Teleflex Incorporated (TFX) Earnings Call Transcript & Summary

Thanks and good morning, welcome to our next session. I'm Matt Taylor, the UBS U.S. medical supplies and devices analyst. And I'm joined by management from Teleflex, including Liam Kelly, who's Chairman, President and CEO; Jake Elguicze, Treasurer and VP of Investor Relations; and John Hsu, the Senior Director of IR. So thanks a lot for joining us for our virtual conference here. Maybe not as exciting as some of the other exotic locations that we've had conferences in, but we do appreciate your time and for joining the call. So just a couple of words about the session this morning, it will be a fireside chat with me. I'll be asking questions for the next 40 minutes. If anybody has questions, you can e-mail me or there's a way to ask those through the webcast technology as well, and I'll try to weave those into the conversation.

To get started, Liam, I just wanted to kick things off and ask you a little bit about some of the recent trends, things that have been driving Teleflex growth. Pre-COVID, you did talk about 38% growth in UroLift in Q1, for example. Some good growth in a lot of areas that are driving margin as well. So why don't you give us an overview of how the business was performing pre-COVID, what some of those key drivers are and then we'll talk a little bit about the period of COVID disruption here as well.

Thanks, Matt. Yes. So obviously, last year, we finished the year, we ended up growing just over 8% on a full year basis last year. And in the fourth quarter, we grew 7.7%. So as we headed into Q1, obviously, there were impacts within Q1 from COVID and other things. But as we look at our business and we try and take a step back, in Q1, we grew at 4%. But within that, there was 1 less shipping day, which was about $9 million. You had the COVID impact of about $11 million. You had the sterilization impact of around $6 million. If you actually normalize for all of those, our core business -- and if we want to see the wood through the trees, our core business actually grew 8.2%. So we actually accelerated our growth from Q4 into Q1 if we eliminate all the noise within the quarter. So we were really pleased with how our business was performing as we went through the first couple of months of the quarter before COVID hit. And you're correct, UroLift was doing exceptionally well through January and February. It grew 38% through those first 2 months. But even that doesn't tell the true story of how well it was doing. January traditionally is a fairly slower month because we had the kickoff with the whole sales team and so on and so forth. And in actual fact, in January, the business grew 30%. But in February, it had increased to 47%. So we were really on a great trajectory just as we headed into March. Everything was going in the right direction. We had all our salespeople in place, and we were really executing at a very high level. And at that stage, our guidance for UroLift had been plus 25%. We're expecting it to do better than 25% on an annualized basis. And we were ramping really to have an exceptional quarter for UroLift. And then what we saw as we went into the COVID was that it declined in the last month of March by 3.3%. Now we do believe it's going to be one of the first procedures to come back. And I think from a Teleflex perspective, the portfolio -- we built this portfolio, not because of COVID clearly, because nobody could have contemplated that. We really built the portfolio based on 2 premises. One was on the premise of the demographic trends that we see in the market. And the second was really building a portfolio that is focused on emergent procedures. And I think that has stood us well. Given that only about 1/3 of our entire portfolio is susceptible to elective procedures. And obviously, the biggest one being the UroLift.

Right. Right. Yes. We'll definitely get into some of that. Maybe I'll just stay on UroLift for a second since you were discussing some of the trends. I mean 47% is pretty encouraging growth in February. Can you talk about the things that are driving the growth there? Give us an update on how you're training new physicians, opening practices? And maybe how much of the growth is coming from the existing physicians versus the new ones?

