Welcome to the LeMaitre Vascular Q3 2016 Financial Results Conference Call. As a reminder, today’s call is being recorded. At this time, I would like to turn the call over to Mr. JJ Pellegrino, Chief Financial Officer of LeMaitre Vascular. Please go ahead, sir.

Thank you, Catherine. Good afternoon and thank you for joining us on our Q3 2016 conference call. With me on today’s call is our Chairman and CEO, George LeMaitre; and our President, Dave Roberts. Before we begin, I’ll read our Safe Harbor statement. Today, we will make some forward-looking statements, the accuracy of which is subject to risks and uncertainties. Wherever possible, we will try to identify those forward-looking statements by using words such as believe, expect, anticipate, pursue, forecast and similar expressions. Our forward-looking statements are based on our estimates and assumptions as of today, October 26, 2016 and should not be relied upon as representing our estimates or views on any subsequent date. Please refer to the cautionary statement regarding forward-looking information and the Risk Factors in our most recent 10-K and subsequent SEC filings, including disclosure of the factors that could cause results to differ materially from those expressed or implied. During this call we will discuss non-GAAP financial measures, which include organic sales and growth numbers, as well as EBITDA. A reconciliation of GAAP to non-GAAP measures discussed in this call is contained in the associated press release and is available in the Investor Relations section of our website, at www.lemaitre.com. I’ll now turn the call over to George LeMaitre.

Thanks, JJ. Q3 2016 was another strong quarter, I’ll focus on three headlines. First, top to bottom Q3 2016 was a record quarter. Second, XenoSure grew 59% in Q3 2016, benefiting from a competitor’s safety alert. And third, valvulotomes grew 26% in Q3 2016. As for our first headline, in Q3, we posted several financial record sales of $23.2 million, up 22% versus Q3 2015; record op income of $5.3 million, up 61%; record net income of $3.2 million, up 54%; record EPS of $0.17 per diluted share, up 48%; and finally, record EBITDA of $6.1 million, up 55%. As to our second headline, the XenoSure biologic patch continues to drive our growth and was up 59% in Q3 to a record $5.5 million. Roughly, one-fourth of XenoSure sales in the quarter were $1.4 million, were due to the safety alert that Baxter announced on June 24, 2016. Baxter resumed selling vascular patches on August 11, and some customers have now reverted back to their product. Nevertheless, we believe we will obtain approximately $500,000 of these sales into Q4. As we had anticipated, XenoSure is now the largest product of LeMaitre Vascular and we expect this to continue into the future. Admittedly, the Baxter safety alert hasten this changing of the guards. As to our third headline, valvulotomes enjoyed a record sales quarter as well with growth of 26%. Valvulotomes sales grow since mid-2014, has been driven by the introduction of HYDRO valvulotomes. In Q3, however, the HYDRO is 26% growth was due in part to voluntary recall related to the products closure mechanism. While disappointing, we were able to address the issue quickly. In fact, all manufacturing issues were rectified by September 9, and we’ve been shipping HYDRO since. From a sales perspective, this recall may have unexpectedly increased Q3 HYDRO revenue by approximately $300,000, as hospitals increased ordering to protect their valvulotomes supply. As you might expect, this could lead to some softness in Q4 HYDRO sale. We believe the entire recall and its financial implications will be contained inside each to 2016, and is included in today’s guidance. Looking at 2016 as a whole, we’ve continued to increase sales and earnings guidance throughout the year, as our view of the future has improved. Our manufacturing team has done a fantastic job improving the gross margin and we benefited from our larger sales force footprint. All the while, LeMaitre Vascular’s growth trajectory has been tilted upward by XenoSure’s continued success, which has enabled us to achieve substantial operating leverage. Before I turn the call over to JJ, I want to remind you LeMaitre Vascular’s simple financial objectives, gross sales 10% and grow operating profits to 20%.

