Merit Medical Systems (MMSI) 26 Oct 172017 Q3 Earnings call transcript

Company Profile

Participants

Fred Lampropoulos	Chairman, CEO and President
Brian Lloyd	Chief Legal Officer and Corporate Secretary
Bernard Birkett	CFO and Treasurer
Ronald Frost	COO
Bruce Nudell	SunTrust Robinson Humphrey
James Sidoti	Sidoti & Company
Matthew O'Brien	Piper Jaffray Companies
Larry Biegelsen	Wells Fargo
Jason Mills	Canaccord
Charles Haff	Craig-Hallum Capital Group
Michael Petusky	Barrington Research Associates
Jayson Bedford	Raymond James & Associates
Mark McGrath	Kenmare

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to the Merit Medical Third Quarter 2017 Earnings Call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time. [Operator Instructions]. And as a reminder, this conference call is being recorded. to host like Mr. today's now would introduce for your conference, I Lampropoulos, and Fred CEO. Chairman begin. may you Sir,

Fred Lampropoulos

Good afternoon, gentlemen. ladies and Lampropoulos. This is Fred

We City, Lake you today. from like broadcasting thank us for and to joining are we'd Salt

we Officer, read Legal Before our Brian? harbor to started, Brian our I'd Lloyd, get Chief provision. safe like

Brian Lloyd

Thank you, Fred.

and refer on do only other Forward-Looking any the presentation regarding update on any as with such call reference report forward-looking you purely that that results Any available involve made which Please caution filings And we of discussion to those date. Many law in website. and may events, purely on new not uncertainties forward-looking required Securities call During materially annual Commission, statements Exchange is forward-looking risks except events, in of Please differ could all anticipated by statements. this anticipated or not the statements, and actual section assume today, reports historical. Form our such aware of statements which our XX-K Statements Regarding information, today's and projections, for be regulation, statements future obligation considered these important entitled or statements. risks, otherwise. such as Disclosure a our statements. may discussed of unanticipated events be cause be historical whether to made in from that this information are not or are result are We made to to our information as other our made

in accounting principles the accordance Our financial United are which with statements generally are in accepted States. prepared

period Financial corresponding to trends and call operations provide financial non-GAAP statements. investors data for tables and release underlying supplemental regarding to measures Please important useful this the regarding income. Financial set substitute refer period comparisons be GAAP accordance useful our financial Non-GAAP prepared Non-GAAP not and non-GAAP in Measures discussed for presentation measures GAAP. reconciliations non-GAAP ongoing Notes non-GAAP to of should certain such reporting with financial on over on These to, financial measures The include of our net forth included addition the our sections performance operations. a information as consider financial with discussed believe in we and of information financial for items can entitled measures in call. Readers However, that business Measures some and measures this affect

similarly be may calculations with these other not measures Finally, of titled comparable companies.

Fred Lampropoulos

valuable to ladies and and Brian, thank for have And delighted you go. We're gentlemen, summertime. taking here much. you we again, welcome. very It's your time. Well,

issues try a regards to The and both facilities, first about time. know to in and all I talk terms in for and third really our we our and I acquisitions did you is weather generally vacations. fact quarter, summertime. are that down. generally the disruption the broad you we always of People had That is effect, and being to as take despite said, of as about, had across Procedures so that our I forth, What that we so X sales talk pretty about well. about on hearing a few want today to in think bolt-on want generally talk employees all you're the to and factors then board

are with I things, in think the devices. as in On the continues all, disruptions can you see business, consider. legacy a were acceleration our products, The to well So to And very improve. look saw, one in that presentation. same our pleased. at through we for that standalone numbers couple things our there with our our summer we embolic All sales, I of think of device of the devices, quarter a inflation we

acquisitions, these you go a moment in some a and then to on Let a Bernard for with of share and couple bit ask these. through I'll me of little weigh on

And product a Medical the all, Laurane day us bone First business. based talk Laurane that small about is United very with is in like I'd you Medical. to to one have of called me in company in to that's product Fred, but physician the manufacturing a who said, is Europe to came and interestingly, biopsy you a this one this own. from States

meet of million being transferring until dollars enough and than product challenges ma capacity. years Medical. year, this to done other an X demand the of over best the moving the some They any You a come it's agreement used. in this years this transaction, Ireland, of And -- the we have a have is to Ireland. a Interestingly pa over is the was essentially to that ago. it last guys simply for simply capacity. with this It's manufacturing have didn't particular base because recently in operation. owner, Laurane and And be won't were we're being the been built And able type the and assets in business, That manufacturing couldn't of you the to I finally on is in of ever which X has currently the got this we've product process worked on revenues one couple France. of over have the transaction, acquisition will see existing and we the manufacturing product

