LIVN - Earnings call 3 2023

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Operator

Good day, ladies and gentlemen, and welcome to the LivaNova PLC Third Quarter of 2023 Earnings Conference Call. [Operator Instructions]As a reminder, this conference call is being recorded.I'd now like to introduce your host for today's call, Mr. Matthew Dodds,Â LivaNova'sÂ Senior Vice President of Corporate Development and IT. Please go ahead.

Matthew Dodds

Â Thank you, Alex. conference third webcast quarter our results LivaNova's to the for of welcome call discussing and financial And XXXX.

to Executive Directors Joining Bill me to today's release Bolton, will performance, Director We discussions any Interim President including SEC, the of Briana Epilepsy; Officer; of Kozy, including our to are statement. Shvartsburg, on Chief forward-looking is and include Gotlin, our Chairman website. certain in to of Chief on of the all but Stephanie today's not Financial Officer; GAAP update Alex call our Investor and undertake which directly our Global press Board are statements. respect press Relations.Before that discussed furnished to most this non-GAAP the on available call results, be during financial that to basis. the we Also, found do discussions limited results comparable most company's with is currency on begin, measures sales I website. will be the actual include in stated would Factors forward-looking today's recent Reconciliations like differ can which documents couldÂ cause constant to a materially our remind the you and available that will release filings financial measures not

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

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

William Kozy

XXXX.Before on search. provide for allow Welcome you, the joining a for the to call quarter, to conference Matt. brief turning you, thank results And us. thank for CEO update to Hey, third the quarter of me LivaNova's everyone,

selectÂ candidates. process on interviewing I the currently and and Our board are remains track

guidance. our turn progress quarter company.For discuss lead and will are then Alex the encouraged on committed my improved I'll Q&A.In details additional revenue After and individual XXXX remarks closing remainder are with our double-digit the portfolio by to regions moving marked growth the results to I'll achieved versus initiatives. our year strategic up before wrap the comments, selecting all across we profitability. growth the XX% third quarter, to right updates provide We our performance the to prior of and to by call, and on

strong in to operating Our segment to units. adjusted results. all growth the Notably, to performance demonstrated maintained commitment the reflects in XX% of our execution as value X turning growth quarter.Now by business throughout leverage, we contributing modest the creation organization, achieving income

prestigious increased manufacturing product including revenue of customer demand fully globally adoption the cardiopulmonary $XXX been U.S. both segment, evaluations in For have driven milestones our commercial the August, important more U.S. the third respectively. machine grew region. XXX(k) clearances quarter. end an XX% FDA placementsÂ in in Blood installations of CE enable to in And SX and revenue by our and underway. that mid-teens increased rollout we clearance by acknowledge we Mark is shipments the in the Essenz now in in of successful received million quarter, theÂ EssenzÂ In-Line and the highly on driven the excellent are the increase revenue again. the rest At world supply the and And Monitor their systems performance Heart-lung for ofÂ Essenz.Accordingly, U.S. Europe placements, in These hospital the chain and quarter to higher-than-expected like was XXXX. team cardiopulmonary XX% U.S. than of versus and Oxygenator I'd Europe

to now XX% increased end, in expect anticipate continue through XX% from see should we Essenz cardiopulmonary to full-year beyond. While we to grow revenue XXXX. and XXXX a benefit more for contribution We year meaningful

at with our its through the limit. year capacity revised running in performance months X oxygenator first Our strong oxygenators, the forecast the HLMsÂ and of production incorporates current

the expectations ordering X% year-over-year, sanctions. after invest new we phasing distributor by our year the in previously X,XXX though the and experienced revenue patient third the X% prior our due XXX epilepsy region with higher our led quarter, and ramp X% to the in epilepsy mix. of expectations. primarily grew Epilepsy We but implants on X% revenue growth in the Building quarter versus much year, decreased in the increased rest to in patterns expect Europe uneven had prior U.K. to prior versus world well businesses, widely initiative representing XXXX. our quarter.We digitizeÂ manufacturing known very now favorable representing as a the XX of year, modest achieved X% execution price in product replacements, first growth continue through represents successful meaningful U.S. the by LivaNova the we As versus This Epilepsy alignedÂ with systems, revenue Houston quality increased year-end. stated, super versus decline very XX% line of second achieved systems. our we And X% with users manufacturing driven again, core inÂ EssenzÂ revenue a operating organization. realized MES. in a revenue upgrade have and fully go-liveÂ in to a commitment

