U.S. Markets closed

Edited Transcript of CGNT earnings conference call or presentation 9-Mar-17 4:00pm GMT

Thomson Reuters StreetEvents

Q4 2016 Cogentix Medical Inc Earnings Call

Orangeburg Mar 9, 2017 (Thomson StreetEvents) -- Edited Transcript of Cogentix Medical Inc earnings conference call or presentation Thursday, March 9, 2017 at 4:00:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Doug Sherk

EVC Group, Inc. - IR

* Darin Hammers

Cogentix Medical, Inc. - President & CEO

* Brett Reynolds

Cogentix Medical, Inc. - CFO

================================================================================

Conference Call Participants

================================================================================

* Chris Lewis

ROTH Capital Partners - Analyst

* Brooks O'Neil

Lake Street Capital - Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Cogentix Medical, Inc. fourth-quarter fiscal 2016 financial results conference call. (Operator Instructions). As a reminder, this conference is being recorded. Now I would like to welcome and turn the call to Doug Sherk of EVC Group.

--------------------------------------------------------------------------------

Doug Sherk, EVC Group, Inc. - IR [2]

--------------------------------------------------------------------------------

Thank you, Carmen, and good morning, everyone. Thank you for joining us for Cogentix Medical's conference call to review financial results for the fourth quarter and fiscal year 2016 which ended December 31, 2016.

The news release announcing the results crossed the wire this morning prior to the market open and is currently available on the Cogentix Medical website. We have arranged for a taped replay of this call which can be accessed by phone. This call is also being streamed live on the Investor Relations section of our website at IR.cogentixmedical.com and will be archived there.

Before we get started we would like to remind you that during the course of the conference call management will make projections and other forward-looking statements regarding future events that are subject to risks and uncertainties that could cause actual results to differ materially from anticipated results.

Such risks and uncertainties are more fully discussed in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2015 and other periodic filings with the SEC. Further, such statements are made only as of today, March 9, 2017, and the Company assumes no obligation to and does not intend to update these projections and forward-looking statements to reflect future events or actual outcomes.

And with that now I would like to turn the call over to Darin Hammers, President and Chief Executive Officer of Cogentix Medical.

--------------------------------------------------------------------------------

Darin Hammers, Cogentix Medical, Inc. - President & CEO [3]

--------------------------------------------------------------------------------

Thank you, Doug. Good morning, everyone, and thank you for joining us today. With me on the call is Brett Reynolds, our Chief Financial Officer. Our agenda this morning will cover a brief review of our accomplishments during the past year, a review of our objectives for 2017, and then Brett will review our financial highlights. We will then open the line for your questions.

The results we reported this morning cap a year of significant transformation for Cogentix Medical. We have substantially expanded our presence in the Urology market, capitalized on opportunities to meet the needs of our clinicians in the Uro/Gynecology and Gynecology markets, gone from a heavily indebted Company to one with no debt and nearly $30 million in cash on the balance sheet, and we have positioned ourselves to execute a well-defined business development plan to build our market presence.

As of today Cogentix Medical is in the best overall position, than at any other time during my four years with the Company, to grow both our business and our shareholder returns. We currently offer three innovative products to our customers: our Urgent PC product for the treatment of overactive bladder; our injectable bulking agent, Macroplastique, which is used for the treatment of stress urinary incontinence; and PrimeSight, our proprietary endoscopy platform of products.

Urgent PC is our nonsurgical and highly effective therapy for growing a market of more than 42 million people in the US with overactive bladder. Despite the competitive challenges during 2016, we grew Urgent PC revenue by more than 5% for the year and we had unit growth in the US of 11% in 2016. We sold more boxes of Urgent PC lead sets during the fourth quarter than during any other period in the Company's history. And we achieved the second highest number of lead set boxes ordered per active customer during the fourth quarter.

And as I have stated in the past, we believe that with PTNS, a rising tide lifts all boats. Having a very large medical device manufacturer enter the market created some initial pricing pressure, but the reality is there is further validation for the therapy and an extremely large market opportunity.

Macroplastique performed as expected during the year and continues to be a solid contributor to our bottom-line performance. The PrimeSight product line was the leader in terms of revenue growth for both the fourth quarter and for the full year. Our PrimeSight Urology product line had revenue growth of nearly 18% in Q4 and 20% for 2016.

