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VREX Varex Imaging

Participants
Howard Goldman Director, Investor Relations
Sunny Sanyal President & Chief Executive Officer
Sam Maheshwari Chief Financial Officer
Anthony Petrone Jefferies
Larry Solow CJS Securities
Suraj Kalia Oppenheimer and Company
Jim Sidoti Sidoti & Company
Call transcript
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Operator

Greetings and welcome to the Earnings Conference Call for the Fiscal Year of 2021. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Howard Goldman, Director of Investor Relations.

Howard Goldman

to quarter Corporation's of welcome for conference and first the fiscal afternoon Varex earnings Imaging call Good year XXXX. are our today and me Sunny President our With and Sam Maheshwari, CFO. Sanyal, CEO; this Please note presentation can accessed be call investors.vareximaging.com. a Varex's at supplemental that website conference at that slide includes of live will and presentation on website. be webcast The slide Varex's achieved supplemental fiscal To after the quarter simplify to year references XXXX. the our discussion, all unless quarter otherwise of stated, first

events. on first are addition, year our described fiscal will cause quarter advised could anticipated. unless we from the be filings about with call, the are otherwise the sequentially are Risks In statements be fourth XXXX the fiscal our that assumptions SEC. year. relating projections during materially of current are prior are release and results to to of or comparisons XXXX risks in uncertainties based of subject to made those quarterly our making the quarterly than to to same forward-looking earnings year differ quarter this predictions future which that and Please and from expectations stated, actual quarter rather that statements, These business

nor XX-K. is Form in financial they to presented call press measure assume discussion this measures. item statements to that in report provided the posted These which reconciliation On materially SEC now, our measures. Form is speaks in release, today's information our earnings information measure of the annual to obligation a comparable of no financial our on we actual The update date XX-Q I'll Risk website. financial Additional non-GAAP to those substitute turn the we call, accordance over discussion. our of Sunny. our And on non-GAAP and measures anticipated concerning non-GAAP in GAAP on or and directly financial this GAAP forward-looking today's as are revise factors discuss could We including cause each contained XA, a for, certain not are differ with, will factors results most in from filings quarterly reports

Sunny Sanyal

afternoon, independent very excited week an welcome. Thank to public you, as was and say last company. fourth our anniversary Howard. Good that I'm everyone,

to on and improve continue save to remain throughout making visible. mission world our by invisible We focused the help the lives

are a We with in and products innovative continued their years, incorporate our bring and the and X,XXX market. over applications more XX last imaging continued world X-ray our which into colleagues decades. we spanned four suppliers, to help them, of leader relationships as well our for many we X-ray as systems and customers our have industrial and OEMs the technologies breakthrough our of mission-critical Global than imaging components have to to strengthen medical with

our sequentially end the Global for first of followed in results higher by Our recovery few came our towards indicating range. have quarter the tubes increased the strong and QX last X%, quarters during our start demand stayed CT the business. of same Revenues trend. guidance in

cost disclosed XX%. approximately increased of million, within previously favorable $X reflecting in continued mix margin as shift The to segment. product to improvement medical due benefits as our operating reductions, gross on realization non-GAAP was from profitability. down were Non-GAAP well focus expenses Our a our

Cash guidance from towards by flow cash driven diluted operating Non-GAAP non-GAAP in As a end share. came X% higher also per result, improve the at our margin million $X.XX $XXX to of our revenues. EPS improved operations. of positive

and to of CT We during a give replacement business visits the strong our oncology, is different some for which we by that bodes In see including quarter. some fluoroscopy procedures. primarily patient well saw business system modalities remain new the from QX. had CT our quarters, high-level quarter coming this into elective improvement, in for Much of began performed, has Let me for an installations, insight to stabilized, number future. our recovery. indicated driven previously our business how increase we continued in you a

flat to and the Port for see remained quarter. inspection is remain other recovery. Our screening well improvement. Cargo beginning low. other sequential also non-destructive Industrial consistent modalities security baggage showed as But verticals, testing medical and sequentially business as

me China, on are update now momentum. Let in we continued give progress you our an where seeing

in so to years. provide needed hospitals, patients in reminder, estimated called, believe CT Chinese COVID, we be will Systems scanner China, systems XX,XXX dedicated fever year These to few emergency will be As period. over XX,XXX approximately at of we with and a the rooms accelerate in intends new conditions. the CT CT infectious the government clinics Partially a placed response XX over departments local installation Systems, about that next order in for to

we're our China. As in Systems for a a significant result, seeing in demand, increase CT for new tubes

them components, few other and Systems. For our past pricing new to the with with Chinese Tubes years, OEMs working into active CT we've agreements eight and CT incorporate have been their