full-year grow global to we XXXX, X% expect the X%. now For epilepsy to revenue

of by incorporates during the quarter of first growth $XX XX% reflecting versus in respiratory case the mix. performance X was product revenue forecast and months in offset quarter, million partially year. the ACS revised XXXX, the volumes an of Our the cardiac increase third

to we XXXX, $X DTD flat was to million. quarter now the initiatives. to portfolio expect ACS continue the for be For third year-over-year.Turning revenue strategic

$X anticipate from we to DTD study. XXXX, advance. of study RECOVER primarily million revenue the For approximately $X to RECOVER to continue continues million

completed. the Upon the will conduct in XXXX, study of we As a of June XXXÂ unipolarÂ patients data a reminder, enrollment final analysis. cohort the for for the receipt follow-up XX-month been unipolar of has

XXXX. expected, expect with The publication patients. in that of to to had continues from enroll unipolar late pleased bipolar we recruitment study bipolar We by results the success the continue refocusing we're as our cohort efforts to and

frequent continue close-out study clinical futility to reached designed analysesÂ that if OSA. reminder, trial a of recruiting or is unipolar continues is to to heart or the actively predictive cohort progressing. bipolar assess controlled OSPREY with The As should interim the with randomized theÂ ANTHEM if enrolling.Moving the was study probability andÂ that XX study of all similar is cohort, progress failure, sites patients. In the the success

continue the R&D approximately We heart majority this spend million, to the the Alex. related first I'll which call the failure overall be in of occurred year.With of to $XX turn over to year to that, expand half the

Alex Shvartsburg

Bill. Thanks,

results portion my the an Revenue on call, to quarter increase During quarter provide of versus a of in commentary was guidance.Turning of $XXX third share XXXX. results. XX% the recap brief I'll the XXXX and million,

by million, margin absorption third favorable revenue. price, favorable expense quarter compared $X revenue well which approximately $XX quarter XX% R&D was XX%, the a was in Adjusted quarter a impact of million Adjusted of lower third in XXXX. of revenue net Adjusted third line realized in XX% overhead fixed percent quarter inbound as XX% percent as freight in XXXX. the of net as inflation. of had a drove gross from year-over-year volume, of R&D the down which the with impacted Foreign exchange cost to costs, was quarter component margin higher in X% was offset as XXXX. or of gross favorably third

with declined expense costs on trial. flat ANTHEM year, associated closing a basis largely out R&D dollar While by driven the sequentially, prior the versus lower

such SG&A related compared quarter in was the XX% to a $XXX income variable toÂ ANTHEM, investment the net rate year. operating expense XX% margin to compared effective was third XX% legal of third operating costs of Global changes effective the tax XXXX. driven income third million supporting improved third as margin revenue million for commissions higher quarter in was in R&D the primarily of impact expenses, and mix. of the the operating XX% with X% in by million was versus year. launch, rate will and quarter XXXX. compared in was and leverage. $XX continues was as is rate to to quarter in increased in was attributable Excluding compared costs driven tax year-over-year tax increase Adjusted in of expense operating million geographic landscape the quarter $XX tax associated the by Adjusted to our quarter increased and to as Adjusted prior Essenz The percent XXXX. investments X% revenue. income targeted third XXXX.SG&A the The gross our XXXX. quarter last $XX the of evolve versus third Adjusted freight Adjusted XX%

become per of in the we the We but with will anticipate as they as plan $X.XX available, to XXXX. Day.Adjusted during to be diluted compared consistent details our our XXXX quarter described more $X.XX share was third share rate previous long-range Investor earnings

in Our Net period. cash guidance. down balance September from launch phasing. XXXX. September The turning increase capital, infrastructure year-end revised at up investments spend CP $XXX was driven decrease was million in XXXX. million. the on year was September the $XX of supporting in million and the total $XXX million million, in was months The the we $XX by flow as Total cash Capital including from $XX compared debt, higher first of place was inventory facility at million million, prior $XXX million driven in was year-end capital investments.Now $XXX restricted X The as higher Essenz which cash increase Adjusted XX prior at at of of free delayed by the year-over-year July quarter was million, debt our spend Loan function year $XX the year. by was draw debt the working to $XX XXXX the $XX driven million in from a XX was revenue that of up the at in manufacturing XXXX. to for Term put A XX well

