Richard Baldry: Thanks. You had a state of new product and service sort of upgrades, enhancements and roll outs lately. I felt like a lot of your R&D projects sort of come to fruition, but this quarter, R&D is up about 21% sequentially. Can you talk about sort of where those incremental investments are going? Is this – was there anything one-time in there? Is this sort of a new sustained or extensible level? How do we think about that?
Jerrell Shelton: Robert, do you want to take that?
Robert Stefanovich: Yes, absolutely. Look, if you look at our R&D expenditures, we have a number of initiatives that are ongoing. Some obviously have come to fruition such as the Cryoport Elite Shipper that’s being used for Sarepta and ultimately available to other clients in the cell and gene therapy space. Others are still ongoing. We recently launched the Cryoportal 2. We have some additional activities related to that Cryoportal 2 and logistics management system. We are also working on condition monitoring systems, SkyTrax. So, there are some ongoing investments in R&D activities related to those initiatives that we expect to complete during 2024.
Jerrell Shelton: And in addition, Rich, we have the global supply chain network, which continues to progress nicely, but it certainly is not to its full maturation. And so all-in-all, it’s progressing the way we expected, but it is robust.
Mark Sawicki: Yes. We are actually seeing a very nice monetization of the services that have launched. I mean you guys have seen the two new facilities, the one in New Jersey and the one down in Houston, Texas. Those facilities are now averaging 1.5 audits a week. We put 29 new bioservices clients in those facilities over the last year, I mean so it’s substantial. And that’s monetization of those investments.
Richard Baldry: And there is a lot of talk about the private equity and VC pulling back on their portfolios. Can you maybe talk broadly about the acquisition environment? Are you seeing more opportunities? Do you think valuations are finally coming into better zones for you to go after?
Jerrell Shelton: So no, Rich, we actually don’t look at it that way. We look at things that fit in our strategy and fit to where we are going, and we don’t see any big change in that area.
Richard Baldry: Okay. And lastly, looking at the balance sheet, you took out some of the convertibles early and how to gain on that and did buybacks at the same time. How do you think about the capital structure as it sits today? Was it just opportunistic on the convert side, do you think that’s strategic, you want to keep that up, if at all possible? How – what level of cash would you be comfortable with aside from doing the buybacks?
Jerrell Shelton: Rich, in today’s environment, it’s a question that we constantly are asking ourselves, and we are constantly monitoring. But we have the geopolitical situation. We have an industry that’s developing very rapidly. We have a lot of things are going on. There is a lot of dynamics. We do have acquisition opportunities that come up occasionally. We want to be prepared with – to move on those when they do come up. So, managing the cash and managing the buybacks is an artful thing, and it’s one that we do look at on a constant basis, but we are measured in that. And we do – we are open and we are very open to all the information that comes in and we make our decision. So, there is not much else I can say about that, except we are constantly looking at it.
Robert Stefanovich: Yes. Maybe I can just add some data points to it. If you look at – you are absolutely right, we did buy equity in the past, and in this just recent third quarter, we did repurchase some of the convertibles, that’s some of the 2026 convertible debt. So, we have actually a gain of about $6.2 million in the income statement on gross gain from that repurchase, really, buying the converts at about $0.80 on the $1. So, we are monitoring that. And with the repurchase program, we still have about $36 million remaining to deploy under that program. And so we have some of the ability to repurchase additional convertible debt or equity if we think the timing is right and it’s warranted.
Richard Baldry: Great. Thanks.
Operator: Next question comes from Puneet Souda from Leerink Partners. Your line is now open.
Puneet Souda: Yes. Hi guys. Thanks for taking the questions. So, first one on – I am wondering if you are getting any feedback from some of the commercial providers, I mean you said commercial therapies capacity, we are hearing sporadically and with different drugs that the supply is constrained on the cell therapy side. I am sure you have seen that, too. So, just sort of trying to get a sense of, is that gating some of the growth in the near-term? And how do you see – what are you hearing from – on your end?
Mark Sawicki: Yes. I actually think we are getting over the hump on that, to be honest, Puneet. I mean the nature of conversation is shifting from manufacturing capacity now to patient accessibility. And that’s one of the reasons that we look upstream at the IntegriCell platform that we are building out, is to really drive that patient accessibility and help facilitate scalability as it relates to ensuring that the patients that want the therapy, can get the therapy. So, I think that’s going to become a smaller issue. A lot of the contract manufacturers now don’t have – we don’t have these 2-year and 3-year backlogs on product requirements or manufacturing backlog. So, I think the manufacturing capacity issues, we have largely caught up to it, I think.
Puneet Souda: Okay. And then on CRYOPDP and MVE, obviously, a large portion of your revenue is still – so just wondering if you can provide some guidepost as you are thinking about sort of 2024 in those businesses? Anything you could provide would be helpful. Thank you.
Jerrell Shelton: Yes. Robert, do you want to take that?
Robert Stefanovich: Yes. Look, just in terms of the ‘24 outlook, we will provide guidance and a more detailed review of the ‘24 outlook at our year-end earnings call. Look, we have talked about the CRYOPDP business. They have expanded their geographic platform. They have been very strong in Asia-Pac and Europe. We fell a little bit short on the U.S. side in terms of driving the revenue synergies between Cryoport Systems CRYOPDP. That is advancing, and we have taken steps to really enhance that. And you will hear more about that over the next weeks and months. So, that’s how far we can go at this point in time, but we will certainly provide a little bit more of a detailed outlook for ‘24 at our year-end earnings call.
Puneet Souda: Okay. And then if I could ask about, there is – some companies are seeing more expansion in EU versus U.S. in terms of therapies. I am just wondering if you are seeing any logistical challenges with all the – obviously, the war in Europe and then now the Israel-Gaza situation. So, just wondering if you are seeing any disruptions in logistics on that front?
Jerrell Shelton: Nothing of significance, right now, we have had disruptions in the past. We have got – but they are reminder and there is nothing of any significance whatsoever at this point.
Puneet Souda: Got it. Okay. Thanks guys.
Operator: Your next question comes from David Larsen from BTIG. Your line is now open.
David Larsen: Hi. One more, it looks like your SG&A costs came in maybe up 20% year-over-year. All the companies that I cover have talked about sort of paying aggressive attention to their cost structure. Do you have any thoughts there, Robert or Jerry? I mean it just seems to me like there is a lot of EBITDA potential in the business as it stands now. Just any thoughts around cost containment efforts that I think a lot of folks have been sort of seeing recently. Thanks very much.
