PKI - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q1 2020 PerkinElmer Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to your speaker today to Mr. of President Vice Kipp, Investor Relations. Bryan you. Thank go sir. Please ahead,

Bryan Kipp

Chief welcome PerkinElmer With Senior first operator. President on Good XXXX Vice the and afternoon, and Singh, Financial Prahlad call. Thanks, President quarter and Jamey Officer. to earnings call are Officer; Chief Executive and the Mock, me conference

is one and a www.perkinelmer.com. section Investors of be website at If received our our May press the copy you website have live release, XX, from earnings note, being this archived on XXXX. call Please of will not you webcast may get until our

everyone Before uncertainties. intentions. a not have the call may detail expectations, may to we comments involve necessarily SEC begin, suggested press afternoon we factors certain financial our plans, projected are need statements, to those our our forward-looking forward-looking in be company’s those Harbor to projections by and discussed release are we or may remind SEC which objectives, of that also company’s in on earlier include Statements but this of filings. the limited or or any and made statements statements this statements earnings matters which issued These significantly of Safe from outlined The due in actual variety or other risks in differ results filings.

so as our today. change, obligation representing our disclaim forward-looking as forward-looking Any estimates date as of of only should statements even statements today’s any after made on today to any update any if statements the views today. We not represent views of forward-looking our in rely future, you

financial reconciled extent promptly. will as this financial we use that reconciliation certain the GAAP non-GAAP during attachment that measures to our the To we to we provide earnings measures directly an reconciliations call of this comparable plan be to During are to the release. call this in we not press will available during attachment, non-GAAP financial call, measures. is GAAP most to use A measures non-GAAP referring

Singh. I Chief the to Prahlad President Prahlad? am PerkinElmer, of pleased and now introduce Executive Officer

Prahlad Singh

and good you, Thank everyone. evening, Bryan,

Before I person, The changed the world my my extend and earnings well every test. putting company on I dramatically remarks, to since prepared to begin wishes our call, the country everyone to last call. has want

great However, great of uncertainty can times of purpose. bring clarity also

principles stronger customers expansive safe; environment; to fourfold: capabilities guiding to Our have first, and to company. our fight keep crisis third, with emerge and been this a the in against join expansive excellence our a difficult from all employees finally, as COVID-XX; our capabilities to serve company utilize second, to

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driven by so partners employees, changes evolving quickly Additionally, management the review expedited of redundancy crisis we our respond our customers and pandemic. and can plans, to the

humbled proud organization. our am I entire by of and

make months, Over for everything I innovating a beyond witnessed of customers, our industry experts and colleagues, mission the XX,XXX world. employees few could partner to to past go with above we and governments to healthier fulfill impact our do and an

against DNA. rose COVID-XX. a to PerkinElmer's and over team, challenge help It what fight solutions and kits is quarter dozen this they Improving lives and workflow impassions to the is our developed in unique

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both portfolio highlights from our and and geographic and company. the of both business, business, to and a The performance strength it resiliency geographic speaks our first of quarter portfolio the a diversity from standpoint,

we year-over-year. XX% down delivered over points results, XX% company million to overall, And to length in at our especially margins business, operating drag speak accounted considering that our despite when top will total a Jamey solid first line year-over-year, revenue initial the the China operating for for performance. normalizing top-line But of our XXXX, shortfall XX was $XX financial which extra margin declined when basis week, from adjusted relative the guide. quarter

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few our response. a take China, began minutes to When immediately we mobilized me Let this. the in spreading elaborate on virus

hospitals providing institutes Centers for China several research to virus We them screening. leading in and to Control have solutions and drug help mechanism been conduct Disease and

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quickly Our per current scaled X team market The demand for foresaw in to customers' address exceeds reagents. the extraction nucleic our capacity extraction month. for the production growing production million and bottlenecks kits tests

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employees of hospital, the least at cohort specificity XX.X%. at was the Within

successfully team EUROIMMUN RT-PCR months. SX working and few The manufacturing assay. has been ELISA has protein test non-stop scaled past The its of the team

to to per further month address demand. Today, manufacture tests over plans the ELISA million has growing to team and EUROIMMUN weeks the X.X customer coming scale capacity production over has

to are here test In has rapid to rapid and from the is for team lateral and The serology manufacture Superflex we China not total working Tulip diagnostics, to IgM serum, detection develop in plus body a leverage together plus IgG local are sell received India, or looking flow our also human antibody plasma stopping IgA terms teams COVID-XX platform in detection. of regulatory And in a India approval test in point-of-care chemiluminescence China for whole blood. testing.