Yes. So approximately 60% of our growth comes from physicians we've already trained. That has been fairly consistent over the last number of quarters. And as we went through the first quarter, our goal for the year was to train approximately 500 physicians. In the first quarter, we trained just shy of about 120. So we were well on track to do that. We were also -- had accelerated the hiring of our sales organization. So the sales reps we had originally planned to bring in, in Q1 of 2020, we actually brought them in, in Q4 of 2019. Because we wanted to hit the ground running, we wanted to be prepared to have all the territories aligned so that we could accelerate through the year. And it normally takes a number of months before a sales rep will become effective and really start to drive revenue within their territory and accelerate it. So we really felt good. As we went into the year, we really felt good after the first 2 months of the quarter. All the clinical data continue to support the product. The reimbursement has been looked at twice since we've owned this product in the last 2 years. And twice it has been modestly improved, simply because the procedure does what the deliverers of care want to do. It reduces the overall cost of care. There's no sexual dysfunction. And if you compare it to the cost of pharma, the crossover point is 2 to 4 years dependent on whether it's a generic or a branded pharma. So -- and with great patient outcomes. And also, we've really worked even through COVID to keep the salespeople motivated. We have guaranteed a minimum variable comp for them so that they can actually continue to live their lives. And we've rolled out a number of virtual tools. And just in the last 10 days, we had a webinar where we trained 200 urologists. So we're ready to come out the other side of this COVID, and we think this will be an early procedure to come out the other side of COVID for a variety of reasons.

Right. I want to get to that next. The other thing I just wanted to ask about was the webinar training. So are you actually able to train new doctors completely virtually? Or do they still need to be proctored and trained in person?

So there were a few new doctors that were being proctored. But I wouldn't want to mislead you that the 200 were new doctors, Matt. The majority of them were existing urologists, are those that were halfway through their training and just need to be proctored on the last few cases. So -- but the training went very well. And the whole idea of the training, quite frankly, was to keep UroLift front and center in the minds of 200 urologists that were also very keen to get back to work who had postponed patients that they were originally planning to do in late March and in April, and to ensure that they had the skill sets that would get them back to work very, very quickly because there is a limit to how much you can do over a webinar. And I just would say also that the docs that are already trained on the UroLift can also train others in their practice. They can proctor. So we do have some flexibility there as well to help us along the way.

Got you. Okay. So you mentioned this idea that UroLift would be one of the procedures to come back more quickly. And you've talked about things like the ASC and office exposure, the quick procedure time and the profitability. Is there anything you would add to that? And can you talk about some of the more recent trends with regards to some of the green shoots that you're seeing in the last few weeks?

So what we expected to happen -- I'll deal with the last part of it first, I guess. So what we expected to happen as the curves of COVID continued to increase, we expected to see the UroLift procedure being impacted as are Interventional Access and Surgical. At the same time, we expected to see a positive continue to come from respiratory and Vascular Access. Then as the curve started to flatten and the new cases and the cases within the intensive care units started to drop, which is we're right in the middle of that for the -- today and over the last couple of weeks, we anticipated that respiratory and Vascular will get back to more normalized levels and that the UroLift procedure would begin to come back. And really, as I sit here today, that's what we've seen happen. And as you know, the UroLift product fell off the last 2 weeks by 50% year-over-year. Now it was a step-down. The second last week of March, it fell some. And then the last week, it fell even some more. So the expression of seeing green shoots, yes, we are seeing some green shoots. We want to see that continue. And in my mind, it's all about consumer confidence. And the reason that we believe that the UroLift procedure will be one of the first ones to come back are some of the points you mentioned. So besides the service. It is a Phase I product. It's a day-case product. It's 1 hour within the doc's office or in the ASC, which I think will be the first 2 areas where people will come back. But it's still only an hour in the hospital, and it normally can be done in a step-down facility within the hospital, so you don't have to go to where COVID patients may have been in the past. And a lot of hospitals are also segregating entrances for COVID patients/non-COVID patients to actually make people feel more confident coming back to the hospital. We also heard from urologists that it's in the top 4 procedures. We have a 200 urologists' survey, and it is in the top 4 procedures they are going to do behind things like prostate cancer and kidney stones. And logically, that makes sense to me because if you have a kidney stone issue, you're in pain, so you need to get it resolved. And also, if you have prostate cancer, you don't want to delay that too long because it's obviously not going to get any better. Even though it's a slow progressing cancer normally, you don't want to leave it too long. And therefore, the UroLift procedure will follow shortly behind that. And again, I think that we need to remind ourselves that these ASC and offices are like small businesses within America. And like every small business, they need to reopen and start getting some cash flow back. And the economics of the UroLift would bear that out because, number one, it's a great procedure. No sexual dysfunction. Man doesn't have to wear a catheter except in 10% of the time. IPSS scores are great. Lower revision rates. Everything that you'd want from an excellent procedure. And because of that and because of how great a procedure it is, it's well reimbursed. So therefore, the urologists then, therefore, in the office will net approximately $1,100 or $1,200 in the office, will net approximately $3,200, $3,300 in the ASC. And even in the hospital, around $4,000 for the hospital. So in order to get cash flow back, the economics really also bear fruit for this procedure to begin to come back. And as consumer confidence comes back, I think we will see these cases flow back into the office and the ASC first and then to the hospital. And I think you'll see these types of procedures in the hospital before you'll see many more. And lastly, there is capacity within the system. The urologists I've spoken to are using telemedicine for their nonprocedural patients. So they free up their waiting room for the procedural patients to come in and get them done. And they're also able to engage in new BPH cases through telemedicine and do some of the preliminary diagnosis in order to make sure that they have the appropriate amount of patients that need this procedure ready as we start to come out the other side of COVID.

