Luminex (LMNX) 6 May 192019 Q1 Earnings call transcript

Good day, ladies and gentlemen, and welcome to Luminex Corporation’s First Quarter, 2019 Earnings Conference Call. My name is Carmine and I’ll be your coordinator for today. Today's call is being recorded. At this time all participants are in a listen-only mode.

Following the prepared remarks there will be a question-and-answer session. Instructions]. [Operator like President call for and now Currie, to opening turn Vice Senior Chief to would over the Harriss remarks. I Financial Officer proceed. Please

afternoon, to conference XXXX Luminex welcome and our financial first quarter Good call results. operational and to discuss Corporation's

for me our after the the following review Shamir, President We’ll agenda. the questions. highlights, that, I'll Homi open will your financial is and On today up Homi and Executive we Chief will call with Officer. corporate performance call standard be review our

As statements. available on being our meaning Reform company of and will Relations forward-looking a not during call and recorded Securities may purely provided Act Private is of the the of XXXX call made be reminder, and Regulation and review non-GAAP today’s maybe for be defined undertake statements conference are historical the of the within a replay update Homi today's We the consequently claims the Litigation with in course protections website. forward-looking available section XX, the statements. reports SEC on XX-Q the the be Certain statements months of financial six Investor our release, obligation may you and will now and of reconciliation Regulation encourage these speak that known as To quarterly results GAAP current which and in covered, in could statements. our turn detailed differences expectations this the Exchange XX-K risks XXE certain on to and beyond our forward-looking Shamir. presentation President are Act by in beliefs Section of documents Securities uncertainties, a any some website actual we to contribute and could those our Form the Securities and cause that accordance non-GAAP on measures, based unknown are such G call company’s such Factors I’ll financial Commission. filed December or which from extent most these hereof to measure subject the is and as our financial included comparable earnings cause date to plans that on only differ CEO, to to Exchange over and materially anticipated for Also, year-ended measures are control directly for covered the are the by statements our to no or or and forward-looking of G. adversely These with be the Form call.

results operational our first Overall Thanks for I'm results. to expectations. our and pleased were financial quarter line with quarter today joining which discuss XXXX us in the of with the

have and positioned For two well of prepared for LabCorp Women's the the Health years last we departure business. ourselves the

I'm growth quarter this very forward profitability. gross confident double and it moving comparison will our and will a diversified be behind expanding margin we both with Thankfully The first company that stronger by much fourth quarter, first be of was will which significantly for quarter the departure two in largely next and us. only quarters result. impact the our digit impacted the then more and year the it

Luminex into in strategy businesses. science our a building life continue player We and MDx of both substantial

exceed previously XXXX Therefore in and We’ve level, but our the million. this to in of $XX.X of million, supported at our by our in reminder, first more seen substantial R&D. high million detail communicated rates. $XXX fueled remains digit Harriss revenue diversified to organic for release, and later, in mid-point portfolio $XX As our of $XX and discuss quarter. our press mentioned approximately I $XXX will we double revenue as we at expectation financial million year investment we delivered as revenue guidance of growth growing is the million a be leave goal our to by expect

Our by reflecting LTG that previously guidance the communicated. revenue stream grew X%, we

$XX of Health the quarter revenue and the that one-third reduction. flat could related for result acquisition million, stream In headwind the about after MDx affected million that XX. adjustment margin prior this were profitability indicated was revenues in on Obviously $XX compared revenue departure years million high Our departure from related XXXX. December down We the Women's we the LabCorp to of closed reflecting the of for of addition a previously the expected loss flow quarter. almost the $XX of year our the LabCorp current million revenue in of revenue of LabCorp approximately $XX full

reflect expect have that forward, discuss look been total million the million be million LabCorp will guidance will Harriss will later. Overall, realized. expect the This related $XX to As million XX, June the quarter the additional $XX reflected the of will second we an we by we headwinds $XX total reduction. or $XX in

the LabCorp commitment Despite third know us. the of be we $X that XXXX. departure extended two another pleased let an the to During for business, quarter behind headwind we at to you substantially expect recently of LabCorp CF are its end point additional years million this departure will that and of the

