Bruce Voss - IR, LHA Mark Sieczkarek - President and CEO Jack McGovern - CFO

Scott Henry - Roth Capital Yi Chen - H.C. Wainwright Françoise Brisbois - Laidlaw Ed Woo - Ascendiant Capital

Welcome to the NovaBay Pharmaceuticals Conference Call. At this time, all participants are in listen-only mode. Following management's prepared remark, we'll hold a Q&A session. [Operator instructions] As a reminder, this conference is being recorded August 10, 2017. I would now like to turn the conference over to Bruce Voss. Please go ahead, sir.

Thank you. This is Bruce Voss with LHA. Thank you all for participating in today's call to discuss NovaBay's second quarter 2017 financial results. Joining me from management are Mark Sieczkarek, President & CEO and Jack McGovern, the Company's Chief Financial Officer. I would like to remind listeners that comments made during this call by management will include forward looking statements within the meaning of federal securities laws. These forward-looking statements involve risks and uncertainties that could cause actual results to be materially different from any anticipated results. For a list and description of those risks and uncertainties, please review NovaBay Pharmaceuticals filings with the Securities and Exchange Commission. Furthermore, the content of this conference call contains information that is accurate only as of the date of the live broadcast August 10, 2017. NovaBay undertakes no obligation to revise or update any statements to reflect events or circumstances except as required by law. And now, I'd like to turn the call over to Mark Sieczkarek. Mark?

Yeah. Thank you, Bruce and good afternoon to everyone and thanks for joining us. It's my pleasure first and foremost to welcome Jack McGovern to this, his first NovaBay conference call after joining us as Chief Financial Officer just three weeks ago. We certainly look forward to benefitting from his more than 30 years of finance and operations experience as we grow revenues and expand our operations. You may be aware that Tom Paulson plans to retire at the end of the year and we're fortunate to have him remaining with NovaBay until then to ensure a smooth transition in CFO responsibilities. So now turning to our results for the quarter. I am really pleased to report another quarter of strong performance as we continue to build momentum in our Avenova business. Among the highlights, we set a new quarterly record for unit volume from our higher margin ophthalmology channel, which allows us to capitalize on third party insurance reimbursement. Now product sales through this channel represented 79% of total Avenova sales for the quarter, up from 65% a year ago. Another highlight is record gross profit margin on Avenova sales, which continues to grow and reach 89% in quarter two. Total Avenova revenue increased 48% over year as we continued progress with our planned shift in sales through the ophthalmology channel from our legacy in-office direct sales channel. Importantly, we're making strong progress on unit growth which is our ability to gain market share. As I mentioned previously, we achieved record unit volume from prescription channel for the quarter. We also continue our year-over-year and sequential quarter growth in both the number of prescribing physicians and in the average number of prescriptions written per prescriber. As in the first quarter of 2017, we experienced some drag on revenues in April and May due to variations in deductibles, co-pays and rebates among our customers. Looking into this we found that macro healthcare plan factors of expansion of higher deductible HSA plans and co-pays continue to drive higher rebates to our patients later into the year as compared to the past. We did begin to see this clear in June; however, as our average net price increase over the month of May and should continue to increase now for the remainder of the year and that's based on history. This is only our second year of focusing on the prescription channel in each quarter we gain more experience and understanding these factors and translating that knowledge into more effective marketing strategies. Finally, we are affirming our 2017 outlook for revenue growth of 60% over the prior year. Our total net sales are up 79% at the halfway mark and in the last two years, we have experienced 66% of our total sales in the year in the second half of the year, which gives us the confidence in achieving this guidance. Gross profit margin on Avenova sales at 89% for the first half of 2017 is tracking right on target with our outlook. We continue to carefully manage expenses and reduce cash burn while investing in sales and marketing initiatives to support the Avenova brand. Again, we're affirming our financial resources are sufficient to fund operations and our growth initiatives throughout 2017. So, with that, I'd now like to turn the call over to Jack McGovern to review the quarterly results. Jack?

