Good morning. I'd like to welcome everyone to the KeyBanc Life Sciences and MedTech Investor Forum. My name is Matthew Mishan. I'm a senior MedTech analyst here, and I'm pleased to be joined by Sotera Health, who's represented today by Chairman and CEO Michael Petras. Michael, welcome, and thank you for joining us.
Good morning, Matt.
I'm gonna start us off, but this is gonna be a 100% Q&A. If you do have questions, they can be submitted directly to me by typing into the box below the video screen, and I can then relay. Michael, let's start with the first question. In our view, there's now an opportunity to kind of refocus investors on the positive underlying fundamentals of Sotera's business model. Could you just start off by discussing at, like, a high level, you know, what the revenue growth and margin profile for Sotera looks like over the medium to long term?
Yeah. Good morning, Matt, and thank you to yourself and KeyBanc. Before we begin, I'd like to remind everyone that some of the statements I make today will be forward-looking statements. Please refer to our most recent 10-K filed with the SEC for discussions of risk and uncertainties that could cause our actual results to differ materially from those projected or implied in the forward-looking statements. We assume no obligation to update the forward-looking statements. During discussion, we'll talk about non-GAAP financial measures, including Adjusted EBITDA, adjusted net income, Adjusted EPS, and Net Leverage. Please refer to our filings in the SEC or Sotera Health website. Now that we got that aside, Matt, let me just say, you know, from a company perspective, this is a great company.
It plays a critical role in safeguarding global health. We provide mission-critical services to, you know, many of the med device and pharma companies around the world. When I look at the long-range prospects of this company, this is a organic, high single-digit organic growing company. It's got great ability to continue to have sticky relationships with our customers, grow top line, have very high, margin rates. You know, we've grown this business every single year since 2005. We have Adjusted EBITDA margins of 50, +%, and we just have great relationships with our customers who rely on us for our critical services.
From a macro perspective, kinda how would you compare the current environment and kinda your level of visibility to kinda start 2023 versus what you had to deal with over the last couple years?
You know, I'd say it's a little better than it was a year ago. Probably better, you know, as the year progresses. You know, we've projected that we'd grow the business 5% to 9% for the year in 2023. We've also, you know, made sure that people understand, the first quarter's always the slowest quarter we have of the year. You know, in particular, when we talked about our guidance for 2023, we called out Nordion. You know, where Nordion is gonna be very lumpy this year, where 75% of the revenue approximately will be in the second half of the year. The first quarter alone for that Nordion business will be very small revenue.
I mean, really small revenue amounts, just because of the lumpiness and how we work with our supply chain in getting Cobalt-60. The first quarter will be a lighter quarter for the company in total because Sterigenics, Nelson, and Nordion, all three have light quarters, but, you know, exceptionally low for the Nordion. We see 5%-9% for the year.
Yeah. When I think about that 5-9, I think the 9, that high single digit growth is what you'd normally expect for, you know, Sotera. It's basically where you've come in the last couple of years. The low end seems a little bit conservative. How should we be considering some of the moving pieces kinda within that, within that range?
Yeah. A lot of it's gonna be dependent upon how quickly volumes ramp up. When I look at the three businesses, as I mentioned on Nordion, we've got this lumpiness. For some of you who aren't as familiar with the business, we get Cobalt-60 from nuclear reactors that their primary purpose in life is to generate electricity. We harvest the Cobalt-60 at the time that the utility goes down for maintenance or shutdown. That'll be very lumpy. As I'd mentioned, most of that revenue will come in the second half of the year. For Nelson and Sterigenics, we feel really good about where we are on that and our visibility on the Nordion side.
On the Nelson Labs and Sterigenics side, it's really gonna be how quickly volumes ramp and what that looks like. A lot of customers are in a state of flux with their supply chain. We do see that, to your question earlier about 2023, we see that stabilizing better in 2023 than it was in 2022, but it's not perfect yet. I'd say the biggest factor is really the volume activity in 2023 that'll help us around that range of guidance we gave of 5%-9%.
I think that's fair. Could you also discuss some of the headwinds around the initial range for EBITDA? I mean, you typically would get some leverage on EBITDA to sales growth. And this year it's sort of your EBITDA growth is growing in line with sales growth. How are you thinking about it?
Yeah. I tell you know, first of all, the business does 50%+ that's five-oh, 50%+ Adjusted EBITDA.
Mm-hmm.
