Good morning, ladies and gentlemen. And welcome to Henry Schein’s Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this call is recorded. And I would now like to introduce your host for today’s call, Graham Stanley, Henry Schein’s Vice President of Investor Relations and Strategic Financial Project Officer. Thank you. Please go ahead, Graham.

Thank you, Operator. And my thanks to each of you for joining us to discuss Henry Schein’s financial results for the second quarter of 2023. With me on the call today are Stanley Bergman, Chairman of the Board and Chief Executive Officer of Henry Schein; and Ron South, Senior Vice President and Chief Financial Officer. Before we begin, I’d like to state that certain comments made during this call will contain -- will include information that’s forward-looking. As you know, risks and uncertainties involved in the company’s business may affect the matters referred to in forward-looking statements. As a result, the company’s performance may materially differ from those expressed in or indicated by such statements. These forward-looking statements are qualified in their entirety by the cautionary statements contained in Henry Schein’s filings with the Securities and Exchange Commission and included in the Risk Factors section of those filings. In addition, all comments about the market we serve, including end market growth rates and market share are based upon the company’s internal analysis and estimates. Today’s remarks will include both GAAP and non-GAAP financial results. We believe the non-GAAP financial measures provide investors with useful supplemental information about the financial performance of our business, enable the comparison of financial results between periods where certain items may vary independently of business performance and allow for greater transparency with respect to key metrics used by management in operating our business. These non-GAAP financial measures are presented solely for informational and comparative purposes and should not be regarded as a replacement for corresponding GAAP measures. Reconciliations between GAAP and non-GAAP measures are included in Exhibit B of today’s press release and can be found in the Financial and Filings section of our Investor Relations website under the Supplemental Information heading. For additional financial information, please refer to our quarterly earnings presentation also posted on our Investor Relations website. The content of this conference call contains answers to information that is accurate only as of the date of this live broadcast, August 7, 2023. Henry Schein undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Lastly, during the Q&A session, please limit yourself to a single question and a follow-up. And with that, I’d like to turn the call over to Stanley Bergman.

Thank you, Graham. Good morning, everyone, and thank you for joining us today. We are today reporting solid results for the second quarter, driven by our North American dental businesses with strong equipment and steady general merchandise sales, and with continuing strength in sales of our technology and value-added services, our implants, biomaterials and endodontic products. The underlying fundamentals in the U.S. dental market remains strong and demand for dental services and customer confidence continues to improve as, of course, evidenced by our -- by the ongoing investments our customers are making in their practices. In addition, we are seeing growing demand for our implant systems and endodontic products, as well as our integrated software and services solutions, which are generating strong growth by delivering greater efficiency and a better experience to our customers. In the alternate care market, that’s the medical market, electric procedures are close to normal levels, while second quarter visits to primary care physicians were down year-over-year, reflecting last year’s higher visits to physician offices and urgent care centers as a result of the extended flu season last year. As expected, sales of PPE and COVID test kits continue to decline. However, we are now seeing sales level off sequentially -- we are now seeing sales level off sequentially and we expect the year-on-year impact to be much lower in the second half of 2023. When excluding these product categories, local currency internal sales growth for the company was 3.3%. In general, our North American dental business performed better than we expected at the start of the year, offset by some incremental COVID-related headwinds facing our medical business, as discussed earlier on. Our outlook reflects overall confidence in our business and in the markets we serve, and accordingly, we are affirming our non-GAAP diluted EPS financial…

Thank you, Stanley, and good morning, everyone. I will be discussing our results as reported on a GAAP basis and also on a non-GAAP basis. Our second quarter non-GAAP financial results for 2023 and 2022 exclude integration and restructuring costs and amortization expense of acquired intangible assets. This is detailed in Exhibit B of today’s press release. With respect to sales growth, I will focus on LCI sales growth, which is internally generated sales in local currencies compared to the prior year and excludes acquisitions. Second quarter global sales were $3.1 billion or an LCI sales decrease of 0.2%. However, when excluding sales of PPE products and COVID-19 test kits, our LCI sales grew 3.3%. We sold $138 million in PPE products in the second quarter of this year, a decrease of approximately 28% year-over-year and we sold $26 million in COVID-19 test kits, a decrease of approximately 62% year-over-year. Our GAAP operating margin for the second quarter of 2023 was 6.5%, an 81-basis-point decline compared with the prior year GAAP operating margin. On a non-GAAP basis, operating margin for the second quarter was 8.2%, a 14-basis-point decline compared with the prior year non-GAAP operating margin. Excluding the impact from lower PPE and COVID-19 test kit sales, we estimate that non-GAAP operating margin expanded 27 basis points. Second quarter 2023 GAAP net income was $140 million or $1.06 per diluted share. This compares with prior year GAAP net income of $160 million or $1.16 per diluted share. Our second quarter 2023 non-GAAP net income was $173 million or $1.31 per diluted share. This compares with prior year non-GAAP net income of $179 million or $1.30 per diluted share. These results were impacted by a decreased contribution from lower PPE and COVID-19 test kit sales, estimated to be $0.08 per diluted…

