Elite Pharmaceuticals Inc. (ticker not provided) has reported a substantial increase in its financial performance for the third quarter of the 2024 fiscal year, which concluded on March 31, 2024. The company's total revenues reached $15.5 million, marking a 67% increase from the same period in the previous year. The operating income also saw a significant rise, jumping 75% year-over-year to $3.5 million. This growth is attributed to the successful launch of their Elite label in April 2023. With three quarters of the fiscal year completed, Elite Pharmaceuticals' revenues nearly hit the $39 million mark, outpacing the previous year's total of $34 million.
Key Takeaways
- Elite Pharmaceuticals' Q3 revenues surged to $15.5 million, a 67% increase year-over-year.
- Operating income for the quarter was $3.5 million, up by 75% from the previous year.
- The growth was driven by the successful introduction of the Elite label.
- Research and development expenses stood at $1.4 million for the quarter.
- A future tax benefit of $20.2 million was recorded from net operating loss carryforwards.
- Despite strong revenues and profits, the company is managing cash burn due to rapid growth.
- The balance sheet remains robust, with a 32% increase in working capital over nine months.
Company Outlook
- Elite Pharmaceuticals anticipates positive cash flows as inventory and receivables begin to generate working capital.
- The company's CEO is confident in continued growth and future prospects, including facility and infrastructure expansion.
Bearish Highlights
- The company is experiencing cash burn as it navigates through a period of rapid growth.
- Total liabilities have increased due to the revaluation of existing liabilities with stock price movements.
Bullish Highlights
- Elite Pharmaceuticals has maintained a strong sales and distribution performance with no supply interruptions.
- Ongoing research and development efforts are in place, with potential high-level generic products in the pipeline.
Misses
- There is a slight decrease in inventory levels, although the company assures there are no supply issues.
Q&A Highlights
- Elite Pharmaceuticals is not currently engaged in stock buybacks, preferring to allocate funds elsewhere.
- The company does not have an employee stock purchase program but may consider one in the future.
- Prospects of a buyout or uplift to NASDAQ are possible within a couple of years.
Elite Pharmaceuticals' CFO elaborated on the financials, explaining the increase in total liabilities as a result of stock price fluctuations. The CEO praised the company's transition to direct sales and the success of commercial products. In terms of strategic partnerships, Elite is satisfied with its collaboration with Prasco and is exploring international opportunities with Dexcel. Updates on new packaging and warehousing facilities were also provided.
The company touched on ongoing litigations with Purdue Pharma and discussed the potential development of a generic version of Pfizer (NYSE:PFE)'s OxyER. Despite these challenges, the leadership team, including Kirko and Doug, has led the sales and distribution team to a smooth transition without any supply disruptions. Looking ahead, Elite Pharmaceuticals is optimistic about beating revenue projections in the coming years and is open to significant strategic moves, including a potential buyout or listing on NASDAQ within a shorter timeframe than previously suggested. The call concluded with a note of optimism for the year ahead and gratitude to the participants.
InvestingPro Insights
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InvestingPro Data reveals a robust revenue growth of 24.7% over the last twelve months as of Q2 2024, with an impressive quarterly revenue growth of 64.89% in Q2 2024. This aligns with the company's reported surge in Q3 revenues and indicates a strong upward trend. The company's market capitalization stands at $188.17M, illustrating a solid presence in the market. Additionally, the operating income margin has improved to 13.14%, further demonstrating Elite Pharmaceuticals' increasing profitability.
Two key InvestingPro Tips to consider are the company's high return over the last year and the notable price uptick over the last six months, with a 380.26% one-year price total return and a 277.35% six-month price total return. These metrics underscore the company's robust performance and may suggest a positive trajectory for investors looking at the long-term potential.
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Full transcript - Elite Pharmaceuticals Inc (ELTP) Q3 2024:
Operator: Good morning, ladies and gentlemen, and welcome to the Elite Pharmaceuticals Conference Call. At this time, all lines have been placed on a listen-only mode. Before management begins speaking, the company has the following statement. Elite would like to remind their listeners that remarks made during this call may contain forward-looking statements that involve risks and uncertainties that are subject to change at any time, including, but not limited to, statements about Elite's expectations regarding future operating results. Forward-looking statements are made pursuant to the Safe Harbor provisions of the federal securities laws and represent management's current expectations. Actual results may differ materially. Elite disclaims any obligation to update or revise its forward-looking statements, except as required by law. More complete information regarding forward-looking statements, risks and uncertainties can be found in the reports Elite Files, with the SEC, which are available on Elite's website at elitepharma.com under the Investor Relations section. Elite encourages you to review these documents carefully. With that covered, it is now my pleasure to turn the floor over to your host, Mr. Nasrat Hakim, President and Chief Executive Officer of Elite Pharmaceuticals. Sir, the floor is yours.