In Analytical discover our by pharma therapies, new providing and to develop Solutions detection imaging we existing segment, the customers and disease, Discovery study enabling our & and large solutions. several are vaccines

COVID-XX drugs are We by review qualify with existing helping therapies clinical potential our signals template. studies as medical fight new supporting to

XXX have basis over screening reagents to the virus through research adaptive within the deciphering pathogenesis. We immunity aid our viral understanding portfolio of discovery that life cycle in infection and

to created isopropyl Two organization applied to and determine our content fast our Spectrum FDA-approved according hand and ethanol of using the WHO method And reliable guidelines. sanitizers FT-IR and spectrophotometer a

to Puerto lines. an production has The Rico, first sanitizer pivoted hand up came from order where ramping distillery alcohol

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are at a We products launching rapid more speed.

implement and styles We becoming virtual digital. are work to more learning

We lead. in seeing are empowering non-COVID support we tomorrow, Real COVID our leaders time, we both to can a world. truly better a how and are

thanks our safe and to in a as my getting from that new we help will employees. amaze again is of me. lab around all keep thanking our communicate The masks close possible. heroes passion, and employees to of is finding and In teamwork hear collaborate across to dedication running testing and to why and their day, once to hours to and manufacturing stories training to these all at difference our that's the labs facilities happening It shipping instruments ways new of by the own working able night. clean I them closing, at remarkable. virtually, globe our remarks every XX,XXX delivering up sites, field the make and continue are employees personally customers, and the Producing as I clock them are fellow

With that, I'll Jamey. it over to now turn

Jamey Mock

good to to be additional your proud want airtime Prahlad's I extremely and want and to I employees. humble give well of everyone. the Prahlad, family. Thanks, families, PerkinElmer wishes to you I'm part echo and to evening, and

this the around develop get solutions spread rallied the out to and and worked colleagues the stop world door. Our pandemic product of tirelessly together help to

Prahlad from doubt day, are this crisis a have as As will evolving company we I no company. we as mentioned, emerge that a each improving and stronger and

posted Before Investors quarter of which has our under want point Information. attention to first everyone's I section I begin, on to call earnings been the our Financial website presentation,

provide I'll additional first then prepared served metrics. always, remarks As end and our plan my I the on begin markets color some highlighting by quarter, financial to

my remarks guidance commentary. Typically, I end updated with prepared

year. hopefully improves, visibility more and that we efforts. our as Instead, release in you guidance guidance. I However, hope I today your in update will annual be updated current details challenges issued earlier And press later environment, provide not in the associated substantive context providing due additional to earnings the modeling with fact to the serve unique assist withdrew the the will ongoing forecasting to provide we full year a and some that will you own with

was we Jumping The in, though quarter deteriorate are well, on after globe, revenues, we China headwind quarter estimate quarter by as in the pleased conditions fourth net the as team Overall, in offset first executed COVID-related $XX progress these our cascaded shortly we call. pressures And million our began results. across of tailwinds with were pressure. that a the through COVID-related $XX to quarter. market of $XX million even COVID million

Meanwhile, extra line range. the of at disseminated from contribution quarter the in top came end first in our the week previously low the

However, our resulting of operating EPS range. guidance to our also prior results of adjusted expenses closer end the lower, lower were assumed week extra in

by multiple demand offset markets exchange Organic a net grew acquisition Adjusted tailwind. shutdown year-over-year X% and X% was a impacts COVID-related $XXX more included in million revenue decreased in to headwind than X% foreign X% revenue and China. solid reported as

was X% strength sales, our Discovery more XX% was entire declined was business by representing digits, than Solutions, representing digits, and Analytical applied and total declines in impact grew the applied from our markets. over softness of Americas Asia life down in geographic total Diagnostics, offset and modest more Europe of stemming COVID-XX genomics business, in decline offset as XX% with also in health which sales, sciences declined declined franchises. as double immunodiagnostics On of X% China, XX%. strength By mid-single Pacific basis, reproductive by in the grew a & food digits organically, organically, double

overall by quarter XX.X%, by lighter XXX are week of we Adjusted the expenses, operating driven margins extra first points line declined by extremely controls. our given the an revenue. week extra Operationally, cost pleased with driven especially of labor offset to labor an performance, basis in top

have impact, earnings only EPS been adjusted shortfall. up year-over-year declined $XX we mentioned, Prahlad $X.XX in week X% As our adjusted would estimate guidance of for our year-over-year. $X.XX per came below $X.XX guidance Normalizing despite extra share below over million and the the topline X%

drivers start further the our our business. let's Diagnostics Looking within into key segments, with

declined organic the my in robust Europe X% as offset Americas was mentioned double-digit earlier and growth decline China. by remarks, in in revenue As

organic geographies business genomics way, handling nucleic on led liquid growth applied and acid momentum Our and lines. over by led product XX% extraction broad-based the posting our across all

kits Demand vital detection for our RNA and systems year-over-year our our upstream COVID solutions nearly automated in are nucleic doubled workflow. purification as acid RT-PCR these in isolation

increasing organically immunodiagnostics Meanwhile, EUROIMMUN was for with mid-single-digits. allergy, during testing. immunodiagnostics infectious disease declined the our patients mid-single-digits portfolio anemic as in Demand quarter, deferred autoimmune, and China

Outside business Europe. of prenatal organically, China, Reproductive mid-single-digits performed over testing driven declined the in our lower China. and by XX% newborn immunodiagnostics growing well, health Americas in and

both regions have were the appear in modestly to some stocking. Americas pre-COVID from testing Newborn and Europe shutdown up benefited single-digits, high both though

