Luminex (LMNX) 4 Nov 192019 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Q3 2019 Luminex Corp Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised, that today's conference is being recorded. [Operator Instructions]

to Christensen, conference Relations. Senior like speaker to now Jeff today, Director would hand over the your I of Investor you. Thank Please go ahead, sir.

September third is download Relations in good joined financial viewing results working and or everyone. slides our results you. and of website are The in for our with information you Investor to XXXX look at from contact Thank My our release. investor.luminexcorp.com. forward quarter afternoon, Luminex I available

Harriss Homi agenda and are will Vice Shamir, review today Currie, call the CEO; be standard Senior financial after and and our our the open will today. call We'll CFO. performance On we review the Harriss President for President up questions. will that corporate following highlights. Homi your

today's purely may be XXXX call the call today's and consequently Securities The claims Investor be such conference the slides Reform will Relations recorded. Securities statements. Act Act Section of being Certain replay Exchange statements during course website. the for our of the statements reminder, the that be Private six company's on conference available is made XXE historical within section of and provided As months the may and a call of meaning for by Litigation not the projections forward-looking of

forward-looking speak materially which the anticipated of that plans to and subject some or to are the from date statements and statements. here unknown our expectations and and cause adversely those of beyond only uncertainties, could the forward-looking as of results company's on known These beliefs and differ are in actual current based are risk control or

We on December XX-Q obligation such XX-K our to reports no documents XX our Commission. the Form encourage ended Form the that Factors for you to cause forward-looking these could contribute statements. undertake and with Exchange review update on differences we quarterly to Securities and these year filed are or detailed

of covered be our GAAP G, are which extent and to is G. To release, with defined financial website on directly on financial financial accordance reconciliation our the by measures, in in presentation may certain be SEC that as non-GAAP most any a included press this the Also, measures Regulation Regulation will non-GAAP call. available measure covered, comparable

turn CEO, I'll Shamir. the over President to our now call Homi and

Jeff. you, again, Thank the welcome our posted our this And for we earnings Good quarter call. to afternoon. third XXXX XXXX. once quarter afternoon third of result Earlier

a by the the work $XX the businesses, their a As of see to impact X% million through you and as most basis, as we created can grew on this year-to-date well current profitability departure which about quarter total we Despite revenue departure, from on quarter third revenue drag of XXXX. the that million departure over LabCorp challenges result, LabCorp of continue the $X presented.

in sample-to-answer growth progress Continued revenue quarter with in our growing this our portfolio by product XX% line. led Molecular this

continued our revenue license with with of demonstrated also X%. We success growth technology growth

guidance revenue million and our $X While flow the quarter. primary contributed our the expectation stream about third cytometry was This quarter. the we for reason $X.X in million is new the revenue below missed

rate year, us the Given sales flow in of our be $XX anticipate businesses, in projection. XX% with neighborhood the this timing initial the of for to than is we consistent million, $XX which combine year-to-date a When sales million more these will QX of our we about million. much of bring $XX target stronger to growth

revenue. of of with and sample-to-answer were our saw cytometry the in LabCor our margin from replacement line sample-to-answer margin margin the quarter In the addition, our once the again cytometry the in lower and during flow of revenue the mid-XXs. businesses This portfolio. both, a in expectation third Gross is flow gross high-margin with reflection we improvement growth

variability; margin Obviously, quarter that a we growth we profitability. work returning successful Overall, revenue mix a generated gross putting sustained were, was as Luminex reflects into organization while in our hard positive. cash loss and still it expected, plays a flow the the large quarter to in the part is

touch like two to I Today, topics. on would quickly

update pipeline. businesses. And for on secondly, product the an robust our First, expectation our longer-term