Got you. Yes, that all makes a lot of sense. And I think on the last call, you talked about the fact that if you looked at all the states that were opening up, it was like 60% of your procedures in the U.S. Can you talk about how that's evolved? And any early data points on those places that opened up in mid-May?

Yes. So it's a little bit better than that, Matt, actually. Our industry group is a group called AdvaMed. They've identified 44 states that are actually going to open right now or in the next coming weeks. And that accounts for about 90% of our revenue. So that's very encouraging to us that, that is happening. Anecdotally, I can tell you that there are certain states that we see activity. So we're definitely seeing activity begin in Arizona, parts of the Midwest, Ohio, Florida and California. So we are beginning to see the beginning of procedures come back, and it is coming back initially in the office. And the states that opened up a little bit quicker -- and I'm sorry, I left out Texas. In places where it's opened up a little bit quicker like Texas and Arizona, we're actually now beginning to see some in the hospital in those states as well. So it does start -- as we anticipated, it does start in the office. It quickly goes to the ASC. I mean those 2 are almost hand in glove at the same time. And then not that long afterwards, you begin to see confidence return to the hospital because of the fact that it's such a short procedure, 1 hour, in and out, gowned up, gloved, and it doesn't require any respiratory intervention. So you're not getting intubated, you're not getting a laryngeal mask. Your airway is not the area of the body we're working on. Clearly, we're at the other end. But we feel that that's helping us as well.

Got you. Got you. And just on this topic of recovery, I was wondering what are some of the other things that you're looking at. I mean you have a meaningful business in China and you spoke a little bit about procedures returning there. Is that another market for you? Or what are some of the other areas around the world that you could point to, to say, here's evidence or lack thereof of recovery?

