Bio-Techne Corporation (TECH) Earnings Call Transcript & Summary

Everyone, thanks for joining us at the Baird Global Healthcare Conference. I'm Tom Peterson, I'm an associate on our life science tools and diagnostics list here at Baird. Really excited today to have Bio-Techne presenting. And representing the company, we have President and CEO, Chuck Kummeth. Chuck, welcome.

Thanks a lot. Glad to be here.

So yes, in terms of the agenda, I think, Chuck, you're going to give a quick company overview for those who might not be familiar, and then we'll hop into Q&A.

Yes, given it's only half an hour, let's not spend half of it on slides that are -- you've got the -- you've all got the slides. But Bio-Techne, we're a 46-year-old company. Been a while on NASDAQ as in the stock symbol TECH, not bad there. I've been here almost 10 years, and we've worked really hard to build it from really just a reagents-only, an assay company to a diversified life science tools company. So we have the reagents still, the proteins and antibodies, which we're well known for ELISA Kits and other assays as well. But we've also gotten into diagnostics that use these assays, and we've also gotten into instrumentation that also uses the reagents as such. And then we're hot on the path going after cell and gene therapy pretty big. And we have a very good, I think, workflow and a system for that and the portfolio of products. And so it's a lot of core, a lot of instrumentation but a lot of new things that have a high growth like a new diagnostics platform, Exosome as well as cell and gene therapy. And that's more or less the mission for us to get to where we are today, which we just finished our fiscal year at $1.1 billion, and we're about 4 years away from hitting $2 billion. And the margins, if that is a accurate number, we're in high 30s now. We should be about a 4% op margin business at that time, and we're ahead of schedule in meeting that, I think. So it's 500,000 products in the catalog. We make -- they're mostly antibodies that we source. So we do make about around 100,000 or so of these products, different types of reagents, assays, antibodies, proteins. We're the world leader in proteins. And after that, we're in the mix of other people in the [indiscernible].

Great. Well, that's a helpful overview, Chuck. And I think we're going to get into fiscal '23, you're one of our few names that have put out a next 12-month sort of outlook. But maybe just start at sort of a snapshot of where we are with some of the macro pressures. Maybe you could start in China and what you're seeing there sort of a post-lockdown environment and kind of the medium-term outlook for China?

Yes, if we wind back a couple of years ago, and we all had that horrible quarter with COVID in China, and then it came worn back within a quarter, and we were literally back to 25% growth within 1 quarter. Had that won't happen this time around, it's a much, much deeper situation in China with lockdowns continuing in region by region, district by district. But we are on the comeback, and it will be an improved quarter, but I think we're probably a quarter or 2 away from getting back to 25% or so growth, which we think we'll get back to. We're roughly 10% of our company is in China, roughly $100 million or a little over and -- which is a lot for us, but not a lot yet, so considering the vast potential of China. Healthcare is very important to the Chinese. The governments prioritizes healthcare for almost anything else at this point. And we've always done well by that in the country. Not a lot of local suppliers in our areas, so where they're pretty loyal to us. We get preferential treatment. When they did reopen and allow certain companies in to Shanghai here a couple of months ago whenever it was, we were in the first wave. And even though small, we pack a lot of weight for power for value. And they asked us to be part of the first wave because really, without reagents, you can't get a lot of work done in the laboratory, we're the leading reagent supplier, so.

How do you feel -- you mentioned this a little bit, but just how do you feel about the positioning in China from a manufacturing standpoint, headcount? Where do you think you are operationally in China today? Just kind of...

Well, we've grown from about a dozen people when I started to almost 200 people in China now. We don't -- we did buy a company that did proteins more of a China-for-China strategy at PrimeGene, and it's a good local brand and for certain things they're in. But other than that, we bring everything else into the country, and it's -- we use mass distributors to a large extent, but we're also very direct. There's a lot of high-level partnerships now with many companies. We're in a lot of different incubator programs across the country. There's -- people know China, there's roughly about 180 or so institutions in Shanghai, another 180 or so in Beijing. And they're run primarily by U.S. citizen Chinese who went home. And so these are PhDs that know our brands, know our company well, and so they -- that's helped us, really embedded very deeply into the workflows of life science research in China, so...

Great. And then maybe sticking with macro in Europe. I think it was mid-teens last quarter, so still seeing strong growth. But what's the outlook there? What's embedded in the guide? And are you -- any concerns you have over kind of funding in the near term given some general macro concerns in Europe?