Thank you, Ron. We are here to answer any questions which investors may have. So, Operator?

Thank you. [Operator Instructions] And the first question comes from the line of Elizabeth Anderson with Evercore ISI. Please proceed with your question.

Hi, guys. Thanks so much for the question. I have maybe one shorter term question and one long-term question. In terms of the shorter term question, obviously, the fair value adjustment was new this quarter. And I just wanted to sort of make sure I understood, was this something that you knew sort of last quarter when you updated your guidance or because I am just trying to understand whether the guidance moved down ex that? And then for my longer term question, it’s obviously very interesting with you adding all these new capabilities and geographies in. How do we think about, like, for example, for S.I.N. and like how long that might take or what your plans are in terms of bringing those implants into the United States? And then similarly, in terms of the medical, the ability to sort of push those sort of more broadly across -- the new products across your portfolio? Thank you so much.

Certainly, Elizabeth, I will take the first question and Stanley will respond to your second question. So the re-measurement gain was something we contemplated in our guidance. We didn’t have a definite amount for it, just like we weren’t sure how much our acquisition costs were going to be either. So, ultimately, those -- as we have kind of demonstrated in that exhibit to the press release, those amounts once we realized the higher expenses and we also realized the net re-measurement gain have largely offset on a year-to-date basis. So, yes, our guidance does contemplate the effect of those items. And Stanley, if you want to take the second question.

Thank you. Elizabeth, the S.I.N. Implants, not the whole line, but significantly important part of the portfolio already approved in the U.S. are selling to some extent and are being well received by our particularly DSO customers where we, in fact, by coincidents last week were able to land a pretty decent DSO that is interested in the S.I.N. Implant System. It puts us whole S.I.N. transaction puts us in a very competitive position now, because to some extent, in the U.S. and maybe some other markets, although Camlog -- BioHorizons Camlog is a premium product selling at a slightly lower price than some of the major brands, if not all of them, we still were missing a piece in our portfolio on the more economic side of implants and now I believe we are well positioned with S.I.N. and I believe in the next year or so, we will be able to also launch the Biotech line in the United States. Different market segments, but I think we are definitely in a very competitive position now and are actually starting to see some sales.

Very helpful. And then for Shield as well, that’s sort of a similar time line and you can sort of push that across your broader portfolio later this year or is that more of a -- we should think about that as more of a 2024 type of occurrence?

No. I think we acquired Prism about a year or so ago or two years ago, which was mostly an East Coast business with a relatively limited portfolio. Shield puts us into the West Coast with a broader portfolio. And Shield was missing the wound care offering that Prism had. So we believe we will create synergies relatively quickly. There are costs, of course, on the integration, which we have taken into account in our guidance, mostly one-time costs. But I think in 2024, we should be able to start adding accretion in a nice way. This has really been an area that our customers, our big IDN customers have wanted us to perform and we didn’t undertake these kinds of services. We have one DSN -- IDN in New York area that we service in the homecare area, but we didn’t really have the full capabilities between these two acquisitions and another small one which we hope to announce soon, we will have a pretty good offering in products for the home and will be a great extension to our physician and urgi care business.

And the next question comes from the line of Brandon Vazquez with William Blair. Please proceed with your question.

Hi, everyone. Thanks for taking the question. Maybe first on one high level question just on the macro backdrop. Can you guys talk about where you are seeing some strengths and weaknesses in the environment today? I think maybe equipment looked pretty strong in the U.S., but maybe a little weaker international and then consumables globally looked kind of stable low single digits. So curious how all these segments on the dental side are playing out from the macro side?

