Masimo (MASI) 5 Nov 242024 Q3 Earnings call transcript

Ladies and gentlemen, good afternoon, and welcome to Masimo's Third Quarter 2024 Earnings Conference Call. The company's press release is available at www.masimo.com. [Operator Instructions] And I'm pleased to introduce Eli Kammerman, Masimo's Vice President of Business Development and Investor Relations.

Hello, everyone.

Joining me today are interim CEO, Michelle Brennan, COO, Bilal Muhsin; and Executive Vice President and Chief Financial Officer, Micah Young. forward-looking our reflect XXXX expectations financial contain including current and will performance. of certain regarding call statements, management's which judgment XXXX This fiscal year

actual and are our could that periodic detail SEC. and actual materially the that to forecasts they differ our differ risks filings to our However, could Risk with subject cause cause in from results results factors are to materially. in uncertainties projections discussed

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I'll now pass to Brennan. the call Michelle

many to capitalizing and focused I'm continued executing Eli, want plan Thanks, be potential. today. management how with and the growth onset, everyone, ahead I stress earnings at the for for by team are on Masimo. I in believe Board long-term as growth us pleased Masimo. my you see team and you interim CEO achieve joining for our company's hello, thank been have call business. by of to first strongly the the I on the And to opportunities this impressed we At

Over who energized month, our many our by have by our and the patients' saving past I path culture. are had innovation-focused interactions lives purpose with By employees of forward.

a talent Notably, meeting. fact, today strong can seen what decline. we the team, since have rates annual have any such in is And seen to attrition critical With in not we future. limit there no departure and the accomplish

in. to right so We jump today, a cover have let's lot

Then around plans and Micah I'm our near-term of corporate to a governance, touch some the cover specifically and of financials initiatives. on margin going strategic dive improvement number updates. and will areas into priority,

Bilal questions. turn to Q&A us then answer and join to will We will your

during you to focused items the Board, earnings currently quarter. With on your business ask we those call during questions quarterly the this the and financial limit all by considered significant being performance that

business. strategic the of First, Consumer review let me provide an update on the

business. evaluate Morgan engaged strategic Centerview legal Sullivan and & our advisers a announced, Board Stanley we the as to Cromwell consumer as financial has previously Partners adviser As and alternatives our for

for updates provide and the delivering you we appropriate. best will are focused that fully outcomes we is on shareholders. when to the underway, to want this But our market process assure We

have review are headline areas we on resources projects portfolio for our we the of will opportunities a unmet growth opportunities needs. on Next, return. focusing high that the concentrating product on allocate excellent laser-focused the and ongoing. ensuring is we projects therefore, and clear market be to big At greatest that and is addressing R&D those will drive level, But fewer those

reduce not effort objectives. refocusing to this the our of contributing long-term found spending of we to part are also organization, have As areas growth that

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Finally, regarding leadership.

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quarter. to the floor the now I'll And turn over the into to dive for Micah financials

good everyone. and afternoon, Michelle, Thank you,

million, in was with versus end as in luxury year. prior million, business for affects to near the installations and expectations. capital represented were by last for Non-health of growth a decline as by in were continues range third and housing service which guidance related approximately range strong and versus and care market, quarter, products. upgrades. the line purchases the shipments growth quarter other We affected were product the top decline care our which well represented equipment third saw slowness low XX,XXX XX% our revenues which $XXX the X% $XXX end weakening guidance near year. in of For revenues, offset revenues the consumable consumer Driver our environment our partially were the our and health a is This be and

moving the P&L. Now down

our gross gross efficiencies sequentially quarter, XX%, coming and for manufacturing points increased higher health from third sensor year-over-year to combination the as improved operational basis XX of points for continue our margin In XX.X% we For care. to from Healthcare a impact XX.X% margins which of the Malaysia. consolidated non-health basis XXX margin and non-GAAP rose our a was related with benefit included gross consumables. to favorable and relocation sales of proportion care

growth profit last For was our consolidated non-GAAP year. business, $XX versus million, representing operating XX%