On models OEMs. CT you various the of the this current scanner by and different introduction can panel left rollout see of slide, plan

the progress have And couple components are development. of hit we utilizing that these we their next before, OEMs As confident, said will several models, new our with are making years. steady the market CT product over

Varex on, you give positioned how for some me let growth. Now, is perspectives

increase. replacements budgets, as replacement and elective require, service per expenditure will demand pre-COVID sequential revenue back the to exhibit $XXX procedure new of growth operating driven hospital by that purchase whereas, for pace typically systems The be to started initially Service increasing products, funded has of imaging million by, lead about of us business volumes quarter. budgets. are surgeries capital Our levels should recovery

new facilities recovery, thresholds. that Beyond certain medical systems, once levels begin utilization expect reach to for will imaging hospitals we and commit initial capital the

numerous systems segment, healthcare and gradual of governments key We substantial midterm, recovers. world the globally. also the years facilities revealed around COVID expect imaging modernizing broader China, to areas In expect occur that are healthcare, seeing as including utilization in the infrastructure expanding just to medical play see increase to levels. associated and economy The in increasing spending continued pandemic a of is in we likely Such on the will healthcare. capabilities. response, vaccines industrial X-ray role over like improvements, spending other In our vulnerabilities in has we're and preparedness many in likely

our I long counting new and term, These and we to the our moment. a photon discuss Over products detectors innovative expect digital which in our technologies drive Nanotube growth. technology, include will

since a what the summary are have headed. me Let of give from and achieved spin-off where a Varian as you company we we

We completing to Beginning be call the we During a phase, this and stages transformation. we we which last acquisition global entered Varex a consolidation our years, integration the major in early of expanding our consider focused year, X.X on X.X success. and first are up three company, public of footprint. a the new Varex standing second and

focused remain three areas. we Here major on

growth First, accelerating strengthening sheet; our our innovation. balance second, our through margins; and improving third, operating

with completed of our transformation that new increased first We limited the structure have element provides already with the flexibility covenants. capital financial

we're structure operating working Second, the the of improve to company.

is by operating reducing expanding objective improve expenses. and margin our profitability our gross Our to

new remain We the changing business expect third, changing And game significant recently place on largely we focused that we're recovers. made and technologies. based releasing on products, in cost as even reductions to

number new new in a years. an that our the coming release over expect products us investments innovative will of We to enable platform

X-ray have long, While tale multi-year is systems. been from adoption new our can that customers into of technologies several products recurring engineered imaging of take years, a revenues upside

for billion. CT complimentary our to is plan exciting photon We the photon enable At our has contrast the counting in CT invest our detectors. potential for Since counting detectors. energy using counting An counting CT we doses our family discrimination. are entry to quality to detector modules. market of photon new ability good believe equivalent include introduced resolution, by Conversion, at $X.X produce do products acquisition business. continued should Direct detectors new tube to compared available to our CT amorphous soon detector is and to their lower into detectors. very These We RSNA designed expand evaluation. our of Our tissue soft modules photon Platform detector customer high the Z produce last application due CT high to dynamic to market addressable we the market, images to doses technology enter the digital These have technology. silicon low at year, Detectors technology leverage precise be images which

of may the the take While this excited are technology a opportunity. adoption about few years, we

technology on work Nanotube BEC to imaging. our with joint continue We venture,

We are cold a cathode multibeam developing X-ray nanotube.

intend have on industrial We providing so are pleased far by verticals. segments, In grow the extending our made to and progress with into our select to we we future forward look development. technology updates

and systems. We verticals, forward full components been and may focused subsystems our in imaging develop certain have we going on

in performance the over excited about greater let Sam industrial to talk we that, hand are our With are about financial We developing. call to detail. products me

Sam Maheshwari

year Sunny, and Thanks, keeping wish happy you families your hello, and a you everyone. and very and hope safe all are I healthy. new

indicated, our fourth of sequential the first with of I provide those quarter fiscal year our As XXXX fiscal comparisons a will reminder, XXXX. unless quarter of results otherwise of for

see we our in business. As Sunny mentioned, begun have to recovery

million saw an in million, sales were Medical of million, region. growth. $XX revenues. revenues XX% India a the increase in of million America, from $XX strong $XX basis, grew medical China. On XX% X% million X% were XX% was of quarter $XX Sequentially, first robust $XXX million segment in revenue a saw while Industrial in revenues growth quarter APAC revenues quarter industrial revenues. sales or of regional total We segment XXXX. or First fourth $XXX fiscal total and the

result basis. now a Let cover our me GAAP on

quarter. compared GAAP quarter diluted to on XXX XX%, of per from share quarter fully $X.XX the was previous loss $X a expenses operating the First by improvement substantial basis. was lower basis are a fourth million gross and margin points GAAP

