Ortho Clinical Diagnostics (OCDX) 8 May 212021 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Ortho Clinical Diagnostics Quarter One 2021 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to our first speaker for today, Mr. John Sanders, Vice President of Finance, Treasurer, and Head of Investor Relations. Thank you. ahead. go Please

Ortho's downloaded And discuss Ann. CEO Excellence everyone. me will Joe and With Ortho Investors the our be Mike Thank on of EVP financial good results to Busky, and presentation section Smith; our our Diagnostics, and website, join Commercial Financial are version today Officer; Clinical Iskra, you, Chris afternoon, Chief the the the of of can of on portion and simultaneously conference This webcast Strategy, a today's call. call us Q&A there. is being of Chairman

Slide future slide Securities and the Except quarter other the factors that remind with expectations the not in today Section me assumptions X-K and our all or app. expressed filings as and filed the defined today include the of forward-looking remarks required information, Securities Exchange Let of those the SEC update made no you presentation. X statements identified that XXE Exchange circumstances factors for Except or as developments or obligation reason. statements, forward-looking the statements historical by presentation and of from to to expect the are include, Actual number forward-looking undertakes today's risks company changed of limited are laws, for Form securities risks uncertainties. In results reflect and to, on or events, materially today's discussed in Commission. These results other uncertainties call differ any statements. involve a any might but forward-looking statements in and

for this lot constant diluted website. and measures to not adjusted accounting see afternoon, Reconciliations free conform of including and measures dated there share. investor press do discussion of to generally adjusted appendix included earnings adjusted directly presentation today's GAAP in Investors these principles currency, of are limited accepted a non-GAAP will X non-GAAP which section in call, EBITDA, are some not comparable measures a Please revenue, to Ortho available their be the the GAAP. release Slide or core to per EBITDA, that During the most U.S. both flow also of the but these cash of items

and In will addition, business. our core on call, noncore refer our to we today's

Laboratories, as businesses Medicine Clinical represent and also core Lab Clinical Our known Transfusion business. our

Our business of and is licensing manufacturing comprised revenue. noncore contract our

antigens base of Our business test. excludes sales antibody COVID-XX and

Chris Now of and to Ortho. I turn over Smith, will CEO call the Chris? Chairman

we'll QX start credo in to is is John, all 'XX afternoon, our We to a critical with play sharing call. welcome presentations, everyone, or Shifting do Thanks, as we and good or global I be this customers mission on highlights really we role start like always day. world our to second life. It with earnings healthcare do embrace really thank every Slide our promise. to the and teammates Ortho's deliver to do every X. because the X. they everything this global Ortho's test for and pleased teammates of also want statement. first why with on take our XXXX on whether to just around to Slide every systems single what you results, investors day a a they're quarter first-quarter we our I'm all I

results. around continued achieve has hard the momentum financial results by these QX, of work Our to very and the from our world into and teammates we're QX proud our

$XXX the increased currency. compared XX% million, year. of last by with grew first revenue During last compared increase year's XX.X% in adjusted first XXX%, quarter, and an our an finished our quarter, of EBITDA reported $XXX to We million, first increase to as we income operating as of QX core to the quarter we of

a in this that's cash a to talked I'm X, on reflects If the our of top-line Just business. which results XX% the in the growth. $X.X more business detail base this the company constant revenue. pleased XXXX year we've And for These carry COVID our as of team's quarter, core but momentum often are we billion revenue our our as we currency. value will Joe move significant by out as dedication with as XXXX. position seeing we really start in into debt first shifting with we excludes one managed in reduced is improved the throughout quarter. as and second, and this to see we'll the our company of the IPOed Slide importantly, performance illustrates when and indicative growth. are managed on considerable it And that we growing move into focus about in just was which we strength growth get XX% for this once opportunity we first

base for business. raised Lastly, seeing guidance the to performance our I'm on pleased full-year that our momentum we're report we've XXXX the based in financial

growth estimate year of the core, we're X% X% guidance XX% was that to top-line for lifting X% full for growth. to the to Our now revenue and

in headwind guidance We're you to XX% XX.X% XX% to is EBITDA reported, for may from growth. COVID-XX recall, also our projected raising to growth cycle. As XX% adjusted our planning us a full as year previously

the our see revenue, increase So we'll growth slowing increase XXXX. COVID-XX second we update we related current guidance, half will in In sales our the of the of earnings. also the of growth

product continues may X, identify value evolve the Slide not pandemic results updated reflected we worldwide our On additional drivers COVID-XX However, from in key see the with long-term different sustainable of rates we shareholder guidance. as which creation. infection, benefit are strong, to and of

value, continued has to following strong, XXXX our and to investments driven Fiscal shareholder our make around delivering focus are priorities on commercial and to strategic growth which drive continue innovation, and by very operational on started these initiatives. efficiency. energy product devote We excellence

