RxSight, Inc. (RXST) Earnings Call Transcript & Summary

Good morning. Happy to kick off Day 4 of the JPMorgan Medtech conference in our med tech track. I'm Robbie Marcus, the medical device analyst. Very happy to introduce RxSight. We're going to have Ron Kurtz, the CEO presenting. And later in Q&A, Shelley Thunen, the CFO, will join us. Feel free to e-mail me or submit questions on the conference website. Otherwise, Ron, I'll turn it over to you for the presentation.

Well, thank you, Robbie, for the introduction, and good morning to everyone. These are forward-looking statements. And these are the key takeaways that we hope you get from this presentation that our experienced team has led innovation in private pay ophthalmology for over 20 years, that RxSight is targeting a large and growing multibillion-dollar TAM based on the world's most common procedure, cataract surgery, that our proprietary technology is the first and only adjustable intraocular lens that can be customized after surgery to deliver the highest quality vision addressing major shortcomings of other premium IOLs. That we have a readily understood value proposition, one that is based on both better medicine and better business, and then we are building a high-growth, high-margin financial profile, leveraging a razor-razorblade commercial model. The core RxSight team came together in mid-2015, following the first institutional investment into the company. Over the last 25 years, members of our team have collaborated on some of the most important innovations in ophthalmic private pay market, including the development and commercialization of LASIK, All-Laser LASIK, premium IOLs and laser cataract surgery. This includes 2 companies, ICO founded and led [indiscernible] and Lensx Lasers, collaborating with Shelley Thunen, Eric Weinberg, now or our Chief Commercial Officer; and Ilya Goldshleger, our Chief Operating Officer at RxSight. For those of us who have spent our careers in ophthalmology, the market dominance of cataract surgery is well known. Cataract affects about half of those 60 years old and over as the natural lens becomes cloudy over time, leading to light scattering and reduced vision, in most cases, impacting both eyes. Because of aging populations, particularly in developed economies like the U.S., the number of eyes with cataract is growing. And while cataracts can temporarily be managed with glasses, most people eventually undergo surgery to remove the clouded natural lens and replace it with a clear plastic intraocular lens, or IOL. Cataract surgery is the most common global surgical procedure, not only in ophthalmology, where it dwarfs corneal refractive glaucoma and retinal surgeries, but also across all other medical fields. It is, therefore, the foundation on which most ophthalmic practices have been built. For the past 15 years, patients undergoing cataract surgery have had a choice as to the type of IOL that they can select. The 2 broad categories being conventional and premium. Conventional IOLs, which have been used extensively for over 50 years, only replaced the spherical power of the natural lens and do not treat the common refractive conditions of astigmatism and/or presbyopia. Therefore, nearly all patients receiving a conventional IOL require glasses for best vision after surgery. Cataract surgery, with a conventional IOL, is a reimbursed procedure, with the surgeon fee paid by Medicare and other insurers now only a little over $500, which includes all pre-op and post-op care as well as the procedure itself. In contrast, premium IOLs are designed to reduce the stigmatism and/or presbyopia, and therefore, provide the potential for reduced dependence on glasses after surgery. Importantly, with the premium IOL, doctors have an opportunity to charge more for the procedure to achieve better visual outcomes, something they are permitted to do under long-standing Medicare rules. The surgeon still receives the approximately $500 surgical fee, but they also charge and receive an additional payment from the patient, ranging from about $1,500 to $6,500, depending on the type of IOL used and local market factors. Typically, about 1/3 of this payment covers the additional cost of the premium IOL and about 2/3 remains with the practice, providing a critical revenue source as conventional reimbursement payments have fallen. Of note, patient pay procedures are well established in ophthalmology with LASIK being the best example. In 2021, nearly 30 million global cataract procedures were performed, which, due to aging demographics and increased access, are projected to increase to nearly 37 million by 2026. While premium IOLs represent less than 10% of the worldwide total, they are the fastest-growing segment of the market, with about 60% projected growth in volume and 80% in dollars over the next 5 years. Using the 4.3 million projected premium procedures and RxSight pricing, our total worldwide addressable market in 2026 would be approximately $4.3 billion. In the U.S., premium IOLs represented about 15% of total procedures in 2021, and are projected to grow to approximately 20% or over 1 million procedures by 2026, when they will represent over 60% of all IOL revenue at the manufacturer level. Now while premium IOL volumes have grown, it's taken longer than people originally thought it would given the potential benefits to patients and financial incentives for doctors. We believe inherent shortcomings of the competitive premium IOL process is a major reason for this, since it forces doctors to predict which IOL work for a particular patient before surgery. They have to judge how much of a reduction