Thanks, George. I’d like to say a few words about our gross margin, operating margins, cash balances, share repurchase program, and then conclude with our guidance. Our gross margin in Q3 2016 was 73.3%, an improvement of 470 basis points versus Q2 2016. This sequential increase was driven primarily by manufacturing improvements in our XenoSure, AlboGraft and HYDRO product lines, as well as favorable geographic mix, as the U.S. accounted for a higher percentage of worldwide sales. At a higher level, it is worth noting that our Q3 gross margin compares favorably to a gross margin average of 70.2% over the previous four quarters. Given continued cost reductions in our XenoSure and HYDRO manufacturing sales, we expect higher gross margins to extend into Q4 2016. Our op margin in Q3 2016 was 23%, a record high since our IPO in 2006. Indeed since Q4 2015, our op margin by quarter has been 15%, 16%, 17%, and now 23%. And our guidance indicates an op margin of 20% in Q4. This improved operating leverage has been driven by higher gross margins and restrained expense growth. At September 30, 2016, our cash balances were $34.7 million, an of $7.2 million since December 31, 2015. Year-to-date, cash increases have been driven by cash from operations of $12.7 million and receipts from stock option exercises of $1.4 million. Indeed our cash generating ability was strong in Q3, as we put $5.4 million into the bank in that quarter alone. Turning to guidance, we expect Q4 2016 sales of $23.1 million, an increase over the prior year of 13% on a reported basis and 13% organically. We also expect Q4 2016 gross margins of 73% and operating income of $4.7 million, an increase of 52%. For the full-year 2016, we expect sales of $89 million, an increase over the prior year of 14% on a reported basis and 12% organically. We also expect full-year 2016 gross margins of 71.5% and operating income of $17.1 million, an increase of 49%. Finally, I’d like to note a recent milestone for LeMaitre Vascular. The 10-year anniversary of our IPO. On October 19, 2006, we entered the public markets at $7 per share. Since then we have nearly tripled sales to $89 million and increased operating income to $17 million. We are proud of our accomplishments over this time period and have been pleased to live up to our stated 10 and 20 objectives over the longer-term. With that, I’ll turn the call back over to the operator for Q&A.

Thank you, ladies and gentlemen. [Operator Instructions] And our first question comes from Chris Lewis with ROTH Capital Partners. Your line is open.

Congrats on the 10-year anniversary.

Thanks, Chris.

Thank you.

I wanted to start on the Baxter front. It came in a little bit ahead of expectations, I think, your fourth quarter remains unchanged going for $0.5 million in sales. Can you elaborate on just what you’ve seen since they’ve started reselling on August 11, in terms of percentage of customers reverting customer behavior on that front. And any impact you’ve seen, I guess, since the FDA put out a safety alert on that product subsequently on September 1?

Right. Okay, great. So there are some things coming and going, and we have to pay attention to the official notices versus what’s happening in the market. So you’re pointing out the exact dates of those two official notices. We found that about – we feel that about 35% of the customers that we got will stick with us in the Q4. Although we’re electing not to try to be too far in down the road on guidance on that topic. So that 35% is sort of, I think, what we were telling you about two months ago and we still feel pretty strongly that that’s the number for Q4. In terms of what the customers are saying, I think, we announced this on July 27. We talked to you guys and told you about this. We sort of thought that the safety alert would last longer and then on August 11, it reversed and they were able to ship product. But remember, they still had a lot of quarantine products in the hospitals that were left there that were unable to be used. So while they could ship products, the doctor still saw the quarantine products in our hospitals. And as a result, there’s still a very live feeling among vascular surgeons we think through other data checks that we’ve made that the vascular surgeons do think that Baxter is still having problems manufacturing this product. So the reality is, it’s over. They can make fine products right now. But I think the perception is maybe they can’t make fine products, but that’s just a rumor. It’s going on amongst vascular surgeons.

But in terms of those new customers that you’ve seen come to you, have you been able to cross-sell them on other products within your portfolio?

So we definitely felt like during this whole thing, we’ve been cross-selling them from the small patches, which is where the safety alert took place to the larger patches. So within the bovine pericardium, broader product line, the answer is yes.

Okay, great. And then if I just look at the guidance for the year, you beat that out of $1 million, the annual outlook on the top line went up by a little less than that. So maybe implies a slightly lower fourth quarter outlook than expected. You mentioned the HYDRO recall and maybe some lingering impact in the fourth quarter. Is that the majority of the fourth quarter outlook implied revision, or are there some other factors there to consider?

Yes, so – thanks, Chris. So the HYDRO piece is definitely part of it, maybe a little pull from Q4 into Q3. But there was also interestingly an FX topic since we last spoke. And you’ve been watching the British pound go down to 122 or so recently. It was actually up significantly higher when we last spoke. And so that combined with other FX. This is and that’s going back and forth resulted in about 140 okay or so of sort of downgrade, if you will, just based on the FX piece. So I think those two together really are pretty much most of the answer. But as you said, we’re still up $700,000 for the full-year from our previous guidance to $89 million even, so and we’re happy with that.