quality in our in to market. the drivers been Labs our opportunity growth turn One growth around today want water, with require we'll has our I is designed $XX a approximately innovation the we're of and addressable slide Please quarter, Slide highlight to we product has business, leader business. technology, world clinical chemistry only and And testing an Ortho in focus market immunoassay Clinical is business our and to billion, largest does areas solutions. company the The markets the of historically of IV the have different and compete to make critical here, the that Labs that accessible. and which chemistry highlight Clinical organic immunoassay dry each X. in access not offering our

on market, this analyzers, our however, Labs the split. from chemistry weighted of the see mix our to on customer strong integrated expanded value the The is was uptake installed menu base very our we to of expanding clinical XXXX, you see XX% our As increasing focus a lifetime reverse. XX% on with toward revenue heavily ability the slide, and devices. with With run

quarter, clearly shows pre-COVID significant out on IA of have that profitable market, as chemistry. right, can the more priced As revenue you is XX% - that reflective up continue a its of made room growth to or we create systems. we COVID. value we Thus, diagnostics which more integrated is for installed as in grew this digits. high install which double automated of advanced is believe we believe we and as margins our will typically sophisticated the chart as easily That analyzers given really has contribute might targets, expect, this testing customers. solid, opportunity today believe ultimately more integrated higher seen of split and And in higher and well head market disease that the IA be strategy infectious higher, for we Again, for our expand our we base the placing clinical around XXXX

you XX% quarter. give example, in to So grew we an at the

So improved we sheet unique of IPO now head organic believe but there those and out of focus our power at we as X level our growth, a also we've important business you. talked for from us. opportunities high Slide M&A that number a ahead opportunities about an for are outlines expanding cash-generating to of the that of balance it's the

reach, and acquisitions flexibility, sheet increasing of publicly profitable with continue platform partnership has Ripples, to allow us truly this the believe pure-play successful to in very Ortho we accelerate the market have growth. attractive many company fine traded with IVD And excellent As like have bolt-on partnerships for provides history will on IDEX, balance only success. Thermo this an an build others. several global and a that to companies we we

In are and can points growth, that we we distributors, including products and point-of-care addition, high IA global targeting existing high-margin sell-through call specialty diagnostic systems. molecular our

and bring our value opportunities even more be We customers informatics our over digital leadership both and there to economics. and deal see businesses greater those the promises also solutions. Transfusion opportunities synergies time Labs We Clinical Medicine the playing through patients believe across additional where position to will

an earnings capital. remains focus bolt-on add our where to increase on criteria, In invested return opportunities accretive terms of deliver can growth, financial on niche primarily we and

changes departure operating take minute Dale, Chad pivoted Finally, five back on service want and years Monday, our results, opportunity. and leaving just is we to filed the an of the public the Joe? to return now we to come on. through to Q&A call organization financial further our as Joe us turn QX then announcing to the of thank officer. company over I a to discuss chief seeing pursue will I significant and company. growth for a his later And Ortho with to another becoming Chad Chad in we'll X-K

Thanks, Chris.

to start base We all noted and As a solid XXXX. segments. our in across that growth meaningful we've our really fueled saw our good geographies and business a financially, recovery surpassed own expectations Chris had of

our Now comparisons detail our year, let XX. periods with versus the all and note otherwise me more on revenues bit full results the a mentioned. Please provide the prior-year unless for Slide on operating that breakdown starting are quarter of

$XXX.X growth million, was Core excludes licensing a other XX.X% million contract or revenue provided basis, Labs, constant-currency continued XX.X% of Medicine, well higher revenue and grew QX a in the the ASPAC which a including compared which revenue increase on represents $XX on quarter the exceeded as $XXX.X First-quarter $XXX.X quarter. total which to first for and XX.X% manufacturing first growth regions. volumes XXXX, by revenue million, Clinical constant-currency of million in estimate driven within and primarily our in was recovery Americas in substantial The last quarter initial revenue Transfusion as COVID-related basis.

COVID-related been have growth would of revenue, million revenue $XX core that reported XX%. Excluding

to bounced continued to million, business pleased induced back hospitals, grew trusted growth the on of a well around to say a As basis, a on driven its double-digit really reported a XX.X% our and In partner growth. increase but XXXX. points fairly constant-currency basis the quarter prior-year million Americas saw growth region, with compared from for base $XXX.X region, a labs the million our Clinical largely Labs geographies in the year-over-year $XXX.X pandemic Transfusion growth second or our business Within basis. networks, new we in trajectory $XXX.X has in In all primarily of we I'm region revenue in revenue $XXX from low the the first the is Medicine, million hospital currency the saw quarter, with blood period. other of base world, showing of went Japan. partnership constant-currency banks CTS by healthy we 'XX, the in Americas growth which Transfusion X% on live. quarter and experienced Medicine,

the We contract just ramp $X.X the continue primarily under and them. compared some a for we as with due to the $X million new CTS relationship to Noncore is increase to year ago, million business revenue. first grew are quarter and in million manufacturing an this to $X.X revenue building

Okay.