than a last QX. tempered return evenly our strong a few non-automated XX% first dollars comp, more Therefore expect that observing LabCorp quarter and with the fewer patient year growth I to respiratory season system. spite million expected. with bit We between related flew to in prior headwind, week to was in sample-to-answer however in the impact of felt by the in sample-to-answer impacted result compared with the our as of a believe weaker XX%, pleased We this much deliver growth respiratory a presented to QX approximately or being year. addition compared ability to In to symptoms to season XX% we

improve dilutive dropped second the mainly the result required adjustment expected quarter the new of approximately and nature added the acquisition of flow on initial the flow XX cytometry of modest with also significantly to We cytometry LabCorp mainly We business in margin systems coupled based the absence quarter, due Gross business. the as compression during of Gross on position generated first margin margin result. the quarter. a part contracted in quarter loss acquisition. of the as we should flow operating effect as the the a

As flow the still be year and accretive net to expect the the revenue guided, of to to the stream a we contributor by end previously profitability. overall

digits the revenue included excited quarter With flow business belt, for our in the of this relative grew remain flow XXXX. first the full business. to by activity newly what of we prospect first Merck in acquired quarter under The our the revenue double was in stream about

be the end to includes financial, this by system transfer of and that continuing well to anticipate are process quarter. of seen flow This most the IT as this Luminex. and of integrate enabling business We activity will in from the we’ve as ERP India of manufacturing the concluded Austin,

Our new marketing, well. very support sales, colleagues and in are customer performing and R&D engaged fully

was extremely and effort, this trial and QX. R&D than quarter although future profitability our also has impact is resulted higher on a with effort first usual clinical busy expenses. This significant growth in for The in critical

a are to of We impact QX. reduction expecting this after end the

This trials unusual For Luminex, in example, we pipeline. our three for product accelerate had but process is during the future clinical quarter.

VERIGENE of as We the our August, MRCA the on and II follows: by on on enteric scheduled are to panel II to planning second for soon respiratory end VERIGENE FDA quarter, the submit after. ARIES

development. exciting our pipeline VERIGENE II-plus system continues. full have assays also R&D, II for and new In of and very in work VERIGENE We development on SENSIPLEX a

We it expect and customer available testing expect the the by by to launch for of a have year. mid-year end market

would with I partner transfer now a matter to initial about call product started positioning. review discussion As of our have Harriss to fact, financials. we the our

Thanks Homi.

quarter $XX first the in from LabCrop revenue cytometry flat sales cytometry expected mentioned, our million. line contributed flow first and first million. was new revenue Homi business. of decline the $XX.X contribution expectations. flow decline in LabCorp the the with Consolidated $XX.X the our was to the was the reflecting As quarter assay offsetting in In quarter addition This million, by quarter for of

interesting steadily. Our that revenue in but X% user up note and partners growth approximately by million, revenue, reported end was grow previous continue offset guided. It’s in double revenue royalty to LTG a stream systems by the the for multiplexing our to decrease as consumable $XX sales quarter,

driven molecular departure. million $XX quarter, stream Our for the revenue XX% primarily diagnostics of LabCorp was the the impact down by

this the first in the current lower was reflecting quarter, sales XXXX. season as was flu respiratory of heavy stream revenue flu the for season LabCorp the quarter down X% light, Excluding compared to

As approximately Homi down XX% mentioned, it was in presentations. patient

For to active has our of customers sample-to-answer both number and products, customer the increase. per utilization continued

VERIGENE ARIES from product up our For the the line, and for up annual to $XXX,XXX the $XX,XXX, prior was prior our average X% per utilization products for annual rate the utilization increased X% first year, customer year. quarter from

the year, prior XX%-plus in doubled of flow line service. Remember, acquisition to cytometry system revenue quarter and Turning the the primarily revenue compared to nearly revenue XXXX streams items, flow driven are our business. that the the as first by revenue system

we systems, quarter, compared first the placed multiplex systems, ARIES and to in quarter. prior the During year XXX VERIGENE not XXX including

and the and placed bulk driven systems agreements. by VERIGENE Consumable lower reagent we're prior approximately systems, Included ARIES completion xMAP of our declined cycle. of quarter, XXXX, under revenue, result Lambda’s in our the sales a substantial XX% a One rental of system, year our for systems flow from a As sales system as of those allocations both expecting e revenue full less FLEXMAP XXX reminder, XD the for sales our rental primarily range upgrade year of the of purchases.