Yes. it's definitely a softening occurring now in Europe. I think we're all talking about it. I've been worried about energy this winter and a lot of factories have been warned in Germany that they may not have all the power they need, in fact, things like that. We've had a very good 2 or 3 years of solid double-digit growth in Europe, and I used to work in Europe and live there. And having 3 full years of growth in Europe is almost an anomaly anyway. So they're due for a pullback probably, but it's starting to look like it might be. I think we're going to have decent growth continuing, but maybe not near 20% anymore, so...

Okay. And then what about small emerging biotech. Can you just remind us sort of what percentage of the mix that makes up for Techne today and what you're seeing from a funding and cash usage?

Yes. We're -- we kind of segregate our business by academia versus biopharma, and it's roughly a 60-40 shift now towards biopharma. Within that biopharma, it is roughly 1/3 to 1/2, we called biotech. But they range everything from small to the large biotechs, the new pharma, right? So we see funding still pretty good across the board. People, I think they're still pretty well funded. The future may look different. I think as funding start drying up more and more, but it's only been about a 6 month or so, essentially start hearing about funding getting tougher. Pretty strong business for us yet overall. And again, I think we're involved in a lot of clinical. I think the clinical funnel is probably tightening some, and that's going to affect us and everybody else. But I don't think it's any -- it's no hair on fire event yet. That's for sure.

Great. So for the fiscal '23 setup, you've guided organic growth range, maybe low end, 11% to 12% higher end, mid-teens, I mean 14%, 15%. Can you just give us kind of the puts and takes that's embedded in the guidance? And what gets you to that higher end?

Yes. Well, first off, we don't officially give guidance. We give an annual type of guidance, and that works for a while until your analysts have their models run and you miss, right? So you have to help at some level, no matter what, right? But we finished the year at 17%. We had a 19% quarter. We were probably 300 or 400 basis points over where we thought we were going to be. Looking back and reflecting, there was probably some pull forwards because we raised prices in July. I think in general, there was a -- it was like in China trying to get as much as you could out the door as they reopened just before then, there were things I think that gave us probably a little extra in that Q4 that maybe make Q1 here a little lighter. We've always kind of cautioned to start the year as lighter, and we usually end the year hotter than we predicted. I don't think it will be different this case. It's a tough comp. This quarter, it's tougher as well. And so I think somewhere in that low double digit is probably practical thinking right now. And -- but I think at the end of the year, it's more towards mid-teens probably we were hoping. And in our 5-year cycle, we talked about a lot, we're in year 2 now of that, that's probably -- we're still on track. We think high teens by end of that cycle, largely because of the more scalable new platform start really ramping by then, so.

Great. So let's get into the core business a little bit. There's a lot of really interesting upside drivers and emerging cell and gene therapy play and certainly will get into Exosome a little bit. But let's start on core research reagents, an area where, at the Investor Day, you were calling for maybe high single digits, growth historically. You've been performing well above that.

we've been wrong every year on this one. Yes. So when I started here almost 10 years ago, it was maybe a 2% or 3% kind of growth platform, maybe mid-single digit in antibodies. And we've done remarkably well from a lot of reasons why, a lot of operational support as well, website development, search engine development, good acquisitions that gave us more breadth in the category, et cetera. And so instead of being -- hitting our goal, which is in our model, being high single-digit growth, we've been double that, right, for 2 or 3 years running. I don't think we're going to continue with near 20% growth in these reagent levels, but I do think we can easily carry a high single-digit growth, which we need to hit our $2 billion target, and I think it's pretty safe.

Great. Maybe let's turn to the instrument platforms. It's not a huge sort of percentage of the mix for Techne, but again, the growth here has been really strong. How should we think about the strength here? And Techne isn't a company that talks about backlog a lot. But what kind of sales cycle and visibility across the instrumentation platform do you have?