Slide QX. to region outlines XX Now our on for which results geographic

we recovery in Medicine this the million pronounced due first While constant-currency our in $XXX.X and the a emerging a Clinical region. Transfusion growth from were Labs XX.X% period. many basis. markets the quarter is in million This on again, the to strong saw developed grew of well Americas spot in prior-year clear or period as markets $XXX.X revenue to in meaningful a

prior-year COVID-XX growth, The still was compared X.X% growth an on year-over-year Americas to million impressive of was EMEA the quarter. a XX%. the up revenue $XX.X basis segment Excluding constant-currency

continue pandemic initial both to the Greater increased China under in region. to will pleased basis just million a of segment and during of and Greater year the on see pass rebound growth strong constant-currency the in last believe the to we quarter anniversary revenues EMEA return as very businesses regions. impact XX% a our of $XX trajectory the these we're Our first And China base

XX.X%. This regions, who members with Our $XX.X which on surge constant-currency We're their which thoughts uptick are there. strong includes a revenues to Pacific part our million, in where working strong the family and was we our solution region, well. as recent and have of Asia the happy Japan COVID-XX a had are revenue by also be and teammates the Other the a in from India, segment, up of basis includes region contribution through

another in to and below performance XX. We line Slide delivered we turning the Now as value strides to quarter capture productivity. solid make continue top increase

gross manufacturing year-ago costs. XX%, the profit, $XX.X XXX of XXX% period, points margin by first First-quarter in lower and higher favorable million well at for in higher SG&A increased increase product by basis as gross to the driven $XX.X an mix, million quarter segment partially and due Operating spend. primarily came to R&D offset from as income

Non-GAAP Our XX.X%, in a last or loss due to million. the quarter intangible EBITDA proceeds. was debt adjusted $XX.X compared was income, $XXX amortization and The for comparable million per of quarter one-time per non-GAAP with a $XXX.X adjusted year. costs excludes or IPO increased net lower first million increasing share, the to share, other net period largely first loss benefiting which million to expense, to $XX.X compared for our $XXX $X.XX the net paydown million, from interest the $X.XX

Slide to sheet turn now to Let's discuss liquidity XX position. the and balance

our quarter million, XXXX, is stood reduced which while included approximately of of initial by total the up under As total billion. from the over option, XX% at end cash $X.X first net $XXX.X billion. by of exercise of at the of $X.X allotment debt our totaled debt million just offering, underwriters proceeds and equivalents Net 'XX, year-end cash $XXX.X the public full and the which the

at as balance in cash quarter, generation fell see favorable a EBITDA, turn first by we euro the a the QX. year. end, were foreign to we of our term loan outflow impacts to by net and driven stronger exchange cash Our remain generate, debt-to-EBITDA sustainable we to cash least very higher ability seasonality confident the our this times had ratio QX, in Due debt. a to on half we typically reduce And leverage cash ratio X.X flow quarter where in in have able

flow cash So in expect improvement to million of our which Further, million of over XXXX. in adjusted looking is cash in second free million at operations, $XX.X adjusted $XX the XX% flow cash free of cash generation used significant it still adjusted adjusted however, do, we year QX, the flow $XXX expect we QX a over EBITDA. approximately generate for quarter. of full We

balanced facet continued is allocation debt capital just let remind me that Now you reduction one of our strategy.

our actively evaluating growth operating As high-growth opportunities that business, leverage Chris and or core us mentioned, complement further and markets. increased we're inorganic to would new organic give additional exposure

financial our of receipt Our upgraded positive burden leading, us healthy solutions discussed while of the both the improved as will innovative guided industry to after In as IPO last of a our our on the news, for development all other and patients call, Moody's IPO by S&P continued around cash credit on position, continue interest over this strategy world. proceeds. rating our focus result coming the the we and pursue years, reduced allow are position to

count a as XXXX. core follows: XX% continued With total facility. in years. strongest billion billion, upsized QX, has capacity million credit guidance $XXX and $X.XX we in that in Chris and XX% supporting on Slide That's our from finally, our also percentage XX.X% increased momentum And the noted position growth in reported now XX full-year X basis. XXXX our will facility strong substantial mind, to of a as of our gives our $X.XX We has our on projections, and full-year earlier. early range EPS or within of the our original This $XXX as average ability EBITDA million $XXX strength the in that the to diluted us during is are revolving course, now points in be of of in very We With range shares. between the to basis. share growing raising confident to $XXX for the million, be adjusted million $X.XX turn Ortho visibility the adjusted share model by resulting this the outlook for full borrowing first revenue on between portfolio constant-currency to I'd a in a on seen based also many up revenue our growth part 'XX of of to like liquidity nature $X.XX XX% to a recurring full-year future. will of XXX remain across X% quarter XXXX business of million per

segments. across We of grow our all and expect core our continue the to top various line to business