PrimeSight is quite simply a very differentiated product platform that continues to address a physician's growing need for an always ready, always sterile flexible endoscopy solution that maximizes throughput and the associated revenue opportunity. The product line has been clinically proven to reduce the risk of cross contamination associated with the reuse or reprocessing of difficult to clean conventional endoscopes and also reduces the typical 45-minute reprocessing time to less than 10 minutes, allowing for greater patient throughput, increased physician productivity and ultimately economic benefit for our customers.

The ECRI, a nonprofit organization that researches and publishes an annual list of health technology hazards, has listed the inadequate cleaning of complex reusable instruments, such as and endoscopes, as the number one and two hazard on its top-10 health technology hazards in 2016 and 2017 respectively. PrimeSight products directly address this hazard and our strategy has been to efficiently utilize our 50-person US-based sales organization to get the word out and highlight this great technology that provides a sterile endoscope for each patient.

As we move into 2017 we continue to see the Urology market as a very viable growth opportunity for Urgent PC, especially through expansion of our current committed customers. At the same time we continue to gain new Urgent PC customers and in 2016 we began to see the demand for our Urology product lines extend to the related specialties of Uro/Gynecology and Gynecology.

And as a result of this development, our Urgent PC sales plan during 2017 is to aggressively convert new customers from the Uro/Gyn and GYN segments while we continue to focus on our core Urology market. We believe if we successfully execute this strategy we position ourselves for both unit and top-line Urgent PC growth for the year and capitalize on our unique market positioning to benefit pricing and our competitive strengths.

We also expect in 2017 that both Urgent PC and PrimeSight sales will benefit from the leadership of a newly created position to oversee government and strategic accounts. This new sales resource is already on board and working with our sales organization to capitalize on numerous opportunities in both the VA systems as well as other military hospitals.

For PrimeSight we will be expanding the effort to target large Urology group practices, large clinics and various government institutions, most importantly the VA system with our messaging of improved practice efficiency and superior infection control due to its sterile endoscope EndoSheath solutions.

We believe that infection control in particular represents a key opportunity for PrimeSight with larger institutions and facilities. Our team has targeted several dozen potential customers whose PrimeSight system requirements would mean six-figure revenue opportunities for Cogentix and these system placements would lead to substantial annual disposable revenue.

So that summarizes our approach to 2017 for our core product lines. We are excited as we look forward to 2017 and we believe our strong and building relationships in Urology, Uro/Gynecology and Gynecology provide us with a unique platform for which we can bring in additional products and technologies to serve these practice areas.

Our business development efforts are intense and we have several opportunities well along in our assessment and diligence process. Our strategy is to complete transactions this year that create revenue either in 2017 or shortly into 2018 as we enable Cogentix to further leverage our expertise and relationships in the Urology, Uro/Gyn and Gynecology markets.

I will provide more color on our expanding business opportunity and our efforts in my closing remarks, but let me now turn the call over to Brett for a more detailed review of our financial performance.

--------------------------------------------------------------------------------

Brett Reynolds, Cogentix Medical, Inc. - CFO [4]

--------------------------------------------------------------------------------

Thank you, Darin, and good morning, everyone. We accomplished many financial objectives in the fourth quarter. Two key financial objectives that occurred in the fourth quarter, especially important as we look to expand our product offerings, were the issuance of slightly more than 16 million shares of our common stock in exchange for $25 million, as well as a conversion of nearly $30 million of related party debt and accrued interest into equity. These transactions have transformed our balance sheet and provide a great financial foundation as we look forward.

Also in the fourth quarter, our Urology products had revenue growth of 6%. Our overall gross margin was the highest gross margin as a combined Company. And the trend of lower operating expenses continued. All of this resulted in second-quarter positive operating income on a GAAP basis and a fifth consecutive quarter of positive cash operating profit which was $1.5 million for the quarter.

Total revenue for the fourth quarter of 2016 was $13.2 million compared to $13.6 million a year ago. The biggest factor in this comparison was a $1.1 million decline in the revenue of our Airway Management and Industrial product lines which were down approximately $350,000 and $750,000 respectively.

As I mentioned previously, revenue growth for our Urology products was 6% in the fourth quarter of 2016. For the full year we had revenue growth of 5% when compared to the pro forma combined result of 2015, and our Urology products delivered full-year revenue growth of more than 8%. When excluding the impact of the Stryker agreement that we did not review at the end of 2015 and on a constant currency basis full-year revenue from Urology products grew 14%.