So I think China is a good predicate for us in the U.S. So if -- COVID really became apparent to us in the latter half of March. In China, it was in the middle of February. Now 3 months later, in China, we see Shanghai, Guangzhou, some of those in the southern part of the Eastern Seaboard really get back to 80%, 90% of normalcy. We see Beijing in that, call it, 70% -- 60%, 70% of normalcy, probably 70%. I spoke to my country manager there just last week to get a view on the situation, and he does see it begin to come back. So I think that's quite encouraging. I think patients are now returning to the hospital to have procedures done. People are back at work. There's precautions, the social distancing, there's mask-wearing. We still run our office on 2 shifts. And all those precautions that we need to take in America, but I think that's beginning to happen there. We also see, in Korea, pretty normalized levels of activity right now in Korea as they came to grips with the virus. We're seeing Australia start to ramp back up a little bit ahead of America. And what I expect to happen, Matt, is I expect America to gain confidence faster than Europe. I think that we have a better infrastructure in the States. We have a better capacity from intensive care units. We've actually built a lot more of these temporary hospitals in case we run into an issue. And we just need to treat society slightly differently, in my view, we really need to protect the vulnerable. We just have to protect the people in nursing homes. In my own state where I live, 70% of the deaths have occurred in nursing homes. So we really got to cocoon those individuals, protect them, make sure that they're isolated, there are no visitors and then open up the rest of the economy in order to be able to support those individuals longer term. But make sure that we protect the most vulnerable and the people, like yourself and myself, that don't have any underlying conditions, that we're healthy, you run from the ferry to your offices when you're back working and so on and so forth. So we're in relatively good shape. So we need to be very discerning as we return back to protect the most vulnerable. And we just need to trace, test and isolate in the same way as the Koreans did and they managed through it, and as the New Zealanders did. So I think that's our benchmark. But positive signs for sure in China.

And I appreciate your revealing my training regimen to everybody on the line. So I guess the other topics I wanted to discuss were just sorting out some of the puts and takes on the trends here in the interim. Could you talk a little bit about the areas that you're seeing some increased demand in like Vascular Access and the other ones where, because of elective procedure delays like anesthesia, there would be a little bit of softness. I just wanted to cover that kind of quickly before we move on to some other topics.

Yes. So in respiratory, for example, we saw the normal destocking through January and February, so it declined 2.2%. In March, it grew 44%, to end up growing 13% in the quarter. Now as I said, we'd anticipate for respiratory and Vascular for it to run at a heightened level until the curves start to flatten, which is where we are right now and back down to normal then. For Vascular, it grew 2.3% in January and February, and then it grew 12% in March. Now I would advise the investment community that most of that acceleration to that 12% came from Europe as they were ahead of the curve, and it grew 5.6% in the quarter. Anesthesia is really a tale of 2 cities, insofar as you have part of the portfolio that's negatively impacted, such as your laryngeal masks as procedures get postponed. But then you have another part, which is your airway management. And in particular, in Europe, we saw a big buy-in, in some airway management products like ET tubes. So even though it declined 4% in the quarter, it actually grew just over 3% in the month of March, but largely driven by Europe. Now I would not anticipate that happening in the Americas simply because the portfolio that we sell in Europe is much heavier leaning towards airway management products such as ET tubes and circuits, whereas it's more regional anesthesia in North America. But I would expect the vascular products to come through for North America. So that's really what we saw in those businesses. And again, the rest of our businesses outside of UroLift, Surgical and IA were not really impacted by COVID.

Right, right. And I've heard you talk a little bit about this stocking. Obviously, you mentioned the stocking related to these products to prepare for COVID patient management. There's 2 other stocking things I would have in mind. One was I think you mentioned in Q1, you actually saw some destocking as you typically do from the bigger distributors in the U.S. So I was wondering how that could play out in the coming quarters. And then with the idea that there could be a second wave or just ongoing need to deal with managing COVID patients, I was wondering if you could comment on whether you think distributors and hospital systems will carry more stock of some of these equipments on a permanent basis?

