Nephros, Inc. (NEPH) Earnings Call Transcript & Summary

Good day and welcome to the Nephros First Quarter Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Kirin Smith. Please go ahead.

Good afternoon, everyone. This is Kirin Smith with PCG Advisory Group. Thank you all for participating in Nephros' first quarter 2020 conference call. Before we begin, I would like to caution that comments made during this conference call by management will contain forward-looking statements regarding the operations and future results of Nephros. I encourage you to review Nephros' filings with the Securities and Exchange Commission, including, without limitation, the company's forms 10-K and 10-Q, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements. Factors that may affect the company's results include, but are not limited to, its ability to successfully, timely and cost-effectively develop, seek and obtain regulatory clearance for and commercialize its products and services offerings; the rate of adoption of its products and services by hospitals and other health care providers; the success of its commercialization efforts; the effect on its business of existing and new regulatory requirements; and other economic and competitive factors. The content of this conference call contains time-sensitive information that is accurate only as of the date of the live call today, May 6, 2020. The company undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call, except as required by law. I would now like to turn the call over to Daron Evans, Nephros CEO. Daron, please go ahead.

Thank you, Kirin, and good afternoon, everyone. Welcome to Nephros' first quarter 2020 earnings conference call. This is a very unusual time for everyone. I want to thank all the frontline health care workers and all those providing the essential services that are keeping us all fed and safe while putting themselves at potential risk. It's unprecedented. Today, we're going to run the call a little differently. I will not spend much time talking about the first quarter. Instead, I will talk about our view of what might be the new normal. I'll then turn the call over to Dr. Kimothy Smith, Vice President of our Pathogen Detection Systems Group, who will spend a little time talking about his team's work and some of the main issues buildings will face as we try to get America back to work. Dr. Smith will then turn the call over to Andy Astor, our Chief Operating and Financial Officer, who will do a deep dive into our Q1 2020 operating results. Overall, Q1 2020 revenues were up 43% versus the year before. Q1 generally provides a very clear view into our base business as the first quarter of the year is generally not a time where many outbreaks occur due to colder weather, and this was no different. We're pleased with the 43% revenue growth but did take note that only 8% of our Q1 revenue was from new customer sites compared with the prior average of 30% to 40%. We look at this as a leading indicator of a coming change in customer prospect priorities due to COVID-19 and began to realign some of our activities, thus. As we moved into the second quarter, we identified a few key risks that needed to be addressed to ensure our ability to maintain our high-growth momentum. First, because we manufacture our medical device ultrafilters in Italy, the location of the first non-Chinese hot zone, we were very concerned about potential supply disruptions. To mitigate that risk, we increased our order sizes and added about $1 million of additional inventory to manage through what could have been up to a 6-month shutdown. Thankfully, to date, our Italian partner has been able to manage through the crisis. We've had no significant shipment disruptions. Second, we recognized, as did others in our industry, the risks associated with stagnant water in the pipes of office buildings, hotels, dormitories and other buildings that have had less than usual occupancy over the last few months. Stagnant, warm environments are natural breeding grounds for waterborne pathogens. To that ends, we accelerated some of our pathogen detection research and expect to release a white paper in the coming weeks comparing the building bacterial biome of an unoccupied building to that of an occupied building. This is a real risk, and we're working to understand more. Third, we recognized that our customers would need to be singularly focused on their COVID-19 response programs and that Nephros products, while still critical to their infection control programs, would take a back seat for a period of time. Accordingly, we shifted our focus towards the next steps in the life cycle of this crisis. Among other focus areas, we're using our time to run more experiments to bolster our pathogen detection program. We've made great progress in our DialyPath system, which is designed to provide real-time endotoxin level estimates for dialysis clinics. We've also made significant progress on our SequaPath system, which is designed to provide a bacterial census of a building's water system, an estimation of a building's bacterial biome, from a database of over 20,000 different bacterial families. We'll soon be releasing the white papers on these different results from these 2 systems. Before turning the call over to Dr. Smith, let me provide a quick update on our hemodiafiltration system program. We are still on target to file the Special 510(k) this summer. We are currently in the process of manufacturing the systems and disposables that will be used for the last steps before completing the regulatory package, the verification and validation testing. Thus far, we have not had any COVID-related delays in this project. We will hopefully continue to avoid delays in this process, but we'll be using contract research firms to perform some of the testing as we finish the program, therefore, could be subject to their timelines. Now I'll turn over the call to Dr. Smith, who will talk more in detail about the most recent analyses we're performing to better understand the microorganisms around this.