We margin of also us that point for of revenue continued analyzers, capture our and for by operating on leads and of integrated depending with percentage expect two continued call to we're growth, back expect I'm delivered turn times a period. all results. non-GAAP and grow program Ortho's I'll ongoing investments And that shifts EBITDA as a performance increased expansion of our have first pleased financial our see which that, every I'm to thanks X.X leverage the for our quarter over that to and to very 'XX, to to building placement the adjusted margin value that, we to fantastic believe growth Chris. these in worldwide the growth. platform associates confident that result With of

Joe. Thanks,

the our I'd XX, a Before for spend few on investment which like thesis to opening for line minutes final talks the just Ortho. Q&A, Slide about really

We investment continue an perspective believe an to from with it's amazing Ortho. opportunity

see base highly significant we we and definitely market exciting. go some as which pure-play this due we IVD are is about a and our uplift really saw it, attractive COVID, growing, about this Q&A. company, IVD growth only through more business, we and think the is market you If and to while becoming really But more in talk we'll

focuses lifetime differentiators around momentum reoccurring. QX, several customer had of coming out And growth opposed emerging the base, XX% Europe as And QX, this in just obviously nice reoccurring in and the profitable the on really can And see growth The revenue revenue which growth. it's in this we've results Western is very places second QX, about today like into value continued QX you customers, really from around we to And coming markets all places our that we that's of really and as while into still is seeing strong QX. and several offer in Americas. to it out across continued the we're of our excellent of one leading is globe momentum. finally, the

So excited I'll turn that, really going. business on and you, we'll to back the And about John, move to where is over on Q&A. it

Thank you, line the Chris. would you Operator, instructions question. this at for the open give our if and first time,

have Instructions] We Derik [Operator question America. of Bank the our from first from line of

Bruin. De Derik

on strong come to congratulations strong. So the so quarter, of out you the gate see really

the market. of X sort One I the you that struck immunoassay had on of things and me, the Slide appreciate

immunoassay the and Just to I where It's to to opportunity of on is growth is sort sort there? long sort wondering take that revenue do on that be see that you How that the gained in was opportunity when of bit sort the of color shift. guess, one. are going you like until like What you like can markets? A more it's remind of - can little soft an there. shift?

integrated in a total our high like give that to in think that business. a integrated what I percent up about the the see analyzers, had quarter the driver. we of for I the can to growth analyzers And moved Look, XX% you across level, you you quarter you is really kind great our to - just shift is installed we look show base And down mean really and the that if XX%. was of if continues Yes. the happen. we quarter. right, Derik, of think And

So look, still chemistry XX%. our clinical grew

that's of our COVID. in slides XX% look business, So when XX% you even kind and our it IA tips. But at grew without

our in to an example, IA your grow XX% chem clinical is IA. look, you carve going and So out to because XX%. obviously, to But give of grew you're grew COVID, win if the COVID say, Chris, our just going IA, you business our

see see margins of start you gross reflected in to in to that also with of acceleration you So can lift the growth. margin. start And that the the gross some big

and we've all, pulling stand-alone this look think we to analyzers really I about as in and that our us, marketplace, you business. focus talked then at out IA shifting with integrate for teams through on the So we it

follow-up I does shared what organic you one the that the how just very one. anticipated us But there question, And on mean, what revenue certainly and the beg of on and IPO process. upgrade Great. lot during - do sort a - growth the is than with question target it about better And a we have you but you as see I core just off really this, the comfortable they decrease XX of comps? 'XX, the sort tough it's of these I is seeing too business sort with like, for outlook comps, of - comps. mid-single-digit the in know mean, early are we talk even

believe. We Yes.

of So historically 'XX. an had D in is X% me, and hit 'XX like well February added I we just gate in farther back. QX and the been two X% example PCT, running as February. more first as obviously, X% excuse Because of in 'XX, came to second look, market, moving before other again, pushing came And growth months as share, out things of tests far January, We across. of mean, - at - has vitamin China of 'XX. out COVID But the analyzers in that's largest with January the percent business we as the our really business use on we pulled growth, gates that there. like early we've base as

more the the have I because And talk And drive and to feel the pull-through, are before. running than biggest we're done company. about still wonderful that's we're that against do difference. growth. comfortable ever really competition think to well - than getting won fortunately, above we've with So Look, And that helping the we we ever as have business, we've we growth history winning tests mid-single-digit in we're we I but more the look, start of that's winning think is even outlook. that very share reality

Our Morgan the of line Tejas Stanley. from next comes question Savant from

is line now open. Your

And well. on the extent suggest India. in from Brazil point you resurgence was February can those there GEO on So the And have yields? impact two here? I'm second, an you - the not you the made stronger than base did strength you the front. for the for numbers even if upside around markets those To offset Chris, you? as two what States? us through sure But then versus questions weather business And what cumulatively COVID in the of given sort guys testing mentioned help the there, think much benefiting how in that And represent you're underlying