the achieved I'm including the this X IT now through margin the leverage to million growth and income company's that, innovation, $XX be operating drive in first critical by months capabilities achieved to the positioned improved we operating our having the mentioned, our encouraged a adjusted I'll XXXX per growth adjusted currency basis narrowing on quarter, and XXXX share range full-year Bill earnings we're the third between free now while X% with for XX guidance free expect As revenue on approximately a exchange continue shares through Bill. cash based financial remain for operating the increasing performance back million.In adjusted from manufacturing of diluted of tailwind while and adjusted summary, assume constant call $X.XX of revenue year. We adjusted investing months diluted execution in range the in the that of to modernization.And We pleased X% We on Adjusted $XX year. the flow. and year-end, share in with the full-year. XX% expected adjusted $X.XX flow be XX% cash earnings weighted average range and expect to and outstanding first to XX% per million is now by to performance to infrastructure, over X the turn I'm diluted rates. have company, the

William Kozy

Alex. you, Thank

take entire of on a to minute As creation. and communicated colleagues year-end as our to leadership priorities Alex, company, well-positioned pipeline We thank that, guidance, the forward full-year have questions. leverage commitments. remainder Achieving and well months me these level innovation, including are we around executive into we team open are for performance on our goals first through a XXXX. the targets X the building our deliver our against and top call of the value this their ready of patients, by We're on executed value shareholder to creating for and the operating focus as the to year XXXX.With globe.Let organization of through look

Operator

Stifel. first of Our for comes Instructions] from question [Operator Wise today Rick

Frederick Wise

see to -- first touch -- at Clearly, And it make of I'm the correctly, before things to to of me EPS a quarter and rate? this want fourth us understanding? tax have even comments. you is bit If the in with than if that happening more me I And start quarter. might though let could this I I prudent stepped up thought a the -- lot all, good a I just that fourth there encouraging When and little wanted better conservatism? I'm thoughtful, solid modeled. there not related your bit, implies looking it's Is just to great something guide, to Is of current give we bunch Bill, a on just overall. understand. growth had I understand, off just color you I a a it's for lower something said

William Kozy

EPS right Rick. range. Sure, at the Getting

manufacturing, really but attention we balance all innovation, performance, profitability throughout well-known the to infrastructurally, only paying investments. We year, sales of not some close some strategic and also supporting needs this have and have been

the around position. business on been can't competitor those We the quarter.Additionally, corresponding get the focused and to our volume some that the much business, going ability CP We We of we this same have amount very to the and year choices in the on notably latter the on X predict have sales do core and achieve got better have where that will few to situation, on supply a little and to now. impact give investments oxygenators in that. quarters set inflationary strong and EPS we've some eyes and we from of we've benefit cautious into pressures, targeted ensure we of the put growth in hopefully, our particularly right particularly of it's ongoing of that components. But support the a first profitability, we're picture fourth we're got ongoing you a going investments sitting on, made

Frederick Wise

bit a it's again, the always favorite -- of question setup. management's little just talk year. And this XXXX time the you'll Maybe about and

particularly on strong comments for end. organization are the should things most the there there we focused little encouraging how year we much that we year at are in how expand the a key as or more performance, given -- some that cardiopulmonary ahead? made ahead and What next lasting? the to on. inning Maybe But that bit, maybe long benefit could just look running, you You you anticipate drivers

William Kozy

Yes, you. Rick, thank

the take latter first. that Let me part question of

back Just much to have out running right are we marketplace. surprised our yet Everything the not sell, volume the organization cardiopulmonary that greater we we oxygenators have side manufacturing don't make, put seemingly were focused into be We flat any now. competitors capacity. on available our more that on clear,

can't And have and others just to relates we that We up really are it last forward to with plan questions the because looking an all get been we to be we so detail, where won't.As we encouraging upcoming we and our greater when were actually just pretty going popped they happen to do call. when in let we October meeting had Rick, and took that, in results. strategic discussion don't our to showed quarter us defer you, that same the guys covering a numbers the about year year. have the you're and XXXX, quarter We to sure and we of we not mentioned for the coming lot I asking successful trying asking much fourth to Clearly, board project if that predict you that's know. We going back. just given business fourth until you back. quarter they've were I

Operator

Our Mike next question comes from Polark of Wolfe Research.