The business continues to perform. For us, you know, it's about how do we continue to grow revenue and margin dollars. That's ultimately the key measure. That's what we're gonna use to invest back in the business. I tell you, that's all gonna be very strong with strong several hundreds of millions of dollars of cash flow in the year. From a margin perspective, you got a couple things, inflation, that we're still working through, predominantly on the labor and utility side. You know, as we catch up with some of our contracts, that'll play in. We also have some mixed components, particularly around our costing side with some of the Cobalt-60 supply coming in.
lastly, I'd say we continue to invest in the business to continue to make sure we have the people in place to continue the long-range growth. The most important thing for us is expanding margin dollars and revenue dollars.
Okay. It doesn't sound like it, because as you talk about 2023, do you think the company was distracted by the noise over the last six months? You know, how difficult was it as a manager to keep the team focused?
Yeah. You know, Matt, when I step back and look at, you know, the company went public in 2020, November of 2020, and all the things we talked about the company, you know, high single-digit organic growth, you know, good margin, sticky customer relationships, critical role in healthcare, all that has played out. In between, as you referenced, we've had a lot going on on the legal side. It's, you know, frustrating at times because the company didn't do anything wrong. We continue to abide by all the rules and rights. I'd say there's some distraction, but how I try to run the company is keep that contained to the legal department, the key people that need to be involved in that litigation, and try to keep the rest of the team focused on running the business day-to-day.
I gotta give the team a lot of credit. Through all these cycles, we had the global pandemic, we had litigation. By the way, the litigation's been going on since 2018, so it's not just a 6-month thing. I give the team a ton of credit for continuing to operate in this environment and deliver results and take care of our customers. I mean, our customer satisfaction scores are very high, our Net Promoter Score, our service rates. Overall, I'm really proud of the team. It has been frustrating to have to deal with this litigation, but overall, the team's done a really good job.
Okay. When I think about Sterigenics, I just think about, like, a good, steady, high single-digit growth business, like as you had described. Is the growth algorithm still volume plus price, plus capacity expansions? You know, are those the key moving pieces that people should be considering as you kind of build up to that growth?
Yeah. You know, when you think of that business, as you referenced, you know, high single digits growth. We've got volume and mix that come into that play as well as price. We get about, I'd say around 4% price in that business a year. Last year ran a little higher because of inflation, which we said we'd be able to offset, and we did. You know, that business, there's a lot of. We got expansions going on in that business, but we're also driving a lot of internal process improvement and getting more yield out of our existing capacity. I give that team is really focused on, you know, Mike and the team are doing a really nice job and continue to take care of customers.
We just saw our satisfaction scores come back, which are really high once again. Yeah, I'd say the business is a good, solid high single digits with good margins.
What does it mean that you get more yield out of the current capacity? Does it mean less CapEx investment moving forward, better leverage of those facilities?
Yeah, better leverage of those facilities. What we ultimately look at when I say better yield, we're trying to improve our operations. You've got a chamber that you load product into. The time between chambers and making sure you don't have a bunch of empty time there, or you look at our radiators, where you put Cobalt-60 in, you got totes, and making sure you don't have empty totes. We're doing all kinds of things to drive process improvement in lean and simplifying our operations to try to get better utilization of our existing assets.
You have medical device customers, and then you have biopharma customers, that have products go through your facilities. How should we think about that, like, that breakdown? Are you impacted by the same, like, near-term dynamics as kind of one of your competitors, described on their last call around biopharma?
We do business with 40 of the top 50 med device and 9 of the top 10 pharma companies in the world. I would tell you that, you know, we have presence in biopharma, and good days and bad days, we don't have as much exposure as some of our competitors do. I wish we had a better market position than we did today. We continue to work on that. One of the benefits of that, Matt, is when the market isn't as strong, you don't feel as much of the downturn as maybe your competitors do. When the markets are strong, as they have been for the past couple of years, our competitors have probably done better than us because of the growth in that biopharma area. It's one that's important to us long term and strategically.
I would just say at this point in the cycle, we don't have as much presence there as others. You know, we'll see some softening, but not near the impact of others.
Well, in the office next to me, the other, one of our other analysts is going through life science tools companies and talking about growth of bioproduction. It seems like a very good end market. Just when you think about the single-use bioproduction, and how that's changing, how should that go through your... Is that now more likely to go through your facilities before it gets to, like, a biopharma manufacturing plant? I mean, how big of a leg of growth could that be for?