Thank you, Mark. Good afternoon, everyone and I'm pleased to be joining you today. I will be taking you through the highlights of our financial results beginning with the second quarter, but before I do, I'd like to share a little bit about my background. First of all, I am very excited to be NovaBay's new CFO as it's clear to me that Avenova represents a major commercial opportunity in a huge and underserved market representing over 40 million potential patients. With respect to my background, I start my career with KPMG as a CPA and have spent a considerable amount of time in both structured finance and international M&A. More recently, my experience has been a large public company along with several venture-backed and private organizations as both CFO and COO. I believe this combination of financial and operational expertise puts me in an position to help NovaBay grow and expand operations to the next level and beyond. Let's take a look at the numbers here. Total net sales for the second quarter of 2017 increased 55% to $4.1 million over the second quarter 2016 and 11% over the first quarter. As Mark has mentioned, sales of Avenova were up 48% year-over-year to $3.8 million with record unit volume through our higher margin, ophthalmology channel. Product sales into the ophthalmology channel increased 80% to $2.8 million and comprised 79% of total Avenova sales. This is an improvement over the second quarter of 2016 when sales for the ophthalmology channel comprised 65% of total Avenova sales. Avenova sales to our legacy and office direct channel for the second quarter 2017 declined 12% from the prior-year, which reflects our planned transition and focus of sales to the ophthalmology channel. During 2017 second quarter, we added nearly 900 new Avenova prescribers. This brings the total number of physicians who have prescribed Avenova to more than 10,600, which is a 21% year-over-year increase and up 9% from the first quarter of 2017. Gross profit margins on Avenova sales for the quarter reached a new record of 89%, which is up from 85% in Q2 of 2016. The operating loss for the second quarter of 2017 was $1.8 million, a 22% improvement from the prior year. In reviewing expenses by line item, sales and marketing expenses for the second quarter of 2017 were $3.4 million up from $2.9 million for the prior year, due mainly to increases in the number of sales representatives, sampling and marketing programs. GA expense per Q2 '17 were $1.7 million up from $1.3 million for Q2 '16, primarily due to higher non-cash, non-stock-based cash compensation expense and increased expenses to support our sales force, partially offset by lower office lease expense. R&D expenses declined to $70,000 for Q2 '17, $278,000 for the prior year. The decrease reflects our focus on Avenova commercialization and lower spending on clinical trials, which we're now pursuing on a limited and very targeted basis. We reported a non-cash gain on fair value of warrant liability for the second quarter of 2017 of $15,000. This compares with a non-cash loss of $424,000 in the prior period. The net loss for the second quarter of 2017 was $1.7 million or $0.11 a share and this compares with net loss of Q2 of 2016 of $2.7 million or $0.36 a share. Turning now, we'll look at our year-to-date results. Net sales for the six months ended June 30, 2017 were $7.8 million, up 79% from $4.4 million for the six months ended June 30, 2016. Gross profit on total net sales was 84% for the first half of '17 as compared with 75% for the first half of 2016. Gross profit margin -- I'm sorry, gross profit margin on Avenova sales grew to 89% for the first half of 2017 as compared with 82% for the first half of 2016. The operating loss for the first six months of 2017 was $5.5 million, which is a 20% improvement from $6.9 million operating loss for the comparable period in 2016. Operating expenses for the first half of 2017 included sales and marketing expenses of $7.1 million, G&A expenses of $4.8 million and R&D expenses of $132,000. Non-cash loss on the change of fair value of warrant liability for the first six months of 2017 was $220,000 as compared with a non-cash loss of $809,000 for the first six months of 2016. The net loss for the six months ended June 30, 2017 was $5.7 million or $0.38 per share compared with a net loss for the six months ended June 30, 2016 of $7.8 million or $1.35 a share. Turning to cash flow, we used $1.6 million in cash to fund operations in the second quarter of 2017, which represents a 40% reduction from the $2.7 million used in the second quarter of 2016. This improvement resulted primarily from higher Avenova sales. As we look at our balance sheet, we had cash and cash equivalents of $5.7 million as of June 30, 2017, as compared with $9.5 million at the end of December 31, 2016. We remain confident that our cash position combined with continued sales growth and expense management will be sufficient to fund our operations and growth initiatives throughout 2017. Lastly, we are affirming our 2017 financial guidance as follows. We expect total sales to reach $19 million, which is 60% increase over 2016, with the growth be driven by higher Avenova sales. As Mark mentioned earlier, our sales at the halfway point in 2017 were up 79% over the prior-year. We expect gross profit margin on Avenova sales to continue to be in the high 80% range, again we are tracking against this metric with gross profit margin on Avenova sales at 89% for the first half of 2017. With respect to the operating loss and cash usage for the year, we're evaluating two new sales and marketing initiatives that if implemented would impact our earlier guidance. As such we're eliminating guidance at this time to total sales and related gross profit margins. We will continue to invest in initiatives to drive revenue growth while appropriately managing our expenses and balance sheet. And with that, I'd like to turn the call back over to Mark.

