Hello and welcome to the Third Quarter Fiscal Year 2023 Cardinal Health Incorporated Earnings Conference Call. My name is George. I'll be your coordinator for today's event. Please note this conference is being recorded, and for the duration of the call, your lines will be in a listen-only mode. However, you will have the opportunity to ask questions at the end of the presentation. [Operator Instructions] And I would now like to hand the call over to your host today. Mr. Kevin Moran, Vice President of Investor Relations, to begin today's conference. Please go ahead, sir.

Good morning. Today we will discuss Cardinal Health's third quarter fiscal 2023 results, along with updates to our full year outlook. You can find today's press release and earnings presentation on the IR section of our website at ir.cardinalhealth.com. Joining me today are Jason Hollar, our Chief Executive Officer; and Aaron Alt, our Chief Financial Officer. During the call we will be making forward-looking statements. The matters addressed in the statements are subject to the risks and uncertainties that could cause actual results to differ materially from those projected or implied. Please refer to our SEC filings and the forward-looking statement slide at the beginning of our presentation for a description of these risks and uncertainties. Please note that during the discussion today, our comments will be on a non-GAAP basis unless they are specifically called out as GAAP. GAAP to non-GAAP reconciliations for all relevant periods can be found in the schedules attached to our press release. For the Q&A portion of today's call, we kindly ask to limit yourself to one question so that we can try and give everyone in the queue an opportunity. With that, I'll now turn the call over to Jason.

Thanks, Kevin, and good morning, everyone. Overall, we're pleased to deliver another quarter demonstrating progress against our plans with our Q3 results led by continued momentum and growth in the Pharma segment. With a strong overall performance in the quarter and our increased confidence in the rest of the year, we are raising and narrowing our fiscal '23 EPS and adjusted free cash flow guidance. Our Pharma business is a resilient and growing business where we're well positioned given our critical role in the pharmaceutical supply chain and strong and diverse customer base. We've seen ongoing stability in the underlying fundamentals of the business, including consistent market dynamics in our generics program. We've also seen continued broad-based strength in pharmaceutical demand spanning across product categories and classes of trade. Pharma team is executing our plans to build upon this growth, both in our core distribution operations and in Specialty, where we're focused on capturing the increasing demand for Specialty Products and Services. In short, we're pleased with the resiliency and strength of the business and to be able to raise our Pharma outlook for fiscal '23. Medical, we remain confident in our medical improvement plan target of at least $650 million of segment profit by fiscal '25, driven by our inflation mitigation and growth initiatives. While we are making progress with the second consecutive quarter of positive segment profit, we remain focused on taking actions to drive more predictable financial performance in line with this business's underlying potential. For several quarters now, we've seen demand for our higher margin Cardinal Health brand products remain generally stagnant, which we've reflected in our updated fiscal '23 outlook. We continue to achieve progress with inflation mitigation, the number one key to returning the business to a more normalized level of profitability. Across the enterprise, we are operating with urgency to drive our businesses forward. We're collectively focused on our three key strategic priorities of executing on the medical improvement plan, building on the growth and resiliency of the Pharmaceutical segment, and maintaining a relentless focus on maximizing shareholder value. I'll provide some further updates on our continued progress shortly, but first, let me turn it over to Aaron to review our results and updated outlook.

Thank you, Jason. I am pleased to join you this morning on my first call since assuming the CFO role with nearly 90 days now under my belt. What I could see from the outside has proven to be true on the inside. Cardinal Health is a business with a strong leadership team and engaged board, a defined strategy, a strong balance sheet and plenty of operational opportunities to promote value creation for our stakeholders. I'll begin today with the enterprise's strong results for the third quarter. Total revenue increased 13% to $50.5 billion and gross margin increased 6% to $1.8 billion, both driven by the Pharma segment. Consolidated SG&A increased 4% to $1.2 billion, primarily reflecting inflationary supply chain costs, which were offset in part by our comprehensive enterprise wide cost savings initiatives. Operating earnings of $606 million were 11% higher than the third quarter of last year, driven by significant Pharma segment profit growth with opportunities remaining for us to achieve Medical segment profit increases in future quarters. Moving below the line interest and other decreased 32% to $28 million, driven primarily by increased interest income from cash and equivalents. As a reminder, our debt is largely fixed rate, resulting in a net benefit from rising interest rates. Our third quarter effective tax rate finished at 22.4%, slightly lower than we had expected, reflecting some positive discrete items in the quarter. Diluted weighted average shares were 258 million, 7% lower than a year ago due to continued share repurchase actions. The net result of the progress against our strategy was adjusted earnings per share of $1.74 in the third quarter growth of 20% versus the prior year. Now turning to the balance sheet. We ended the quarter with strong liquidity with $4 billion of cash on hand. The…