XXX third compensation and headwinds normal to make points very XXX XXXX. health margin from improvement the discuss detail of XX% moment. operating of second the share overcame and margin to basis compensation, expense represents improved the levels the our on strong We meaningful EPS points to of primarily in that quarter. basis a we sequentially a by per Our basis continue This we expense strong in rose progress points year-over-year of business I Even year-over-year XXX from across care performance-based earnings which organization. effective to due initiatives, considering quarter. return result of return our for $X.XX XX% the management was driven will more non-GAAP growth performance-based performance with delivered in reach Which

to update financial provide on our like I'd guidance. XXXX Now an

And $X.XX $X.XX. For $XXX non-GAAP $XXX XXXX, projecting are per of the to fourth quarter consolidated million revenue of earnings to share we million.

For segment, Healthcare million we projecting to $XXX revenue the representing XX% growth. of $XXX to million revenue X% are

to fourth For XX,XXX the quarter. in to ship drivers we expect driver XX,XXX shipments,

to For projecting of segment, the million care are non-health $XXX million. we $XXX revenues

guidance. financial our year to turning Now full XXXX

revenue of projecting [ billion ]. We [ a consolidated $X.XXX to now are $X.XX billion range ]

For XX% representing [ billion our line midpoint. [ the year, guidance in projecting Healthcare $X.XXX $X.XXX segment, billion to for prior of ], are growth now our revenues we revenue X% with ] to

are $XX million For of projecting a revenues care prior at versus $XXX now the of segment, we guidance million decrease the the which represents nonhealth midpoint million, to $XXX range.

margins consolidated gross nonhealth For health gross the full margin care XX.X% XX.X%. we and non-GAAP of of are year, includes projecting gross margins which XX%, of care

prior a an of increase we basis to versus which consolidated points the midpoint operating non-GAAP represents guidance XX%, XX.X% of projecting range. are range at margin XX the Further,

versus midpoint partially strong by to reduction our an at consolidated care the we non-GAAP due Finally, business expense range increase represents of guidance across care now offset $X.XX, management which performance EPS nonhealth $X.XX and $X.XX organization. the revenue. in the are a of prior effective from health the projecting to range

like earnings and XXXX earlier, I'd initiatives power on beyond. some in expect revenue had growth we of expand Now mentioned that which important Michelle strengthen the will to Masimo's and fully

the are we see opportunities business with that focusing committee We management R&D the the enhance on team done Board partnership we to projects are while will process have we profile, to new in long-term enhance of enthusiastic of work about our in date. our to about growth continuing expand and review growth resources the The revenue is the those margins. excited

growth. innovation-driven on is focus foremost our While

happy items things. show among other with the growth, marketing jet, We margins associated and are to generating corporate gross see actions costs, take expenses overhead corporate unrelated that reduced to our our do rightsize promise products on of also as top improved we as line revenue meaningful other expand such cost margin, selling reasonable drive not

we our long-term least to forward deliver as on growth identified we believe operating basis deliver we at It points continue XXX of is to XXXX, is to our But early, still additional and look actions ongoing. margin date will expectations. while revenue work

our we on context for XX% investors QX profile margin detailed call, earnings for EBIT a business. health August care our For

date, to As this be at least and we identified we XXXX into margin look actions take the expect to consideration XX%. to forward

please those roughly rate net we our expense diluted interest year currently and For of per shares in outstanding. $XX earnings effective have trying estimate and you million tax potential, approximately that to million XX% note XX

on to the work team update the the partnership review Board's and business continue will the market management of with committee. We

review strategic of regard our other decides update in made decisions publicly the will business operation a traded spinoff process, separated. a We expect a discontinued pursue treating anticipate being determination things, upon those not to no business the the has be the provide into final consumer With longer finalized. we consumer which Board manner to Board the as among in If a the this XXXX. company, January business to of next

still it the customers exclude longer if no of into has from for this quarter remains would provide our winning closing, the foundation and a focus for segment company we with guidance first In customers earnings and expanding with Further, built XXXX. results solid our this footprint for new XXXX. the in ongoing growth non-GAAP on our existing segment

incremental opportunity with And quarter of and year third As when value. billion $XXX the shown improve front itself slides in share excited new record of has third strength which is in last and most margins, company. X and per business customers ahead quarter. a as clearly continuing ongoing seeing a value $X.XX more market our for doubling end of we us are contracting in contracts demonstrates hospital our our years tremendous increase business. to that goal shareholder million we of separate now I'm year, within share strong and achieve totals earnings Masimo's about today, of gains in the our the reached health the was unrecognized core initiatives Which track importantly, XX% you to this combine This increasing contributed contract through have the through of revenues. the to our have consumer operating with to care our the than our

questions. that, the we'll open to With Operator? call

Sandler. with [Operator Instructions] your And Piper first Jason Bednar of the question line from comes