Michael Polark

guidance. of cardiopulmonary primarily tough XX on the right, on competitors, quarter the looking last upon? or us of that implied half over timing I'm at you or phenomenon that year remind the back specifically I'm there months? Was and up math me One conservative. more is and some in the are at we're a XXXX strikes The coming can the XXXX that is comps it oxygenator very just revenue as the fourth sequentially question on year-on-year, segment doing If down disruptions

William Kozy

is You're the start the really fourth the uptake But in math And this of a important first to math and in way, our revenue we did see quarter on escalation only. 'XX. our to the by topic. oxygenator

and running So repetitive that little we're flat just #X, up bit go excuse a produce be tougher the #X, here, quarter. know more can't trying we're in not a we our I'm comp into can't oxys. I of to me, that but any as plant. and against please we out organization

we double-digit projections critical So seeing could hard when growth. sustain we're a factors, we time on those do our based the having really X how

that's as out we of comp within of by we're guys can't course, levels where on see to scenario. make we're a is the term assembly, well we've system term, molding, we of but we just to just we're that well, magic There's everything And optimize short we quality looking recovery production volume, quality all create once here. facility operating expect. in oxy, the optimizing of forward can boundaries we do look you sterilization wand sustainability.Now, know the our packaging, no So fourth at quarter in the against short everything capabilities. in way, notable going management quality at can, and and our the we 'XX sure that that tougher the got a very But not are

way I'm about So in -- by situation the all can any way, that complaining not absolute I'm just have. best sharing that that. that doing we the the we we're in

Michael Polark

guess fit right with sleep the Those opportunities. comments. happens ask LivaNova, look I'll to on the as my at transformative potentially I know there the find I I appreciate my it and what before For is, follow-up, search, question depression is you as examples? difficult CEO

when to how just about more year be have back somebody Bill, and And kind Any I timing -- programs still next you middle of would a is on if forward, would little I turn clear potential out roll great. prospects. for color bit new the clinical or data the You therefore, is commercial wonder going better maybe this know -- risk. to data of this it and these a pipeline be and half

William Kozy

Actually, we you have same who been encouraged coming have number that see no but getting company. asked, I hint people pleasantly to CEO. the and people be been The to asked that of a candidate we process, questions it's our in dampened want have the by interest

on past are since our finding As to we'll us have the those going we're late and the to it, months. of my -- we would board keep things: of in calls, say spec. X We take When process X-month it we level to have now on is the we're I not that important the find terms likely early of more staying quality in that little over active and X connected And right candidate. August, getting X we're person. attention in continue things initially, been are September. mentioned but some that. of our just moved flexing to really All the described last the to We said and person, right in right we've earlier our window, myself interviewing do couple a remarks, the at the kind

Operator

Sandler. Maeder comes question Adam Piper next of from Our

Adam Maeder

quarter can little I on I'm place, to onÂ specifically wanted Congrats kind systems was just that the grew contribution had that theÂ EssenzÂ rollout. segment of many And heart-lung you talk forward? pricing did in do also What XX% a in to And start if follow-up. then how going on I a how machines. relative a quarter. remind you did QX. fromÂ Essenz, then the HLMs and strategy foresee I about CP SX. And think you you said evolving nice bit more curious the us just

William Kozy

and move, did We earlier driven SX full byÂ EssenzÂ installations in launch. my mentioned Europe for U.S. comments, a revenue a as HLM of world. to growth with kind rest of in just sure, was And I our placements in some primarily

XX% get at if customer start price to that and next the ourÂ EssenzÂ orders achieved. then circle All Because to that starts back we were in funnel above even ourselves a yet of date both to talking as we're quality what prove were more is We're about early we where being actually to we U.S. the quarter, some you pipeline inÂ Essenz, premium 'XX we achieving the target is placed. expectation would, out. the do our of the price What fourth to to. quality we're roll in about going about this are seeing interest level, and stage, to of onÂ EssenzÂ performance hope can we a around are traditional point expecting that units Europe.So all hoping and is and of we past SX. in enthused technology, At have advancements very not the talked the expected in

Adam Maeder

the of failure terms follow-up, ask you're I heart want -- can on bit what you're the for did not you a about say but And program little I realize limited in closure. 'XX to

versus spend I luck depression as strokes spend about broad of business? guess even year. next through year that Any this million investors relates the flow as think thoughts, with OSA spend just year, my letting about $XX to in that's I'll to updated reinvestment and on think it you next test ask then that well. And also associated how I and

William Kozy

have our on I'm He's on -- heart -- Alex his comment me going our real got to handle there. game a Let tight plan failure.