Regarding our Flow pipeline, how generally, portfolio. and Guava LTG II our we in to I'm with our the and which our is VERIGENE science as in non-MDx and molecular business and made includes have very with we ARIES the flow proud SENSIPLEX of our as businesses diagnostics businesses, life next-generation progresses, cytometry refer well CellStream

excited II With we represent platforms VERIGENE to businesses. submit say I'm next-generation panel this advancement of FDA, you panel VERIGENE II, the that also expect of now tract technology I'm to our let II that respiratory significant submitted and has by every happy VERIGENE GI the in our know, to year. diversified This to major end area been

receive next I've panels two we impact As we previously, planning as said as launching FDA possible are market clearance. year, those once to together generate maximum on close

actively II two also on our In panels gram-positive, are blood and menu the system. working of our those to on development we VERIGENE addition expand gram-negative assay culture yeast the to

and VERIGENE cost dead Luminex system flex current us and resulting of the integrated user on pathogens expanded fully current unique a of features success environment only data the is give interest, clinical advantages results. multiplex builds test allow in II the and fully to report next-generation reimbursement reminder, The capability system. panels VERIGENE effective, in of relevant analyzer. that and As system the IVD sample processor, automated It sample-to-answer reader

and in clearance cleared in Assay FDA the Lastly to for we eighth This US. MRSA received September MDx our ARIES, on XX. our the be the represent, seven assay segment, globally ARIES

that now, run lab tests. instrument is likely a development time system the by you both ARIES can real and IVD sample-to-answer know As

result accuracy only syndromic fit increase Luminex both ARIES laboratory today actionable and remains the rapid laboratory patient the into improves and offering testing ensuring the customers. show to laboratory, while efficiency workflow Designed modern targeted seemingly its company the system results. for and

plans half XXXX. the new XX,XXX This supported introduce more the our previously the we is years. Luminex by reader it XX In system a shipped bead-based market-leading last xMAP multiplex communicated is technology, next-generation next-generation our the in to than which have platform to over our of life second of leverage xMAP system sciences market businesses,

We offer are enhanced a with backward complete same and new compact the exciting second features – xMAP that to compatibility, supports SPARC to Innovation. as and performance, launch introduce reporter excited this instrument channel menu modern such the Research

We partners. from meeting received are solid in feedback have progress milestone positive making development our and

the involving their partner product customers, our to development of ensure market We bring a needs as are meet we businesses. of the the backbone that will the to in process while

Guava CellStream Flow excited also early and pipeline cytometry about with year. of are next flow our We both expected launches next-generation

focusing a no differentiated the is which We on technology results ImageStream, are with completely current competition.

results, cells of visual rare with other flow images in statistically technology imaging an cannot. technologies validation producing ability population claims and see to Our that relevant allowing imaging scientific

will term margin the In years, figures. in around the within next growth this to of to we to XX%. near expectation expect revenue years operating future organic, our of businesses, any margin Luminex is more contemplated we being incremental four with million than acquisition five our opportunity XX% $XXX to and All grow continue gross with revenue, annual together

to franchise, around grow XX% Cytometry grow both We grow in automated business XX%, to low non-automated partnership businesses Flow our to digits. expect our single-digit and the to and double in our the high molecular

strong level margin economy within expansion, This spending of us our allow of of including manufacturing, projected our increase scale and expected continued our margin revenue provide level. to our from operating the will growth gross control coupled with should margin resulting R&D OpEx, to

thoughts. data will Harriss return Now, some with afterwards, will and final review the I financial

Homi. Thanks,

absorbing revenue the consolidated which addition of mentioned, $X.X quarter, revenues million while $XX.X the Homi As of X% for approximately quarter LabCorp Cytometry third contributed for million, decline our quarter. Flow million. approximately reflects $X the up in for new This the was business, the

quarter revenue Cytometry short and third revenue our as is to Homi for guidance our quarter. of primary did this Flow the expectations for missed the the driver mentioned, fall

on the We revenue on full Cytometry financials in Merck basis rate revenue the growth the Flow revenue year, year. our with on year track expectations a meet However, to reported last above million year-to-date over the growth still $XX XX% basis, for expect flow with the in our business our maintains year-to-date over which target XX%. a is