Nasrat Hakim: Thank you, Matthew, and good morning, ladies and gentlemen. Thank you for joining us today. My name is Nasrat Hakim. I am Elite's Chairman and CEO. This is our earnings call. Our CFO, Carter Ward, will give us a summary of the company's financials, after which I'll give a brief update and answer some of the questions you've submitted to Dianne. Carter, you have the floor.
Carter Ward: Thank you, Nasrat, and good morning, everybody. Thank you to everybody calling in today. Yesterday, we filed our 10-Q for the third quarter of our 2024 fiscal year. We have a fiscal year ending March 31st. So December 31st, 2023, is the third quarter of our 2024 fiscal year. It is available on elitepharma.com, sec.gov and any place else, you get your SEC filings. So please, if you haven't seen it yet, I would appreciate you taking a look at that. I'm going to give you a little context and go over some of the more relevant areas of the financial statements. And along the way, we received a lot of questions. Thank you so much for all the questions. We really did get a lot last night, and I'll do my best to answer all of them, as I go through. So let's start with the P&L. Total revenues for the quarter were $15.5 million. You can compare that to $9.3 million for December 2022 last year for that quarter and $14.2 million for the September 2023 quarter, the last quarter. Percentage-wise, that's a 67% year-on-year increase, and it's a 9% increase since the last quarter. And I got a lot of questions, and the answer to the question is, yes, Prasco shipment made in December is included in the revenue numbers. For the full nine months on our P&L, the revenues were $38.7 million for this year. You can compare that to $25.5 million last year. That is a 52% year-on-year increase. Our operating income for the quarter ended December 31st, 2023, was $3.5 million, compare that to $2 million for last year. And -- the last quarter, the September quarter was $1.9 million. So percentage-wise, it's 75% year-on-year increase and 84% increase over September 2023 quarter. For the full nine months, our operating income was $7.1 million and that's compared to $4.1 million for the full nine months ended last year, December 31st, 2022, percentage-wise, 73% year-on-year increase. Now whichever way you look at, our operating revenues, our operating profits, you're only going to see significant year-on-year increases. The biggest change this year, as compared to last year, was obviously the successful launch of our Elite label in April of 2023. So 2022 numbers didn't have this, 2023 does. It's been very, very successful. And our P&L clearly demonstrates just how successful the Elite label has been. The Elite label has boosted our growth. But even before that, our revenue streams were expanding, they were solidifying and growing before we even launched the Elite labels. Just to give you a little history, in 2019, our revenues were $7.6 million for full year, full 12 months. In 2020 -- fiscal year 2020, it was $18 million. And then 2021, it was $25 million. 2022, it was $32 million and last fiscal year ended March 31st, 2023, it was $34 million. So that's nice growth. And this year, with only nine months into our fiscal year, only three quarters there, we've already booked almost $39 million in revenues. And last year was a good year and for the whole 12 months, it was $34 million. So we're already above last year's full year results. No, there's no doubting the importance of the Elite Label launch, but that's -- it's just added more steam to the company that had already been moving steadily in a positive direction for more than four years. Moving down the P&L. I want to talk about R&D and research and development and G&A, which is general and administrative expenses because both of them -- they both give some insight into what we're putting together. R&D, as I've said over and over again, R&D is the lifeblood of any pharmaceutical company, and we are no exception. We spent $1.4 million this quarter and $5.2 million up nine months on R&D, on Product Development. Nasrat, as he usually does, will speak more on Product Development. But from a finance perspective, we're continuing to fund development of new products and more importantly, we're doing it from cash flows generated by current commercial operations. I always like to see that. G&A expenses, general and admin expenses, they were up around $500,000, from last year's December 2022 quarter. This year was $1.7 million for the quarter versus $1.2 million last year, December quarter, now the increase is mostly due to hiring more people. The Elite Label operations, the launch, the operations and our expansion plans require a larger HR footprint, we need more people and more infrastructure. And it's a good result because there's more opportunities. There's more jobs available here. So that's always nice. As the growth continues, we expect to have better utilization of the infrastructure. So our utilization rates are going to increase, and we're looking for improved efficiency of these costs, as compared to top line revenues. So you look at that in a proportion standpoint. I did get a question on the income tax benefit, down below the line, of $18.3 million for the nine months ended December 31st, 2023. This is also going to answer, I had a similar question on the future tax benefits going forward, of our NOL, our net operating loss carryforwards. So I'm going to answer both of those together because they're both related. Elite in the past was not profitable for many years, and we have built up large net operating losses, NOLs carry forwards on our tax returns that we filed with the IRS. Either tax deductions that we can take going forward as we become profitable or as we are profitable. Prior to this year, the tax effect of these tax deductions were fully reserved, meaning it was in our balance sheet, but we didn't meet the criteria to demonstrate that we were going to be reasonably and consistently profitable in order to realize the benefit of these tax deductions, to be able to take these tax deductions. Prior to this year, that was the case, so they weren't there. Now we've