Merit Medical Systems, Inc. (MMSI) Earnings Call Transcript & Summary

Okay. We're ready. All right. Well, good afternoon, everyone. And my name is Danielle Antalffy, I am the U.S. med tech analyst here at UBS. Very lucky to have with us from Merit Medical Systems, CFO, Raul Parra. Did I pronounce that right, Parra?

Yes, you're good. Yes.

Yes. Okay. All right. So Raul, thanks for joining us here today.

Maybe we start off with the management change from earlier this year. Why is now the right time to appoint a President? And how do you expect Joe's role within the company to evolve, particularly as we think about Fred's retirement at the end of next year?

Yes. Look, I think Joe has been around for a long time. He's led different divisions at Merit. And I think it was -- it's a good opportunity for him to continue to develop. Obviously, there's going to be an internal succession discussion, and there's internal candidates and external candidates. And I think this gives Joe a good opportunity to kind of just get more responsibility.

Yes. Okay, makes sense. And while we're on the topic, what can you say about how the search for the next CEO is going? Do you expect this to be something that is final this year? We're getting close to the end of the year. Or is it more 2025?

No, I don't know. That's really a Board-level discussion. But I can tell you that the Board is actively engaged in the process. They've hired the consultants, and they're trying to do the right thing for Merit. Fred has obviously got another year left on his contract, and the search continues, I'm sure. And there's a lot of work being done there to make sure that they get it right.

Yes. Okay. All right. And the big story over at Merit other than the management changes are -- it's WRAPSODY, right? So let's talk about WRAPSODY, and can you share an update on WRAPSODY?

Yes. So the latest is, obviously, we submitted a PMA approval at the end of the second quarter. The clock continues to tick on that. It's 180 FDA days. And so we'll let that play out. I think our messaging is still the same. It could be as early as the fourth quarter, but realistically, probably Q1 of 2025 for approval. In the meantime, we continue to work on making sure our sales force is trained that they're ready for when the approval comes. We did submit for NTAP before the October 15 deadline. We'll participate in the December 11 panel discussions if there's any questions or things we can address there. And then once approval comes, we'll submit for TPT. And we should be kind of, probably third quarter of 2025, kind of hopefully have reimbursement in place or at least find out kind of where things are at. Subsequent to approval, we'll have an Investor Day or investor meeting, I should say, where we'll kind of hash out the commercial strategy and kind of what we think the market opportunity is.

Okay. Okay. Well, you already addressed my one question, and that was around the 3 different reimbursement pathways. And so it seems that that's pretty clear. So it sounds like -- will we have more visibility after this December 11 panel meeting as to what direction this is going?

I hope so. I mean we're pretty optimistic. But at the end of the day, we've done what we can do, and we've submitted our information, and we'll see how it plays out.

Okay. Got it. Some physicians we spoke with said economics and relationships drive utilization more than the data. What do you think about that?

Yes. I think that's just general in life, right? I mean, so relationships are everything. And I would say that we're hiring the right people. I think we're getting very competitive individuals as part of the sales team. I think we're pretty excited about the caliber of salespeople that we're getting. And so they have the relationships also. That sales force is already in place. So they're out there selling product right now that they're going to sell to these doctors, and they're building those relationships. So I think we're going to be okay.

Yes. Okay. And actually, I was remiss in even -- because some folks on the line might not even be familiar with the story and what WRAPSODY is. How do you frame the TAM? And once you launch, how do we think about the ramp contribution to sales growth?

Yes. I think that's probably the biggest question we're getting right now, and we haven't disclosed that quite yet. I think we're waiting to know the full story, what's reimbursement look like. I think that obviously plays into the strategy and what the market opportunity for us is. And so we'll continue to be patient, and we'll disclose what the market opportunity is, what the selling strategy will be once the approval comes. So we'll have an Investor Day that will cover all that stuff.

Okay. Okay, that makes sense. And as far as -- so first, you have to get the approval. But once you get approval, once you get reimbursement in place, are you ready day 1 to launch this? Or where are you on the supply side? It sounds like you've been building the sales force as well.

Yes, we've got the sales force in place. They're actively engaged in training and understanding the product. We sell this product OUS. So from a manufacturing standpoint, we're prepared for that. So there's no ramp rate or anything like that. They're actively looking at the forecast and making sure that we're ready for a launch. So I would say, yes, we'll be ready as soon as the product launches. Obviously, with reimbursement and VAC committees and all that stuff, there's obviously kind of a process that has yet to go through. But yes, we'll be ready when the product is approved.