Yes. Thanks for that question. On the macro side in North America, I believe there is stability on the dental side. That’s what our team believes in general. Consumables, people are -- patients are returning to the dental office if data is not perfect. But if you look at the latest ADA survey and some recent analyst reports and studies, it suggested that patient traffic picked up throughout the second quarter after the steady volumes in the first quarter of 2023, and so we -- and we also -- of course, we had some volatility in the first quarter of 2022. And so it appears that patient flow is good. July, from our point of view, was a good month. Our e-claims data also suggests that, what I have just described is backed up again by e-claims data from Henry Schein One. If you peel on in a little bit further, at least from our point of view, implant sales continue to grow well in North America, same for endodontics. Our small aligner business is showing similar times of trends. If you look at international, it’s slightly more tepid in international. It’s hard to tell, because we are now in the summer month that when -- the summer months when Europe is largely closed. Having said that, we did suffer in the second quarter because of the strikes in France. I would say Germany is okay. We had pretty strong numbers in 2022 from a comp point of view, because we had the trade in in the second quarter of 2022. Patient traffic in Germany, which is our biggest market outside of the U.S., seems to be steady. There is somewhat of a staff shortage. But again, it’s really hard to tell. This is the vacation month now, July, August…

Perfect. Thank you very much. One -- and maybe one other quick one for Ron. We are trying to -- can you clarify, you may have given this already on the call, but just to be clear. Can you kind of talk about what EPS growth is in 2023 and based on that guidance ex the PP&E COVID and part of why I am asking is just to make sure we understand what underlying dynamics are as we are kind of looking at our 2024 models where maybe PP&E and COVID sales can kind of stabilize and we can return to some more normalized growth rates? Thank you.

Yeah. Our full year guidance is still $5.18 to $5.35 and that includes an expected $0.35 to $0.40 headwind versus the prior year of impact on EPS from contributions from PPE sales and COVID-19 test kit sales. So those -- that remains unchanged from a guidance standpoint. While we have adjusted the some of our revenue assumptions on those products because of the better-than-expected margins on the PPE sales, we haven’t had to adjust the $0.35 to $0.40 expected headwind that was built into our original guidance.

And the next question comes from the line of Jeff Johnson with Baird. Please proceed with your question.

Thank you. Good morning, guys. Stanley, maybe I would like to dig a little deeper on your North American comments. Consumables, you described that market as fairly stable, I think, that fits with a lot of our survey data as well. The consumables number, though, did come down to 2.5% on an organic basis ex-PPE this quarter, last quarter it was 6.5%. Do you think that’s just the comps from the Omicron stuff in the first quarter last year that really helped inflate that first quarter number, was there any change in the pricing dynamics? Any other factors kind of bridging from the 6.5% first quarter to the 2.5% consumables this quarter? Thanks.

Very good question, Jeff. Thanks for asking. I think you need to take the fourth quarter of 2022 and the first quarter of 2023 and more or less average out because of the cut-offs. It leans a little bit higher in the first quarter, but it certainly was a 6.5% growth of apples-to-apples. I think we have covered that in the past. I would also suggest that inflation in the consumable world, in the dental arena has muted. Maybe some products individually of certain brands have gone up. They are not necessarily sticky from the manufacturer pass-through. We are not -- the manufacturers are not necessarily able to hold all these consumable price increases. At the same time, there is a movement towards corporate brand/generics, and some of the smaller brands are doing well, where some of those manufacturers are prepared to keep prices or even reduce prices. So it’s very hard on a one quarter basis to give you the perfect measurement of mix. But I would take into account the cut-offs for 2022 for the fourth quarter and I would take into account the fact that generally there’s been some deflation in merchandise prices. And I would say this is particularly coming from the larger DSOs and the midsized DSOs who are to-date a lot more educated consumers than in the past. This is not really impacting our margin per se, the general mix of our margin to DSOs. So there’s a lot of nuance in what I just said. Let’s see what happens in the third quarter and fourth quarter. But my sense is the trend that I just described is not going to change much.

All right. That was going to be my follow-up, Stanley. So is there more deflation to come or have we kind of taken that step down and you think we can hold steady from there? And then, Ron, just a follow-up on your -- on the non-recurring below the line, well, I think, it was above the line actually this quarter on the one-time gain. The 5% to 10% -- $0.10, I am sorry, of dilution is unchanged that is on a gross amount. You are talking about a net been impact from acquisition activity being close to flat this year. If you had provided that net guidance last quarter, would that have also been flat? So, essentially, you are not changing your gross or your net acquisition guidance for the year? Just wanted to understand that? Thank you.

