QuidelOrtho (QDEL) 8 May 242024 Q1 Earnings call transcript

Welcome to the QuidelOrtho First Quarter 2024 Financial Results Conference Call and Webcast. [Operator Instructions] Please note, this conference call is being recorded. An audio replay of the conference call will be available on the company's website shortly after this call.

I would now like to turn the call over to Juliet Cunningham, Vice President of Investor Relations.

Thank you. thanks Conference the Brian Call. With and Quarter Blaser. everyone, Results Financial me evening, for QuidelOrtho's joining First Good today are

EVP Our Officer; and and President Busky, and Iskra, Joe Officer. newly Officer; Chief Financial Chief Chief Commercial appointed Mike Executive

Chief and follows us that Officer, will prepared remarks. EVP for our also Q&A the Bujarski, Operating Rob session our join

posted on aid the of our page Investor conference is ] the that referenced This in Relations will call presentation being throughout Investor simultaneously a discussion, page Relations the we To the webcast [ supplemental on be website. call.

expressed call materially statements report Actual historical, are certain with XXXX our that Information and are that filed the Statements contains potential vary factors that This factors. future the meaning from may subsequent risks, the conference fiscal XXXX. available SEC, Litigation results forward-looking statements uncertainties, our implied is those strictly not plans, forward-looking prospects, statements. forward-looking including of for Securities the Risk reports and to in Private other the about Form are of XX-K subject company's the results in and affect Act assumptions Reform these expectations, could year or including within actual on performance annual

Factors section.

law. Forward-looking by obligation as and to statements XXXX, except of no required are made we update statements, assume today, X, May as any forward-looking

of measures discussions to call our page supplemental today's earnings measures includes on which the certain the these our of directly their available quidelortho.com. at most Investor presentation. non-GAAP Tables comparable non-GAAP and addition, release In in measures. website are financial reconciling Relations are GAAP

currency today's given on comparable to a are including stated Mike I'd otherwise, unless all Lastly, now And given rates, revenue growth Iscra. call basis. introduce like revenue ranges, growth on year-over-year constant

financials introduce I'll Brian Thank into quarterly and our will new minutes, CEO, Julian. In a detail. Blaser, in then few Joe our go you,

[indiscernible] recent XXXX first First, which actions increased quarter value. I'd our our cost structure the and discuss deliver performance business are we're quarter first like performance. to our taking, shareholder and with to improve Beginning review

by with constant currency, COVID-XX total growth grew regions. revenue Excluding revenue, across X% in solid

good Excluding in the growth in saw first COVID-XX revenue, quarter. during we China, particularly EMEA

Our business, by placements. collaboration performed Swift expected, QX year by in approximately X% period. the Driven growth as onetime approximately with OrthoVisionMax of group XX% the in revenue about our excluding OrthoVision X%. which revenue settlement XX% QX was regions across Swift Transfusion labs grew and was third-party instrument immunohematology reagent prior of and medicine

business of medicine, to transfusion streaming Care Within plan. as the QX revenue. donor efforts represented Point our XX% U.S. continue of wind down

COVID-XX and strep XX% Care Excluding was revenue, Growth business approximately our our ] combo tests. speed test, Sales our driven the [ of by in Port strong were including market year-over-year. flu,

lastly, revenue. X% Molecular QX in was And Diagnostics

albeit over On XX% competitive well for respiratory molecular as additional grew and the Excluding low we assays channel menu producing expansions to work on revenue Savanna, and balance as approximately with the market. STR base. time. COVID-XX revenue, continue a from a highly U.S.