As repeat in in XXXX. addition the of previous $X.X the communicated, This XXXX we partner in rates. at XX% of grew in to favorable had increase an mix same a didn't for purchases first the of large revenue reflected some royalty million, base level that quarter royalties Royalty quarter.

with to are shortfalls XX% base royalty the including million loss listed user nearly As royalties, quarter, primarily which Based includes stream, in self-reported revenue sales quarter, reminder, molecular revenue declined $XX and not driven sales, the first approximately revenue the last XX% year. by audit LabCorp our findings, previously. of the items accrual from Similar on we adjustments. couple for a declined up total assay diagnostics expected

remained year levels. assay impact, Excluding total revenue at this prior in

gross the which quarter, of of points statement, to gross corporate driven number X This in averages; XXXX. absorption two, carry a turning income our quarter acquired number resulting decline first the by nature business in impacts from first percentage adverse impacted a sample-to-answer sales and assays gross in for heavier adverse down of mix lower which XX% margin margin weighted was from flow higher our therefore Luminex’s cytometry carry a Sample-to-answer an effect first sample-to-answer one, the higher historic mix. Gross flow million much margin XX% posted a change acquisition Now only in or the quarter; quarter from than which the the sales. for by the sales business primarily in of one-time reduction temporary we number causes was margins three, margin and included relative margins assay $XX to LabCorp sales and the in the negatively margins are typically the accounting.

anticipate margin quarter Excluding significantly. second these impacts, business in the for we the flow temporary should gross improve

Our trial cytometry up business, cytometry prior flow of primarily Overall included flow in and the number operating expenses OpEx showed year XX% both $X and time an first increase million incremental was the for the and just costs. $XX.X to related trial relative inclusion activity. another due or R&D to integration and related to the clinical SG&A, expenses of million million one over $X quarter clinical activity a

anticipate continue. we million, earlier, million growth compression and up, will that gross margin and to benefit primarily back margins Operating this quarter margins stream, an to flow We trials expense further then we $XX.X in clinical as to three will $X.X are likely that aforementioned operating continue operating climb of historical due and to Homi return in improve of levels. the to spending on our but engaged further, loss increases. not not we revenue the anticipate for mentioned declined LTG profit As level our completely from sample-to-answer bring margins do trials clinical are heavily

U.S. Tax the for aspects transition for related unrecognized a benefit ruling related reduction to certain rate result a rate to benefits million discreet and to adjustments earnings. ended subsidiaries we tax tax expectations in time of March to impacts the on the our XX% and XXX%, of Canadian the U.S. discrete quarter XX%, tax, tax Reform distribution the revenues a an which Absent of IRS in between consolidated to as effective overall effective of significant quarter expect current of items, of $X.X a benefit our one tax reflecting of incorporates jurisdictional our based be and Our calculation your full the expenses. XX was adjustments

tax various business impact in We continue to our and assess and its model jurisdictions.

in $XX.X million the occur one, and the annual of sheet flow cash over million now XXXX. with and used and quarter, inclusive capital bonuses recent payment purchase investments cash expenditures balance million remains after strong $XX of Our of some in million in business. in a $X.X of that and quarter commissions cytometry of dividends the absorbing $X.X of the second of quarter paid We visibility

the stream. quarter $XX between For revenue $XX to second revenue total million we from over million XX% deliver expect flow with our new coming and

system expect but Consumable the are down up to the We second quarter versus be flat revenue. be prior royalties with first will base the from anticipate but modestly down that revenue but remain We stream robust by flow quarter. quarter, to in XX% XXXX. revenues comparison our total of year slightly, relative revenue business as more than to contribution up, the system revenues of the elevated derived from flow the

findings in should As in see included accrual in revenue. user you the given accounting change end growth and audit rules. base We know, base growth royalty adjustments sales, and are therefore recent in revenue royalty to aggregate

