IDEXX Laboratories, Inc. (IDXX) on Q1 2021 Results - Earnings Call Transcript
Operator: Good morning and welcome to the IDEXX Laboratories' First Quarter 2021 Earnings Conference Call. As a reminder, today’s conference is being recorded. Participating in the call this morning are Jay Mazelsky, President and Chief Executive Officer; Brian McKeon, Chief Financial Officer; and John Ravis, Senior Director, Investor Relations. IDEXX would like to preface the discussion today with a caution regarding forward-looking statements. Listeners are reminded that our discussion during the call will include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today.
Brian McKeon: Good morning, everyone. I'm pleased to take you through our first quarter result and to provide an update on our initial financial outlook for 2021. In terms of highlights, IDEXX delivered excellent financial results in Q1, driven by continued strong global momentum in our CAG business. Revenue increased 24% as reported and 21% organically supported by 23% organic growth in CAG Diagnostic recurring revenues, reflecting continued high gains across U.S. and international markets. The operating profit gains were particularly strong in Q1, reflecting flow-through benefits from high CAG Diagnostic recurring revenue growth and favorable comparisons to relatively higher prior year pre-COVID operating expense levels. These dynamics and a higher than expected $0.17 per share in stock based compensation tax benefit enabled delivery of $2.35 in earnings per share, an increase of 73% on a comparable basis.
Jay Mazelsky: Thanks, Brian and good morning. IDEXX had an excellent start to 2021, driven by continued strong market trends in our core CAG business and strong execution. This resulted in 21% quarterly organic revenue growth in the first quarter and high profit flow through supported by 23% organic growth for CAG Diagnostics recurring revenues. There were strong gains across all our market segments. Our business performance reinforces the tremendous long-term opportunity we seek to develop the global market for companion animal health care, and gives us confidence to raise our 2021 outlook, just a little over 14.5% to 16% organic growth for CAG Diagnostics recurring revenues, and 21% to 26% gains in comparable EPS growth. Today, I'll provide an update on the trends we're seeing in our companion animal markets. And our approach to drive accelerated market growth, leveraging IDEXX, innovation to raise the standard of patient care. I’ll also provide an update on our product and commercial initiatives that will enable us to capitalize our market tailwinds and position the company to deliver continued strong financial returns. Let's begin with an update on market trends. Companion animal healthcare continues to see strong global market momentum. This is reflected, for example, in U.S. market data showing higher growth in clinical visits, and continued high growth in services supported by expanded utilization of diagnostics. As Brian highlighted, we saw continued high U.S. clinic visit growth, up 12% in the quarter with non-wellness visits up 9% and wellness visits up 16%, with strong growth seen across practices of all sizes. New patients continue to be a significant contributor to critical visit gains. We estimate that new clinical patients added approximately 3% to overall clinical growth versus Q1 2020, up from 1% to 2% in the second half of 2020. And we continue to see record levels in progesterone testing, evidence of a continued step up in breeder activity. The growth in puppies and kittens and continued evidence of the deepening of the pet owner bond, augmented by the growth in new pet parents can provide long-term tailwinds for our business. As a benchmark, we estimate that the average annual diagnostic revenue per senior or geriatric pet is double the amount we see per pet for puppies and kittens. If we do our job well with programs like preventive care, we can help to drive twice the level of annual visits in young well pets and continue to expand diagnostics usage through life stages, thereby helping advanced standards of care. In looking at our U.S. market data, we've seen an acceleration in the utilization of diagnostics. In our earnings snapshot, we shared annual data for the percentage of 2020 clinical visits, including Bloodwork. The percentage of clinical visits with Bloodwork increased approximately 1% to 18% in 2020, double the historical rate of annual increase. Interestingly, the highest increases were in customer doing more testing. With gains across wellness and non-wellness Bloodwork utilization, reinforcing the point that even the highest users of diagnostics has significant potential for further growth. In increased focus on services and adoption of higher standards of care in areas like diagnostics are driving very strong overall growth and veterinary clinics. In the first quarter, same store total practice revenues increased 15% versus the same quarter last year, reflecting a 19% growth in clinical revenue per practice, and 21% growth in diagnostics revenues. Clearly, our customers are extremely busy. It's not surprising that they are looking for help from partners like IDEXX to support their high levels of business growth through our customer centric solutions offering. We're particularly pleased with our commercial execution to support these customer needs evidenced by 32% year-over-year growth in premium instrument placements globally, including strong growth and placement in new and competitive accounts. A key area focus has been leveraging our integrated direct go-to-market model to accelerate international growth. We achieved 28% CAG Diagnostics recurrent organic revenue growth internationally in Q1 with strong gains across all our major regions, while driving a 36% year-over-year increase in premium instrument placements outside of North America, despite continued restrictions and sales access to clinics. IDEXX 360 continues to gain traction internationally, resulting in higher growth with customers leveraging IDEXX technology across modalities. IDEXX 360 is helping to accelerate growth in our international reference labs and key markets like Europe, supported by our state of the art, new core lab in Kornwestheim, Germany, and our expanded commercial presence. The International commercial expansion efforts we've highlighted continued to progress the plan with a goal of completing on-boarding of new sales teams in key markets in