U.S. closer undergone achieve company launch. as call amount We our plan the milestones of for our to commercial full earnings and has Since updates target get tremendous we change. February, in provide to a

need managing an on address While as build our be this to challenging, strengths areas to see can opportunity the change and we we improve.

near past better and deliver implemented the in term. designed have results Over months, to X initiatives reduction cost we long the both

deliver includes in expected include count $XXX head Our to savings. approximately annualized reductions which restoration focus margin areas million

initiatives. as and as business in greater part improvement ], business [ looking Beyond those savings our our margin continuity maintaining interim new restoration CEO, and in I initiatives, we while acting La the continuous realize our are efficiencies culture. for At Joe of to as accelerating same opportunities firewall actively office improve prioritize time,

team's our I be to while purpose. in end, that with now to keeping ahead our ability performance speaks fact, momentum in first forging business To believe in transitional our period a quarter

and our CEO. over and of as of This of Abbott's industry, phase global record new years makes revenue full XX Brian diagnostic improve driving welcome X to ideal next Brian responsibility We diagnostics to experience leader of brings QuidelOrtho for including business. years President core. dramatically profitability its in strengthening him track an senior the operations growth leadership through

operating behalf like helm would dedication the appreciate ability your our team, QuidelOrtho pave now a a Brian On and smooth on focused serve our transition to our forward I We of to transitional leadership during continuing for and remain future. successful employees the at our to to with XXXX to thank plan. deliver global times. look customers We way

Now like to Brian. to turn I'd the over call

the today. with Mike. have is of opportunity and call exceptional that join first, this work very by it I'm in I this this pleased I team say share pivotal me am to the leadership few the let And a join compelled our today, across at to history. And the to to was true talented to a company. I'd organization. the honor point company's opportunity thrilled reasons like colleagues Thanks, this

I testing. hospitals, have continuum care highly of reference to separately now broadest spanning portfolios has formidable viewed labs Combined urgent care business as as product to QuidelOrtho, home clinics always companies and First, of the and and competitors. the one Ortho [Quidel innovative this retail ] and from

full its in unwavering term, while patient the and flow are company customer capabilities QuidelOrtho steering including This patient drive exceptional profitability to touches is the diagnosis, and to all excited work a in it care, improving profitability focused underlying debt so care which to our large compete ourselves the and In diagnostics cash attention and growth has priorities, market. be spectrum, and business level highest satisfaction highly effectively prevention, can patient on will our care required of expanding stage I There do, of market. to of reducing positioning the short about and the monitoring. competitive achieve every I'm potential.

direction engage with earnings in about answer call in your to I host opportunity and you details forward of coming I'm to months many providing as strategic look excited move the August. I our quarter about when the second our forward. questions more we

it turn over now I'll you. Joe, to

also Brian. I the in Thanks, chapter QuidelOrtho like company's and to story. the I our to next welcome And to look growth you forward would

Let's begin the on Slide presentation. X our results quarter of first of details with earnings

a unless stated revenue As on a today's call reminder, otherwise, all constant on year-over-year basis. provided growth are currency rates comparable

financial trends XXXX quarter business in expectations first our and underlying Our results solid. line with were remain our

basis. First decrease period. is quarter $XXX reported Compared in million related. year-over-year COVID-XX year the $XXX revenue was The XXXX to prior revenue million primarily

you regions. total total settlement in million Therefore, X% exclude grew constant excluding revenue growth And with onetime currency, collaboration $XX also QX the revenue and of by if constant last revenue, from solid third-party our across COVID-XX all currency. year,

constant the and the revenue X% growth From in QX, of a XX%. rest growth Japan, in regional world and X%, EMEA Latin grew America, of Asia of currency, excluding revenue achieved again, which Pacific of growth we includes perspective, And X%, North COVID-XX in China America.

$XXX flat prior quarter period compared respiratory of the to million. XXXX First was year revenue

Excluding third-party business, period nonrespiratory to year collaboration onetime prior X%. in the settlement revenues the related grew our labs

First decreased revenue. to million which COVID-XX approximately due $XX quarter year-over-year, revenue XX% included was respiratory XXXX lower $XXX primarily Respiratory in revenue. COVID-XX million, revenue

revenue first Sofia global customers Sofia driven our XX% growth grew respiratory in quarter government-only professional base multiple of Sofia sales And setting. We strong was installed with mentioned, by large X%. purchasing respiratory the the COVID-XX Excluding as tests. orders, Mike our leveraged

for test, our this QX which greater the fleet includes and quarters, several combo of XX% testing is of demonstrating ] with This than the revenue product. [ accounted our consistent in past durability

compared essentially P&L. the down flat operating to total Non-GAAP were period. year the expenses Moving prior

the in to for Slide as high-margin that versus year-over-year X shows change favorable year lower made that primarily The sales, gross profit adjusted QX XX.X% comparisons. was prior product which was are onetime margin period. COVID-XX as well items XX.X% contributors related