NEO for muscular began proprietary recently states MDX two using atrophy expansion, solution. menu of terms our screening In spinal

about to-date revenues this of long-term offering. been the the excited we're potential While minimal, have

Solutions, in the By we the by declines enterprise, growth in by more end Discovery strength declined product as market, and single-digit discovery revenue lines. quarter, to high Europe Turning than X% pharma/biotech, our in propelled & organic informatics was Analytical revenue in offset experienced organic Asia-Pacific.

regions robust despite low major geographic Demand single-digits. across declining was China

and service enterprise well Our led the business our reagents, as research way, growing discovery, screening, as double-digits.

offset declined low Europe. Meanwhile, applied over XX% more declines markets Asia-Pacific declines the the low in and single-digit than as double-digits, in in growth single-digit high Americas,

Overall, Fluid up declined January low mid-teens in and declined orders industrial environmental single-digits. solid, safety trends and double-digits. high were applied

quarter. we XX% down However, conditions progressed steadily were over the orders as year-over-year. through deteriorated March

a early signs cancellations, delays, digitally and pivoting to solid teams not improve to have lead backlog and funnel point While are to velocity acceptance we order continue our generation.

So, after to we to operations benefit start are COVID-XX. customers as trying and our reopening contemplate plans

XX%. items, Shifting and to interest million below expense was our and other tax the rate adjusted net approximately line for was $XX first the quarter

quarter was the cash. the debt since with of cash for to conversion Turning million. million flow approximately $XXX we flow flow finished and of free sheet, the quarter adjusted cash the billion which balance free XXXX. cash first $XX $X We an achieved adjusted performance strongest Free of quarter and XX%, was

X.X net exited to a the we EBITDA Finally, of with ratio adjusted times. debt quarter approximately

the As XXXX in earnings previously we our mentioned today. disseminated release withdrew guidance earlier, press earlier issued

exchange want I on modeling for that scenarios. provide now XXXX. headwind However, We updates items X% COVID dependent on less impact are to a foreign anticipate

and items, interest million XX% tax line we to million range our Further count $XX of to for a the $XXX below the to $XX share and XX% adjusted anticipate rate in million other expenses, average year. the

we higher of a as compared previous expect rate assuming with mix are tax come We to rates. our jurisdictional tax will greater guidance areas higher profits a now from

adjusted two on we returning we call, over to As free to conversion the our cash XX% years. steadfastly three stressed XX% next to the remain last earnings our to committed range flow

the manner, the XXXX, continue gives on to now us We we right into execute balancing to a confidence and progress processes quarter first in laid seen while roadmap throughout conversion that track. on and last are prudent year, the out growth profitability. The building our XXXX, improve of

earnings adjusted is second terms organic $XXX And an of $XXX to a COVID-XX-related $X.XX we to the approximately million, Embedded forecasting a drop per XX%. the XX% this to exchange of negative growth, forecasting comparable for foreign in period. the in the growth, including organic X% are representing guidance of million are to revenue per of of X% revenue prior of a guidance demand we XXXX, headwind of to revenue XX% share. quarter, XX% Turning versus reported offsetting approximately partially minimum quarter X% share

page earnings is this first last the presentation. our of second in quarter noted of All to

over COVID-XX. Employees end I of prouder where to our to hands joining want be team. couldn't fight world are all I the PerkinElmer support I closing, against the started. In

during the and We difficult At from the proficiency emerge supporting we same are this to frontline, our stronger are time, as crisis on customers an extremely a operating collaborative environment. PerkinElmer. processes building

this questions. like would to at Operator, time, open to the call we

Operator

first Instructions] question [Operator Please sir. from from show Arias our ahead. Dan go I you, Thank Stifel. comes

Dan Arias

the like speak players I you're assay you'd the that to the distribution big with Thanks. in into some of you guys. but big against can to? market on way it assay, looks path Prahlad, getting capabilities. the afternoon good, performance pretty EUROIMMUN mean, for just the the obviously, Good the tests up

market? when instruments What be think the test that manufacturing in what So choice? on guess expectations? by comments your you are of are levels, the your about we saying own to I your on EUROIMMUN number test differentiation, then what extent are labs the might And constrained

Prahlad Singh

Thanks, Yeah. Dan.

against the We and lower that that two cross-reactivity pointed I good than after, know something means risk some NVS would high on a homology level go When domains, was expect two less coronaviruses, think -- developing picking which, focus our And have to and focused one of a SX that that's could much that started focused the on. protein, produced probably things are were there that. the think sequencing and I it out right? at to has proteins. SX. very S we is around functional the The to that domains that SX assay the of we there on other the good you EUROIMMUN, why elaborate mean, are as focused there -- specificity. we we and Antibodies I is you

the this validated center. our availability, terms In we of at capability, as yesterday. fact, got I EUA And FDA's saw, the in think you approval we had