Turning now to our performance by product line. Our PrimeSight Urology business in the fourth quarter had total revenue of $4.1 million, up 18% compared with the year-ago period. This increase was driven by the fact, as Darin discussed, that our PrimeSight products offer a meaningful value proposition to our physician customers and their patients, as well as the continued high execution by our sales organization as they build proficiency in selling our PrimeSight products.

Urgent PC revenue in the fourth quarter was $5.5 million compared with $5.6 million in the prior year quarter. While Urgent PC revenue was down slightly in the quarter unit growth for this product line in the US was 4% in the fourth quarter. We sold nearly 6,500 lead set boxes in the fourth quarter, the highest ever unit sales for a quarter.

Customer utilization in the fourth quarter was 3.6 boxes per active customer, our highest for any quarter during 2016, demonstrating the ability of our sales force to deepen our relationships with existing customers. Offsetting the unit growth was a lower average selling price. The ASP per box of lead sets in Q4 was down 6% versus the same period of last year, but was down only 1% sequentially from the third quarter.

Our third Urology product line, Macroplastique, had total revenue of $1.9 million in the fourth quarter, up $100,000 as compared to the year-ago period. As we have mentioned in prior calls, our best-in-class bulking agent serves a small market relative to Urgent PC and PrimeSight.

Our non-Urology products, comprised of our Airway Management and Industrial products, had a meaningful decrease in revenue in Q4 this year versus last year. Our Industrial product line has historically experienced significant revenue fluctuations by quarter, but for the full year of 2016 our Industrial product line had a revenue increase of 4% over 2015.

Our Airway Management products are very good products, but throughout 2016 we have continued to focus and direct resources to our Urology product line where we see the opportunity for the most long-term benefits and this is consistent with our previously communicated strategy.

Our overall gross margin in the fourth quarter was 69.8%, up 580 basis points from the 64% gross margin in the year-ago period. The increase in gross margin is due primarily to product mix and better utilization of manufacturing overhead. As we have stated in the past, our gross margin is highly dependent on product mix as the gross margin by product varies significantly in that our PrimeSight and Industrial products have a lower gross margin than Urgent PC and Macroplastique.

Operating expenses for the fourth quarter of 2016 totaled $8.8 million and were approximately 7% or $600,000 lower than the year-ago quarter. The primary driver here was lower sales and marketing expense as we had lower headcount and several open positions in the fourth quarter compared to the prior year. The open positions have been filled here in the first two months of 2017.

Operating profit for the fourth quarter was $500,000, a $1.2 million improvement as compared to the $700,000 operating loss in the year-ago quarter. Cash operating profit, which excludes non-cash charges and one-time items, was $1.5 million in the fourth quarter of 2016 compared to $500,000 in the year-ago quarter. As both Darin and I have mentioned, this cash operating profit that we achieved in the fourth quarter represents the fifth consecutive quarter of cash operating profit for Cogentix.

Below the operating income line our GAAP net loss for the fourth quarter included non-cash debt conversion expense of approximately $18.8 million. This was the expense we had to recognize from a technical accounting perspective related to the debt conversion that occurred in the fourth quarter. Again, this was a non-cash one-time charge.

Most of my comments so far today have been on the fourth-quarter results and now I'd like to make a few comments about the full year of 2016. For the full year, again revenue growth was 5% when compared to the pro forma combined results for 2015 with Urology products leading the way with 8% growth. Again, when we exclude the impact of Stryker on constant currency, full-year revenue from Urology products grew 14%.

This 14% growth in Urology is very meaningful, especially in light of a new competitor in the PTNS market, and reflects the value proposition of our products and the relationships our sales force has developed with our customer base.

Moving on from revenue, we have done a very good job at looking for operating efficiencies and executing on those identified efficiencies since the merger of our predecessor companies. Our 2016 operating costs, excluding one-time charges, totaled slightly more than $35 million while the pro forma combined operating expenses for 2015, again excluding one-time charges, totaled over $40 million representing a cost reduction of over $5 million in just one year.

All told our bottom line changed fundamentally from 2015 to 2016 with cash operating profit in 2016 of slightly more than $4 million, an improvement of over $6 million from 2015. Financially 2016 was a tremendous year for the Company.