Alex Shvartsburg

failure year. out closing heart that our by of look, the we the the of So program, down end continue path

We into we capital costs update our We're our QX year. process. part expect performance year. on in next of as all some and at deployment expectations budgeting residual of looking for We'll as guys our next you end

William Kozy

you out planning DTD, do DTD, what uncertainty OSA expect the of to resides, scenario And our on little the given bit in as business did, can would particularly is that on questions, close best we we planning. your do, is

going moving of down, to be what good to spend and depression has more There go. the to product, of to on commercial what That's really not when already you scenario there.And get into benefit a prepared button as in homework try have prepare we're kickoff we next completed of have that follow. a we're we of bit our start couple quarter what 'XX, it, to and to late have review. would we I We give activity. to launch scenario take a And into planning a that are planning for actually few And operate a would we're get to than this our you so the XXXX possible to both has will the details for but but guess. parts why of obviously, premise course, more about chance months under insight, to be that that until going we quite do, effort. really talk going that do And of financial we'll be fourth think, a we'll

Operator

next Taylor from Matt of comes Jefferies. question Our

Matthew Taylor

expect replacements, bit the dynamics centers that about that opening on at was a us hood color carry force, some those talk least sales under epilepsy high with I and and more the been dynamics been for year. talk the forward starts, give what the could about the and guess also landscape patient the I has next you level doing your trends you've in wondering to a little maybe things at with how if new

William Kozy

We've got been she havingÂ StephÂ here, on time these of the benefit topics. of X and spendingÂ inordinateÂ amount has

question toÂ Stephanie I'm that going over to right Bolton. So just turn

Stephanie Bolton

during a And that team, performance and we consistent mentioned now execution. encouraged having in like continue as really that focusing consistent So with I to call had, the been producing particularly the we've last by what looks the on U.S. be

the So into operating groups. different we leaning keep between fundamentals of the consistent focusing collaboration our on and the mechanism

Our QX was another sort of consistent given execution quarter expectations and our our NPI is how entirely in line with QX. exited we

I'm are we'll treat anticipate customers the we pleased our we teams, that of they on the continue DRE population, to the amount our through very of most So our CAMs year.So end that in much strategy to normal with our towards the CEC have opportunity that focused rate the move with sales as really and run continue of terms in field.

consistent So is on work our continue execution. a we moving nice very in to And direction. everything

Matthew Taylor

within changing call Anything next of in out CEC? business terms or notable year to dynamics the in

Stephanie Bolton

as stands now. changes noticeable No No. it

We have about U.S. full they remain the in and our priority and CECs, moving forward. firm appropriate coverage

Operator

Mike of Needham Company. comes & question next Our from Matson

Michael Matson

strong just guess ACS. I growth to good in see the

So of now? steady that's strong is you to kind that do double-digit growth back think --

William Kozy

to ACS color let to bit we keep on our continue just I we of mentioned that a a give case side. just revenue. -- in back smaller happened that. catch-ups in service clearance, quarter. briefly the events benefit. other volume of that adjustment one-time some had related minor me few tailwind we order little Well, on the In fairness, that purchases you in a had in had When some couple Europe, a And and we eyes

maintaining last those year-on-year was that Continuing of it to X elevated of in remains for kind ACS you improve guidance that work -- full-year leadership team guidance. our our year look ahead. we growth grow our ACS. profitability to much closely We're pretty we of time. But the combination so with what at mentioned things the further can the how and And kind to

Michael Matson

enrollment you've more we the what the see of running. give possible to it is terms be got it on good all data expectation could could 'XX? you just Is asÂ OSPREYÂ goes, is of any your that to sites or sort And as really and and in when going where far up then hear be us update 'XX in released? towards Can is

William Kozy

flip to right that going I'm one Matt. to

Matthew Dodds

Sure.