Thanks, Daron. It's my pleasure to be on the call today and to discuss a bit about our line of pathogen detection products: PluraPath, DialyPath and SequaPath. First, let's talk about PluraPath. PluraPath is a mobile, quantitative polymerase chain, that is qPCR, waterborne pathogen detection system that could provide on-site, actionable data to infection control teams on up to 15 different pathogens in under an hour. PluraPath allows our customers to understand the breadth of waterborne pathogens in their premise plumbing systems, not just Legionella, but Pseudomonas, non-tuberculosis causing Mycobacterium, Burkholderia and many others. These pathogens are major concerns for certain segments of the population and are associated with HAI's, hospital-acquired infections. PluraPath is also appropriate for identifying pathogens in cooling towers, which are external to building plumbing systems. Cooling towers have been a difficult case for PCR-based methods in the past because of heavy metals and other substances causing inhibition of the test. We have developed a rapid, enhanced sample preparation kit which removes the inhibiting compounds but retains the DNA needed for the PluraPath testing protocol. Our second pathogen detection product, DialyPath, will be released later this quarter. DialyPath is designed to provide real-time endotoxin levels estimates for dialysis clinics by detecting and quantifying endotoxin-producing gram-negative bacteria. In simpler terms, this means that DialyPath can identify bacteria which can cause inflammatory reactions before they impact patient health. The DialyPath system is extremely sensitive and specific. It can detect levels of gram-negative bacteria as well as 1 bacterium per 100 mls of dialysis water or about 1 trillionth of a gram of endotoxin per milliliter of water. And it can provide the specific identity of the predominate bacteria in a water sample. The third product in our pathogen detection roster is SequaPath. This will be released later this year and will provide a window into the true microbial diversity in a building's plumbing system. SequaPath extends the technologies of PluraPath and DialyPath with the power of rapid, targeted DNA sequencing. It will provide an opportunity to understand the microbial community dynamics of building biomes. As Daron mentioned earlier, there are risks associated with stagnant water in unoccupied office buildings, hotels, dormitories and other buildings that have had little or no occupancy over the last few months. We're collecting water samples now and expect to write a white paper in the coming weeks on this topic comparing the bacterial signatures -- the building bacterial signatures in unoccupied and occupied buildings. We are working to understand the potential risks of stagnant building water from a holistic perspective rather than through the lens of a single pathogen. I'm now going to turn the call over to Andy for a financial overview.

Wait a minute. I apologize. I am back. Can you hear me now?

We can.

Yes. Please go ahead.

I'm so sorry about that, everyone. Thank you, Kimothy. I will now provide a look at our financial results for the first quarter ended March 31, 2020. And I'm very pleased to kick that off by reporting our 15th consecutive quarter of year-over-year net revenue growth with an average growth rate of 62%. Nevertheless, as Daron outlined, we have seen significant changes in customer priorities, and early Q2 has been a slower than -- has seen a slower-than-planned start, particularly with respect to new customer acquisition. As Daron pointed out, about 8% of our revenue in Q2 was from -- I'm sorry, in Q1 was from new customers rather than the normal 30% to 40% that we see in a quarter, which, of course, we attribute to the COVID-19 outbreak. Nephros reported net revenues in the first quarter of $2.5 million compared to $1.8 million in the same period last year, an increase of 43%. Now over 99% of these revenues were generated by the Water Filtration business segment. And net loss in that segment was $0.6 million compared to $0.8 million in 2019. Adjusted EBITDA in the segment was negative $0.4 million compared to negative $0.3 million in 2019. Please refer to today's press release for more details about the calculation of adjusted EBITDA and its reconciliation to GAAP net income and loss. Additional information about our Water Filtration and Renal Products business segments and their operating results can be found in today's filing on Form 10-Q. Also, beginning with today's report, we are recognizing our Pathogen Detection business, which Kimothy runs, as a third business segment within Nephros. On a consolidated basis, net loss for the quarter was $1.1 million compared with $1.3 million in 2019, a 19% improvement, while consolidated adjusted EBITDA in the quarter was negative $0.8 million compared with a negative $0.9 million in 2019, a 7% improvement. Cost of goods sold in the first quarter was $1.0 million compared with $0.8 million in 2019, an increase of 35%. Gross margins in the first quarter were 59% compared with 56% in 2019, and we expect future gross margins to continue in the 55% to 60% range. Research and development, or R&D, expenses in the first quarter were $0.6 million compared with $0.8 million in 2019, a 26% decrease. Depreciation and amortization expenses in the first quarter were $46,000 compared with $50,000 in 2019, an 8% decrease. Selling, general and administrative, or SG&A, expenses for the first quarter were $1.9 million compared with $1.5 million in 2019, an increase of 30%. And our cash balance at the end of the quarter was just about $9.0 million. I'd like to stop for a second and take this opportunity to briefly highlight the charitable efforts of our own staff, led by Michael Milman, our Vice President of R&D. And working with personal funds from the Nephros team, Mike and his team, his staff worked tirelessly to import thousands of NIOSH-certified N95 masks, which they then donated to more than 20 health care teams in the New York, New Jersey metropolitan area as well as other geographies in the United -- throughout the U.S. In closing, we remain resolute about staying strong during this extraordinary time and remain very excited about our future growth prospects. And we look forward to seeing many of you virtually at financial conferences this spring and at our Annual Meeting, which will be held virtually on May 21. More details will be released soon. In the meantime, please always feel free to contact Daron or I directly at [email protected]. And this concludes our formal presentation remarks. I would like to personally thank all of our stakeholders for your continued support and look forward to speaking with you again soon. We'll take questions from the audience now and also answer e-mailed questions as we can. Operator, please open the call for questions.