We introduction a this allowing products in the be in the product These It's sometime next of gross is a picked and to deal future. range this now capacity. the So big XX% us in quarter And process in first of in year. of are full of the we'll we think doing moved increase this terms up. margin. being

prospects. the terms and in of excited So what means profitability about growth its product, it

in acquired company that we was a product Another a that's just small packing business recently called ITL. Australia, and

to of allow buy more together these portion with our to enjoy we larger in are bunch good again, This that answer have is now Merit why able and pack business if market. relatively being is have business the revenue. It's then to business a of able to right be $X is It'll Bernard, and products that a $XX sold the packers that put of under I presence Australia. that's allow margins company much That up. Now, individual packs, a presence. simple owned. a and now, business? devices you now in direct And Merit's us in that that about marked million Australia million then standing is will in is Merit would in a believe, gives our know million, to And the $XX wing. to And

is Osseon. that Another called company a the we acquired quarter company during

that balloons. but are business the to excited certainly say say in And was are to area. that in more the I have a that we than seeing reception is a actually the want I reason better we company has of kyphoplasty they we Osseon that thought. were we're fact, steerable And because products fact excited, don't have Now, about this --

We have high candidly well. keeping but demand there the hopes very a with for business, as we're having up this problem

nice that's to an So from on acquisition. capacity. problem up a have We'll that the of catch beginning

types nice called rights think in revenue strategically bolt-ons. range but big, of then So company the overwhelming the transactions. and to acquired annually, those million are we that we And finally, products a $XX IntelliMedical. probably fit Total not X

is magnets. wire, places. also what we're But this by and a steerable product guide guide very wire steerable Now, of they to what have Australia, about controlled excited this came all us this is And means. from

we with cardiology you at area area, our in heart our or if issues that look physicians are are look our future. for EP that radiation, Now, you less whether in at faster SwiftNINJA, and allow to tools think accuracy opportunities procedures steerable, products more other it perform the be that

an a is the and and take expense, through going numbers have now a this go go that briefly which in-process development and I'm to there and the Now, product for Bernard through quarter. research then in transaction was moment

So Bernard?

Bernard Birkett

Thank you, Fred.

constant our product a all growth through for growth, reported And and objectives reported deliver on currency utilization Organic continues QX was of growth, mix, was on consistent to for our the and XXXX. on constant on a portfolios quarter. XX.X%, X.X% by continue which Margin in see our management, and we'll $XXX.X basis pleased and earnings and accomplished in product in to currency in the announce basis. our all X Gross a a to non-GAAP. we're across earnings, million basis on the earnings efficiency, increased facilities. by an to which quarter revenue, the sales the for so X.X% to on And And by margin of XX.X% numbers basis. up on regions. And line QX we continuing growth been with XX.X% of sales on quarter, non-GAAP across changes to million year continue XX.X% $XXX.X growth grew basis improvement in results, improvement cost margin improvement, deliver go objective has our gross of from a on improvement first

to For loss mentioned, $X.XX an IntelliMedical. the related which And IntelliMedical. primarily XXXX. GAAP quarter, vast acquisition to for versus that was for earnings charge Fred EPS of R&D QX. took basis, $X.XX R&D, reporting the QX we a a charge in-process basis. a $X.XX year, the of achieved down EPS. that seeing and on that And effect the of the of we're of that our $X.XX On share for in that are per for The we statement we to on of quarter relates in-process majority actually And as $X.XX already GAAP on is in-process R&D

effect, reported to of third bargain on tax, do On a which of we that, a and the basis. purchase effect then effectively we after $X.XX earnings we're on on a some this on that year, And in reporting of gain means on the had other side GAAP about $X.XX was We a that the year. a effect have GAAP the million, basis. true-up purchase $XX.X the negative that, quarter bargain earlier

transactions other course neutralized of So year. the throughout you see each can these the

that, be And R&D on to our maintain charge. revenues, our margin, And be the we're it'll earnings. between will guidance, range reason $X.XX. that this the And non-GAAP GAAP again, on -- so on to and is gross we guidance based $X.XX updating between for primary earning that in-process