Yeah thanks, Jack. I'm really delighted to announce our recent partnership with a group called MedVantx and also the world's largest retailer to make access to Avenova even easier among our growing number of patients. MedVantx offers home prescription delivery to customers in all 50 states and the partnership also provides patients ordering Avenova through this major retailer with the option of convenient home delivery or in-store pickup at one of their thousands of in-store pharmacies across the U.S. Now Avenova is already accessible in more than 90% of U.S. retail pharmacies through our distribution agreements with McKesson, Cardinal Health and AmerisourceBergen. In the longer term and more importantly, the ability of the larger MedVantx organization working with healthcare plans across the country, provides patients access to coverage and reimbursement and knowledge more consistently in all 50 states. Now as a reminder, we have ample room for growth in the largely untapped U.S. market. Jack already mentioned, we have an estimated 30 million Americans that suffer from chronic eye conditions such as blepharitis and dry eye that many eyecare specialists find their best managed by regular twice-daily use of Avenova. Eyecare specialists are also using Avenova for patients undergoing ophthalmic procedures such as LASIK, retinal and cataract surgeries, as well as for patients with contact lens tolerance issues, which represents another 11 million Americans. So early this year, we expanded our sales organization from 45 to 50 field representatives to capitalize on this market opportunity and I'm pleased to report on the overall quality of our sales staff as we continue to see growth in both sales and unit volume. We expect sales to increase in the coming quarters through productivity gains, particularly as our newer reps gain tenure and learn from the success of our more experienced representatives. While we have representatives located in major markets across the U.S., our current sales force only addresses about one third of the market opportunity and when it makes commercial sense as I said this before, we will look to expand our sales staff while we manage expenses and available cash within an improving return on investment. We're still benefiting from the awareness created by continued heavy consumer advertising and promotion of dry eye products by two major companies Allergan and Shire. These products take a totally different approach to addressing dry eye, but they are complementary to the use of Avenova. We're also benefiting from the ongoing support of our ophthalmology and optometric scientific advisors and patients who are driving Avenova awareness and adoption. Our Advisory Boards are comprised of some of the most respected thought leaders in eyecare represent Avenova at industry conferences and other events. Several have also taking the opportunity to chronicle their successes in incorporating Avenova into their practices. Now you can check out our website at www.avenova.com for examples also unsolicited consumer feedback on the successful results in using Avenova as well. Let me give you one example of in May, Dr. Steve Lichtenstein of the Illinois Eye Center issued a press release discussing his use of Avenova for young patients suffering from blepharitis and black meibomian glands. He noted that the children are at particular risk for these conditions, which can be exacerbated and even caused by them rubbing their eyes and failing to wash their face. Previously he had prescribed the more traditional approaches like warm compresses, which only provide temporary relief or even treatment with antibiotics or steroids, which can become more worrisome in children than in adults. Dr. Lichtenstein is finding great success with Avenova and his made Avenova his first-line therapy for managing these conditions in younger patients. In another example, Dr. John Sheppard who is President of Virginia Eye Consultants took advantage of National Dry Eye Awareness Month in July to highlight his success with Avenova in managing patients with this chronic condition. He is recommending regimens that incorporate regular use of Avenova along with dietary supplements in individualized environmental changes to bring relief and improve the quality of life for patients with dry eye. So, ophthalmologists are increasingly recognizing the advantages of Avenova's proprietary pure hypochlorous acid formulation. Hypochlorous acid is proven to reduce bacteria that can be the underlying causes of dry eye blepharitis and other ocular conditions. So, in closing at NovaBay we remain firmly focused on growing Avenova revenues while managing expenses and cash burn. We continue to execute on sales and marketing programs that have proven success in growing sales due to the more profitable ophthalmology channel. We are driving improvements in key metrics such as the number of prescribing physicians and the number of prescriptions written by each physician. We are confident that our financial resources are sufficient this year to support our operating activities and our growth strategy in this large market. We also continue to pursue opportunities to monetize our non-core assets to bring in additional capital while we focus on our core Avenova franchise and the end result of all this is enhancing value for our shareholders. So, with overview of our business and our plans, I thank you again for your attention and operator, we're ready to take questions.