been profitable for several years, and we meet the criteria demonstrating a reasonable expectation of profits going forward. So now these NOL carry forwards have a value to us, a real value in the form of tax deductions against real profits. So there was a partial release of this reserve in March 31st, the small amount, but the big release was this year in September of this year, the release was -- the reserve was fully released. So now we're showing that we have a future tax benefit, that we will be able to use going forward. So when that happens, you have to book an asset, which we have, we have a deferred tax asset on our balance sheet of $20.2 million. So there was a question about -- what is the value going forward of these tax deductions. There it is. It's on our balance sheet. It will be there every reporting period, every quarter. You'll see that. We do an evaluation every quarter on what's the value there. Income tax wise as the tax rate changes, so will this. But as of December 31st, the value going forward is $20.2 million. And that's a real deduction. We expect to be able to take in the years going forward. The flip side is when we release the reserve, we record essentially, it's a tax benefit, it's like a negative income tax, and that was $18.3 million, onetime benefit on our P&L statement. So moving to the cash flow. Our operating burn for the nine months ended this year, December 31st, '23, was $5.3 million. Strong revenues, strong profits coupled with cash burn may not make sense at first, but it's quite normal for companies with rapid growth. And we are a textbook example of the importance of working capital, during the initial phase of rapid growth, which is what we're going through. Sales are strong, profits are increasing, but also on the flip side, inventory and receivables are also growing. Those two together grew almost $18 million for us. Whenever you have this type of growth, it takes in our industry, approximately nine to 12 months for these receivables and inventories to start rotating into positive cash flow. We have to buy the inventory, manufacture, sell it, ship it, collect our accounts receivable. So there's a whole process. And roughly, it takes nine to 12 months, before what I call rotations happening, and we start achieving positive cash flows. And we are now nine months into that, and we're just entering that phase. So as we continue to grow, I look for the inventory and the receivables from the prior period, things that we already booked to start generating working capital, and that working capital will support the ongoing revenue expansion. So as long as we keep going up, there's always going to be working capital demands, as you go up until you hit a steady state and then things level off. Now on to the balance sheet. Our working capital that's current assets minus current liabilities has increased by $4.3 million, approximately 32% over the past nine months, since March 31st. Profits drive working capital and our financials, they clearly demonstrate this. So I had some questions on total liabilities increasing at a rate that is faster than the rate that total assets have been increasing. So this is a question on the rates of increase. Now to answer that question, really, I want to point you to three lines on our financial statements. On the balance sheet, there's the warrant derivative liability, and there's the accrued expenses on the liability side. And then also on our P&L statement, there are two lines there, change in fair value of stock-based liabilities and change in value of derivatives that are on our P&L. On the accrued expenses, approximately $7 million of $11.9 million, in accrued expenses are for stock-based liabilities. If you look at Note 4, in our financial statements, give you a little more details of that. And the warrant derivatives are obviously 100% stock-based. Now these liabilities are essentially valued as our stock price moves down. So if the stock price goes up and it has gone up quite a bit over the past few months, so then we have to adjust the liability. We have to make the liability higher. So it's not really any new liabilities. It's just that accounting rules, they require that we have to revalue existing liabilities, which is what we did. And the net effect of all of these revaluations is recorded on our P&L. Whenever we adjust the liability, there's a P&L expense. And, for the quarter, the change in fair value, so the increase in these liabilities is $5.3 million for the quarter. That's on our P&L statement. And for the nine months, it was $10 million. So, we booked change in value of liabilities of $5.3 million for the quarter and $10 million for the nine months. I also got a question on our inventory level. And our inventory levels has increased from the beginning of the fiscal year from $9.6 million to $14.3 million at December 31st. But our inventory as of September 30th, was $15.2 million. So that's a $900,000 decrease from September to December. This is all pretty standard supply chain metrics going on here. We're always challenged. We're trying to achieve just-in-time inventory, but we also have to make sure we have enough stock level support. There's lead times and regulatory and all the things that we have to do to support our manufacturing operations. So we're always trying to -- we're always monitoring our inventory levels. There's really nothing more than just ordinary supply chain metrics going on here. We continue to look at that, but there are no issues. So to sum things up, when you look at 2022, December compared to December 2023, Elite Pharmaceuticals, we are looking at a very different company than from one year ago. Revenues are up 67%. Operating profits are up 77%. Nine months revenue are already more than last year's 12 months revenue. Our working capital is increasing, our debt is low, and our balance sheet is strong and continues to strengthen. So a very different company, all of which is for the better when compared to the last year. So very happy to see all of the things that have been going on lately. So that concludes my presentation. Now our CEO, Mr. Nasrat Hakim will provide his comments.
