LIVN - Earnings call transcript Q1 2018

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Operator

Good day, ladies and gentlemen, and welcome to the LivaNova PLC First Quarter 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Ms. Karen King, LivaNova’s Vice President of Investor Relations & Corporate Communications.

Karen King

Thank you, and welcome to our conference call and webcast discussing LivaNova’s financial results for the first quarter 2018.

calls Huston, McDonald, our today’s Officer; Chief on Thad and Chief me are our Damien Executive Joining Financial Officer. release, press forward-looking morning’s slide conference and This call statements. presentation include

forward-looking are assumptions may, believe, available on Investors expect, be be the that identified or Forward-looking and plan, information that to will, such statements to but Statements other reasonable. statements to, use presently similar anticipate, may words. of we all limited believe not terminology risks cautioned intend by and forecast uncertainties. and estimate, us including, based are involve

Our factors materially known these involved actual or are beyond cases that of results, control. forward-looking performance those by and other or performances and achievements in some unknown guarantees may implied company’s not future from the differ risks statements and are which and expressed uncertainties,

be measures as not by ongoing in basis For information, accordance Accepted measurements SEC measurements factors Generally detailed Principles our filings are monitoring this financial used management results. In to the be prescribed differ, Please These points may of operating measures release financial alternatives GAAP. measures that website may and benchmarking most with non-GAAP be This against on performance posted but today’s for have has in not and other To companies. the the press refer in non-GAAP used communication the Company companies. release quarter-to-quarter non-GAAP present to actual operating that other these complementary financial as the used uses press the reconcile a other tables the should release review similarly to our technology and with presentation considered measures or company’s as financial accordance from measures to, and with, with in not titled in from may Non-GAAP therefore call financial management presentation GAAP. as provided an regulatory regular is results financial directly performance Accounting presented year-to-year GAAP. differently along necessarily cause recent call, summarizes to calculated comparable discussion enhanced to and Included aids financial press our such enhance we disclosed call. the a be the please that per measures the selected materials should that to tool. of today medical filings. by other comparable company

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Damien McDonald

before improved XXXX Thad results received financials moving highlights additional gross approval new started beginning Thanks, good we the on the to with with four clinical my another to growth, solid the products, the showing quarter CRM call. strategic to business. through Since the closing Karen, afternoon, strong Welcome year conference commencement of of margins and by comments comments, and additional good and everyone. items our a quarter those studies, After you first for We I’ll will topline wrap acquisition and discuss our up announced business. you then morning on Q&A. and provide completed earnings. divested I’m two going and sales with year walk and our color

which first patient evaluates by X, response the announced enrollment resistant RESTORELIFE study standard we January numerous the our have and who system an of On our to year to treatment who launch the and failed of initiating management. depression in started achieve use studies. adequate VNS the therapy we Global First, patients clinical in psychiatric

plan be at sites the XX patients to will enroll implanted Our minimum outside of a who up of is XXX U.S. to

enrolling to in currently Germany identified patients had in leaflet and overall patients announced are LivaNova BELIEVE. we January heart year. other We On of a the countries motion focuses that on European expand receiving imaging the CT by will incidence we enrollment aortic in started valve. XX, reduced study during This

of feasibility enrollment first examine Microburst announced of The VNS to effectiveness study approximately clinical delivering stimulation the enroll U.S. valve on XX, the in to and epilepsy. planning PERFECT, at sites Perceval is and are safety cohorts eight a Therapy up determine XX enrollment clinical safety XX patients we consists in approximately at U.S. investigational March two who Canada. to of drug-resistant at high had have we demonstrate study approximately being study that This started using XXX We sites. in the VNS bursts Then the We announced Perceval XX, in patients population. in launch enrolling a patients Chinese study and This March conducted in sites the System XX plan to on finally XXX And patients using of Therapy the will of China. patient of initial the enroll our the frequency and study technology. effectiveness to use in we

had Second, in On two Mark for line we for surgery PureFlex we adult of we products, arterial that in our X, one February cardiac and one received regulatory approval CE announced cannulae. neuromodulation. received

best to line of this deliver possible. We advanced are eager cardiac and clinicians to cannulae surgery the to offer patients care

the with SenTiva LivaNova. is small XX, This and it the we drug-resistant is System. globe. received Therapy portion growing portfolio, our for the patients This approval treatment business the for combined XXXX. October cannulae VNS and epilepsy U.S. approval across by follows in we recent announcement On FDA advances FDA the Therapy still CE Mark the in VNS announced for business important April an of a our cardiopulmonary While