[Operator instructions]

Yeah and while we're waiting for that first question, I would like to mention that we're going to be participating in the Rodman and Renshaw Global Investor Conference being held September 11 and 12 in New York. A webcast of our presentation is also available @NovaBay.com and I'd also like to mention that NovaBay was included in the Russell Microcap Index as of June. The main determination in qualifying for this Index is market capitalization. Our inclusion demonstrates again the dramatic strides we made in our turnaround at NovaBay since directing our focus on Avenova commercialization in late 2015 and you may also know that the Russell Indexes are widely used by investment managers and institutional investors in making investment decisions and benchmarking results. So okay operate, I'm ready for that first question.

Our first question is from Scott Henry with Roth Capital. Please go ahead with your question.

Thank you and good afternoon. I guess a couple questions. Hello, as I reconcile the model with your revenues, one of the things is I'd like to model the prescriptions and then the revenues per script and that number bounces around a lot with the 156 in Q4, then 138, then 132 this past quarter. Is that where you would expect to see a big jump in the fourth quarter and perhaps the third quarter as well?

Yeah Scott, going back to your stats and I think you for your precision, if you take a look at December of last year, that price was $155 and again, that reflects some of the things I was talking about today because typically as the year goes on, net price is an increase and that's again because of that rebate program we have in place and also the deductibles and the co-pays, the rebates said differently that go out. So, if you take a look at our first and second quarter of this year, as I mentioned in my script, our rebate number was with higher than anticipated. I believe in the first quarter we talked about 700,000. This quarter it's about 400,000 more than we had anticipated. And again, I see as we looked into this further, there's the HSA plans are growing, the higher deductible plans are growing, the co-pays are getting larger. So, all these things are lasting a little bit longer into the year, but as I mentioned from May to June, we saw a nice bump in terms of that price. And we see kind of a clearing even as we're moving forward here with the rebates going down. So, I think that's the important piece in that pricing peace and that's why I want to emphasize the fact that our unit growth is extremely strong and as that price comes back, so will obviously the revenues on the top line as well. So, I think your assessment is correct and as you go on you'll see that that price will continue now to increase through the third and the fourth quarter. Now the other thing that I did mention and is worth re-mentioning is that our last two years and it's not coincidental, the second half of the year accounted for 66% of our total year sales. So, in terms of taking a look at first half and saying hey, that's 34% of your yearly sales, you can see how we're confident getting to the $19 million number on the top line. So, I think you bring up a really good point for everybody else on this call-in terms of that price sometimes is a little bit elusive but we keep close track of reimbursement and we do look at the macro factors. And as I said we're getting smarter about this. We've only been in this now year and a half and we're collecting all these different factors and thrown them into the hat so to speak and spinning them around and we want to make sure the right answer comes out. But I think your point really is the essence of probably this call and as we -- we move forward being able to really be precise about our business.

Okay. And then one other thing, when I look at the weekly prescription data and it seem to peak in April and May at around 7400 scripts that we can now it's down in the 6200 range, is there anything going on there? Is this seasonality because we didn't really see this decline last summer, but I just want to get your sense of what's happening there and when you think scripts should bounce back to new highs?

Yeah that's another great question, Scott and that's as a result of the MedVantx program that I was talking about we have a number of scripts down there going through MedVantx that don't show up in that data that you're speaking to. So, it's skewed from that perspective. I think we're trying to make your arrangements, again this is a relatively new partnership and we're trying to make arrangements so that Symphony does pick up these scripts and so you'll be looking at real data. As I said right now, Symphony doesn't pick up those scripts in their accounts for the downtrend if you will in units.

Okay. And can you estimate how many scripts that is or just give a sense of the magnitude?

Yeah, I would say in general numbers you're looking at about 1,000 a month. So that's -- it's not that's roughly 10% of those are going through MedVantx.

Okay. And then just a final question could you estimate how many reps you currently have in the market today and do you anticipate increasing that number this year? I know you've talked about why you may or may not, but at least get a sense of where we are today?