'XX. comprised year, points expiration the summary, onetime QX points In were XXX QX related of government third-party QX to basis collaboration XXX tied product inventory in the in of from onetime items. to order And of to large basis an XXX gross reserve points basis headwinds summit last ] last respiratory related margin [ COV-XX in year. finally, the X

by margin XX% was [indiscernible] period. . in base prior the EPS $XXX year-over-year to to XX% basis diluted in was period. the year $X.XX the to in of work. Adjusted million compared prior others business and to supply the partially in within approximately compared compared margin. government year X $X.XX EBITDA offset points invested primarily Adjusted $XXX to manufacturing was actions Adjusted lower change adjusted were EPS on The Those diluted was COVID-XX XXX performance the and due and EBITDA the underlying chain, were million which EBITDA cost-saving benefit

the charge In of Our prior goodwill our year first tax we was recorded full [ the impairment which during noncash the America rate to which decrease $X.X consistent quarter the estimated the and billion in value with capitalization in ] line XX.X%, unit market decline a was with expectations. for the was QX consistent reporting XXXX, effective fair quarter. the North year due company's in with

higher flow in of working margin on improve to to Note sheet was the in avoid effect. driven we revolver. We tact Turning quarter, capital with on seasonally that to to We in million restoration do of with by the take [indiscernible] half $XX now cash Slide flow expect drawn as additional negative the cash Recurring of million the X expected . free $XX cash XXXX second and needs. presentation. QX. Along revenue $XX finished of balance quarter liquidated our the million during investments

designed sustainable We improved continue performance initiatives on savings are deliver and cost to margin focus long-term growth. restoration which to executing our and

benefits the the of half be in the from 'XX XXXX. expect first half these in realized to of We and initiatives second

effort in beginning and of we of initiatives. QX we amend loan credit And this Taking our be XXXX. maintain intend as implement in with To in an through to this this, April. increase QX year conservative, operating all minimal May the agreement light to of in In impact the consolidated these ratio leverage did maturity in year. maximum perspective, we this flexibility

cost Importantly, of commitment completed a and amendment total unchanged. XX.X is pricing we loan loan at bps of the this the

current leverage innate maximum adjustments be X.Xx forma specified ratio by maximum in was forma quarter compared approximately of the the agreement first we of including half the for 'XX. quarter XXXX, on including leverage first expectations, adjustments the consolidated pro need our to Xx, Based the credit EBITDA our EBITDA group. expect During to of consolidated credit end to compared pro ratio Xx this year, specified the

provide visibility. Lastly, some to current we updates based on relevant want our

] current expectation view now revenue $XXX approximately change are to COVID-XX million year the [ our Our prior expecting developments, we COVID-XX on full on COVID-XX subject revenue based is for $XXX was for in million which based XXXX. approximately

ended no in respiratory respiratory 'XX 'XX, U.S. public revenue the season. Second, [indiscernible] And be with for expected we a also immaterial in COVID-XX May contribution will the emergency in as Savanna expect reminder, XXXX. that U.S. of in XXXX health from the

to continue again in we COVID-XX the QX quick However, view comparisons of this challenging the year. Hence, quarter sales retail expect year-over-year in in COVID-XX we setting second cash to see significant 'XX. revenue be

of With opportunity give result Brian we've a our and communicated previously these are board to the new as CEO week, for current [ end President evaluate on low changes suspend COVID-XX and ] EPS. decided EBITDA adjusted our ratings plans to to rest slightly And our revenue, of business and this the to revenue, for to below the XXXX. assess 'XX and the our coming guidance guidance adjusted expectations be of at or Savanna

ask open intend the later please plans. the year able do guidance our We to when I to share resume for we in questions. are call now would operator the to to like providing

with first Research. The is Instructions] Jack Meehan the Nephron from [Operator line of question