Thanks, Aaron. Now a few key updates on our three strategic priorities for fiscal '23. First, executing our medical improvement plan initiatives. We remain on track with our mitigation actions for inflation and global supply chain constraints, and I'm pleased with our continued incremental progress on this critical front. We've now mitigated over 40% of the gross impact to our business through our mitigation initiatives. This includes widespread temporary price increases across nearly all of our Cardinal Health brand product categories, supplier distribution fee increases to offset higher transportation, labor and fuel costs, and our focus on other offset opportunities such as additional sourcing efficiencies. We continue to work collaboratively with our industry partners to make pricing adjustments that are reflective of current market conditions on our path to fully mitigating this headwind by the time we exit fiscal '24 through these collective actions. By taking a transparent approach, we are also advancing our re-contracting efforts, successfully adjusting long-term product contracts as they renew, and including language that allows for greater future flexibility. While costs generally remain significantly elevated relative to pre-pandemic levels, we've seen a stabilization across most areas, along with improvement in international freight. We believe we are now past peak overall cost levels as the improved international freight costs will begin to be reflected in our fourth quarter results. We remain committed to our mitigation efforts, as highlighted earlier. To drive growth outside our mitigation actions, we are focused on optimizing and growing our Cardinal Health brand portfolio, accelerating our growth businesses and driving simplification and continued cost optimization. As Aaron indicated, demand for our Cardinal Health brand products has remained generally stagnant over the first three quarters of fiscal '23. We believe market demand will improve in fiscal '24 and '25 coinciding with our ongoing initiatives…

Thank you very much, sir. [Operator Instructions] Today's first question is coming from Michael Cherny coming from Bank of America. Please go ahead. Your line is open.

Good morning and thanks for taking the question. Maybe if I can just dig in on the Medical side and just get an understanding, especially given the bridge dynamics between where you're run rating versus the build to the $650 million in '25. Is there any way you can go into more detail about what the quantitative and qualitative components of what led to the nonrecurring piece that's been absorbed within the segment? And then as you think about the dynamics behind that, how does that roll off over time as part of that build towards the longer-term multiyear targets?

Sure. Thanks, Michael. Yes. Let's break down the inflation into the components as a way of giving you the pieces I think you're asking for there. And we've given you enough of this, you can back into these numbers, but let me just be really explicit around the impact of inflation across the quarters in fiscal '23 and what that then implies for '24 and beyond. And I think that will get at most of your questions. So the first half of the year, namely within Q2, somewhere around Q1, Q2, we saw the peak net impact of inflation, gross inflation net of the mitigation actions. And then specifically in Q2, we had about $100 million included in our reported Medical segment earnings. Now we have had improvements over the course of the last quarter. So in Q3, we saw both the ongoing pricing dynamics as expected and the costs continue to be incurred at lower levels as expected. And what that did then was drove a P&L benefit related to those mitigation actions of $20 million to $30 million for the quarter. The difference in the quarter is that both Q3 as well as Q4, our volumes are now expected to be lower. So what we see in the P&L is a little bit less than what we had anticipated. But what we're spending on those incurred costs are coming in as expected. So again, that's Q2 to Q3, a $20 million to $30 million improvement in the net impact. And then we expect pricing to continue to improve as we roll over more and more contracts into the new permit structure. And then we have ongoing the international freight especially continue to roll through our P&L, again, at a slower pace than originally anticipated, but we still expect…

Thank you, sir. Next question is coming from Lisa Gill of JPMorgan. Please go ahead.

Thanks very much and thanks for all the detail. Jason, I know you're going to talk about this at your Analyst Day around the portfolio review. But there's been some speculation around your nuclear business. Can you just talk about the contribution that, that had maybe overall thus far this year and how you see that? Is that a core component of your business going forward? Or is this something that you would think about when you think about your portfolio review? And any insights you have around nuclear would be helpful?