in visual quality of patient is willing to trade off in the form of glare, halo or loss of contrast to get more near vision. Next, they have to use measurements and calculations to try to predict the specific IOL prescription that a particular eye will require after surgery. However, the accuracy of these methods is modest, and patients are often left suffering after surgery with the consequences of a bad prediction, including residual refractive error, [indiscernible] glasses or worse that leaves them with visual side effects that can't be corrected with glasses. Unfortunately, there is limited flexibility to address these problems after surgery with these nonadjustable IOLs, often is necessitating a second surgical procedure like LASIK, which has generally provided at no additional cost to premium IOL patients. For this reason, doctors may not be motivated to perform the additional LASIK procedure, leaving the patient dissatisfied. The potential need to perform LASIK also limits the number of cataract surgeons likely to offer premium IOLs since a relatively small percentage of cataract surgeons perform and/or have access to LASIK. RxSight simplifies the preoperative and intraoperative process for both the patient and the doctor without the need for lengthy discussions about trade-offs. In fact, it progresses exactly like conventional IOL procedure, with no special preoperative or intraoperative measurement steps or tools. Approximately 2 to 3 weeks after surgery, the patient returns to the office for standard postoperative refraction. This is a normal process for cataract surgery patients and practices, with these refractions most commonly performed by technicians and optometrists. Instead of giving the patient a prescription for glasses, however, the refraction is used to program the office-based Light Delivery Device, or LDD, that will allow the doctor to change the focusing power of the Light Adjustable Lens, or LAL. The LDD procedure takes about 3 to 5 minutes, which includes setup by staff and approximately 30 to 90 seconds for the doctor, either an optometrist or an ophthalmologist, to deliver the light treatment. The patient can have up to 3 refractive adjustments after surgery, including the ability to go back and forth to customize the LAL. They will then undergo a final treatment to make the correction permanent. The LAL is the first IOL to deliver LASIK-level precision and is not associated with visual side effects such as glare, halo or loss of contrast vision. Because of this, it is applicable to a wide group of patients, including those who might not otherwise be good candidates for premium IOLs. It is also accessible to more doctors, for example, those who don't perform LASIK, and therefore, are less likely to offer competitive premium IOLs. The RxSight technology that enables postoperative adjustability is based on the principles of photochemistry. When a specific pattern of UV light is delivered to the LAL, it induces photopolymerization of shorter polymer chains called macromers in the portion of the lens that is exposed. While these are illustrated in this cartoon as white specs, they are, of course, transparent in the lens. Over the next 24 hours, macromers from other areas of the lens move into the exposed volume, resulting in a precise refractive change. As I noted before, the process can be repeated several times over a period of about a week until the patient and the doctor is satisfied and the entire lens is polymerized to provide a stable long-term correction. As you may imagine, this technology is highly proprietary with a large intellectual property portfolio. The RxSight LAL has several advantages versus other premium IOLs that allows it to deliver much more precise visual results. First, the treatment is based on the actual refraction after surgery not a prediction made before surgery. Next, it corrects using the same increments used to prescribe glasses, which is twice as precise as other premium IOLs. The LAL also corrects down to a half diopter of astigmatism, while leading premium IOLs, which show little to no benefit below 1 diopter. Finally, using a golf analogy, the LAL does not depend on a single tee shot, but gives the doctor a chip and a putt to get the patient where they want. The advantages -- these advantages are demonstrated in this comparison of clinical data across different FDA studies. The LAL delivers a much higher percentage of eyes with excellent visual acuity 20/20 or better and dramatically fewer eye with uncorrected visual -- with lower uncorrected visual acuity compared to competing premium IOLs. Because doctors can precisely control the level of postoperative astigmatism, sphere and esotropia, which is the difference in sphere power between the 2 eyes, and because the LAL provides a broad and depth of focus, about 80% of LAL patients choose to customize vision in both eyes using an adjustable version of blended vision. In this method, one eye is corrected for distance and intermediate and the second eye is set for intermediate and near, thereby providing excellent visual outcomes at all distances using both eyes. Highlighting the advantage of customization, we also see that in more than 50% of cases, doctors and patients actually change their refractive goals during the course of treatment. So if a patient sees better with a little bit more power in the near eye, that can be added with the next LDD treatment, which the patient can then trial and adjust again if needed. Using this customized approach, patients achieved excellent vision at both distance and near at about twice the rate of the leading multifocal IOL, again, without