Okay. Well, let's move on to some recent trends that you guys have been seeing in guidance. When you were here last year, a big market theme was at macro -- well, Fred was here, but macro headwinds. Now again, this year, it seems as if some of those concerns around macro weakness and potential recession have actually reemerged. What are your latest thoughts? And have you seen any impact to your customer demand year-to-date? Or how do you think about how we're setting up for 2025?

Yes. I mean I think things are definitely improving. I would say that there's still pockets of maybe what I'll call resistance, right? So supply chain, I'd say, for the most part, seems to be solved for. But there is little pockets here and there that continue to be slow. We ran into one of those for our OEM division in Q3. And so I think, generally, things are getting better. The U.S. market continues to be outshining and grow at a really strong clip. And so things are definitely getting better, but I would say that we're not completely out of the woods. And we'll see how it all shakes out here with a new administration and everything else that's going on.

Yes. I was going to ask if there's any -- like if you look at the new administration, tariffs are something that always comes up. I mean, how are you guys thinking about that? I know we have a lot to learn still, but...

Yes. Look, honestly, I have that question a lot, quite frankly. And my response was, look, I'm not really -- I'm obviously conscious of it. I try not to put too much thought into it. We've obviously been through a President Trump administration before and things are said. And I think sometimes, it's really hard to kind of decipher what is really being said and what will really be done. And so I think for us, we'll continue to kind of keep our heads down, be focused on the business. As soon as we get some concrete information as to what it really means for Merit, then I think we can react and then adjust the strategy if we need to. But for now, let's just keep our heads down and our legs pumping. That's all we can do.

Yes. All right. I like that. Okay. You did post 6% organic growth year-to-date through the first 3 quarters. This was off tough comps year-over-year. It seems like headwinds like China VBP, the OEM issue you talked about, have started to abate. Can you walk us through the performance so far for the year? What have been the key growth drivers? And then I have a follow-up after that.

Yes. Look, I think we've, I think, exceeded our expectations. As far as volume-based purchasing in China, it's come in as expected. But I think our team, our sales force has done an excellent job of executing at a higher level, and the volume has been stronger than anticipated. So generally speaking, we're pretty happy how China has developed and how they've performed year-to-date given the challenges with volume-based purchasing. On the OEM side, I think 2 different dynamics really that played out. The first half of the year, it was really a demand issue as customers destocked and level set their inventories. In the second half, it's a completely different issue. I think now the demand has really outpaced what we can handle. And so we're slowly getting -- there's 2 customers in particular that we're dealing with: one is Medtronic, and then there's another customer. And we think we've got a handle around it, and we're expecting 20% roughly growth or about 18% growth in the fourth quarter. So still strong -- pretty strong growth...

Of that OEM business...

Yes. Yes, OEM business. And then just generally speaking, U.S. continues to be strong. And I think we've done an excellent job this year just kind of executing.

Yes. So the guidance -- the updated guide for the year does imply Q4 decelerates. Can you maybe talk -- bridge us what that...

Sure. If you looked at our original guidance at the beginning of the year, the fourth quarter was really -- it hasn't changed much since then. It is soft. I think there's some tough comps out there. We've got some SKU rationalization that was a little heavier in the fourth quarter as people place their last-minute orders. We did take OEM down just given the supply chain issues that we're seeing specific to that division. But generally speaking, you've got the hurricane season that was still kind of out there. You got in the election change. You had the IV shortage and all that stuff that's going on. And so when we looked at the guidance, we said, hey, let's just leave it, it's the fourth quarter, we've got good momentum and then let's just kind of -- we'll start to kind of think about 2025.

So it sounds like there is pretty significant conservatism.

Yes. I mean I would say that we feel pretty good about the fourth quarter and our abilities to deliver.

If I could follow up on China. So you have outperformed year-to-date expectations. I know you aren't providing U.S. -- OUS guidance, but how durable are the volume and pricing trends you're seeing in China? And just how big is China for you?

So China originally, before volume-based purchasing, was at about 13% of our business. It's down to about 10% now. And most of that is really driven by the pricing dynamics. So look, pricing for us, we think we'll continue to deal with this through 2025. And based on the information we have now, we hope that we start to exit out of kind of the pricing headwinds in late 2025, early '26. And so we'll kind of be on the path to kind of what we hope is normalized growth. But look, we think the Chinese market is a great market. Aging population, health care is very important. We just kind of have to make it through these, kind of last few years have been pretty tough.

