LIVN - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to the LivaNova PLC Fourth Quarter and Full Year 2020 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, Mr. Matthew Dodds, LivaNova's Senior Vice President of Corporate Development. Please go ahead, sir.

Matthew Dodds

welcome results conference and for XXXX. and discussing and full Catherine, financial LivaNova's the you, to call our webcast year Thank fourth quarter

me and Melissa our our Vice Damien Shvartsburg, Joining Investor Interim Farina, call Relations. of Officer; our Officer; Executive Alex McDonald, Financial Chief President today's on Chief are

performance, statement. are will basis. would to, company's the actual remind today's will begin, discussions limited you comparable press on release, recent forward-looking statements. all forward-looking financial sales Before not our be results include include results, any is do measures which measures on documents the discussions the differ that in the furnished undertake the stated to is Also, website. GAAP I our SEC, currency but press Factors to we website. cause discussed constant that filings and like including, including financial on a to can We to available will not available non-GAAP update could most release directly our to most be materially call Reconciliations certain in with which during to respect found this that today's

posted the This other also to have enhanced that tool. should an today's communication complementary call presentation be to presentation and summarizes We website materials points our is a call. of our used as

and Presentations presentation Damien. release and turn the our in News to call now the under Investors I over press find and of can investor.livanova.com. Events the With will You website at that, section

Damien McDonald

our quarter and times. families conference XXXX joining and healthy and continue safe full us, remain And and fourth for year to I your Thanks, challenging Matt. during Welcome these you thank to you call. hope

up Today, week. all to sales all dedication wrap provide us epilepsy will large like relieved will results to The our guidance, Q&A. Many on world details move we additional LivaNova and then which the has moving valves. closing Board OSA. running. for employee of thank platforms. to I'm we quarter. updates to would our results benefit into of primary December, will a discuss I structure, Heart sharpen to Gyrus from with valve provide the to will business. will singularly for and initiatives, building continues before primary and I our heart enable an its heart focus the DTD, This ability on drivers, This the valve results, comments, our on and ownership sale entered agreement the In focusing strategic Then After with ACS. Then portfolio include you comments and growth the Alex and to thus my into XXXX the or aware, failure with cardiovascular of Gyrus focus guidance portfolio dynamic heart on business. our on Capital that neuromodulation to of last updates, storms start have keep Houston, first their recent and them are recent the you time, challenges. shut COVID-XX XXXX. were and ingenuity is will everyone and the impacted around discuss company quarter unique the As safe XXXX in of periods by whom and operations in continued fourth operating by including population this a presented far pandemic and varying off for has discussing and have to I'm operated down our business going inconsistently markets some for

that a the site campus. are you Gyrus we with are complex, closing management know, services agreement is the to a of to an subsidiary deferred and currently at for responsible divestitures amendment Saluggia As related discussing purchase

health and of driven where responsibility, changes including the December, which Todd as care, the second occur has in he sales boards in and the Italy in Directors. to Financial of XX second In at the followed in the of years its year. of Audit will the retirement of at Companies, the of and Canada XX as the infrastructure continue upon his increasing Bard, Officer. in Independent is currently committee. Metabolon Hugh the expect and to Nominating positions leadership closings XXXX C.R. heart also those where We serves Travelers Director years initial quarter, Chair half Board held changes, Morrison experience operations to Todd by risk culminated Hugh's of Board consisting by closing, appointed Schermerhorn Corporate tenure a X-year chairs He on the of global he Todd the Chief we Lead was AGM. Committee. succeed announced with Included Governance series valve

be Additionally, We enhance chairs believe the our all and to XXXX following the Board independent to we further AGM. X leading underscore changes committee corporate the will oversight. help these governance rotating commitment and Board's

declined XXXX. of All X% service fourth Now and ACS. of the basis. globally replacement and versus implants. a to I'll patient be core discuss in quarter the sales on is This attributable drivers, the net impact of constant currency end epilepsy growth or COVID-XX results sales new stated Epilepsy decrease both will