we $XXX X, based additional we complement had strategic solutions now to MicroPort week, business we an the solutions On provide the earlier and of our Support. completed the temporary Cardiac announced Third, April will for announced of advanced an Thad on completed from that milestones. down acquisition XX, the focused company held second our portfolio of of a completion be acquisition. privately for our will announced in TandemLife. cardiopulmonary the bridge be that for update TandemLife successfully we in on deal Life used Rhythm shortly Circulatory received we six-month divestiture. XXXX TandemLife, which obtained paid guidance, And we acquisition regarding and acquisition the Management reflects of support TandemLife The million we with us cash for loan Percutaneous to to the The that pay of Mechanical divestiture our set $XX Extracorporeal this our addition million, complete with Support to a allows regulatory $XXX million the on April cash. quarter

the MicroPort, for With sale Neuromodulation Surgery CRM market portfolios, completion where stage we the and and we of our strength focus growth have now will strategy to next on Cardiac of the leadership.

and to call submission to study late we February, other couple turn on valve enhancements our the feasibility our of of PRELUDE results a design discussed a we make enrollment Valve with a in sizes. Caisson large or update Mitral Starting brief had the last on on TMVR, provide development to to I Before earnings various to items. FDA paused system our two in I temporarily Replacement Transcatheter want the sales

the and pleased study track are and very in on that We’re received process March back FDA report PRELUDE in approval to enrolling complete to the we of late third begun we’ve the quarter. patients again,

being issues the U.S. performed Next, with the progress no allow The in the we to we being FDA XT move serviced. us unit offering at with charge the address in and Heater-Cooler deep service service is to devices. aerosolization are while hospitals This are device a making to our loaner agreed potential cleaning to ability forward is

more Stefano and guidance support the like Board I’d recently from as Company. for take up XX is XXXX. President election Investor or website. for in our Meeting March and for Vice for well FDA on XX Relations resigned healthcare transitional continue as this shareholders Stefano finally, discloses to This a to to Becton, Gianotti Officer has Texas to Chief XXXX XX, important with his the Executive on it April remediation Nominee thank plan we Houston, modifications held on XX, our in will design our work The Annual clearance and at of through the meeting section field. period most to at We proxy Operating the a June Kozy, in years full device on as industry, And that of AGM. Mr. moment AGM. Kozy Dickinson be proxy secure which a posted devices includes Director William the to the upcoming spent We distributed than implement LivaNova. closely General virtually.

Growth turning Neuromodulation first and to the showed the quarter to performance million cardiopulmonary sales from but up quarter. results Cardiac Total with first an of decline valves. quarter versus major of XXXX. quarter, to machines in every sales in $XXX the the a X.X% contributor XXXX. net first compared sales X.X%, net Cardiac were X.X% of Starting in the of Surgery favorable heart Strong increase in quarter for Surgery, the growth growth offset Cardiopulmonary quarter were the in XXXX. region. was Surgery Cardiac in were heart-lung now $XXX So, up million sales the

in management strong heart-lung on our result catches sales. focus upgrading and our existing Our and is from global customers in The devices. machine remaining SX the with from resulting of majority quarter SX device building to sales current competitive replacement our momentum SX of device the coming contribution funnel were the of execution legacy

next As opportunities that gives of conversion the us years. funnel visibility we’ve couple before said for

a Turning for million quarter the of of valves to in versus quarter, were XXXX. $XX first valve, the heart X.X% heart sales decrease

a every consistent this in If As contract than $X.X traditional sutureless The in tissue the agreement. approximately both our the million. last are rest of majority and double-digit impacted change valve during sales call, by showing for manufacturing region, the greater we of of were Perceval due isolate agreement now to the loss valve Sales of of mechanical decline known quarter sales earnings discussed combined was in growth. up Perceval, valves. we the a sales

make exit a rate run $XX equivalent are on with Perceval the annual sales. to to track progress to year in million continue We significant with and

quarter market technology first or Neuromodulation. to Adoption SenTiva. strong We long the of the a demand X.X% superior almost exceeded to of let’s SR $XX and up rates AspireSR to and XXXX. term increase. Sales entirely is is U.S. turn to versus for XX% their move implant a Now, SenTiva SenTiva. believe and saw We million, continues were goal