these with volatile coupled elements, royalty However quarter. revenue quarter other to can from be

to second quarter. assay $XX revenue million we see For additional headwind in an LabCorp from the expect

exceptionally challenging anticipate a in comp last the first anticipate we season. given respect to factors. of With long we another flu several as quarter addition and profitability, respiratory improvements from strong In modest and margins result gross year's

the result will ending acquired on rules, inventory second low were flow but a flow gross negative the as inventory the First, in all the quarter mark-to-market of had we revenues in impact. so all acquired quarter, this accounting artificially first exhaust been the margins

third expected there growth second is Second, Millipore fact, of derived is service conclude the Sigma to at to factors the primarily the are above agreement expected with its markup will be and The end by manufacturing below be quarter. XXXX and the presence tempered flow total the margin the of averages, revenue from could revenues, of recent overall corporate gross profitability. compression and which affects a quarter. of Obviously franchise our sample-to-answer have both the margin for our represent this

quarter Although keep is mix, in We to standpoint we benefits expected for ultimate state, business the which include another a gross significant volumes from earnings relative reported thing in breakeven steady giving loss. and line we be of mind quarter-to-quarter business, the integration or or returning flow activity economies added completion the margins across driver entire further cash us experience flow an is rise of that to mix positive can of the our margins. expect still contributions. a experience One scale. and or factors of year, overall in Stabilizing margins push still volumes the to could down to the volatility gross up depending on a item

returning are do We demonstrated take profitability. paid lightly. cash committed in priority to expenses integration by R&D a we margins we are top to and and trial growing We than occurring matters activity the higher year. But profitability as and the operating and have our of further is of clinical attention XXXX a lot a to end flow. result current It affecting XXXX expenses, we Nanosphere, not through these as of the careful sustainable

we quarter. Finally the show will positive in believe current flow cash

turn Now for I’d like it back final to some over to comments. Homi

Harriss. Thanks

As I we to said and about I excited towards first with our are we the quarter the very pleased the am earlier, make future. progress company. result continue

much passed substantially diversified until LobCorp two to are stronger about as have the more go We as we and quarters of merged loss a company.

sample-to-answer gross who term increased for the of our to strong the will please cash comments. we This with slides, conclude, this my as flow. company Operator, long will are a term as margin saw objective. continue formal extremely great We very digit growth, innovative to be dedicated money. a the a favorite the am the and return build happy I that in to open year foundation confident lead me this I end Luminex well ends of on Luminex am employees To will team. questions. for in again double in committed profitability achieving live improved we in and show really line and a our near By During demonstrate management science posted time businesses. solid to our portfolio technology

our BTIG. Sung with Ji you. Thank And Nam Instructions] first [Operator is from question

Your is line open.

be for year, expectations in but of you us of end think driver by sample-to-answer again the remind had VERIGENE next you realizing the II will of thanks – year, first could to Could again you're the you us remind the be just could that balance terms you still until Hi, XX% taking the what the of comp. over not the year. the for is submitted a kind balance year, Homi, your of question. tough given the you know guiding know especially you growth, for available quarter that

in in available. it keep of existing $XX going gross No, the of on continues it that’s the on new and customers we is the continue nothing follow changed We VERIGENE months assumption mean the under the year, that we I growth million, why hopefully back million $XXX are we pushing XX Until it the be about we are million, so after a hopefully the got on customers. track of II XX% in out and our three we and $XX see That’s Yes, stull which QX call for rate should to be year this within that. that submit I it but said comfortable VERIGENE. end this what going to record. felt. be We running days, to submission. August before targeting will now on

this have they a compare As growth, our it our compare in you only competitors fact, I not of of been XX% again if levels. matter there where some

business we good are doing is are going, well So we there. and the where feeling

well. us is MRSA going think I to So as help

running be the is year assumption our by there rate the the to $XXX million. of nothing end in of changing in So

you Great you talk you want as applications of the and might seeing a of the well. where good obviously growth are end flow about then there for targeting, seeing terms some could are highlight in maybe lot there, kind of cytometry to business, market also you strength