As you would expect, Lisa. First of all, good morning. I'm not going to comment on the any of the rumors or speculation. What I'll say is nuclear is a fantastic business. In our segment footnote, we break out the revenue that's trending a little above $1 billion. It did increase a bit here because of some RevRec changes that's taking our revenue growth at well over 30%. But the kind of the normalized level of revenue growth has been in the low double-digit type of revenue growth. So it's been growing nicely. We've never broken out the margin, but we have indicated it's a higher than average margin. So it's a growing business. It's a strong business and a great secular area. And that's all that we're going to say about that. Next question please.

Thank you very much, sir. We'll now go to Kevin Caliendo calling from UBS. Please go ahead, sir.

Thanks. Thanks for taking my question. I want to -- I appreciate all the color around the things that you can control on the Medical side. But it's a little confusing to understand why market demand has been stagnant the last couple of quarters for your products. Given what we hear from at least the public hospitals and the like who clearly are doing better, is there a geographic issue? Is it a customer issue that you're not seeing increased demand? Is purchasing changing at the hospital level? Just -- or is it a product portfolio issue? Like what's actually happening in the marketplace that's kind of kept your private portfolio stagnant?

Yes. There's a few components I can provide some additional color on. First of all, we've highlighted the some of the categories. So PPE, we've highlighted the destocking situation still. So we're not seeing anything new or different there. We have some other categories like our lab business, which is actually seeing a little bit of a headwind sequentially. Nothing too significant, but it's certainly with COVID originally and then with flu testing, we had some pretty good volume over the last couple of years, and that's getting more normalized. So we have some headwinds like that. For the other non-PPE type of Cardinal Health brand categories that are important to us, especially from a margin perspective, what we have to go back to is just highlight that a couple of years ago, last year, we saw some very significant supply chain constraints. And at that time, we were not able to get our customers the products that they needed. Fortunately, we've been working very hard on that. Our product availability, our product health, our customer service levels are at levels we've not seen since before the pandemic. So we're in really, really good shape now, but we were not getting all the products to our customers that they needed over that period of time. And we lost some opportunity as a result of that. So that's why we're not benefiting from as much of the growth right now. I do think that the underlying utilization is improving. We're not getting our fair share of that. And that's where we're very focused on further investments in our capacity, further investments and product innovation, but also just making certain that we keep our service levels ever increasing to levels that are really exciting our customers, so that they want to buy more and more of that product from us. And we're in the best position we've been in, in years and have more confidence that we'll get there. This is an important part of the medical improvement plan, right? It's one of the four pillars of growth. And so we are anticipating further improvements. It is about 20% of the actions necessary for us to hit the $50 million-plus target. That's why we're very focused on the other actions as well to see if we can over deliver and derisk this. But we do believe that utilization will continue to improve overall for the market, and we are better positioned now than we've been in a long time to participate in that, and I feel good about our prospects to see that growth, especially as we get into fiscal '24.

Thanks so much.

Our next question is coming from Elizabeth Anderson calling from Evercore. Please go ahead.

Hi, guys. Thanks so much for the question. One, I was hoping, thanks for all the details on the Medical business. I was wondering if you could just help us on one more thing and sort of exclusively tell us what the contribution of -- or the hit from onetime items was in the quarter on Medical? And then two, can you talk about the pushes and pulls on the Pharma operating profit in the fourth quarter? Because it seems like it could be a little bit of a bit conservative there. So I just want to make sure that we have all the dynamics down there. Thank you.

Okay. So I'll make a comment on your first part of your question, I'll turn it over to Aaron for the second one. It's nothing that we've explicitly quantified just wanted to highlight the words that we used, again, that it was a modest net negative impact in Q3. So it's one component. It's a number of puts and takes within there. I did highlight that as an example, one of the types of items are some costs for further simplification actions. We had some of that in the first quarter as well. So we're constantly looking at our portfolio and taking action to improve our ongoing profitability and that required us to take some further adjustments within the quarter, but nothing else to really highlight there other than the key is that we just don't expect them to continue, certainly not the long-term or even into the rest of our guidance for fiscal '24. Aaron?

Good morning. Happy to talk about the Pharma business. First, just let me repeat a little bit of what I said in my prepared remarks, which is we are really pleased with the performance of the Pharma business and what the team is accomplishing in that core part of our business the resiliency and the strength that they showed in Q3 based on the progress on the generics platform as well as some strength in the brand portfolio and the double-digit growth in specialty allowed us to be able to lean forward and raise our guidance for the year for the Pharma business. I want to highlight a couple of things as you think about Q4, which I think was the point of your question, which is, while we expect to see continued good news relative to the operational performance and a stable macro environment, with the strong underlying fundamentals we laid out, it is important to note that Q4 last year was a strong quarter for us, and so we're lapping a higher point. It's also the case that we'll have less benefit from some nonrecurring items that we called out in our prepared remarks earlier as well. And so overall, strong performance in Q3, looking forward to a good Q4. But careful in our expectation setting.