And just one more for me. Gross margin really shown quarter above 73%. Guidance assumes another 73% in the fourth quarter. Perhaps you can just elaborate on or quantify, which each of the factors that led to the elevated gross margin? And I guess, following on to that, how should we think about the sustainability of this, as we kind of intend to 2017, I know you’re not giving guidance, but I’d love to just get your thoughts o that? Thank you.

Yes. So good question. So I’d like to think of it more sequentially than year-over-year, because a lot happens over four quarters, but sequentially up more than 4.5% obviously. The mix piece had a lot to do with it. The U.S. did well. I think you saw on the press release, the Americas up in the 20% range. And to the extent that the U.S. has a larger percent of our overall reported sales. That’s going to help margin a little under 1% on that topic. And then XenoSure and HYDRO to the extent that we sell more of those products. They carry nice gross margins and they helped improve the margin as well. The big answer was really, however, in manufacturing efficiencies in Q2, we just had some bad luck with how the accounting rolled off the balance sheet into the P&L, and that sort of rectified itself in Q3. And so there was over a sort of a 4% swing just from that. And I think we had given you guys a heads up on that in the prior quarter saying, we were going to dip and then come back and that’s basically what happened. And then there was another piece related to the HYDRO recall. We actually booked 125,000 of expected warranty expense for the rework of the HYDRO that’s going to come back, and so that hurt a little bit too. But really I think the story is a good one, which is you’ve got some really nice efficiencies coming through the P&L now from the manufacturing folks, particularly in XenoSure and HYDRO, we continued to get costs out of those two areas. And I think we’ll continue to do that going forward. So we’re giving guidance for Q4 not for next year, but I think those two stories are fairly enduring and we’re going to get some more good news out of those areas. To the extent that you get price increases of around the turn of the year, which we typically do, that’s going to help you as well. And in some point our per call purchase price accounting goes away and that’s going to help your margin as well. We’ve got some headwinds going against that. But I think there’s generally sort of a nice feeling about the gross margin these days, where I talked about it on the – in the script to you guys earlier, we’ve been in that sort of 70% area range bound, and I feel like we’re sort of in a little bit different place certainly this quarter and next.

All right. Good to hear. Congrats on the nice quarter. Thanks.

Thanks, Chris.

Thank you. [Operator Instructions] Our next question comes from Rick Wise with Stifel. Your line is open.

Good afternoon to you both. Maybe it’s a question for you, JJ, turning back to the operating margin and the growth rate You help us think through and maybe tease out the sort of the benefit on the EBIT margin from the incremental XenoSure sales? And again, just sort of back of the envelope, but we assume, let’s say, a 60% EBIT margin on those incremental XenoSure sales, that’s like 840,000 in operating income, if we exclude that then operating income growth would be something like 35%, and this is all very approximate versus the 61%. Is that the right way to think about it? And again, are there other puts and takes we should think about as again as you approach 2017 and the sustainability of the 10% and 20% target?

Yes, I mean, I think, it’s directionally correct, Rick. I think on the top line the 22% growth, we said there was $1.4 million of that related to the XenoSure piece. And so maybe without that your growth rate is in sort of the mid-teens on a reported basis, and that’s going to trickle down. And if you’re thinking maybe a 50% or 60% sort of op margin, maybe 80% gross margins on XenoSure and then pull out some operating costs, you’re probably in that range. So I would say you’re directionally correct within that quarter. Going forward, we’re going to keep – we don’t really know. But we’re thinking 30% to 40% of sort of what we got in the quarter. And so we should get sort of a nice tailwind from that as we go forward on the top line and the bottom line.

And I just want to make sure I understood, I mean, and you’re saying it multiple ways that you think you’re going to keep some of the business. Can you give us a little more color, I mean, have you actually opened up new accounts, or and back to that cross-selling discussion earlier, I mean, do you think now that you’ll be permanently selling a broader range of products in these accounts. Can you give us any metrics around that as that we think about the next year or two?