in QX sequential measures ahead our of the previously now Let website. of XX.X%, points that midpoint Clara manufacturing the posted communicated of Gross itself Comparable basis. exit Santa quarter results the our release from from significantly note we improvement in and our the from of fourth been margin Please me stated operations completed earning was a expectations. schedule. ahead have non-GAAP included our XXX previously on GAAP basis cover

our Santa savings As reflected a result, related fully in Clara results. the non-GAAP closure QX were

want QX to had as favorable our from the to QX cost second reminder, compared reduction on and the we progress Overall, efforts, to Just realize that previously margin we from benefited mix quarter gross savings smaller communicated a a product product expected you when can fully margin onwards. customer to general, segment, volume. performance mix sales from to due remind higher and medical I and that within by levels. quarter mix fluctuate between gross our quarter concentration, segment utilization cost In to each factory extent industrial,

lower from to well quarter down quarter. efficiencies spending decrease realizing mid-XXth of the sequential initiative the year. prior as quarter. to R&D are operating in previous efficiency benefits fiscal in this Non-GAAP expenses, R&D initiatives, of our When level. basis $X in fiscal was There's and to from the targeting reduction to One the efforts, pre to was volume points where of R&D expect is returns of we as GAAP materials. and compared quarter compared occurred fully improvement are million due in end operating and a gross revenue COVID $XX in we as the manufacturing quarter. gross our complete that as of loss our non-GAAP X% in million a are the due XXX and million, revenue in earnings to lower margin improve operating levels, Non $X the spending XXXX previous servicing previous non-GAAP in $XX million million, force XX% we the margin by expenses first $XX

being opposed non-GAAP fourth profits annual million, or tax As $X the first tax the of QX compares per interest Non-GAAP net prior amount $X.XX quarter about to diluted incurring was our the quarter quarter million per $X in in in paid expense to the XX% in as we $X million, net per started expense The is in transition our generating approximately or losses that at was to diluted earnings million. Non-GAAP loss a were $X.XX earnings or the actually QX share. $X a $XX although cash few operations quarters. due we quarter, quarter in This can vary. from share. unusually call, high prior outlined rate million

a by turning by accounts the accounts balance Inventory reduction by payables is also million, priority us. decreased Now $X for receivable decreased the and quarter. to sheet, million, million inventory during $X decreased $X

and the end initiative We target $XX $XX inventory fiscal combination lean this products. on a velocity achieve year. this million have and early implementing make million programs, continue of through chain started by this a progress completing to streamlining supply tend to discontinuing low facility to further reduction consolidation, to our of We

need a the prior quarter by to $X million in offset support the partially been only as inventory quarter. declined of from raw bring have to result, efforts in reduction our However, by first in levels materials growth higher sales the

$X Now cash the the moving million cash sheet, to of cash million. from of million. $X the $XXX information, million We $X Gross was ended debt flow flow prior cash quarter. on million. Adjusted $XXX an significant quarter, in of debt about operations improvement the and balance increase with was $XXX first $XX net million, million in of EBITDA that from was a and quarter

open the questions. $XX and to our between outlook in non-GAAP XX% moving $XX XX% on share expect our million per business that, $XXX earnings the will up $XXX diluted expenses with now and margin driven by based continued gross And Now for These operating call non-GAAP between range are QX, to non-GAAP $X.XX. and your million. of million revenue $X.XX for we in we expectations to business, recovery between and million,

Operator

a will with conducting Instructions] question from this we question-and-answer with question. proceed At Petrone First Anthony session. Jefferies. [Operator Please time, your be is

Anthony Petrone

Sunny, and sense just offset where on you particular, Sunny, by of end pivoting detector just can And us how driven medical Sunny give a indications follow-up seeing side? on much for is there, in good a you other recapture and by an quarter And and then couple a you're Sam. starting then that strength few seeing versus maybe with congrats was quarter Thanks, of you think components? bit were a medical, any dental, And little to driver. a sense China, by a was are with I update strength? seeing year. tubes and indications, mammography last the flat maybe Maybe rebound us where can for in to perhaps a you you Sam, maybe the start on CT the been give panel

Sunny Sanyal

Anthony. Hey, Yep.

the seen several thing one CT. quarters in So, for strengthen we've been consistent last been that's has

couple we've So volumes. like increase these seen ongoing some on uptick the fluoroscopy, by areas medical a side, we've procedure visits see and now and strengthen patient in oncology, in driven to continued CT, and other of in are

as For the soft was down, be quarter, continued dental has quarter, was to mammography also particularly, soft – well. and this we see quarter the slow dental dental and last

recovery So in the China, and this strength quarter from China, a And CT market. us primarily oncology, for strong fluoroscopy about question came is your CT. very