important been and the expansion physicians better label SenTIva, for Since average the In multiple adoption recent to start the have the the earlier implanters of a with clinical know we’re extremely patient We launch patient strong This outcome. addition seen we attracting Therapy, that reasons. on there SenTiva, age VNS decline. of is Therapy. haven’t we VNS

that implanted an implanted were London. first In of addition, is our that chance has CE Therapy at know for XX%. College VNS announce to the if SenTiva, second a device, third patient Hospital we in Mark received We them King’s we device a using our patient pleased

take favorable that have focusing will and We to a launch are handful who Europe, on our initially in countries in physicians approach reimbursement new a technology. climates, interested phased of

the Now overview an financial Thad, I’d call for results. of over turn to Thad? our

Thad Huston

discuss Damien. detail speak guidance. greater financials you, in I’m and the to about first going further Thank quarter

focus our strong as of million mentioned, percentage sales first from XXXX. the XXXX. at first discipline, X.X% continued quarter mix, in XXX our XX.X% XXXX. product quarter as gross versus first expense sales the X.X% up net margin drivers. trade a of quarter was R&D solid margin first was the at Damian growth sales was of The of in R&D compared sales the in by percent to quarter to net was million XX.X% primarily of XXXX first of growth quarter quarter versus in efficiencies. all the trade, points was quarter pricing due improvement $XX As on $XX driven in Adjusted and cost first basis of the Adjusted a

investments the the expected first sleep first increase of TMVR and and an in to R&D year, expenses drivers expected versus compared continuing quarter marketing $XX products, to operating we growth basis for first by SG&A and first development was in our investments the compared to offset percentage XX.X% continuing due Adjusted year. operating to margin our discussed, last which was was clinical $XX to of related a gross As from due clinical trials $XX in in in last net XX.X% in the XXX in primarily million to foreign Adjusted key sales with the sales quarter related the improvement ramp-up in you know we Adjusted activities. failure. up an first reflects quarter previously of XXXX. to as of next-generation of million SG&A XX.X%, quarter million income currency. million, - operations growth compared heart in points drivers quarter XXXX operations from $XX apnea, margin

adjusted the changes tax XXXX was in as Our our improvement quarter U.S. efforts tax effective and the in quarter rate XX.X% the of the of UK laws. tax first ongoing an XX.X% in recent a result and from

Finally operations adjusted compared of diluted to in quarter EPS first XXXX. increase was X.X% $X.XX, from continuing quarter the the of an

cash Now, moving flow. to

of Capital from $XX months for period March was for cash down from excluding of one million ended Our flow XXXX the million. costs integration $XX spending flow restructuring million. months XXXX. payments for XX time $X three first and million, was the Cash operations the three from operations $X for was same

balance cash XX, was $XX million at XXXX XX, million, at XXXX. from $XX Our down March December

net March to million Our acquisition. the the million as ImThera $XXX at up was debt from year-end XX million $XX related which $XX included XXXX, of

provided last turning XX, earnings for call we year. Now during guidance. XXXX the financial On full to guidance February our

basis both of TandemLife As from between and and currency changes sales rate the increasing the our grow to acquisition a We adjusted of our closing laws, on constant XXXX increase contribution guidance TandemLife. projections. we a tax sales an in to tax decreasing in due effective adjusted the X% sales earnings result expect now and basis, XXX and points X% are

revenue if use they the unchanged. currency benefits full rates, approximately exchange foreign X%. year remain The Regarding we guidance company’s by current

rate effective a for the tax U.K. primarily and to XX% adjusted now laws. range tax in decrease XXX basis Our XXXX recent expected to the changes is points, of be of U.S. reflecting XX% in

per $X.XX the a to projecting We an are of and in share currency the negative changes in contribution to operations foreign be acquisition which $X.XX The to the rate. diluted includes $X.XX earnings projection earnings adjusted from TandemLife continuing from range includes $X.XX now the from impact $X.XX. tax of

comments. are reaffirming call some we’ve last on We during I’ll to With all for February provided final guidance Damien back turn earnings our XX. that, other ranges the call

Damien McDonald

Thanks Thad.