Sure. Rick, it’s George. So I don’t have the exact number of accounts at my fingertips. Although we’ve been sort of bunch of times at our Friday sales calls. But we really have been going line item by line item and come up with this percentage retained. And so the number of customers that have ordered on into Q – into late September in Q4, we are feeling is around that 35% number of the customers that we got. And we were very confident, we were able to understand, which customers came to us because of the safety alert and the recall. So that 35% number feels pretty good for us. And again, I don’t want to get into 2017, because you don’t know when we’re going to learn a lot more. But the safety alert ended, what we say, September 11 or so, or am I doing that right? August 11, excuse me, it ended August 11. So we do have now two months plus of data about how many customers are sticking with us. So we’re going to stick with that 35% number and it was a concrete number of accounts. In terms of cross-selling that you asked, I don’t have much more except that color. But of course, whenever one of my sales reps is able to go into a hospital and get a big piece of business, their next move is always going left and right inside the product range and trying to cross-sell. So clearly a foot in the door is the classic salesmen’s technique, and I think we’ve got a foot in the door on a ton of new accounts, particularly in the U.S. Rick, if this phenomenon still feels more like a 85% U.S. phenomenon versus international.

Gotcha. That’s very helpful. Just to get a big picture question now just some of the companies that have been reporting and obviously it’s been mostly larger ones so far have had sort of mixed commentary about hospital utilization, or procedure trends. Just wondering if you have any incremental color or perspectives? And especially, as we head into the last quarter of 2017, any movement and levers relative to pricing volume or mix weighted more towards one category, just any color?

Sure. So, Rick, though some great news is getting trampled underneath the XenoSure issue and the HYDRO issue here, which is, if you took those two product lines out of our portfolio, the organic growth in Q3 was 9% worldwide for us. So we had a striking quarter versus normal in clips – in asset clips and ePTFE and TRIVEX. And I’m giving you the very concrete answer to, we think our procedure wise, as we think the things that we worked on in our very small world of 15 product lines, we had a really nice quarter X the two issues that obviously are important and have a material financial impact. So we thought it was a nice quarter procedure wise for hospitals in the U.S. And then things just keep running over in Europe for us as well. I think our organic growth rate was 21% over in Europe. And again, I don’t think the HYDRO or the XenoSure recall impacted Europe to any extent versus what it did in the U.S.

That’s terrific. Just the last one, I was going to ask about Europe and I’ve forgotten just maybe you could remind me that European growth how sustainable? What are the factors driving? And this quarter was that and I just forget, I apologize, was that new distribution going direct, or more reps, just can you – if you could just remind me? Thank you so much and congratulations on the great quarter and the ten years?

Thank a lot for all that, Rick. So it does seem like, we’ve been bringing up some huge numbers, actually I think I gave you the international number of 21%, I apologize, it was 16%, Rick, for Europe organic. So just let me correct that on myself. So looking out over the last four quarters before that it was 25% in Q3 2015, 2016, and 2013 and 2015. So high level answer to your question is, we do feel like something really good is happening in Europe. And to your point, I think, some piece of it is, we’re able to break in the new virgin markets over there unlike a little bit in the U.S., where we’ve been here around here for a while to where places like Finland did really well, places like Norway did really well, and then also we’re in Australia now it’s not exactly a European topic, but they had a big quarter as well. So I would say virgin territory is helping us out a lot over there. Maybe in Europe, the balance of the surgeon’s work has pointed a little bit more towards open vascular, and in the U.S., it’s a little bit more endovascular, and maybe that helped us a little bit in Europe as well.

Gotcha. Thanks, again.

Thanks.

Thank you. And our next question comes from Erica Layon [ph] with Benchmark Company. Your line is open.

Hi. Thanks for taking the questioning and congratulations on a great quarter.

Thanks a lot, Erika.

It seems like the two chunks of headlines that we’ve seen over XenoSure and HYDRO. And my initial question was going to be, how are you going to have your [rest of supplies] [ph] hold up to that? But it seems it was 9.5% growth there, you’re doing quite well. Do you first to try to look for more high profile products like this to add, or are you going to lose some more of this singles and doubles like you have in the rest of your portfolio in future acquisitions all the way, if you don’t mind, share any of the strategy?

Sure. Erika, this is Dave Roberts. Obviously, we would love to add more XenoSures to the bag. And of course, the HYDRO valvulotomes. The valvulotomes were invented here at LeMaitre. So those weren’t required. But HYDRO – the XenoSure has done well. Omniflow we haven’t talked much about that. That’s done well recently. So I’d love to add those to the bag. But when we acquired XenoSure, the sales back in 2009, we started distributing it around 700,000. So we thought of that as – maybe that could be a single or double and it just proved to be a terrific fit and taught us a little bit about our criteria in terms of niche market number of competitors and learning curves. So I would say, we’re absolutely looking some more XenoSures. They’re not – it’s not, I often say it inside the company like there’s a supermarket and I can just push my heart down to XenoSure like acquisition isle, it’s not that simple. But the criteria generally now is pretty well understood. We’re looking for disposable and plantable devices used by vascular surgeons in niche markets, products to that short learning curves. And anything where I’d say $1 million or $2 million to $10 million, $15 million, $20 million of revenue. So and obviously, the closer on acquisition can look to – like XenoSure in terms of its metrics and performance, the better.