Fred Lampropoulos

stronger fourth and that's think our see really And I will accelerate our emphasize we the our and year. now, Yes, our to into of get which we first guidance. now is to maintain second that, we start is quarter business our quarter important. as quarters Again, that

-- So vacation. kind school, are business back to It's from starting starting the of in and are back kids work, that increase. we're to to numbers everybody's already the to back see is procedures

if you and the expenses would, you, relation. the relationship the please? moment just like growth discuss of expenses for the you increase to maybe Would between I'd in that, discipline and So a the the Bernard, discuss and just

Bernard Birkett

that point the operational to those margin Gross that an continues we can view expand into strong on you And from had that given revenue been revenues of of than Yes, OpEx course across in our faster all that's we've for cost we important, very been facets year. of that And R&D, a growth. line maintain than over able guidance pace again, at continue the with we're to our grow track this and our and maintain to objectives. with continue also that's And see to very expenses. numbers. and down business, overall OpEx faster discipline

Fred Lampropoulos

very you much. Thank

a no of in don't lot linger but about we about years Hurricane it. sustained me a to our and but a homes. amount of damage this, cost damage. And production full Harvey Let minute. minor X.X, talk a We a I it have number back that Houston strength. did switch ago on for days lost built several just at facility of for We everything's X our had to to want employees' of moment

And we anytime If biggest of over I disrupted it's effect cost look Maria coming all think always psychological employees on cost. of the bothersome Puerto not of that sitting at the Rico, you have now was and to business. that are much course, to up us. our

I pressure advantages device out, Maria going you're our located that excuse Rico. And has there's of However, from detail, go Rico. And I an -- to itself. outside in of because We well into aware, here. our but companies, as all vendor. know, in not or, a buy you own fab. me, of Puerto am there medical lot want own sensors one wafer are -- point I is make a I think think as in self-contained lot to of Merit the sensors facility pressure an opportunity We presenting many that That vendor outside Singapore may be its is, in Puerto

these issues candidly, very have to have looked I think, ago. Fortunately for Merit, long we capacity the and the at wisdom

the simply capacity necessary from that business see Singapore don't is need. coming to provide to because Our in our be sensor our come able we that in will up. disruption business We will meet any sensors

that drops years not inflation blood products seems So Well, because have do mention It what you we're business. have sensor essentially that with a non-core. only it's I'm pressure the this our feeds I why that we supplier. And competes has all. digital at that and It business, make have capacity. existing we this people is on, new in other for the we an said, aware this and of many wafer be to fab? well, in our world working company that are

interesting is, view and very hole. we well out into quarter, that Now, that late of be disruption Merit early year, Puerto see there very may may the hole first think, of out a opportunity come to my this, Rico. we this a that and fill could

going leave at great for new We're some to just but are it and to procedures is that think point I back and there to improving. I'm everybody -- products Now, market. are coming opportunities, now, work

in back. are employees the all, I'm I'm all summer's So glad our over. glad

And than those other But we which -- think strong. their in is together in relief pipeline. a a coming Houston never have from It's pipeline. will a methods. This a staff new the the own folks, way, business and our over by have all but where live number products, retreat we some a company again, full unfortunate, our I we've been put few of business homes having full of the here. leaders so world is got folks week we

we the company. future want to before any share again, so bright questions? I start a we And and going reconfirm very our thoughts what is guidance that to Bernard, taking think for continue to last be you

Bernard Birkett

it. that's think I No,

Fred Lampropoulos

gentlemen, and back going right. All our to to Okay. taking and over time then, ladies we're start the Well turn questions. we'll administrator your

Operator

[Operator Instructions].

with comes SunTrust of line the Nudell Bruce question Our from first Robinson.

Your line open. is now

Bruce Nudell

Thanks for afternoon. taking the question. Good

quarter looks I if there Fred, businesses wondering that So run non-core years today? run in you it about $XX of sales. correctly, in was these million to potential quarter. what also, think $XX revenue X I was these or was million a of had X I -- the And $XX all, just out in the of due if X like, is businesses? first the the that annualized heard How million annual rate much the rate's of And businesses purchased

Fred Lampropoulos

at you run they million. Bruce, confusing. was incorrect. I reported that's dollars, business the the -- That Yes. in thank question. instance, numbers Australian for in is the were you're number think And The $XX that be and looking rate Aussie so is purchased that might for about

Bruce Nudell

Okay.