out mentioned earnings. the I another and As my initial in growth quarter, started with comments, solid year line top we showing good

business TandemLife product activities four clinical acquisition We CRM the as continue make by to the of the the numerous of good beginning evidenced areas progress and completion of many our the year, divestiture. since the two approvals, in studies,

in We’re next a funding and is growth. exciting more and in of growth much our initiatives Cardiac improving portfolio. quarter-after-quarter and heart-lung obstructive an which double-digit Surgery apnea for valve treatment single-digit and This portfolio and both In our machines breaking year Neuromodulation product single-digit our include records portion gross expanding drivers surpassing our becoming strategic market margins growth innovating our low business. for and through price clinical discipline, strong is sleep is high in future, to Surgery, pipeline, mix Perceval products and efficiencies, show Cardiac resistant our continues while TMVR, failure. vastly significant depression, generation trials also heart investing growth our

now that questions. commitments shareholder are and to offer the on patients we’re ready receive in initially SenTiva approval the Cardiac and value. We on seeing continued and Right Support We VNS are look U.S. for forward excited Heart business delivering to to you CE Neuromodulation, and and In Support And VNS System our increase Surgery integrating TandemLife in patient on the updating to Sharon, demand for world. Therapy and care SenTiva around are ExtraCorporeal we System growing our we drive access. Mark to options our our U.S. strong into with to and focusing Therapy progress Life

Operator

question Instructions] Please Denhoy Your [Operator Jefferies. Raj first go from with comes ahead.

open. is line Your

Raj Denhoy

quarter. if start of Wonder numbers I two could areas that maybe on the stood kind two on out

the First bit maybe on SG&A you bit launch in stronger, up in particular at little a of could is give given you’re last down X.X% was quarter I that? step SenTiva SG&A, year. for big surprising a detail the step VNS, it the quite a around around so guiding the and a maybe growth are U.S. second And that think little full more a wasn’t from you where where us a beyond question then in

about as any progresses? there’s just the in at So or you’re curious there a described of kind but of sort the of you - whether timers investing look I’m is in spending level that kind we business this just one new year should of

Damien McDonald

Raj. order go in me Let there

patient we’re the we’re look, XX% earlier stages the globally. the with U.S. important to of account strong. of improves SenTiva reduction forward there. is And adoption I’m behavior EU. driver by change think intervention pleased us now the think encouraged the in acquisition And label the the in is in Neuromod’s gate, is out how I the expansion looking launch this in And the know big too really mean, for age. the I progress I really clinical and received we’re importantly new outcome is of Neuromod in We really going, about on CE Mark us We for just and early future and SenTiva. So driving the launch of convinced that this plus especially in out really I both think rolling the that with SenTiva the market future. an we’re that the

about by increase guidance SG&A in the here. what we for respect So candidly I saying our and to quarter all On guidance the encouraged SG&A, reaffirmed pricing look was we’re really in XX%... is just of this with range

Thad Huston

expansion. Neuromod and as XX% are currency as well in mentioned well as we’ve items, related related as to international our DTC investing was we that

We our far as year are comfortable guidance full reaffirmed. with we very

Raj Denhoy

I if up, under follow could on, one just Neuromodulation. Maybe

does think a I in and in price XX% mistaken premium do year a it the SenTiva, on mentioned you early well. that not if price premium You have I’m take as

into does the United how So, factor growth the price in seeing States? this, you’re

Damien McDonald

still we’re drive seeing important SenTiva, so for device And is again to upgrade that. that’s a why us think I SenTiva and for X% roughly the conversion On continue we’re to this others. looking the versus

So more think as in device we’re to come said advantages coupled seeing. really get think the indications, the with this encouraged news the I with the were and what we accounts changes I by I more about as

Operator

from comes question Please with Next Berenberg. Scott ahead. Bardo go

is open. line Your

Scott Bardo

I your appreciate on somewhat SenTiva. you a think when XX% first is saw than Neuromodulation. being XX%, XX% here, system orders initial it So, AspireSR launched. was question, of My in is recollection I following just that which gross straight mentioned but you from what products lower line shipped new that of with

weak or on we a the another is put product should slightly here to see way, see expect desirable reflection accelerated less growth for trajectory than we So this the quarter in launch of it the some heart of throughout purchasing. there? color of some growth obviously the several give year negative growth relatively we’ve valves, remainder us you years Also Neuromodulation here. for Can additional seen -

negative. the contract but signs encouraging quite had you a into last few now appreciate large I revenue. a manufacturing one-off Some quarters back

revenue target won’t So, manufacturing gone Lastly a is your performance for I possible back better should from are come if give going us for you contract you year-end feeling expect a follow-up. we please? million now for forward? - of could and $XX where that all towards Perhaps valves heart