[Operator Instructions] And we can take our first question from Howard Halpern of Taglich Brothers.

Congratulations on the quarter, guys. Good work during this tough environment. First question, I guess, is in regards to -- I know you talked about the mix with new customers, but what do you see or what do you anticipate seeing in terms of lead time as your distribution network gets back to, I don't want to say more normal, but I think you understand what I mean. Are you going to have a good lead time as to when they're going to start shifting around and the environment starts shifting?

When you say lead time, are you talking about the time to close the sale?

Well, no. In terms of them making the shift to where they might go -- circle after -- going after new customers again, expanding their...

I'm sorry, yes. I think that the lack -- the reduction of new customers is just a direct result of the fact that everybody's got their heads down on the big problem, the 800-pound gorilla. And as soon as things return to, as you said, somewhat normal within our customers, infection control and waterborne pathogens and the identification of waterborne pathogens through our testing systems remain a super important priority. And so I think that -- I don't know exactly how long it takes for us to get back to normal, but we're certainly seeing some activity, some early signs of new activity. And we think it's coming, and how to quantify that, frankly, we're all -- none of us have done this before. We don't really have a way to project.

Okay. And in terms of as you start ramping up the testing, the pathogen detection side of the business, you have adequate ability to produce in this environment, I'll say it, the test kits, the kits that go into your device. Do you enough capacity for what you believe could be a potential ramp in sales of that -- of the testing?

It's a loaded question, Howard. We're -- yes, we have significant capacity. We're building bigger capacity right now in an internal manufacturing facility that we are putting up. And we think we're good for strong demand. But -- so we're planning on a strong first year for pathogen detection, let's put it that way.

And Howard, I would expand on that. We're making robotic capacity, which means we can almost implement scale, and we're clear on doing that, and we can scale in a very precise way. And long term, I've talked about this where we want to use our SequaPath and understand a building's biome and understand what are their problem mechanisms, the problem bacteria, and then create custom tests for people. And we need to be able to press print whenever they need to press print. So we're going after that.

Okay. So the SequaPath, is that going to -- is it the same distribution network you're going to use? Or are you going to expand on that? Since so many things have closed down, is there -- I don't know if it's -- like I said, is it the same? Or are you going to have to expand your distribution network -- distributor network?

So it really is the same. The beauty of this pathogen detection world is the same people that put their focus are the ones that organize and manage testing on-site. And so it's the same pipeline of people. And so, really, it's about educating our current water treatment and consulting network on how to use it and how to integrate it with their water management plans and then be able to just deliver it. And there'll be different levels of expertise in the field, and we designed PluraPath to be able to be done by anybody. My 12-year-old can do that. So we're trying to make PCR-level technology come to the masses.