-- CT. we China, that go in as with CT you voltage and other We and pull means through components tubes to high there components sell general that So that subassemblies that, was know, sell related CT. of a to connectors are tied

we production Your has, detectors, and know, about our is Wuxi about, question there's there detector in you – up talked running.

specific be to Petrone when industrial, uptake here. of on on airport gross savings two a In Santa you've We gross producing there. And helping time strengthen you - continuing And I this do envision customers On Q the can leadership mix? get – update much for on there's X% and in in area. our our security the detectors businesses from strong there an you But that cargo and And But how to relative details screening? being about we has our general, would I China. solid was then the do us market pre-COVID with Nondestructive in rebound detectors on is begun – customers and strong our industrial see to that margin, market referenced those and been are have CT. position dent Sam sequential can levels? – Clara Anthony particular no that dental in When seen you'll we recovery at form Thanks. well think have think give in and Testing margin. in

Sunny Sanyal

Okay.

– a related the in – non-security non So, on vertical. the side, me with start let industrial

the Nondestructive that those based. So Testing NDT, and fairly inspection there all is, other – was recovery broad

– of aerospace automotive, in inspection. is of – other exception saw verticals down. aerospace, battery recovery the food we, seen electronics beginnings in inspection, still With we But food most in – we've inspection,

encouraging. well, year. very cargo expect amount start recovery to see so security in Security second And and the the been of half some and that's seeing particularly of we inspection,

been some our we've to to – there shipments had scheduled. because as orders tender actually wins that delivery have those for translated that we're As But have wins sooner with in COVID actual us, we're getting those and by challenged orders and happy customers into you've tender installations due will have see to were specific been – noticed you has translate us. later our the by not customers, side has their very been our and there might activity noticed noticed, slow, major or for

Airports in story. to that second year. half different of expect be We the the

and in tubes that a our call but to or We baggage have a a travel-related little at business I increased passenger into yet some major nothing go to uptick airports equipment, modest mostly translated seen the screening bit strong -- tight has of can at that activity it that contributor. airports, as trend

Sunny Sanyal

Sure.

is I address and -- on So to this will your question margin. gross Anthony try Sanyal,

to of cost about mix, is from related than in volume say X% product that call uptick less QX X% sequentially less improvement, QX, what here. saw is about we we slightly and X% X% improvement to related is due to So to bucket,

is is eliminated X%, to within Santa our migration, efforts. from And Clara X% in cost at So of QX about a bucket, --- flowing QX, X% of cost that is number we X% so which results. the reduction now the that positions fully

X% Santa that. and outside by yields Clara, X% X% improvements, like Santa stuff driven of improving reduction again is cost So, then another Clara, and productivity

and in the less So than in that's overall X% improvement one in X% cost, volume slightly area. and mix

Anthony Petrone

I'll Thank queue. back great. That's in get you.

Sunny Sanyal

Anthony. you, Thank

Operator

question. Our Larry is with Securities. proceed next your Please CJS with question with Solow

Larry Solow

questions. guys afternoon taking in there. good my me, Excuse morning. Good for Thanks

coming number. is -- you sort target that know is sort the high-end a give getting not Sunny, XXX lot level levels, pre-COVID variables a that maybe – which in the first Sam. kind -- just back of, you, and see you of, The it of, question. mix of a to some it's can for areas question, maybe your and high as I million sequential, sound But or do and lagged know, trying flat improving being whereas of difference between and you lower it plus your you low-end with the or medical markets end other if to sort back there? minus. of the aggressive bit your you maybe you And there your that's like, take position, significantly of there, between decipher, does the little guidance, a the high-end actually

Sunny Sanyal

provide I'll Look, color. ask Sam to some additional

Let get the maybe type have just tied my back me to to we'll ongoing there, medical. to to in to -- XXX rate. – there, say we strength up introduce running happened to XXXX answer when that. get things medical questions XXX needs to about talked two we part levels, that see. basically latter quarterly your get recovery recovering -- to To would of Well, of need and in When

well. CT-side us, business Fortunately medical we continue there. for the to expect our strength see – of is we And doing

the has will wagon year-on-year-over-year pull that previously than basis. harder So here medical -- it

broad continue medical -- to the have do see we get well think million the that I side, more our to to So to But the in expect level, recovery side through industrial we'll CT. on is some based. to XXX

I'm And likely the second the that see cargo. recovery So happen in year. happy half continue some we'll recovery to we will theater to is seeing of we're that in the towards NDT, but with need --

-- levels, but be trends a we’ll encouraging. have timing, to the XXXX you to its broad that then So get all recovery are I to but based can't give