representing was and driven royalty by million, consumable in LTG a year revenue both the revenues. quarter, over growth growth mainly stream prior X% Our $XX.X

prior total both We sample-to-answer year annual XX% non-automated over year. year diagnostic includes current products, and the product VERIGENE increased in at reduction comparable LabCorp line, increased but products, of per XX,XXX stream, which strong portfolio, impact The and with roughly approximately prior from with utilization to per the annual the remain revenue reflected. was customer rate XXX,XXX our prior quarter automated ARIES quarter for the utilization Our the the annum for XX% the to which LabCorp excluding the was molecular our had another flat rate approximately our year results XX% up quarter, X% per for quarter down the quarter.

We XX as we sample-to-answer Interestingly, XX revenue. fourth additional our the quarter, to two but in closed previously, systems under contracts on weeks of the which liked future systems. discussed assay contract standards, growth by the support in own in additional placed continues almost first quarter,

systems a under with finish additional approximately total the to XXX contract. expect We of year

and streams Remember, Turning flow by Cytometry to service. the compared plus revenue as the are quarter the the driven system line of third revenue our acquisition prior business. in items, grew revenue year, XX% XXXX XX% the system to of revenues Flow that

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

from communicated by were of per X% primarily quarter. placements increased partners. XX% Royalty quarter. the grew expectations revenue quarter, of large multiplex for the Consumable bulk purchases our XXX to previously prior year from revenue quarter some systems driven Current our higher within XXX

As and by audit revenue $XXX self-reported million. base the total than partners sales reported the were our quarter findings, up shortfalls royalties, Base to a adjustments. coupled more royalty with includes accrual XX% end user for reminder,

which revenue revenue driven the the molecular Similar of departure declined third quarter, prior year in to diagnostics our the by revenues, decreased million primarily stream, quarter. expected LabCorp from XX% $X.X assay

XX% well. assay flow included small impact, amount Excluding a of as this approximately prior over year the and grew revenue reagents

items. was income assay gross for points quarter change the statements. X the was and This margin from turning sales Now, driven to towards lower primarily the decline in heavier a quarter million mix in the by weighted third margin percentage reduction weighted XXXX. lower sales LabCorp -- $X.X XX%, towards of by Gross

XX% aforementioned expenses of the and addition. from prior amortization intangibles, the up flow to the of We not was gross expenses million million, of year the incurred Flow $X.X compression and Cytometry OpEx present included loss margin approximately the or million $X.X primarily to due year the figures. operating relative operating Excluding prior an in $X.X related

rate the third in third prior the projected in tax reflecting Canadian XX%, effective from for income provisions federal X% benefit taxation mix the earnings Our of for Tax the jurisdictions. losses quarter included impacts of effective to tax the foreign year Act This U.S. U.S. quarter our of of of taxable in XXXX. of which intangible U.S. was the and a rate compares XXXX and the the

discrete one-time revenues and impacts full-year the consolidated XX% tax significant expenses. effective and which based incorporates expect quarter of the the to reform to to expectations XX%, items, on in to our jurisdictional current Absent be we tax adjustments tax overall of adjustments our rate U.S. distribution

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

Our remains of investments over and recent cytometry with after absorbing business. in flow $XX the the balance million cash sheet strong purchase

a is models' capacity of and in cash basis. our the capital cash million. fund the to $X paid million dividends During $X.X continue of of organic our an $X.X business operations shows business million strength to from and indicator modest we This LabCorp to generated losses of in expenditures quarter, adapt face operations generation after continued incurred and on of of residual great the

into we to some And visibility finally year. how the finish expect

our we've year are million and of adjusting $XXX between press indicated range As million. to in release, full our we a $XXX expectations

at far our our which expectations. adjustment, that the of midpoint relative contemplated of we For some previous initial have range robust season, little we clarification into flu impact to $XXX additional consider million, a so of more seen please