SoÂ OSPREY, track. We've filing right talked 'XX, the getting the X-month And data, To a of bit that's as Bill late about analyze why like 'XX, get enrollment looks early it said, kind we've 'XX, about now follow-up. in your 'XX. a was of in to we'd on little completed it. point, time talked

Operator

comes question Group. of next Mizuho from Anthony Our Petrone

Anthony Petrone

ask one little a Maybe bit epilepsy, a bit company and is end know margins. then patients. Maybe actually service. I'll I just on about the little on more of those tracking

would be, still Just in the a upgrade patients terms they then are on choose wondering And SenTiva? where would at upgrade, have if those many of end-of-service that, to queue you I'll guys are how in they margins. for and follow-up wouldÂ assume that of most

William Kozy

over that to I'm Steph. going flip to one

Stephanie Bolton

Sure.

overview to we So have looks right, end-of-service opting that to are for each absolutely be now I patients continue sure, encouraged coming NPI. our quarter, And that to ourÂ SenTivaÂ platform. move for we you're through of And the both have identification end-of-service an what and by like.

that seeing change. that's we're see again, So mix you the incremental And and improvement. around the the piece

So withÂ end-of-serviceÂ patients that's to opting move latest our platform. to

Anthony Petrone

I And on are end the the last or service? that of queue again, the on you quickly then in into tailwind, ending through terms XXXX all of of mean, the end margins. And can just 'XX way there

on or And don't the on here. those where Congrats recap there, to a business an would let R&D fall you scenario readout would RECOVER. amount then you line? under the a to wondering on I'm elsewhere get spend bottom ideal R&D dollars of in those the good Just quarter be redeployed

Stephanie Bolton

what updating terms of end of our we think in single I'd say models I every like quarter. service, to keep

due next and information the year So of our towards for more the part of number have patients that a in we are SenTiva opting should to that beginning launched on fact we XXXX.

So keep But see a with identification because first those. higher that We'll continue replacements that. of to see the end-of-service we'll you we're of starting reason. slightly to updated

Alex Shvartsburg

burn study RECOVER million on approximately, is the depression, on it, annual an Anthony, basis. And $XX call

to so our how in year, we're question next said, thinking depression. as and relate about scenarios we you your we'll budget year. guidance for about deployment they how think as XXXX about there's capital again, multiple about And guys to early I do answer for next Obviously, update

William Kozy

depression we throughout of in kind get funded 'XX June that be of news But XXXX. fully unless unexpected will some

Alex Shvartsburg

Correct.

Operator

of Miksic next question Our from comes Matt Barclays.

Matthew Miksic

Congrats quarter. on the

this yes, up this implants one of a So in maybe expectations. on the -- they work the quarter, guess doing said bit? You in new the seemed And business. with sort question team. given of was like that maybe just Is that with is dipped I in line something epilepsy your following the it some the forÂ Stephanie it you're orÂ for

pipeline of, sense And year or another there Just I follow-up. to generalizing improvement to how 'XX. programs quarter is or you're of cadence give some is the one entering assuming, I'm the that how that trends of should a us would kind should expect we we into a think concept had the and then something X 'XX, new and put QX and improve and for about of the sequentially

Stephanie Bolton

Yes.

in look consistent to say look why reason execution a So I'm as specifically NPI I had towards continue is the that we I back increase I at QX, encouraged quarter. for by continued when we sort XX% be of QX, or and that our

in entirely is what that did we my expectation we saw in it QX. So line with

see fact continue to we a due was I that I encouraged be to dip. -- because didn't fact, In the

Now when terms NPI refer quarter, full-year the and back of towards gave mid-single in for look to we that guidance digit original end-of-service. fourth we I'll you the

the So a rate we normal anticipate quarter. fourth run for

Matthew Miksic

some for the the of and And maybe R&D your of of spend ability to cash then the into reinvesting maybe flows reinvest unwinding you're priorities sort to just follow-up end that this on of year. sort and here

color provide plan adding recent that, to investments. any redeployed strat If but ahead could want most don't P&L And soon. understand being CEO coming thoughts get on you to for I on board back your latest And kinds of on new think that there's your how maybe you to and potentially a and the what talk? of a there's underway about

Alex Shvartsburg

year this cash to $XX million is our free of this -- free flow. is for cash flow. Alex. We million I'll Matt, take the $XX target adjusted

organization is continue drive see to in is expectation profitability working cash we'll That's that management. and capital focused the is improvements on. continue goal conversion. an to Our assuming That what to

As are at in point. terms with you as as quarter. that a the deployment scenarios to guys success first Obviously, update and get depression we're we getting multiple ready talk about not there for in XXXX next early there. launch We'll capital into for of this potential ready far year, us

Operator

Rescott question next Our David from comes ofÂ Baird.