Yeah, we're -- right now we're at 50, but I just want to mention this, we've taken two of those 15 and realigned those two focusing on reimbursement with major healthcare plans. So, in essence we took them off if you will the sales side of it and reassigned them to reimbursement. So, the two numbers like 48. Now to your second part of your question, I don't anticipate at this point in time adding any more reps in this year. I think I brought up in earlier calls we want to get to a point and in terms of the metrics where we feel comfortable with adding to our salesforce. And given as you mentioned the price in the first half, obviously we have a breakeven point that we tend to look at in terms of the metric and by the pace as you said fluctuating, that means the units in terms expectation go up on that breakeven point as well. So, we're not quite there yet and as I had indicated again earlier in the year, we anticipate that metric to probably be at the level we'd like to see it at late in the year probably early next year sometime.

Okay. Great. Thank you for taking the questions.

Thank you, Scott. Great questions.

Your next question comes from Yi Chen with H.C. Wainwright. Please go ahead with your question.

Thank you for taking my questions and congratulations on a strong quarter. So, regarding the -- obviously based on your $19 million revenue projection, the majority of the revenue for 2017 is going to be in the second half. I don't know if you can at this moment provide additional color on whether you will follow the similar pattern to the second half of 2016 here the fourth quarter would be the strongest quarter?

Yeah again, I think I mentioned this on the last conference call. I don't like the business flows in terms of -- unfortunately, a lot of our business does come in the fourth quarter for all the things I mentioned prior, but you're actually right on, again the major factor there being that at this point -- at that point in time, typically people are free of deductibles and their co-pays are lowered and that's when they are if you will in the market and that's where we get the highest net price relative to our gross price. So that's the way the business does flow and again we're not really giving projections by quarter, but I think you can fall back to what we talked about earlier in the call that the last two years we saw 66% of our business come in, in the second half of the year and I don't expect that to change too much.

Got it. Great. I don't know if you can provide some -- if there is any information regarding the breakdown of the sales of Avenova in terms of the usage whether it's for dry eye or blepharitis or other patients?

Yeah, I wish I could. We don't have that level of detail quite frankly. Anecdotally one of the things that we have found is that, again a lot of our physicians are kind of using it in most severe cases and that's one of the messages our sales force has taken back to them if you start with this therapy first line, you'll never get to the severe cases and obviously for us that will increase usage as well. So again, that's just anecdotally, but it's difficult to be able to track exactly how physicians are using in day-to-day basis.

Got it. And on a question, so for the two prescription eyedrops for dry eye, Restasis and Xiidra obviously Restasis continue to book revenues that is significantly larger than Xiidra. I don't know if you have any customer or physician feedback regarding which patient group between Restasis and Xiidra are more likely to use Avenova concurrently?

Yeah, you know what, I don't think -- I think that's a neutral. I think they both can use it concomitantly and I can tell you that the split isn’t any different between Shire and Restasis. I think it's virtually the same. As you said things are starting to level off there in terms of Shire and Restasis continues to dominate that side of the market, we're happy that they're both out there advertising and they're creating a lot more awareness around dry eye and we're neutral in terms of who we pair up with. But again, we perform something different than either one of them. So just happy to tag along and be used concomitantly with either one.

Got it. Thank you.

Thanks.

[Operator instructions] Your next question is from Françoise Brisbois with Laidlaw. Françoise Brisbois: Thanks for taking the questions and congrats guys on a strong quarter. My first question is just in terms of the speed of the reps to get to profitability, is that, can you break that down? Are you seeing improvement as you wanted or is that still a little slow?

You know what, Françoise or Frank, I'm not sure, which one it is anymore, whichever I want okay, I like Françoise better. All right. It's never fast enough okay in terms of their productivity, but I think as with any new product and this one certainly were changing the paradigm of how people treat dry eye. So, as you're changing that paradigm, it takes you more cause if you will do get back to over the hump and from that perspective, it's difficult and we're also learning about like I said reimbursement along the way. We want to make sure we take those hurdles on as well. So, I think, the true answer is I'm never happy with if you will the productivity. I always think it can be better. Right now, we have as we talked about the data, we have over 10,600 positions we've now prescribed. Avenova that's probably about 25% of the population of the physicians that ultimately, we're going to call on and the number that strikes me, that I know we can improve on is doctors are sold on it because they're writing it, but are they using it enough? And I mentioned that earlier when that earlier question anecdotally, I said that we're finding that doctors are using this on their toughest cases. And once again, the toughest case are because of the buildup of this bacteria and if you use it early you're not going to have that build up and you're never going to get to severe. And we'd like to think of ourselves as more of a level one therapy replacing hot compresses and baby shampoo. And that's where we need to get to with our message and that's where I think you have that turning point if you will in terms of Avenova and its use. So long answer to your short question, I'm not happy if you will with the uptake. It certainly could be better, but at the same point in time I know how harder people are working out there in terms of changing habits. I've been in this business long, long time with a couple products that were very, very new and took a long time to change people's habits and I think Avenova falls in that class, but obviously we're still growing through that? Françoise Brisbois: Got you, okay. Great and then quickly as I'm looking at the model G&A last quarter had quite a bit of non-cash or stock-based comp and in this quarter, is there any of that involved? I see that it is in the press release, but can you break down how much of that is non-cash?