sales Rest prior in rose a Spain. the strong year as The XX% improve sales our our the of of over Australia quarter. third the in continued epilepsy and region XX% Middle in with procedures year in quarter, implants full mid-single performance the Europe non-emergent grew digits levels sequentially Nordic as range. strong and East Importantly, fourth sequentially recovered. U.S. region declined In to with were world growth and guidance and nearly in reached line epilepsy the

a strong to the to new XX% physicians, to replacement For the including and patients their XXXX. we expect related implants global tailwind we created backlog full year return to expect in XXXX, in in implants as sales epilepsy growth grow XX%,

driven and on in was by Growth new procedures. progress with were pleased respiratory $XX XXXX. increase the an in the are during We ACS the of adoption of the acute the distress-related in U.S. the increase teams LifeSPARC of go-to-market still million XX% plan and from of dedicated quarter initiative adding X quarter, fourth sales XXXX. an

to XX% expect at grow least ACS continue to in XXXX. We

In now fourth we a XXXX, and in study were RECOVER of quarter DTD. of Turning implants DTD $XX full combination from the to sales the $X patients. to the expect for million million Sales and million replacement year. million the $XX $X CMS-eligible approximately for

achieve unipolar trial patients XXXX. XXX in year-end. reach to We implanted RECOVER failure, bipolar patients to continue the still progress the by to patients in enrolled. heart first patients expect XXX arms pivotal half In and/or expect over enrolled their with ANTHEM-HFrEF respective U.S. study We of to XXX XXX continues

We submitted questions We in approval fourth quarter. expect during start continue in IDE the was the still study The study confirmatory to to some for additional mid-XXXX. make progress and OSA. received

in low cardiopulmonary XX% sales digits a quarter, versus For business, fourth in a equipment XXXX. has in of in offset $XXX quarter the the and sales quarter. recovery by procedure faster digits restrictions million high world declined the the as were volumes over and in on improved Europe. declined decline HLM sequentially all Oxygenators the procedure impacts in U.S. region was due single for the COVID-XX budgets globally double regions capital third to of the the of rest hospital

for some by in year, of to another quarter through Japan, $XX sales. versus the Starting XXXX, quarter, segment we reduced Sales decline XX% decrease Perceval. valves. double-digit quarter heart including were the driven the to XXXX the fourth of offset second the of in of costs million quarter and in Moving the growth a in continuing

to reallocate to in fund continue XXXX. million have These approximately savings We priorities. $XX actions resources in delivered

and performance-based key spend anticipated these events expenses, we compensation output First, remain and marketing other incentive; financial to and methods; initiatives. short programs of have and the related field Specifically, call leadership for next now still while our of and second, in to to turn working stakeholders including reduced we term discretionary the move in I'll with we on manufacturing overview pandemic employee-related lower over through spend of disciplined as reduction following: travel, to in freeze, and the results. We X this control pipeline demand. and areas participated our a hiring an included phase using remote with Alex balanced executive temporary reduced to focused we our shifted investing consulting customers the reduction in the presence expenses coincide related a external adjusted instituted third, fourth, staffing; we work government-sponsored significant

Alex Shvartsburg

is year. of XX.X%, was of X.X% compared primarily was partial quarter net of was I'm points $XXX behind in and $XX down percent quarter Adjusted in as mix million percent margin unfavorable quarter to in sales rate driven operating Adjusted is a in $XXX the were lower from decline XXXX. $XX XX.X% R&D in allowance million expense $XX XXXX. RECOVER as the in for quarter compared from the and income fourth of detail of down XXXX. Adjusted million discuss compared XXXX. continuing in down for The provide the operations fourth was greater $XX fourth was quarter volume XX.X%, XXXX. of was compared million, XXXX. manufacturing of R&D XXXX. results expense in million fourth primarily lower the from valuation XXXX. from XX.X% fourth in to the the XX% and $XXX income the the last tax The quarter fourth Thank a of a net income basis to million, sales, was variances. compared to in to quarter the XX.X% sales quarter operations effective fourth progress fourth Adjusted million the declined X.X% the attributable in negative to adjusted compared decline Cardiovascular SG&A fourth were Adjusted increasing of then you, in to the The pivotal U.S. gross as of margin of X.X% quarter study. margin quarter XXX $XX and of quarter quarter million the of Sales was and XXXX. fourth by to going sales tax continued to the trial the XX.X% sales XX.X% net quarter the quarter quarter X.X% of were our versus R&D continuing million compared a rate of quarter SG&A the fourth the the of was operating sales quarter fourth from Damien. fourth in XXXX $XXX ANTHEM-HFrEF XXXX. geographic guidance. fourth percentage Neuromodulation

