Neo Performance Materials Inc.

Thank you, operator and good morning, everyone. Just a reminder, today's call is being recorded and a replay will be available starting tomorrow in the Investor Center of our website located at neomaterials.com.

I'm joined this morning by Neo's President and CEO, Constantine Karayannopoulos; and Rahim Suleman, Neo's Chief Financial Officer. We will then provide additional details regarding the company's third quarter performance.

Then we will open the call to questions from analysts only.

Thanks, Ali, and good morning, everybody. I hope everybody is safe.

It's a pleasure to update our shareholders, investors and employees around the world on our progress over the third quarter. With the health and safety of our employees' top of mind during the pandemic, our business in the third quarter performed better than we expected as we're coming out of the second quarter, generating about $78 million of sales during that third quarter.

We started growing again and return to a better level of profitability and free cash flow generation. Our global operations experience no major disruptions and we saw customers start rebuilding inventory levels at a modest pace while their businesses improved.

Macroeconomic trends over past few weeks, as well as updates were receiving from customers in our key end markets are pointing in a stone direction. Our order books are rebuilding and there are signs that customer demand is getting back on a path towards historical normal levels in most of our end markets.

While the trajectory of the pandemic is impossible to predict, we and our customers were able to regain our footing in the third quarter. It is too early to claim that we have fully turned the corner, but the latter part of the third quarter felt like the worst was behind us.

We're not out of the woods yet and COVID, of course will have the final word on that. But at least for now, we're seeing signs of recovery, getting momentum in several downstream sector.

Most of our customers are also saying that they both hope and believe that the worst is behind them.

Thanks, Constantine and good morning, everyone. Our third quarter results indicate an inflection point upward with improvements across most of our major markets.

While every industry that we sell into is battling with the pandemic's effects, we noticed a market improvement related to the auto industry. Inventory pipelines began to be restocked and a general sense of cautious optimism has taken over as factory assembly lines restart with new COVID operating protocols around the world.

In lockstep, Neo's operations have been accelerating production and shipping, increasing amounts of volume to our customers. These early signs are encouraging, yet, we are well-aware that COVID infection rates have never been higher in parts of Europe in North America, and it is still too early to call the bottom .

We remain cautious and prudent in terms of our operations and we have a balanced view of encouragement and pragmatism as we approach yearend. During the third quarter, we reported a consolidated $77.9 million in revenue, compared to $102.6 million in the prior year period.

We reported net income of $0.4 million or $0.01 per share. Our adjusted net income was $1.3 million or $0.03 per share.

And we reported adjusted EBITDA of $5.7 million compared to $12.8 million in the prior year period and up from the $1.2 million we reported for Q2 of 2020. As the global economy continues to manage through the impacts of the COVID pandemic, there's no surprise in the continued decrease in our financials year-over-year.

However, it is important to note that quarterly sequential improvement in both volumes and revenues and improvement in our profitability. As we engage with our key customers and enter into the fourth quarter, we are cautiously optimistic that these trends will continue, driven by relative strength in the automotive sector.

Of course, we must caution that any near-term strength is subject to extraordinary volatile environment, as no one can predict the future past of COVID. But we believe that our core product portfolios remain essential to the success of our customers.

Our commercial and business development teams are working hard to ensure that Neo's products continue to grow over the long term, irrespective of the outlook of the pandemic.

Good morning, guys.

Good morning, Yuri.

Good morning. Constant, I just wanted to square some of the comments on particularly, the auto industry.

The C&O segment seemed to benefit from a recovery there but the sequential recovery in Magnequench really lagged. And just wondering, what was that auto part of the business slower to come on or didn't benefit from the same inventory movements or just any color you can give on -- the rather muted recovery in Magnequench?

Thank you, Yuri. I guess at a high level, clearly, there were -- it was the latter in your question; it was clearly some inventory movements refilling a pipeline in the C&O business as opposed to Magnequench that led to part of that performance in the third quarter.