I don't have that number at my at my fingertips, but I think this quarter, our cash used and our net operating loss we're a lot closer than last quarter. So that's just a different way of looking at it. Go ahead, sorry. Françoise Brisbois: Oh no, that's fine. I just saw there is a jump last quarter that affected a couple things. I just wanted to make sure that wasn’t the case here and then in R&D should we be seeing that lower rate just keep going as a run rate for the year or should we see some kind of hike and I guess what's the status in terms of post-marketing studies and such.

Yeah, I think in the second half of the year, we're trying to get some of these things ramped up and that's why you're seeing a positive variance right now. I think as the year goes on, we'll probably continue to as we go into yearend, we'll probably show a positive variance on that line. But we're attempting to really sign up patients for these studies. So, it's hard to that's a difficult one sometimes because we're counting on a third-party to sign up patients as quickly as they can and oftentimes again it doesn't happen as quickly as I'd like it to. So that's why you're seeing the positive variance right now. Françoise Brisbois: Okay. Great and then lastly, in terms of the other products that you guys have that are on the shelf are there discussions going on? Is there interest from the outside in terms of maybe getting some sort of partnership or that pretty quiet and you guys are just focusing on Avenova?

No absolutely, we talk to people all the time about that and I think I'll leave it as we're in active discussions. So, it's not stagnant. Those discussions are active. Françoise Brisbois: Okay. Great. Congrats and that's it for me. Thank you.

Thanks Frank.

And your next question comes from Ed Woo from Ascendiant Capital. Please go ahead with your question.

Yeah congratulations on a solid quarter. I had a question that comes, I know you said that the wrap up for the sales rep is never fast enough, but do you think it's just a timing issue or do you think that possibly there is some more training than needs to be a loss of sales people?

If I take a look at I've got a number of people who are already over that metric. Obviously, you always tend to have a bell curve of yourself for. So, we know that metric can be met and is being met. So, it's just really a matter of time and we're doing whatever we can to help it go little bit faster. So, I am not -- I'm very confident that we're going to get there, but the question is when and I see steady improvement on a month-to-month but again I don't want to you falsely lead you. We're not there yet.

Great. And then I think previously you guys talked about having more products in the product back to possibly increase productivity. Has there been any more discussions about possibly doing that either with your own product or with somebody else's product?

No, we always keep our eyes open. As I said, we're opportunistic both then may be picking up a product, certainly co-promote brands. Whatever the case may be, we're opportunistic there. That being said, I always say that with Avenova and the opportunity that we have with Avenova, we've only really touched the beginning and I don't want to be focused our people off this huge opportunity with a great margin. So, any product that we put in the bag quite frankly, I'd much prefer to do it when we have a full sales force that's fully trained and they really are moving fast on Avenova rather than interrupt if you will the growth process right now with only one third of the people in the sales force in terms of what I'd like to have to cover the whole country.

Great. Well thank you and good luck.

Thanks very much.

There no further questions at this time. Please proceed with your presentation or any closing remarks.

Yeah, well great and great questions and thanks again for joining us today and your interest in NovaBay. I'm really excited because I can just sense from the questions people are really didn't understand this story. I know sometimes at the beginning it's a little difficult to grab what we're doing and how we're doing it. And so, we're certainly excited about sharing our progress and the opportunity that we have with Avenova and I'm glad that you've come along for the ride and we look forward to updating you during our next quarterly call to discuss the third quarter results. Remember again, we'll be presenting in September and anything else comes along, hopefully you'll see some good press releases along the way, but other than that, have a great day and thanks again for joining us.

Ladies and gentlemen, that concludes your conference call for today. We thank you for your participation and ask that you please disconnect your lines.