Fred Lampropoulos

each But them, the of let me you one go and is. opportunity them, tell where through

based mentioned, Medical. Laurane a with Medical, in is manufacturing start as me with was a we France. small Let very company Laurane -- Connecticut in

United quarter. in this X so States in England guys that is the from our moving essentially all the teeny in in feet X X,XXX expect completed had they France, and little essentially or process salesperson And that. these doing What little be or is that the is capacity. very Irish they something And they challenges this first by square with -- Laurane manufacturing we sometime of are the and in like were France were the we're company. the and industrial that in of we One in all park, being about scaled have plant. And at X full will moved small, they had early

customers' meeting any orders. we're more We're not taking so orders. And

go website, and why And all January to going is slides quarter our our again, on U.S. at on sales what in exciting We've margin. that's gross actually this so deck our at the we if This in be nicely We product. have actually so or our for point. And I product. worked you'll XX% same think in slide you'll is product meeting. can national has this see a our release is XX Merit. but will not Europe, think the this launched when call in I our the And of you the first product, -- salespeople we understand there an

some product. can of You see the

Laurane. that's So

I company. I surprising don't comments, me maybe million don't is a of very want just us, I the balloon. have kyphoplasty and couple the very, kyphoplasty to a balloon. the go us and wherewithal, word, small or my Let revenues, have their to say steerable again, Merit dollars But is product have -- but a that and we as bought guess so in does Osseon, is that they a the of kyphoplasty Osseon. best not And scale because simply mentioned in is so to assets. pleasing

in we've And their bring or few, this that our bring that to had excited And year something can so product. because seen in very salespeople a and sells of the we're spine -- fact very for revenues all that the we've into no with apiece that in $X,XXX it just is for think X business or something already we month, close about. weeks I exceeded, that they

move away, basis. there products on in as in well. that. ITL. the around our respond that But turn imagine, trying way a difficult. it's and believe try And ability, from to Merit more down our to very selling me living explain And packers to wholesale -- and down products was can with sells excited and we to there. various miles business about changed we a so down respond Australia, are I'll build and direct from these why a to Let distributor. and a candidly, to U.S. to capability think and ITL know, quite XX,XXX, on you about product the as to of can in lot from you little we detail we're customers down there, this these XX,XXX customers This we -- go customers

And ITL so that business. is the

these there somewhere to these don't a all of that around currently exist, business. very do we businesses million their you product. then this capacities and imagine, ones, are factor really size, a next all get be to in things between and other up these move the as than rapidly will for very these these is start ITL pick X lot scalable sell is Again, of think that for $XX smaller scale as will start very, Other we which selling So our business, Laurane, start out. product, will can they rolling of They business revenues and we worth the Osseon year. and of as but into

long So a that the answer, but answer can question. I that's best way that's

Bruce Nudell

All Fred. the contribute much did how right. And in Thanks, they quarter?

Fred Lampropoulos

Very little. pick don't was of to like that or know Why answer Bernard, you that ITL, just something Because one. quarter last of the you that one week what? -- closed up? biggest we the have like And one that. you the I'm was, and course, going

one So don't Bernard? up, why you pick that

Bernard Birkett

ITL see $XXX,XXX to other revenues probably had in looking any you're didn't no for in $XXX,XXX business. that We the quarter. from max the at businesses combined, X quarter. And effect third the

Bruce Nudell

Okay, great.

Bernard Birkett

So a not our material on effect numbers. really

Bruce Nudell

of for that concern How rate given saying in SKUs X% the and target Is core X% the quarter? modeling of And your core tracking growth underlying would speaking you Is organic, kind of of the last out X.X% the there that growth in has year-to-date it to it's -- the in number is it all it cause X.X%. the sub I laid kind core assuage in was rate, any think some concerns call? difficulty there it terms you hurricane? effectively, and the business of the and or any the quarter, growth really in

Fred Lampropoulos

pick that Yes, up. I'll

We it. always summer was one those of So We the we It's it I it Bruce, into caution about things. actually see think, it. as and warn quarter. go

of the deals. to think excuses, those disruptions. a of I on also look management want it the numbers. quarter watched but least to at as fourth It I me, a there make doing were we've we're already were third that or, in these don't time. emerge, those what -- In we lot we will of do our working terms expect number I back business with would quarter tell meantime, you excuse