operations year to XXXX, the range. compared continuing of from within the share in in per earnings quarter and diluted $X quarter was $X.XX was the adjusted fourth guidance Finally, full

up flow. approximately in XX, million, XXXX, the December million The at debt Net second impact cash was at completed XXXX. year-end at reflect December was cash million, $XXX end $XXX of to Moving quarter up from $XXX changes of the from $XX at quarter million These financing balance XXXX. the XX, XXXX.

spending Capital digital million, Our adjusted excluding higher platform. XXXX through the $XX flow, items was related sterilization our capabilities was extraordinary to quarter million. $XX of cash XXXX, further innovation million develop and manufacturing, XXXX than to $XX for fourth epilepsy initiatives free support was to which

divestiture, As of took a heart charge the the million valve valve to of result related in we sale of the business. anticipated heart quarter fourth the a $XXX

$XX site for for have hazardous million substances former a related subsidiary campus. we reserved addition, at provision to Italy, of management obligations Saluggia, In operations our future from

Now turning to to valve by grow unchanged, We to current and and rates ACS, of a late-stage revenue year replacement franchise of X% offset constant full grow to heart the our business XX% includes will year digits, guidance anticipate by in business. XX%. We estimate between impacted growth low to guidance. positively the XXXX than less the XX% growth X%. this remain with We currency basis, sales cycle the company's full strong the forecast HLM. from largely cardiovascular neuromodulation mid-single on If exchange XXXX be

share extraordinary expected expected is cash million. adjusted $X.XX. range continuing the per operations, We to in diluted excluding count from from to operations range be XX $X.XX share flow million. the million be are projecting is of of $XX approximately earnings $XX to in The to Adjusted items,

out. in generally we quarterly don't provide be lower, are evenly more sales While expenses spread first half to the guidance, while are assumed

first X% we expect the XXXX, down sales For be to X%. of net quarter to

be to With $X.XX I'll we expected softest per to The for forecast a quarter, range final comments. share. and first is some Damien to of call the $X.XX earnings the quarter back turn that,

Damien McDonald

Thanks, Alex.

we expected, optimistic have agile, While infections with of results remain declining will and coupled our expectations COVID-XX throughout focus, execution cautiously rates lead not as XXXX more to improving go year. stronger, become the that did

our trust innovation transition we customers share. increased the as out of and valued partners both continue we believe pandemic, will market actions As reward to with and

commitments our As believe Catherine, continued questions. to We progress delivering doing procedures return, And to on work will shareholder been our we that, open margins to on and the drive become we've look you improve with updating forward we're for value. clearer.

Operator

with first Stifel. comes from Instructions] Wise Rick question [Operator Our

Rick Wise

little Damien, maybe weakness we've days in general in January. all for in you Can trends. and about Obviously, COVID-driven December start hearing everybody with recent been into off and weakness, a trends give quarter. I'll the recent seeing -- you just weeks more late worse us Are stabilized? X/X what first you're it recent way just you're and getting things the or better color on as the -- Have seeing? now through is of

color, if additional could. you any Just

Damien McDonald

Yes.