Thank you. That’s very helpful. Congratulations again on a good quarter.

Thanks for your question, Erika.

Thank you. And we have a – our next question comes from Mike Petusky with Barrington Research. Your line is open.

Hi, guys, good stuff. Handful of questions. I guess, I didn’t hear if you mentioned it, did you guys give the current rep count as of the end of the third quarter?

In fact, we did and that’sinteresting. Rep count is 91.

Okay. Give a breakdown there at hand or now it’s not a big deal, if you don’t mind?

Yes, I think I can give that to you. Here we got 45 in the Americas. We got 36 in Europe, and we got 10 over in Asia/Pac Rim.

Okay. All right, great. And, JJ, I guess turning to gross margins, I understand you’re not giving guidance next year and I’m not really specifically pressing you on anything concrete. But is there any reason that gross margin shouldn’t be minimally at the same levels in 2017, as you’re going to do for full-year 2016, 71.5%. I mean, is there any reason that that shouldn’t – that range, at least, shouldn’t be a baseline of that as we think about 2017?

Well, Mike as you can tell from my tone over this feeling and I’m feeling pretty good about the gross margins. That said there’s always things that can trip you up. We’re going to be building out a new clean room here as part of our expansion here in terms of working space, and that’s going to add to costs. We give raises every year obviously to folks and those raises wherever they come in at are going to sort of go against your gross margin and do so every year. There’s mix topics for us. So to the extent that the U.S. or the Americas doesn’t have a 20% growth quarter and maybe U.S. does or to the extent that U.S. exceeds the U.S. growth. There are lower margins outside the U.S. typically than in the U.S. and that would hurt the margins. We’re going into China and we’re working hard to build critical mass there to the extent that we do that, that might hurt margins as well. And then FX sort of new waxes and wanes, but a stronger dollar would hurt margins as well. So, there’s always things to worry about. But I feel like last quarter and our guidance for Q4 suggest that we feel like we’re in a nice spot right now.

Okay. I think you’ve talked me down to 65%, I’m kidding. All right. So in terms of terms of the mix, the tax rate, I’m assuming, the higher tax rate had to do with mix. I mean, it’s 35% for Q4 a better guesstimate, or at least, as good a guesstimate as any?

Yes, I mean, you might want to use 35% something in that range.

Okay. All right. And then, I guess, turning to – I didn’t hear it if you guys mention it. Did you guys give any update on China and any product registrations or anything else you want to share about what progress you’re making there?

Sure, Mike. In fact, there is a little bit of an update, not much. So I think on the last call, we had approximately five approvals over in China and that accounts for 29% of our worldwide revenues. So you can imagine, our sales reps over there are selling a third of the bag that the rest of the world is selling, so that’s a baseline. We have found a path we think to apply for the lifespan product line and maybe we’ll get that in two years. We’re also sorting through right now what we should do regarding the inclusion catheters, the Over-the-Wire catheters and the valvulotomes. We haven’t made any final plans here. But one of those will get set up on the runway, and I feel like that’s a one to two-year project for one of those. So there’s two more products that maybe you can count on in two-year-ish. And then the bigger issue is the XenoSure trial in China. The XenoSure trial we’ve given you projections that we’d be into humans in Q4 and that we would have an approval in 2020 that flips during the back-half of this year, based on the new regulation was published in July in China. And now we’re talking the first implants will take place in Q1 2017. Although our estimate of when the trial will finish and we will receive approval hasn’t changed, it’s still at 2020. In general, China is still a smallish story inside LeMaitre. You can think of it is roughly a $1 million in revenue a year. And when things start going, you’ll probably hear us start focusing on that thing more in our earnings calls.

Okay. All right. I think that that’s all I’ve got. Thanks a lot, guys.

Thanks a lot, Mike.

Okay.

Thank you. And our next question comes from Larry Haimovitch with HMTC. Your line is open.

Good afternoon, everyone.

Larry, how are you?

Terrific. How are you doing?

Very good, very good.