Nasrat Hakim: Thank you, Carter. Most of the questions this time were about financials. So I asked Carter to handle them and he was kind enough to embed them in his presentation. I'll say a couple of words about financials before I talk about the sales and distribution, research and development facility and infrastructure and then go to Q&A. $15.5 million in revenue is what makes this our best quarter ever. For the past four to five years, as you heard from Carter, every year, our revenue have been better than the year before. And therefore, every year has been our best year until the next year. Last year's revenues were $34 million. Within nine months, okay, of this year, we've achieved $39 million, and we still have a quarter to go. Our goal for the current fiscal year was $40 million, and we modified it to north of $40 million. It is safe to say that we'll achieve our goal for the current fiscal year, and will surpass it, the following year. As Carter outlined, our income four or five years ago was in the single digits, we made $7 million. Then we jump to the teens and then the 20s and then the 30s, $30 million, $34 million last year. We're skipping the 40s and we're jumping straight to the 50s this year, and we will continue to grow the year after and the year after. We are not flattening in sales. We are actually growing, and I see all the signs for us to continue to grow, as if I just have reported to you. Elite, successfully transitioned from a CMO private label model to a national distribution with the Elite Label. We created an organizational structure to support our new business model and increased production, revenues and profits for all of Elite products, not just Amphetamine IR and ER, which are the stars of the show, but also for the rest of our commercial products. The bariatric products, Phentermine and Phendimetrazine. Our hypertension drug Isradipine. Our antidepressant and nerve pain drug Trimipramine. Our schizophrenia and eustachian drug Loxapine. All of them have increased and have been sold under Elite's label since April 1st, 2023, and they are all growing. Elite's transition to direct sales is complete and has been a tremendous success. A major credit goes to Kirko, Doug and their teams. Our partner, Prasco, that has a nonexclusive license for selling Amphetamine ER, launched their product in January. We shipped inventory to them in December of 2023, but the actual launch just happened last month, January 2024. Our other partner Precision Dose, they have a license for naltrexone and phentermine tablets and capsules. Naltrexone is in short supply and is doing particularly well. Elite maintained a strong cash position during our transition to sales. We have supported working capital needs as well as R&D pipeline costs, while maintaining our cash levels. Regarding the research and development pipeline, Elite has four ANDAs, filed under FDA reviews. And antimetabolite ANDA used to treat arthritis, inflammatory arthritis, a generic dopamine agonist, ANDA for the treatment of Parkinson's. An ANDA for treatment of pain management, a CNS stimulus ANDA used for attention deficit disorder. And all of them are under FDA review. Elite continues to provide support to whatever FDA requests they make and they make a lot of requests. And Elite will issue a PR upon approval. Regarding the pain management ANDA generic OxyContin. One of the common outcomes of ANDA filing is a lawsuit by the Brand company. Most generic companies contend with such lawsuits in the standard course of business. Elite too has a complaint filed as a part of the Paragraph IV filing. This is an expected event, and Elite expects to manage this as a normal course of business. Elite has other products in the formulation development stage that has not reached a reportable milestone yet. We will update you on them upon reaching these milestones. Regarding the facility and infrastructure, with our success in moving to direct sales, Elite is expanding our inventory and packaging space to meet the growing demands. We have taken an additional 34,000 square feet to support expanded packaging inventory and warehouse. We closed the deal and took possession of the facility, literally right across from our manufacturing facility in January. Now the hard work begins. You first need permits for construction, to modify the inside of the facility and separate it into two parts and what have you. We are working with IT and servers and installing cameras and ADV security. We're working on setting up the Vault and working with the DEA of what else do they need, the form of securities Vault in order for them to come in and approve the facility. We purchased the packaging line. Now we need to deliver it and install it, qualify it, make batches on it, put these patches on stability and file or ask FDA for approval. Have the FDA come in and inspect the facility. At the end of the day, we'll have duplicate equipment for manufacturing and packaging. We already have validated and qualified our Niro. So now we can make pellets. We have three times the capacity of making what we used to. We have bought a new encapsulators and a new packaging line. On the packaging line alone, once this packaging line is