Thanks very much, sir. We'll now move to Eric Percher of Nephron. Please go ahead.

Thank you. Staying on the Pharma side, I wanted to ask whether the changes we're seeing to list prices around the insulin products and the potential for more changes in front of the AMP Cap Sunset next year is significant. I understand this is a change to fee-for-service economics, and that gives you a right to renegotiate. But how would you characterize renegotiations that type when they come up? And are you confident you can maintain absolute profit or something close to it?

Yes. In short, very confident that we'll continue to appropriately be compensated for our activity-based value. So this is not any different than the various other types of adjustments we've had to make over the years, and it's something that I think we've demonstrated makes sense to make the appropriate adjustments. The other thing I'd highlight is the starting point for a product like this is not real strong margins to start with. So there's not a big profit pool from which to draw value from. So we do expect to be compensated for the value that we provide and we'll continue to monitor and follow. One thing we had talked about in the past on this type of topic is where I have the most concern is when we don't have sufficient visibility to changes and that something would just kind of fall in our lab at the last minute because it does require some renegotiation, restructuring in some cases of how the arrangements are made. This one is a little bit more straightforward, and we feel like we can negotiate the appropriate outcome for it. And we certainly have the time for it. But the distinction is if there's ever any really short-term type of impact, and that would be needed to be addressed separately.

Thanks very much, sir. Next question is coming from George Hill of Deutsche Bank. Please go ahead.

Good morning, guys, and thanks for taking the question. I guess, first, as it relates to the Cardinal Health branded products in Medical, I guess, Jason, is there any way to evaluate whether or not you guys are losing wallet share with customers and that guy is impacting volumes? And I guess my quick follow-up on that would be as we know that you guys have historically look forward bought commodity-based products. I guess is there any way to provide any more color around the timing of when Medical in flex as it relates to kind of the forward buying and the commodity impact in the inflation mitigation. Just trying to think about when we kind of like when we see the inflation as it relates to these lower costs really pulling through.

Yes. So as it relates to share I think when you look back at our volume, we had a step down in volume in Q3 and Q4 of last year. And again that was -- there was a lot of PPE that came out there. We clearly lost share there. It is a business that's a commodity business for us. It's important for our customers. We participate as needed. We source most of that product. So it's a category that's not our priority. What's most important is that we take care of our customer needs. In the non-Cardinal volume, and we also saw some weakness there, as I mentioned before, the supply chain constraints. So as other providers had capacity then we would have had a lower share as a result of that. Again I think there's been very little of that change since then. Our service levels and our product health have improved dramatically even over the course of fiscal '23. So I do not believe that we have everything that we're seeing from a new contracting perspective has been consistent with our expectations here this year. So I don't see anything new there. But we are dealing with some impacts that happened over the last couple of years. That part is the case. Your second question, I think, I answered it before in terms of the timing associated with the commodity impact is really the international freight is the big one that's reduced. And that reduced significantly six to nine months ago. And that's why right now, we're on the cusp of having to hit our P&L favorably or benefit our P&L is because we typically have two to three quarters' worth of inventory. Why it's spilling over into '24 is that our volumes have been lower than…

Thank you very much, sir. Next question is coming from Eric Coldwell of Baird. Please go ahead, sir.

Thank you. Most of mine have been covered, but I did want to hit on the generics pricing topic. I know you've made some positive comments during the call, but also suggested that market dynamics are generally consistent. We've seen some generic pricing in our data, some generic pricing deflation improvement over the last few months. I'm curious if you're seeing the same thing. And what your outlook might be on that front moving forward? Thank you.

Thanks, Eric. We called out favorable volume and mix and consistent market dynamics. As we've highlighted many times before, it's important to look at the total of both sides, buy and sell. And we continue to think those overall dynamics are fairly well balanced. And there will be ongoing volatility on one direction or the other, one side or the other, but it's the importance of Red Oak Sourcing and continue to deliver the best-in-class service levels as well as cost. And we feel very good about our competitive positioning there and why we think the margin per unit will continue to be as expected and not as much a part of the story than as the volume in the mix.

Thank you very much, sir. Next question is going to come from Mr. Steven Valiquette calling from Barclays. Please go ahead.