We also got some new business and gained market share in that space; new platforms and the light . So, it -- overall, we saw consistent trends between Magnequench and C&O automotive; slightly different -- as I said, pipeline behavior between the two the two businesses.

At the same time Magnequench is a bit more exposed to Japanese and European supply chains who tend to run relatively consistent inventories. So we didn't see a major realignment or adjustment of inventories in that space.

Rahim, if you have any additional color?

Yes, Yuri. I think it's always -- I think your point is valid, I think it's always tough to compartmentalize things within a quarter.

But if I were to try to do that a little bit, I would -- I would suggest that there was -- there is also an underlying trend in Magnequench but honestly, a very difficult July and somewhat difficult August, and we really started the rebound in automotive volumes kicking into September; so we're -- we feel pretty good about what we're seeing when we just break it down in that level of detail.

And that -- the rebound in auto, like -- did that -- did that continue post quarter? And any -- any early thoughts on how the fourth quarter is shaping up?

Well, as both Rahim and I mentioned, we like what we see. Those trends we saw in sort of August and September are continuing, so, so far so good.

So yes, the same patterns that we saw exiting Q3 have continued into Q4; so we're -- we're pretty optimistic with what we see. But again, we need to color that with a bit of caution.

But knock in wood, it seems -- as I said, and both Rahim said it, it seems that the worst is behind us. Rahim called it two tough quarters, the only time I can remember quarters that were this challenging were fourth quarter of 2008, first quarter of 2009, and some of us, the older ones remember what happened back then.

This was sort of -- almost similar, not quite, but almost similar type of performance and behavior. And it's gratifying to see that we continue to make money and generate cash during very, very difficult conditions.

But not to belabor the point Yuri, but we have exited Q3, and into Q4 -- those run rates, so we're -- we're fairly happy with what we see. Again, we're not comparing this year to last year or the year before, but the fact that we seem to be -- things seem to be getting better and better compared to June and July, I think it's gratifying.

Okay, that's fair. Thanks for the color, guys.

I'll turn it over.

Thank you.

Good morning, guys. Question is for Constantine.

You've now been in the CEO seat for a few months, and I was wondering if you could just break-up right now -- break down the time you're spending on sort of M&A opportunities versus operation? And where are you spending most of your time?

Well, the last three weeks were -- well, thanks for the question, Frederic. And I appreciate the concern for -- for my -- for my work patterns.

I am spending quite a bit of time actually -- the -- for a little while I needed to get my feet back in -- to get my feet wet again, and I spend quite a bit of time on the phone and videos, zoom calls, and so on, which was an adjustment for everybody. And so, the last little while have always been spent with our business units around the world, we recently had our strategic reevaluation process that I sort of superficially; I referred to in my comments.

That involved all three business units, the senior and middle management groups, we had a number of calls, and as well as our -- normally at this time of year, we have our planning meetings for all three business units; as we look to the future, we evaluate the past, and we put together our strategic priorities. So, all of those typically to accommodate time zones in Asia, North America and Europe; we start very early in the morning, and we finish kind of mid-morning.

So my -- the last few weeks have been spent on that effort alone. On M&A, we have a number of options on our radar screen.

I have been spending indeed quite a bit of time, clearly not as much time as I've been spending on the business unit and strategic discussions, internally, but we have some paperwork out there, NDAs, LOIs and alike. So, I'm hoping that during the quarter, perhaps into next quarter, we'll have something to talk about but it's way too early.

But clearly, my priority, especially getting into the chair in July and looking at the numbers in July that -- even though they weren't as bad as they could have been, you know, getting back into this and that sort of environment was challenging; so I needed to do to figure out what was happening and why. So the bulk of my time, to be truthful has been spent on the businesses, understanding what's going on, perhaps even pushing our development folks a bit harder than I had done in the past.