Larry Solow

like fully markets almost and wouldn't recover fully in to way, set have To quarters. sounds qualitatively two it another I them Okay. your recovered, all expect not it

macro it at, as now, does growing not higher were yet, me, on maybe to beginning, full like be almost like get seems when especially level. even Because to not putting there we maybe a China a at recovery, above a full qualitatively can that sound at back And you're look we and but right a number it from so, maybe XXX of a year we level than I number on with assume XXXX that's XXX just it, recovery, couple it quarters, to ago can the right? we

that an how encouraging it. So, to XXX I me is at and XXX to look sort number, of that's

upside kind of I'll could what's just supply number the to gauge out figure and So what as we even out? that look in

Sam Maheshwari

again, for going Yes, what's is so well us CT.

to hasn't to it'll need is well, and recovery so the dentist's grow if see I've So also and that you're this possible, need office And medical there. people go need about from to be recovers, need It to in dental they talking back. XXX, looked firing to recovered. We for good it then confident get uplift scenario, about there because We're in on with you're if will and all other CT situation at it implants every see still is area continues mammography, CT all get we the time, to the right. getting they’re do come talking need and cylinders we're than dental, all At down. modalities, will recovery and should us.

Larry Solow

Go ahead, Yes. please.

Sunny Sanyal

I’ll below also historical industrial is add level. its that still

comes also industrial So back.

also that here growth moving can add forward. So to

Larry Solow

guys of fundamental could of XXs, is obstacle get said, had XX%, settle as of to or not that of is into that And several sort on that that back that putting XX%, for that sort could just get you to there ever low the Right. sort or ever that levels, is to maybe would gross we sort a targeted end range? inevitably what you of a that -- timeline maybe even pre-COVID back -- -- mid a spin, margins get years we cannibal the in XX% or it? post a something Is couple targeted without you even

Sunny Sanyal

Yes.

Larry. the address to questions, So let me try

we area. upside look, compared and we servicing And manufacturing here. in going initiatives volume there is to to what some right on also reported, So have now just

gross something completed, think type efficient back, plus volume get these margin, call XXs these as it I as the comes mid initiatives like of So minus XXs I'm looking that. and mid at

Larry Solow

Right.

Sunny Sanyal

completed, goal, range, volume that But and once to need and I gross our once that the still to is that and that new highest you we said margin, would of the boost. that, XX, XXs, beyond back, for these think us are is beyond XX% target new then provide released these technologies XX%, be you and products type initiatives And goal.

the volume million level. type course, goal extra also and to we driven will new as XX%, XX% quarter Of get per us, $XXX of need But And to say margin. boost that of to that definitely cross a do is help boost us we these XX%, products type gross give a target.

So that's how in of I margin. there see it, gross getting terms

Larry Solow

Okay. about XX,XXX Great. $XX,XXX. like I by tube? the sounds And these -- period, question is of the sort if machines then like that recall, you opportunity. last number one that's or you I of of China on it on the Philips, you think machines, Sunny, into Is there the machines XX,XXX is, machines of you the -- only XX are like the and the do just tubes signature or slice still XXXX math and who and if expedited of are a taking can, China And XX,XXX average And and be suppliers on if that I sort spoke primary know mentioned, sort year CT is the price of could the today? still go

Sunny Sanyal

Yes. So last let part. me the with start

OEMs, it's to an terms -- we’re in leader. And of market largely us Philips from and sales the global a OEM suppliers. So

mix. on depends the price of terms the In average

high it's CT. from end different of [indiscernible] of because XX,XXX, a CT a high variety So as to it's mix not as

is and in But acceleration around our XX,XXX of they the has prices. I call the out a let's different, referring purchases, you their average to, trying there the bracket, as it's to So thrown say plans. so are what news say, customers the is CT good number by which been the will were

capacity And planning asking same the deliver. to well to what they're be put by in to to As our token, for expansion thinking as need able be they're they capacity about us place.

about years, clearly expecting over they're the in CTs has So acceleration. been range which next the of XX,XXX few

in is the other -- reason has we by this is that which kinks exposed the do inpatient and are mentioned sorry, their and separate here governments that's Chinese the pandemic facilities would -- have similar, also prepared healthcare make -- delivery that doing the in the so the armor, pandemic. the from are way, process want for is as earlier in -- that they China expect the to their main remarks have want to weaknesses there sure that through that facilities And I thought we where shown diseases. am alternative government, particularly something the been systems they for this diverted infectious for I particularly in expressed the patients they And to the

notion So of that's this fever. setting up

of they're clinics. think to I part same are campus calling facility, it clinics fever of it's the an adjunct separate facilities are basically same that or part the The but fever hospitals the a location.