the first half of 2021. The outstanding growth momentum and long-term potential for IDEXX and international markets reinforces the high return from investments in our global commercial capability. Advancing international commercial expansions will continue to be a key strategy. Innovation is another key pillar in our growth strategy. In late March, we reached an exciting milestone when we began shipments of our next generation hematology analyzer ProCyte One. I’m was very proud of the extended team, including our Westbrook, Maine based instrument manufacturing personnel for delivering this world-class analyzer on schedule during a pandemic, to the delight of our customers. Our first sales and installations were to U.S. clinics that participated in our customer experience trials, which is a testament to their highly positive experience with the analyzer. ProCyte One’s exceptional simplicity and accuracy give our customers confidence in running the analyzer and in the patient results. This is helping to gain efficiencies and practices in this truly at best-in-class experience. ProCyte One also represents the next step for IDEXX in providing leading edge technology integrated with information management, which enables clinical decision support and supports a wide range of veterinarian partners in providing the highest levels of care. We expect ProCyte One to drive CAG growth as chemistry and hematology testing go hand-in-hand and as part of the IDEXX 360 program to help drive reference lab usage. This quarter, our commercial focus for ProCyte One is on shipment to the clinics that took advantage of our pre-sales program, while concurrently manufacturing and building volume to support our through 2021, including the international rollout expected to begin in late Q2, early Q3. The is another investment in innovation that supports our customers at the point of care by providing workflow benefits, accurate reading of diagnostic results on the SNAP Platform, a smart service connectivity. Our veterinary partners are busier than ever, so providing ease of information management within the practice is a key benefit to help them save precious time, while maintaining accurate records. SNAP Pro provides a tool to address these needs and does help drive recent growth internationally for our rapid assay business. We see high engagement from international customers who are actively using SNAP Pro and are connected to smart service with growth and retention rates consistent with trends across U.S. customers. We're also making excellent progress in expanding our installed base in key geographic markets like Europe, which help to drive 20% organic growth in global rapid assay revenues in the first quarter. Our innovation agenda is also driving favorable business performance for our software portfolio, which had another excellent quarter. Record breaking worldwide PIMS placements in the quarter grew 43% versus Q1 of last year. With two PIMS placements driven by cloud based technology. IDEXX Web PACS saw double-digit growth in subscribers, including improvements in customer retention levels over 96%. We received consistent praise from subscribers about usability, value, and support to the Web PACS system. Important feedback as we look to expand this product into new markets. These integrated offerings together create a diversified technology stack that provides multiple customer benefits to help manage the growing productivity demands of veterinary clinics in a high growth market. Through our PIMS tools, through our PIMS and tools like SmartFlow, our focus is on improving clinic workflow by seamlessly connecting data between devices to streamline every step from patient admission to discharge. By bringing AI capability to tools like Web PACS, our platforms enable faster procedures, while leveraging data to deliver insights and reduce efforts by clinic staff. Extending to the client, our communication applications are more compelling than ever with clinics managing a significant portion of visits curbside. Connected software is critical for clinics in creating capacity to meet the increasing demands for veterinary services. IDEXX is uniquely positioned to serve customer needs in this area, enhancing our value proposition and differentiation. In terms of our key initiatives, we continue to promote the advancement of preventive care in annual wellness testing to the IDEXX preventive care program. In addition to increasing the standard of patient care, preventive care programs can help veterinarians improve practice capacity, to more predictable schedule, and level loading of practice staff. In the first quarter, the commercial team executed over 200 new enrollments, bringing total enrollments to over 5,000, which is an exciting milestone, as we are more than halfway to our goal of 10,000 enrolled customers in the U.S. by 2024. As our customers enter the wellness testing season, and wellness visits accelerated in the market, we are focused on continuing to capture the underdeveloped market opportunity in Vector-borne disease testing. There are significant long-term opportunities to expand Vector-borne disease testing in particular, given the current prevalence of heartworm only testing in the U.S. Shifting its balance to a full Vector-borne disease screening using 40x plus not only enhances the standard of care, it represents a material opportunity for clinics to drive additional revenue. This focus in strong underlying market trends help to deliver double-digit revenue growth across all regions, led by increases in utilization of 40x plus and fee-line retrovirus tests. As we look ahead, we're very excited about the opportunity to leverage our commercial capability, innovation in partnerships with our customers to build on our strong growth trends. A key area of focus for us is to continue to invest in the infrastructure necessary to meet high levels of growth, while maintaining top notch service levels in prioritizing support for our workforce. Our employees and customers have shown high levels of adaptability and resiliency during continued COVID-related restrictions. And we look forward to a post-COVID-19 environment. We anticipate more flexibility in the future, and leveraging new ways of working together with our colleagues and customers. I'd like to add that I'm extremely proud of the way that the IDEXX team is executing. We're on track for strong 2021. That concludes my opening remarks. And we now have time for some questions.