But it's primarily looking after the core business and not neglecting M&A opportunities, which as I said, continue to progress.

Okay, thanks for that color. Didn't mean to throw you up there but I'm just curious on the M&A front.

In the past, I guess decade, you've been gradually growing the rare metals business with some tuck-in acquisitions and investments. And more recently, we saw the acquisition of magnets facility of this making business, which I guess showed that you're still seeing tremendous amount of growth in the magnet business.

So I was wondering, when you look at -- in the future when you will be looking at opportunities; I mean, can we conceivably expect you to be active in all three segments with respect to M&A?

Yes, that's a fair statement. I think when -- judging from the comments that both, Rahim and I made, as well as the numbers; you clearly see that Neo's metals business is very challenged with it's exposure to aerospace.

So, clearly our focus there is to diversify away from aerospace, not neglect aerospace, because eventually aerospace will come back, but also look at opportunities beyond the aerospace segment; we do have a few options in that space. As far as the magnets are concerned, to tell you the truth that has not taken historically, an awful lot of time; from the executive group, we have a very competent management group within Magnequench that identified and executed on the acquisition and the integration.

Here in Toronto, especially, since we haven't been able to travel for a while, we're just keeping an eye on it and helping in any way we can. But that relatively small acquisition was handled by and large by the Magnequench management team, and we're very pleased with the way it turned out and we're happy with what we're seeing.

So, we are encouraging the Magnequench Group to continue to identify opportunities to grow the magnet business, as well as our powder's business but this has been a very good model, and a very good precedent to build on. So I would expect that the next few opportunities could be in both, relate -- related to both, the comments that I made about supply chain realignment; we see an awful lot of interest in Europe by our European customers who really want to be -- to feel a lot more secure in their supply chains, which we believe gives a great opportunity to our Silmet facility, both in rarest, as well as rare metals; and perhaps that could be coupled with Magnequench capabilities in Europe in the future.

So, some of the initiatives involve all three business units, others are selective; and they're geared towards helping with our raw material supply security, as well as identifying opportunities to grow aggressively. Now with all three business units, we really have -- we feel that we have a pretty good grasp on strengths and weaknesses, and we're trying to cover the weaknesses and capitalize on the strengths; really no magic there, so it's all really predictable.

Awesome. Okay, thanks for the color, Constantine.

Hi, good morning. Just a question on, much of you want to get granular on the entry of the quarter to the exit in terms of volumes because it -- you might be able to maybe make an exception this quarter because I think when you look at what's happening, it's important to get an idea of what's happening in Q4 because of what's -- what we have to do for modeling in 2021.

So for instance, on Magnequench, is it a case where you sort of entered the quarter at say 300 tons a month and you exited at 400? I mean, is it that big of a difference between the beginning and end of the quarter?

So Mac, I would say that it is certainly a big difference for Magnequench in particular, where we enter the quarter and where we exited the quarter. Where I think we're more cautious on that perspective is where we exited the quarter could be a portion of that; and as we said, it was strong coming into Q4 as well, but fortunately that could be refilling of the supply chain.

So, I think at this point we're -- certainly there was a big difference between July and September. But we're…

And so -- okay, I understand that. I -- does that then -- would that same rationale, like when we look at Q2 for Magnequench, it could have been -- it would have been exactly the opposite, probably coming in at 400 and leaving at 300?

And is it may be just the case that what's happening is really that recovery is just being masked by timing, because C&O might just be shifted a month or two, but experiencing the same thing, notwithstanding the restocking. Is that what you've been experienced, maybe a just a lag difference, as opposed to a degree in an improvement?

Yes, I would say generally, yes. But I mean, I would even caution that we don't actually have to compare and contrast between Magnequench and C&O, we could do a comparison trust within Magnequench, even within C&O, where certain products that are going to certain jurisdictions ramped up a lot faster than others.