presentations. reduced saw in the of half this elevation the of last of reminder, respiratory at a seeing In compared XXXX-XXXX we're end slight season, the As year, season, current volume year. we first with the

also half into been We excess obvious of modified higher the into of within the was rate these in took incorporated which an an flow narrowing factors slightly first cytometry, approach XX%. growth growing All account end by of our our range we those success, have with as a year. validated

from now revenue particular could we revenues LTG contemplated. for believe more our streams, slightly expect we respect flat in LTG prior we to revenues With that calls for be where XXXX our And initially to to than we've down, currently in total benefit strength slightly in called LTG up. coming

expect the as recover flow $XX approximately revenues as quarter to we for rate in a million in to Secondly year, our deliver initially growth fourth the and excess expected. XX% previously, and we've of mentioned

to respect teens. factored expect in we into full to with our revenue is expect but And year we the our mid-XXs up molecular in be for revenue consolidated be total LabCorp molecular mid obviously, revenue revenue, to molecular the sample-to-answer the revenue, down when

to respiratory our of than a the the average from to range. we quarter factor in bottom move we've how in of The it presents the experienced lower important top keep fourth One and strength is mind might respiratory in is season. season how the primary factor that the

continued we that growth with be anticipate in position. we we of the profitability, anticipated relative expense overall fourth or to respect With breakeven when the significant the better control on quarter, revenue quarter to our that could third deliver

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

Harriss. Thanks,

at a said was of we be Luminex. for transition this to year, the XXXX year As going beginning

the the and which associated this LabCorp cash We has flow have all year. majority impact financial with our of bottom our line growth departure, and revenue impacted

a weathered storm across product have a we each the platform be company as company, much which era and stronger say opportunities lines. new new will for Luminex, diversified proud entering transformative are and that exciting our of that offering However, to I'm and

at In what XXXX be next platform launching Luminex in be time history fact, across three beyond. to exciting happening will personally excited the very over portfolio. all our for I'm here first going where of and Luminex's are And is we year new

This Operator, open the end questions. formal our please for comments. line

question BTIG. Please your Our Ji, Sung comes Instructions] ahead. go is open. first Nam from [Operator Ji from Sung line

Hi.

here. multiple Sorry about that. juggling calls I'm Thanks for taking the questions.

rate are -- now revised this for So the apologies, $XXX flu going for if your curious the year, back a lighter roughly expecting million to you been think molecular just year given I season? expectations but still quarter that the miss or exiting run sample-to-answer the has and platform I is for that your

Yes.

So start call. the by Sung everybody off Ji, on actually certainly, me let to apologizing

Our minutes our working out and we're press before what provider on to determine release actually happened. wire got XX with market exactly about close early the

number -- I to everybody. to So one, want want I apologize

it? Now to contemplated million normal turn $XXX back the is to your obviously run a flu question, I'll what Yes, call rate season.

projected people here United that different We're quarter be lower just As a in States million, hardly much. anyway, hearing not seeing the and million. $XX of we're you, seeing pieces -- $XX country. as the -- in around that modest with And than result right anything. upticks be the fourth bits the we we're number to honest certainly of possibly million in $XX could now, seeing regions But we're

any set Yes. believe we why not strong so nicely we when Earlier something enjoy compared we seen of the as -- slightly it be we the a or Sung going we beginning the are year have of reason season but neither couple script, to elevated why I respiratory last we this have we seen year his when XX% it's to the year, not X.X in justified And the ago. came, $XX million And in business did really over by that. for the mentioned hope it of Ji, question. have years the we reason that year been Harriss year-over-year. grow answer very the up range year this target, in to main adjust I set quarter. first guidance the us to because the impacted for we about up the that's in far

any your their impact Thank you. given talk customer that potential Was -- from impacts was your does. potential that very about you is soon. terms also II decisions? VERIGENE impact maybe there launching is of purchasing in from, delaying Yes Could any it there