Thank And afternoon. you aboard. -- welcome Brian, good

you. Thank

wanted just on topics. your get X to And maybe to start thoughts

CEO, taking . were were you you diligencing the as [indiscernible] the CEO as at First, role taking

did to about on one. the margin your profile Savanna you number Number what kind Well. once the is in view market through go you want period business transition your is like competitive where of That's this on level aspirationally, and this you talk just do You platform work of get view there. X on confidence right what to

business information that and the case. learning me around the with I business days I very took first I'm to somewhat But [ did the some work had to this as models on model Yes, amount diligence talented And to for here why the space thing. market a to the chain assessment business launching I of the and manufacturing the but impressions let business. role the into available been was say have time. that in of generally of have limited. new few your do areas a now, answer I've see in still here drive prior the development my projects landscape, mentioned, lot familiar of been business, first ] commercial the new I've details I'm all the are some was teams days a -- X optimizing in sort let am I performance long complex a with of systems, that experienced. things I job me lot work expand and think really in of this me what in of to models in to for very early the the industry opportunity have able And taking and just I been product having markets, of to the and here, opportunities right? I now supply my on where change and organization I optimization, that the days, I as said, And there and improve of I like on clear

opportunities have to CEO the flight of I see and by in are product along. areas general. been productivity improvement Many moving of and that here in some already more the in commercial interim the opportunity excellence mentioned just are office development identified the of particularly I the do productivity,

I'm our performance. with I sees on leadership as think the the improve to these excited those to here team things work well. opportunities And team

achieve a something to very So if about my certainly, reasonable do over more be And at think would certainly, second like that as I XXs would this margins To everything here. great we far question and going skis operating can. I be a this. we high can But get I to that opportunity. do want don't for look to do the we're business your in too aspirationally,

I then And ask guidance. wanted to about Great.

just time you XQ? kind come it line us could to the to Do So around Joe, with you you I give reinitiate out the think color, when shaking you're appreciate then? of where guidance? guide. before a expect relative prior Or Can

all, transparent first Jack, want possible. of as as be we Well, to

open updates did business . XXXX. And front some suspend we give guidance know we that on And plans further to we [indiscernible] So been provide in Savanna our XXXX. the to expectations assess because did point for chance evaluating at will COVID we they've little guidance our those revenue in in for questions a resume the a

that I data it's think early to too what though. say is, specifically

let add And Yes. me is this Brian. just --

Let the postponed to front to that a get happened. we me as of defined as Day certainly, bit. there do was year. that thinking as And everyone. when was definitively might little just haven't we investors get a result There of Investor anxious with to an in add anxious of that and -- can an things Investor the I'm again, soon we Day. we're But before out interact end I'm out the And

of is from question with Blair. line Brackmann the Andrew Next William

what respiratory thus can view you endemic you revenue Buy is from on on full on appreciate for Andrew about levels the Joe, us your Savanna season under and COVID realistic talk provided Hi, this Maggie today. color you're the based what seeing everyone. point, I you here? at But This belt with far. as

asking you're correct? revenue, before about I And COVID answer specifically Maggie,

[ revenue. Yes, respiratory ] and just COVID

Yes. Got it.

Okay.

use the on customer, million We really did size let remarks. to [ We as just QX, down be hit you to the up spoke this scripted ]. market probably we X guys as as of projection the that's We But do accessed revenue $XX right don't We and have accurately industry it's data did don't COVID think COVID The first. believe research timing. -- clear. points said me full take is in we we and well well you the peer the to in the we've year COVID So the proprietary heard And the X, COVID million say that and revenue before. as with truth come predict no about. data $XXX number. triangulate

typical in indicators, things evolve QX and And And expectations fourth low obviously, on we the revenues although the lean given continue monitor we we as levels. expect continue higher to to year all the respiratory we'll be will and in carefully half the COVID quarter. do COVID season be sales to third adjust at in progresses. second the that, And and