Yes. We're a little unique. I used to work for Thermo, and ran their largest business. And I know one thing I don't want to do is go head-to-head against Thermo instrument platform or Danaher or some others. So all the acquisitions we've done in instruments have been -- they've been instruments that can leverage the content that we have, so we can sell as a solution. But they always been instruments that are really good at productivity. They're -- so they're really good value for the money. So they're sub-hundred thousand dollar in specimen. Not a huge capital process to go after them and a lot of them at $50,000. So they're good bang for the buck. But they also have incredible productivity, and they scale well for supporting lab expansion. So like on academia had built out and get more spread out and do more of their research papers at home and do their work in the lab. And then there was a need for more instruments. And so we get to benefit from that because they are, again, a very good class of platforms for the money. So that worked well. I think overall, they're all very early in their cycle. I think there's a slide in the deck talks about the markets we serve, and we're in low single-digit share across the board. So an example of Simple Western, it's the only automated Western blot platform in the market. It's got a lot of IP, all the platforms we have, have IP, so we don't have to worry about the Danahers of the world. So we are very safe in everything we do. We will never buy a company that doesn't have -- in instruments who doesn't have IP is a good moat and a decent upside. So switching all people going from hand western is a billion dollar issue. And it's -- we're only 10% of the way into that right now with that platform. The other 2 are equally expansive, have opportunity, the biologics platform. Unbeknown to us, we didn't realize that a lot of people will be switching from HPLC to our platform. As HPLC gets older and older, very difficult, cumbersome complex to be repacking columns all time and stuff. And we have this nice little cartridge-driven platform that works great. So it's taking share. And we've had 7 quarters in a row of 30-plus percent growth in that platform, and we only promised 15%. And then lastly, the Ella platform, Simple Plex, it's really the only microfluidic type of immunoassay platform in the market. We can plex to 8 now. We have a very strong menu. We're taking it through a 13 45 process and the 510(k) process. So it's going to have -- it's going to see its day in patient monitoring in the future. And I think it's a real sleeper. Right now, a $50 million, $60 million business, but it could easily grow to $500 million someday, I think, so.

Great. Let's pivot to cell and gene therapy and maybe specifically on ScaleReady -- and then ScaleReady joint venture. Can you just give us an early update on sort of early learnings from Techne's perspective about sort of how that market is developing from your partnerships with Wilson Wolf and with Fresenius Kabi?

Yes. Well, with 1,300 clinicals en route anywhere from preclinical through Phase III and only 8 products in the market. We're all waiting for that day, right? There'll never be that many products, but they're likely going to be 10 to 20 new ones a year by 2025 according to the FDA, and I kind of believe them on that. Wilson Wolf has an 800 different clinicals. If there is a de facto standard out there in cell and gene therapy for bioreactors, it would be Wilson Wolf with the G-Rex, and we're buying them. So that's a done deal. It's just a matter of waiting for trigger points. Teams get along great. I talk to John weekly, if not daily, and you got to know John, but it's been a long relationship there. I first tried buying John 14 years ago with Thermo and everyone's tried to buy Wilson Wolf, but they're down the road, they're both Minnesotan and that just kind of worked out. The other side is Fresenius Kabi, the leukapheresis instrument is, and they've got a new one out the queue, it's going to be fabulous. You combine that with the instrumentation you just talked about, which can be QC in the process, but we have our proteins. We built a [indiscernible] in our factory that's pharma grade for laying out GMP proteins. We have antibodies, we're going to have media. We're going to be able to do a close system to provide it through within a year, we hope. So I personally think we have the best workflow in the world on the future for cell and gene therapy. So the whole world wants to get away from the current way it's done, locking up an ICU and a patient for 3 weeks. It's too expensive, too much risk, et cetera, and everyone's compartmentalizing, taking as much of that process away from the patient and ICU until you have to bring it together. So a closed system in a compartmentalized workflow is the way to go and we're in the lead. Now others have seen this, Sartorius one. They've made some nice acquisitions, and they're hot on our heels for sure, and they're definitely a great company. So nothing you got to worry about that. But I think we're going to get a good place. I also think it will be everybody wins for 5 to 10 years because we're really all this way for this market to happen. It's already a sizable business for us, and it's literally all preclinicals, if not in clinical Phase I and II. So when these things hit, they're going to scale very large, very quickly. And we've been told numbers by a lot of our customers who've gotten in with us saying, you're the world leader in proteins, but for research, we want you to make this protein for us for this new therapy. You've got to be able to make anywhere from $10 million to $15 million of the single protein a year for us. And we have dozens of inquiries at that level. So therefore, the $200 million a year factory build. We're getting ready, so.

Yes, I was just going to get into the new GMP facility. Last quarter, you, I think, added 2 additional proteins you've got by. How should we think about sort of the pacing of new protein introduction?