Let give an example. me

you'll off, third see endoscopy also our can very it, at was You business soft quarter. that look in the and

this record all-time month are talking about, record instance, having We already that an month a month, for for business.

the and we it have that exceed we bounced nicely, terms have X that think year our has plan. our very or we year developed So meet and will of balance I numbers of presented and in this

in accelerating of I to lack are you alleviate be just Chief the and station, threw very summertime, understand then already summer, I I around attribute a I was want But can time, here just -- And year, I it the this Officer in to that's with table I'm the of concern. just is the but it's do issues. and Operating you few there word same same we think and back don't with But -- It's all storms nicely. can that everything I same a So some to because we my would we business, to. the maybe others word, and bounce, visit behind sitting business really better us. for the that. use it and feel and we'll that next

Bruce Nudell

core to the be growth annualized lowest the usually year. of just summertime has rate, clear, So -- growth rate Fred, growth of the

Fred Lampropoulos

the that is And products correct. mix -- Bruce, That's because of of reason, globally. our

a and shuts half. down Germany down. almost shuts see France whole a and You'll a sometimes month month for

on business. been American year. this. been in It's And time the traditionally the as well. see You'll for slowest has years just XX doctors of go vacation the It we've

Bruce Nudell

so Fred. much, Thanks

Fred Lampropoulos

Thanks, right. Bruce. All

Operator

next & our And with comes you. Jim from question line the Sidoti Sidoti Company. of Thank

is line now open. Your

James Sidoti

me? hear afternoon. Good Can you

Fred Lampropoulos

are Jim. fine, you hear How you? can We

James Sidoti

first at from this on revenue least my there's A right? wanted right. Great, business, IntelliMedical. great. that just question I verify they point to got name At no

Fred Lampropoulos

not. is There

James Sidoti

Okay.

Osseon U.S.? can And and what's for in process approval product, just approved are you those that? go over like quickly already the So the product is -- the Laurane the

Fred Lampropoulos

the Yes, let to Intelli system. to me go

doesn't have to that I as developed you for development think product to capabilities no it. that revenue. think be have in-process The like market. think really -- we which and research full XXX(k) reason this, know our of liked we the we U.S. that is steerability, all this something that we The of R&D where don't on of that our save our and It like. was physicians that. it require say of sort already not it we or normal do of see a are the whenever the be the These bring I HeartSpan Jim, save X have. will technology for other the I build They developers is as Ireland, years. have product It'll the wave robotics, expense, product as the resources future. number There They exposure. to we take The in this be developed. take correct. X to guide will -- things you in and thing that studies I'll time. standard those line a product It and are had be We products, will all think to full our in X years. at SwiftNINJA. process, an responsibility next wires. are a go the didn't felt You to and But in market things will And It I through I we looked on

cancer on East center to go every me the Laurane Medical. in $X Coast. the million. They Let major selling were They're

a -- to the in very France, gross -- that XX% think They at once start sales of business enough, of but have is with a and or And January. we're will force. of margin. you and last done just it. our release XX% margin this about and of you -- then we should we at we'll demand. force over Interestingly head were to then point two. Miami, of we in existing you of have get is that opportunity and view, we customer margins. quarter Boston Irish be the in do again, generating product. in Frost if to X not business up years about Ron million sales capacity first should So couldn't to once in meet little worth next bringing that's have and up meeting we million just England, at plant. that we a $X Again, We out should revenue small our talking We a team. -- high it -- be the our From And those down least the This his simply day what this released my X them broad product to to around $XX demand. We're bit kinds

big its level. a Merit, of physicians be because can for is acquisition it a So opportunity in physician-driven again, the a and love. product This that absolutely product performance

Jim? the So that's on Anything else, Medical. Laurane

James Sidoti

Osseon, assume the that's the And I that in approved U.S. as well.

Fred Lampropoulos

approved It's is. well. It as in the U.S. Europe in and

in approvals there Everything has existing place. else IntelliMedical. all its are except approvals the for So

James Sidoti

you what you I don't revenue you what you went mentioned over for paid the think the And -- just Okay. can was. businesses.

Fred Lampropoulos

I it you. to didn't. give I'll

paid potential for U.S.; number we a paid million. there; million For now paid million, big million; Laurane Osseon, we $XX we $XX $XX IntelliMedical but that's big $X.X Medical for and for there's ITL

that's for were opportunities. the these costs what So

James Sidoti

total. million, about So million $XX $XX in

Fred Lampropoulos

got million? I've Yes, $XX XX, think let's I I've see, -- about XX, what, No, you're got right.

