Edwards Lifesciences Corporation (EW) Earnings Call Transcript & Summary

Good afternoon, and welcome to another session here at the UBS Virtual Healthcare Conference. I'm Matt Taylor, the UBS U.S. medical supplies and device analyst, and I'm really pleased to be joined by management from Edwards Lifesciences. Today, we have with us, Scott Ullem, who's the CFO; and also Mark Wilterding, Head of IR function for the team, along with Oliver Moravcevic from the IR team as well. And so really looking forward to getting some feedback and insights from all these folks on the business as they've had to adapt through COVID. [Operator Instructions]

So Scott, just to get started here. Thanks a lot for joining. Wanted to kick things off with just a higher-level question. Maybe you could update us on some of the underlying business trends, what's been going on in the TAVR market. You had a lot of momentum in the early parts of Q1 that was apparent on the back of a couple of quarters here post low-risk approval. Maybe we could start there, and then we'll start to talk about how that potentially could resume as things begin to open up as well.

Sure. Happy to do it. Good morning, Matt. Thank you, and good morning, everyone else as well. In the first quarter, we were very encouraged by how TAVR was trending through, call it, early March. And in fact, we were running in the U.S. at similar rates of growth that we saw in the fourth quarter before trending down and ultimately coming in at about 30% growth in the U.S., 25% growth globally. So we felt good about how things were trending. I think it reflects the positive addition to the clinical body of evidence that PARTNER III represented last year, but it joined the body of clinical evidence. It was pretty extensive over the last decade or so. And that's just given clinicians and operators and referring physicians and patients even more confidence in this therapy. We do see new patients continuing to enter the system independent of surgical risk. So the days of how sick are you and that's going to depend -- that's going to determine what kind of therapy you can get, we think are increasingly behind us. Then the question, of course, comes to how quickly do treatment rates start to recover and improve as we get through COVID. And we can talk about that now or later, if you'd like.

Yes, sure. I did want to ask you, and I was really curious to get your feedback because you were one of the few companies that actually provided some quantitative guidance for the year. And I thought I was a little ironic, thought a lot of the times in the past, you talked about how hard it can be to predict TAVR growth on a quarterly basis. But maybe talk about your decision to do that. What kind of inputs inform that and how things have been tracking since you gave the guidance?

Yes, sure. Well, I can comment on the first couple. It's going to be a little premature to talk about how things are tracking relative to that guidance at this point. But we spent a lot of time thinking about what was the right approach. And we went back and forth on whether we should withdraw guidance or continue guidance. And we ended up taking a hybrid where we have a set of views and some assumptions to support it around the top line and the bottom line, we just felt like it was the responsible thing to do to share those views, recognizing we will be wrong. We're going to be wrong on the outside or the downside. But assuming that there's no significant second wave, and that's a big assumption, we do believe that the second quarter is going to represent the low watermark, that we'll see a gradual improvement during the course of the third quarter so that we could end up with a fourth quarter that looks similar to our original expectation for the fourth quarter of 2020. There are all kinds of reasons why those assumptions may be wrong, but they were based upon our experience talking with hospital sites, seeing flows, estimating what the recovery could look like, recognizing that the last part of March was really soft, April continued that trend. And our expectation is that we could see gradual improvement during the course of the second quarter, but we're not going to get into the details of that other than to say, we've seen a lot of signs of positivity. I mean we saw plateauing treatment or incident rates of COVID, in some cases, declining rates of patients who are in the hospital system suffering from COVID. And that's only going to improve hospitals' abilities to get back online doing broader procedures like TAVR.

Right. Right. Okay. No, that makes sense with that broader framework. I mean, TAVR's been part of a recovery debate. Maybe we'll start and talk a little bit about this because obviously, it's a necessary procedure, these patients can degrade quickly. But it's also, in a lot of cases, in patient 1 uses PVT. So there's some crosswind, maybe in terms of how it would come back because of the meeting courses. I was wondering if you could speak to those and how you see TAVR? And maybe you can speak to SAVR as well, on the recovery pathway versus some other procedures that are out there?