So validated the has by been FDA. it

across using all And Beaumont study be there globe. the the and on the at largest of are on in country can In terms right going and the thousands used of them antibody is workstations, workstation. our United that's open-ended it installed base, now the States in automated

questions So that had, the right? I three think you I helped

Dan Arias

Does in be around mean any ask, the thought production I not is what the expectations maybe, point a it's the assume for way? that about getting many tests just how to Can maybe just the follow-up? into you market? supply-constrained that you're Thanks. inventory And you'll XQ. building where and get in I did. You process can

Jamey Mock

Dan. Yeah, I'll quarter Hey, second the about Jamey. guide. talk it's

bulk because to products. and then I'll serology DAS some to I'm PCR diagnostic out the there, is RNA. to and the of leave And going products talk and So to tied going revenue of be our

month of little per as current million of by So, that, forecast around X.X that the the as a million end tests bit We be much production could month now. per right capability talk this month. $XX

So test, is. the guidance should of that I serology revenue our half come guidance think from about

we limited that been We've behind the year. XXx continue is has we that has had will anticipate And and side. PCR starting our per date. RNA flow, much flowing last the tests up revenue been and we've -- perspective, just to will don't serology product X to month. into we're now some and well be extraction versus but so as restrictions put our are And extraction, to on us, it flow, is volume then that million at as

so, make well. the and PCR revenue about And XX% RNA as of up should portion the

Operator

you. Thank

comes Evercore from Our Kumar Please next ahead. from ISI. go Vijay question

Vijay Kumar

Hey, Thermo, about are look taking my you. peers. right? through. you to cause good COVID -- contribution on the low one That's scenario I you for come talk peers, to when and a here the print And kind high-end now, line what the raw down X% what would flattish bakes to minus XQ XX% at the have guidance. Thank on flattish. they XX%, and in XX%, congrats and assuming in in guided here, your what I to contribution? for versus guys. guess, Maybe even Thanks Organic, almost of relative for question with the Jamey, back of

Jamey Mock

Vijay. the for words, Thanks Yeah. kind

different of our at it So at it and looking at continued into and to as we the in throughout guide thought many put recent have month ways all April and looked the a trends. well look lot of

XX% So down. little the bit maybe a of to on elaborating XX%

no So mild down and what's assuming the and reopening. XX% So Europe, XX% a different? Americas we on the down, in assumes are reopening

bit to just get our way of that you take COVID revenue recurring goes is basically of a the little high quarter. range. you throughout have you the X%, end So The

of add you zero. and XX% the there, to down the XX% X% the and minus offset to XX% it maybe on XX% by you the on the demand, obviously, organic the gets COVID book, that the revenue. the then on And rest is So, down

lot China. of part, So the would us on subtle I of how we looked two that information in rest differences. say, we good most had lot with a experience the world that the will for at gave of operate a

The in large immunodiagnostics. first percentage China. Immunodiagnostics up makes a is concentration in

revenue. serology that's China EUROIMMUN of tests of because XX% In XX%, that of, about important, hit we than immunodiagnostics COVID-related. less probably that's saw outside the are it's and get obviously, rest the So world

difference big second reproductive is The around health.

testing was that's in at was to And trends, at health was So China, reproductive because hospitals. newborn people utilization a the versus avoided XX% historical XX-plus And percent. screening down because XX% going level. prenatal

anticipate don't the rest in some, impacted world the we in will the first It quarter. but that be as world. the of still rest down think will the So was we as of happen China don't be will

again, at So we we very been we've looked China April, at many looked things. experience, we've seen guide. in that confident the through feel looking orders at our the We different

to question in And it's versus through or terms on RNA. And down of probably then kind the versus Dan's COVID serology not. in big of June reopening so XX%. the revenue, difference is I PCR The ex-COVID, XX% talked

Vijay Kumar

helpful color. Okay. is This

Just side. the remarkable and was on one maybe It cash the flow operational on quite free margin. side

China of you you rough? that sort here walk the can on there’s margin rate, the fixed structure the to Is we some controls? us of guys variable you maybe trends cost actions How you. about increment the cost Thank could of maybe Just the should your saw through business? think something versus after cost trajectory

Jamey Mock

Yeah.

protect to levers obviously, talk the of in and to biggest a want I So here. But And, base The labor. just first about there's variable costs. is think categories a second I'll broadly, quarter cost numerous three have I portion mean, workforce. pull, we we highly our with

hour reductions hiring freezes, reductions, actually So increase there's other you around can ways pay could one and benefit merit cost, to have freezes, that you control reductions. have

that's one we control. of but category that cost can -- So

mostly related variable. and is highly to second that products, is The

or would with there so you freight, The the either You that. in product don't. like maybe only other part that customer’s put is our have I we work

the third then is And indirect. part

So right that travel all every where significantly. I’d control we've now, to And really But down entertainment, three say categories variable. et and have and that spend. services, and is are dollar raised we levels supplies, cetera third-party utilities, is clamped precious highly authority

So to started first as as your a we point quarter, on China saw helped, in yes, enact we the few obviously. which unfolding February, measures, to soon quite

probably couple a But overall, would say with our we measures. get look want did should at. of I heading control. quarter others, we also full there's a But controls to the those one-timers We benefit in benefit there cost touch and of enacted if second that workforce. we that that not several our helped certainly cost into us

Operator

question America. from Please Bruin And go our next Thank De Bank of comes ahead. Derik you. from

Derik De Bruin

Hi, good afternoon.