Let's now discuss the Company's significantly improved and debt-free balance sheet in more detail. The issuance of equity in November added $23.4 million of cash net of expenses to our balance sheet. That, when combined with the cash balance at the end of Q3 and cash generated during the fourth quarter, allowed us to end the year with cash and investments of $28.3 million.

We had no borrowings outstanding under our $7 million line of credit and zero debt, which when combined with the cash on our balance sheet, dramatically improves our financial flexibility and ability to prudently execute growth oriented business development transactions that aim to benefit our customers and our shareholders. I'd like to turn the call back to Darin. Darin.

--------------------------------------------------------------------------------

Darin Hammers, Cogentix Medical, Inc. - President & CEO [5]

--------------------------------------------------------------------------------

Thank you, Brett. We now have the resources to execute on our business development plans. We believe that successful execution of some of our business development strategy, combined with our continued execution of our core product line growth strategies, should drive our annualized revenue run rate significantly above the current $50-million-plus level as we look out into the future.

We have progressed due diligence on a number of possible opportunities and will work to make sure that these opportunities are the correct fit for Cogentix. We are taking a thoughtful and methodical approach to business development and we aren't going to execute a transaction just to do a transaction. We look forward to updating you on our progress in this area as developments merit.

So in summary, 2016 was, as Brett mentioned, a transformation year for Cogentix. We continue to demonstrate strong consistent growth in our Urology business and have significantly changed the operating performance of this Company. Our sales force continues to strengthen and build new customer relationships and we fundamentally changed our balance sheet and thus our ability to complete business development deals to add additional products to our sales bag.

We faced a significant headwind in 2016, but the work we have accomplished has positioned the Company extremely well. I would like to thank our shareholders, the Board and the entire Cogentix Medical organization for their commitment and focus as we aim to build value for our customers and the Company. Operator, please open the line for questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions). Chris Lewis, ROTH Capital Partners.

--------------------------------------------------------------------------------

Chris Lewis, ROTH Capital Partners - Analyst [2]

--------------------------------------------------------------------------------

Wanted to start on just the broader outlook for 2017. I know you stopped giving official guidance as Medtronic came into the market, but can you provide any commentary just on how we should think about the growth rates across your various business segments in 2017 versus 2016?

--------------------------------------------------------------------------------

Darin Hammers, Cogentix Medical, Inc. - President & CEO [3]

--------------------------------------------------------------------------------

Sure. Well -- and again, you are correct, we stopped giving guidance. And I think what we have said publicly in the past, and I think we will reiterate today is, we don't expect things in 2017 to be much different than what they were in 2016. There is unpredictability when you have a competitor enter the market, but we have been very pleased with our ability to not only protect our current business but to continue to grow this space.

And when you look at the other segments of our business, we are extremely excited about what PrimeSight offers us in 2017. Clearly this has been a growth engine for us and we expect that Urgent PC will continue to be a growth engine as well. Macroplastique, you know; you have seen it for years. It's a very stable base of business with high margins and we expect that to continue in 2017 as well.

And then our Industrial business is typically lumpy, consistently right around $4 million a year, but it doesn't come in equally quarter over quarter. So that's why you see some of the fluctuation that you saw in the fourth quarter of last year. We continue to be bullish and we continue to focus on the things that we have stated are core to our strategy and we expect that to remain in 2017.

--------------------------------------------------------------------------------

Chris Lewis, ROTH Capital Partners - Analyst [4]

--------------------------------------------------------------------------------

Okay. So just as I look at it on a year-over-year basis, I mean you grew 5% on a pro forma basis in 2016. Sounds like that's a reasonable expectation this year given all the different dynamics you just went through in the various underlying segments. Is that correct?

--------------------------------------------------------------------------------

Darin Hammers, Cogentix Medical, Inc. - President & CEO [5]

--------------------------------------------------------------------------------

Yes; well, I would say we are not necessarily saying 5%. We would like to think that we are going to do better than that -- just [not going to give] guidance.

--------------------------------------------------------------------------------

Brett Reynolds, Cogentix Medical, Inc. - CFO [6]

--------------------------------------------------------------------------------

Chris, the other thing with the comparable 2016 to 2015; in 2015 we had about $2 million of revenue from Stryker, so that was a tough comparison. We will no longer have that in 2017 compared to 2016.