Operator: Thank you. And our first question is from Michael Ryskin from Bank of America.
Michael Ryskin: Hey, thanks for taking the question, and congrats on the strong quarter guys. To start, I want to ask on, I want to focus on some of the OpEx side of things, obviously, a gray quarter here. And on the margin side and coming out of the gate, but Brian and Jay, you both had comments in you prepared remarks sort of on how to manage spend going forward, both from the fact that you're going to be lapping some easier comps, but also that you want to invest into the growth in the business. I think you mentioned, you know, adding on some staffing on the reference lab side. Could you expand on that a little bit? And is there anything on the personnel, just sort of how should we think about, you know, reinvesting some of the gains the business to support the growth for the rest of the year.
Brian McKeon : Mike, why don't I start by, just kind of, framing the comparisons that we're trying to highlight as we move forward, because that's a key dynamic? We're just trying to reinforce. Clearly we had very strong profit results in Q1. We are going to start entering a period here where we're going to be comparing ourselves to the control spending levels that we implemented last year. So, if you recall, we had 25 million of OpEx savings that we highlighted second quarter, another 5 million of savings from lower health care costs. We really, in the early stages of the pandemic tried to be very mindful of how we're controlling labor costs in areas like the labs, and so we're just trying to highlight as we move forward. We're going to see, you know, some of those comparison effects moderate the margin gains, the gross margin gains, and we'll see relatively higher OpEx growth. Again, as a benchmark just in Q1, we had over $7 million of cost reduction year-on-year from things like lower sales meeting costs , which is about 7% of OpEx growth. So, moving forward, we won't have those kind of favorability. So, we're just trying to highlight that. And we're also trying to highlight that we're advancing investment in the business. So, maybe Jay can talk a bit about that.
Jay Mazelsky: Yeah, sure. So, just a couple things to build on Brian's comments. Obviously, we're in a high growth environment, there's excellent opportunity to continue to support that growth. We do that, obviously, in areas like reference labs and production, and field support. And the other area of opportunity for us is just our international markets. We've identified this as being very attractive and we continue to advance our expansions where it makes sense. We know that there's pretty good short-term return on those expansions. We have, I think, really optimized our ability to identify all the right pieces you need to have in place, including additional field, personnel, reference labs, information technology, investments, those type of things. So, we're very optimistic about the opportunity, short-term and long-term in our markets, U.S., as well as international and will continue to advances as we see opportunities before us.
Michael Ryskin: Great, thanks. And then if I could throw on a follow up, sort of on some of the underlying figures you provide for market conditions, as always, the snapshot is very helpful in terms of visit growth and revenue growth for practices. I'm just curious, you know, looking at it on one more granularity, it seems like you're actually seeing continued acceleration from 4Q, you know, both on a raw number spaces and even if you adjust for some of the comp, I think, I guess I would say that we were expecting a little bit more moderation and maybe a gradual phase as you go through the year. But it seems like there's no indication of that. Is that a fair analysis of the data? Have you seen anything that would indicate that things are moderating a little bit as some of these markets, sort of come out from COVID, and we're seeing some reopening of the economy? Just wondered if you could talk about, sort of the underlying trends there?