As flu of far for methodology reminder forecasting COVID respiratory place on mix we revenue specifically flu-only as was methodology year, combo put market did the market products, based share, flu revenue. the say, on of tests and a last I following size, that And the in outside new And market size. of number test. mix of versus

Based much QX pretty on expected. new have say I And numbers the would that methodology. as that to out turned

flu you typical And test. as think we think XX half, And expect XX for that of second range we've XX that so we million volume into is remember, roughly as size you the balance Europe of a said to million million season the market about tests. of for of the us, do move

somewhere pegged we haven't going think that any levels inventory seen That's in And other where impact it. or the so materially to would our we middle. leading in indicators we're we've land we any forecast. distributor And changes

there So see and maybe stop answers question. if that I'll your

we And Yes, quarterly pieces margins. couple those I that's of in we saw just thinking can a on of rest on one about the maybe we just year? should be appreciate throughout how as then the gross go QX. the basis moving But great. another --

Yes.

This than prior no we've what in seen different So was Yes. years.

have to some going seasonality You're the within quarter.

within our line be gross lowest seasonally that And quarter year. gross that of as the bringing -- we're margin the revenue amount the lowest a certain is costs down. there's So QX will of gross our for margin typically fixed margin

you see then go -- even QX higher revenues in and again, will respiratory seasonally the QX. on the seasonality the be and will QX QX back based up, So and labs lowest

the the year. the margins back would go So up second expect of in would we half that

from James. Andrew is one with Cooper the of question Raymond Next

thinking where in-flight call find have and in started the your maybe in the sense of the to the margins earnings $XXX what maybe need motion to versus first, about and target and just are underway. base million year, out cost to to you give the sits maybe saves and are already you quite just and we Brian. get as not that what's in us a terms Maybe identified it trajectory today? go can first for for Good

Yes. I'll that Andrew. assume take I question,

annualized. count completed recall X% we're ways earnings about head will count head last the those to reductions X% that organization. happy the that did $XXX and I'm on the million of you a talk to improve of at to say pay we've the majority call, reduction count in So range we look continuing to And to continue and

XXXX. expect positions. of that to this XXX We million which see $XX the year. complete And midyear to the other of majority in going this the That benefit [indiscernible] by is we half of reduction, the we of be expect announced and primarily about around be half year, second to million of SG&A this $XX first in benefit the will in again,

It's note count probably important were within level individuals higher focused also the head on a organization. to little reductions that more these

position going to of to XX% look out closer So we're even level ways We're our total XX% headcount, And we on taking company because to did X% higher continue positions. to the more efficient. this to done. benefit, X% are for it's make focus though not management it's reductions to again, compensation again, and

being about But typical we that should write-down be quarter. to obviously from fair And about talk at which that's of Or when it about to called a gross Helpful. about way how Is piece, margin on it, maybe assume a just perspective? won't well. on least think that a think we lowest, the we're inventory repeat? I hoping as for talked -- one a adjusted since bit the clear, trajectory Okay. you absent out a just the just XQ an basis, sort that more just the you

Yes, that's true, Andrew.

and prepared would we QX due good really reserve So remarks, reserve be inventory expect overcalled the see margin question. inventory you as low. by QX. I significant And a don't I seasonally QX was impacted QX write-offs XXX guess, an so said still basis since points in 'XX, the we a in about to

in, if just maybe Okay. And Brian. one I then for can more sneak

ask shuffle. it think but tried maybe I lost the it, in Jack to got

platform, think Just on particular, what's forward? what's kind in actual your mid-plex of how the kind molecular about think ability compete with views you out of about Savanna attractive of in the path as marketplace, product? product like that And to a go you and the about do competitive kind that

focus on offering product, think tests competitive quite in menu is it's and the platform have is the the our that I my attractive as competitive -- to point frankly, an quickly we challenge deal. can and menu. so a we as that getting And of

is the . RBC. Next from line of McNamara question Conor with

-- you QX know go Because can in involved sales way Welcome it gave guys into just do of But to that how you comment you on looked at San you you respiratory haircut And kind the you how the assumptions were guys it about some in the of big involved to the you a versus forecasting looks Diego then the of blue are that. pretty guidance? like Brian. of assumptions. talked took some when Joe, how the you you now? did kind of I