of consuming barely their capacity and broader of of to others, the broader and the care their then if downstream issues which And they mess patients COVID middle hospital endangering the And hospital hospital, they're into ability so they to realized capacity pandemic. they're kinds to bring want to they've health results the the in hurting that in equip it, manage all population. deliver and

very actually set So is here progressive the the up by this thinking a clinics. fever

they equip the And would they've with that for said so also emergency so faster rooms CT that scanners, [indiscernible].

play countries situation, And watch this at elected that situation. one officials as again. career the a on are happen this there are in looking many countries Now this that no in forward, and their wants are to political many breaking

general be these closing push we a gaps. that will So there towards believe

medical delivery. a to need you will you thing delivery, equipment, going for ongoing is this we us care where it's health thing once do And thing is an that, see and so And the be in good care continued particularly first imaging. investments

to this expect trend be we So for us. favorable

Larry Solow

I Thanks color. that appreciate Okay, lot. a great.

Operator

with your Company. next with Our Kalia question Please with Oppenheimer Suraj proceed and question. is

Sunny Sanyal

Suraj. Hello,

Suraj Kalia

quarter. Good afternoon, Congrats Sure. Hello? the Sam. on Sunny,

Sunny Sanyal

you. Thank

Suraj Kalia

hear me all can Sunny, you right?

Sunny Sanyal

Yes, hear we you. can

Suraj Kalia

perfect. Okay,

drive out I'll your me you into to show that very listening questions. Varex very with the Sam starting commentary, a I outlook, And technical initiatives understand drill are the And – show the about Sunny, two to then are start results. sound X.X. think you So rather to I and high place In in Sunny, and level question. numbers confident so the putting let down specific

can some see they end in up of sales question and about of to scenario? that comments mixed. cycle, I the leading can Maybe are happening know, to terms were get indicators, from from the guys your Your we the phrase what's terms seeing if somewhat trying the plan you out you in end trying markets, end in average just markets, differently, customers what speeding

Sunny Sanyal

we So, the actions our the cost are we factory improve which place Suraj, the efficiency. first, lot – is to quarter performance, initiatives productivity took that a helping and confidence last quarter in reduction actions that our outlook, of before a in took, that lot that we improve of put financial

So my Clara confidence completed. already have the my been in And, had comes non-Santa the those that many part completed. actions performance and from or you financial of and Santa know, fact optimism relate both our actions to And of Clara.

factor. So, for – visibility, looked confidence have that's as to clear that those, we one line benefits we the from sight so of

markets, So more second, frame end would terms know, optimism confidence. in you than, so I of as it super

hospitals grinding fluoroscopy, procedures in in recovery, when I broad back had when oncology, our previously. see which really performing a surgeries, going when means based see I to like recovery that the in people or elective the volumes halt I come modalities, are to that, in volumes general see So general and are

months has COVID though are in positive and like – to itself allowed that though a side even care did not Europe is that's health the countries it state, lockdown still a – ago. is delivery rampant, get even in frozen So nine indicator that's

top locked incoming moving for fact seems recovery a be that on recovery, us what the what layer – look locking us the you our That's seem no is now So see that of makes orders – to the delivery. starting orders to that's that and in confidence when one us to gives direction. don't seeing and be right that hospitals means inbound we're and we're and we that's at as healthcare that down – if believe down,

said, some in those them haven't mammography the quite been – has and Now, we end you know, to those by I see dental, geography. where where are would our happen way like vary like markets recovered

pinpoint, are another surgery you the inpatient know, the seen other haven't the and I and inpatient when, has exactly to fluoroscopy in that I time, procedures coming the if that very trend been and back. yet. which good at trend, think take I you space when same and like hard when So but general outpatient

increase will performed. the I utilization start So mean, hospitals replacement orders the for mammography up, and new come then procedures, moves start space. people procedure have forward. starts, clinics volumes But we're in the capital larger performing dental increases equipment. the you these procedures being outpatient are in But volumes -- seeing in predominantly placing are once means the replacement come goes these volumes back, the once then that yes, when There cycle

as optimistic keep as that the replacement clinics, to those patients we're these and long will handle if going systems new start So, come capacities, systems to back. of older addition then the to of

all trends. are while positive can't timelines, pinpoint So we these

Okay.

the the flood the picked fact that up optimism a in have there's that of pace different on hasn't -- the general be going introducing the and many that in near there's a in market later the are because now distribution even of vaccines. yet, vaccines there's -- throes so that future, though to that So manufacturers vaccine

here contributing market sense we're is towards this all of a sharing. So end optimism that

guidance people been they'll with captured -- up. now yesterday. the have exactly But picking given orders Now, want that start our specific is they very hasn't customers, sales us anecdotal And they for their there of those, except some want of activity what backlog when velocity it CT it on they these some guidance shipping have CT. that

they're the orders, like And booking or modalities, sooner means been other we But that. so a And CT. up sense picking that they're urgency of shipments later, orders, high come. there's around will