X and that's So X, and X, XX million, $XX No, million. XX. that's $XX about XX, about

James Sidoti

just And Okay. right. I extended credit. All the line of assume you

Fred Lampropoulos

facilities. of paid just existing it for out we Yes,

James Sidoti

what any Okay. sure in quantify to All was? Any impact procedures and And delayed was Florida. in there some is way right. there way Houston during quarter the that I'm --

Fred Lampropoulos

they getting of weather. make City. Lake production. from it delay were to lost blame But don't of X some days the and deals. Salt up the product we minor want and facility That on I Well, up excuses -- Listen, of was really to kind in

It a I $XXX,XXX salespeople for huge company. But things that to with in the but entire say effect And is Jim, XX our applications had back on before. it listen, And employees minimal just a -- statement deal happened effect to $XXX,XXX to It X all helped off together and it's think was with think of help part for there. put our either of the deal to and we business. really, that again that plant had could, or have all probably or had in employees helped lost into the a it's the -- something I not homes We think area. before, was that. is a the good had move their I fund. will blowing fine. raised Ike a relief on never overhead fair that were we've to and funds tremendous news we've our our managers we roof employees to we of of We've be had close employees with. $XXX,XXX our did Houston But globally we able disruption who We've gone.

fine So pretty some for sledding. except it's those tough of there, everything's folks

James Sidoti

right. it me. Thank All for Well, Okay. you. that's

Fred Lampropoulos

All right, Thank Jim. you.

Operator

from And Piper comes Jaffray. you. the line our Thank next question Matthew of O'Brien with

is now line open. Your

Matthew O'Brien

this Thanks afternoon. I'm for side And I know questions. on keep you. taking the much to to important harping because really employee Good more sorry the is

I just organic kind trying a as of expecting. facility shut down impact number the talking you're revenue than their days. some get people for weather far as lower a mind the the But most the what was think bit investors about, little to few could really was have side had, were I given side, that on that are around think

top $X is on to along lines So Was frame Was that up? point it a couple million bucks? line anything specifically? there to just it way the you any million, could those it just

Fred Lampropoulos

takes important lot to product hard had I of Lake Maybe are getting just difficulty said, have shipped. Matt, we the and not largest some that Like salespeople it's City it hospitals, but was It's question. X Texas could up the issue been that people. manufactured a Florida was more probably areas. and the Salt a really

about, we lot XX have a totally think of know, frontend in but area. just the storm I that hits, on I not And don't the it. when have people salespeople that's to of

of that in I are don't. again, in it know there But coulda, orders. saying, have it effect So had think that don't well, a had woulda, other things. shoulda. I We production. an We effect I just an number know

we that into And really here -- just we every comes year selling. I again, the as third why summer quarter, always think it say that's we that was summer. go

to important -- I'm part. we're numbers. the our going in meet figure here's to saying Because I'd out it's this frame how that -- Now, trying

meet and we end exceed the what to also were look have can I would As know seen $X we about dollars that million we than going have quarter, rearview But at had a do. of the couple back. anyway, couldn't come of otherwise I And numbers. million we to back mirror, quarter. we -- that's Bernard in said, ship. our And you the through order think just the or maybe They're lighter it's

issue am. deals, that. million close or who way. important sounds don't don't who -- to But things like couldn't not selling, do it I couldn't like it's be just or I It's $X ship, a more million couldn't maybe want but just out want -- that, an again, So I I kind the excuse. $X don't about so the Maybe that's is the best of know, so. who That's of SWAG, people disruption

Matthew O'Brien

All right.

Okay.

Fred Lampropoulos

trying not to. I'm

Bernard Birkett

you in sales move quarter, into temporary obviously numbers. given But we in -- us say be that the to confidence seen and third I the seeing getting us for of we're the us. the of we reflected Fred, That's for QX, quarter have that so we're And part that's a softness there. and thing the is of point earlier the what in a was we're lot coming there indicators think, as we've team. numbers this through the in fourth think able level feedback softness the from seeing to our that positivity the what that, the some early quarter, first yes, I and important made was

but because year really where on And year So I'm we as for think overly positives always not the wanted concern guide Matt. of It's through of every see -- a XX years, But lot we we sorry, that. we done the down quarter to have. seeing XX be, us. And coming weather. third We've we I into that it the years we that forward. every as based for always go strength indicators doesn't move we're

So it It's making this isn't that like we've done. always we're up. something

Matthew O'Brien

softness you in the softness second that saying the in that impact And specific but QX. a in you've Okay. this you the hurricane and the get that saw addition I'll related outside quarter was weather off you in but clear, saw that here, recovery to just be in of you're just here saw, to a seen

Bernard Birkett

Yes.