Great. Thanks. Good morning. You might have just touched on this a little bit, but I guess I was curious more just for the overall Pharma segment. You've had obviously a bunch of consecutive quarters now of double-digit top line growth, including 14% this quarter. And you talked about brand inflation, brand volume, generic specialty, all being strong. So I guess my question was related to.

Very sorry about that gentlemen. [Operator Instructions] We'll go to Daniel Grosslight of Citi.

Well, if I could, I think I might know where he's going with the question. I think he was leading up to -- I'm guessing that he's leading up to, were there any deviations from that. I mean what we saw was really broad-based performance throughout our Pharma segment. I meant -- I've asked -- answered questions about nuclear, nuclear was just like our other businesses this quarter. We referenced generics. We referenced brand. We referenced specialty. We saw a strong performance across the board. Utilization is certainly strong across the board. I also wanted to highlight our performance on delivering this very strong volume was also positive. The one thing to maybe add to this as well, the -- we talked about a new customer that was onboarded Q3 of last year. And that was -- they were onboarded in the prior year Q3, but there's always a ramp-up process there. So we did see some benefit this quarter relative to last year in terms of this customer now being fully onboarded. So we had a bit of a benefit there, not to the extent of what we saw in the last couple of quarters. And then the last piece that has been -- was very robust this quarter as well. That was not the case in the prior year, certainly were the GLP-1s that Aaron had mentioned. So it was a combination of strength across customer class customers, trade -- class of trade as well as the individual business units. All right. So now you can go ahead to the next question.

Thank you very much, sir. Sorry about that. Our next question is coming from Daniel Grosslight calling from Citi.

Yeah, thanks for taking the question. I had a similar question, but more on the EBIT for Pharma. Nice raise obviously this quarter. But I'm curious if you can kind of break out for us the nonrecurring items in a little more detail in the Pharma EBIT raise and how much will be recurring in fiscal '24? Thanks.

Well, I think the benefit of them being nonrecurring items is they won't recur into fiscal '24. If your question is more on Q4, I think the answer is similar in that way. For the Pharma segment, we saw strength across the board. It was a stable macro situation. We had the strong underlying fundamentals. We have the good operational performance as well. We did see some modest benefit from branded manufacturer price increases and this being the third quarter for us as well, which we don't -- we don't predict are going to repeat as we carry forward. And so I think the story for us for Pharma was a good year so far, a good quarter for Q3. We have -- we raised our guidance for the year, and we'll talk more about fiscal '24 and indeed our long-term expectations for the business during our Investor Day on June 8th.

Yes. And I'll just add, the way Aaron put it was perfect as it relates to true nonrecurring items, the only one that we could think of that way would have been -- it depends on your assumption of what you think brand inflation will be next year. That was modest. The other part that we did call out that was a benefit from a growth rate perspective year-over-year is that we do see some of our costs related to opioid legal fees and our ERP implementation running a little bit lower than anticipated. Now those are -- that's nonrecurring, right? It just means that we have gotten to a bit more of a normalized level quicker than what we had anticipated. So I do not expect there to be further significant improvements in the out periods out years related to those costs going down even further. It will be something that we'll continue to evaluate and provide updates if that's the case. But it's for those reasons why our implied growth rate in Q4 is more normalized. It's also why we're not communicating anything differently right now for our longer-term targets. And we'll certainly revisit that point when we come together at the Investor Day on June 8th. But generally speaking, we're seeing the strength, whether it's the new customer, the brand inflation or some of these cost drivers trending in the right direction, are all items that we think we are normalizing now on a go-forward basis and why you should expect more normalized margins from here on out.

Thanks for the color.

Thank you very much, sir. Next question is coming from Charles Rhyee calling from TD Cowen. Please go ahead, sir.

Yeah. Thanks for taking the question. I wanted to -- just wanted to follow up. I think it was with Eric's question around, you were talking about in that specific instance about insulin pricing and sort of how you can kind of mitigate some of that. Can you just kind of go into, again, for us a little bit, how your fee-for-service contracts are arranged generally? And maybe more specifically, with insulin perhaps ahead of with these changes occurring, and -- because I would have thought that a lot of the language is already built into your contracts that would automate sort of adjudicate to maintain sort of the -- to capture that service that you are providing. And then as a follow-up, you had talked earlier about sort of Red Oak and continuing to perform well in generics. Curious if any work in Red Oak is being done in terms of biosimilars and trying to get better economics on that side as well. Thanks.