the First Rick, and you of on. people that December, quarter the can hospitalizations a you in especially I March, then quarter been with continued of mid-November see year-over-year. like in say least. the October us. was commentary mean, some Comparisons in the that but the easier trend all, headwinds, into increasing. that QX Europe. noisy, have to to getting was Look, Fourth start first for in just lot noisiest lovely interesting quarter. of we COVID-XX strongest, that the the we fourth Sales gave. really faced Look, has was And carried

Rick Wise

thing. I'm signs meaning? you about sorry, some you color? tunnel some the at recovery of cited light give more noisy, kind else of have share? you feeling of bit us a end or Are optimistic? any can talked companies the Many Can have more Anything

Matthew Dodds

Rick, it's Matt.

what rebound So U.S. in companies. from seeing Jan, what in Europe. been in were you've the situated, hospitals was similar It a tougher especially like as say last it has The as lot just year maybe didn't a as in heard other we're of would May. It better Feb Europe little I April, to wasn't much. bad is

in end We in last in week shape the and would weather looked and And we were trends last pretty good in but the temporary of what setback. off slightly like I have February, the seen came quarter. international that with say remain Houston, from happened improving what before -- there of a last week at

weeks, So I'd a lot know say we'll more. X the next

Rick Wise

what to turning XXX if correctly, unipolar the sounds the the you with correctly, very headwinds timelines Okay. XXX expectations or and me XX, It are extent is on I Or guidance or in correct we enrollment, Damien, heard you heard And that if RECOVER concerned to about bipolars I'm say, months. hearing rather or end XX, And like you If wrong, by of I recent seeing of are comments there? much did Am enrollment track 'XX. sort and please milestones. understanding timelines? or trial we've correctly? you these I'm --

Damien McDonald

Yes.

You are hearing that right, yes.

we thought or been turns going So in We XXX XXX a the timeline that not it's with the in and as actually bipolar than that the track deal has But unipolar to out patients harder recruit those was both. just them. it faster because to bipolar recruiting anticipated. or fast that,

some know, whereas factor the is been of implants the as are So implant, is lot limiting clinics well. consents well. lower, The it's really progressing tracking just a the psychiatry visit from progressing which, very are of very, being Again, you well. to the to telehealth neurology, open trial The well. have into clinics progressing studies,

So I'm there. and or the progression missed implanted. with are yet. definitely following I the doing up tracking extremely pleased that on and the patients The study how titration not consents a existing team follow-up that is we've We've already like well,

Operator

Jefferies. next with comes Our from question Petrone Anthony

Anthony Petrone

baked on couple we guidance. then The outlook, for of Maybe XX% baked -- Great. trying to XX%, the some a that. in I what negative Just there as exclude just terms actually is XX%. heart everyone in get math in, healthy. And valves? to XX% X% to hope all is negative neuromod

and -- how patient a COVID in reflected of you XXX,XXX that sense the from reimplants trying is new -- recovery well? How even reimplants that many starts how base. in as versus existing how to get much then much Just reflect do

Damien McDonald

say, First of you welcome, all, And tracking just me I'll this have Alex. pass Great Anthony. to us. to let

Alex Shvartsburg

Yes.

million So it, valves in from $XX ended sales. heart a sales XXXX call at roughly, perspective,

of say. sort valves heart from I to recovery digits, mid-double a expect We low would

way expect right we quarter. the now, said, business. have So the But the the good forecast close year. that's it we to of full heart valve sometime in in to transaction a And second as kind for we

Matthew Dodds

And Matt. it's

XX% to up say, That's a is little XX%, neuromod, I that year-over-year. For would DTD. look, the of bit

If that's a underlying least our is hopefully, what at don't because is at you higher And a saying X% global is look been U.S. then little epilepsy, plan, OUS the we've better, XX%. number. forget

So it's mostly by the driven U.S.

the So in be consider snapback. is if what what to more under of we you than you service to now pieces, replacement see that's come difference take can the or kind the from our And is of thought NPI. going right the of those terms