So, even within Magnequench, there were products that ramped up much quicker, and other products that are still on the slower side of the ramp curve. In C&O, there were certain elements that were still popular and selling well in July and August.

So honestly, I think we're absolutely confident that the current volumes are very supportive of seeing the type of recovery that we're talking about. But I am just a little bit more cautious about reading too much into specific applications.

Both of those businesses are about 50% automotive. Both of those businesses are very, very global, with end markets all over the world.

But they do have different weighting to different regions. And I think different regions are also growing faster.

So the non-automotive stuff is also recovering. Automotive stuff is recovering and different regions are recovering at different speeds, I think that's what we're generally seeing as a difference between Magnequench and C&O.

Mac, within Magnequench you have different parts of the business behaving differently. Going into the lockdowns, I would say that our magnet business, especially the plant in Chuzhou, didn't really feel an effect.

Now, keep in mind that it's a relatively very small part of the overall business. But if you look at the magnets that that plant makes, the very small magnets primarily for electronic applications, so it wasn't exposed to some of the larger industrial automotive trends.

And one would argue that electronics, as more people were working from home, benefited slightly from -- ironically rather, from the pandemic. So, the small magnets that go into fan motors for laptops and tablets and the like, that was a very strong business for that plant.

Now, it's not going to move the needle overall. But, we announced that we're expanding that business and we're expanding it again.

And that's primarily driven by electronic, gaming, the PS5 controller that I mentioned, but these are all very small magnets, but it's a nice little business that is growing and we plan to continue to grow it aggressively. On the model between Magnequench and C&O, as Rahim said, those two segments behave slightly differently, different parts of the supply chain and different parts of the automobile.

It was encouraging though, at Magnequench, to see the continuing success we have with both EV and internal combustion engine drive trains and that I expect will continue as the business unfolds over the next few quarters.

Okay, that's helpful. On the lag that we typically see, I'm looking at pricing looks to -- on a per-ton basis has stabilized in Magnequench, maybe up a bit in chemicals and oxide.

But when you look at this effect of pass through, where are we on that process this year? Do we need to make any adjustments given what's happened in terms of volumes?

Or should we start to see a reversal or is it just status-quo from here on out?

I think if I look back over -- you have to look back probably six months to get a sense of where lead lag is and for that you'll see most of the rarer portions of the business anyway being stable. The exception is neodymium which is actually important in both C&O and in Magnequench.

I would say in the last quarter here, it's probably a little bit of a headwind for Magnequench and a little bit of a tailwind for C&O. So as a company, they're almost offsetting each other.

Overall, though, these are not huge lead lag numbers that we would have talked about in the past. So I guess that even though that one element is up in price substantially, we haven't seen huge lead like impacts.

And then just lastly, Constantine, when you're looking at some of the M&A opportunities, generally speaking, what are the product lines or maybe material lines that you're most excited in terms of the opportunities? Could you classify them as businesses you're already in and you're adding technologies?

Or is it more new materials that you want to add perhaps to the same customer base? Can you contrast where the focus might be?

Yes, it might be a little too early to get too granular, Mac, but we're looking at things that, as I said earlier, that could start fixing or helping some of our weaknesses, whether they are supply-chain related, or looking at folks who have a larger presence in markets that we have a small presence in. And again, I don't like speaking code, but I really am limited by what I can say.

And as I said also, other opportunities that are presenting themselves are more supply chain -- regional, the change into regional supply chains and resilient robust supply chains at the local level are presenting some opportunities. I don't think when you look at our business, at the opportunities we're looking at on our radar screen, we would be looking to get into something that either we don't know how to do, or product lines that we're not already in.

I mean, I think we're getting all a little too old in the tooth to be learning new tricks. So we'd like to continue to hone what we do well, and addressing some of our strategic weaknesses in the process.

So I wouldn't expect to see anything that is far from what we do day-to-day right now.

Okay, great. Thanks.

Yes, thank you and good morning. Just a couple of quick follow ups here.