Well, I'm not going to go into the mechanics of a product level contracts and structure. Just go back and reiterate that we feel very confident about our process, our experience, our history with any type of change that comes any other product. Again, as a distributor, we play a role. We play the role of getting the product from the manufacturers to those who need it. And with that will always be changes in the structure and how we go about it. But we -- nothing is different in today's environment than what's been present for the last 50 years of our existence when we'll have to continue to adapt and evolve with this and that's enough to be said there.

And then with respect to biosimilars, what we would say is that we are quite well positioned to support the next phase of growth over the next several years in that expanding therapeutic area on the sites of care. It's going to -- we believe it's going to come predominantly from products with a greater retailer or a specialty pharmacy presence, which plays to our strength as well as new therapeutic areas such as immunology and ophthalmology. And so we -- our expectation is it will be a tailwind for us as we push ahead into the end of fiscal year '23 and beyond.

Next question please.

Thank you very much, sir. Thank you, sir. Next question is from A.J. Rice of Credit Suisse. Please go ahead, sir.

Thanks. It's Jonathan Yong on for A.J. here. Just going back to Medical again. I appreciate the comments on the cost improvements that you're doing and how that's going to set up a good framework for '24. But I guess given some of the volume constraints that you're kind of seeing and not seeing the same flow through, how much of improvement related to the cost side, especially on the freight line is tied to actually improving that volume side that you kind of need to flow through. Thanks.

Well, so it depends on the time frame we're talking about, but for fiscal '25, our ultimate goal of the $650 million that volume impact we're talking about will not materially impact at all the recognition of the inflation mitigation. That is something that does have some volatility quarter-to-quarter, which is exactly what we highlighted as one of the drivers in the guidance change for this year. But it's not something that will impact significantly the future quarters let alone when we get to fiscal '25. And so I think about volume, the volume component of the order of magnitude of the impact and the benefit that we expect for growing this volume is that $75 million that we have on one of the slides in the presentation, that volume pillar of growing Cardinal Health brand products, that is the order of magnitude we're talking about. And so I do not believe long-term that, that spills over and impacts the mitigation and the cost side of that. So you can think about those as independent as it relates to the longer term impacts, they are a bit more mix in the terms of the short term and what that does to how quickly we recognize that, that lower cost, but that is very much just a short-term timing effect.

Thank you very much, sir. And our last question today is going to be coming from Brian Tanquilut calling from Jefferies. Please go ahead, sir.

Hi. This is Kristen Shuman for Brian. And you might have mentioned this earlier, but I just want to clarify. So could you just give some guidance around how much of the Pharma segment EBITDA guidance range is expected to recur in fiscal '24? Thank you.

Well, we have not provided fiscal year '24 guidance. We're pleased to report the strong performance in Q3. As we've talked about, and indeed, we did raise our guidance overall for Pharma. For the year, we're now expecting the profit guidance to be 10.5% to 12% for the full year. That's in contrast to our earlier guidance of low single digit to mid-single digit. So we are expecting a good finish to the year from this business, and we're excited to see you all on June 8th at our Investor Day presentation.

Thank you very much. Ladies and gentlemen, that will conclude today's Q&A session. I'd like to turn the call back over to Mr. Jason Hollar for any additional closing remarks.

Yes. Great. Thank you, and thank you, everyone, for joining us today. I know that we threw a lot out at you today, but we have a lot going on as an organization and just wanted to share the progress with you and give you more insight to a lot of the key drivers. If I step back and just think about what we went through, certainly, feel terrific about the progress that we're making across the enterprise. Pharma has, of course, a fantastic quarter, a fantastic year, broad-based as we talked. On the Medical side of the business, we have opportunity. We're very, very focused on driving the medical improvement plan. We feel really good about the progress we made are clearly making in three of those four pillars. We have work to do on the underlying volume. We'll have more confidence in where the market is going for that volume also have confidence in the leading indicators that will take for us to get our fair share of that volume. Of course, also, we're very pleased with the cash performance that we had and that we talked about today and that raising that guidance, narrowing the guidance as well. It highlights both the strong cash management that we have, but also the responsible capital deployment that's going along with that. So just again, thank you for your time today and look forward to seeing you all of you at the Investor Day on June 8th.

Thank you very much, sir. Ladies and gentlemen that will conclude today's conference. Thank you for your time. You may now disconnect. Have a good day and goodbye.