Operator

Our with next question Sandler. Adam Maeder comes from Piper

Adam Maeder

to couple housekeeping of questions. a start just wanted with I

an Just that. first, valve update you I gave it sure to understand divestiture. pending heart incremental like make better But I sounds on want the

I think more in impact and -- housekeeping stands And today? that's can where once there the but and of the color then how just you about final? isn't the is So question any potential And know then the contemplated second guide, search we on I share divestiture X or that do in update follow-up. dilution have any CFO terms

Alex Shvartsburg

Adam, it's Alex.

the expect $X.XX be full year we stated $X.XX heart we divestiture, impact dilutive. to previously, valve to On about as the

So it in as the see fashion, prorated it. would way, given I that's timeline, the that you model obviously,

Damien McDonald

the with And respect CFO search, things. to two

year of most First for of to Qs] because an it's bonus recruiting be and [K all, executives for interesting is the end companies. time reporting senior

is fortunate he's really human function. said think has candidates, the difference say when of that, and into role Having many a have whom that will to a that I'm Alex partner, partnership, fortunate, So you're our step interesting over tangible palpable of unearthed I we've which able pack role. global a a I months. is intriguing resources to And making the has a Having recruiting. think stickiness that, met and we're to being the last company, several as said large I

I'm we be right And person filling to convinced so as the the have search, we continue the that seat.

Adam Maeder

initiatives That's very than guide just one follow-up, it me kind would behalf. on my guess, range But the talk perhaps pretty understand to carry arrived I the just about to into going helpful. mismodeling outlook. for XXXX, some wide, and maybe of then the a just below and at EPS turnover. is expect of what's be a -- was, And I helpful The savings 'XX bottom you I cost and over top EPS the to kind end And And the morale on better bit guidance. guidance of employee you then how expected, there, the XXXX. bit had the about the that's in little talk that kind of so then

Alex Shvartsburg

Okay.

is So from we our then margin about valves of a in accretion. heart R&D from XXX are we increasing volumes you, on going a expect to to is margin the due out points the increasing to to had the gross and largely of Relative just profile base. actually CP. margin is mix spending RECOVER in ANTHEM improved remind of once gross increased VNS percent XXXX, P&L, in and perspective, basis increase sort XXXX. And basis This Also, XXXX, trials. a is in as the XXXX. depressed of sales of

of expense, is and million Then, some well. of as $XX going SG&A leverage tax there bit I pure look to guess, little to an to continue the of of there. economies sales $XX in XX% we and a XXXX. scale the rate there's as range just XX%. million to see XXXX It's interest So versus we increase, sales a decrease in as increase percent at

Matthew Dodds

apples-to-apples, where major Alex's we and have of what Street consensus, a look point, versus say, numbers a say see a I'd a the couple little bit because the s sales. of valves I'd to tricky That's try it's differences R&D G&A. our Adam, we Yes, heart little it's to as ahead really of at but out percent you

Damien McDonald

on great question. a Just employee morale, it's

let an quarter-on-quarter. about turnover Sequentially, improvement our in of first voluntary So rate saw talk all, data. we me

that pleased heading I'm direction So the right we're there. in

mission and this growth faced we leadership senior virtual days virtual ingenuity extreme XXXX X at conducted linked the start organization XXX the together reading More the And weather into our senior have reacted motivated positivity. to a over and in has convinced a first. we and which in XXXX motivated our of challenges convinced of freezing highly the say conference, COVID with chat that's conference, even And that the January. look again, December leadership of and continued leadership we've Yes. And with team and I'm weather line really Houston. of how the just team. Secondly, broadly, brings I I'd I'm patients our of got people with highly to

Operator

from next Our with Baird. Polark Michael question comes

Michael Polark

I the of have several follow-ups to questions. some prior

then, heard said revenue, I prepared slides, clarification. Just I without sense digits is for Alex, comments, cardiovascular to says with My perhaps variance slide the on think and the XXXX. deck high misheard. is you -- mid. to mid- in a single or low the up in I in your And there valves, heart

So X tidbits clarify those for can just me? you

Alex Shvartsburg

Yes.