Prahlad Singh

Hi, Derik.

Derik De Bruin

Hey.

you just up? guess you're thoughts not just what end And are about of I'm and in of what markets with I but this, but a curious OneSource, university government on lab -- player, in pardon question, colleges, me of of sort I'm market? of you that you're how So market? wondering sort sort and first in academic access me, are to terms opening like the And shutdown. big sort of seeing just labs your if just your spending and forgive of in terms are those thinking And number I missed

Prahlad Singh

what plans started to to have we large think they get for us starting to of I see that seeing back. we've are place in right, and engage engagement starting are side, pharma started OneSource the sort we some there. And on of the putting Derik,

You want the to talk about academia?

Jamey Mock

is on the so the I'd the I first little -- say in enterprise only in side, Americas some But mean service. than general, Yes. just better up access have I Europe. better. the enterprise core We think bit thing other than a holds do I is mean service holding throughout more

most closed small it's quarter for And that the revenue throughout percentage here. anticipate of our and entire is of mostly part down is the terms In I base, academic, luckily, it second but a guide would closed.

Prahlad Singh

working still back, even China, mean, academias measures I though ways they to coming some sort of starting of in even are the new safety enact of and are Derik.

So, it really hasn't started.

Derik De Bruin

Great.

but to an may question, unfair this I'm going it So, be ask anyway.

in testing sustainability, the I in apologies -- now There's But everybody questions And now sort think biggest -- think like getting testing, of on. one planning do going for advance. of investors right right going testing? if benefiting. of from So, you what are the or you a demand lot QX is is we're XXXX, in what of look serology exiting into for demand terms at you going molecular for what's

like one that sustainability appreciate vaccine? this, a of the return your something there's the with from Does normal. how do I'm until companies on the is a this to because -- all thoughts I really is of getting throughout markets obviously, like, number The it sustainability has year lot to tied is fizzle question are last does sustainable out? these it Is that benefiting? it

Prahlad Singh

spend a that going unfair Yes. but question a very interesting time not question, and I Derik, we definitely it -- of it's thinking. a to is a lot very I'm or say mean, it's fair brew

suppliers, level will another sites. running. and if an is we've how And why redundancy, that's from site in RT-PCR across globe. focus ensure the of focus on that a up And right supply on we we particular benefit do globe. sites that XX we've site are at one now there that the that that infection that things now And that chain, The see things got right is different we are got is have coming there second we sustainability the you

from have There do different sustainable, shipment of availability regions. we is issue But a which long-term, that's really earlier different regarding now on multi-pronged products was that, from an resolved. China, how where is sites for and approach our focus

the is that's manufacture And be floor. continue capability this product footprint can we ramp several the is months. coming think to used And as sites we regionally. availability to I at where up different way our thinking that can over significantly are We geographic now next products and of

Operator

Thank you.

comes go Please Steve from Willoughby from Cleveland question Research. ahead. next Our

Steve Willoughby

on all of least quarter you. the provided first, relates everyone. Hi for Two it and page. second the evening. Good Jamey, EPS same commentary I to $X.XX. The guess we're at so as you things just

worst-case $X.XX XX%, be feel to was scenario with comfortable a number? revenue in down Just clear, that do and you organic still situation

Jamey Mock

Steve, of quoted XX% encourage right. is And or low that's quarter of $XXX to it XXXX end at the Yes, ties a the our overall. think the I I'd XXXX first -- I you yes, comparison. kind to tied second of million $X.XX revenue. quarter down guide Or look to

about in just So we the generated $XXX of revenue. million quarter, first

revenue the more on forward million we line, COVID-related overall. gross gets a there's anticipate shift $XX moving down we're So margin revenue but that mix uplift that significant a

So volume then quarter. the that of cost, the first enacted helps, get the in measures control decline. offset on And we obviously, cost versus quarter overall, to question we full a earlier that the

overall, down and does only on million $X.XX EPS, $XX but on down to we're low it our end. tie So, revenue,

Steve Willoughby

June? you for it of assuming test. million to run to million tailwind, the up XX make X.X the to secondly, ramp then, And Okay. also that serology of include rate XX% month the a it does now, month able was incremental XX It to ramp COVID related of could The that that right by month. the is X.X X% but revenue the million commented, talked about potentially you're or up end million

Jamey Mock

XX million that No, of from exactly X.X ramp, the the assumes some to certainly yes, gets a range ramp it not. It's that in it's kind But, includes million. whether kind here. of or

Steve Willoughby

very Okay. much. Thanks

Jamey Mock

Yeah.