Jeff, it’s hard to tell, as I -- maybe I wasn’t clear, exactly what the impact is going to be of deflation, whether it’s price reduction on specific branded products or switch to generic or other manufacturers for specific kinds of products. Yeah, I doubt, we are in more than 100-basis-point, 150-basis-point swing, maybe 200-basis-point, but I am not sure it’s much different to that. So I don’t think inflation is going to be significant in the dental consumable business. I think it may go down slightly to deflation, but we are in that range. Units are holding more or less steady. Of course, from our point of view, we are growing our specialty business, although the business may be growing, that doesn’t have an impact really in a material way on our total sales of dental consumables because it’s not material in the context of the whole consumable offering. Having said that, specialty products are impacting our margin in a positive way and so our corporate brands and some of the smaller manufacturers.

And Jeff, to answer the second part of your question, the $0.05 to $0.10 that we referred to after the first quarter when we amended guidance was specific reference to the expected dilutive effect during the year from biotech. The -- we are holding that $0.05 to $0.10, but it now is for all the acquisitions that we have announced so far this year. Apart from that, we have higher-than-expected acquisition expenses, which are largely offset by the re-measurement gain that we recorded in the second quarter as well. So we kind of have set those aside and that was the purpose of Exhibit C to the press release, so people could see the components of that and we are holding to the $0.05 to $0.10 of dilution, but now it captures all of the acquisitions that we have announced today.

And the next question comes from the line of Jason Bednar with Piper Sandler. Please proceed with your question.

Hey. Good morning. Thanks for taking the question. I will actually follow-up there on kind of the track that Jeff was going down. But maybe so, Ron -- just maybe first starting on gross margins. I mean, those are still hanging around multiyear highs despite what I think are maybe some inventory step-up costs from the Biotech Dental transaction. So could you quantify how much inventory step-up may have hit in the quarter in terms of hitting that gross margin and earnings? And then with absorbing the dilutive S.I.N transaction and your reaffirmed guidance today, can you give us some detail on how to think about what the dilution is from that deal that you are absorbing, even rough numbers, is it a few pennies, a nickel, a dime? Anything there would be helpful.

I will start with the quantifiable one first. The step-up charge that we have and it will be disclosed in the 10-Q as well, in the second quarter for Biotech was $2 million. So not a real significant effect on gross margin. In terms of S.I.N, it is absorbed within that $0.05 to $0.10. There’s also going to be a step-up on S.I.N, but they don’t turn their inventory as quickly. So we don’t expect it to quarter-to-quarter have as dramatic of an effect. So S.I.N without kind of disclosing the modeled dilution on that, I can tell you that it is absorbed within that $0.05 to $0.10.

Okay. And then on the $2 million, I guess, just a quick follow-up there, is that $2 million steady as we go forward for the next quarter or two for 3Q and 4Q or does that need to move higher just as we think about how to model gross margins…

Biotech…

… for the back half of the year and...

I am sorry, Biotech -- just to answer you quickly, Biotech churns our inventory about twice a year. So we have about another quarter of that inventory step up left. So it will be another $2 million in Q3 and then we will be able to move on from that.

Got it. Perfect. And then as we think about the composition of the equipment backlog, you mentioned it’s holding steady, but it sounds like maybe that’s starting to shift back towards high-tech equipment. Could you drill down into what areas of high-tech you are seeing that recovery leading? I would assume it’s mostly in iOS. But just wondering if you are starting to see any better results on the digital imaging or anything on the milling or 3D printing side that’s maybe influencing some of your comments today?

Yeah. We are very pleased with the equipment growth we had. I mean, North America equipment growth on an LCI basis of 9.8%, especially in this environment on some of the high-tech equipment traditional remains very high at -- our LCI in North America on traditional equipment was growth of 14.6% and that was with virtually no movement in the backlog. It’s almost identical from the beginning of the quarter to the end of the quarter. So it’s very indicative of ongoing strong demand for traditional equipment. On the high-tech side, we still have some headwinds on scanners, but it’s price related. We are getting good values on scanners, but the revenues are down, some on the scanners. We do have -- I think they are down 12.1% on, well, I am sorry, digital restoration sales were down 12.1%, but the scanner revenue is still down 40% for us year-over-year and that’s really a pricing matter. Having said that, on high-tech equipment, we did achieve very -- a little bit of growth. It’s single-digit, low single-digit growth, but we did get some high-tech growth, which we are pleased with and that’s coming from some growth really kind of across the Board. You mentioned a lot of the categories, some growth in mills, some growth in 3D printing. Those are all coming off relatively low basis, but nevertheless they are providing us with some growth and that’s helping the category.