Micah, of as some to hear wanted in about stability well. business Congrats comments I great here. free and the on Michelle, weigh to feel to quarter start nice in your and with the a

or those spending in gave But over [ comments just direct greatest pretty on release whatever? XX% ] -- insight like operating appreciate plan care. focus that additional and reductions actions up in months health the you regarding margin the just really seems few have taken with projects the place focused today? and the that to actions we Your also still now take spending now have I taken to that for next the that have 'XX for to reflect place to does the press clarify, the on date return does on already between fewer it Or contemplate you that and

this. other And on point then one

do that XXX some Because clarify Just of have mostly can believe or points that part gross R&D lift is out that as we're you well? in of that basis was Or there we plan? the I SG&A? seeing, original margin

your much to of going thank for we're going between actions over year-end. rest your very But Micah question. question. The you now contemplates answer the Jason, to XX% and it to turn to I'm take the

health date. some Yes, of to thanks We're Jason, Yes, really resources those to going as the operating initiatives. refocus resources deliver these Those the our expect best of are care based just top that's margins in to as initiatives of And XX% the for we're be return. XX% date, that's line the well for going through taken to we've some things ] to we improvement our through on the and actions [ the XX%. growth least we've really going at costs question. organization, actions the working focus lot and taken to to drive year reallocate drive through that working end projects to on a margin -- of the

then about those of line. on feel aren't have corporate And things far, other overhead in actions impact reducing as meaningful meaningful associated good marketing top mentioned and lot so actions improved we rightsizing terms with that the taken will minimal products are gross that a returns. and that think revenue And and mentioned have So, that just of cost we've we the margins, really expenses driving we I that to contributing those we the actions well. costs driving

up where very So, deliberate being preserve those those intentional us profitable things we and are the for and making set growth about we and forward. well line moving growth We're top just sure target contained. that

seat help ask Really being one the we one talking operations-focused Are what's at But, helpful. the on prioritizing very what veteran, about to for to looked hear for just a process, just search here us understanding talking And that is the in a timing. then CEO? a not the search. Board attractive med and industry understandably maybe individual of tech an fill. maybe we're I'll you're CEO would sort also This important level Board or for love out individual, growth-focused next an

candidates. at are external So all, both First and of we looking internal

well the the like We want focused atmosphere. are is culture looking in a of for because of balance good to technical have and refreshing pipelines. a that med Masimo tech as background. have or experience family of fit to type a strong We as operational is here with would very culture at We make sure a innovation that we really

the . running So we that the and is ground come want the new sure make for CEO to right will long really and term. person in the hit

BTIG. And your next Marie line question Thibault comes with of from the

ask Malaysia a and gross be wanted to to with talk to I glad here get Michelle, question Bilal, Micah margin. and I'll to working you. you and on

of the uplift realizing benefits. lot facility, are I the a of already out? of on that sort the of would in we've Malaysia margin some benefit sort we Just seen? to see those has gross to roll volume timing And some of where continue know how the might you we portion what flowed of of say update

Yes. Thank you, Marie.