the visual side effects of glare, halo and loss of contrast vision that are associated with all such lenses and which compromise the patient's visual quality. The RxSight system also provides a compelling better business message with an attractive ROI for the LDD as well as the potential for ongoing increases in practice revenue. The results of this third-party study demonstrate how RxSight enables practices to build their premium IOL business. The study found that approximately 1/3 of LAL procedures came from patients who would have otherwise received a conventional IOL, and therefore, would not have generated any additional practice revenue beyond the standard reimbursement. Another 1/3 came from patients who were upgrading to the LAL from lower price competing astigmatism-correcting IOL procedures, which typically leads to a twofold increase in revenue. Finally, the remaining 1/3 are patients who otherwise would have received multifocal IOLs. These are patients who want excellent vision at all distances, but may be concerned about the side effects of glare, halo and loss of contrast. Although this latter group has the smallest pricing differential compared to the LAL, more happy patients and fewer unhappy ones are obviously a key to future referrals to the practice. On average, each LAL case increased net revenue by over $1,600 at these practices. Taking into account their LAL procedural volumes results in a payback of the LDD cost in about 5 months. The study also looked at the ROI for practices with lower national average pricing, finding a 17-month payback on the LDD, assuming only 6 implants usually just 3 patients per month. In summary, it's a combination of higher pricing and expanded premium patient pool and enhanced referrals that drive practice revenue and profit gains for RxSight practices. RxSight's initial focus is the U.S. market, which, as noted earlier, is the largest premium IOL market, with well-established private pay mechanisms and highly incentivized doctors, which -- but which is still underpenetrated. From our previous experiences, we also know that rapidly developing best practices in the U.S. lays the groundwork for future expansion globally. We believe our business model is set up well to convert this large opportunity while leveraging established practices. We sell the LDD to physician practices for approximately $125,000, which is a relatively low amount in the context of what ophthalmologists are used to paying for equipment. For example, this is about 1/5 of the cost of the equipment required for LASIK. The LDD can be financed via a third party so that revenue from just 1 or 2 LAL procedures can cover the monthly charge. Like all premium IOLs, LALs are consigned at the ambulatory surgery centers, where most cataract procedures are performed and are billed at the time of the implementation at approximately $1,000 each. There are no other procedural charges. So again, it's quite simple for customers to understand. Since we began commercialization in mid-2019, and despite being under COVID for most of that time, we've seen a progressive growth in our installed base and increased LAL utilization. Our recently announced Q4 results demonstrate a continuation of that trend, with 45 additional LDD sales and nearly 3,000 LAL implants. This brought 2021 LDD sales to 114, more than double our installed base at the beginning of the year, with total procedures for the year climbing to 8,300 and total revenue to approximately $22.6 million. Moving forward, we continue to see near-term growth driven by expansion of our U.S. commercial team and installed base, with additional technology advancements and international expansion driving longer-term growth. We are on track with our previously announced sales team expansion, with 18 LDD-focused and 13 LAL-focused sales team members now on board compared to just 6 LDD and no LAL-focused sales team members less than 6 months ago at the time of our IPO. We know from our previous experiences that technology innovation is also critical to continued market penetration, and we have been able to leverage our complete engineering and manufacturing control of all components of the RxSight system to rapidly introduce improvements which ultimately drive increased utilization and adoption within our practices. Our most recent technology advanced called ActivShield was fully rolled out in Q3 and has been a major catalyst to continued growth in Q4. This advance reduces dependence on UV protective glasses before the final LDD treatment, providing peace of mind and scheduling flexibility for doctors and patients. It also sets the stage for additional technical and labeling approvals, which we believe will drive further adoption over the next several years. We are approved in Europe -- while we are approved in Europe, COVID has had a more significant impact on practices there, and we will likely continue to wait for improvements in these conditions while initiating steps for regulatory approvals elsewhere, particularly in the large countries in Asia. Leaving you, again, with these key takeaways about RxSight, an experienced team that has led innovation in private pay ophthalmology, a large and growing multibillion-dollar TAM based on the world's most common surgical procedure, a proprietary technology that can customize vision after surgery to deliver the highest quality vision, readily understood value proposition based both on better medicine and better business and a high-growth, high-margin financial profile based on a razor-razorblade commercial model. Thank you very much. And with that, happy to turn it back to you, Robbie.