qualified and operational, we will have two packaging lines and the capacity actually will increase by three to four times because the new packaging line is a lot faster and more modern than the old one, which was really a very good packaging line. In summary, Elite has shown strong growth this quarter and is executing its strategy of commercial, sales and distribution and research and development growth. We look forward to talking to you again about more success in June when we filed the 10-K. Let's go through Q&A. As I said before, Carter handled all the financial questions and there were a lot of them and many of them came in late last night or early this morning. I will be addressing the nonfinancial parts with a couple of comments in gengralities about financials. First question is on drug development pipeline. We know SequestOx was shelfed due to cost. Do you anticipate resuming any NDA type R&D in the future? Or do you think Elite will stick to mainly filing for large market and as generics? Is it possible to improve upon an existing generic drug with our control release or abuse the TeranTech and still is filed as ANDA? Or is that -- is it necessary to file NDA? A comprehensive question that have a lot of parts, so let me answer it this way. A few years ago, we shifted the company's focus and we created a three-pronged approach. The three basket approach. One is the NDAs and the AR technology. Two is partnerships in order to elevate cost and bring in ideas and three is our own product. And all three are active at any moment if the circumstances are right, to move forward with NDA requires a lot of money, okay? And it's because it's the company. So will we do it now? No. Will we do it in the future when we have money? Of course, okay? Everything needs to be done in context. You got to figure out what do you have, what are you risking and what do you want to do, to protect the company. Can we use our technology? Our technology is definitely usable and a lot of things, including something like Pfizer's technology. We have the same technology as they do. So if there was a way for us to make a generic out of their OxyER, then that will be an ANDA Okay. Still keep in mind, we are still targeting a high-level generics because they are the most lucrative, lease cost and the best and fastest to the market. Has the BE trial started yet for the third needle mover, that is expected to be filed sometime in calendar year 2024? We do a lot of pilot studies that, of course, we do not announce because most of them are for you to learn, on how to modify their formulation. And once we are comfortable and go to a BE, we only announced that the BE passes. So we will definitely do that in this case if there is a BE trial and if it does pass, then we will announce it at that time. A question on legal for OxyContin, I see this question a lot on investment message boards regarding the generic Oxycontin. My question for the next conference call is -- is there a lawsuit pending regarding OxyContin? And if so, what are the details and circumstances that can be shared? As I said before, okay, Elite filed the Paragraph IV certificate with the -- with its ANDA generic OxyContin and as that Elite got accepted by the FDA, after the ANDA, got accepted by the FDA, Elite sent the patentee, as we're required by law, and the NDA holder, a notice letter. And that's required by Hatch Waxman, okay. This was followed by a Patent Infringement Lawsuit, filed in the District Court of New Jersey by Purdue Pharma, standard procedure. Elite obtained an agreement with Purdue, to stay the litigation for six months. Elite's launch of the generic Oxycontin will depend on the approval by the FDA and the outcome of the various litigations involved with Purdue, okay? Or if the patent expired and especially those that are listed in the orange book, okay? A question about our partner, TAGI Precision Dose. I noticed in November 2023 that our three products with TAGI were changed from the TAGI label to Precision Dose label. What was the reason for the label change? Well, the honest reason is that because our partner/client requested it, said, we want to call ourselves Precision Dose, only from now on. And then they changed their mind, they want to keep some on the TAGI. But the -- that's really as far as we're concerned. They asked us to do this to selling it, we'll do it. But the rest of the story is that the gentleman who started TAGI retired and sold his share to Precision Dosing. And now it's a Precision Dose that owns both companies, and I think they are transitioning to one name only. There is no impact on Elite [indiscernible] server. Prasco Burel, are you still happy with the Prasco Burel agreement now that we have officially launched with them so far, are they selling our Adderall, as well as you hope? Look, they are a good partner. Prasco has been a very good partner. They have just started transition to us as a supplier, and they are doing very well. We have no complaints. Dexcel and international opportunities, any update on potential foreign market opportunities such as Dexcel. I'll make a broad statement about Dexcel and any country outside of the United States. All we can do okay, to support