I if mean coming last you XX.X%, margins this over, or were guidance seeing health that now, that and year. I for X ratcheted into X think year, our we've stepped right raises. look we're good this think, now up I very care improvement So at up year

year. what now to we're So, XX.X% is up guiding we're this to

least points think year, XX about came guiding to we in came So up basis we're year. where we at into the XX in -- I from the and

traction So in we're seeing good Malaysia.

of are, our as course, Malaysia out for of Mexico. moving you We know, and manufacturing over to high-volume sensors

of terms structure That's giving us between those of great X in cost comparison locations. savings the

seeing are very flow efficiencies our margins. manufacturing and are good that through We to into starting inventory

around XX%. implied are margins QX our fact, In

and to very we more efficient this quarter. into margins we continue XXXX, and XX.X% Malaysia. So to very, as some we we're that expand move more well to we workforce over those into delivered continue production tracking with expect And become move as

just Okay. of overview here past, color census, My on general. then That's In us think thoughts in ordering activity. the as a season care some you've helpful. of well early environment sort OEM Maybe QX? activity, about QX, we really on follow-up any hospital health headline given the flu as

Yes.

think quarter, between that to last in So kind growth. contribution We're was we of terms census of somewhere zone. -- that of QX I talked probably terms That's -- guidance we're in what in now still implied result has stable. we're our about X.X% seeing year, And X%. it's census in in of and expecting in stable. terms very census, the we've been what for And still the we're it it saw with

are the So been had and can in very years. it's very business back stable, past much few where in than we been patterns it predict they better kind much the strong. of the to Ordering past, better than

and things as So fourth with in we're we move quarter happy are our where the for into next giving guidance year. us and it's confidence .

at Marie, then, to add Bilal. said, like is held flu far too Micah us. related has early it's everything One so we've And predict to point. season, this anticipated steady probably this But for to that thing

of your And Michael next comes line question Polark Research. with from the Wolfe

X a bone perceiving I'm organization product little wondering the a portfolio or deemphasizing to broader efficiencies? put you're you how meat look and just that as drive around more be the is on if here, share the review you X might opportunities willing or to to these

Yes.

are there that products we've few a So deemphasized.

One Opioid of is them Halo.

well wanted Opioids removing -- monitoring pain people reduce a for patients patients therapeutic on or the of for opioids Bridge, push we of coming that to remember, guys basically home a Opioids we're as was off Opioids. device on you which If as made at

So of we've current products our that portfolio. those are both from examples reduced

studies I of not expect on products also we done would progress the we really to noninvasive cancer, monitoring is add made Michael, would those bilirubin were had some have bring feasibility like being we And felt diabetes. to had we that and market.

we have So those. discontinued also

And Mike, too. can I just add that, to

want going opioid, products focused we're are terms hospital. though, Opioid In in Halo, that still we be area of using still in the are I -- be have clear to to we that that

business we very very, those it's still think monitoring, So now. those a I we really sure hospital. where that's of of more illicit remote It's some . the about to those want think products make we're as to efficient long the -- term want especially the a of of that more that's just focus clear to we're be for important road on in right will things, types as pathway. It's get much on and not challenging terms the we in things reimbursement, that users,

direct-to-consumer markets. The

Yes, yes.

is topic, you've starting trade As this team want Michelle, curious a Apple. this here comments ask how in? -- on believe. understanding trial I follow-up this the about the the investment again any dug My retrials opportunity does this learned Board the week, just has of secrets what on or pursuit as to I for view is kind Maybe this

with comment think to Well, really anyone. we an do it on where turn going news to is to as to very our over like And we I don't this definitely welcome. defend are that's are. You're to patents. would who active litigation Bilal, I What is innovation new leader,

actually did Thanks, trial started today. a bench It It's start. for Michelle. trade trial. secret captive The California

we're be predict the to at this of able timing time. and . updates have further So any don't we it, not to going

Stifel. question from Wise next with of your comes the line Rick And

now been quarters better-than-expected shipments, health shape. The strong observed One. in I of business guess driver seem I sales it's does backlog or growth. care X that performance X

towards As 'XX. we move

we some about thoughts early a drivers, expansion. Help key feeling we You concerned the revenue 'XX couple thoughts, potential the you're positive start should the gave build about there's models of of you're things outlook to that point -- us some thinking to as year from how our if can start of can further and we hints reflect Micah, something on our on early of just a so the about the for maybe be about about -- us the that margin operating anticipate sales see view? we

Rick. Thanks, Yes.

earlier did this we lay this So out year.