And the next question comes from the line of Jon Block with Stifel. Please proceed with your question.

Great. Thanks, guys. Good morning. Maybe just the first question on dental specialties. I think the reported was up 15.7%. I don’t know if I missed it, but do you have a precise internal number for that division? And then just to go a little bit further down the road, how implant growth shook out within whatever that internal number was? Was it above overall internal below and just maybe your thoughts on ongoing share gains or implant share gains, pardon me, now that you have got some of those investments in the more robust implant portfolio to work with going forward? And then I will ask a shorter follow-up. Thanks.

Certainly, I think, with reference to our specialty growth. I mean we have kind of elected to stick to total sales growth in order to be consistent with the message we had around specialties in our Investor Day. So we are really -- we are focusing on total sales growth as opposed to LCI sales growth. We think it’s more reflective of our strategy for that portfolio of products. We remain very bullish on implant sales. I think that we have gotten -- we had growth in North America, as well as internationally on implant systems. Endodontic sales on the specialty side remain very strong for us, both inside and outside the U.S. Stanley, anything you wanted to add on the specialty side?

Yeah. Jon, that was -- thank you for that question. If you look at just North America, sales of our BioHorizons Camlog premium implants, remember that -- it’s a premium implant at a slightly lower price than, perhaps, our competitors in the premium area, delivered mid-single-digit growth and that’s a sequential improvement versus the first quarter. Internationally, implant demand remains good. Remember, we have a very small business in China. Generally, demand for dental implants, again, favored the low price part. Although I must say, for BioHorizons Camlog, we did very well in our biggest market, which is Germany, Austria and Switzerland. But Medentis did very well also in Germany, which is on the lower end. So, overall, we are quite comfortable, actually, very excited about our growth in the implant business. Hard to tell you how we are doing compared to others. The data from the association that reports premium implant sales is not yet available for the second quarter. But my sense is we have gained market share, both in terms of units and in terms of euros, dollars. So as it relates to the competitiveness of our product line, Elizabeth asked a question earlier on, we were missing a piece in the lower end of the mix in North America. I believe S.I.N will enable us to be highly competitive in this area, specifically with DSOs, large ones and midsized ones. I just want to go back to the ID, the sensor DI question earlier on. I think we reported this time last year that our sales that include a large sale of DI equipment to substantial DSO and so if you take that out. The units are more or less returning to where they were and there still is some deflation, but not a significant amount. And on the DI side, it’s not really deflation relative to a particular brand, but there are lower priced brands that we are selling more of relative to the larger brands.

That was helpful. Thank you. And maybe I will try to ask a tight second question. Just for medical, ex-PP&E -- ex-PPE and COVID was up 2%. And I know flu was a year-over-year headwind. But just the past couple of quarters, that’s come up a little shy versus our expectations. I know you talked about the long-term thoughts at the Analyst Day. But in the more intermediate term, is there a way that we should think about that division, maybe with the balance of 2023? You are still standing on a couple of comps maybe, but maybe just talk to us on how you see that unfolding for the balance of 2023, again ex-PPE, COVID. Thanks.

Yeah. It’s very hard to give you specifics. I think we are doing well in terms of units with our existing customers. We are gaining customers. But the whole area of visits unrelated to steady visits relative to urgi centers and normal type medical visits is hard to gauge, because of the impact of the seasonality of flu and we sell quite a bit of flu-related products, be it the test or the related products that go with the test. At the moment, it seems pretty steady. It’s -- I wouldn’t want to say this, really, I wouldn’t want you to view this in the wrong way, but COVID is growing a little bit. So people are going more to the physician offices to check things out. So July was a lot better. But you can’t draw conclusions. There was a lull in equipment sales. We had a lot of good inquiries in July. But it’s hard to give you a specific number. The impact of generic pharmaceuticals is quite a bit on the injectable side, not the vaccine side. We don’t sell many tablets and capsules, not our business. So overall, it’s a good business and whether it’s 3% or 5% or 6%, I don’t think that impacts the overall profitability in a meaningful way. There are so many puts and takes in our medical business. But we feel very good about our medical business and continue to believe that on a unit basis we are growing market share.