First, on the magnet making operations; further expansion was announced in the summer. Just curious of the status of that, is that complete now?

And is there any way to characterize the capacity level of that business that you can support at this stage?

Thanks Steve, it's Rahim here. So it is completed in that the majority of the capital has been spent to support it, but honestly, completed is an awkward word because we just continue to grow.

And we continue to see more demand through that. So the first phase of completing that was, there were two sets of capacity expansions that we did for magnets, one was in Tianjin, our main magnet manufacturing facility in China to prepare -- I would say, for additional magnet programs that are automotive customer-based, originally; so that capacity is ready, and we're starting the supply of those programs.

And the second type of expansions that we were doing was in the facility that we acquired, the small plant in Chuzhou, so we've continued to add expansion and capacity there. And I think we're going to continue to be adding capacity there, as demand really requires us to continue to grow.

So I don't think there's huge dollars to come. I think they're substantially ready, but it'll be continual expansion.

In the TJ one , it was much more of a larger upfront costs to put the initial infrastructure in place that will grow into a lot of that capacity. In Chuzhou, we're going to continue to expand over time.

Steve, one more comment. Because again, what Rahim said, Tianjin is mostly focused on larger complex automotive type magnets, whether that is for pumps that I talked about or see different -- some under the hood, some in the passenger cabin.

And the lag between committing and actually making shipments is quite a bit different from the electronic application focus that the other plant in Chuzhou has. So, after we build capacity expansion in Tianjin for automotive, we have to go through qualification, reviews, the works with our customers, because some of these programs are relatively new, whereby in Chuzhou, we're just adding capacity to go after existing business.

And given how quick the electronic supply chains respond in the manufacturing environment in Asia, the time lag is a lot shorter. So the effect of that was the first expansion we did in Chuzhou sold out again.

So we had to add to it. But this is fairly straightforward, it doesn't take an awful lot of time and effort and investment to just keep adding presses that do the same thing that the other magnet presses have been doing for years.

So it's a bit of an easier expansion and the faster response time in terms of seeing the effects at the operating level.

Okay, that makes sense. I guess just on the demand side, there's lots of magnet makers out there, and some of them are already your customers.

As you're winning this new business, in particular, in automotive, how are you differentiating there? How are you positioning the magnet manufacturing business to pursue and win these orders?

That's a tough question. And it'll take a long chat to articulate how we do it.

Again, it's a slightly differentiated strategy between electronics and automotive. Other models were very much pulled by what our customers asked.

And they tend to be largely European component, motor and system manufacturers, with plants in Europe and plants in Asia. In that case, we respond to what they say and we go after, because it's on typically newer programs.

So if we win new businesses, it's not as threatening to our existing customer base. And at the same time, we do have a pretty sticky business with our existing customers, even though in some aspects it could be seen as we are competing with them.

We don't, we try not to take business on price, we don't like to commoditize the space. And very often we get programs that a lot of other suppliers cannot get because they don't have the performance characteristics or the quality characteristics in their magnets.

And this is absolutely critical in automotive. On the other side with the electronics, Chuzhou had been a very consistent well-regarded supplier into the same fan motor market and we continue to build on that.

So I guess the short answer to the question is that we try to be very selective what we go after. And I think we're so far, so good.

And we do see opportunities to continue to grow that business handsomely without necessarily stepping on too many toes. It's a bit of a fine line, no question about it.

Understood, good perspective. Thank you.

Thank you and good morning, gentlemen. Just a couple of follow up questions on Magnequench, following up on Steve's questions.

He actually asked most what I was going to ask, but with your magnet making capabilities, are you seeing any additional joint development requests from major customers, I'm thinking, automotives?

Yes, that's always the case. Scott, especially because these, as I said earlier, by the way, it sounds like you and Steve has compared notes.

We have not, but thank you.

I'm sure I was. So yes, in automotive, it's a very long term.