Damien McDonald

technology breakthrough I in change get of the change think rapid technology AspireSR with me seizure uptake. some and those step that two real come The really was a a trajectory with and what follow-up. candidly the Let was the launch response really is I I’ll back there,

also new communication whole titration SenTiva real the one, reboot. advantages and Bluetooth the the some the to now software the there’s order Now with with and pad with and

or AspireSR generations continuing what’s that. that’s I just a such anything things think a had I being I was launch discussions in from that VNS had the And and said but we’re previous this as either the implied with VNS really accounts don’t drove think never us. but what to those have trajectory I view that stopped for of really really place. I rate think the first conversion positive is are accounts great encouraging number because change as important

of going you should back as think the half that’s look into that going start out I and DTC positive getting about we tried VNS view the full this And to I therapy to what and behavior. very in especially issue. of valves, I a take I think be year doing. And more So, into change be the think OEM signal quarter. help to year you’ve we to of think we’re us Heart got world, the the relationship last it’s

the So, the to strong on in of double were two positive. the sign. the And digit I is us you fourth really really results I other fantastic. be principal really quarter. quarter than were significantly for that really the portfolio rate by $XX million growth the important previous fact and think we the mean a encouraged now more we’re parts it’s run legacy an and And know expect results

So this one I acceptance give was to one the one in where in think implanted phenomenal that’s this country which reading through and little really well. we account. a There anecdote. had technology of really Perceval I’m five piece is account day week off going in

we’re to see going So pleased through there. what’s really

for follow-up. the Now,

Scott Bardo

year what Neuromod, if a you’re lastly I is understood expressed that Is million Market So forward? we’ll $XX Thanks. double-digit below lot for Capital sustain slightly run that expecting And by quite the a business. the QX full just for you rate think follow-up the in $XX initially you this I expectation? still probably high-single-digit, on division that of not still growth an those confidence your going with Day so just rates reports. can An million correctly. Is see what that you this on

Damien McDonald

to Mark the there. about do what I and do U.S. able I and excited to we through going in they team internationally Yes, the the to really The came Like is I I with seeing what can we’re in that SenTiva approval, be really do. just being are we’re and literally said, more we’ve now important. think expansion about encouraged Neuromod lots work think know And EU show got

happy really that Day. the track at by be Neuromod to on about we talked Investor and I’m encouraged So

Scott Bardo

so up exciting prelude. hear the I the on with then, of pipeline a expectation, to the lastly your progress September just for which Thanks. large that forward going it chats how some And here, - showcased be could conference it your also treatment if for there’s in good give with depression? will coming some resistant Is are you progress there, date is know monitor trial feeling this CMS

Damien McDonald

we’re before we’re the We the to all various have having of it. at I’ve interventional to I not us, prelude a be meetings. let committee we’ll we’ve as And be hard lot it’s and think up post data visible know, will of steer we’ll with CMS the I encouraged the that get timelines. again try to What and change is, those the requirement present them not by that to on organizers a cardiology as to said all to major able the said taking say be statutory the it’s based at hope at up have It’s treatment discussions to I presentations. get to we at continue we But working these because before in we live we’ll as that resistant really you accepted there’s depression. that, tone things a we’re approach think conferences.

restore the life commitment opening have a this technology commitment made So that trying and in regulators have we CRD the unless also, we’re believe belief and payers We a patients that right up in strong is I our belief around and see we signal that really think wouldn’t technology. do by this pay you’ll trial. to that makes to world difference with meaningful the

Operator

question comes O’Brien [Operator Piper Matthew from Instructions] Jaffray. Your go next with ahead. Please

open. is line Your

Matthew O’Brien

the for questions. Thanks taking

you either $X.X clarification Thad, Just have on was been expected basis the the would manufacturing - expected line, know did it, growth including top you to top that XXX the impact you line that that the you’d million cost it X.X% contract come point amount points like I out? or so to but Damien about more

Thad Huston

growth excluding the X.X%. our roughly was OEM It’s impact

Matthew O’Brien

question FX. then kind And clarification of on same the

going XX% SG&A throughout you on did sorry, year SG&A but headwind quarter side this, rest specifically? much in of about - the mentioned you think the $X.XX linger of it the the is and cost that in how I to

Thad Huston

of impact basis The points. XXX SG&A about was

actually would been rate have to growth the closer So excluding XX% FX.