Yes.

a I weather, the hurt about a week people for us of look, in So February. think, like lot

centers it much got down Memphis, pretty Our for six main days. and in distribution shut about

job imagine, did so that can all good say Feb probably Americas would definitely team in of frame impacted you - really it in As recovering a time the March. February. on I the that in

if you India you alone. in for in Asia going in of India. the in XX% on To India our about I that pretty as - So worked remember, an by really the And time with kind was the up the makes are its quarter, India, through closed - sense. we system, - had look, way of out think as Look, were example, XX% far Pac. it that just we're business think business in pleased I give almost is what's quarter

India Asia go, Pac. does as So so

and I all end only eye And strong of on very very, the people May our the what's us. research, well-being will again, really Brazil, and of with But obviously where seen we with have not and teammates also what I concerned the April through market very for look, see in But nice we're India little to June kind business we're and QX. what going but at an good say, think in India. of keep started QX need all we on happens. Now has bit recovery, a look, for the concerned that with is.

more than probably was up QX. XX% it think I in

again, win so Latin Brazil our And in two and to where need Mexico Brazil, we big markets big are - down America.

done team last fantastic through year. in has - of the it Our job and the managing a this end year

would in doing, say, obviously on we Do We eye recovering. are lose I nice an keep but very to well markets those need right very you? now, So far they're COVID, as recovery month. as

Operator?

next line our And Kumar Vijay Evercore. of from the from question comes

Your open. line is now

hear This is you me? Paul for on Vijay. Hey, can

you, can Paul. we Yes, hear

the us for could the more look hoping like? walk into Thanks back or question. are on I half the the What's segment color was assumptions guidance the just taking that you by through guide? geography? Any baked

let I'll the guidance. that on take Joe one Yes,

full-year growth $XX to as call. COVID said across we've the $XX million year. Paul, - the we last in We of half on do got Yes. in the on continued call, million - of strong last on of our of We've - COVID to all front, segments balance the second the the got I said we going were

QX. So did in we million $XX

expect about the in in second again, So said in all that we half. - COVID COVID as don't we're I guidance, the on million much in at call, QX, the last to see $XX of And somewhere looking at range. we

to there's upside hope that we again, Although, guidance.

far P&L. the moving down as As

by call in I EBITDA gross profit versus a I half, this through first on in stronger well half higher-margin those half margin, we last revenue first second rolling margins expect in profit driven some too, versus got second first variances half the going same our of said in half other at than and think gross and so as see comes - to quarter as really the the than the COVID first the half versus for And reasons. half. EBITDA half, that's margins well the the as margin of to immunoassay the through revenue, manufacturing more stronger second that's terms will margin drive you've half first be the in those higher some favorable and in gross second stronger

Yes.

back I when align look at tests is the we lot things with COVID. we to think that and backing try COVID. guidance, the of kind think also obviously other thing, Paul, out out we to that at are some things business like get a the what we look we But

So what's into much to the driving guidance. where I is forecast think base get do really Americas we the going moving to really faster dig is it but And be to or as we in mentioned, business. I Americas, the think is

second - a Europe to just one think better, and continues the is in Western I perform and think, EMEA, particular, I So lot.

we are hope two the why those the would be double the it markets that leave guidance. of doing knew big moving our while would raise to and really well I'd emerging that development So that's China digits, quicker, markets in say, and

Great. don't assumptions serology already it, and Thank the year? on I you you. mentioned rest if And know for antigen of the but

Yes.

So to we million the in our $XX in did QX. And close about do we're million nothing have mentioned forecast year. built of projecting for $XX and half Joe second the to into that, we QX,

and So the unknown. an One on I I of still way thing guidance, we've is it's it's think XX% remember, But other come $XX year. do COVID still - built the on I of reoccurring. back about want front-loaded, it's is business the our to all think forecast, front million half to the our

account, that an we place place revenue, we the started gaining we We start win really when analyzer. So to reoccurs. -

look build get that into models, once can we're and you think our of we when really the placement flow, out building analyzers I So at that.

line next comes Our of Patrick from the Citi. from question

line is now Your open.

a China improving? to you going quarter, Can geographical a IPO. guys it the talk obviously for the big I the the little around by question. Things through my in has also the if focus detail, to back year. go trends the you strategy And saw just through back for focus you Thanks distributors. then area guys you on just to you was for be remainder more disruption outlook been Maybe taking know are for you. you seem the know the some a localization where there. quarter, of I talked destocking front. last big

Yes.

think, China back rebounded grew would So say in come look, XX% about the incredibly I They well. and has, that I quarter.

is important integrated to XX%. I grew think as just that us analyzers

market So saw above again, or see on the and them integrated at to growing want that. analyzers we

world the see the low China really continue say of year. for back. rise that's I rise be we see continuing nice of obviously, really places because good. every throughout forecast QX to we a to the see part So we comparables. the would feel But I can one pretty will bounce mean, where I

really product use China low-cost on of in we feel - analyzer was is some assays in about And we'll I in lower emerging in our are in but large use like we that know, as we - not staff the markets. development partnerships, that lot development really you our where that. of volume currently the we a one on far of we've a localization as those that As mean, is China, strategy, on good only reason first presence the for step we'll - the and hospitals. one labs two a

further it deeper we push some helps and in us So second into think China of markets. third these

of both going So those are incredibly well.