We have time for one last question coming from the line of A.J. Rice with Credit Suisse. Please proceed with your question. Hello, A.J. your line is live. Our final question will come from the line of Nathan Rich with Goldman Sachs. Please proceed with your question.

Great. Thanks for fitting me in at the end. I will ask both upfront. First, I wanted to go back to the commentary around traditional equipment and the equipment backlog in North America stabilizing. It has obviously been coming down, I think, as we cycle through some of the supply constraints. I’d just be curious outlook for demand, though, how you are thinking about that over the balance of the year and what you are seeing with respect to kind of practice formation and remodels just in the current environment that we are in? And then, Ron, maybe a clarification on the margins, any commentary on the margin outlook between 3Q and 4Q, I guess, especially as it relates to potential timing of acquisition and expenses between those two quarters? Thank you.

So, Nathan, on the equipment, I believe that demand is quite good and steady. Some of the larger DSOs continue to invest. There may have been a bit of a pause a few months ago when some of these DSOs, perhaps, highly leveraged, we are looking to determine whether they really should invest or not. But there is a demand for dental care and I believe that our bigger DSOs are growing, one or two of them had some operational issues, which I think are largely behind them. But I believe that they are investing. I am talking about the largest size and the midsize are growing as well, smaller practitioners not so much. But, overall, I would say, the demand for traditional equipment is there. The -- on the digital side, the DI scanners are growing in terms of units. Yes, there’s -- to some extent, movement to the lower priced units, but not discounting of any particular unit in a material way, just to switch as more people look at this area, very important to realize the high comp we had in one area in the DI area last year, we disclosed that on our call. And the mills, I would say, are steady. There’s a demand. It’s not as hot as it was, sort of a trade-up, that helped a bit. And 3D printing is quite hot, tick up back a little bit. If you look at our numbers, in general, we are a big player on the dental lab side. There is a movement away from consumables into digitalization. So that movement is also impacting, to some extent, the sales of consumables and resulting in an increase in equipment. But overall, I think, our equipment backlog in the United States, which is pretty similar to what…

And Nathan, just one thing to add on the backlog. The -- like I mentioned before, our backlog in North America has stayed pretty constant over the course of the quarter and we saw a very good sales growth. Yeah, I would -- quite frankly, I would like that backlog come down some, not just for the revenue lift it would give us, but it’s just better for our customers to reduce the timing of that backlog so they get their equipment more quickly and it increases capacity in the end market, quite frankly, for -- in those situations where that backlog is for equipment that is new to the business as opposed to replacement. So we would like for that backlog to come down. But right now, we still up in North America, we are experiencing a fairly consistent backlog. In terms of your question on Q3, Q4 margins, I do think that, especially at a gross margin level, we can continue at the levels we are at. I think that it’s indicative of the growing importance of the dental specialty products in our overall portfolio, as well as the growth in our technology business and I think we can continue with that as we get into the back half of the year. Of course, there’s always -- it’s a broad portfolio. There are things that can impact that. For example, Q4 tends to be a heavier quarter for equipment sales than other quarters and those sales tend to be at slightly lower margins than what our overall margin is right now. So that can bring down margins a little bit, but in exchange for the additional sales, we will clearly take that. So I don’t know -- I think that that’s -- my general expectation is we will be able to continue with the margins that we have seen in the first half of the year into the second half of the year.

So, thank you. I know we have gone over, 8 minutes over a lot of time. Thank you everyone for calling in. Again, we are very pleased with the progress we are making in the business, both the core business, our specialty businesses, our software businesses. The markets are steady, lots of ins and outs, subtle points. But generally, we are comfortable with where we are today. We have reaffirmed guidance. Sorry about the complexity on PPE and test and the acquisitions, expenses and related costs and income generated in that area. But this will I think, we will try to make it clearer for our investors to make it as simple as possible for the remainder of the year. But I think next year should be a relatively clean year, and hopefully, you will see that we -- our confidence in the business is justified. So thank you all for calling in, of course, Graham and Ron are available to speak with investors over the next days and thank you for calling in. We remain confident in our team. Thank you to the team for the tremendous work that has been undertaken as we come out of the other side of COVID and implement our strategic plan. So thank you all and have a great remainder of your summer. Thank you very much.

And ladies and gentlemen, that does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day.