Yes. Well, look, aortic stenosis is a deadly disease. And it's important that patients get treated as a priority and quickly. Patients do not do well with time when they have severe aortic stenosis. There are studies that suggest that patients who are waiting for aortic valve replacement have about a 4% mortality risk at 1 month, growing to 8% at 3 months and 12% after 6 months. We've had studies that show the mortality rate of approximately 50% in 2 years. And so it's not beneficial for patients to wait when they progressed to the point of severe aortic stenosis. At the same time, it's a very difficult time for structural heart patients, as they're weighing the risk of COVID-19 versus the severe effects of progressive heart valve disease. And they're afraid of COVID. In many cases, these are elderly patients who have decided to stay home. And the recovery of our structure, our businesses, whether it's TAVR or surgical, are going to be influenced by many factors and tempered by the time it takes for patients to seek and receive treatment. It's also tempered and influenced significantly by referring physicians. So patients depend a lot on their doctors to give them advice on when it's okay to proceed with testing and ultimately getting referred to the hospital for a procedure, either in the cath lab or in the operating room. The other consideration is just refilling the pipeline. So it's going to take, oftentimes, 2 to 3 months for a patient, once they're identified as somebody who needs to be treated, to get screened and get their imaging done, get the pre case work-up completed and so we're eager not only to start treating patients again, but also for patients to start getting through the referral channel because those are the patients who are going to end up getting treated in the second half of this year.

Okay. And what are the -- you mentioned this on the call, you referred to some of those somewhat alarming rates of morbidity that can occur with delays. What have you seen from a societal perspective or a hospital perspective to support some of these patients coming back into the funnel?

I want to make sure I'm understanding your question right, Matt. Are you trying to get at how patients are -- help me understand the context?

Well, I guess I'm just trying to understand because you mentioned these patients need testing, right, and they're vulnerable. So I'm sure a lot of them are fearful of reentering system, a lot of these surgeries need to be done in the hospital. Can you talk about some of the efforts that you have made as an organization or that you've seen from physician societies or hospitals to be able to coax these folks back into a setting where they could be treated safely?

Sure. Yes, and it's less Edwards and more site-specific and hospital system-driven, where they're evaluating and reevaluating, how can we get patients in to start getting treated again, and in the wake of the severe disruption that happened with the COVID. And in some hospitals, that means just reworking logistics, like which doors do patients come in? What times do we have different patients come in, if it's a patient who's coming in to get a surgical valve replacement, for example, we'd have to go to the operating room, that's a different protocol and different set of logistics than a patient who's coming into the cath lab. And so each center is trying to support this return to doing a broader range of procedures. And doing it in a way that's safe for health care providers, safe for patients. Obviously, we have, maybe it's not obvious, Edwards has full-time employees participating in virtually every TAVR case in the U.S. and in a lot of cases, outside of the U.S. as well. And so we're also taking measures to make sure our employees are protected in both supporting procedures, but also making sure that we're supporting hospitals' abilities by not -- by being compliant with their new requirements for industry representatives who are on-site like the Edwards professionals. So there's a lot going on. We're trying to be nimble and adaptive and really put patients' interest first as we figure out how to help accelerate treatment rates from the lows that we expected in the beginning of the second quarter.

Got you. Okay. Maybe you could talk a little bit about your pipeline. I know that on the call, you mentioned that some of the activities would need to be paused. And I was wondering if you could just give us an overview of how your pipeline's been impacted. Some of the time lines that you expect for return? Is there anything positive that could actually come out of this for your pipeline, too?

When you say pipeline, are you talking about patient pipeline? Or M&A pipeline?

No. Your product pipeline. So your -- you paused some of your activity in mitral and tricuspid trials.

Okay. Sure. Yes, sure. So just in terms of new product development, we're continuing to push on all fronts, with the exception of the pause that we had in clinical trial activity that's specifically impacted our PASCAL trials in the U.S. where we have 3. So our class trial for patients with mitral regurgitation, that's functional, so class 2F. Class 2D, which is for patients with degenerative mitral regurgitation, and then class TR for patients who have tricuspid valve regurgitation. And so all 3 of those trials are on pause and probably will be for a couple of months -- or excuse me, a couple of quarters. But at the same time, our internal development work and our other early feasibility studies and trial work is continuing at a rate that's appropriate and can be accommodated by hospitals, who are still trying to dig out of this COVID interruption. So our passion around continuing to innovate or passion around continuing to develop the funnel of technology hasn't changed one bit. And we do expect that this COVID interruption to be relatively short-lived, so that we can get back to advancing these new technologies.

Okay. And then on the new technology front, maybe you could talk a little bit about some of the trends in mitral. You've seen a little bit of early traction here with PASCAL. I was hoping you could talk about that, and how you're looking to expand the mitral portfolio across some of the other annular and replacement options?