Understood. Yes. Yes, well -- and I mean, do you guys look at China as a double-digit growth market in general, not specific -- I'm not asking you to give you your guidance, but...

Yes. No, no, no. I would generally say that we think we can get back to kind of historical growth rates, which was pretty, I'd say, 10% plus.

Yes. Yes, okay. As far as VBP goes, are you expecting any delayed impacts in 2025? And when do you expect to fully lap these? It sounds like you're saying late '25, early '26.

Yes. I mean, look, I think the variability will continue from quarter-to-quarter. We still think we'll deal with it in 2025. And so yes, we'll -- there's products that haven't quite hit yet and that we think will hit in 2025, and so we'll deal with them as they come.

Okay. All right. Just a quick follow-up on OEM sales. So it was flat in first half, softer than you expected in Q3. Your guidance does assume pretty strong growth in Q4. Can you give a little bit more color on what's driving that reacceleration? And how much visibility do you have into that number?

Yes. And like I said earlier, I think the first half of the year was really kind of a demand issue. In the second half, we have visibility to the orders. We see the demand. That gives us a high level of confidence that they can hit those numbers. And so we did take down our OEM growth from 10% down to 7% for the year, still a solid number. I mean we still think we can hit somewhere around 18% growth for the fourth quarter. So we just need to be able to kind of deliver the product. And it's on us right now. So I feel much better when it's on us...

Yes, when it's in your control. Yes, totally. Okay. All right, let's talk about gross margins. You had originally guided to, I think, 50.5%, 50.7% in 2024. You actually, on Q3, came in a little bit above that range. So what can you say about gross margin? I don't think you gave an update to that initial guidance on the Q3 call.

Yes. We don't guide on gross margin, but I would just generally say that when we look at our LRP, our 3-year plan that we laid out, the primary driver of operating margin expansion is gross margin. So on the 20% -- 20% to 22% range that we gave for that LRP, 20%, most of it is gross margin; on the 22%, it's gross margin and some OpEx leverage. So I would say that generally, we're pretty happy with the way gross margin has worked out. We put a lot of effort into it to make sure that we can kind of continue to drive the expansion that we've seen this year. So really happy with the progress. I think our sales force has done an excellent job from a pricing and mix standpoint. And then our operations department, I think, is in the fight with all the headwinds that they've had to deal with. But I think they're doing the best they can to find the efficiencies and drive those through to the gross margin.

Okay. And that actually -- so as we think about WRAPSODY and the incremental investments made, have most of those investments, and thinking sales and marketing, things like that, have most of those investments already been made, so it's already in margins? Or is that still more of a 2025 when you launch?

No. So we did an acquisition last year of some angio-related products, and we created a renal therapies sales group. So the sales force is in place. Some marketing support is in there. We'll have some incremental expense next year, but it's nothing that's going to take us backwards. I think it's going to be -- for the most part, it's kind of fully baked in. And then just maybe point out that the launch of the U.S. WRAPSODY is not included in our LRP, right? So that will be incremental to what we do there.

Okay. Okay, got it. All right. Let's talk about 2025 in a little bit more detail. I mean, how should we -- what are the puts and takes we need to consider as we look ahead to 2025, appreciating you're probably not giving guidance today?

Yes. No, look...

You can if you want to, though.

Yes, no. I think the big thing to kind of consider is we've got a $15 million headwind that we're dealing with this year related to SKU rationalization that we did last year. So that will be behind us. I think OEM, like I said, the demand seems to have stabilized there. So I think we're looking forward to that. U.S. growth continues to be strong. We'll have to -- I think as far as maybe headwinds that I'm kind of thinking about, okay, well, what does Russia look like, right? What does that region kind of look like? What is the new administration? Is there tariffs? Do we have to kind of think about that? And how do we pivot or adjust quickly if we need to? But generally speaking, I think there's a lot of momentum in the business. We're excited about the WRAPSODY launch, and we'll just have to see how it all plays out here in the next couple of months.

Okay. And I'm going to ask the same question for margins because you do have some natural -- inflation is getting less bad. So it feels like there's some natural lift in margins, but just curious if you could do the same puts and takes.