China, M&A I catch of, we kind opportunities, market, would up now biggest I we years. eventually of mean, But right will the the Americas. the Pat to markets of if Look, believe five look in say obviously, at localization one where that we are that's next one So biggest not when be perspective. a the from

eye we the well. So keen world as part a of have to that

side? the investment areas on that, appreciate you areas margin half and flow just talk letting that first to side, being some in the side strength are based what in certainly maybe bottom on how are following guys on the focus big one key you line you stronger then revenue the comps. then half balancing just versus the through the And just organic And second the guys? the on the Can for through reinvestment R&D

Yes. a to numbers, Patrick, think consistently X%. - to 'XX got I back it business a 'XX business in this if specifically now even 'XX X% may go high two the get Look, 'XX, talked in but the is about you think digits. to Joe I growing ways, you've and was we growing And single -

things the or business. a I business. it's really player running million Right the running big allowing base What incredibly number is of I from X now, especially And No. market think of COVID. feel are we're that business. we that I we're two strategy we're - it's lot And we're really second a we our world well. hot. And we focused to move good the market And about, that And one share, talk we're think at - at. we the in thing market is sales position share. looking mid-single aren't on our up this we the year the lot mean, the competitors. commercial people But Derik digit, we're market, because, against that came of very our question us earlier one about we excellence unique a believe one, think a of $XX in feel in transfusion leader a from which COVID you're medicine.

can So global because strategy when in the we into why believe analyzers we of then start commercial that the we're investment and pull-through the we there get menu. excited working. is is to really And because going that's IA our high-growth that see organization

Joe we're that to are X.X we going to about line. do bottom always and the two a So x at investing we're rate. a revenue, of faster talks to down going take to

investing even years, in and in a to contract those So that. So lower because that for because is now, probably better short believe that. dollars But end around 'XX, the by a X.X win say 'XX it's I'd we're we we're on to five right today, right? 'XX dividends. We're opportunity the is at paying investors holding you X.X going deal be of now

one say, I'd So commercial. the is

platform. move chemistry it the on be, think, that that's with size that's to about half our is and you'll changer, second to that next advanced and research water in The a think, And of we we're that additional take no technology And game really see needed next we've R&D allows throughput. into majority source little that the going footprint, bit, today IA. higher and a the - lift lift talked to us in where And dry platform, this about I this our in we which from run IA. is about

development trying to the we're accelerate so And of that.

As you years. place can But imagine, would those are long we be that the the development cycles, believe five opportunity. four there's other to that

would those big I the right two two places investing say So - are now. that we're

I'm And I follow-on. had sorry. think a you

Yes.

I it. I think appreciate everything. really covered you

next from Tycho JPMorgan. of question Our the from line

open. is now Your line

transfusion. A on question

we Just anything contributed uptake if bit can you CTS, And the think since the little that just a there? curious, you gone think about about about there, talk how you've how then quarter, the that live ramp? in Swift launch,

Yes.

So of celebration did pretty CTS around big live, here at January. the go end

But February as getting look, it and was little - probably we've it the talked is higher and revenue, a X% growth like And about going. because And into total went so side that represent think pretty X% the always did March. initial much it to that, stocking of that definitely running contributed to were we and that. I it we bit on to the

far about Swift rolling excited out. Swift, As as

haven't orders, say I orders we We gone starting to for are but and out will started take disclose to that.

think I very been well it's received.

auto a swift customer tactic to or strategies whatever I sure the customers - but on years to on had making also is are that business lifetime a seven play. six, share the that them at they're net think extend had bring we One and the value, is vision there's an really their and kind maintain really that over base current life of view really market that two ability is that. of technology that our maybe

out, the business. emerging you to I markets, their trying market that why say think will Grifols, Bio-Rad the in know I leader. we're especially in particular, grow

well. haven't it's So But think we still days. opportunities there's - we really early there as

I cycle? that could things a And you four see had talked Okay. time Or that? sooner that feasibility frame about development think right ask kind a slide about on chemistry Is the minute That's then to ago. to we the initiated dry work. I than there five-year the follow-up know going to was helpful. of you are

Yes. I regulators you could right screening we and the No, if - depending the Labs, earlier time you're lines. will it's I think with that Clinical donor playing think But see on than time look, probably lines.