Okay. And for the dialysis part of the testing, is that the same distribution? Or what I would think is people get back to the centers and the hospitals, they might be comforted to know that they're doing that type of test. So I don't know if it's easier to get that test into dialysis centers or dialysis part of hospitals.

So most of dialysis is run by 2 companies, right? And we have great conversations with both those companies, and they really run their own shop. And so it's not the same fragmented federalist-type system that the hospitals have. When you sell into DaVita or you sell into Fresenius,you sell to a few people that then touches all 2,000 or 3,000, whatever you have, sites. So it's a very different type of sell and doesn't need -- quite the same for them, but it is the same pipeline.

And one last one from me on -- it's sort of like a commercial side. I don't know if you are tweaking the commercial side a little bit given the environment, but are you able to go into like assisted living facilities and nursing homes now with, I guess, both the hospital quality and your commercial type of filters with their protection, I guess?

We actually sell to a lot of nursing homes now and generally during outbreaks because most of them are 1-story, 2-story facilities with mostly residential plumbing, which is pretty good about not going about them. But when they do, it's going to be cleaned out, and it's going to have time to get there. And so our current network of water treatment professionals goes to respond to those emergencies and [ wear the Nephros ] brand. They don't use that many -- the commercial [indiscernible], the paper, the scale for coffee and tea and Coca-Colas. As you'd expect, one of our markets is Las Vegas, and that's basically shut down now. We have our team roll through it. A change [indiscernible], but our expectation is that the longer the pause is, they may hold off a little bit, but when they turn back on, they turn back on right.

And we can now take our next question from Anthony Vendetti of Maxim Group.

I want to talk a little bit about your current clients and whether you've seen an increase in orders of your products for the current hospital clients that already have your product. Are they ordering more for different units like ICU, critical care, emergency rooms? And then as this plays out, as this pandemic continues to play out, how do you see the need for your business? We just finished up a big infectious disease conference yesterday, and we certainly believe that there's going to be a heightened awareness on all types of pathogens. So do you see the adoption rate either dramatically increasing, incrementally increasing in the long term?

Why don't I take the first part of that, and then maybe, Daron, you want to add. We are seeing ongoing purchases from our hospital customers and through our distributors. This is not a time where -- the last 8 weeks or so have not been times where we're seeing big increases because a big increase means a decision-making, and decision-making right now is all around COVID, which is an airborne pathogen, not a waterborne pathogen. So what we're seeing now is a lot of keeping the wheel turning but not changing the wheels a lot. So in the second half, in terms of what we see going forward, I think as you pointed out, Anthony, the -- I like to say there's a billion people who know the word pathogen today that didn't know that word 6 weeks ago. I don't know if my numbers are accurate, but I think you get the point. And so we do think that in the long term, this awareness of pathogens and their effect on the community is good for us, and exactly what that schedule looks like, we just don't know.

And that same new awareness is about PCR. I mean one of our challenges going into this was trying to educate folks on PCR being a standard of care that's possible. There's maybe 0.5 billion who know what PCR means now, especially the ones that have gotten the test. So that's now becoming -- if we thought the acceptance of PCR and the technology was going to take a couple of years, it just got fast forward. So the word PCR negative exclusion is something that we're not going to have to repeat and define, which is fantastic for our business and as well as people know the viruses and they know it's a big deal. From a filter world, there's not a lot of viruses that float around the water, but the ones that do, they migrate, and we're the only ones who got it. So that was a check box positive in the past, and that could become a leverage point in the future. So this -- at the end of the day, the world will be more knowledgeable about small things that hurt you. And we make things that help you see the small things and help up with all things. So it's probably going to be a net positive, but we can't characterize that so much now.

Sure. Makes sense. And just a last follow-up question. Daron, you've spoken about the QSR opportunity. I would assume based on this pandemic that most of the decision-making around that has slowed and put on hold. But I would also think that at some point, it's not -- now in the near future, the pipeline for that business should also increase. Is that accurate on both fronts? Or if you could just comment on that, that would be helpful.

Yes. No, there's -- we believe there've been thought delays in that sector and then this whole group that's just kind of been turned off. But I also say that we're pretty comfortable that -- we talked about the [ whales ] in past that there's going to be -- we just had some success in that space this year. So we see that as a growth area. That hasn't changed at all. There might be a monthly delay into things, but it's still a good space for Nephros to be in, and it's a good complementary product for our other products. And there may actually be, to the last question, a lot more discussions that we could have with the QSRs in the world about their pathogen detection programs. So there's a -- that's one of those discussions we probably could have a couple of years from now once we are providing the service for a while, but it's promising [ room ] we can sell as well. So there's a lot of -- more opportunities for people who now might be more willing to discuss what small bugs do in a lot of different places that you didn't use to think about it.