Yes. Look, I think FX is going to play in our favor, I think, especially the Mexican peso with our facility. So that should help a little bit. To counter that, you've got obviously labor wage pressures. So hopefully, those kind of help neutralize each other. And then generally speaking, we're going to do more of the same when it comes to gross margin, and that's just throw the kitchen sink at it and hopefully cover any headwinds that might come our way.

Okay. Got it. All right, let's talk about the longer term. You brought up the LRP. You did introduce your 2026 continued growth initiative targets earlier this year. So maybe let's talk about some of these. You seem to be making good progress on these 2026 CGI targets. How are you feeling today as you sit here about the revenue, margin and free cash flow goals that you laid out?

I feel pretty good. Obviously, we laid out the 3-year plan. We laid out guidance for this year. We've revised guidance upwards twice this year already. So I think, generally speaking, we're off to a really good start. And I think we're right where we kind of want to be.

Okay. Okay. And then as far as the 5% to 7% CAGR organic growth target that you laid out, why is 5% to 7% the right number? What brought you there? Because you've actually been able to deliver higher -- ex COVID, you've been able to deliver higher organic growth. So...

Yes. When you look at our 10-year CAGR, it's roughly about 9%. So I think we get that question a lot. I think the best way to kind of -- that I can explain it is we're comfortable with the 5% to 7% that we think that that's a realistic and achievable guidance that we can deliver regardless of kind of what comes our way, right? And so I think for us, it's about making sure that our investors have consistency, that there's something that they can rely on. Obviously, we can't foresee everything, but we're pretty comfortable with the 5% to 7%. And so that's realistically allows us to kind of say no to things or pivot and make sure that we're -- we can still deliver the 5% to 7%.

And so that 5% to 7% reflects -- I'm sorry if this is a dumb question. Well, you mentioned earlier, WRAPSODY is not in that LRP.

Yes, that's right.

So that's incremental. Is that true of all product launches? Or do you...

No. Yes, so the 5% to 7% includes our kind of normal cadence of product launches, right? So it's a lot of singles, a lot of doubles, kind of incremental revenue that helps us kind of deliver that 5% to 7%.

Okay. And I guess we have to wait and see how big incremental WRAPSODY can be.

Yes, you'll have to hold on.

All right. Let's talk about margins in the long-term plan there. You laid out an operating margin goal of 20% to 22% by 2026. This is well 2 to 4 points above where you're going to be in 2024. Can you talk about -- but also over your last LRP period, you saw operating margin improvement of 400 bps. Can you talk about why you wouldn't see a similar level of operating margin improvement this time around?

Yes. Look, I mean I think when you look at what we did under Foundations for Growth, I thought it was pretty impressive, especially going through COVID and all the inflationary things. I don't want to take away from CGI, but there's obviously a level of investment that we kind of plan for, especially with the things that are coming our way with WRAPSODY and whatnot. And I think we've tried to be, again, realistic about what we've done. When you look at the incremental improvement that we'll deliver from when we started Foundations for Growth through the -- as we exit CGI or Continued Growth Initiatives, you're talking of almost 600, 700 basis points of improvement. And I mean I think it's better to look at it in that context than it is to kind of break up the 2 different LRPs and say, okay, well, why is this one better than the other? It's really kind of just a continuation of Continued Growth Initiatives.

Yes, that's fair.

Or Foundations for Growth, I should say. We already forgot the other name.

All right. What about gross margins, can you see gross margins improve year-over-year throughout the CGI period?

Yes, that's the plan, right? So we're building a best-in-class or we've built a best-in-class what I think a pricing department that's over contract management and contract compliance. Our sales force has done an excellent job of executing on the mix side of things. So those things are important. On the operations side, it's more of the same, right? We throw the kitchen sink at it. We're looking at logistics costs, supply chain costs, looking at our raw material input costs. Labor, we feel that that's going to continue to be a headwind. So we've factored that in. Hopefully, it's better and we'll have some cover there. But we'll look at transferring product lines to lower-cost areas. We'll have to pivot, I guess, if there's some tariff initiatives there. But I think that's the nice thing about throwing the kitchen sink at it is we know some things aren't going to work out. And hopefully, we throw enough at it that we can cover for some of those kind of shortfalls.

How much do you manufacture in China today?

We don't manufacture anything in China, but we do have facilities in Tijuana, right? So we'll have to see how that plays out.