It's a long runway. I don't want to start dropping names.

But if you look at the magnets we're making in Tianjin that would been trying to get into that for over three years. And it was actually two of our largest German motor customers saying, listen, we need you to do this, because we're not happy with the quality and the performance of the magnets that we get elsewhere.

And we work with them jointly to understand what the objectives were, what we had to do, and the whole thing worked out. Over, as I said, almost a three year timeframe that we've been trying to do this.

So clearly, on any new program it's a long runway, and unless you work very closely with these our customers, there's very, very low chance of success. And it's discussions that go way beyond the sales manager to purchasing manager level it, there's a very intimate contact between engineering groups, applications, groups, motor design groups, and there's a continuous optimization of not only the magnet making process, but also the motor design and manufacturing process.

So it's a long process and that's another thing that makes us feel pretty good about getting into this activity this way, where the business tends to be stickier and longer term.

And so a quick comment to that, clearly on the automotive side, where we've been long regarded as a powder supplier of choice, adding the magnet expertise has been something we're working with our customers on and they're certainly very interested in. We have proven a number of different areas of that's been very successful as Constantine said these are longer based programs that we've made great progress into.

But the opposite is also true on the magnet customers certainly have got, on the magnet making side has certainly got a great appreciation now of the magnet design and motor capability that we do have that perhaps we were not as focused on facing some of the magnet customers, some of the smaller magnet customers in the end markets that our new facility is after. We probably hadn't spent an invested as much time in magnet development from a powder perspective.

So now the combination has certainly yielded a lot more discussion with customers on what we could be doing. So I would say the integration of both sets of knowledge has been valuable for both end market perspectives.

So, it sounds like you're learning kind of new things you can do with your powders in terms of finished products. And is that true?

And is that the basis of your sort of…

Slightly on new things, although I would suggest that we were probably very aware of because we were already, we already had a motor design group, we were already very aware on the powder side, what I think it is actually the practical application in some areas were kind of we weren't facing the customer directly. The volumes were maybe smaller, like the types of business that our usual facility faces would not have been a lot of business where we would have invested a lot of resources on changing the magnetic properties.

Now we're doing much more of that type of work and customers are much more interested in. So I think we've always had the capability.

It's just now the opportunity is giving us a talk to new customers on new programs.

What may have changed in the last three, four years, Scott is the fact that we can now put together a package that involves new powder manufacturing ways to prepare to make a material that has different properties that marries up better with the magnet making process. So the solutions that we're bringing to the table for example involves motors that spin at three, four times the frequency of a jet engine and the magnet performs under very, very harsh conditions.

And five years ago, that wouldn't have been possible. But in order to achieve that, we had to work both on the magnet making process, but also on the powder making process and the compounding that takes place between powder making and magnet.

We continue to learn, and we continue to develop new tricks. And right now, when you look at our capabilities that really differentiate ourselves from pretty well, anybody out there, we can control powder making at the molecular level, we can take that knowledge all the way to making magnets at the quality and performance level that it would be very, very difficult for others to achieve.

So, the learning process is constant. Just that now it's applied to making powders, and making magnets in addition to what was always the case before with Magnequench, which was just making powder, and then leaving it up to other folks to make the magnets.

That's great. Thank you.

That's very helpful. I'll turn it over.

Good morning, guys. Maybe just a few follow up questions at this point.

Just the comment around September being much better than July or although you said -- because that speaking specific to magnet launch?

I think it's heavily weighted to Magnequench.

Got it. If I could just ask the same question different way.

Is there sort of a rough quantum or order of magnitude just to sort of help us ballpark it? Thinking of how we're -- our future ?

I think that the way it was described earlier about kind of the entry point and exit point of Q2 and Q3 probably are reasonable ways of thinking about it. You know, we don't give exact numbers going into the next quarter.

But I would say that both good more than 35%, more than 40% of Magnequench current sales probably happened in the last month.