Great. Thanks, Ron. Maybe we could start with the news you put out this week on fourth quarter. You put up better results than what the sell side had expected. Maybe walk through some of the trends you've seen through the quarter, doctor receptiveness to the new technology and everybody's favorite topic, how much, if any, did COVID play an impact in the quarter?

Yes. I think that the trends that supported Q4 were also in play in parts of Q3. We've been, as I mentioned, expanding our sales force, which is -- particularly our LDD-focused sales force. That definitely has had an impact. General awareness of the Light Adjustable Lens technology, of course, is growing as we grow our installed base. So that also has an impact. And then finally, as I mentioned, ActivShield, which we introduced in Q3, but all new customers in Q4 received, has also been a key driver. With respect to COVID, I think that ophthalmic practices generally have been somewhat protected from the effects of COVID because most of the surgeries were all -- practically all cataract surgeries are performed in ambulatory surgery centers. So they're not sensitive to the -- what's going on in the hospitals. And practices generally have figured out a workarounds for COVID. Now with respect, obviously, to the more recent upsurge in cases from Omicron, that happened relatively late in the quarter, and we didn't necessarily see an impact from that since cases have largely already been scheduled. But of course, it's early in Q1, and we're still watching that. Shelley, do you want to add anything there?

No. Thank you.

So this is a potentially disruptive technology moving into these ophthalmology clinics. So maybe spend a minute, and for people on the call, walk us through what the -- how different the treatment pathway is? What are some of the differences upfront, there's a capital component, which others don't have, but then also really spend a minute on the benefits that are tangible to the patient straight out of the surgery? And how RxSight is different and better than what's available right now?

Yes. So the distinguishing features of RxSight is one that we provide the highest quality of vision for patients. And we do that because we can customize the vision for that patient -- the doctor can customize the vision for that patient after surgery. So from a process standpoint, the cataract surgery and the preoperative portion of the cataract surgery is essentially identical to a conventional IOL. The lens is implanted as a -- and it looks and feels like a conventional IOL. So there's really no changes to the normal process for the cataract surgeon or their staff. It's postoperative that there is a change. That's when patients are coming back to the office as they normally would. But instead of just being left with the refraction that they have, they can have that refraction modified with the Light Delivery Device. And there are 2 real benefits to that. First is that we can have a much more precise result at the end because, obviously, we see what the result was after surgery and then we can modify the lens to fit the desired refraction. The less recognized benefit is that we've now introduced a patient participation in the process that did not exist before. And so the patient actually gets the opportunity to trial their vision usually in both eyes and make adjustments to fit their needs. Every patient is different. They have longer arms or shorter arms, they like to hold their phone closer or further apart. And this really, for the first time, gives them the flexibility to make those modifications essentially in real time.

And so there's 2 components here. There is the implantable LAL and there's the capital component, the LDD, which imparts the final prescription into the patient's eye. Two components, both did pretty well in fourth quarter. Maybe, Ron or Shelley, if you want to just walk us through what's the -- what's been the receptivity to buying the capital component? And what were the trends like both in fourth quarter and then feel free to take them to 2022? I know you haven't given guidance, but Street has a decent ramp-up. How do you -- do you think that enthusiasm remains beyond the early adopters you've gotten?

So maybe I'll take just qualitatively, and then Shelley, please come in. The reception continues to be highly favorable. Doctors intuitively understand that they -- that being able to provide a better result to patients is a benefit, not only to them, to the patient, but to their overall practice. The differences with our technology, as you pointed out, Robbie, are that there's a capital cost to the equipment, which doesn't exist for other technologies. Again, that can be overcome just by some of the data that we've generated with respect to the ROI. Doctors can be provided with how that will likely impact their own practices and that's a fairly straightforward calculation for them. And then there are some modifications to how the postoperative care is delivered. We have -- with our team, we have a group of members who are clinical trainers. And then we also have what are called LAL account managers. This is a new functionality that we added towards the end of last year. And these teams really work together to optimize the integration of our technology within the practice, taking best practices that some of the early adopters have developed over the last couple of years and really promulgating that to our -- all of our customers so that they can be successful from the get-go. Do you want to add anything there, Shelley?