Okay. All right. And what about sourcing goods?

Sourcing, very little, too, right? Now to the extent that our -- some of our vendors might source, right, and how that gets passed on to us, it's kind of -- we're all kind of connected. So we'll see how it all plays out. But very little -- I mean we've had little exposure to China historically. So I think that will continue.

Okay. All right. And then in CGI, the free cash flow, the LRP calls for at least $400 million. In free cash flow, I think you expect about $150 million or so this year. Should we expect that metric to improve linearly through the LRP? Or how should we think about the cash flow?

Yes. Look, we anticipate doing a minimum of $400 million. We're off to a good start this year. We do have a new distribution center that's going to be put up in Salt Lake next year. So we've accounted for that in that $400 million. So I think it will ebb and flow. And look, it's cash flow, right? So free cash flow, I mean that, just by its nature, is going to flow from quarter-to-quarter, from year-to-year. But nevertheless, the target is still a minimum of $400 million, and I'm pretty happy with how we've done this year, and it sets us up for a pretty good opportunity for that $400 million.

Yes. So let's talk about capital allocation priorities and how you're thinking about that over the next year or 2 years with that level of free cash flow you're generating.

Yes. Well, we've done a few acquisitions over the last year. The latest was EGS and then -- or I guess, EGS is one of them and then the latest is the Cook lead business, lead management business. And I think, hopefully, people are picking up on a theme here. The acquisitions we're doing are really to kind of stand up or maybe fill certain sales forces so that they can go deeper in the bag. And our product portfolio is very wide. And what we're trying to do with some of these acquisitions is now go deeper into the bag, deeper into the channels we're already in, the ones we feel really comfortable with and supporting those with sales forces that we think can scale those portfolios. So we've continued to generate free cash flow. We've got a pretty strong balance sheet, and we'll continue to preserve cash for any transactions that may come our way that we feel are strategic in nature.

Yes. You did do a few deals, as you mentioned, over the last year. So do you need time to integrate and digest those before doing any more M&A? Or do you feel like you have the bandwidth to...

Yes. No, that's a good question. It's one of the lessons learned from prior acquisitions, right? I think we understand that no matter how big or small the transaction is that it does take time to digest. And so I'm happy to kind of report that, obviously, the Angio acquisition we did last year, that's fully integrated and fully supported within Merit. Our EGS transaction, which happened earlier this year, we're fully manufacturing now at Merit. So that's fully integrated. Our sales forces, so the sales force we brought over from EGS and our endoscopy sales force are in training together. January 1, they'll start to cross-sell each other's products. We're already starting to see some of that. So I feel like we're at a good spot right now. And so that leads the Cook lead management system. We have a TSA agreement for 2 years. So I feel like we're in a pretty good spot right now to look at things if something comes our way. But we're very conscious about making sure that, one, it meets our CGI initiatives, right, that it's equal to or accretive to those plans; and that, two, we're very conscious about making sure we don't do too many things too fast and that we don't disrupt our sales force too much.

Yes. Okay. That makes sense. Do you have a financial criteria that you've laid out ever as far as M&A?

Other than the Continued Growth Initiatives plans, right, it has to be at a minimum of 5% growth CAGR, and it's got to be at a minimum of 20% operating margins.

Okay. All right. No, that's helpful. Okay. A quick question on just the growth drivers. And how much of your growth -- you mentioned pricing, you're doing some SKU rationalization now. How much of your growth in '24 was volume versus pricing? And I would argue more pure price than product mix benefit. And what's baked into that 5% to 7%?

Yes. So it's a great question and one that we kind of don't answer, right? But I would say that it's a good try. And generally speaking, volume continues to be the primary driver of our growth. And pricing is definitely going to be -- it's helping. And the way we look at it is we don't want pricing to ever kind of go back and be a headwind for us, right? So I think that's why we've made the investments we've made. And I think we'll let it kind of sit there.

Okay. Got it. And one follow-up I did -- I meant to ask earlier, the recent acquisitions you've made and integrated, that is included in that 5% to 7%. The cross-selling opportunities, all that is included in the 5% to 7%? Or is that incremental?

Yes, it's incremental, right? So there's -- the 5% to 7% is really organic constant currency growth, and anything we do above that would add to it.