And we can now take our next question from Bob Wasserman, Benchmark.

Congratulations, guys, on a good quarter and new products launches. Real quick, can you just give me a little color on -- you said you had 20% growth from new customers this year. Can you give me a little color on where -- what sectors that came from and maybe what groups did not, who did not close on new accounts and might do it later this year?

I'm not sure, did you say a 20% number, Daron, in the introduction?

Yes.

I didn't understand that.

You say that you usually have quite a bit of growth on new accounts, and you didn't see that this year. Are you [indiscernible]?

Yes. Yes. And that -- we attribute -- I mean in the first half of the first quarter, we saw normal growth of new accounts. And in the second half of the first quarter, we saw new accounts deeply depressed. And we took that as a leading indicator -- or an indicator, let's just put it that way, of hospitals and medical centers and care facilities that are -- that were in the middle of a sales process with us that simply had to turn off their attention. So we are -- instead of having our normal 30% or 40% of our revenues come from new customers, we had 8% come from new customers as a result of that.

Okay. And that -- so you're saying that the 8% was from early in the quarter and you expect maybe to kick back on that -- your typical path later in the year? Is it because -- I mean on the commercial side, are you seeing those same type of numbers? Are your commercial customers open at this point or not even open?

Our commercial customers for the most part are hotels and restaurants and chain stores. So I think you know the answer to that. So they're mostly closed. And that business was -- definitely took a hit in April just because they're just not open. But that's not -- what hasn't been the case on the medical side, which is 90% of our business.

We can now take our next question from [ Louis Snyder ] of [ Next Probe ].

Yes. I came in kind of late. Just interested knowing since the cruise liners are extremely depressed and minimal reservations, is there any area within the cruise ship lines that we could see some entrée with filters?

We've actually talked to some cruise companies in the past, and they've been scared about water for a long time because of a lot of literally newer virus outbreaks. And what they generally have is 6, 7, or 8 or 9 RO systems provide water and they do a lot of chlorine. If you've been on a cruise, which I haven't been in a long time, they tend to have that chlorine paste. So they take a lot of cautions and try not to have filtration. Where there might be opportunity is in the testing side. They want to do more thorough testing of their type, just as any building would, and not just because the crew ships would be sitting around for a while, but there's a -- every time a cruiser comes in and gets cleaned out, they may want to have a check. So that's a place where we can go look. It's a bandwidth thing. At some point in time, we'll see what we can do to get some entrance there.

[Operator Instructions] And we can take our next question from Scott Weis of Semco Capital.

Congrats on the quarter. I have a couple of questions. First off, I want to go back to the existing customers and new customers and just have a quick question. Over the last several quarters, you guys have grown revenues between roughly 60% and 90%. Can you break out the historical growth from existing customers versus new customers?

I don't have that handy, Scott. We could do that. But clearly, when -- if you just look at the last -- if you look at the 4 quarters of 2019, our average sales in -- our average sales were 63% existing customers and 37% new. So if that number goes from 37% to 8% in this prior quarter and yet our growth is 43% for the quarter, you can pretty much say that the growth for the existing customers is there and the growth for the new customers is not. That's sort of how I read the numbers.

Okay. Okay. In conversations with distributors, customers, sales, do you have -- are they giving you any visibility on when hospitals are likely to step back into the market and start purchasing? And then we're referring to new customers.

Everybody is trying to open as fast as they can. And hospitals are going -- are probably going to be a little conservative about it. So I don't think they're going to open tomorrow. Will they open on June 1 or July 1 or August 1, I just don't know. We'll just have to see.

Okay. Shifting gears to costs. Given the fewer flights by airliners, and if I'm not mistaken, you've historically gotten your product using airlines, have you changed how you get your product? And how is that -- and with fewer flights, how have the costs affected your SG&A line?

