abaxis back in the day, partnered with Abbott. You'll see it go the other direction. Abbott partners with Zoetis and Blood Gas. And so I think that would be probably a better way forward To have a partner who's interested in medical menu, but until then, our primary focus really is to get these veterinary products out because They're big and they're compelling.

Understood. Okay. Then, Catherine, you said I think $22,000,000 cash payment For LightDeck, the purchase price was $39,000,000 So is there a contingency payments that are due later in the year or next year?

So a portion of the cash a portion of the purchase price is actually existing reacquisition of debt, so like debt forgiveness For previous investments we have made over the years, yes.

Okay. And then Your capital use for the year, that $6,000,000 to $7,000,000 does that include LightDeck? Or is that in addition to the $22,000,000 for LightDeck?

No, that includes BiteTech.

And is the balance of that capital spending or is that Combination capital expanding and R and D type things?

It's going to be a combination.

Okay. And then the last one for me, you said $3,000,000 of interest expense, which seems like double what it was in 20 22, is that due to rising rates or what's the reason for that?

It's a little bit of hedging just on rates, but so it's really about $2,000,000 to 3 And we have reached the end of the question and answer session. I'll now turn the call over to Devin Wilson for closing remarks.

Hey, thanks operator. Thanks everybody who joined the call. And thank you to the analysts for good thoughtful questions and for building models and following Our company, we've invested very heavily, a lot of work, a lot of capital to ascend, but what we think is just a great asset and We think 2023 is a year of execution for us. So we look forward to our next update. And until then, thanks for your confidence and for your And this concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.