Just kind of what's driving curious as there? kind strength to of the

team, but year-over-year. The was XX% we had the we as a I our to strength the – over all had throughout XX%. defense in I San think already I business the close came the business, it’s are we was okay quickly to Guava interact not, the meeting think are more It very acquisition, we luck But force also the across We or it lucky grow beginning nice had don’t profit of line. them the and year also increase I but and side. with They to we imaging bought if to Again come. during our during think said focusing kickoff know in come very we it is, basically and earlier integrated February this that will we about anticipate don’t in year, the to of from beyond that Luminex. repeat, rest came Diego. for lean the

we We another So us are It looking and help margin. this obviously margin the to in manufacturing quarter. gross it just anticipate of the at of the came point gross transfer least to to integration a cross forward add. here. India We lot end by XX from to continue, finish will

started fact built initial there. system of we being As matter a seeing

business forward going good start very going. this about the beyond feel that need is with strategy but just building business, it’s we performing more We So well. where to

lastly, that on And SENSIPLEX? timeline is any the on just then If track launch? still for Great! updates

call. their expecting are we Yeah,

two one already the they see partners major last system. came the have in two of to We our or months

about demonstrating trying a to talking system fact and of with them on see we and them the have actually to system. As them team, the matter our

are end we’ll think will year I but it. track year, hopefully the So provide testing that on that, them of the start system earlier by this than we next early even they

but to – to about hands we them, some it to through the have to that. and leverage because I as losing the emphasize are market are trying and their to as how really there want we call here Now possible, don’t soon to control the bring go we it’s

you Great, thank so much.

Thanks Ji. Sung

question Blair. Thank Brian you. next with our And William from is Weinstein

is line Your open.

Yes, thanks for taking the questions.

flow than of it’s a QX, ask would the $XX was the QX about heard the reason the in I and it imply it for bit better about, business, million that, expected sequential. like so little was down guidance if or you sounds XX% On I right,

I So in that right? anything was QX expected thinking pulled Am there of kind was of that anything than forward better from about QX.

So or we in business more actually to XX% Brian, of was the business flow the what not line our be and XX%. the expect revenue, expectations was with we said QX

So certainly it XX% in quarter. will be in of excess the

quarter. it same guidance our range to was approaching the above know would you on be the expect where based or you So it level in first

you but significantly first in prior quarter Merck certainly is, the at the the we were that rate we plus our know projection not million $XX statements That with but that financial to XX% grew the flow really full mentioned grow of mid year rate in we’re the reported, the business going financial for growth year. for that comfortable numbers in Now over our still the course over remain obviously, we not of statements. year,

Great, you versus are your that customers talk you targeting talk to customer thanks that of about and systems goals to year-end what speaking, can and guys you could your still base a just where sample-to-answer and get as the add then that, you kind additions guys about on you on on the then think be. customer you of can sample-to-answer know they need more the to for ultimately clarification the broadly follow-up, to penetration think

your see you at do where this penetration point? So

Yeah, believe XX during the We we continue I Brian. close to systems added quarter.

the we numbers to continue added so and drive up, business. just them the coming a bring QX online at few and them we look QX, If of you that they

below when the see matter we of in more overall the could in even to growth and you competition. at new you – we see respiratory customers last saw the we we to and year both in have coming, look team, its nice QX but the even QX number. continue Obviously customers, it’s new in our a compare coming a it from when because As fact customers sample-to-answer, it average very

are to and the question. answers what wanted on hope the We I we for track achieve year that

me. from it you. Thank That’s

Thank you.

Dan question Leonard with Deutsche next Bank. Our comes from

Your line open. is

in Thank in quarter. bit in the performance It Homi the a looking versus season, on seems million sample-to-answer wasn't $XX you. we I plus and a internally a the came in little looking quarter light was I And light of hoping big you were but the and that. to results a bit elaborate of have flu it had bit come thought year what I flu ago appreciate the a for, I you there. driver for could thought are

the you can the tie me? ends all So maybe loose for

you about mainly the talked right, came came we it in $XXX,XXX it and serrations. $XXX,XXX, are shy in about from No, where respiratory