So of that's positive all perhaps atmosphere, this you're a from us. creates sensing which

Suraj Kalia

be to the this might be Sunny, into offline. it. and Got more than take it I'd weeds down happy getting

a all the there about phase are partner, think So CT up the the is be emphasis mix going your to would or do attributes be also you quality, when to next clinical at detector going purely record potentially would with reductions eventually you that capital on for I you mentioned photon could with applications. counting or launch or initial to some image help marrying least that i.e. can't the but think it be be, that be technology? in those

Sunny Sanyal

Okay.

counting Luckily, capable choose Suraj about general how customers in the in implement just So question manifest And will what lot to it's and it. about your themselves field. let a Photon you how me comment depend of. ask they'll a our lot on

counts, counting measuring, instead photons it AM what the for, X FM, benefits a a that proxy measuring just an is used technology. noise. let's since amplitude, to to like one, has Photon would as It's be say, Number to susceptible of was photon So we're This from huge amplitude, there's versus ray of of equivalent something counting. it value the benefit, AM counting. measure waveform two to that's amount main

not So noise. to not anything photon counting is measure detector, it it because an does intensity, that's subject

quality a So the there's if noise to -- theoretically is take get impacts very ratio. number if signal the noise that in which is noise signal so of ratio, denominator the one which you very, no to so your thing zero, so you high in is your -- image,

is noise of -- So, means that Exceptionally counting detectors is, good it imaging X-ray of of very, lot very etcetera. very cause one. And That's and quality image that means get with detectors conversion high. detectors, lost and efficiency the exceptionally these number what that a photon low their in detector are used versus traditional very you sensitive. every is photon that a sensitive process is

counting one. we detectors and different those customer -- from photon and counting sensitivity, our applications come number the reduction some levels. Number which will side, while with this are where So buckets is photons, of in them two, in of put we're able energy the to capturing creativity is

you can just that material means – precisely, get you So discrimination. very differentiate very of kinds all very, precise

means all to image you they -- get, you've tissue. people you can can know, soft but heard you you how want imaging, dual want well that is, down comes is, what it energy, spectral Now

the watch So we them you photon very, counting algorithms, photon then detectors, software because counting their discrimination, inherent – precise take ability like can to very do energy energy discrimination, and which and the do as our these way it's the detector we foundational will algorithms position and their up new come that and with new and development we apply of to is it's to customers applications, new our terms and what effectiveness. in their expect see they capabilities, how clinical really these love build

part new question So the capabilities opportunities for we quite bring the the to I can't that yet. table of know that applications. enormous But potential answer

Suraj Kalia

Sunny last queue. in And and I’ll hop enough. one Fair

you can churn next where a core new of guys you public cycle just of should the been forth. relatively we been launched whether Xi they about, replaced. at past so technology a How at so coming product in extrapolate thinking Vinci XX% can start We for have period sort guys in you life into You much And, that know, know, da time. XXXX, shorter and my it's we one, terms in this you talking to taking right in? lipped is look surgical that. you and okay, looking the say, we for of cato happened, and one the cycles we the up, questions. have tight on map now is Thank still net the start was that interesting okay, and are photon, give working innovations When pretty some the the under example an life so step should on about, is of, what this very time can about effect this relatively start we of us clearly variance, you are all

Sunny Sanyal

that last very but question, Yes. very difficult question was a Suraj, question. good

also to more film and let silicon me for maybe market, analog, a seven your we detector, and detectors. mean, was stream to time. two you. long large slow. seeing time the of closer market, something installed frame be to takes -- slow. very takes introduce was further, things, of get in very revenues. more it. to backup new can because after a platform, takes can back stream it very that, so It of cycles I when years And being then bring active adoption base. this the then platform there's very digital they were used to -- to with bring work in cycles in the you and that, a for it get want adoption that, CR you it after you actually to seven actually have two move long existing When it And start used say into results so things, get investments But And even they we years OEMs development detectors, for that let's say of of pay an be by or because let's digital being long more healthcare five this wanted But then healthcare to start technology revenues be revenues, But or can

about digital about things. So when you're you're talking two talking detectors,

converted. that then You're will talking about introduction get of into and a out half base systems a X-ray-based that the systems, more there installed new massive eventually are there's or million

this that's So you very long. tail very, get

adoption rate the into XX detectors accelerated were Even very points adoption So reimbursement of video is new takes and the market. tipping introduced point. bring ETO came tipping it and ago long the takes a for detectors that generally years tipping to the It also with lower, point to radiographic it platform but a market. there's

us All picked long are that product, have volumes models existing so, we right, and when have those up. bring are answer. an fast. in But products, And new we the to detector relatively new detectors for winded now market detector