Yes. We're enthusiastic about it. You're right that we believe it takes a portfolio of solutions to really address the opportunity. So PASCAL is certainly first, where we're commercial with PASCAL in Europe. We're also commercial with our Cardioband annular reduction therapy in Europe, although Cardioband is being redesigned right now, but we are still active in a limited number of cases for patients who can benefit from Cardioband in the mitral and the tricuspid position. But just starting with PASCAL, we saw strong momentum and an accelerated adoption of PASCAL in Europe during the first quarter up until COVID interruption really hit us. But in terms of just outcomes, we're very pleased with PASCAL. We feel good about some of the early indicators from our European CLASP study. In addition, the physician feedback has been positive. So we think it's an important therapeutic alternative for patients. We're also focused on making sure that we extend this to tricuspid patients. And so you might have seen our press release yesterday, where Edwards has received CE Mark approval for tricuspid, for PASCAL in the tricuspid position. And we think that's an important expansion of, an introduction of this technology to a different group of patients who could benefit from it. Overall, in addition to Cardioband and PASCAL, we've also got a couple of different mitral valve replacement devices. One is, we're getting ready to launch a pivotal trial for our SAPIEN M3 replacement device, which is based upon the SAPIEN 3 valve and the SAPIEN family of valves. With a tremendous amount of clinical evidence and experience, combined with the docking station that orients that valve into the right position in the mitral position. And then EVOQUE, which is a totally independent development and another mitral valve replacement platform that we have underway right now. So we're really excited about the portfolio that we've got in development now.

Good update. All right, transitioning to a related topic with TAVR growth. I was wondering if you could talk about center growth. And with the context of the change in the NCD and the prediction that, that's going to lead to a lot more centers coming online over the next couple of years. Maybe you could just give us an update on how that has progressed since the NCD, and what do you think will happen here during the period of disruption?

Yes. Well, the -- we had more than 700 centers in the U.S. certified to perform TAVR and that's up from about 650 a year ago, predating the NCD change. It's hard to predict the exact number of centers that are actively doing cases right now. We mentioned in the earnings call that since COVID hit, we've stopped doing training at new NCD accounts, and we've really been focused on supporting existing sites. But we continue to believe that there should be something like 850 total TAVR centers in the U.S. as smaller, lower volume centers come online and as hospitals are prepared again to resume getting self-certified to start TAVR programs. Obviously, every hospital's been distracted to some degree, either by too many patients or too few patients during COVID. And so we need to get through this interruption and to a position where we can start supporting these centers that also want to start-up TAVR programs.

And maybe you can also speak to the state of center increases outside the U.S.? Are there certain geographies now where you are seeing or were pre-COVID seeing traction and material center expansion?

There are. And you're right, we don't talk about that as much as we do the count in the U.S. But there's expansion throughout JPAC, in Latin America, and other areas in the rest of world where the numbers may not look significant now relative to the U.S. and Europe, but we think we think there is opportunity for nice contributions to our growth rate longer-term as these other regions start coming online. We've got -- just in the month of March alone, we did TAVR procedures in over 60 countries. So we already have a pretty broad footprint, but there are a lot of those countries and regions where they're still in the very initial stages of really seeing this therapy get adopted. And we're optimistic there's longer-term prospects for growth.

Got you. Got you. What -- and then just finishing on this topic. What's the update on your progress in China?

So no real update. I mean obviously, China was first to get hit by COVID, and that was rightfully so a distraction that caused everybody just to focus on making sure that they were addressing the immediate needs. We don't have a specific time line in China. We have a lot of specific interest in getting TAVR approved in China. We think there's a significant unmet need. And even while there's no public payer system in China the way there is in our other developed geographies in the U.S., Europe and Japan, we still think there's a significant enough need that this will be a therapy that can be further adopted, further grown beyond just the local Chinese participants who are in the market now.

Got you. Okay. And then looking forward, you talked about your base case before. You could get to this relatively normal dollar number or growth in Q4 in that scenario. If that does play out, if we don't see a big second spike, what do you think about the demand for TAVR in 2021? Do you think we could get back towards the levels that we previously may have thought, or think some patients will kind of fall through the cracks? Maybe give us some thoughts on what that could look like.