probably QX. quarter, us you that They or the over into I in sample-to-answer, little also said moving or automated But when not were but in system example the shape, the last of especially the in call, only three million. obviously sample-to-answer for So $X the in around with we we purely corner you the guidance, the $XXX,XXX so that’s can as a tell we non-automated, respiratory. to probably have bit the $XXX,XXX day impact know aggressive came I more in

not achieve about worried So the see wanted to we sample-to-answer. see We the or I’m pipeline, our where not growth. we achieving

there. are we going where feel I very So confident

a can Do QX going submit are MRCA here, a in you up, follow out? you pipeline about a that customers know order you you this or clamoring that bit actively it to test? since the Is And roll just there product test. may talk you have pipeline relatively be you – quick that short how do are contribute are expect a in thinking for that would for

sure asking that revenue, are not creates [ph] our much for that. it going standalone but other MRCA as a using are is more how for I add things CB customer opportunity, to a that

when the us, it’s add So that’s not revenue. on it’s later beginning Manuel. rest than it, sure with opener the design and to I’m a it our saw the substantial jumping we a then opener. why of From going we it’s door product, came for door We brought but the the if slightly

you. Okay, thank

you. Thank

with comes from Tycho Our next Peterson question JPMorgan.

Your line is open.

Hey million year. I’ll with mean I thanks. LabCorp. headwind guided you for start the know $XX a for Maybe I

saw You million of $XX quarter. that this

Now this still assuming should can about maybe take headwinds? you flowing $XX with and be the just million about the how contract extension, through we think we

the CF still $XX XX, us times. different the business issue. million of last Tycho, last go another the QX. extension CF with extended Recently and a quarter, million. already remaining $X committed guys end balance even year. That if this of QX, mean that to was me two to $XX to ago lose ago. five The alerted business, company or five X.X we basically $XX XXXX QX and year or $XX been headwind. million which is least And one QX million the CF, it’s years years Yes the When XX, it’s go the million to years $X and you million will I QX the of million recall joined the in The million is regulatory which of contract they four of the $XX December until might we announced at the extension October in $XX is you the year CF,

disruption and helpful. you talked flow, the of That’s force, on are then... know stabilizing some adding the quarter and on people. last Can channel about sales know sales in you you more you talk I you where to then terms maybe And just think

ahead. go Yeah,

don't to flow. you how I follow just Well the think quantified and headwind change you wanted I the much that? up, margin know then of a for ask from to the accounting

where [ph] and them, had called did places the First them then we join sales. us. nobody they had lost not knows additional out We – we lost

did more the think – that for will the of and the a I we say is which Austin, we this will margin will its is have XX% that amount to can end the I the still in the few predict when that will here the a with across most most because you maybe Harriss world. of and of product and that, money, one agreement beyond in of I that the of better rest by and see or TSA actually five QX manufacturing us I be they news we The substantial miss Guava of hard out jump, had in state, quarter. cost and and us. of the see that, probable businesses improvement Obviously be from start coming we are impact when products something? again all gone running impact two of the less of Harriss, Merck street. That more believe in

on all Yes, the are effect there, move from in on a second we and call so our far as component. points that quarter the the first we the margins from into we inventory comes absent quarter. quarter estimate overwhelms XXs. that the as almost second flow in much TSAs or first from the that jump inventories, second to markup that But could margins that the so gone, as the markup mentioned second MSAs quarter, quarter acquired could the the which quarter quarter, in the to in that are as of still were the the mid-XXs that's the be flow Then move business the we just in by expectation the the we that they biggest is XX first in

the expenses revenue of roughly operating profit the know cover same of to $X you gross consider TSAs the another of amount know doesn't that do million down and you passes and thing. sort MSAs you If and eliminations additional of on the math

should of be especially and these as finished where to I'll of integration off, with one-time to we help? substantially have – business that second more grow looking themselves help end move acquisition these, this quarter, pretty revenue mentioned, them toward an as quickly, the quarter. Homi So, we the the by Merck Does associated enlist of we're the with call activities unusual items for MilliporeSigma the burn flow some profitability

there? one or Okay, I yeah that’s on mean something you there a elaborate helpful. that consumable from One bit? Lambda little LTG, And just then else can the was that was last on decline, all just