Operator

you. Thank

Please ahead. go from Doug from next Our Schenkel question Cowen. comes

Doug Schenkel

Good I'm couple questions. last to I want of of afternoon. off a quick to cleanup then, back just come to guidance going Hey. And question. that build

be assay, up on following on quickly. earlier So, looks It so very definitely like the good serology should and moving a testing. on commended you questions

automated the available immunoassay of one now from with platform That a solutions throughput, think, he actually per $XX high these companies. very test, actually. below said, major we did And companies. CEO per call afternoon major this of some is just confirmed high-quality $X per Coincidentally, pricing test, well below there's I test

have an week that's of of per he nearly can one And that month. tens installed thousands tests of just of produce instruments do And XXX of big the that noted with million plans per base guys. thousands tests they to

how And and for sweet the are what's to you world? going mind, spot in that to Beckmen's tests? with of price EUROIMMUN So relative the Roche, the the Abbott

Prahlad Singh

Yeah. Hey, Doug, Prahlad. is this

on we the confirm immunity, focus way SX will at the looking IgG proven spike when and or dual tri differentiation think, other more antibody protein we -- science. IgG, useful around our test it that IgG with why, That's if the be than went our does I tests. is is

on what labs IgM, looking focus to the focus where same have around that's our IgG are degree is around Especially And we sure having line, it large it and SX not end IgA, specificity And is on mammalian hey, got have rather gives comparing which gives very it, is degree early the that's an proven. why, if specificity, I'm which than immunity. or are cell why you're around IgM full we if it of an to developed an immunity we an a look for. way of value provides something high a IgA, protein, has been, that spike the And capsid at customers that's protein, disease high response going.

Doug Schenkel

Okay. Prahlad, so…

Jamey Mock

to I the I Yeah. point, there product. back that there of our mean, just to are thousands use go are open out systems automation would too.

the workstation here, companies are EUROIMMUN is up and along Doug. provides solution, In a way that throughput addition, high the picking it many

Doug Schenkel

assay, a I there's at it's – they're XXX% It's companies per and are than enough and and good pricing a and just is closer in again, and IgG, on got zero again, it capacity, like and for think to everything lot $XX I a No, you their Roche almost talking about they lot test specificity, understood. It's they can close platforms. the of look share. near-term. of to just probably run think Yeah, demand

that's kind of the the question. of So root

$XX. Are you of there. in closer are that's pricing other – we've guys don't moving is But expected assumption pricing question my if your you heard was part to change So I an forward? the there true. pricing know

Prahlad Singh

got not is sure the number. I'm assumption. not That you that where

Jamey Mock

That's Doug. very high,

Doug Schenkel

wrong, appears great. did of, right? but rationalization improvement mix, the answer just in some and just what think answer there. there, you some how about get and last kind and you to that's how Okay, on it you're assuming And Is quick operating in very in might okay. the quickly It then math, That's then be guidance. just mid-teens And the and some think get that second quarter. just the appears given about in I is, you question, QX the to margin

Jamey Mock

You That's got it. right.

Doug Schenkel

Really again. it. Thanks appreciate right. all Okay,

Operator

you. Thank

from from Wolfe comes Our Steve go next Research. Please Beuchaw question ahead.

Steve Beuchaw

environmental, unique afternoon. first, of zoom the how big in recent some the are of government it's Hi, for next do that this government product thanks time make and across have to might your The academic allocate so, the ask, to XXXX to history? or funds. taking different how allocate decisions Thanks How for customers look here of a more think going affiliated, they question. operating that about food, that and you year planning how academic, question. the the you're relative funds in or for I to our buyers to about wanted out going they strategic space contemplating be environment that

Prahlad Singh

That certain the is the we at, that important will that dependent that looking more look you look are supply quality and I think, chain. there just take at as it as example, of on segment market on way become Steve, and aspects food end you right? would it, at pertinent an food are testing food, let's

horizon diagnostics might least over to at COVID the to products, you are of. the continue side, you related time funding talking see Around

production amount our companies pivoting, diseases. And On funding the sciences infectious moving there. vaccine capabilities, informatics be are life even there’ll a comes around we business as up ramp play or significant it's how into our side, that's of OneSource into whether

goes. us pivot our of I offerings and our the our So where diversity footprint to the portfolio based our and think also market allows on competencies

be goes. mean think, enough customers' pressure product needs that on an for will the to funding the fire where us, irons everything I funding. There based that be I got will fortunately will on and some opportunity. hopefully, But will So, see lines doesn't in our able address some we've yeah, depending have mean, we that that

Steve Beuchaw

follow-up Q&A, has Jamey. to relates some Okay. and to And in I Much margin one topic it. it for then that the appreciate on a up wanted trajectory.

think I think margin if another contrast to cost, metric. right variable and you way the to look structure at or it Feel cost that might is what fixed looks whether be free be pick you the it's whatever helpful like. compare could would

of the about Thank what of is the XXXX the were that the space challenging, it cycles it think different? now China, cost some whether that XX% XXXX, model your versus been the I you. should in it prior like range. in saw maybe might challenges we different all structurally such looks that cycle have or How really XX% to