Yes. So I think that's a very interesting question. And so we did see some destocking in the first quarter. But you're so right, Matt, there's nothing unusual in that. So any year in the first quarter, we see destocking anywhere between $4 million and $10 million, and this was right in line with that. I guess what might be a little bit surprising to the investment community is that they didn't react quick enough in the last 2 weeks to replenish. But it did hit late in the last 2 weeks of the quarter, and it probably took them a little bit of a while to react. Regarding the changes moving forward and the second wave, I think there are 3 large distributors in North America. One of them, their value proposition is that they hold 2 months of inventory to protect their customers. I think the other 2 have -- used to hold 30 days, but they've gone down now into the 20s from the days that they hold. I think for sure that there will be some conversations with their customer base asking them all to increase their inventory holdings as we head into a normalized flu season and potentially a second wave. I also think that there are conversations going on with FEMA with regard to what their role is in this and what type of levels that they would hold. I mean we know now what to expect. If there is a second wave, we have at least a predicate as to what happened in March, late March and the month of April. So we do know what the expectation will be. So we are having conversations with our hospital groups, we're having conversations with our distributors and we're having conversations with government agencies, not alone in the States but also in Europe and elsewhere in anticipation and preparation of the second wave. And I think that moving forward, even beyond a second wave, if it comes or if it doesn't come, I think there will be a requirement for state agencies to hold additional product, additional emergency supplies. There will be a requirement on distributors to hold more inventory and hospitals. And I think that, ultimately, there will be a requirement to have more flex capacity in intensive care units globally. I mean it -- what this has shown us is it is not practical to run intensive care units at 98%, 99% capacity and be prepared to deal with any type of a pandemic, whatever it is. And we really do need to consider the allocation of resources to more intensive care unit beds to be able to react much quicker to these types of environments. And I think it's a small price for -- to pay to hold additional supplies of products given that they've got really good shelf lives for the most part. So it's not going to be that much of a burden on society to have a warehouse located somewhere in the United States that would be available to us as a society should something like this come along. And it doesn't have to be a respiratory one the next time either. It could be a bloodstream infection. It could be a multitude of things. But when people get sick, you need certain products. Because as people get sick, they end up in the intensive care unit normally, and you do need certain products, like vascular products, like infusion products, like respiratory products and so on and so forth.

Yes. That makes total sense. So now is the portion of the program where I ask you probably the hardest question, which is really though the one that investors are grappling with. I think just love to hear any thoughts that you have about whether you think there are scenarios where you could grow in the second half of the year. And then as we look into 2021 and think about how the volumes will evolve, assuming there is this return to a more normal environment, do you think that you can reach levels of volumes in the new '21 that would approach what you thought you could do in old '21? Or how are you thinking about that?

So I'll start by saying 2021 seems a lifetime away given that we've had to withdraw our guidance for this year. But look, there's a few dynamics that are going on here. And it is very dependent on what happens as we get into Q3 and Q4, Matt. So what do we see in Q3, Q4? If we see consumer confidence come back, if we see procedures come back in a very strong way and if we see the rebound that we've seen the green shoots of already. But if we really start to see that rebound as we go through the latter half of the year and if the second wave is nonexistent or mild, well, then that's one playbook. And then one would anticipate that you would ramp as you go through the back end of the year, then you'd come into 2021 with good momentum and a -- probably an easier comp in -- especially the second Q of 2022, where you would see an uptick in volumes. And maybe a tough comp then in Q3 and Q4. And perhaps a more normalized situation of comparing year-over-year, assuming Q3 and Q4 would get back to some sense of normalcy. So that's my positive Liam Kelly. Now the other side of it is, Matt, what happens if we get into Q3, consumer confidence doesn't really return and then you get into -- later into Q3, into Q4 and you get a heavy second wave of COVID-19, then that's a completely different scenario. And the recovery then into 2021 probably wouldn't happen until you get well into the second quarter of 2021. And that unfortunately, Matt, is why companies like Teleflex had to withdraw our guidance, because I'm sure that my crystal ball is the exact same as yours and it's as murky as yours is right now. I can tell you that the early signs, just the early signs, are we're beginning to see positive consumer return to certain procedures. Now as long as we can build momentum and as -- I'll go back to what I said about containing the most vulnerable in our society and protecting them and then trace, test and isolate. If we can do that as well as the Koreans did it, then I think we will have my first scenario. If we don't and if we're rash, and if we don't practice social distancing, then we have the potential to not have the positive outcome. But I am an optimist. And I think that there's more testing coming out. I think there's the potential that as we get into sometime in 2022, we might have some semblance of a vaccine, which will restore confidence. But it is really difficult for me to give an estimate as to what's going to happen in 2021 until I get through Q3 and into Q4, and we'll have a better view on a second wave or not a second wave.