our partners with our FDA-approved data that we have. The rest is up to them, they have to take it to their country, work with the dossier, what's required there, what's their Ministry of Health. And every time their Minister of Health ask him a question, they come back and ask us to do more testing. And we'll be happy to do it for them. And sometimes they ask you for stability. So you have to do certain things that are different than we do for FDA, we cannot interfere with that. That's not our specialty. Our specialty is FDA. They handle their part, they're successful, we launched and not successful, we don't. We've been partners with Dexcel for a couple of years now, and we are looking forward to them getting some day and approval so we can launch. But as of today, I have not heard them say, hey, let's go ahead and launch. All right. Corporate update, let me scroll down, I believe, -- not mentioned an ETA of being moved into the new packaging storing facilities around June. Is everything still progressing as expected with this? Are we still running the same number of shifts as previously mentioned, at our main manufacturing facility? The answer is yes and yes. We are on target. We are on target to finish on June or hopefully before. And we're still running the same shift as before. And once the new facility is commissioned. We continue to operate under the same shift because now we have multiple equipment. We don't have to go a second shift. We'll have more people running 1 or 1.5 shifts. My question is in regard to manufacturing capacity, currently and growth in the near future at our existing headquarters in New Jersey. Also, how is the new Vault construction going? Thank you for all you do. The new packaging and warehousing sites will be of tremendous help. Once finished, we will be covered for the next five years, okay? That really helped cover our growth for the next five years. And the construction of the vault is going on time, and we're working with the DEA to make sure that every step we take is approved by them before we implement it. How would you rate the growth brought by the sales and distribution team compared to before April 1st. The sale and distribution team, Kirko and his team are doing excellent. The fact is Kirko and Doug. I mean, don't forget operations because the Kirko and Doug and the sales and operations team go hand-in-hand. In addition to the quality team and regulatory team and the entire supporting structure for the organization. They are all doing an excellent job to date. And notice that we went through this whole transition without a dip or interruption in supply. And that's really a testament to Kirko's leadership and his great communication skills and Doug and the operation team and our quality and regulatory team. Financial questions, we moved most of them to Carter, but somebody asked about the stock buyback, okay, it's the same issue. We're not buying stock back right now. We have better use for our money, stock manipulation. We are on the OTC. I cannot say much about that. An interesting question about employees but purchase from a gentleman that said in the past, I have worked for companies that allowed employees to the option to have a fixed amount of money, deducted from their pay-check to buy company stocks at a slight discount. It gave all of the employees the opportunity to have a stake in the company, does the lead offer such a program? I have worked for companies that offer similar programs, and I really enjoyed that and they give us 15% discount to buy it. Elite does not have such a program. As a matter of fact, we've had approach from the stockholders, when we pay people in shares before even the Board. So to do this is not feasible at this time. Now if we go to NASDAQ, it will be more possible. It's a very good idea. And someday, we'll implement it, but right now, it can't be done. Last question, let's see, company's futures, what would Mr. Hakim say is the likelihood that Elite will uplift to NASDAQ within the next five years? What would Mr. Hakim say is the likelihood that Elite will get bought out by a large arrival within the next five years? Two things I'll say to that. One, cut that prediction in half or more than half. Five years is a very long time to do either. We are at a point where our fundamentals are solid, and we are in a growth stage, as I said earlier. We're not flattening out at $30 million and $40 million. We skip the 40s, went to 50s. And we'll talk in June once I have a little more data, what I expect for the future. But definitely, the year after, we're going to beat that. And the year after, we're going to be that. So we're at a growth stage. So the fundamentals are looking great, a buyout is looking great. And five years is way too long for that. So I would say either of this will happen in a couple of years. All right. That was the last question. It's been a great quarter. We're looking forward to a great year, ending in June. So we'll talk to you after we file the 10-K in June. Have a wonderful day, and thank you, Matthew.
Operator: Thank you, everyone. This concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.
End of Q&A:
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