revenue, of kind planned because bit as margin I really it confident XX% some margin of on progress SET. at range look given a revenue long-term very is, it platforms, of plan long-range we're growing all kind off the think side. growth. our if as far the larger more we base. operating in of good kind think cadence was with of we've operating to product it one, and the you a seeing And as X% expansion, well I And in already very way little up June, we're growth just are I of as starting number We've broadened much a our frame

call digit So X% that at it, well perform as you somewhere between, perform growth to high as XX% But at we -- then continue to of X% automation, that long look rainbow of to range XX% term hospital of to if And SET of expect SET, XX% start growth. Capnography. XX% more. or that long for growing kind single you look brain monitoring to double-digit in if to kind

about of another things I'm [ laid I But is those as launch -- out. we well we're measurements and I to U.S. we're The that categories total to the LiDCO. we're Bringing now now So mean, capabilities last example we've platform continuous -- output and well clearance, the LiDCO clearance. rolling have as hemoglobin, U.S., U.S. and to very acquired we're acquired out. as that or that in add else even product Board, XXX(k) opportunity Anything rainbow we've that that combining want know And have that -- from the as able together, Bilal? -- always we we the launch that's really novo really really that we're the hemodynamics, excited one another talk one the cardiac about with we in we some another when new outside the of but ORi are you Bilal key we market start we're very the that platform the with with now so ] de that excited about, hemoglobin had excited or is that

I Yes. platform. continue going our we're mean to to expand

exciting Radius also our vital including the LiDCO hemodynamics times new designed that this the of wearable product product, launch we're floor. is VSM. that's Micah them this just platform, That's year. the our monitor general throughout starting for the care phases of One mentioned, And year and next

So it for exciting should be us.

just And might the enough for various of great. toward higher a many specifically Micah, or past kind it range like there more been that contemplated? toward you near-term That's the seems moving about for about Or some in through the talk you've you various numbers that -- Maybe would that ranges get and fourth Is wide get unique you've the as responses. drivers, of example, talk pieces? you something a follow-up, calls to and Thank quarter. push end the what lower the just XX,XXX for range? outlook talk the would again, us

Rick, more our that that OEMs. total terms direct around XX% our drivers. Thank that zone. -- represents is we And Masimo of What rest can placement you, control, the that's we drivers -- drivers Rick. of The branded of that in ship is

OEM ordering. on really all QX. it's dependent about we good feel that for But range So

into there. that want how thoughtful those move that's the don't their of we'll levels, climb. continue we things. other be portion of inventory don't to I be to to to and past, a -- get will forward. And as managing that steady of just want we to We are continue think dependent in range next move thoughtful going And of But hopefully, challenge of control we be that. lot as the types year. OEMs that a seen ahead own that We've want kind to on of we a that because ourselves is we quarterly as

prepared all really record over feel getting my the years. few watermark, north which year to past But we remarks, growth, from hoping is which growth that to as coming million really this mentioned year good is deliver $XXX And year, contracting be is the important in million we very seen tracking for to us an new that in, and already we're I for about we're drive level we've $XXX year, this the need at the out. of drivers

about I feeling very So think good that.

XX% up up revenues into that XXXX. we're Our due unrecognized to contract contracting, well strong very we set as and are move

question And the Matt your next line comes from Jefferies. of Taylor with

to a of you I cadence plan. about? tables the guess about kind than that that my think margin guess could I of that that XX% about points update talked question is over in Or that? you back the first taken. I talked year, earlier about XXX right this progression. year a had the know the basis from we beyond you've you on you actions the LRP XX% , do better think And do the getting to

you then to I points, better. past that, and not as at least next do look for think at we if think I expect XX% year XXX move the basis would

could the really deliver just sure we'll we growth improvement, that benefits over that the can see think term optimize into on really type projects. making is and that not everything this those to focusing back at organization getting put we everywhere long move only not forward as margin to most the it's about play hard above continue we're out So taking and But of refocusing us look And we really important that I cadence. can cadence. to but a

resourcing add, pipeline want sorry, fully Matt, in opportunities. I -- it's that important think to important sitting it's are opportunities but making those think I I just Yes, sure going that we I'm our after big those

improvement the as initiatives for So talked margin important just strong we drive our cost really we've some cost about. structure growth. as It's or of are

on here. about just of And components a the forward revenue, the go thinking follow-up

[ driver year. You in nice up going is think this installed out pieces about those stands improvement X% XX% had The to but ], the a really you that really revenue per forward? in base would X growth How utilization.