Got it. That's helpful.

Maybe just one more. Go ahead.

Mark, I'm having a bit of a challenge here to try to add granularity to what we've said. But you also need to keep in mind that there's different dynamics super imposed here.

We had the whole COVID thing and first quarter we saw China shut down. And then second quarter, China came back, but Europe and the US kind of shut down, Japan kind of slowed down.

And this is sort of late third quarter was the first sign of things coming back to a normal trajectory. Clearly, that was also impacted by the fact that in Europe in the third quarter, for example, when you look at July, July was clearly impacted by COVID.

But also because in Europe, July and August are historically very slow month, as folks tend to go on holidays. And the Europeans take holidays; they're sort of a religion, especially in August.

August may have been impacted in addition to whatever they, the COVID impact and the manufacturing impact globally, it would have been impacted by plants in Europe going to being a lot slower than normal. In September, sort of everybody's kind of back to work.

So keep that in mind because especially with Magnequench there's a seasonality through the year that you know I back in my previous lives as the old-new . I would always start my remarks by reminding everybody that seasonality where because and back then was more prevalent because Magnequench was selling mostly into electronics and you look at those supply chains.

You have a very strong second quarter, a stronger third quarter as supply chains are running flat out ahead of Christmas to fill up the shelves in October, November, and then they go into a strong fourth quarter and they start slowing down again in December, because of the holidays, then the January starts strong drops off significantly in February because again, supply chains slowdown in Asia, because of the Lunar New Year. March, the Japanese companies tend to run down inventories.

And then the second quarter picks up again. So there's all kinds of I would go micro seasonality, depending on the market segments that come into this and now with automotive being a much bigger portion of Magnequench.

And by the way, this is by design with 10, 12 years ago, we made it a priority to penetrate automotive markets more so than we did before that is masking that electronic seasonality. So you have, as I said, a number of dynamic super imposed, whether it's regional, whether its supply chain, and whether it's market segment specific.

Appreciate that. That's helpful.

Maybe just one last question. Just on the cost.

A good job managing cost, it sounds like when you spoke with Silm , sort of more temporary. But just sort of curious if there was sort of any opportunity through this.

I mean, your opinions remove any sort of permanent cost from the business. So then we come on to the other side, maybe there's a benefit to margin.

Thanks.

Well, I made some general comments about automation, efficiency, and so on. Yes, we, regardless of COVID, we're very focused on reducing our cost.

And then this has been across the board, Magnequench specific initiatives. CNO has specific initiatives and rare metals, focused especially around Silmet optimization, and efficiency, but we were learning how to do things slightly differently through COVID and to answer your question, perhaps a bit more specifically.

Yes, we were learning a few new tricks and then hopefully, some of these gains than the lessons we're learning will carry through post COVID. And we should see continuing optimization on production and improvement in costing on a per kilogram basis.

Yes, Mark. Maybe one thing I'd add to that.

Is that I don't think, I think we've been looking at cost reduction strategies in a number of locations around the world. Honestly, I don't know that they've been accelerated or changed from a fundamental perspective from COVID.

I think that that's kind of mine and around the edges. I think that the cost reduction strategies are much more fundamental than that.

But we still at the same time did take the opportunity of COVID downtime, in a sense, to actually make more, I'd say, technological gains. So I don't think that what happened coming out of COVID was terribly different from a cost structure perspective.

But I do think we made significant advances in product that, we're pretty excited about, as I said, as we continue to invest in the future growth profile. So having the time enabled us to run a couple of trials.

So thanks, guys.

Thank you, Operator. On behalf of the Neo team, I would like to thank you for joining us today on today's for an update on the third quarter.

We look forward to reporting to you back again on the back of our fourth quarter year end results. And in the interim, if you have any questions as always feel free to reach out and connect to myself by phone or by email, and we look forward to speaking to you soon.

That concludes today's call. I'll hand it back over to the operator.