Matthew O’Brien

to two was by tease see the moving There’s the earnings that spend SG&A plus the the components improvement in you here dime. the could a parts out. in I down, up a gross guide bunch How questions coming helpful. of and hoping you earnings the about The increases the good tax be was on So, margin gross of quarter. guide going just of much just FX rate have very there and would extra then margin kind

Thad Huston

against within and getting have ranges currency on were gross We I sales delivering to fact we’re very even still all mean, we’re pleased some items in we were that basically headwinds that that resolved. that pleased the clearly in of are TandemLife is we margin. were coming highlighted that really improving the even XX% see nearly growth our the quarter. other There because that

the but, if relatively range. outside we good SG&A bit little But a feel was currency was again, the out you guidance gross about we the gave So margin. higher on it back spending DTC is impact, some back because our will come frontend the that we’re things expansion, International of we’re know corridors. doing higher in with growth assuming of we loaded in whereas the

So, overall for where we tax tax the guidance, felt good at quarter landed by should that points. down thought rate. given XXX on we feel basis we really guidance bring the the about that We I the XX.X%,

Matthew O’Brien

Okay.

Damien McDonald

your question? Does answer it

Matthew O’Brien

on me integration. Tandem from one Last helpful. that’s the Yes,

far going technology are on updates starting things that to in move network? and people retaining how through any of terms Just distribution so your broader

Damien McDonald

by going what’s really We’re encouraged on.

there integration. leading guys key our the of one have We

and Chief And that moved had has on around there one business. a them to with We’ve Executive on we’re our their meetings integrate to territory bring start. GM sales work board. was number working team week is but And the force the to of the learning sales into meetings Alex to Pittsburgh as off lead I that So, our do to stayed planning with And the leadership generation. sales two really we’ll business. you’d the Officer, think Cardiac kick-off we’re of one forces who Operating expect early good has in what between with through Travis, is also a force and about of

people that collaborating. think see I a opportunity lot of by

And only so focus in on the also their product growth to continuing pipeline the this and out. development next-gen we’re but about we’re really U.S. and getting excited their not

this all is around I’m how really So happy with going.

Operator

Next ahead. Canaccord from comes go with Genuity. Jason question Mills Please

is line Your open.

Jason Mills

clinic, you congratulations bit terrific. Perhaps just few PRELUDE Starting up follow on could a Damien. on view a give perspective. I the us a earlier asked on comes after So and what of medium from both on case to with it’s European wanted getting questions next into U.S. a term back that

look you at trial clinical geographies? strategies both As in

Damien McDonald

Look love they IRBs what Literally execute with submissions. here promised day recruiting. the the the received we’re team in were and back after into we able all I to approval get we back on of the

well, get, more So that think around We now that recruiting think trial. team the be and XX team our the FDA these IRB the expecting with started U.S. is know of now on trial is they’re in we’re approvals going believe that focusing I again, INTERLUDE great done I so to CE. is patients is all around really execute to is patients did only we’re number QX , so the biggest cranking get We for there XXX, that. really single patients after I start and think getting finish of continuing now the And and the pushing pivotal. the sometime INTERLUDE that done. look then there to thing which and job Ensemble We about all live a to PRELUDE we’re efforts

Jason Mills

to respect on the criteria that, follow-up with potential exclusion early trials, in and this respect inclusion are et the there, in end inclusion an cetera cetera. negotiation me and at specifically CE of U.S. with points trial. parameters a continued mark exclusion Are point Let et number is set patients or for to there stone

trial movement as that’s design a if that? if potential wondering Just is in or locked, there

Damien McDonald

still, is INTERLUDE still that not, recruiting that, already a Yes, is discussion. because done, the for Ensemble that we’re

Jason Mills

meant. the Sorry, is I Thanks. Ensemble I got wrong names what

Damien McDonald

things. so these not Yes, code Ensemble names all locked the is INTERLUDE These of all but are is. for

Jason Mills

So, expect on when on, for Ensemble to details have some will we, us? you

Damien McDonald

we’re we about done get the FDA. once the what open with through think next up the that the discussions really will feasibility the PRELUDE I and

Jason Mills

just of few U.S. couple earlier. to respect And, up I’ll questions Neuromodulation in back following queue. thoughts, With get sort on and just, additional of U.S., a and

mentioned X% conversion in at rate You quarter. a and growth XX% premium, X% the

growth, two am of to and So, growth I’m about with tease U.S. the us? if and priced, new wondering for business growth, of was implant then as out the respect growth the to that out the I estimate to, replacement for you could unit right X%

Damien McDonald

Why you don’t pass as with - little we’ll a and that would a take out we follow-up that bit.