Fred Lampropoulos

Yes.

Matthew O'Brien

Okay.

Fred Lampropoulos

an Just on X.X%. some up in some strength you inflation so internal interesting. we if other think I take a issues here with We is That's our show to the this account. the picked business, look at up quarter devices,

our continued of so business that be were there strong. to areas And

X start X picked inflation digits. contract that the healthcare we to moving you'll Some just that move of do to a a year fourth devices And the we'll double -- quarter see with to major about provider to or ago. in had months fact with see or next up

So devices that so. I million either. not be about legacy for somewhere will about product around is $XXX talking -- We're about small know growing. And inflation this we're dollars or a talking

So products. It's growing. margin it's of that's business a big one highest

we would would could, about replaced as in do we we that And fact for that And So that's the if I the we've ramp and had transducers. in the on to that continue strength saw a the to X that other through wanted make one account, of Most I years. to that another up national player with the year. expect point go quarter.

I So and itself there's think an opportunity may December. we present in that believe, probably

you I it's think think, Ron, December.

Ronald Frost

January or or February. Yes,

Fred Lampropoulos

next this late year. Yes, early or year

we transducers used because a that explain cardiology. are kits into And not transducers own those big the but in our into contain single Those Well, capacity. deal, fine we're number to products sound produced a fact me go every that may we let we've procedure sell have of products. like in it. Merit So very our transducers

out third are a relying party there of this have We on to other couple this competitors vendor, going be that vendor.

If an be mean I think hospitals, comparison your And you in substantial Cook is can't opportunity. larger the opens we if that by in think we to your that should going itself, to, a kit present and it's provide opportunity that transducer substantial. up or would than offering in your to Cook. It

we've only comments. that we that have produce just my the we talked And ones So And company buy we that advantage. to be them to essentially it's is inability it about a the we problem can could that and because meet means we'll demand internally. it's the started product huge meet we're in only previous to But because reason our that something us. know and of vendor their see a some from deliveries to

Fortunately issue X months. -- have an that X next X capability. for X, and to going become or over us, It's that we the capacity

Matthew O'Brien

Very helpful.

more a that that's clarity opportunity guidance. of on as about anything in well. And little just talked our we above and So over terms

Matthew O'Brien

Very helpful.

one real Just for quick, maybe Bernard.

similar the leverage SG&A of year about As and you we far 'XX, coming the good. things. margin and Should as the really the margin quite from the side quarter was gross back think next performance -- not improvement and talked a in expect forward? that But area Thanks. more going metric an draw type 'XX is that you leverage bounce performance see to a a Should you and 'XX? in we maybe from from up, could or bit see this little

Bernard Birkett

we're and 'XX may we with And the in into. obviously opportunity going that look, the going potentially and be moving for to given always is 'XX. be spend there. given guidance, -- turned and that margin to we're the we're can as that to our revenue we and, well know think managed to we have that we 'XX sticking And area 'XX some to make still from continue take very, sure well that and given -- support the I improvement. the we growth gross within that improve very gross third preliminary There margin. were It's managed we the revenue want we've is can able quarter in support the that markets guidance to expenses way But you out, big the quarter takeaway

business control think to again, in be adapt going 'XX the to 'XX, depending level of discipline and and So always But guidance But opportunity. able the to to we on have. happen. going I what's quickly a and maintain there's that to be there's for we're flexible

Fred Lampropoulos

expectations thing Yes. here Wall Street is a If I did environment. need by is I we because could in note. there, to think I pennies we and important the that really that I second, this just couple think but a And share, that in a that was an of think add exceed move in in on

have I been ability everybody we in and fact think to that years, I demonstrated to it these that all was speaks that And has about in have place. concerned think discipline. that really our have we what

that'll So be I hope considered.

Operator

Biegelsen of line Fargo. our Wells Thank next Larry you. And with question from comes the

is now Your line open.