Good. Hey, a great quarter, great progress. Congratulations on the 10-year anniversary you’ve performed beautifully. All the very smart analysts before me to answer, that’s all my questions except maybe I’ll just ask about the cash. The cash, I believe, is at record levels, isn’t it George?

Yes, we’re very excited about that, Larry, actually.

So I don’t know whether that gives you a different mentality toward acquisitions. I know you and Dave have been and the whole company been very careful, very conscious, and very wise about your acquisitions. Do you feel does that change your viewpoint in any way? I’m sure Dave has a big pipeline, as he usually does. But just get your – just get some thoughts on your M&A attitude now that your cash is at such a high level?

Larry, that’s a great question, I’m glad, the capital allocation question of how we’re feeling. I think it’s impossible for CEO not to feel a little bit more spendy when you see $5 million coming in the bank account in a quarter. In the places we want to spend that money on are dividends, not necessarily in this order, dividend, share repurchases, and acquisitions. So, in general, I hope this goes over correctly. I do think, we’re a little bit more aggressive with hunting down acquisitions, given the larger size of the war chest and also given the pile up of cash in the bank. I think JJ said $37 million of – $34.7 million of cash in the bank. So that’s a clear record for us after the IPO was $33 million, and we’ve been pretty true over the cash. So, yes, I think a little bit. I think your desire to get something in the door goes up a little bit when you see the cash coming in that fast.

And where does that sort of, I think, if I’m not mistaken you’ve put up a shelf not that long ago, am I right?

Larry, that was a couple of years ago and it was through, I believe, March. This is Dave, through March of next year, we could, of course, renew that. I think there are $50 million of primary proceeds that are still available to us. My hunch is on the topic of larger deal with $35 million of cash, let’s say, really $10 million of dry powder here. We could spend $25 million on an acquisition. But probably if we’re going to do a larger acquisition, we might turn to debt, which is cheap. Our large corporate [ph] EBITDA is almost $20 million on, let’s say, around $19 million. So even at a modest, let’s say, three turns of EBITDA you’re looking up around $60 million. So I would say, in general, let’s use cash on hand first, maybe debt second, and that doesn’t even count the synergies of the acquisition, if there is a big one. And then finally, the shelf primary proceeds. But yes, that’s up there and it’s available through March, and I believe we can extend it relatively easily.

And, Dave, valuations on the public side for a lot of help to your company yours and others are close to record highs four and five times revenue, in some cases, maybe higher. Has that changed the valuations in the private market? I know they don’t move nearly as much as the public market. But I’m just curious, are you seeing sellers looking for more now than they – than they’ve looked for in the past, because they’re looking at public valuations and thinking they’re higher now we should get more.?

Yes. Well, I think your premise is right. I think a lot of our peripheral vascular peers were up in the 50% range over the last 12 months. And even if you look at some of the deals that have been publicly announced quite a few months back added St. Jude and Medtronic, HeartWare trading at five times sales. Definitely if a seller is paying attention to those things then may be anchored upwards. But I would say, even though, I think the situations are so situation dependent, the levels that sophistication of sellers is different, and what’s driving now it’s different. I would say it’s a margin. Yes, perhaps a little bit, but that doesn’t necessarily mean all the deals I’m looking at have higher price tags associated with them.

And, Dave, I think George maybe throw out a number of a sort of $20 million annual sales acquisitions. Is that kind of your thinking about it’s kind of the top end, you forget, you’re going to buy something at two or more revenue that gets you up to the $40 million or higher that you just talked about in terms of the EBITDA multiple. So is $20 million kind of your more or less your sealing?

So, yes, I actually threw that number out. I would say, if we’re discussing a sweet spot, Larry, for me the key, of course, is to do a good acquisition, or the right acquisition rather than a larger acquisition, of course I want a good large acquisition. And on $20 million, I would say, it’s a sweet spot. But again, it just depends a lot on the characteristics of the business. One of the things that we look at a little bit these days is the growth of the market of the target products and the growth of company. So, if we’re looking at a higher growth target then maybe a $20 million target is going quickly has a much higher price tag than a $5 million target is going quickly. So it’s sort of – there are lot of factors to consider. I would say for me the sweet spot is $1 million or $2 million to $20 million, but if there’s a property bigger than $20 million, I’ll certainly take a look at it.

Okay, great. That’s terrific. Thanks so much and congrats again on all the progress.

All right. Thank you very much.

Thank you. And I’m showing no further questions at this time. Ladies and gentlemen that concludes today’s conference. I would like to thank you for your participation. And you may now all disconnect. Have a great day.