while -- actually actually -- of the the that comments XX placed indicated in first Yes, our not. quarter of another I half half or so first just in we and or October. the over my that for standards the we systems first XX placed yeah the by

almost we the we've what only quarter today, placed quarter. the of matched a month in As into prior

are buy So They sales up there. II continue not -- and worry to that because your sign They're success and is because they're actually people waiting. VERIGENE -- customers filed cannibalizing we or continue to we waiting. waiting we're so see we to

that when -- And when to be or systems. remind are Yes. actually mean, to a place, we very year. for also somebody basically reagent agreement of I contracted we may that say just we we’ll many is you, is all year. they close we committed XXX to Similar contracted. last the number to believe It leasehold are -- saying place for paying somebody

we growing again, order But to end So a the of I'm the markets international the well. think number. in our don't II. respect, maybe impact this VERIGENE the business that's big year some the before for expecting also get I for

lastly think I cytometry as shortfall, lower Okay the shortfall correctly, portion given the than I margin guys remember driver your curious great. lot in was to of on the of And business. last me is then this And just you. the the I from what second increase the a was Thank believe quarter. -- quarter kind of expected then to guided of performance? gross margins flow I versus the sequential slight you quarter, to due gross if the

at you of revenue if assay concentration that less significantly three fall, of are of than at for the revenue mix becomes revenue it all look the concentration majority where components Yeah, that sample-to-answer those that concentration a of is gross the margins which of of the carry us. incremental and -- and of we look system margin you the gross additional challenge

of are any than today we the of as increase aggregate a and drag up which fastest margins revenues revenues sample-to-answer ARIES get of all scale to combined, faster being there by that is growing both the create place we So in grow. are sit else offset as VERIGENE going to where sample-to-answer on modest the increases, our level economies until component

sort We're as -- not opportunity to plenty in also our worried, it's grow. they math margins So as bit. of but have be. where they little down margins within it the they're we of sample-to-answer pulls But increase revenues, a just the they to We increase think flow. in push concentration think going a both

a have And that within systems offer multiplex the significantly of SENSIPLEX in we LTG with producing the launch margins systems honest launch we some better also we're to that of be in to today. should the opportunities and carry system

as think his year targets, help? So overall, I incrementing XX% that gross you'd you would expect, moving margins in mentioned and Homi Does to five that expect beyond. towards see level

thank so much. Yes, you

You bet.

Thank you.

Weinstein Our William Brian from Please next go ahead. comes from Blair. question

guys. Hey,

Just gross of clarify to a were the asked. that couple questions just margin

Homi are could guys a sample-to-answer you So And you higher I to carry and on I II relates as you could margins. flow where the margins, and it of what but potentially gross recognize well. gross on as and right have VERIGENE impact said SENSIPLEX now discussion about had that

give What us well? look launched? when products gross idea trajectory an Thanks. So that that margin can would as like you

Yeah.

start talk me SENSIPLEX. and you to Homi I'll let now let So little bit about

than So are our the in are XXs. less flow today aggregate low to reported margins margins that our mid

drive high as the know stream is is up. there are businesses are and working finding our up. margins what So to a you But to them We're margins typically we've equipment margins down that recurring a significant equipment and flow those most revenue those as behind XXs. stream in in a concentration gross as committed ways where heavy there high of consumable aren't there find

although together do low added the and upwards still and the also business is portfolio increment margins in they ARIES sample-to-answer down our are to in like continue aggregate XXs. In margins those start-up VERIGENE

margins on with the And so those of concentration margins system systems. significant coupled result our the xMAP as aggregate a

increase you getting as where those portfolios. to fall those up, to those the a with today, of When we on math all shifts Does are you up across improve but each absent ends the at mix add that help? that margins volumes opportunities continue

margin a those them could of It the like talk opportunity bit the and like when SENSIPLEX and if trajectory you look what VERIGENE what potentially and the you standpoint does. Yes. will the Homi those launch with look II And little a could from as about well?