Okay. Okay. If you have a question, you can ask it. Okay. All right. I guess we're coming up -- we have a few more minutes. But do you need any -- I'm sorry, are there other key growth drivers in 2025 and beyond that you can talk about that you think are important? Obviously, WRAPSODY is the big one, but...

Yes, WRAPSODY is one. I talked about the SKU rationalization, right? And I think it's more of the same for Merit, right, continue to deliver singles and doubles on the R&D side that help drive that growth, being focused on our international markets and continue to kind of invest and drive the growth in our U.S. market, which we've seen really good results.

Do you see any major white spaces in the Merit Medical portfolio that you think you could?

Again, I don't want to get -- we don't want to get too wide, right? We're already so wide. So I think the white spaces would really be about just going deeper within the bags and the portfolios that we have.

Okay. Got it. Is there anything we missed? What do you think is underappreciated about the Merit Medical story amongst investors?

I think generally, people -- I think the hard part is where does the growth come from, right? Because our portfolio is so wide and broad, and I think people don't want to take the time or maybe we don't do a good-enough job of kind of outlining where the growth is coming from. But I think if you go back historically, we got a strong kind of history of delivering high single-digit growth. And I think the 5% to 7%, again, is something that we think is realistic and achievable. But if we did what we did in Foundations for Growth, we should beat it. But for now, we're committing to the 5% to 7%. But yes, I think it's just kind of more of the same, right, just making sure that we're paying attention to what our customers are needing and that we're reactive. We don't take too long to make decisions.

Yes. The SKU rationalization, is that something you guys evaluate every few -- how often do you implement something like that?

Yes, I think it's a constant discussion at Merit, right? So there's 2 kind of versions of the SKU rationalization that we talk about. The first one is kind of the probably the pretty kind of common one, right, where we just kind of walk away from business or divest of something that doesn't make sense for Merit anymore. We've done 2 of those. One of them was at the beginning of Foundations for Growth, and now we did this last year's at the end of Foundations for Growth, the SKU rationalization for the PAC business in Europe. Those are kind of -- we typically hint at those before we start doing them. And then the second one, which is the one that -- the primary one that we really focus on is kind of the like-for-like products. So we launched a product, and historically, we just weren't very good at product life cycle management. And so just being better at that, making sure that, hey, if we introduce a refreshed product or a new product and we have a product that's been in our legacy bag that can be replaced by that new product or the refreshed product, let's do so, right, so that we can get the benefits of scale and volume in, hopefully, what is a better manufactured product than one that's priced to get a higher gross margin.

And you do have such a broad product portfolio. And forgive me if this is a dumb question, too, I'm newer to the Merit Medical story. So you do have such a broad portfolio. So is that the strategy? It's like how important is the breadth of the portfolio in winning in your go-to-market strategy?

Well, I think it's pretty important, right? And I think there's examples of companies that maybe have -- maybe got rid of their core business, right, and focused on the therapeutics only, and now it's hard for them to generate cash, right, that that's what was paying for everything. And there's also the other spectrum, right, where they didn't really get rid of their core products, but they really focused on the therapeutic side of things and kind of let the core product kind of fall to the side. And I think we've done a really good job, especially at Merit to recognize like, hey, those are -- they're both important, right? Just because we're focused on WRAPSODY, it doesn't mean that our legacy business isn't important. It's really what's funding everything. And the reality is when we look at the therapeutics that we want to get into, our legacy business is very complementary to it, right? So we have access products. We have delivery products. We have closure devices. Those all kind of go hand in hand. And so for us, we think we've created a really good portfolio that can help -- there's a lot of synergies within it. And so, yes, we're excited about it. Just making sure we balance it all out because it's really hard.

Sure. Sure, yes. I think it's always -- it's been a question for the last 5-plus years around bundling. And so is that something that you guys leverage and use? Or is that still not really...

It's still not really a thing for us, but I think we're definitely thinking about it, and we definitely have the product breadth to be able to do that, right? And again, I think it helps us with tenders because we have such a wide product portfolio that we can participate in a lot of things.

Yes. Okay. All right. Anything I'm missing?

I think that's it.

All right. We still have a few minutes or 45 seconds.

A few minutes? Well, I think we should go enjoy the sun. How about that? I mean I think we've all had enough.

I still have 2 more fireside chats. So you have fun in the sun being here...

Yes, I'll have fun in the sun. I'm going to head home. It was nice talking to you.

All right. It was so nice.

Yes, it's great. Thank you.

Thank you.