Yes. Thank you very much. Typically, we do see the fourth quarter as being very strong. We do see seasonality in capital equipment and sometimes in procedures as well, very similar to other companies where we've had a piece of capital equipment and either in implantable or a disposable product thereafter. Typically fourth quarter is very strong from a capital equipment viewpoint as people take advantage of the year-end accelerated depreciation, and they're clear on what they have available in their capital budgets. So typically, we see a very strong fourth and second quarter, a little less in the first and third, just third in particular on vacations as well. But I will say that it's -- we have an installed base now of 206 LDDs. It provides us more reference sites. Since the IPO, we've increased our sales team from 6 to 31. We expect to add another 5 in the first half of this year. Our commercial team is primarily out in the field. We have close to 100 people on our commercial team. The vast majority who are in the field supporting our sales personnel and our new and existing customers, primarily clinical applications personnel. And so we feel like we're well set up for success in 2022, notwithstanding that, of course, we won't give guidance until we don't expect to give guidance until the first part of March of 2022 when we have our fourth quarter conference call.

Great. So Ron, you mentioned the some of the improvements to the technology that are able to filter out outside UV Light for a longer period of time than what you had previously. How much of an impact has this had just third quarter, fourth quarter? And how -- maybe just explain to us the benefits this adds to the patient experience?

Yes. So our technology depends on UV light to modify the power of the LAL once it's been implanted in the eye. Since there is, there are UV light sources mainly from the sun, the patients are -- have been required to wear UV protective glasses from the time of implantation to their last light treatment. With the addition of ActivShield, we've essentially implemented a UV shield on the lens itself. And so we've really reduced the requirement for UV protective glasses after surgery. We still recommend that people wear them. However, we have applied to the FDA for sequential removal of that requirement beginning with removal indoors, which we think will simplify instructions for patients and doctors as well. In terms of how that's been received by the field, very positively. Of course, customers who had -- who have already been using our technology greatly appreciated that additional peace of mind, not having to depend on patient compliance. Even though it wasn't a big -- we didn't have a significant problem with compliance, it's still -- it provides them more peace of mind and flexibility and scheduling follow-up visits for customers who are new to RxSight, that's how they've been started, and it's been certainly a positive reason for them to get into the technology.

Great, Ron. And this is one of the questions that came in here. But we hear a lot of your competitors out there trying to say they could do similar stuff, not exactly on UV adjusting lenses, but they have new lenses with extended depth of field range and getting rid of some of the side effects that the RxSight lens has been able to eliminate like halo and glare. So what are you seeing from a competitive response to the LAL? And anything out there that you think -- any comments you could give us on the competition, and what they're claiming versus what you offer?

Well, in some ways, I think that the general move towards less multifocality and -- is confirmation of our approach. That quality of vision is the most important aspect to the patient. However, with fixed lenses, lenses that can't be adjusted, you can only achieve a certain level of refractive precision. And what we've learned is that small differences in refractive results make a huge difference to visual quality and your ability to titrate the vision in both eyes to really deliver a quality solution. So unless somebody is willing to do LASIK on a very high percentage of their patients, they're not going to be able to achieve the results that they can achieve with the LAL. And they can achieve those results as just part of the standard procedure with the LAL, with the postoperative light adjustments that are actually part of the technology. So again, I think it's confirmatory of the general approach, but it's not going to be -- they're not going to be able to achieve the level of results that we are able to achieve with an adjustable lens.

Great. So let's spend a minute and walk through the profitability opportunity for these cataract surgeons. So right now, today, they bring a patient in. They charge on X amount of dollars. They put the disposable or they put the device, the lens in the eye and they're all done. And whatever the costs are minus the fee they were able to get is the profit. Walk us through how the RxSight profitability opportunity compares to what's out there today? And how that might be able to scale up or down with volumes compared to the competition?