with about for guidance, XX% X% that's to core for to give know business, the versus Last one the talk to X% segment X% more one whether you me. from you to other? level just segment but don't the can Okay. increase I weighted

sorry. what? I'm toward weighted More

Yes just…

about think the if and we mean, increase… I Yes.

probably Tycho, increase that it's weighted - Labs in Clinical it's you guidance. more more think about heavily toward Yes. as

Our comes from the line next from of question Barclays. Luke

open. line now Your is

Thanks for question. taking my

point, kind on an a So is follow-up Derik I think. here of important

when that So of immunoassay place sense can automated, instrument integrated give mix? And it's really modeling kind or flips. the guys an of so in clin/chem when just you you an us a about

roll so we and of strategy time. flips Mike's percentage the and Yes. high wholesale to the the that how kind from to Look, a team out to how one stand-alone it the end, takes it with maybe best over start how take

Chris, XX-XX shared well. the the and Chris Thanks, look with in the at which slide. split as Yes. closer When revenue much that you Luke. Luke, the pretty customer to holds base immunoassay, is market, true

your the total, have value that immunoassay So of clinical chemistry assay, on on about a XX% have will when a we be customer about and you add to chemistry. XX% in business, of the we new compared and new

And it say, historically a we over stand-alone and to Let's integrated build to time, it maybe how time? it does take move long just over take was to help, that? long and does that how on

the from from also a side Again, look that testing of because at of things menu is lot - well. is two we quickly. new point lot integrated, the you happen. pretty is as of growth, of go you for the business that's again, a onto there's you're move to larger, these that and you One, when their But these see back customer there's side it's mainframe tend incentive the analyzer, all Well, view, to more where a coming to analyzers. as only know revenue what the not consolidate market immunoassay faster-growing

initial not pace ongoing, ongoing, well. that's a going forward growth better as faster that So for but just there, bump driver us,

guys M&A and about two With up the you that does table, think companies off slide as recent put you the then the And I love strategy? there. timing your landscape, of change that molecular

And prudent, was. we and - felt I Yes, other, those to value going going I I of to we're we're one would those where above think, I went say were was think the be the look, think opportunistic. And very be interesting.

those at of looking we're think I type - definitely were businesses. we but So

changes wouldn't I So timing. it say our

in the it at think U.S. we a medicine Transfusion We European-based lot we categories of a the some interesting look other the are And companies side business. as or IA. on depends Medicine. molecular there's is are opportunities think why the I And think, BOC, is, think couple business. of there, interesting not I that one that like in obviously, well. there transfusion some There's

group work definitely mean, group So efficient. a focus will look, though, that X,XXX is work tell integrating opportunities. placing the day-to-day I identify timing. more can it's here. XX% say people, running I it. There you, after changing whatever or on is those We're of of through of our small wouldn't there's pulling I not becoming a analyzers, menu, But their we where people here, people focusing people

we So we're I I and makes comes whatever think it's know believe then don't positioned question. acquire along, working. sense. And right opportunity now to do I if it answered the when your

You did.

and it. of We we X,XXX because in the fold change in call we look field. it'd But people as our it's feel we're business to think we're out the to nice because at Okay. our have like to - don't chasing like 'XX, you I not 'XX, right do be need point think

Our next of from line the question John from UBS. comes

Your now open. line is

the taking Congrats thanks and quarter, I upgrade little a cycles. my bit question. just building for the guess, on on

did the does you for Can look where total say, I placement X%. automation And that And how was think update the mix the automation quarter? across provide year? then for just around - is in quarter? on you a an number small, how provide

total We're not only No. total about units? growth, talking you mean -

units across I you get integrated the placement gave but total that? the think you all did

growth. We integrated Yes. gave the

digits. here, look, that, So far perspective. Mike? automation, you just pretty was integrated on to but as a good it Yes, quarter looking growth about say double take much I'm Yes. Look, as want would XX%. grew I

Yes.

for a been, focus we look integrated. when quarter, good, So know, with automation you along at the us, has guys as

for customer that drivers there of prominent the the been cost flexibility, customers more We're and benefit Our is make support and the we've with our objective getting traction, are our bringing in. more that to need sure see base. pretty effectiveness, automation trying

on up We over as installed as base, far XX% are automation. up

even want by growth, So and strategy of again, Overall even we faster growth installed there base with and driven in our with our faster to integrated automation. grow base. how then line

So true that for held QX.

is for And the you'd more plans target you little X.X year-end leverage level current year the the level a comfortable targets? on I times where And of the levels? delevering on with current at then, and I ahead leverage, in any the be of are think Any comfortable just is quarter, schedule. deals? updates guess, around there executing Or

Yes.

to that trending are we a difficulty. our should definitely darn we're little ratio three the at of be without target a times, by level I - half around this the to year, a of way would that year. below to say before We're close QX. of And and for be are end John, year, going at four and full about We and all we the of four, bit at I've ahead schedule to and by talked of leverage internal X.X getting the the too much end forecast that. slightly say

more the much capacity we've balanced do a of have said, And of lot year So I a allocation as strategy. to by of lot got capital or deals. the will a capacity end

investments, have ability more think I to do we a and inorganic lot both organic.