Z that that introduction cycle digital platform, from are So years the the are a their digital Platform to sorry, taken we customers It's same front-end us not bring it's detector expect film of That as to -- detectors. about new catching faster. even it's though product to three Z expect perspective, now our going cycles. Platform, new we market. And from to be our

which introducing somewhere between So the customers development years. now is for products, we're cycles our to three X.X in

from -- revenues supplies it soon detectors. see than these though customers is see we as start to a first it's we'll even start ordering let's call new will And a digital actually -- we'll see we engineering, say platform, the then So so faster adoption on it digital detector, cetera. et

still a and so a What detector a counting to different of takes drastically seen counting. is different an type we very Now is of longer. it fast-forward that type have now Photon application, by Photon fact it expect that in interest the hurdles, driven platform. last gotten the that the it's we some over over few a of we particularly expanding, have years, new technical is the

site. to their So software with will market. that option. and a see of take will time. we have our customers applications lot this some take some And our work It'll time to bring it'll customer to on do But

ready close it. now getting are ready for being We to very for

It’s analog. market behind similar Nanotube. understanding Now technology to in in cycles. There, our to a versus photon terms will bring digital think different take when than cycle these It's adoption platform. I technologies. market whole be Then the the you you detectors farther we're of customer counting

for them, So than I the other it'll don't you, just through have market time a are adoption. and long going cycles. clean answer take some for We're these product

that that. race, there the and we be changes, forward as But get We front faster sea will to it than we're then and once happens. seat in occurs always change market a the looking

Suraj Kalia

Thank you.

Operator

with Jim & [Operator is Instructions] Our from your Please question Company. next question. Sidoti with Sidoti proceed

Jim Sidoti

and Good Can Sunny. afternoon, you hear me? Sam

Sunny Sanyal

you? Jim. Yes, we How can, are

Sam Maheshwari

Yes, Jim.

Jim Sidoti

great. Great,

you the job expect to it's really a laying note all at business the out I had it’s you've good point cash, since in is that? this have going. seen think passing And we've I issues? regard Do now how and changed month impacts with about was where done question administrations, think any a those one anyone you tariffs you from

Sunny Sanyal

Jim, question. It's a great tough question, great,

me back to hand Let Sam.

Sam Maheshwari

Yeah.

Jim. -- hey, So

seen change. comes that be closely not we've will far, So any And, out. we monitoring anything

where are. that's So we

mode from working side, on on tax manufacturing think we this -- monitoring -- strategy. -- the we we've I I our in can that's local-for-local the at perspective are on best say, as the tariffs been time. our as so tariffs But

and in in machinery So Europe and City. here we factory And Salt Lake China. plant have course, also of in have we

from whether or not. happen they situation we've these So of been slowly surely somewhat towards some buffeted actions, we moving and the are where

But on So are we time. monitoring we that again, good feel about even it. this a on at side, basis

Jim Sidoti

not come that's I I think, businesses these I all will And me. it's had. a it's some matter at -- matter a back. of it, Got it's Okay. mean, when it of for point,

business payoff more of some once the are to period and And to week starting place this get through they measures should returns. even than you've put in the payoff

Sunny Sanyal

Jim. That's correct,

Sam Maheshwari

here. stabilized. Yeah. that, has you for thing, That's businesses said are prior now there correct. saying the of that look I that the our the Jim, are midpoint we two leading indicates that quarters it as company And in what order pattern the you business and businesses we is and recovering. we the at the the edge add clearly cetera, is at guidance, in would et that seeing, the is recovering And then only and flow

that that is good feel that direction. we happening. about So, Definitely, will recovery, proceeding that in

Jim Sidoti

thank Well, right. you. All

Sam Maheshwari

Thanks, Jim.

Operator

end back over reached like our of and we the turn have gentlemen, to I Goldman question-and-answer the to, session. Ladies call And closing would Howard for remarks.

Howard Goldman

webcast website. and conference replay Thank archived, fiscal at the Company's access supplemental earnings replay for or XXX-XXX-XXXX. be our on February quarter you calling first slides call will will this The XXXXXXXX. or call, Good can year conference in the bye. presentation dialing be and accessed participating and questions by A conference for be XXXX. website code The our by XXth, quarterly available XXX-XXX-XXXX call through is your of and

Operator

conference. today's This concludes

at disconnect participation. you Thank your time. may for this You lines your