--------------------------------------------------------------------------------

Chris Lewis, ROTH Capital Partners - Analyst [7]

--------------------------------------------------------------------------------

Okay. Great. And then, Darin, can you just provide some additional color on what you are seeing in the market from Medtronic now? It sounds like pricing continues to be a headwind, but perhaps that's moderating a little bit just from the implications of the lower sequential decrease in the fourth quarter? Can you just talk about pricing, customer retention and just any other dynamics you care to share?

--------------------------------------------------------------------------------

Darin Hammers, Cogentix Medical, Inc. - President & CEO [8]

--------------------------------------------------------------------------------

Sure. We have seen some stabilization in the pricing and expect that that is probably -- that will remain in 2017. We don't know. We don't control what they do, but at the end of the day our team has done a pretty good job of holding up ASPs. And like we said in previous calls, we had a lot of opportunity to prepare for this entrance and I think the team has done a really good job with that.

And if you look at the total number of customers, we are right at the 1,770 number of customers in the fourth quarter and that's consistent with what we have seen almost throughout the year. We continue to add new customers every quarter. And as I mentioned in the prepared remarks, Gynecology and Uro/Gynecology is a real growth opportunity for us as well. So, I really do mean that this market opportunity is much, much bigger than the base of business that we have right now and we look to execute in that market.

--------------------------------------------------------------------------------

Chris Lewis, ROTH Capital Partners - Analyst [9]

--------------------------------------------------------------------------------

And what is the sales strategy going to be to expand in some of those newer markets? How are you going to implement that within the sales force?

--------------------------------------------------------------------------------

Darin Hammers, Cogentix Medical, Inc. - President & CEO [10]

--------------------------------------------------------------------------------

So, I've added five Urology sales heads over the last several months. But the fact of the matter is the 50 that we have, or just under 50 that we have right now, are positioned to do that. Urologist offices aren't that far away from gynecologists; it's the same value proposition in that space. For most women, they go to the gynecologist almost every year and so they are really seen as a primary physician for some of these patients that give us the opportunity to access those patients easier.

And we said consistently with Urgent PC our biggest competitor is not the other products on the market, it's apathy. Of the 42 million patients that have OAB, only 10 to 12 show up to the doctor every year to have something done. And of those 90% of them are off the drugs that they seek within the first year. So with the third-line therapy where it is right now treating somewhere between 150,000 to 175,000 patients, we think there's tremendous runway for us and any other product that's a third-line therapy.

--------------------------------------------------------------------------------

Chris Lewis, ROTH Capital Partners - Analyst [11]

--------------------------------------------------------------------------------

And on the business development front, any additional color you can share with us just in terms of a pipeline of potential opportunities; where you are today; how far you are along with some of those? And maybe just any expectations you can share on when we can start to see some announcements actually come through on that front?

--------------------------------------------------------------------------------

Darin Hammers, Cogentix Medical, Inc. - President & CEO [12]

--------------------------------------------------------------------------------

Well, as you know, business development is tricky in the sense that you are never sure until it's completed. But I can tell you the team has been extremely busy over the last six months. And certainly since we got the infusion of cash back in November, in identifying, assessing and diligence on multiple opportunities. Our goal is to do something relatively soon, but a lot of that is dependent on the process. Can't tell you when, but our goal is it is a huge priority and my number-one priority for this year.

--------------------------------------------------------------------------------

Chris Lewis, ROTH Capital Partners - Analyst [13]

--------------------------------------------------------------------------------

Do you have any type of requirements around size of book of business or stage or any other type of requirements for that?

--------------------------------------------------------------------------------

Darin Hammers, Cogentix Medical, Inc. - President & CEO [14]

--------------------------------------------------------------------------------

Well, as we've said in the past, our goal is to get something with either current revenue or very near term revenue to be able to add to the product bag that we currently offer. And we've mentioned that our sales team has capacity to sell more products and that is the goal.

I think conversely we'd also look for other things that really set the Company up for success in the future also. As far as size, we have roughly just under $30 million in cash on the balance sheet, so that tells you where we have to focus and what type of products we go after.