that expect with we of grow normal cardiovascular, the from would you in mid-single kind So growth marketplace. to to the digits, low see line

mentioned we snapback. have to the I larger heart before, valve business As a expect

low So between, would I valves. snapback expect to on heart mid-double-digit somewhere say,

that's for how we So of it. kind adjust

Michael Polark

deck, Page to XX, digits. Okay. single slide cardiovascular, up high says mid- The

you think but that the get $X.XX I the that's valves, to than anchored I I'm offline. components, the moving dilution. slides, want hearing I just differently see genesis rate earnings, of I heart just -- the run I maybe So from $X.XX sure appropriately. And to On want the of pieces. can we're -- several in take question. to we make

it finally of know assume absorb this your you earnings in middle it's revenue Let's I your that hits? when as year, and but that today, guidance guidance does does dilution indicated. -- your Does divest

Alex Shvartsburg

not. No. No, it does

Michael Polark

deck, and the item, a and to I what on dotted slide, what understand that there's the flow number XXXX box, -- cash to and free Okay, seems gray It what that. Slide the want is slide there's extraordinary XX, I the is the understand an line want be for okay. is. In on forecast, to

Alex Shvartsburg

is. That's range, a it just It's all really.

Michael Polark

Oh, got it.

Okay.

the purple... So

Damien McDonald

XX range. to XX the showing It's

Alex Shvartsburg

Yes.

Michael Polark

Okay, Understood. okay. okay,

I studies. the I look, the myself, -- those R&D period if your XXXX? appreciate XXXX, peak beyond, Clearly, what Can and mean, what in that point your finer for spend on -- On put expected? undermodeling are it's Street imagine Because RECOVER. on important is you ANTHEM of model both would the was, R&D, and a we comment. -- dollars is that is Or off this indeed dollar peak 'XX back in spend what in I investment in year and for

-- trying of just little pop in that in a a imagine, bit and would So number to the it's then will I fade, years. out

could So on that, finer I point a helpful. think be that if you put would

Alex Shvartsburg

of quote XX% of sales. I'll a range XX% to

Michael Polark

that Last is early right. you XXXX, here, it to All want yes, Okay. and XXXX foot registry? pace one. the of is but I guess like -- track, recruitment Does RECOVER late timing The for prior the on on the to comments sounds cleared. question. the then, the My keep ask

Damien McDonald

Yes, yes.

So the is short yes. answer

Operator

question Scott with next from Berenberg. comes Bardo Our

Scott Bardo

costs. it And be perverse that makes whether a you can of little pieces. range is your some implicit seems think, a line guidance below know strategic optimize your firstly, operating sales recovers clarify why valves, quite XXXX guidance. to question from margin the even I to while to earnings just, without Alex, something return guidance. margins think, activities. some XX% of highlighting the heart And like your up materially the provide I And parts EBIT a as your I following if you've key you're expecting priorities, margin guided, margin your which that, is my to within correctly, But why of sense? I Yet, think, guidance to used normalized given one to to be, me XX% think is I I understand looks implies divestiture LivaNova, of accretive. more encouraging, wonder, top nature I

which just is times, gross bandwidth, about many shoot think I because parts. Damien, a So highlighted it aspiration an want seems achievable you've important towards margin. these your XX% to to given talk I And margin

a course, great there's uncertainty Of around as timeline that. to

pieces, important. you please us those I if that's with think help could So

Operator

please Speakers, go ahead. moment. One

Damien McDonald

Sorry, we lost Scott there.

Scott Bardo

hear Can me, Okay. you okay?

Damien McDonald

Yes. Catherine, back. got you we've

sorry, lost Scott, So there. we you

Scott Bardo

Oh, I'm for sorry that.

Okay.