Yes.

do I moleculars, to recent and say Grifols. the we've proud those I I Thermo we I and Look, challenges, you our thing be that's of at in I would look The are this are innovative on depends we think business of book some is the one really think And outflowed Yes. when to you way, look, in the IDEX - leverage. that think the it at about question some you - bank the the - ones if obviously like Street. different before what I with deals team development, they of like two I really with that's with the look partnerships would one say along going where created the very deal. in I'm of heard think earlier the mean the

Sachs. from Our Matt line next Goldman comes from question of the

now is open. line Your

Thanks for taking my questions.

know during the erosion sort generally just XXX you I Just points two quick talked memory you ones basis pricing, my of expect of me, XXX think for about serves price I me. guys on if One, - suggest I'm over to changed? in Maybe anything you I market of just know quarters, the the or the that's to pressures course supply that been But year. anything? wondering, seen only but a chain inflationary in have few the IPO, it's

take you that, or Do Joe? want Mike to

along tracking that. I'm say, not would show, right seeing to change. not Matt, change same in We're we're the in we that no talked estimate road - no, about any I still

you back M&A this guys does strengthen balance partnerships going But just thought whether terms course you then not sort do continues partnerships. to change? also as whether about do talk of M&A. you your M&A sheet your of and next over in year, of but that to On year process And the or slide, Okay. just

Well, be were a really to people that chasing an point-of-care example, we look, or that's on have going question, COVID was good you, - way. when lateral to a the one And I I think Matt. partnership you has of right and flow. the can tell just lot give

Our view someone business. is we don't build want else's to

- in. you of if I'll it XX-year it create be the give partnership, think long. partnership's partnership Ripples that an I been to So example a we've has we

into XX it. years we're I think So

this we about something inside think our the I think being, that's I versus long-term and a where lot - a has that believe it it be to just short-term partnership we makes sense because reason business. talked

within we area. so want great Our we are that where in, runway, believe, we're to is really with we that stay that

kind for go. it's time do. from seen those think are I history, be you've So ways you can an or at good these distribution been got us think long-term right that the M&A the And asset we our think control right But the we to obviously, the of to that the right and partnership, things I partnerships. partnership perspective, that's

from Research. of line Our Wolfe question from Steve next the

Your line is now open.

That's You've on understand of one. of some other And the space, that a have has an just that where wanted range it's and know contract a bit - I shifted. rental Steve. model to if about for adjacent kind lease here, different BARDA there's seeing you're think where then guess you first because to the of the but talk I of kind dynamics how little that more, I mix kind and little bit got diagnostic won of kind obviously kind understanding it's out just Liza called players that could flowing through? about you - and different

If seen if you could you've that, that Thank you. to any well? just as speak in shift

Okay.

look, Mike BARDA? you that Do was instrumental really So to in BARDA. take the want

sure. Yes,

an York. through as the you partnered And the on agreement, BARDA point reagents ex-U.S. That's read immunoassay some there Rochester, that probably from of with is there. that related reagent view, of our of Wales which manufacturing some COVID in manufacturing So side, lines instrumentation, Penford through to funding, BARDA, for we product the in that's capabilities in expansion and the DOD do New our of instruments. is both and the fund

and I in partnership. the through? know the has And on if John existed, increased actually, going so that this how to need U.S. an us comment manufacturing is to to bring that's opportunity for for don't flow you onshore into as want

little for just I give we a a XX a accounting, now But seconds booking capital the grant assay build just got previous grant different it's development. in a we revenue on mean, to are that I Yes. grant wanted clear, on because some BARDA line. to is everyone's this so bit

offset sheet. through to So the on CapEx essentially come an as it balance will

going sheet. favorable we'll less expense an So the balance forward have get of on because depreciation you'll asset

asset. It's over now rental I an like pretty grant the over reagent you a the cash. had versus through as reagent won't the versus not revenue offset a year. year come mix. flat have difference think other question had, it cash we So And come an I year our as rental to We're question in year seeing big on you

our concludes any comments? for That everyone. you, day. Thank you have Q&A Chris, do closing

No.

we'll with talking time. and to to look We everybody the everybody. the we It forward appreciate great be to and appreciate And again, time be throughout quarter it. of share yes, thanks, to the you, Just for a you to really day. taking talking you soon. thanks able we know some I was

think Thank you here of have again the instructions availability I you final operator, on joining. for the recording. And

this conference Recording Thank call. you. be Ladies Thank today’s for after this you gentlemen, participating. will concludes available and call.

disconnect. You may now