So I might just tweak your premise a little bit in that it's not all done with the premium IOL after you -- after you've been planted into the eye. There have been some nice recent studies looking at the number of postoperative visits of a premium IOL patients compared to a conventional IOL patient. And it turns out that they're about double. So that the concept that a premium IOL patient is, do the surgery and you're done, you're not. You're dealing with the issues that, that patient typically has and that sometimes can involve the requirement to do LASIK, which, of course, is not charged -- is generally not charged as an additional procedure to the patient, but is incorporated in the global fee for the premium IOL. So with the Light Adjustable Lens, we've incorporated that optimization process within the technology. So of course, that does change the workflow, but most of that work is done by technicians and optometrists who are already in the practice. And so it can be done efficiently. And of course, our teams help the practices make that process efficient and optimized for patient in the practice. The key is in terms of profitability for the practice is how -- who is getting the Light Adjustable Lens. And what we see is that a significant percentage of patients who otherwise would not have gotten a premium IOL, because they wouldn't have been a good candidate, they might have compromised corneas or other ocular comorbidities that make them not a great candidate for a multifocal lens, they can be a great candidate for a Light Adjustable Lens. So we're actually expanding the number of patients who are now being moved into the premium channel. That's new revenue to the practice. The other group is patients who had otherwise gotten a toric IOL or astigmatism-correcting IOL, which is about half the premium market in the U.S., but toric IOL really provide modest benefit to patients, a little bit better distance vision, but it's hard to correct astigmatism with a fixed toric IOL. We provide about twice the number of patients who have better distance vision than a toric IOL. And then we also provide this ability for the doctor to titrate vision in both eyes and provide a great presbyopia solution. That means that we're providing more value and the patients can be charged more generally about twice as much as the practice is receiving for a toric IOL procedure. Those 2, plus the additional referrals from patients who are coming into the practice for Light Adjustable Lens technology really is the business -- better business message to the practice and results in the ROI that I described earlier.

Great. Shelley, maybe we could talk about the margin profile. Right now, it's a higher mix of capital to implantables. Implantables have a better margin than the capital component. You've talked about a long-term gross margin target of 80%. Maybe walk us through how you get there, and how far out it might be before you reach that target?

Thank you, Robbie. Today, our focus is in selling LDDs and they've represented between 60% and 65% of our revenue in 2021. And the reason for that is -- of course, is that until you have an LDD, you are not implanting the LAL. And so that's our short-term focus, while we also increased the number of LALs due to the number of customers and increased utilization. And as you said, the capital equipment has a very modest margin, that's very typical in capital equipment and then the implantable has a much higher gross margin. And part of the way we grow that is we will hit an inflection point where the LAL revenue exceeds that for the capital equipment. And of course, that will drive margins. But just as importantly, as we increase our volume with LALs, our cost goes down. And LAL has very modest labor, very little material and consists primarily of fixed overhead. And as Ron mentioned, we control all the manufacturing at our facilities and at least of the [ AHO ] . And we have enough capacity for the next 5 years. Of course, we would add personnel to do that and some capital equipment. So the cost of the LAL will go down as the volume goes up as well. And so that will create a lower cost as we go forward and that happens gradually as we increase our number of LALs. But I think we're a number of years out before we really get to the point where LAL revenue dwarfs LDD revenue. But we have the opportunity for gradual improvement in gross margins. On the other hand, we have a really strong quarter from an LDD perspective, that's good, too.

So let's move down the P&L a little bit to OpEx. This is not a type of business model where you have to do a ton of handholding from the reps. They're not there for every procedure. So maybe walk us through how you think about the investment needed upfront to grow your opportunity in the U.S.? And then what kind of leverage might you be able to see over the long run?

Yes. Thank you very much. As you all know, we are increasing our sales and marketing expenses considerably in 2021 with the addition of personnel to sell the product that will flow into 2022 because we did not have all those people in the SG&A expense during 2021, but you do get leverage as well. As you get more people out in the field, the territory that they cover is smaller so they can see more customers, and they don't travel as much. right? And so you get more leverage in your personnel as well. And so we'll start seeing that towards the end of 2022. We are still an R&D company. Ron talked a little bit about the major improvement we made to the product with the introduction of ActivShield in 2021. We'll continue to invest in sales and marketing and invest in clinical and regulatory as we start to do some work OUS as well. But this is an investment year in '21. Certainly in '22 as well, we're balancing the need for increased sales and marketing with a maintenance of R&D.

Okay. Unfortunately, we're out of time here. But Ron and Shelley, thanks so much for the discussion today. And I hope you and everyone else has a great rest of your day.

Thank you very much for having us.

Thank you.