Jason Mills

used going then of you happen, within cranking. telling if sort HLM respect that’s product momentum the congratulations end so really the wondering on is cycle And us that And to new you’ve I’m been we lastly year and analogy, have with that. baseball just to a there? the

Damien McDonald

we’re giving probably say on thumbs more understand actually is for he inning lived now, Look the a I’d XX that. baseball. fifth about in up in understands because like Having me this, Seth years America I

about the fifth. say we’re at So, I’d

and for we’ve Polaris next-gen think also why couple visibility so conversions got much on that’s great on the developed out. really getting in and and another of I years HLM we’re focusing the

a to teams world, And applying to credit give next, to tenders, contracting. and competency so, there it start this funnel capital growth will through. say new who’ve and a reading now a the methodology, subject net is for continuing there see is But equipment, of this but lot using really this. see phasing, think it’s we’re around strong was is demand continue the And a to I idea really I And it’s of I we’ll It of skillset oxygenators. sales into leaned is stop to but lot management. that the really to

Thad Huston

to think I And to a driving driving of results really, seeing going think, with and that we’re fantastic we’ve brought great know team. the delivering I on continue funnel, that’s the example momentum. the it’s you Percival really focus seeing think, at accountability, I we’re HLM the

So and account sales. again really driving great penetration

Jason Mills

best the world the baseball might down you team Well, there. have in

to baseball Houston So, so. queue. the in get yes you days these down I’ll is important guys Thanks. in back Anyway, there

Operator

Matson from Instructions] with ahead. question Mike Needham. go next Your [Operator Please comes

open. line Your is

Mike Matson

an approval wanted the start with FDA I brain got guess I for recent news stimulator deep that just Medtronics, epilepsy.

a technology? big how So of Thanks. that competitive threat your VNS to is

Damien McDonald

Mike. question, Great

view. my from Here’s point the of thing

all, more to of having tremendous of anything good elegant a raises that, this my this in I said trying relevant the invasive and that that area We’ve significantly First option. a Having we thing. and less the treatment-resistant a that awareness is more VNS to understand believe market is battling think been answer. much validate epilepsy is get people Medtronic opinion. And is isn’t drugs necessarily

very believe at VNS efficacious is something it’s pathway because rate. the is years. comparisons response between that The Honestly, to publish compare think is have. We I that’s to always DBS trials didn’t with standard XX% the five result. with is that’s us. hard here gold are important here VNS more they

something with. I that So they visible that that’s hope get

not side invasive DBS look, a including infection. effects got very So surgery it’s battery it’s The responsive. bilateral is well-known short here life, pretty are

solution we So going elegant have we about we be are the and that fact like a talking more like the people that to this. fact

Mike Matson

And the we that the at is valve to quarters? so to long drag how from I that with saw regard you the million then range few contract continue next $X.X last. manufacturing heart going the this should that know this mean expect in kind to headwind, over of quarter we just that business

Thad Huston

just year. for similar would this it by amount Yes, and it’s very a quarter be

grow on impacted We to impact. have we heart highlighted position as to half Perceval the a be growth this negatively impact valves and back think but half of despite back continues being growth will first

Mike Matson

is single to have sales separate team team integrate with a how you’ve the - cardiopulmonary for to you going you existing, going a deal, I products? it that or to TandemLife, sales you I be or do teams. TandemLife to their are And closed then just your the with the team team guess mean just or products now are how regard all going selling

Damien McDonald

discussions, structure. our things sales specialists going regional know we’re sales the of you important pre-acquisition what in tuck One to their into do our force have is

are you in group. who sales So TandemLife with from a the from rep sales that that have cardiac you and LivaNova team comes manager are a partners

the sales where this and - to separate much regional in out model key to really more a and force terms builds we the a structure real than we add a account bonds it’s to and as keeping that of are. know the and customer approaching this TandemLife and a think the So opportunities account more it’s we intimate add intend as TandemLife get pool, figure