Yeah, that's a really nice opportunity. As that market grows and they go to single-use disposables in the manufacturing process, they go to shorter run cycles and more changeovers. There's all kinds of bags and disposables that come in and bioreactor kits that come into play, and that creates an opportunity for us in sterilization as well as testing.
Okay. Can you put some into context some of the capacity expansion projects you've made, or are undergoing in Sterigenics at this point?
Yeah. You know, Sterigenics, we continue to invest in long-term capacity. What we try to do there is we target 15%-20% ROIs on those programs. 15 if it's, you know, in the greenfield. If it's an expansion of an existing, it tends more towards the 20%. You know, we've gone live with 5 expansions over the past two years. I tell you there's seven of them that are in process now, and those are anywhere from all modalities and any geographies around the world. We try to be very disciplined on capital deployment and making sure that we have commitments with our customers as we move forward on those capacity expansions. You know, we have a healthy diet of expansions that'll come together between, you know, 2023 and 2024.
I mean, historically, you've had pretty good return on the sterilization facilities. Do you expect a bigger return on the facilities now, given the, you know, the higher risk or the that you've seen inherently in the business over the last couple of years?
No, I don't. At this point, you know, as I just referenced, we try to target 15%-20%. I think that's still in that range of where we're looking at. You know, you obviously have got construction costs that are going up, so that's something we got to continue to be mindful as well.
Just Again, were any of these investments de-delayed? Or, has anything been put on hold over like the last couple of years, as you kind of worked through the litigation? Or has it been business as usual?
No, we continue to deploy the CapEx. You know, I think this year we've given guidance of $185-$215. You know, last year was a pretty solid number in capital expenditures. We continue to invest in the business.
Okay.
You know, our customers need us. They keep coming to us for demand, and we wanna make sure we're in a position to service them.
Is there any particular area you're investing in from a, from a technology perspective in Gamma, E-Beam, X-Ray? In addition, are you continuing to invest in ethylene oxide capacity for your, for your customers?
Investing in all those ones you just referenced. E-Beam, X-Ray, Gamma, and EO. In all modalities, in all geographies.
All right. We've been waiting for the EPA forever to put out a regulation called NESHAP.
Yeah.
You know, just can you please explain what this is and kind of when the last time these regulations were updated?
Yeah. NESHAP, which is the rule that applies for emissions for sterilizers. Matt, I'm drawing a mental blank on when exactly that last one was, but it's been many, many years since it's been updated.
Yeah.
We're waiting for that. We've been patiently waiting. You know, all this information has been presented out there about ethylene oxide being more dangerous than originally thought. That started coming to light in 2016. Obviously, we started feeling some of that in one of our facilities in 2018. Here we are in 2023, and we still to this day do not have new rules or regulations from the federal government. Very frustrating for us. We're hopeful that they get these new rules out very soon.
Mm-hmm. What do you think clarity would mean for Sterigenics and for the industry?
I think clarity would be just tell us what kind of emissions levels and control efficiency you wanna get out of these facilities, and then leave it up to the industry to go solve it. We feel very confident in our position. You know, we've been way out in front of this. We've been putting improvements in these facilities for the last couple of years, and we feel very good that Sterigenics will continue to be at the top range of performers on emission controls around these facilities, regardless of what NESHAP comes out with.
Okay. When you look at the market and the competitive landscape, you really have two main competitors in the OEMs themselves. Just over the next couple of years, is there an opportunity here to shift away from the OEMs and more toward more towards outsourcing?
There is. There's always been that opportunity. We see a mixed bag on this. There's some folks that have invested in internal capacity. They'll continue to do that because they feel it's really important to their business. There's many customers who don't, and they come to us. You might have another group, Matt, that has a combination of in-house and outsourced, but as they're growing more-
Mm-hmm.
They're not putting incremental money in necessarily in the new capacity. They're looking for us to pick up that growth. I feel really good about the position of a contract sterilizer and our ability to grow long term.
Okay. Moving over to Nordion. I think you explained the volatility on a quarterly basis, you know, well. Just depends upon when things are harvested and done. It's on a schedule, so you relatively know kind of when you're gonna get delivery. Any reason this shouldn't track relatively in line with Sterigenics on a full year basis?
You know, one thing that may be helpful, we've given guidance, you know, on this business that it'll continue to grow long term. You know, your price is on the low end of our range or I'm sorry, the high end of our pricing range.
Mm-hmm.