It's a great question and it's a thoughtful one. Thanks for asking it. The -- in the early days of the pandemic, in the March time frame -- you're correct, we do -- we have traditionally because our -- because of our growth rate, we've had to bring in our focus mostly by air, which is expensive. And in the month of March, those costs went up just because there were fewer flights. But happily, because we've spent the last 3, 4, 5 months building inventory pretty strongly, it's up from $2.5 million to $3.5 million this last quarter, we're now bringing most of our products over by ocean. So our costs are actually going down right now in the shipping where we can. And where we have an occasional strong need for a product, we'll ship it by air. But I don't think there's going to -- there's been a significant impact on the SG&A line there, except for maybe a small blip in late Q1.

Okay. Do you think this is going to be a permanent shift? Are you going to maintain higher levels of inventory going forward and, therefore, continue to use the cheaper, rather, transport ocean liners versus airlines?

We'll do that analysis. But certainly, we were looking for a way to transition to ocean before there was a global pandemic. That's one of the reasons we were building our inventory early. And so I do think that we will continue to try to optimize our costs on our shipping wherever we can.

Okay. And then last question on the testing side of the business. I don't think that you -- I don't think you've given guidance on revenue ramp for the testing. But can you give some visibility on when we can expect to hear more about commercial placements and that ramping?

The ramping of the testing products?

Yes.

Yes. That's actually why we broke it out as a business segment in Q1. So unfortunately, only a few weeks after we launched, the launch basically got canceled by the pandemic. But there was $18,000 worth of revenue in this quarter in the Pathogen Detection business. So you'll see that broken out going forward from now on. Did that answer your question?

And can you quantify what kind of feedback you got from the customers that were using it?

Yes. Qualitatively, just superb feedback. Really excited by what we've got. Intrigued, they like the depth and breadth. In other words, the specificity of the product as well as the ability to look for multiple pathogen simultaneously in one test. And the pricing of it seemed rational to them. And we -- in a couple of weeks, we had $18,000, $20,000 worth of sales. So very promising first couple of weeks.

And we can -- Kimothy is still on the line, so -- Kimothy, if you can give sort of a high level when you're at meetings, how do you feel? What questions are asked? Are we meeting the needs? Do you think we're going to fit in the market?

I do, and what -- yes, and one of the things that you said earlier, Daron, that your daughter can run the PluraPath system. People who were aware of qPCR were aware of PCR testing that happens in a centralized laboratory and never thought that they would be able to run it themselves on-site at a facility, and they're thrilled by having that power in their hands and being able to provide a really huge breadth of information and actionable information to a client. At least they have to wait minimum 24 but usually 72 or more hours to get, they can now get it within an hour. And the excitement that, that generates, the ability to look at bacterial in resident -- bacteria in residency and premise plumbing and localize where that is, do something about it in a matter of hours, that can mean a huge difference in terms of lives. So a lot of positive feedback from the field at this point.

If you look forward, say, 3, 4, 5 years or even beyond, which has bigger potential, the Testing business or the Water Filtration business?

Testing. No doubt. If you look at the markets, in general, if you look at Legionella testing, it's a global market, over $8 billion. If you look at water filters, it's -- the commercial side, it's sort of $2 billion, $3 billion. The numbers you see in the medical side has been smaller. To be able to do this, to do what people would tend [indiscernible] by the hundreds, [indiscernible] on-site, it will get faster and faster and more specific. So we talked about our ability to make a custom test for a building. If you've got a problem bug you've got to watch for, then really, you want to watch for that bug and maybe 2, 3 more. So we can increase the number of samples you can run at once. We can do things with variety of multiplex where we can customize. So our ability to, today, understand the building's full biome to the extent as possible with our process and be able to provide custom rapid tests, we think, will sort of change the game. And there's other companies out there that are starting to make their on-site Legionella test, but really, it's all about the biome. And there's a lot more than Legionella that makes people sick. And this is a way you can address it fast. And so we think -- and this is probably our major product that can go global. So that's -- not that [indiscernible]. It's the only one that's -- can be proven global. This was -- probably had the most opportunity to go quickly and meet the needs of a lot of places. We've got inbound calls from other countries already, people are doing water treatment, and it's a need to them. So...

[Operator Instructions] We have no further questions over the phone at this time.

Okay. Thank you, everybody, for joining us. In today's time, stay safe. [indiscernible]. And as we get America back to work, there'll be a new normal, but it will be a much more informed normal. And we'll do what we can to make everything -- water safe. Thanks a lot.

Thanks all. Bye-bye now.

This concludes today's call. Thank you for your participation. You may now disconnect.