of a purchase by X.X, and purchase to up quarters where every partners year future. back and is, decline know you X.X they that those purchase there's to and in big are well down same comes expectation of some the this couple and it quarter that first order were bulk in lined once going a partners the last phenomenon There the is year come but partner

back last were five royalty. in Yes, But and business they pay between that's strength consistently less could the to of that we see that and more every quarter, if but quarter growth even six the audit us. to adding you to we every that keep in to or we reflecting the go the go XX% users, anything royalty it's the Yes, us can in or end quarter find in is like the audit. finding somebody X% or continued

the and you average royalty the using around two end see issue half royalty, last we I anticipating. operational know it were At getting partly they know the we some which user more a quarter to So, of take of out in because and One mainly you the that. if ago, of day, end we the in was a X%, are Lambda X% mean last are year more probably year first our at

So, more year. actually be performed It day every for the first of us the I may the upside predict, Initially be thought the getting will well royalty. it very anticipated during the better some hard gave up end will about hope It's to the quarter LTG quarter. slightly during it's was the came growth X%. One into below we the to but than we there of more of we thing, quarter very that LTG, are flat. and rest think be

a is so this or of $X.X recall to getting really quarter, piece million. may getting you well. us $XXX excited about billion interesting information our year Tycho sales as reported ago partners that partners royalties In annualized our Another of from

million user to let's by million it, call just end partner. So, round almost it $XXX that's sales $XXX in our

and the continued well partners with primary the our indicator and which continues partners our number technology engagement grow they of have and in very the growth expect desire we the established. of So that to there grow, and excited because technology the use continues engagement to remain their are marketplaces that to in that's of use marketplace of and in we our steadily our indications

you. thank Okay,

Instructions] Bill And [Operator is from our you. Piper Thank Jaffray. next question Quirk with

Your line is open.

Dan and for on Bill. Homi this Hey is Harriss, you. thank Hi,

XX that? based so, all, what's of evidence placed the you in quarter, is the First – instruments guys sample-to-answer but on

sample-to-answer clear. Let XX contracted We me be systems.

So, we forward. moving placed them commitments reagent over and with in the market under period contract to a three four-year

Got you.

Okay.

negotiated customer. of a XX these commitment no commitment. Big you – levels all from cases the from placement the with boxes negotiated negotiated of difference In a with came know as from, no system

Okay, got you.

XX to out speak installed that instruments? does by the only base So active going

went are the XX, active heard seeing average the you customer, math customers XX. you think The XX may you you that if I gets per systems when up systems. number, – you customer to X.X that – talked system contracted what by about have but we you're the base math doing on up

okay. you. you, thank great, Got Perfect,

reviewed do those If more reimbursement me, from market? some overall for How they Okay codes. and to sponsoring multiplex then potentially think BMU’s XX. get PLA June the you codes be for one better affect that testing to would were

think Well, obviously us. we for could benefit us it

not Our by reimbursement are changes. those necessarily tests directly affected

Our reimbursement. our cases not with reimbursement the can for in agencies, for the -- face we up up-charge in up, do. reimbursement, established. reimbursement, deal the goes pretty certainly is the the charge we Remember, reimbursement don't of well for reimbursement where If customers

for that workflow to math a perform were involved if to comes rest. product, the of and the down between intricacies can have that they they get have and spread it the the a and the in all reimbursement So the what's and obviously higher customers the the cost to the still realize able product for all of the what our pay cost to assay they do of reimbursement

codes reimbursed material it's on at effect So, We won't the are if be okay. or estimation a codes that we'll other really rate, think us. our those it then higher have a

the FLEX the II us make will have reason. of pricing you one and completely capability the have unique VERIGENE beyond and that to remember, FLEX very that Yes, that's pricing be we in the And market.

they new continue competitor. used the the opening technology We never are from in coming custom either door momentum coming that from us. marketplace see more customers that to are or the to This

So a we'll if if VERIGENE when pricing us to and adjust huge we giving where the the can environment environment I the good it, be capability are. think FLEX obviously prices, for in launch the good remain the is the investment, II so will increase we market, will is not

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