We'd like to believe that we can continue on this trajectory of growth that we had originally envisioned, that gets us to the $7-plus billion range by 2024. And so if we end up in a position as we've guided to, that fourth quarter shows something similar to the fourth quarter of 2020 that we originally had planned, then 2021 should be another good year of growth. And in fact, the growth rates will obviously be better just because of the interruption that we had in the first half of 2020. So no reason why we shouldn't be able to get back on that same trajectory, Matt, if there's not a second wave, if we really get COVID behind us.

Got you. And maybe you could also talk about what's happening competitively. I know it's strange to talk about during the period that we're in. But what were the trends like -- you've been growing faster than the competition here for a couple of quarters. Are you seeing any disruption from new entrants? And what do you think of some of the incremental offerings that your main competitors have come out with?

Well, it's really tough to tell what's happening competitively, just because of the extent of the disruption from COVID. As you know, in the U.S. and in Europe and Japan, it's really been just 2 participants in the market, principally. But we've got a new entrant coming in the U.S. who said they expect to have about 150 centers online by the end of the first quarter. I'm not sure whether that -- where they are in that trajectory. But we are expecting them to get traction or expecting them to carve out a position for themselves in the market. Recall that originally, we were planning for some market share loss as a result of them coming in as well as another entrant joining the U.S. market maybe later this year. But during this interruption, I think there's probably been an inclination on the part of treating physicians to go to systems and technologies that they're most familiar with, where there's the most predictable outcomes and most principal lengths of stay. And so that's probably benefited us short term. But again, it's -- I wouldn't read a lot into any kind of market share projection at this point.

Yes. I was just curious about your decision to nix your self-expanding program. I don't think people ask you about that a lot, but it doesn't seem to have really impacted you. Maybe you could just speak to the factors that drove that decision, and what you've seen in terms of the adoption of some of the newer S3 related technologies, including your new delivery systems?

Yes. When we decided that we were going to cancel our CENTERA self-expanding valve platform, it was a really tough decision. And it was tough because we had invested many, many years of resources and time and effort, both within Edwards as well as with our clinical partners. We had run clinical trials. The original results of our CENTERA trial in Europe showed that it was the very best performing self-expanding valve. And so we had these incredible results, a ton of time and energy that we invested into a system that was working well and prospects for working even better. And then along came PARTNER III, where we got these results from our low-risk trial for SAPIEN 3 that were so outstanding that it made us really have to rethink the prospects for CENTERA. And in addition to just having clinical results that were very, very positive, we were also in a situation where there's going to be such a gap between the indication that it was going to take CENTERA a long, long, long time to catch up because right on the heels of the PARTNER III data, we got approval in the third quarter for treating low-risk patients with SAPIEN 3. Our clinical trial that we had underway for CENTERA was only for high-risk patients. And so the confluence of all those different factors led us to believe that the better course of action was to really focus all of our attention, put all our energy into continuing to develop the pipeline of next-gen products and the SAPIEN family of valves. So right now, we're in the process of introducing SAPIEN 3 Ultra, our fourth-generation valve. And that -- we've got good traction, converting about 30% of the centers in the U.S. and Europe to Ultra, but that has not been a priority right now during COVID. We'll return to that transition to SAPIEN 3 Ultra as we get COVID behind us.

Great. And I guess when you're looking, I know people have asked you about this quite a bit, but the technology is getting to the point where performs really, really well. Over the last several generations, we've seen big reductions in stroke, big reductions in mortality. Where can you continue to push the envelope with the core TAVR technology? Maybe you could just talk about some broader strokes about where the next-generation beyond this could go?

Well, we're not going to tell -- we're not going to say too much about what we have in the works. But suffice it to say, we think there are big areas of opportunity for improvement in transcatheter aortic valve replacement. And it relates both to the valve as well as the delivery system. It relates to the performance of the valve once it's implanted in the patient as well as to the operator experience. And so making this procedure teachable and scalable to physicians around the world with various tumor levels of experience in various different centers is a really high priority as we think about how to continue to grow this therapy longer term. We still think this is a $7-plus billion therapy by 2024, but it continues to grow beyond that. And so as you think about the technology enhancements that we could introduce to support this broader group of patents that could come with asymptomatic trial results as well as even potentially expanding treatment for patients who have moderate aortic stenosis, there's a huge opportunity. And so we're going to continue to invest in technologies to support that growth.