Our volume mix is on the low end of our range. What that means is about 4%-5% on price per year, and then it's on the 0%-2% on volume. There is a relationship between Nordion and Sterigenics. Obviously, Nordion is a supplier of Cobalt-60 to Sterigenics. When there is delay in Cobalt-60 going to Nordion, it impacts Sterigenics in the quarterly sequence to some degree as well.
Just curious why it's just 0% to 2% on volume. Shouldn't medical device volume be a little bit stronger than that on a market, on a market basis?
No, I'm what I'm referencing there is Nordion's Cobalt-60 volume index. That's what I'm referencing.
Okay.
Yeah. Yeah. Thanks for the clarification.
All right. No problem. Part of the supply comes from Russia, a place where I'm not planning on doing any channel checks anytime soon. While there's no near-term disruption, I mean, you've framed a worst case scenario again at like 0%-2% or 0%-3% revenue if something changed. Is that status quo at this point? I think most importantly from our perspective is, what is the timeframe around the investments that you're making that diversify and enhance your supply?
First I'd tell you know, the whole geopolitical situation with Russia and Ukraine is very troubling, right? As a company, we, you know, have employees that have relations and families back in Ukraine, so that's really challenging situation. For us, though, it's really important to the global healthcare system that we're supplying Cobalt-60 because of how dependent upon all these surgical procedures and medical devices and pharma products around the world are for Cobalt-60. We do buy Cobalt-60 from Russia. We said this year, if we were to be impacted by supply out of Russia, it would be 0%-3% impact to Sotera Health revenue. Matt, to your point just minutes ago, there is a knockdown impact to the revenue of Sterigenics if we can't get Cobalt-60 through Nordion. 0%-3%.
Ironically, that's the same number of the risk profile we put up for 2022, and we had no impact from Russia in 2022. We just wanna make sure investors know that if in the event that something changes dramatically where we cannot get Cobalt-60 from Russia, that would be the bracketed impact on the company. Overall, the team's done a phenomenal job in working through making sure we're compliant with all the rules and regs. If it's in Russia, if it's in U.K., if it's in EU, in Canada, U.S., we make sure we're compliant with those rules and regs. you know, we get Cobalt-60 from Russia. As far as development, part of our elevated CapEx last year, this year, and next year will be around Cobalt-60 development.
We are working actively to diversify and grow the amount of Cobalt-60 we're able to get. Today, Canada is a big supplier to us for Cobalt-60. One of the programs that we're working on is expanding capacity in Canada. We're working on that. We should see some of that start to play out in 2026 through 2028, depending on timing of when the programs come up. We're also doing development with Westinghouse to really open up a whole new base of reactor technology and a new platform here in the U.S. We think that could be late 2020s into 2030s before we start to see Cobalt-60. These are long-range development programs, but we have a steady supply and diversified supply.
Today, we buy Cobalt-60 from China, India, Canada, Russia, Argentina, and we'll continue to do that.
Okay. Shifting over to Nelson Labs, what gives you confidence that this business can start to show a level of improvement as the year progresses? Just eventually, you know, it potentially being accretive to growth. Like I believe if you go back a couple of years, Nelson was a growth driver for Sotera.
Yeah. If you look at, you know, Nelson last year, you know, they grew the fourth quarter. They grew about 2.7% or so like that. Then on top of that, about 2.5% of FX impact. That business grew, you know, in the fourth quarter alone, I think it was, like, 5% in total if I remember correctly. I want to give some context. This is an outstanding business. In this business, we have over 800 tests that we do for med device and pharma companies. What we do is we help make sure the products are safe and the products meet regulatory requirements. We're an independent lab. We got facilities all around the world. Great business. This business, we bought it in 2016.
Although many of you don't have the benefit of seeing the margins back prior to our IPO days, I could just tell you we've done a great job, really expanding and professionalizing and growing that business. We took it public in 2020, as you know, the company. We continue to grow in that business. What happened is you know, in that business, really early days, pre-IPO, you know, obviously you guys didn't have visibility on all those numbers, but that business is in the low 20% EBITDA margins. Today, that business has settled out around the 35, you know, mid-thirties to high thirties range. The last several quarters have been the mid-thirties. That business continues to grow.
What happened during COVID is, you know, this business was growing pre-COVID, very steady margins, expanding, nice growth trajectory. What happened is we got called upon by our customers to help with PPE testing, and the business went from here to here. It really stepped up in volume and margin because it was very healthy mix. As COVID wore off, that business started to come back to normalize, and we're still coming into this business that's got nice, solid growth and margins in the mid-30s% and high 30s%. I would tell you we're just back to more normalized. We got through the COVID bump, which has been a positive, and the team, you know, has really worked through that. You know, first quarter will be a weak quarter.