Mike Matson

we’ve with would regard their my ImThera, medical inspire And question then one file be seen final to that’s competitor just now. and

assuming at about was So their you opportunity so for et to kind in what more - that relative about at that business there revenue SX, looked there when surprised you of into look visibility market cetera, mean I that doing what they’re that you’ve that have anything forth? had that, so you you thought

Damien McDonald

I A them few me, won’t things surprised that publicly. talk but about

through Here’s is so but the work still really the like a think great clinical the We therapeutic area. ImThera, market. public to in validated We therapeutic getting fact commercial a is is thing, we’re market believe we area. the continue chain and acquired to capabilities, being that we that this great in the this the just supply this

Operator

Bardo go Scott Next Berenberg. ahead. Please question comes from with

is open. Your line

Scott Bardo

see follow to very for come great up rate, rate tax Thanks taking down. the questions. And tax much underlying my

forecast because I’m it you be that? your appears relevant, comment to something sustainability Just hasn’t that Is the expect cash somewhat you all. if guidance flow and can wonder that of on changed period, surprised over the at cash

to lot a discussion you doesn’t there market on oxygenator, is capital base trickle the expanding some more of side, That sort tunnel that guidance? have possible? why well leveraging maybe the like us the quite on way what the down actually it as comment think at but install could any so your side and accelerate end about give of your doing all market to just does bit Thanks. I the important to Also to business. again your to dynamic this that operating in install oxygenator feeling little seems the just position, predictable And cash in light of is of was be with a base. growth the

Damien McDonald

sustainable, rate. didn’t There we do why of of international profitability tax There’s So the we a the and kind the is some the cash early but always - tax key and we that’s in the guidance exactly fluctuates. XX% of we brought impact year your reform, I’ll terms it think the XX% we are flow really XX% take terms down why flow guidance one tax. certainly on take year level provided. cash about comments. cash on of that in benefits flow of the it guidance. we some number impact factors uncertainty in cash feel Clearly flow, point as discuss it’s come To XXXX the that tax tax clearly pay on did we to on good of we the adjust whether The out the next we real the of the the reasons

on in this we important in we’re working time. me that something to reasons focusing flow is adjust Cash clearly the of didn’t is capital. one that’s point why and really at So

So to updates chose in but I’m cash in the provide the ranges point hopeful this that year will on not year, at go you we adjust improvements know as guidance. we flow, through the we and

Thad Huston

the job a which know final you Perceval counterparts unit. methodology is with versus the well done really is The daily with machines. here stretch one much team think organization I’ve this thing. understanding go. am I in to talked them to about going have change and how for management methodology strain heart-lung after planning of average and I before, done board get in believer the oxygenator, throw really into a Perceval Candidly you at has And what big cardiac on account getting a team great you

the a to really oxygenators And we’re I how we starting on. now that really look that change me pleased around know ramp, I’m next pleased really to mean, to be and to next we’re that. wins losses. discussion But it’s work able for capacity thing that’s last going you to the and we’re lean wins, for just into in tracking at what’s the in - So we’re the ramp, and I the with had months, U.S. starting is the starting that’s if that’s three that in last account

Scott Bardo

XXXX. And that share plans or CMS anti-AP some in one headache as Is America of sort that one more there? for last Perceval your thoughts you the please. saw for discontinuing maybe just for the can Thanks. processing I environment perhaps February North of a adoption

Damien McDonald

taking that from change Honestly really belief will changed but continue NTAP. of timeline, the customers it’s When Perceval is. commitment we’re to a point advantage grow talk little not and that they’ve it really that our it to doesn’t many of view, we annoying like

but it a in so, the be don’t and terms And it’s way the to then view, trajectory, shame like pulled have we changes something think that. it to of our introduce

around been it hard with And plan. long I governments a of about. that’s to inconsistency some ranging the world makes for the companies discussion think that

to If and be consistent. consistent innovate be to you people want you have

drives so, a And meeting that’s change. But what weeks I’ll view, time thing the message the few any giving of [after-mid] this isn’t point of innovation. certainly in from our we be that sort don’t at see

Operator

time, will this I at And over to call presenters. the the

Damien McDonald

call and look we updating our progression our to forward you plans. And much. very you Thank on next Okay. on continuing

Karen King

Thank you.

to We’re now. Thank going disconnect you.

Operator

This concludes today’s conference call.

may now You disconnect.

LivaNova (LIVN) 2 May 182018 Q1 Earnings call transcript