Got you. No, that's totally fair, Liam. Totally fair. Well, maybe you could just spend a minute, though, on helping investors understand margin impact. So I would just like you to discuss some of the things that you've been able to put off in the short-term to protect margins? And then again, maybe just assuming we go back to a more normalized environment, is this really going to change the longer-term margin level or trajectory for Teleflex?

Yes. So the things that we've done -- and I'll start off by saying, again, we were on great trajectory in Q1, clearly evidenced by the op margin. We had 190 basis points expansion in op margin just in the first quarter, even in the midst of COVID. And I'd also say that when we gave our guidance, Matt, we were pretty confident in our margin expansion within our guidance. Unfortunately, we had to withdraw that guidance. But if you take the midpoint of our gross margin expansion, it was about 90 basis points, and the midpoint of our op margin expansion was about 170 basis points. So we felt really good heading into the year and through 2 months, it was playing out very much like we had anticipated, if not even a little bit better than we had anticipated. Now the reductions that we've made as an organization, we've really tried to focus on the top of the tree. We have a lot of employees living paycheck to paycheck, and we're trying to protect them and have them motivated coming out the other side of a recovery. So we reduced variable comp for executives and management. We -- any nice-to-haves that were in our budget are gone. We reduced all of that. Any variable spend around travel, entertainment, attending conferences, shows, internal meetings, we reduced. And we actually protected -- again, we put a floor on the comp levels -- commission levels for our sales organizations because they're very highly commissioned bases. So again, we wanted to protect the people that would be living paycheck to paycheck and trying to come through this. We did not furlough. We did not do a 20% pay cut to our employees simply because we're looking at the longer-term game here. We're trying to have an organization that's very focused on accelerating out the other side. It's much easier to ask an organization to go the extra mile if you've taken care of them rather than if you've furloughed them, you've reduced their overall compensation and they've been trying to scrape a living for the past month or 6 weeks. So we believe we've done all the appropriate measures to give the best return to our shareholders as evidenced in the first quarter. Whereas, at the same time, also protecting our shareholders to ensure that we would probably be one of the faster companies out of the blocks as we start to come out the other side of COVID, given what we've done to our organization.

Got you. That makes sense. I mean related to this, I think you stated on the last call that the long-range plan goals for Teleflex are still the right one. Can you talk about what you meant by that? You covered margins and maybe just speak to the same on the top line?

Yes. I mean, look, we put out our long-range goals of 6% to 7%, 60% to 61% gross margin and 30%, 31% operating margin. Now clearly, given my earlier comments on the first quarter, excluding some onetime impacts, we actually grew 8.2%. And I'll tell you, Matt, if there was ever a quarter to have 1 less billing day in the first -- or every year to have 1 less billing day in the first quarter, this was the one. And if there was ever a quarter to pick up that day and another one in the fourth quarter, this is probably the one. Because I think that as confidence comes back, I think the fourth quarter having that -- those additional 2 days will help us. And I think that those -- nothing has changed in our view or my view as to -- that they are the right goals for Teleflex. We clearly have a portfolio that can grow 6% to 7%. Our restructuring programs are still well in control. So they'll deliver $25 million to $35 million within our time frames. And the mix effect of -- once we get UroLift back growing, Interventional and so on and so forth back growing, the mix effect still sits there in the gross margin line, and therefore, that will drop through to our op margin. The only question that we have to answer is when, not if. They are the right goals. We can get there. With the impact of COVID -- once we get out the other side of COVID, we'll be in a better position to do that. Once we know the reality of is there a second wave, is it a U, is it a V, is it a W, a double W, whatever it is, and we've -- Matt, we have scenario planned, all of those in our company. And if it's a V or a U, obviously, that brings the time frame much better into perspective than if it's a W or a double W.