Brian McKeon : I would say, overall, Mike, the theme would be more consistency than change. What we saw in 2020 was an improvement. If you break down the drivers of things like CAG Diagnostic revenue growth in the clinic, we saw higher levels of contribution from frequency and utilization, and those have sustained. If there was one thing that improved a bit in Q1, which we highlighted in the comments was the new patient contribution to clinical visit growth was up about 100 basis points. So, I think some of the, you know, the building effect of the new puppies and kittens helped, but, you know, adjusting for that the two-year growth rates were largely consistent with Q4. It was more consistency than change. We're entering a period now where we'll have the, you know, the COVID compares, you know, because, you know, the growth rate numbers are a little tougher to follow. So, we're trying to highlight some of the two year trends. And, you know, I think we're encouraged that the two-year trends are holding up well, and you know, that's factored into our outlook for the balance of the year.
Jay Mazelsky: I would just add to that Mike. The trends we described, the broader level trends we've described have largely been intact. So, these are obviously new critical business growth driven by new patients. The majority of which are puppies and kittens, higher usage and intensity of diagnostics and more of a pivot to services by the veterinarians. For those that we have seen over the last, you know, second half of 2020, we continue to see in Q1.
Brian McKeon: One thing I’d highlight in addition to the market trends is, in terms of IDEXX’s execution, our international teams are really doing an excellent job. We had excellent instrument placements, you know, growth in 360. I think the global commercial model that we've been looking to leverage and build upon is really, really in a good place. And we're very pleased with the international momentum. So, we wanted to highlight that.
Operator: Our next question is from Erin Wright from Credit Suisse.
Erin Wright: Great. Thanks. So, you gave some incremental charts in the snapshot this time where the percentage of clinical visits, including the Bloodwork increased by 1%. So that seems like an acceleration from the prior trends even seen on an annual basis, but was this driven mostly by the greater proportion of acute visits during the pandemic? And how should we be thinking about that acceleration continuing with potentially greater adoption of preventative care measures, as well as other initiatives in a post pandemic world?
Jay Mazelsky: I'll make a couple comments about that, Erin. So the use of Bloodwork has – the growth rate has approximately doubled as we talked about a percent in 2020 and versus about 0.5% the previous year. And so there's a number of things that are driving that. We've seen greater proportion of the higher users of diagnostics continue to increase. And we see that very optimistically, as evidence that even those who were at the higher range from a standpoint of diagnostic users feel like there's a lot more capacity. We also see – as part of clinical visits, greater use of diagnostics, and then when they use them, greater intensity has also gone up. So, all those factors are playing into it. And we think that they'll sustain three plus quarters.
Erin Wright: Okay, great and then on ProCyte One, can you provide an update on traction there? Do you anticipate that accelerating throughout the year and how is that tracking relative to your internal expectations at this point?
Jay Mazelsky: Yeah, we're very excited and optimistic about ProCyte One. It's been a very successful roll-out. There things – there's a time and distance dimension to these, you know, as we roll-out a new analyzer in terms of building volume in production, create awareness, in the marketplace. You know, the exciting thing about ProCyte One is the opportunity itself is very significant. We think that there are 100,000 plus opportunities for placements in the hematology market, but there's also a nice multiplier impact where if there's hematology, there's chemistry. So, we tend to place those together. There's, as part of IDEXX 360 there's pull-through in terms of, you know, the reference labs and rapid essay, not just the U.S. now, but internationally. And so, we're excited by the opportunity. I think our experience, our customer experience trials have given us a lot of confidence that the analyzer has hit the mark, both in terms of usability and performance, and we expect our ramp to grow throughout the year. And especially, so internationally as we release late Q2, early Q3 pending on things like regulatory approvals.
Erin Wright: Great, thank you.
Operator: Our next question is from Jon Block from Stifel.
Jon Block: Thanks, good morning. Maybe two questions from me. Brian, the first one's a little long both for you. I think a level of year-over-year gross margin expansion, I think you said you expect the year-over-year level to moderate, but just to be clear, does it stay in this, you know, low 60% range? And then on the balance sheet, the leverage, I think you call that 0.6 net. That might be the lowest level I can remember since you came in the CFO and started to flex it a bit. You've got a couple of big CapEx build-outs. It's now behind you in Germany, and Westbrook. So, just maybe you can comment on how we think about cap deployment going forward? And then I just got a quick follow-up.