Jamey Mock

OpEx between and margin line. gross mean, down I Yes, would the line break I the it

margin I have line; a we very different portfolio. gross the think

instruments in less So, past. the drop out than

And more so that this keeps -- period. probably line we our margin and have during time recurring gross revenue higher

gross the of line. kind that's margin So,

line, OpEx the a about it's Steve, in think the I downturn the choice. it On is way

when or I it's sales about thinking invest grow you need in think most incrementals, -- force. to do to on R&D this of you're your what the line

think environment. And I I pretty a think want your more variable do you on cost said OpEx what do we want a do before, to around in like indirects. labor can to with I what the what well R&D, is line, do base to you flex of highly force, any you do it do your with choice that want have with

Operator

you. Thank

Peterson ahead. Tycho from Please JPMorgan. comes question from go next Our

Tycho Peterson

China able that? on the you was? Thanks. of headwind you And on out Prahlad, how much you quantify commented pre-COVID issue then mentioned comment export in earlier. stocking just that Are serology Diagnostics to you the of can also a business,

Prahlad Singh

was earlier was to not It issue around the Tycho, related China Yes, RT-PCR. serology.

because RT-PCR, to the So, governments out to Chinese worked in serology happen. hard resolved, have And and this of clarify comes facilitate Germany. I U.S. just the thankful it's are make the help even very that that to very and government both we both all to to wanted Lübeck

the question was-- resolved. has So, that second issue And been

Jamey Mock

I didn't catch it.

Tycho Peterson

Pre-COVID stocking.

prepared your You called comment. out pre-COVID stocking in

Jamey Mock

Yes. right. that's Yes,

in the kind think stocking more We what why We is rest sustainable XX%. saw happening EUROIMMUN of EUROIMMUN's So, a it's the a as growth kind business, of of was that's double-digits. little think low we over saw our were China, European revenues bit in which rate. in the both up world don't of

there in probably million, So, stocking of EUROIMMUN. million was $X $X

to some of amount health, if And the they in reproductive then shut think Europe, again, supply. ahead in were labs that of get were trying needed I they both down, risks

million $X had health in reproductive million $X of to as So, it stocking well.

well. That there was said, push-outs as

what in in -- talked China. level, script, prepared that At high $XX I my million is we about So, a overall. I remarks, solely said my

So, versus mid-single-digits. XX% XX% of million the $XX business, headwind literally up or $XX just China, is the million down over

actually the which product, there was But There then tailwinds of about. plus talked million; push-outs well. I COVID that were I million of think of $XX I COVID stocking million said, $XX as was $XX just

dramatic. most India the was probably

of we million in. down, revenue well or as hit of the at at $X the America, India But So, $X Europe we shut it of that of million the couldn't lost also Americas probably end the quarter then borders as to ship as and end started quarter. the the Latin

both a that the So, the all is that noise, well and from is, revenue China stocking nets the plus the out, standpoint, while most as of pushout here big difference. COVID was really the picture as tailwinds had

X% organic story a about for was that So, swing that's the here. us and really

Operator

you. Thank

Paul Please go comes question Janney. next from from Knight Our ahead.

Paul Knight

with comparing how of as close your specificity obviously, you test, high that well. to EUROIMMUN is Talking ELISA what to the about sensitivity field? and love do the out your XXX to think that specificity. is in data evening, that and the sensitivity But mean, strong. Good seems -- color readout it's It I on

Prahlad Singh

It's Paul. a very good question,

First reality when should that's sensitivity and really approval these we think off, that when are onset, is, talk the seen that you look ranges people mentioning about sensitivity, data. XX%, But I the XXX% metrics, is we be shown various studies at in not post what including point is, have have the than discrete. these three our weeks greater data EUA

factors to be comparison, are consistent. there now, different. assays true a several The compared need For right are, being that

one only are each And antibody. IgG. consistent. samples is from them performed The They not to X,XXX-plus of tested tests on ours, are of example, sample. XX for Some total number range

X,XXX if So sample XX you have study, represents in sample But sample, in XX%. one that represents sample one XX.X%. a study, a

four to So three to this an on early response also days out. are at infection. variable would antibody robust and and more the post weeks performed different be more expect much studies -- We

More independently were of importantly, studies validated. most not these

outside FDA. was the used. cohort of also same Ours not by are patients validated The

changes use So antibody these numbers. in cohort of the the one in of are average completely any delayed same comparison, to cohort. patients that on you have response If

preference of of they their test. cases, of to these guess best aware itself, us the and Paul, folks both comparison. it's make have We the will these points. bodies outside a independent a intimately So, long-winded Done be trends, and market of in saying, on I already in a terms way customers lot are comparisons IgG for to specific difficult frankly, the it's spoken, based our believe all and that highly make as to

Paul Knight

sectors Okay. permanently like growth we've so That’s think to analytical just last question seems a readouts you above typical that business, then the particular would the energy you're that are rethink what there? impaired do the and -- been in markets well rate about seeing. some it And the part when is out like Thank -- you. those having niche instruments be, of