And speaking of the investments that you're making, I was wondering if you could talk a little bit more about capital allocation in this environment. How are you thinking about that differently? And can you speak to some of the different options that you have, and how you look to deploy capital over the next year or so?

Yes. Well, for capital allocation, I think you saw what we did in the first quarter, when we bought back $615 million worth of stock. We felt like it was an opportunistic time to do it. We still like share repurchase as a means of returning capital to shareholders, as well as eliminating any kind of dilution from stock option exercises by employees. So that's going to continue to be a high priority of what we do with free cash flow. In the area of M&A, it's still going to be important as a support for executing our strategy. It's not required for our strategy, but it's supportive. And so we're always looking for new technologies as well as intellectual property and experience that we can purchase. We have a pretty disciplined approach to M&A. We're primarily focused on tuck-in technologies to our existing portfolio of new development programs. And so most of the things we buy are small in size, sometimes we don't even report them, but we've got an active effort underway. And in fact, it's been helpful to have a pretty strong balance sheet through this COVID crisis because it means we can continue in dialogue with potential acquisitions, despite the interruption in our commercial business.

Right. Right. Yes. That makes sense. And very opportunistic with the stock purchasing. The other question I wanted to ask was, everybody knows you for TAVR, but you actually have a really nice Critical Care business, which has come a little bit into the spotlight because of COVID. So I was wondering if you could maybe highlight some of the key products there, especially ones that are seeing some increased needs and talk about how that Critical Care piece really fits into the broader Edwards story.

Yes, sure. And I don't want to overlook our Surgical Structural Heart business either, where we've got several new products that are just in the process of getting introduced, that will help fuel growth in our surgical business as well. But in Critical Care, Critical Care has been performing well. We originally expected that Critical Care in 2020 was going to grow 6% to 9%. Now we think it ends up looking more like a flat, plus or minus 5% a year, but it's going to be fueled by both capital products or no HemoSphere monitoring platform, combined with growth in consumable products that support patients who are getting treated surgically, as well as patients in the intensive care unit. So what happened in the last couple of months during COVID is, our products that go into use with patients who are getting surgeries, saw a steep decline in volumes. And meanwhile, we saw a sharp increase in demand for Critical Care products like disposable pressure transducers that are used in the intensive care unit. So obviously, those don't offset each other because our growth rate expectations now for 2020 are significantly lower than original. But you're right, Critical Care has benefited from this disruption. And more importantly, the way we think about it is, Critical Care has really been instrumental in helping some hospitals support the heavy volumes of COVID patients that came in, and we are feeling really proud of our ability to play a role in helping those patients get treated.

And just on -- to tack on to that, this is a good business in and of itself, but can you talk about how it strategically fits, and how you see this developing over time? Are there synergies with the core business, maybe some hidden one?

Yes. There may be -- I mean, there's not a lot of synergy between Critical Care and the rest of Edwards, but it's an important part of the company. We know the business well. It's a leader. We run it with a similar strategy in that we invest for long-term sustainable organic growth. And it's not a big consumer of capital. And we've got some exciting innovations in the pipeline. So while it doesn't have any necessarily strict synergies with the rest of the Edwards product lines, it's still an important part of our portfolio of technologies that we're offering to customers.

Okay. And then maybe with a few minutes, yes, we have left, I'd like to talk a little bit more about the margin structure and impact on margins, short-term to start. You did talk a little bit about that on the call, but it's really hard to pinpoint, given how fluid the situation is, the way that margins will be impacted over the next couple of quarters. Could you offer some thoughts on this year, just to help folks understand the major puts and takes? And then also talk about your margin expectation philosophy going forward, assuming that we do get back to more normalized growth next year?

Sure. Be happy to. So we were through our guidance originally, that we had originally set out for margins in 2020 for gross margin and R&D and SG&A as a percentage of sales. Originally, we had expected a little bit of an improvement in gross margins in the range of 76% to 77% in 2020. We thought R&D and SG&A as a percentage of sales were going to be in the 17% to 18% and 28% to 29% range, respectively, which would have given us operating profit or EBIT margins of around 30% to 32%. So like I said, we've withdrawn that guidance, but there's no reason why once revenues recover, we can't get back into that same margin profile that we had pre-COVID. And in fact, that's our plan. Over time, we're expecting that our operating margins creep upward slowly. We're going to continue to invest aggressively in R&D and in field facing resources and SG&A. But over time, we do expect revenue growth to outpace expense growth, and that's going to support our gradual expansion and operating margins to go. Again, that's not our top priority. Our top priority is investing for top line growth, not cutting cost to boost margins. But I think overall, we're expecting a really favorable margin profile as soon as we get through COVID and as the company continues to grow and scale longer term.