Right. Right. And then maybe we could just spend a second and talk about the balance sheet and capital allocation. Could you just remind folks your liquidity position and how you have confidence that you'll be able to weather the storm, so to speak? And any changes in how you're thinking about capital allocation at this time?

So always, our preferred use of capital was to continue to do M&A. It's given great returns to our shareholder and build tremendous value within Teleflex. Right as we got into the end of Q1, our net leverage was 2.6x, so well below our -- our strictest covenant is 4.5x. So as we ran the various scenarios, we couldn't envision any scenario that would get us to that 4.5x of our strictest covenant. And there's a saying in Ireland, it's an ill wind that does not blow some good. And ironically, for Teleflex, with our leverage at 2.6x, this ill wind could create an opportunity for Teleflex as we come out the other side of COVID. Because our net leverage is down, company's valuations will probably be more reasonable post-COVID than they were pre-COVID. Any private equity assets that are held are pretty -- normally pretty heavily leveraged, so they may want to get some cash back into their funds and to reduce some of their covenants that they may be bumping up against. And the IPO market probably isn't going to be as attractive out the other side of COVID as it was entering into COVID. And I think, finally, in the shorter term, we probably now would not be the right time to do a $1 billion transaction just given the uncertainty of COVID. But as you begin to see some certainty and as we get out the other side of COVID, Teleflex is very well positioned to continue on our M&A route with the same discipline that we've always had. I wouldn't want anyone to think that we're just opportunistic. We're opportunistic, but making really good, thoughtful decisions based on all the metrics we've used before, and that will continue to make us a very successful company.

Got you. Got you. I think we probably have time for just one more question before we wrap up this session. So I guess let me ask you another product one because we really just covered UroLift and some of the Vascular Access products. Why don't we talk a little bit about MANTA since that was also an ongoing new product launch for you. How was the trend in the MANTA growth in Q1? And maybe talk about the opportunity for that in the future?

Yes. So yes, MANTA is a great product and great opportunity for us. The market that we're addressing is TAVR and EVAR, and that -- we have identified that as a $200 million to $300 million market. So if you take the midpoint of that $250 million, we had converted roughly 4% last year, mostly in Europe and then some with our limited launch in the U.S. And our goal was to get to 8% penetration this year. I can tell you if we prorated that $250 million to January and February and sized that market through January and February, we were close to 6% penetration after 2 months. So it was doing really well. Really happy with the adoption. 80% of the growth was coming from users in America -- 80% of the American growth was coming from users that had been part of our limited launch. So really driving adoption within those limited launch sites. Getting through VAC committees very smoothly. Product was performing well. Really saw the reduction in major complications. And as we know, a major complication will cost the hospital $18,000. And also a reduction in time to closure, going from that 12 to 20 minutes down to less than 20 seconds. So the product was doing exceptionally well. We've continued to do some telemedicine training. I mean, it's not as good as being there yourself. But right now, it's sufficient. But we -- and we have acquired for all our salespeople, not just Manta, UroLift salespeople as well, we have acquired PPE so that they are ready to get back into the ASC, office and hospitals to do these procedures. And I would envision that TAVR procedures will come back in a reasonable time following the UroLift procedures coming back. Just simply, you just can't keep postponing these procedures. The patient isn't getting any better because they're not having the procedure. So I think there will be a push to get some of these cath lab procedures up and running again, and that product was just doing great, Matt.

Got you. Well, great. That's a good update. And I think that ends our time. So I just want to thank you so much for joining us here virtually. I hope you have a good rest of the day with the conference. And thanks for all the thoughts on these different topics. It's good to see some of the early signs of recovery, and hopefully, we can continue on that path.

Absolutely. Thanks very much, Matt.

All right. Take care. Bye.

Thank you.