Brian McKeon: Yeah. On your first question on gross margin, we are seeing a really nice flow through and obviously the high CAG DX recurring mix and just the strong growth were is helping, we do anticipate, Jon, we're going to be adding back some costs here to keep up with the growth, particularly in things like lab staffing. And then we'll have, you know, some compares just to the, as I mentioned on a year-over-year basis, but we're still anticipating a high level of gross margin flow through and that's factored into our outlook. And on leverage, you're correct, we've, you know, we're quite disciplined last year in terms of pausing, share repurchases, and really controlling our capital spending. Our capital spending on an annual basis was below, kind of the normal levels that we typically have. And we deferred some projects. And we're – you will see a step up in that as we move forward, not a change fundamentally in our long-term view, but just, you know, catching up on some of the deferred capital spending. And right now, we're just signaling maintaining the kind of net leverage ratios that you see. We did initiate buybacks in Q1, and feel good about sustaining those. So – but not trying to signal any change to the leverage profile at this point.
Jon Block: Okay. Got it. Very helpful then. Huge quarter, but we got to try to anticipate some of the potential push back. And the only thing that I can try to identify is, you mentioned the 900 basis, point U.S. CAG recurring premium to clinical visit growth, you know, that's down from the 1,600 and 1,200 premium I n 3Q and 4Q 2020, respectively, I think you said they adjusted it was closer to 1,000 or 1,100 bips, but any thoughts on why that slight moderation? You know, Jay, maybe in light of the Vets, as you mentioned, still focusing a lot more on services at their practices? And how do we think about the premium going forward, is it still in that 1,000 bip range? Thanks, guys.
Jay Mazelsky: Yeah, you know, Jon, there's always a little bit of variability from quarter-to-quarter. We think that 900 plus, you know premium is, it's what we've seen over the last quarters in 2020 and we think that that is sustainable. I think it's a reflection of a couple of different things. Obviously, the pivot to services, which if anything has accelerated as part of the COVID response in clinics, but it's also in response that our strategy as a company around innovation, the commercial partnership with our customers in bringing testing relevant testing practices. And so, we think that that's a successful formula. And it's supportive of what veterinarians and pet owners want to see in terms of better patient care, better – higher standards of care for patients. And that will continue to be a focus for us from a commercial and innovation strategy standpoint.
Brian McKeon: And Jon, Jon, one thing I'd highlight too, I know you're looking quarter-by-quarter, but Q3, I think you need to factor in there. There was some pent-up demand likely effects and so I think the overall trend is very healthy. It’s at the higher-end of our outlook. It's above where it was pre-COVID. We feel very good about the growth and services trend as being sustainable to something that's going to, you know enhance our growth profile.
Operator: Our next question is from Nathan Rich from Goldman Sachs.
Nathan Rich: Hi, good morning. Thanks for the questions. I actually wanted to start with the follow-up to John's question on the CAG DX guidance. Brian, I think you said it was up 2%, relative to the prior outlook. I would just be curious to get some more details on the underlying assumptions around visit growth and increases in diagnostic utilization. I think you had talked about, kind of 2% to 5% visit growth for the year previously, and then that 9% to 10% premium that was just referenced. So, I’d just be curious if you have any, kind of updated assumptions, as we think about the balance of the year on those metrics?
Brian McKeon: Sure. started a little higher level with the global numbers, but made our – our updated range, the higher-end of the CAG DX recurring range, basically assumed similar two year growth trends to what we saw in Q4 and Q1. So, it's largely in-line with that. And I think that, that is the primary driver of the update. I think is the – just, you know, more competence coming through Q1 on sustainability of some of the trends and some positive dynamics with critical visit growth. And so that's more of the headline. We're still maintaining, you know, a range, because that may moderate. You know, we may see some pullback. We're going to be up against some compares here. But I think, on balance, we feel very good about the trends. And if anything, they improved a bit in Q1. And as a benchmark, we do try to highlight that U.S. clinical visit growth, and premium dynamic that you mentioned and our initial estimates were 2% to 5% for the full-year. For clinical visit growth, that's a one-year basis and the 900 basis point to 1,000 basis point premium. And I did mention that our updated outlook reflects that we're trending at the higher-end on clinical visits. And that we're reinforcing the premium outlook, which is right in-line with where we were in Q1. So, you know, I think the, you know, just the underlying market trends have sustained. We feel good about that, and we are seeing that globally. And I think we feel very good about our execution. And now of course have things like ProCyte One to innovation issues that'll help us build on that momentum.