And then related to this COVID, do you see ways that you could do business differently going forward with regards to training, meetings, real estate, things like that? And could that actually be a material margin driver for you in the coming years?

Well, we do see opportunities to do things differently. And that's one of the silver linings as things like CMS agreeing that telemedicine could be reimbursed and actually encouraged in situations where patients can benefit from not having to come into the hospital or drive over to doctor's office. And so that's a kind of example of technology shift that could benefit the system longer term. I think we have gained experience in doing training, seminars for our hospital customers during this COVID crisis. So as practitioners have had more time in some cases, to invest in training, we've also invested time and resources in training them remotely. And so hopefully, some of those learnings and experiences can benefit us going forward. I do not think it's going to have any kind of material impact to margins, however.

Okay. Okay. And obviously, you're investing a lot in R&D and driving the top line with those -- the fruit of those investments. I guess, how would you expect the R&D spend to continue over time? Can you talk about that as -- ultimately, with a lot of large numbers, the TAVR market could slow a little bit. Where's the right level of R&D for the company longer term? And how do you make that decision as the market doesn't fall?

Yes. Well, and that's -- I think that second part of the question is probably the biggest driver, which is how do we decide how much we're going to spend. And the way we decide how much we're going spend is on really the size of the opportunity. If you would have asked 3 or 4 years ago, you probably did, what I thought the R&D as a percentage of sales would look like, I would not have guessed, 17% to 18%. And the reason why we've let it grow to that level is because we got such good preliminary results and feedback from the efforts we're making in transcatheter mitral and tricuspid therapies, where now we've got this portfolio of technologies that are all showing really good promise. And we decided that the right thing to do is to continue to invest aggressively in them. Longer term, are we at 17 -- 18% or something lower. It remains to be seen. But as I mentioned before, we do expect that revenues are going to outpace investment in R&D. And so that should show -- eventually, that ratio should come down a little bit. I think that it's also important to keep in mind just in terms of the composition of R&D investments, most of it still goes to TAVR. I'd say the biggest consumer of R&D resources is TAVR, followed increasing closely by TMTT. And within R&D, about 2/3 of our spend is to support just internal development, 1/3 is to support clinical trials. And so you'll see the R&D spend shift and the composition of the R&D spend shift as different trials start and finish.

Right, right. Okay. That makes sense. And then we have just a couple of minutes left. I'll ask one more, kind of big picture question. I guess I was wondering when you get questions from investors about the different areas of the portfolio or the pipeline, what's 1 or 2 areas that you feel like are really under focused on that you're excited about, you think could be the hidden gems in the portfolio or in the pipeline, that could be growth drivers for customers?

Yes. I mean, I'll invite Mark to chime in here as well. I feel like we've done -- we've tried to do as good a job as we can at illuminating what's coming in terms of the development pipeline. And I feel like we -- there's a pretty good understanding of what we have in our different business units. But Mark, do you want to hit on any highlights?

Yes, Scott, I'd also maybe just add SAPIEN Ultra. I think, obviously, I think we've mentioned coming off of the first quarter call that it accounts for about 30% of our mix now. But on track to become, we think, the workhorse valve as we progress, seeing really good response from the physician community there, very happy with some of the PBL dynamics there as well. And so Matt, when you talk about underappreciated aspects of the story, I think I'd even put that on that list as well. In terms of things that we have in the pipeline, we've talked a little bit about Harpoon and getting CE Mark approval there in the first quarter, excited to begin the commercialization of that as we look out over the course of this year. And some of the focus that we're doing in Critical Care as well, with respect to predictive analytics and artificial intelligence, also something to keep an eye on that I think, maybe a little underappreciated, albeit early still, but something to look for down the road.

Great. All right, guys. Well, thanks so much for all this time and feedback, especially when I know there's a lot of demands on the business. We really appreciate you spending time with us, and I know investors on the line do too. So I just want to wish you the best of luck as we move through a challenging year. And thanks, and we'll hope to talk to you soon.

Yes, it's our pleasure. Thanks a lot, Matt. Thanks, everyone else, for joining.

Thanks, Scott. Thanks, Mark.