Well, here is a little still kind of unknown fact about our GMP protein and cell and gene therapy strategy and where we're at, that half of that business currently today is not cell and gene therapy, it's regenerative medicine. So we're -- the last 2, we moved into the factory for regenerative medicine. We're the world leader in regenerative medicine for providing reagents. But we'll need more like 20 to 30 different proteins for that, not 3 or 4 or 5, that's the CAR-T will need more or less. So we're working on that. We have the best proteins in that space now in a research level. So now it's a matter of our converting them to E. coli because it has to be animal-free, and then getting them into production and ready. And there is just a ton of demand and of course, in stem cell-related regenerative medicine therapy. So it's growing better than cell and gene therapy. It's a market forming because it's been around longer. So it's ahead of cell and gene therapy. So it's nice to have, so it helps us start working that capital sooner because the depreciation is starting to hit rates. So sooner the better for that revenue ramp to happen, so.

Yes. So you've got call it, ballpark $200 million of capacity at the new facility. I think there's a little capacity at headquarters as well.

Right, about 40.

Yes. So speaking to customers that are coming to you for tens of millions of dollars of potential orders annually. How do you evaluate potential further capacity expansion? And do you have any appetite? Or is there appetite from your customers for pulling some geographic diversity, whether it be Europe or in Asia?

No one's too worried about that yet. I think when they come and see the factory, they're blown away. This is a beautiful factory. And it has -- we have the ability to scale up on the tanks and the formulators and purifiers, et cetera. So we can expand that capacity in situ on site right now, but we also have green space to add on to the building. And I think we're 3, 4 years away from filling it probably. So we'll have plenty of time to work out whether we're -- what's our first and second layer of expansion needed. But we're -- it took us 40 years to get to $150 million business in research proteins. And it's hard to start thinking about potentially $0.5 billion in proteins in just a few years, just because it's production-based. But it's probably going to happen. So we're trying to get ready.

How should we think about the small molecule play through Tocris and sort of the outlook you have in the business between small and large molecule, how you think about the growth split between those 2?

Yes, I've been waiting for almost 10 years for a small molecule to actually hit double-digit growth and we finally got it there. So where you gave them a big expansion in Bristol, England, 7, 8 years ago, realized this is like 50 people with 30 of them PhDs. And the building we moved them from didn't even have heat. We worked with coats on. And we built them a $20 million facility for roughly 30 people. So it was a big leap of faith and business is roughly about a $20 million business. And now it's eclipsing $30 million, and now growing double digit, primarily because we've gotten really good at making -- we got a new generation of dies coming out. And we have -- there's a lot of these new molecules are being used in cell and gene therapy as well. So we have 2 new markets forming for them to help expand the business.

Great. Let's sneak one in on Spatial Biology and ACD. Can you just give us sort of what you're seeing here today and how you think your portfolio plays in spatial, which seems to be an area of emerging interest amongst researchers?

Well, we bought ACD 5 years ago, thinking they would be the next-generation IHC. And since we're the IHC antibody provider, we thought we'd better cover our bets. And we haven't even gotten a pathology yet. So it's all been around biomarker discovery driving all the growth, and it's now over $100 million business, growing double digit and hopefully, this year back to 20% growth. We definitely suffered a little bit last year, all the hype around discovery-related spatial went to 10X and NanoString, and there's not much hype this year, let's put it that way. So we're coming back a lot stronger. And we probably are the largest business in spatial yet even at this point. But between biomarker discovery, we're going in what's going to be happening around pathology in the future, we still see there's a $300 million, $400 million business unit. So it's -- we've got a strong pipeline of products. But our -- we have a new [indiscernible] to coexist with, lights a single cell up beyond anything, anyone's imagination beforehand. So it's a wonderful tool. So researchers love it, so.

Great. Let's pivot to diagnostics, specifically on Exosome. Can you just give us an update on sort of where urology patient volumes are? What kind of traction you're seeing as things start to maybe open back up?

Been waiting a long time for this year. We bought Exosome 3 to 4 years ago, hit the snag with NGS first year, learned how hard it is to get things through regulatory with the MAC, the hard way. And then COVID hit, the neurologist stopped seeing patients for almost 2 years. All that's been rectified. And then the LCD has been that we got reconciliation -- reconsideration coming out now so we can actually use the tool that was designed for as a surveillance tool. So now patients can order it and get it paid for a second time or a third time. We have 75,000 tests that have been -- that have occurred. And when we get that reconsideration finalized, should be any month here, it's a done deal. It's just a matter of waiting for it to come out. There's 75,000 patients to go after a resell to immediately. So this is going to be a breakout year. We also brought a surgeon, they added to the portfolio, but also bring in a very experienced management team in diagnostics. And they changed everything from our go-to-market message to the organization to everything, and we're now ramping our organization, having more salespeople and our growth rates are north of 40% already and climbing. So this will be the breakout year for Exosome finally, so.