Jamey Mock

energy I companies you a actually of if a from if can that's broadly, mean, E&P low low price. put I prices. sure. producers for obviously the not in oil take chemicals you oil I'm lot and benefit Paul, But by certainly, Yeah, gas troubled firms, oil think and

think reusable about plastics you if this to it use produce bags, until in nobody can or have environment, So more. you

held well make up first of hand about our might there in actually and which So the actually, in quarter. industrial -- to energy, XX% business, in chemical XX% pretty

mix is I trouble So within it think yeah, some the I to -- chemicals E&P I depends think some of the maybe obviously, on there But, going don't energy. think, be with firms. and

Operator

from show I Jefferies. next Brandon you. comes go question from Thank Please ahead. Couillard our

Brandon Couillard

the working cash all? And the speak extending to you're in is year? you year. Could environment? through you payment capital flow revised plans for good, Are operating have thanks. managing you terms Jamey, quarter how for your of especially mentioned at this Hey first pretty CapEx you

Jamey Mock

Brandon, Hey, yeah.

the but in saw that's here. what encouraged I the is progress assumption here. the kind by quarter quarter we our into were first quite relatively year, coming flat, first all and you yeah, categories, was think operating CapEx that's In So, of

that $XX volume say, of out or first terms always the inventory, that, was million should a or I because a drop we thing and only $XX it. million we accentuate of this quarter quarter about have little of had In build, bit accelerate

we'll So there. our recover and plans adjust

of But point, the point been on is working customers, to a particularly work, receivables, accuracy, of in process we've think terms et in lot putting cetera. the biggest around side with your I where invoicing

long in with the are the don't handful -- time. yes, want a I good extend think as whether question To is to dues We last we're shape But that to we’re it's and very customers. answer long working a overall, I a who high-quality terms, customers will seeing worked with don't past few a in of here. for but think China;

Brandon Couillard

mask Thanks said for in you believe orders down specifically Was clarification. and… your remarks, I for applied in prepared were March XX%. that

Jamey Mock

applied. was specific Yeah. Yes. that Yes, down specifically markets. for applied That XX% to was

Brandon Couillard

speak can you March for case DAS overall perhaps? April, In or Okay. either to

Jamey Mock

three general, think in I be on down that if sciences, think, you will side, think better Yeah. about the to mean, I in will reproductive hang areas health and I are there XX%, and in it. that areas immunodiagnostics life XX% business, EUROIMMUN Food the on be markets, side, that the serology. I which why is And does core applied three what will is genomics. applied excluding, which on I obviously, commented think with tougher this

in March. So up life was I than exact XX% sciences, over imagine better but makes of which ranges, XX% you won't give can DAS business down the

Operator

Thank you, sir.

Schulte Catherine Please Our last go question from ahead. comes Baird. from

Catherine Schulte

help in all in you your think to it takes how far? look business the first I Hi, virus. has to What return talked quarter. thanks the so like that the this guys. guess, And there? recovery China Thanks for are question, team XX% doing in long down you first combat on to and and you for do growth immunodiagnostics,

Jamey Mock

Hope Thanks for the you're doing question, well. Catherine.

quarter. down not I'd immunodiagnostics it's China XX% So over in first yeah, the was back actually levels. in the normal – it's say

the assuming China. in think And It way immunodiagnostics second and quarter is in in levels. I But to basically, will is kind not to those question levels. immunodiagnostics back Our similar mid-teens we're the I growth business that growing APAC. answer China is flattish is of back

Catherine Schulte

something Europe? lateral -- then talked that Or flow about plan bringing U.S. more marketplace? And test Okay. of emerging is talked an to and rapid India. that Is China a you developing in or the you on about you

Prahlad Singh

Yeah.

So Catherine, this is Prahlad.

On now, the COVID-related India, which export for products flow, lateral not country. the is received India right approval any out of we've of in allowing

be emerging to going from more that's an So marketplace. focused

other in the work probably we upon China. ongoing Beijing, and that have The of to bring markets we development that in outside might Taicang

Catherine Schulte

you. Thank great. Okay,

Operator

time, and call remarks. Please session. ahead, I’d At this closing back Thank to President turn Prahlad you. This for Singh, like go to concludes our Mr. sir. Q&A CEO, the

Prahlad Singh

proud you should despite the in very entire position months all our Thank rated first and our macro for you, better the has delivered questions. everyone months. profile organization over Again, quarter together good your ahead. Thank operator. past of results how the company improved liquidity I'm the few and uncertainty, We

are help there still to breadth of puts While our lot a capabilities pandemic. combat the unknowns, us in of unique position this a

We quarter we I PerkinElmer, company. have are and Thank stronger earnings emerge to look leading with forward crisis science on call. is clearly providing and that you. second our an I from doubt you supporting resonating. Thank further even no this for updates

Operator

for call. this and Ladies concludes Thank conference today's participating. you gentlemen,

You may now disconnect.

Revvity (RVTY) 5 May 202020 Q1 Earnings call transcript