So we'll question the summarize again.

guidance are a that top a good recovery quite margins XXXX. be disconnect going earnings top trying to maximize your And efficiencies. materially seems guidance improve your XXXX, of your bit and of seems to me Your implies it to and given line but that the operational that line, dynamic below statements a about profit suggests below

question is guidance your is, can margin back And understand guess a in margin, take within your current implied XXXX. what to you help view, us So I is XX% the of midterm when, the we'd the guidance? for which nature towards path your

Damien McDonald

Scott, question. your thanks for

investments. initiatives our coming it, Again, expecting of that R&D these highlighted past, to dilutive some kind of XX%. the That's adjusted making good containment effect I at we're guess, investments work driving to somewhere between take you we've in XX% costs. progress major time of So margin, the of kind the point. this in we're reallocating in. terms of It's to the, cost kind where call the of in We're of are the so going us plan bit that's a little through could

Matthew Dodds

Matt. it's Scott, Yes,

to in improve, And Capital the on forward give be to year. planning back the this over you we're specifically, more the horizon. we to of each a year Day obviously, get is plan number, on 'XX very Our year. Markets our margin expect to We're that that. clear we'll lot tentatively XX% back a half longer-term color going And from going then

Scott Bardo

and that on following R&D questions the basis Is normalize we an are But forward? then that say X at I a absolute fair fair on that, statement? mean, then. before should going to of peak it Is for

Alex Shvartsburg

Scott. exactly, Yes,

Scott Bardo

right. maybe please. All And just X last free on flow, cash question

guided cash see expecting have this adjusted of given free year. you're been cash of the that cash encouraging, progression think flow last would flow. But to the in I some guidance that still course, it's time flow are that XX% numbers free free being

flow convergence guidance? so a your towards we And free free historic when is see cash poor? flow actually cash So why do

Alex Shvartsburg

Scott, So we the just remind flow. free changed you, want of to definition in cash third this quarter,

point and a of settlements. out cash stopped flows, items essentially we less -- activities really has to investing flow and free the extraordinary where a Our it's adjusting for taking adjustments it like XT only operating cash number measure streamlined

Damien McDonald

now Year-on-year, calculate are mean, I about I this our you sort think of people flow with exceptionalizing. think a of at much response think I a had number and But in I largely more creates some And could robust. is clarifying to is directly and more discussions definition. GAAP. place from much what cash robust it not we muddiness. where And we a

Scott Bardo

clearly nature these cleaner this material quickly of we guess us next some underlying When flow? you was, free significantly then, mean, you that? Good. to adjustments do of get year. then. sense still some Okay. Can year? the of give set adjustments that abate question Very And expect do cash I you're of some I seeing a

Alex Shvartsburg

for we've of even seen part, the part XXXX. out in lot I think coming latter of adjustments a most these the

So...

Damien McDonald

for at And you also look they of years. we out. merger things that in can costs, a see there's significant And I going that, have and integration And think you taking of that I as were there there. been the of people pretty provides to metrics can that table think forward, modeling again, number I high lot if lower a a hope clarity I differences what we expect the sorts were number those of in chart, think where again,

Operator

Taylor Matt from comes question next UBS. Our with

Matt Taylor

I different in regards the in and you some what to conservative Have just us baked an flavor color some year follow through does with recovery? And haircut? wanted recovery see or guidance about on in could some give assumptions businesses. terms you to is the behind assume question the of if think you guidance earlier So utilization up how of overall it the on assumptions

Alex Shvartsburg

the it's So the situation. still We're -- to continue appropriate, there's given seeing of the think a overall through COVID that lot quarter. first forecast, current uncertainty. of We still I mean, in we terms in read

So sales about we're the glimpses recovery terms thinking of forecast the second showing half. in in of

So essentially modeling market. an still we're depressed

Damien McDonald

Yes, yes.

throughout then is year. cautiously And QX words toughest think we the gradually used optimistic. the So comp, see the and I I progression

to there's epilepsy, require And which XX% the patients of and states are willing to number As into -- the procedures grow, to the vaccine patients clinic. pediatric, skews reenter rollout our a our of back of disease feel So need the pediatric, the clinics, carrier continues. child willingness go go you patients and right? like