Great. Any updates on ExoTRU? You had the commercial partnership with Thermo. Maybe more broadly, how you think about the kidney transplant market and how that tech shapes up? Do you think it's still a promotionally responsive market and providers and transplant centers are willing to test?

Absolutely. It's a major pain point. Even NGS was very -- I would say, they're never nice, but nicer to us. So we're wanting to help and get this in the market. Because I think prostate cancer is still viewed as the cancer you die with but not from but organ rejection is a huge issue in very big markets and very, very expensive and traumatizing to patients, right? So here, we've got a situation where we didn't -- we're not breaking the ice. We got CareDx ahead of us, but it's more invasive with blood, ours is pee in a cup, send it in, it's great. The studies are done. The data is there. It's the best science in the market for this. And Thermo saw that and them and everybody else tried to get it, but they earned it from us. So we have, obviously, a long history with Thermo. And I think it adds a lot of credibility to our platform, having Thermo come on board. They've been a fantastic group to work with. It's the 1 lambda group, and they want to do more things with us. They will probably beat us to market if we had done it ourselves by at least a year because they're in the jurisdiction where CareDx is. So I wouldn't call it a rubber stamp, but a lot easier than us, breaking ice with NGS again and starting from scratch there. The channel is in play. They've got a sales team. I mean everything, everything is done. So they've taken it over completely. They are doing the study -- additional studies themselves and we are extremely confident they'll be very successful with it, so.

Great. And then last week, you guys press released a new offering or new data from Exosome around Sjogren's syndrome. What are your thoughts on that market specifically? And also, just autoimmune from an Exosome front?

I think autoimmune is the right discussion. I think this one is more of a single base hit, but it's certainly an annoying disease. It's just very hard. It takes years to diagnose. So it's a very good entry point to help us showcase the power of our platform, and that's the primary reason. I don't think it's not going to cover all the bills we have. That's for sure but it's one more thing. We have like a dozen things in the pipeline. The other reason we want to license Thermo, we're going to do a mix of some things ourselves and some things licensing so we can get more out the door and make this a real -- the real standard in the world for liquid biopsy. We think this is the liquid biopsy solution that everybody should be focused on. And they still take years to get there, but we're on our way.

Great. And then maybe just a quick update on the Asuragen. You mentioned sort of the cross collaboration between Asuragen and the Exosome team. But your thoughts on sort of that team so far?

Yes. Well, we bought them just on the eve of them launching the SMA and the cystic fibrosis test. So we knew that they could transcend from single-digit growth to 20% growth, and they're actually ahead of that way. So it's been going great. We're launching in all their products in Europe for the first time. So we're expanding quickly there. It's been well received. So we see a bright future. Again, this is a $30 million kind of business, but growing 20%, it's going to grow to something and very profitable. And again, it's part of the overall division of our Exosome's as well for diagnostics with that team running at all, and they know what they're doing. I'm just staying out of their way.

Great. We got about 5 minutes left. So let's flip to M&A and sort of the capital deployment outlook for Techne. So typically, I think you guys have played more in the private side. Just give us an update on what the funnel looks like, where valuation is amongst private players.

Done 18 deals I've been there, I have an M&A background. So that's one of the reasons I went there. But -- we have definitely focused more on the private. I definitely like working on relationships and helping an owner stay on Board as an executive and then take their baby even further with our capital behind them. And make it another division, another leg in the stool, and that's worked quite well. We have a good track record now that will come to us and more so as of lately with the funding, the way it looks out there and the IPO market kind of going to nothing. So I see a big year this year in M&A, both from the public side as well as private side. And I think we're going to be hopefully good beneficiaries. We just put together $1 billion set of funding here. So we're a net debt 0. So it's -- we're ready to go. And we're very opportunistic. We don't have a singular M&A strategy. We have a pipeline of over 100 targets we're always viewing. We have a fairly decent-sized M&A team for the size of our company. And wherever the opportunity is, anyone of these legs in the stool division-wise, then we attack and go there. So we have needs everywhere. We've tried some big swings and not come in. And if we'd got them, it might have been a different -- might have changed the course of the company strategically, then we took a shot over Aldevron, clearly the cell and gene therapy we're doing, Aldevron would have been a great acquisition. But at the size of that thing, we definitely changed what we're doing, right. So -- but we're seeing to do better at the smaller ones under $300 million or so in price and taking a company that's technology strong and a way to inflect. ProteinSimple is a good example. ACD was a good example. We bought them really just on the eve of them taking off, and we're pretty good at that. We're very strong technically as a company and we work hard really doing good due diligence. I know we're getting into -- we're avoiding, which we avoid 9 out of 10, so.