Yes.

bed know per terms you only how platform it, we can per driver. revenues. you really out of more our -- we're that's -- to support -- I to decision up our And differentiated at for carry think also and deeper, types future. something not revenue dig as that and higher those continuously look we're that is and the per see about if monetize think on laser-focused revenue of really if advanced driving really in some way well And Bilal's we're I algorithms we charging as premiums, patient. continuing And it's service technologies but that we things connectivity the build

forward to future, look that's do going more want base growth. talk I that installed be to than and we into something is think more going we you about And add move Bilal, to be anything the forward. as meaningful an there? we'll revenue more driver that So just per as

Micah just guys platforms. different across provide the as not it's now, you it just our but additional technologies pulse oximetry, we No, said, know expands

we're in the within looking or on at patient we terms installed as of really platforms expanding see after can expand a closely of base. we land that many So each basis how from our bed to apply per

line your next with Vik from And the of Wells Chopra question comes Fargo.

bottom what this just maybe talk already asked. end new So updated just of been top you apologize guidance that you and about gets the But to on your gives what this the range versus confidence guidance, in has your guidance? end

of say care terms of in -- health we Yes, Yes. lot front a Thanks, have we're mean, I of in I'd business. the opportunities Vik. us right now,

strength good we're -- also very monitoring, for brain growth there. some in see in expecting rainbow QX to in, expect good platform and example, We and

of the and really at on point. us -- of end, going about In we this dependent terms good of to census is seasonality course, the guide higher puts the the in of and it's at where of I just XX.X% what reflective think about range at of feel low which fourth the the all midpoint the our be puts the the of historical revenues business, midpoint. quarter, kind that's range really is

us things to performance we're strong So going But moving of to contribute we're how line and that end the in very about all to a it's growth strong. higher on to the We that's are end season, census, that can across flu targets, strong platforms the very set going some that QX, finishing year. of into in really it's think those if moves by excited range. next year that with up year, well our dependent the going see be of the

business -- a business, range But that's have to we the at very midpoint. nonhealth consumer of lowered terms the difficult is predict. In care

Now our is take that that expect seasonality decline that kind that and you the is some of look, there growth I mean, has I historical which range see derisked at really as of reflects the there moderating I we last range we if the historical some growth the that, the headphone and at a of look and think mean, we midpoint growth right core seasonality. there. in been year, that And We've in had quarter guidance of that throughout of this in to fourth business. XX%, year that started the business the

for thinking and And your as our tailwinds answer. and look next models how we Comprehensive headwinds year? next any markets end talk about outlook it. maybe XXXX. at the just Got you're for potential just about in for year,

generate ability Yes. Thank a that's our revenue we the base, us being to large know, revenue the predicated you year. I'd very growth a large markets, also base really a Vik. very have contracted per installed very for this around I in but strong the business well say mean, installed as end amount have, next driver. our that's in the the of is setting And year we up you,

that into XXXX. health on in very pointing into But everything So census. end it's strength going that care. year again, be we're feeling market to is with strong year next we're to moving a dependent the heading how fluctuates on for contracting, based seeing good And

and going consumer growth. seems introductions lot with to think business a there business lot going out QX stabilizing -- play have be of kind the it's that will market, but in and of be that how things moving to will there's we a more are hopefully on of to little predict, elections difficult QX. out terms to I That return a product In do coming more forward. that new and bit

comes with question the Mike from Matson And Needham. of our next line

Yes.

want production. just one on Malaysian I ask So the to sensor

much to to benefit what continue a that as get completed? that the year is how of to degree So here, the to going XXXX? be And through in margins is of we end

question, that Yes. you Mike. for Thank

arcanulas kind exit. and year. of capnography the of you manufactured carry that's about lot as a be with other will to think at going look some in going [ are, to expansion products especially in there. ], year -- our Malaysia working moving of as like that some we're if you of sensors this If if moving be we high-volume in we this into and will year, We look where next, we we it's majority margin exit made over other some progress other next process at in what's that disposables be categories the

year. things good those are momentum next going give So us all to into

And it's still early.