Nathan Rich: Great, that's helpful. If I could just ask a quick follow up on ProCyte One, you know, can you talk about, I guess, maybe Jay, you know, the placements that you've seen so far or maybe the orders that you're getting, you know, how many of those are in new or competitive accounts versus with existing customers? And can you maybe just talk about the opportunity to use, kind of ProCyte One as maybe a lever to get into practices that IDEXX is in currently?
Jay Mazelsky: Yeah, so it's early in the rollout, but we're very pleased. It's been a very successful route, very successful customer experience trials, and not easy to do, by the way, in the middle of a pandemic. This is a complex instrument, and it has a world-class user interface and performs at a very high level from just an accuracy standpoint. You know, we've identified the hematology opportunity as very significant for the company. Keep in mind, a lot of our international markets are hematology first markets. So what that means is, if they have a choice in terms of, if it's one instrument, or none, they tend to choose hematology and they test with hematology, even before chemistry, even when they have both. So, in terms of the opportunity itself, as I earlier described it, you know, almost 100,000 placement, opportunities, two-thirds plus of which is internationally. But you know, even more importantly, if I pivot just a higher level comment, it's an important part of our overall in clinic solution. We tend to sell chemistry in hematology, increasingly SediVue together. So, having this type of solution, which from a performance and cost profile standpoint, you know, hits a sweet spot. The market is obviously very attractive to us. The other thing that I would point out is that increasingly, the IDEXX 360 program is just getting terrific traction internationally. And as part of that capital placement piece is the , and there’s pull-through on reference labs and rapid essay in terms of delivering the underlying volume commitments. So, we're excited by the overall attack diagnostics opportunity that ProCyte One represents. It’s going to have, you know, we think a very long tail both duration, as well as, you know, overall volume opportunity. So, more to come over time.
Operator: And our last question is from Balaji Prasad from Barclays.
Balaji Prasad: Thank you. Sorry, juggling different calls. Thanks for the question. So, just two-fold questions for me. One, pretty broad level one, trying to understand a defective growth, was there any element of growth coming through market share gains in this quarter or was it all what we could perceive broader industry growth, led by wizards and increasing utilization? And secondly, our Vet survey indicated at 200 basis points jump in revenue contributions for clinics, from diagnostics, does that sound too as right and are aligned with your internal tracking? Thank you.
Brian McKeon: So, you know, our markets are very competitive, they have always been very competitive. You know, we’re pleased with what we've been able to advancing our commercial agenda. You know, we’ve shared some data new and competitive placements with catalysts, both in North America, as well as international. So, you can, you know, make your own assumptions in terms of what that means. Our focus is just continuing to support and serve our customers with IDEXX Solutions. We do that both on a instrument side, obviously, the broader diagnostic solutions and software. And what we find is, when customers use all of our solutions, they grow faster, they tend to stay with us longer, and they find it supports their practice needs. In terms of the survey you're mentioning, I'm not familiar with that. So, I'm just going to withhold comment not knowing the underlying methodology.
Balaji Prasad: Fair enough. Thank you. Maybe a specific comment, if you could throw some lights on what you're seeing with – since the launch of VETSCAN Imagyst in Q4, and if it is disrupting the market, and what you’re seeing on the clinic side, in terms of comments?
Jay Mazelsky : Yeah, you know, the thing to keep, I think you’re asking a question more generally about the fecal detection. And, you know, our belief is that the fecal antigen test that we offer at the reference lab is best-in-class. It detects up to two times as much than traditional methods like , you know, there just a number of challenges in doing fecal within the clinic. You know, first and foremost is the sample prep, you know, piece, and that's very time consuming and continues to be, you know, messy, and then you can develop an algorithm that protects eggs, as you know, as part of the parasites or worms. But, you know, at the end of the day, they have to be available, that you have to be able to visually see them. The benefit in being able to detect through antigen testing is, you are able to see them in a prepaying period, which is between four and six weeks earlier than physically when the eggs are available. So, you get better detection . So, we like our solutions, we pick our customers, appreciate fecal antigen at the reference labs, and that's where we continue to support them.
Operator: Thank you. I’ll now turn it back over to Jay for final remarks.
Jay Mazelsky: Thank you, I want to thank everybody for calling in. I want to express my gratitude to the IDEXX team for their ongoing, extraordinary performance during these challenging times. We have an amazing purpose and opportunity as a company and I couldn't be more appreciative of the IDEXX team, and how they live our mission every day. And so with that, we'll conclude the call, and thank you.
Operator: Thank you, ladies and gentlemen. That concludes today's conference. Thank you for participating, and you may now disconnect.