involvement I'm curious what versus now? just was So prior your

that revenue overcalled feel year that, a in as pretty of we about good those because that mainly it. we're continue X COVID forecast market And QX market said question, said flow. to that place going previous And I and happened through [indiscernible] products. [indiscernible] the we mentioned to want share because put using last that I And methodology use and variables new I . technology what in again, we refine past, size, that than that unfortunately. of and repos know on other to And don't say in did flu of as rehash too QX we've to much XXXX, I

to outside product, and market But big with to Ray, right year, mix market could. traditional control we our new we how into very leveraging compete we both on fluid is the our we this we a as able and The have coming drive if respiratory differentiating hold is, decided right the we are be Joe, driving is control. doing inner think Joe are of we [indiscernible]. gains, which good. is really said, I if demand get mix what are the season, with share the This and season price. to fronts, feel methodology determine of and I take combos, Look, men

only So we method a we I specific we not have stay do we're how think good how forecasting, that doing. operationalize for KPIs and we very for have

so in of And that's investment I'd this say trying we coming time for is what COVID, year traditional number. the to on the spent deal right a good on triangulate

question asked COVID-XX. was outlook our the And earlier, on

look, there's that I from think information group more that our [indiscernible] the number you analysis the from material of wide pretty we've but done , think, in to we've from thought. with experts today peer the still covering other is I the that $XXX million we market feel and shared range industry a well

the number give what take beginning then and -- year one from at launch. But just of we is the we also can't last you year not learned

important other monitoring what watching proactively have. the quickly than piece is of we call to warning we early can react KPIs the we're to more sure So market that make know think some I systems the we maybe we that's would up set

Great. just on Savanna. follow-up then And a

revenues took You out.

you for would revenue. there still XXXX you chance if before get what leading the took in do would is wait panel, thought Or commentary you you Is of kind was panels your launch it have So you is respiratory multiple respiratory sounds approval still just launch until you the into guys to. -- with Because respiratory? market? Brian, like a it there that's that

Conor question. Yes. good

we financial for So I things. look, X we are One, all guidance around Savanna. is clear think expectations the absolutely gave on

expectations. operational not with Let's confuse the that

move as STI. of we the quickly We not ] [ as that which Savanna respiratory, menu just can, mentioned, have mentioned, a but Brian on very is rest the aggressive as critical. as plan And

I to approved too our But we sort get as out what effort careful confuse in do products with possible. is . to them to an as unrelenting of expectations early. market will think be we soon want don't this the set is

question is Citi. of next Patrick from with The Donnelly the line

side, Joe, maybe covenant just some leverage on the you did. the guys restructures of

through all I the you you work piece the the [ way trajectory leverage as around? Or up the moving think think here, think but the the load X.X. we to it's the here. and production How do you do there? EBITDA guidance about debt just that think year the I the just way our bumped number on ] Is just X.XX about how for leverage

ratio we're Patrick, again, it Xx the clear that at of pro statement sure pro included and to of is from I credit comes make that to and the when know EBITDA -- forma I just QX, at then everyone sure EBITDA make so the forma year I this just there's financials be that ratio allows Xx quarters, leverage the said every versus want agreement the QX. savings calculation. the in several credit agreement for adjustments, on covenant face I last think in to -- the financial leverage And allows calculation you run credit agreement there's that straight

QX and again, calculated versus will X.XX ratio, adjustments remarks, credit said be QX. year-end. -- a the up I And seasonally as will I a covenant do and lot EBITDA Based start likely expect from [ I for and I've the us. on in the forma of come down will slightly of little expect it seasonality X.Xx QX in around the pro creep then will before, that said ratio ]. a be what low would the to leverage including business, at prepared bit agreement

like we're feel cushion of got I there. So obviously, going we've And plenty to be.