Yes. plastic, is et with packaging cetera. there component of VERIGENE less less II, Obviously,

VERIGENE a II, above couple where bit sample-to-answer have more believe that I gross have that is that we gain think are But bit down the of XXs, we we little the the the So around mentioned we ARIES. pulled when margin a more is compared will we than points will the Harriss couple VERIGENE nevertheless, I. points total of VERIGENE little obviously, in than in in the And to the margin. with

VERIGENE have However, continue well two will initial launch, initially as lines, to you one I we it's all will have about II. to support And as volume. VERIGENE we as know, to launching

will of expect year of we VERIGENE gross the improvement kind gross margin. margin. see be I volume when VERIGENE we'll I, So next exceeding the a the But on significant in similar start will in remaining this II kind then

doing prices and sale not the be an to again, it kind into technology we -- what that we a which because the are released planning Now taking of really space. but LXXXX equivalent are higher our in are to to and FMXD, do we I the hoping compared SENSIPLEX, should gross the margin the approach are launch are we and we think hoping partner, have

gross this So, those at least yes, we in contemplating stage margin item. at are higher

word the quick a Also, Cytometry. Flow about

lower gross So over carry margin. to equipment large million between XX%. million gross almost look the end margin. Flow ImageStream, a if $X.XX very divided business The of Cytometry margin they been carry the hefty actually is lower is Muse carry you and have Those fairly the gross at more that is which which a equally units Guava, between $X.X sold

of cetera. depending mix and product So it's et on the the again

nicely overall that last almost continue in two to For actually grow benefit, we us last the the the if years, -- two quarter trend continue to of had all them. our we royalties to and

margin. that on year. over XXs I at That's reach think well years the also this average gross annual royalty two grew X% basis least last our helping the to the in X% in think in will I and they

think So, opening as are moving much overall is us. the in our we and from here a I said I just to -- almost forward coming I land. think behind to think are now promise I water, storm remarks, the my quieter we just And

like I there. analogy the

Yeah you it. got

And comment you make about or I your obviously had that guys appropriately, initial lower Can the potentially did what sure heard expected little then would there. relative little what as business seen your to talked that respiratory might maybe I a follow-up, I you I was on. initially what say expectations based I want lighter off variances guys. did hear hear than of what were? bit first season. right? early the you you Thanks even those if flow some -- a bit just comment did And be you to But just, you of

Yeah.

that expectations a So me for let to obviously million range, think the -- midpoint flow of of a end talked lot At expectations the our million. would we've obviously, our $XX as way been it would you provide. a that closer the than have that $XX more the midpoint Brian were our range, were is almost about -- higher. a that to flow the at give top about, another to end ranges range way exactly The produce the bottom would we be to little that it our way are

but strength the business the out, as we remains. of pull adjusted So to flow that we our had one, number range,

the expectation where was the primary Our Homi timing said were purely contributor two quarter prior number ability as remains. third to rebound fourth there around million to level, or so in manufacture into the quarter low to was quarters. and back in we back is the which to our up The that $XX order

will -- don't I has okay. let -- to So if Homi I know anything

it. really that's So

be flow going healthy. what well for based I The have flow. us. want customers what's to carry business business offer. sales force think engaged. that's strong. The good cytometers it continues are is on to and and sold The The margins overall we It's high being there a in is image

a you clarification. That's Thank good guys.

You bet.

Thank you.

you. Thank

comes from Please Our Tycho ahead. go next from question Peterson JPMorgan.