of lot a over raised you finalize course year plans. have at if And long-term to plan that expansion years. do were But XX.X% margin up would towards full the say, towards about of work we've trying of I this basis XXX to our X march year. already to the XX%, we as for We the previously points look implied

So that per we looking XX out, year. about points even about that's you hopefully, that, the we good we're at I but maybe and if feeling improve can right where think about basis XX you're very feel good now. And average

I Got I know sure doing this, to I Okay. but not something then just to it. here. answer incorrectly And make think want the I'm

that improvement. cost a that the XXX include is other kind that these you'd year, of like in points of basis but this from coming operating that it's So So from that year that also you're normal be that sounds margin efforts? just year, and in points have top And for would a initiatives, next a Or words, basis in XXX? included year it you're about other XXX kind XXX? talking on other about leverage in underlying of of -- improvement talking does normal

included. it's Yes,

of thinking we're So the XX% as all -- about incorporated expansion the initiatives in how as the that's incorporated least place, improvement gross into year. and well some cost put we've we've margin at next getting to

get -- I Okay. there on consumer Are dilutive because much business obviously to how finally, the -- out and going estimates you Would just expense putting know some potential be to it. the savings. interest put that's valid interest aside sorry, Masimo's on or or depend the the then accretive Got expense still you divestiture had those to EPS? previously. And separation. divestiture

Yes.

I I of business the we in think, Mike, on we would the in kind operations. -- decision, what can putting terms reason health so you the out model of prepared remarks, finalized is of the the because depending likely we're mentioned there into that as that kind Board move most really care discontinued

the also business, really and will about I'd So you it there count, what we're say, good the well the we're the interest XX% about health how modeling think as rate and thinking expense give the margins -- a estimate of tax for care share XXXX. kind as of

And of the your next Bedford question with from Raymond line comes Jayson James.

seeing the environment? from on on growth that congrats progress of little still still a just perspective. a follow-ups, And side? any in capital, side, Are selling the bit here. is of have you here. heavy I this few OEM And But assume it seems the on most a I kind capital random just a can the changes

on is us our But hospitals, purchases most believe still were year. seeing slowness starts I that turn at and to in when we we're capital of Yes. capital, looking the next OEM hope we and own terms side. of that for around

year, earlier OEMs and stabilizing. a pullback headwind for this we year, saw kind us and very past to that next sequentially into we shipping it's been as set in throughout up we point the us this think Jason, been that's but We're well as that's climbing going to year, move were we this move where a year. drivers of we of think it's we all

So.

is, as I assume just you hospitals flush seem to with competitive? issue cash. kind of curious meaning -- not I'm think the What it's do

the don't capital. believe imaging believe they're gone manage where being I projects, capital selective think of their they've put come hold now, I We on a we that. using a terms cycle No, through out -- probably they with that it's everything in of as they larger they're very of with their around competitive. think And few and their right

update come back coming prioritizing before prioritization they a where think back We they're But and solutions. those are think replenish based they or their next and were that on where monitoring it's start I today. they see So I should year.

of I That's On per after components revenue think the utilization driver, one helpful. price. is

about just you have over to could if take talk year? price, been so price last you And able the

is to price positive. Jayson, say, stable I'd Yes.

that of do the to the out modest of care you the do And our index clauses for tied or We have and are to equipment continue we each we So -- medical are part contracts. CPI some year. those increase price that get that. health

we're Of subject contracting. GPO a of to customers lot also under course, the where are

improvement time. that do But So there somewhat gives you each see prices some year. ceiling of a over stable modest we to

Okay.

fourth guidance me. Okay. hurricanes Is from I anything solutions? like I And the or last then just IV ask for it. assumed in feel disruption for have quarter to there

we No, for not don't fourth of terms terms our business we're revenue in and there see the nothing -- don't quarter. -- -- have any in -- is with anything of we disruption in

for conference participation. this gentlemen, and we today's call, concludes and your you ladies And thank

disconnect. now may You