David Rescott

pricing the from know that I really premium. the wanted kind to it's I around the contribution appreciate comments I days. in onÂ EssenzÂ and margin early the start of segment.

the move and wondering still of rest that just how underway. just you getting the to contribution You're XXXX leverage the just here should as that and ramps from into we product as portfolio. But maybe relative think about or beyond

Alex Shvartsburg

price for business. premium far volumes for So asÂ EssenzÂ margins that with this base it is continues ramp -- as cost slightly our this a we'll and the scale into The we margin cardiopulmonary expect sort the some are we we have to at compensate improvement XXXX, margin there. of improvement obviously concerned, point.Â EssenzÂ as as higher, is

a has improvement consumable business base the have XXXX. we our about thatÂ EssenzÂ will But other business, Our slightly in It's margin business. than different way from our gross to higher margin think the a perhaps strong companies. contribution capital that's

David Rescott

And at follow-ups think, then made our just comments I you conference. X actually prior quick some on, that

to prior one, place by the Just maybe had expectation in I have think January of replacement CEO wondering, a XXXX. been

in around still you're past time the of asked whether that's or the enrollment line. about concern the not And had think second, or theÂ OSPREYÂ trial. if impacting of wondering GLP-Xs So just I seeing are this any anything then expected we

if wondering thoughts both any those. updated just So on of there's

William Kozy

I'll one. first take the

At being is anything. get made time, when that by know any person. course, or time that see to of operating Every the X- talked time not And X-month calendars take would window. We're April arrival about sure person. to we're frames X-month person in as clear. the to any sooner. that right person deadline. And find into right is frame. We'll we won't the We to make back effort had would right. my a we'll that, be guess, under at in I that of We're right we exactly that time find or commitment you want pushed going You're January same us them. -- not window the

And few think that.Now GLP-X, So very minutes comment see mentioned a ago. the the would board is to as I the on from sincerely you waver don't spec, going committed I just us we're to Matt, please?

Matthew Dodds

Sure.

On the the seeing GLP-Xs, impact to expectation. we believe any trial is our small, XXX patients XXX we're don't on enrollment the also, relatively is ofÂ OSPREY.Â And

seeing not we're anything. So

Operator

Research. from is a Polark question question Wolfe Michael follow-up of next Our

Michael Polark

one. did rate. in said the about What good 'XX I 'XX? remarks, say? Just or prepared input tax thought your you something What's a in you Alex,

Alex Shvartsburg

of tax time, rate the our tax the XX%. to to At course kind Investor in of in to in in happen increase Recall going XX% of be XXXX, an we XXXX from that range of we that foreshadowed XXXX. were we over XXXX, to saying expect Day December We're rate. that see

what modeling. would that So you start I that's recommend guys

Michael Polark

adjusted goes be And that's just year? mean, or XX% I I are for year changes? it? to from is to next if So that this adjusted the rate tax what driving clear want XX% true, your this the reporting, like what's something XX%

Alex Shvartsburg

the that correct. is you some to And we're planning. different tax competitors. the if a enjoyed lose we that versus that our very of tax expect We rate of of tax enjoying normalize years. some The of few we've It's today. as Yes, kind our at changes very benefits last low planning of some over look are: the

Michael Polark

like it up. yes, feels a -- feels just big step It

Operator

At we further no this currently have time, questions.

back remarks. it to for hand I'll Kozy Bill So further any

William Kozy

on your Thank interest On us today's support appreciate joining you. your behalf for LivaNova. everyone, call. in of and team, you, the Thank entire we

Operator

joining you today's call. Thank for

now disconnect lines. may your You

LivaNova (LIVN) 1 Nov 232023 Q3 Earnings call transcript