--------------------------------------------------------------------------------

Chris Lewis, ROTH Capital Partners - Analyst [15]

--------------------------------------------------------------------------------

Okay, great. And then, Brett, maybe a question for you. Just the R&D line has picked up here -- quite a bit here over the past I guess throughout really 2016. Can you elaborate on where that increased spend is coming from?

--------------------------------------------------------------------------------

Brett Reynolds, Cogentix Medical, Inc. - CFO [16]

--------------------------------------------------------------------------------

We have a couple of projects ongoing to help with -- mainly within our PrimeSight technology, just improvements on that. And that expense really started middle of 2016 and should be expected to continue into 2017.

--------------------------------------------------------------------------------

Chris Lewis, ROTH Capital Partners - Analyst [17]

--------------------------------------------------------------------------------

Great. And just one more for me. Overall expectations for operating expenses and associated growth going forward? Thanks.

--------------------------------------------------------------------------------

Brett Reynolds, Cogentix Medical, Inc. - CFO [18]

--------------------------------------------------------------------------------

Chris, so in 2016, a great year, costs came down $5 million from the year before. Until we got the cash infusion our cash line was single-digit million. So very, very conscientious on the operating expenses. As we look going forward we are looking for each opportunity we can to invest in the business to grow the top line. We think the Urology market, Uro/Gyn is great, and so if we can prudently increase expenses to grow that top line we will do that. So I think you should expect growth 2017 over 2016.

--------------------------------------------------------------------------------

Chris Lewis, ROTH Capital Partners - Analyst [19]

--------------------------------------------------------------------------------

Okay. Thanks for the time.

--------------------------------------------------------------------------------

Operator [20]

--------------------------------------------------------------------------------

(Operator Instructions). Brooks O'Neil, Lake Street Capital.

--------------------------------------------------------------------------------

Brooks O'Neil, Lake Street Capital - Analyst [21]

--------------------------------------------------------------------------------

Good morning. I have a couple questions. Following up on one line of Chris's questions, can you just talk a little bit -- is Medtronic attacking the market by being price competitive? Or is that more of a response from you guys to their entry to the market?

--------------------------------------------------------------------------------

Darin Hammers, Cogentix Medical, Inc. - President & CEO [22]

--------------------------------------------------------------------------------

No, clearly for us we were operating at a roughly list price for a lot of years. And so, we have seen some competitive pricing pressure that we've had to react to. And we are not in the habit necessarily of meeting that price, but physicians are cost-conscious and so we have to do two things.

Number one, we have to help them show ways that they create value in their practice. And number two, we have to make sure that do we provide the level of service that meets their expectations to be able to bolster our average selling price in the face of a competitive entry.

--------------------------------------------------------------------------------

Brooks O'Neil, Lake Street Capital - Analyst [23]

--------------------------------------------------------------------------------

Sure, that makes sense. And then I think you mentioned in the prepared remarks an opportunity with the Veterans Administration. Can you just talk a little bit about what you see there and whether you think that might be something that comes to fruition in 2017, or is that a longer-term opportunity?

--------------------------------------------------------------------------------

Darin Hammers, Cogentix Medical, Inc. - President & CEO [24]

--------------------------------------------------------------------------------

No, we have been focusing on the VA and government facilities for some time because we do see that the PrimeSight value proposition really resonates in there. They are certainly focusing on efficiency, cost reduction, those types of things. The fact that we are always ready, always sterile gives us an advantage over some of our competitors. So we've had success in the past with VA and we are going to continue to leverage on that success to grow in that space and we feel like it is a large growth potential for us.

--------------------------------------------------------------------------------

Brooks O'Neil, Lake Street Capital - Analyst [25]

--------------------------------------------------------------------------------

Great. Congratulations on the strong year and looking forward to 2017.

--------------------------------------------------------------------------------

Operator [26]

--------------------------------------------------------------------------------

Ladies and gentlemen, this concludes our Q&A session for today. I would like to turn the call back to Darin Hammers for final remarks.

--------------------------------------------------------------------------------

Darin Hammers, Cogentix Medical, Inc. - President & CEO [27]

--------------------------------------------------------------------------------

Thank you, operator; and thanks to everyone for participating today. We appreciate your interest and we look forward to updating you on our progress. Good day.

--------------------------------------------------------------------------------

Operator [28]

--------------------------------------------------------------------------------

Ladies and gentlemen, this concludes the program. You may all disconnect. Have a wonderful day.