So I the throughout improvement on year. rest very the a of QX with we're cautious think gradual

Matthew Dodds

thing a delayed, we're of for one gets last on is funnel Matt, attention. general. the forecasting is epilepsy I'd the What neuromod the that And that has NPI, backlogged. been say, lot That's in not

been of there's service, render we just be So backlog. kind an for or a lag that that. do going to replacement But there's think of OR on

But some to up patients XXXX. them end in even we're recapture XXXX. So going in of we've modeled

Matt Taylor

and Okay. Damien. Thanks, Matt

So X epilepsy. follow-up on

the impacts about that of has think seeing you've I are from the last I curious, hampering or or here been is around recalls that quarters you said couple drug anything COVID. business? else really was impact everything headwinds any

Damien McDonald

that in our we of No, geography in monitor impact. very to We're closely. specific any not all impact included modeling, any drug seeing continued the drugs. headwinds We've of or specific for

Matt Taylor

Okay.

you're sorry, is the giving by heart got And includes wanted follow-up. more comments. because that this year. $X.XX, EPS to this I When about confused midpoint X be a explicit little valve so I just guidance, really this

So basically, should quarter, divest prorated a if of amount in saying take we the do $X.XX to you second out it $X.XX. you're

below basically, is guidance underlying So your midpoint $X.XX? the

Alex Shvartsburg

That is correct.

Operator

comes with Our question Matson Needham. from next Mike

David Saxon

David This Mike. on is for

call cost XX listed to you measures cetera. sales you some freeze, containment these confidence it, the -- hiring make going measures what across next you of any question continuing any executive over, to a with you're months? the et businesses? XXXX, it's into not to impact growth And comp, Did gives XX that the the taking, cuts Just profile force

Damien McDonald

started already and epilepsy, the will in X Yes. where to QX, into We've hiring additional hiring at that. didn't going occurred. next have U.S. continue pod we're couple the started that into for we're teams, ACS, about and the that XX of example, team those of question. not XXXX, And least year, committed force. we actually we've in slightly talked No, areas. increasing headcount sales headcount the in the another for in those in people we've recruiting similarly, quarters. Good That's And the through cut freezes

So impacted this. not by the sales organization has been

David Saxon

a just question balance quick sheet. Okay. the And then on

just said you million had some the you'll of heart think $XXX of you net from sale get I and over cash debt valves.

thinking one more you if And I the sneak in. could balance about then sheet? are how So

some into backlog replacements. You VNS visibility of could have talked about that. It seems probably guys like a you

So could you backlog? quantify that

Alex Shvartsburg

in -- with balance So obviously, this from cash. point in ended $XXX are, roughly stated the a We mode sheet preservation of kind We we million perspective, correct. we've at this that's XXXX cash before, in time.

there's So behind major any CapEx. deployment plans capital base business no for initiatives than other investments normal and

Matthew Dodds

in we today, should estimating for the high And come that a to the capture perfect it's we before, but not about rate pretty back replacement. there's again, on U.S. replacement. have then X,XXX backlog, EOS who as patients have X,XXX talked for the we're about already And math,

we've a of XXXX, half the they're wait suggest to coming to June, replaced. can back. X as kind at the off changed little months, nothing's said, that in of back. April, you in have of held But we're maybe were May, the matter more So longer year, battery some coming your not timing. And first a least of seeing people It's

that So we feel pretty confident number. in

Operator

turn Thank further to back remarks. queue. There I'd for are in the like closing no any you. to the call questions Damien

Damien McDonald

Well, joining Thank the passion interest on to for And forward our for call your Catherine. want all you updating for you, everyone, thank to Bye. globally us. months. thank team a of couple in I in their of and look our our We continued you company. thanks, QX for business, just

Operator

great have you call for Everyone, Ladies and and a Thank now for our gentlemen, disconnect. concludes you that conference may today. participating, day.

LivaNova (LIVN) 24 Feb 212020 Q4 Earnings call transcript