Tycho. Hi thanks. Julia for is This on

of there you on dynamics wondering so has cytometry the margins At that product a gross basically mix were an deterioration quarter margin you deterioration headwind, you expecting just inventory gross in talked ran outside bit. any this been why pricing maybe a flow of just had through you in to So margin the there quarter because least last contrary to front and hone little XX%, expectations. seeing the about? you're And prior the on improvement

And also you believe about, cut obviously out the on as XXs with margin VERIGENE several XX% deterioration I now above ago margins gross actually the there front been be pricing has you VERIGENE, just as on and low at to talked already, improvement quarters wondering there well? any

understand. let me Yeah, so help you

Let's first. VERIGENE start with

ARIES that's I'm below sample-to-answer aggregate were that's XX% So sorry that's above well or the what -- and XXs I XX%. the and said in margins low that VERIGENE, includes XX% VERIGENE well below

up you bring those are gross II flow. just You two that VERIGENE you above I'm with and out XX%. average sorry, together end aggregate margins

gross But With respect margins quarter. what quarter. the current were is to our margins didn't incremented in to level do up improve actually the flow improved. up flow, for where They actually the they

help? result both pulls So that total pull mix the a you margin they've end are as that aggregate been downward averaging and up to Does sample-to-answer you a will with higher the down contributors historically. revenue mathematically and down than if as flow

the And a it. continue year. this at cadence, any to and placement, changes of the see as the ARIES in will placements we year regarding systems. Okay, down look obviously, got VERIGENE versus you Are versus sample-to-answer last trend seeing then the mix XX

competitive in just any just changing wondering in rate? any in seeing placement the your changes So so general, I mean we changes any XQ. in far appreciate talked you But are about the are seeing you that you -- win dynamics,

RP are sort as and still your panels a look approval of season competitor the you're targeting VERIGENE approval it you multiplex early-- once there panel of RP meanwhile at that most -- the And the like you miss we you approved? year by entrants have targeting now flu new all will And look out II, end, launch does

So, you. me Julia let hang stop on,

-- question us obviously. Let a this us answer is long complicated let really the

the let question. let ask of new half let's question. you a Homi one So, and your answer with first second start off -- We'll then me the

things. of couple Yes,

First, we earlier, contract anticipating last to under as a as I year. said similar this have year system

competitive seen Solvay not competitor So, one dynamic seen okay. I've mix, a we have neither the of recently, about the have the our any change market but seen no, in not we saying the in and

of of we not competitor II, the and we fully Flex because competitive as a surprised running very competitive it's believe a is about it we as it's with actually some because capable I VERIGENE of -- And share a a effect. fact, said, very, system we our are as and fully fully VERIGENE even gain matter our pricing like system market automated can

Secondly, GI it the to you the submit we to recently FDA FDA respiratory. about the the ask our year, me planning to panel FDA we before to of submitted the clear the what wasn't and end are

As you know, XX days the FDA taking at review least to it.

end can quarter the not the latest, we have So, XXXX. At be first it before the end to year. of of this to are respiratory by planning of the

submit late before GI are just obviously the We panel respiratory that last also month. the receive open we to

Got it. Got it.

related to my of part question second actually that. The was

concerned entrant competitor they running So, you upcoming are new the RP your front I season? your their mean approved had how year, during flu with placement early panel this given you the for competitor

we a very continue this that to we I XX% perform mean well growth. in deliver so far

pricing. environment. our We this advantage main big with them pricing in but we know Flex our I have different a any seeing not to compared competitor, I'm think So, and

know said, in you as plus grow XX% this business, And year-over-year three the last years. almost I

Flex a be actually be fully pricing system to gain capability VERIGENE continue continue automated full and we will share. there with will will believe market it the II to so And a and

only can that's So, Julia. I say thing the

you. Got Thank it.

Thank you.

bet. You

Our from Instructions] [Operator you. Thank next Couillard Jefferies. ahead. from comes Please question Brandon go

good Hey thanks afternoon.

Hey Brandon.

A couple couple Guava order assuming the of it out that little more imaging you quarter? all guide, that Can if handful clarifications in a that's Harriss, quarter us would. systems? a the or on whether instruments of gets recaptured a on just you of color Are of that fourth fourth pushed $X was million give flow you

LabCorp the confirm just two Number headwind.