At the Analyst Day last year about this time, you talked about having $4-plus billion of dry powder from a capital allocation standpoint. You've got the healthy balance sheet. You sort of alluded to this, but is there a leverage profile or a deal size we should think about in terms of the appetite? Obviously, something like Aldevron, it's probably bid up a little bit.

That have been stock as well, which was okay, was good. We had a pretty good stock, especially back then. But yes, I think the Board is flying up to a 4x probably. We've never gone beyond 2. So we have plenty of, I think, ability to do some important things if the opportunity arises. And we still have no problem using stock if it's the right deal, I guess, too.

Got it. I will get one in on margins in the fiscal 2026 outlook. I think a lot of people -- that 40% number for Techne is such a targeted number and you put out the 40% plus. I guess, dig into like what the plus is and what is kind of intent to get you there?

The plus is really entitlement thinking. If you -- our $2 billion target, I think it's a slide of this one, and that kind of steps you how we get there. And with the biggest platforms on the end that grow the most. But that doesn't include the Wilson Wolf. So that number really is $2.3 billion. But Wilson Wolf is at 60% to 70% growth on margins right now. So we have just found ourselves a little bit of hedged to help get to 40%. If you roll everything up where we're at now, along with Wilson Wolf, we're probably above 40% by our models. Will we go above 40%. It's a choice. We're -- at 40%, we're top of the pile. There's nothing out there like it. And I think it makes more sense to go after more growth by reinvesting and sticking to 40% if we had 2 or 3 points extra to work with. So that would be my gut feel right now, but it's 3, 4 years away, who knows, things change, and you'll see. But I think we feel ahead of schedule, and we feel very confident we can reach 40% in op margins. So -- we've been there on and off the last couple of years, so.

Right. So we've got about a minute left. Chuck, the last quarter, you announced transition. Your upcoming retirement here in a couple of years. We'll still get to interact with you here for a couple more fiscal years. You're going to retain a spot on the Board. But can you speak to sort of the search process and how you think about sort of the depth of managerial talent you've been able to build at Techne?

Well, it's pretty well network. I love our industry. I know a lot of people, a lot of people know me. I feel very proud that anyone working for me and my company in the last 10 years, I've never used search. It's all been through networking and people I know are people that I've found. Given that we have built an incredible team, we don't have anybody running a business that hasn't run a $1 billion division somewhere. We've all got a lot of great operational skills and a lot of runways given the size of our company. We -- from all that, we've not lost a single executive. We've had 2 retired last year. It's a problem with starting old like I am, and they all get old with you and things happen, people want to leave eventually. But I think we have 3 strong internal candidates, but the Board has been very clear that they need a fiduciary duty is to do a search as well. This is the kind of asset that could also shake out some pretty good current CEOs that might want to step up and come to this. Anything is possible. I'll keep an open mind. I'm hoping to become an Executive Chairman for a year and the move to Chairman. So I'll help to hopefully groom and roll a new CEO while I'm going for 3 years. I'll be mid-60s then and it's probably time. And personally, I think after a dozen years, it's probably time for new blood anyway and somebody to shake it up, work on new strategies that help get an objective, new set up PRIs and everything you're doing is a good thing. But I'll be around a long time and hopefully a long time after I'm even not a CEO, but we have a great bench. And any of the 3 internal candidate could do this job. There's no doubt in my mind. So it's just a matter of work in the process. It's a long light path, 2 years is not common, but there've been a few chuckles to the HR commons where people saying on. A lot of CEOs don't last 2 years. Your Board gave you a 2-year glide path, but 10 years of credibility helps, I guess. So -- but I feel very good that we'll find a great leader that will continue and continue our culture and all the things we built. We pride ourselves as a very non -- no-politics company. It is virtually none. People help each other. We prioritize together as a team. We travel together a lot of the team. We have a tech counsel. We innovate together as a team division by division. A lot of processes, I want to make sure stay in place and remain in place for the future.

Great. I think that's all the time we have today, Chuck. Thanks.