bringing in that As restoration as leverage and ratio Brian focused very possible. said as we're be down earlier, to on going quickly

the in on kind helpful. maybe then And Okay. China. That's the business of core

over region the Can back about you're You there's talk obviously legislations Maybe seeing in there. the pull of a we work expectations year through then would that curve be there. impact what just saw the you questions been lot way of that the the a helpful. various just of bit, -- kind our decent little in potential some seeing some as business, obviously, and you're of about growth trends

that. cover they're for our pleased appreciate thank very here all you question. Yes. and Patrick, in doing. obviously, there. -- I China, the team that very with we're I'll credit to results the Yes, QX

as the think we maturing I think end, is team the But of changing executing in the shared I China quickly, market well drivers a lots it's is It's in for focus quickly, there. different us. business going in in the point across portfolio is we're increases and seeing the We're well. rest of some leveraging of -- our the placements out there. general team business seeing care direct

position somewhat China stat unique of As prominent in we we're a you labs. may where pretty in have recall,

I think some [ us from in have major ] of ] that has not BBP [ not really our efforts like been wheelhouse. things excluded far BBP so the but

throughout -- very and that done that's of In those continue with days. an we've tune think the all fact, in that keep so China. we'll very eye and as and other in on fortunate rounds got we so well challenges I to feel on while won ground some far, again, team But participated have well the I of as we've a

going well starting and localization shape, go projects other future. then lot these and I for China the think we thing -- us things a as are and think to in of efforts instrument our that are manufacturing all help the and in we to R&D as take are is positive And some around forward us as investments

JPMorgan. Casey The Woodring is with the from next line question of

Brian. Welcome,

respiratory Sofia on So season. first, touch of conversations next customer guys can ahead around you

placed contracts number to of X-year Sofias a You COVID. during X- under

are would renewal now, negotiations I imagine. in likely So those

to can SG&A both just out the Sofia how you as expectation a that you and maybe increasing called us customers about -- submission for that head count are test. follow-up renewal then the through and any XXX(k) walk now a turnover process, So especially just that, talk in for and approaching with you your combo

Well, are I'll XX-K effort probably to of in about part, think, concerted the more they take proactive status reevaluate contract in can is and submission to the part put on be customers year are get front than agreements. extending ago, the a where a our in your where we question, back so I you I first first talk back of the we the AR-based go around doing the Casey, -- what

that platform. test. Joe with getting XX% ordering of efforts I of front we and customers more data showing creates think This business could on the the maintaining right? back for put to a around the of more that customers in sticky, is one displace. one of than the helps shared in them this prepared only points little but value remarks, It not other they shows the more something harder customer, what had, make test we're

that's so our a that think efforts good there. And shows I number

of placements went maybe we're trying there back were So and we're coded additional And that shape. in away, more a away, went a a look, couple ago, leverage know we're of I to think I focus that number base good I they seeing one as only. stabilized tests. years were going think probably for

the your being the on we of on anticipate . [indiscernible] in second part 'XX, question, trials Casey, season during 'XX

just $XXX Got walk That's then number. between reductions head that arrived February the number? at expectations million . if -- of now $XX through that's there doubled million. And you it. kind the and call to the helpful. Can And that adjustment count to if you from last how you've your just on

continue going million on not in of call, that think half on to $XX that to talked was executing look I have the half year first with that we in 'XX the million did Maybe want of get that that full we far the really And gotten going for we're that target second million million. in And on annualized had last $XXX number. again, $XXX about actually said, you there's always track -- annualized We number, the at then confusion change I first to about and 'XX. some 'XX. impact to the versus the in right but the efficiencies as we're in stop don't to $XX the business. we're impact

Okay. Great. the more slip just can flu here? number. in. was if gave COVID you what I new give guide You And new in the maybe Did one

Just curious if holding the full here? number

the the to wanted into update gain but more Again, on on guidance we that. and other further business combine give transparency, everyone not. Street little were did gets the and -- know COVID Casey, any Savanna updates didn't Yes, that we and of we those to in we X have because open [indiscernible] because come a questions we suspended has, spirit

There are this no time. at additional waiting questions

you Thank for call. conference the conclude your will that So participation.

lines. disconnect You may now your