It always is in that business on revenue and margins, just because of the fact of the loading of people and everything else, because you're coming off a good fourth quarter. It always seems to slow down first quarter from seasonality. Overall, this is a steady business that has got great relationships with customers. High quality and service are the two big differentiators there, and our deep expertise.
And this is a group that was formed by multiple acquisitions for you. How much integration work is kinda left to be done in this segment to kind of bring it all together?
You know, you know, when you look at the Nelson Labs, we continue to integrate and make that better. Most IT systems are in line to come together. We're looking at putting a laboratory information management system across the whole enterprise that we're in different phases. That's part of our CapEx improvements and investments that we're making. We're gonna do an expansion in our pharma capabilities in 2023, so there'll be some further integration of some of the acquisitions. Overall, you know, we keep investing in that business for growth.
Okay. Shifting over to litigation, you know, in the final 10. You know, starting with Illinois, just what are the key dates that investors really need to pay attention to over the next few months?
Yeah. I would tell you a couple things. First thing is, we went out and raised the capital with the term loan. We were able to bring that money in, so we've got that completed already. We expect the plaintiffs' steering committee, which represents the vast majority of the plaintiffs.
Mm-hmm.
To be going out to their individual clients on recommendations of settlement amounts, allocating that $408 million. That's the way to think of that. Then on May 1, we have to put the $408 million into escrow, and then I think you could expect in late July, mid, early August, you'll start to see us fund the payments then at that point. Those are the kind of big ones. This month and in the next month, you'll see the plaintiff firms go on their people, which we won't have a lot of visibility to that.
Yeah.
until it comes back. We will fund the escrow on May one, and then the payments should go out late July, August.
Okay. When you think about the potential outcomes of the plaintiffs' claims decisions, can you just kinda walk through that? I'm just assuming it's not a yes or no answer. There's multiple different ways this could go.
Yeah. There's 882 claims currently.
Mm-hmm.
When you look at it, there's 4 plaintiff trial plaintiffs, if you will. They're gonna take a larger portion of the $408 million. Those 4 plaintiffs, including the very first trial, Kamuda, those 4 plaintiffs have signed already and committed to the dollar amounts. The remaining dollars will then go out to the rest of the plaintiffs. They will come back, ultimately what happens is everybody falls in line. That's option one, everybody falls in line, you know, we pay out the money, all the cases are dismissed, we're closed out of these 800+ cases in Illinois. Sorry.
Yeah.
The, the second way is there's, you know. Remember, the plaintiff firms have committed that they would bring 98.6% of the plaintiffs to the table in the settlement. That's part of the deal. If they come in less than that, then the company has the ability to waive that right. If they come in at 98 and maybe instead of 12 people opting out, 13 or 14.
Mm-hmm.
It's our sole discretion at the company if we opt out. That would be the second scenario if we do that, and that's a decision we have to make. The third one is if we ultimately do opt out and say, "Hey, we're not gonna go forward because not enough plaintiffs are signed up or they haven't been able to fulfill their end of the agreement," then we're back to going after the trials in the case. Remember, this is a business. The plaintiff firms. You know, there is no causation here.
Mm-hmm.
Okay? The science doesn't support their position. This is $408 million, and that's the business that they're in. We feel pretty highly confident the plaintiff firms will figure out how to get the plaintiffs in line.
Yeah. I... That's a good transition to Georgia, where, you know, where they have to decide whether or not there is general and specific causation, you know, first. I just want to understand the procedural differences in Georgia. How do they first decide the causation?
Yeah.
Is it a special judge? Is it a panel-?
Yeah.
that does that? Then if they were to, you know, say, "We do see that there could be causation," does that then go to a jury trial or are the cases grouped afterwards? Just how. I just wanna understand procedurally how that might work.
First thing I tell you, there's let's call it 310 cases. I don't know the exact number. It's slightly over 300 cases. One case is in one county, and that will run through a different process. That case will take place in October of this year.
Okay.
Okay? That's a little unique. It's one case. It's closed out. You won't be any more cases in that county. It has something to do with the corporate records and how they were kept for that one case. The remaining 309 cases, that's what you're referencing. Those are in Cobb County. They're gonna go through phase I, general causation, and phase II, specific causation. Okay?
Mm-hmm.