$X about then the in what are quarter? million in to XX sample-to-answer quarter. fourth the another maybe I think was thirdly fourth you it assuming placements suggest seems And

the orders an million that me get closing $XX the quarter there range. the to you're lots orders deliver can let Yes, plus remember $X fulfill up to $XX.X there million asking manufactured of or $XX our is flow it up answer million things. ordered and one, plus our in a pretty And of timing delay so from order that is a expectations basis. go manufacturer everything into wasn't Number you much an with question number of million the do into and a given then is, of high you million of how that couple the we guidance us on from $X number. help above one, It's the to is are that because with shifts

manufacturing, custom system different. very So because the configurations are

a not So lot everything. pre-build we can but

be customer six, close, so, to order result, because engagement you of which a of months, from finally timing can a the as And can nine, when vary. an XX time the takes close initial of it

ourselves or that's process. little filled fulfill we've the manufacturing reduced expected, found sped quarter up we accelerated the all had back year Yes, into or to bit than backlog our was little but faster, a third were we orders quarter, a We up. this obviously, because could our lower and in the deliver coming but

are, the expectations moved $XX up to back we now, million. So

that So of million we we're million million get or $X the about. talking $X $XX growth

which flu contracted from little and both in we portfolio systems from confusion we've of times. here be seems to The comes There balance many a talked about incremental that growth molecular that diagnostics said revenues reagent placement the that between contract part but years. quarter of utilization that with over a next year contracted three systems a placed system, were and systems, to committed contracted the XX were last we a five

of We the primarily sold first more we than the placed the systems talked quarter, weeks this two Don't aggregate, closed what about because We of It this we're placed those XX almost also get were there's, -- me some there. -- guaranteed quarter, month wrong. systems. at just of another in we we those I'll contract. XX was first now call, systems In haven't We in XX. the revenue too. concerned recurring

right your idea then, is, But you're about number. Yes. the

us XX contract be for Brandon. targeting to the systems that's to there under what's quarter. going And bring We are about

really And maybe for a may openly about to too kind talk thanks. flow. double-digit about given one Homi, next of guidance revenue be you had you a in Okay, then, year, product not just position understand talked year, for you but next number growth the all new

year. this that's headwinds LabCorp as anniversary the think still kind You at point, next viable of

if organically, OpEx next X%. XXXX. LabCorp we impact the we planning yes between remember, have in targeting level have hold of can low-double to still X% we but overall, some are concerning of digit similar that OpEx be year Organically, under we to the XXXX small to also But, Yes. for be to yes,

we So OpEx. the will hold

that basically and will as might a is generating idea strong more holding growth, have our we revenue. our OpEx organic we add, I start year improving by earlier, said profit I next So operating

a mainly royalty be trend also efficiency, if more Brian in seeing maybe improvement margin one start VERIGENE the of start especially the II of that we'll because coming hopefully, as you point we'll to more margin climbing I getting seeing better points, asked the coming gross with or before. said, and a out and the And margin two mix, system volume,

really and gross good I'm of feeling high a when departing margin, -- that nicely. revenue its departure with survive the all So we that million so, to such really small that a very $XX relative with what -- somebody very have created company it company, you LabCorp

product all top, improvement reason even year, start those line is we that and the with no gross not I are stepping we Luminex to there And us new good margin. for the this really new helping now as why seeing really coming and etcetera, are feeling all should now bottom with we line QX, the --

So cash flow obviously. -- and

Great. Thank you.

Q&A session. President the CEO, our call concludes Shamir and remarks. This you. to to Thank turn closing for Homi the At I'd time, this over like

your person look to near very seeing operator, in and earnings in our for Have forward call. you, the thank you attendance future. We Thank on you everyone a great evening.

conference Ladies call. Thank you and gentlemen, this participating. for concludes today's

now may Good disconnect. You day.