What will happen is the judge is gonna have, instead of like in Illinois, where everybody was free for all, and you're throwing all this in front of a jury, and they're trying to understand science and emission controls and general causation, everything else. The judge is saying, "I'm gonna review this, and you have to prove to me first in phase I that there's general causation. This facility with this low amount of EO emissions could potentially cause the damages that are claimed here.
Mm-hmm.
Okay. That phase I will go in front of the judge in the fourth quarter of 2024 as of right now. Okay? The second phase, let's say the cases come in. There's gonna be... I think there's 10 cases in the phase I.
Mm-hmm.
The judge will go through and say, "Could this facility on a general causation basis cause this injury?
Yes.
If you pass through that tollgate and the judge concludes yes, and it could be 1 case, 10 cases, 0 cases, anywhere in between, then it goes to phase II. Phase II is specific causation. Right now we start to get into Mrs. Smith. Could she specifically have gotten cancer from this? Right? She lived there 3 miles away. She's been there 17 years. She's got breast cancer. Now it's specific into that. That we anticipate would be October 2025 is the timing of when phase II would go.
Mm-hmm.
Okay? If you pass that toll gate, so you're at 10, you maybe get on the 7, you get to phase II. Ultimately, if it's determined that the case can stand through causation, it will go to trial in the spring of 2026.
Mm-hmm.
Okay? That is the first time it'll be a trial by jury. The judge is doing all the work on the front end, deep into the literature and understanding the science and all the engineering. Okay? Very different approach. I will also tell you a couple things that are different about Georgia to keep in mind. One, there's a Daubert standard, which is a much higher standard of opinion that's allowed into the court versus the Frye standard. In Illinois, you got a Frye standard, which I think there's 5 or 6 states in the country that have that. It's a pretty low threshold for opinions of information along the courtroom. Daubert's a much higher standard. I would also tell you this causation approach is different. I would also tell you there's a cap on punitive damages in Georgia.
Just last week, you know, there's a cap of $250,000 on punitive damages in Georgia, in the whole state. That was being challenged in the Georgia Supreme Court, as if it was constitutional to have a cap, and the state court last week ruled it, you're allowed to have a cap on punitive damage to $250,000. Okay? Sorry, you're exhausting all my legal knowledge. I'm not a lawyer, so I'm just giving you the best that I've been able to be informed to educate on the subject.
In the last few minutes that we have, maybe we'll move over to some other areas then.
Thank you.
Is no problem. Is the long-term strategic plan, you know, still, to eventually expand the TAM, with M&A targeted towards biopharma services?
Yeah. I would tell you, we, you know, we have a $33 billion TAM and about $11 billion SAM. We'll continue to expand within both those. I would say we've got a lot of growth opportunity in $11 billion SAM, particularly in the lab space. If you look at that, you know, again, these numbers are a little dated, but it's about $7 billion-$11 billion is in the pharma... I'm sorry, in the lab space. You look at the Nelson Labs business, you know, the Nelson Labs business is $200 million. We think we got a lot of room for growth in those markets.
Okay. The final question is how is, like, the CFO search going at this point? Not trying to move anything along, but, you know, I think it's been almost a year at this point. I think naming a permanent CFO would be, I think, a positive for Sotera.
Yeah. Yeah. I would say, it's been a crazy labor market, and obviously we've had some complications as well during the search. Obviously, looking at you know, the recruiter reminds me this is like three searches in one. You know, I first started out, Michael, you know, was we had litigation risk and, you know, but the person was signed up to come on board, and then you get the Fornek verdict and those people said, "Hey, listen, a little too much risk for me." You get people that came in and said, "The stock's at $6. I got a lot of upside. The company's grossly undervalued.
Uh-huh.
You settle in January, you gotta be back to the drawing board. I would just tell you, we're seeing some good candidates, but we're being very disciplined about this. It's gotta be the right fit. Right now it's been a challenging environment for finance and IT jobs, as you probably have heard from others. We're in a good spot. The company hasn't missed a beat. Michael Biehl is doing a great job. He's got, you know, I guess 30 years of public company experience, and we're doing fine. We're gonna continue to do the search. It'll be July, it'll be 1 year. I'm actually interviewing some candidates again this week, but overall, we're fine.
It's a priority for us, but I can tell you we're in a really good spot with Michael and the team. We have a solid team. We haven't missed a beat, as you can see, to date.
All right. Excellent, Michael. With that, thank you so much for joining and supporting the conference. Kinda we'll call it an end to the meeting.
Great. Thank you, Matt. Good to see you. Thanks for your time and support.
Bye.