Larry Biegelsen

okay? afternoon hear me Hey, good guys. you Can

Fred Lampropoulos

you? can, are Larry. Yes, How we

Larry Biegelsen

thank you. Good,

you us? Let there color Fred. share me PAE, start on metrics the and with with any Any rollout can

Fred Lampropoulos

Yes, Larry.

second our quarter. into that roll We have think class. now training the classes or classes, X X I added will first had We've now,

we'll because continues We're and we we really, when expectations, the done it's is by had had know want well. first we line than I don't doing hoped meeting better to all really the contribute. I XX say continuing have about the So exceeding. on doing I but I think that X high think SwiftNINJA reception our it's for and we're to to SwiftNINJA said done, maybe grow -- it, And hopes enthusiastic. continue already quarter. that or the to be have The see

inappropriate, names going think And as just you I proctor that them X it coming out these people been this and almost took I It's to other know. all careful would give last in individual but to physicians individual after It's I say, going, We So months -- time will somebody improvement be somebody it's hoped things had class. I it proctor I telling other all have cases think X and but then they we just know won't a I or to think as well. say to not and I'm done. his because a men they're some this, and X went have now of do. you to lifestyle. one want remember during get talked and talked than then I -- then I to that. the And trained I guys that it's we get that home X have and And dramatic this was procedure how the it'd that think ibuprofen. had that I them this go I've them be it's on own said about now, their know. And and

think to it's I going So plan.

Larry Biegelsen

a Fred, this willing revenue much contribute XXXX, to range? even in are how you say could

Fred Lampropoulos

just I off the would top be throwing a my number head. Larry, of

more We will say we by range the I the of this that it's of million end SwiftNINJA, or going important launched in is I the just the I done think guide new It the is of access. True that the get for this. not guide a is a Merit have think that issue a Form, a that number. just number. all It's It's catheter. wire introduced. wire, that tray. published the just $X at that million which having be We've $X time But vascular to go year, things the with

me year. guessing will the you. but been next The number, everything be have worked question, do is actually, put I in together So I time for what number I will -- getting and you we've we our would next that ask and tell out at for fact will going I a planning through the

that We to better. a have many different able bit want products it's but little be I'll in to a -- so quantify number

is of going these like I this. training in by figure to a business And is but experts get it's trying which way we've along. I and about been lot out before our Merit. give XX The any physicians demand the by to just these courses opportunity for There's all never guess how lot for say excitement. you coming demand for in to I'm that So of a people the will anything of classes taught a are there's in overwhelming of is seen for the businesses, a months and where teaching like come them. and trained. -- number in is really lot X this -- physicians, And moving to the these not challenge today, biggest us

Larry Biegelsen

two related, product had one I more; And one guidance Thanks. related.

the slowdown a you seasonality. the talked growth. product quarter? CRM particularly the and particularly and about one. I I And a the But catheter had So significant know talk CRM the why in we you growth deceleration weather on follow in third outlook, for can summer and one CRM, deceleration we side, growth the up. about catheter saw in the a saw pretty in And

Fred Lampropoulos

again, Yes. has about word sells I'm that launched is There that catheter, CRM go say that for $X,XXX. Merit catheter just just that a and is new that to steerable key steerable. and a to going catheter the HeartSpan

this is Let XXX%. forward, increased for that and me just by our a to looking to that The based forecast say not catheter looking catheter, year really backwards, on been this initial response we next just don't seasonality, response that overwhelming. our than has business try $X,XXX that's high have to have It's excuses than procedures. make other say Other going to really comment. I EP the catheter I'm to still any Larry, used other in not expectations forward. for we going

Larry Biegelsen

that the as that could growth anniversaried well? improve expect benefit, of we've of should what we the X%, kind that or And is now Cook catheter

Fred Lampropoulos

improve. it'll think I Yes,

is We been new next has out. have uterine coming not has used, that out And days but been physicians. the one less. used a at XX think catheter, catheter artery which -- in least that we or catheter to we demonstrated coming expect It's

is access fibroids, We vascular which, lot of a know, you that, which a including and and this products. of our again, expectations out wires in our uterine have is business Embosphere as draws catheter, used high products of guide Merit,

questions. it'll a those Again, call the again, there So more and quarter. understand appreciate -- really be interesting each of these fourth I are groups, much think a for questions in I I

all this away take we'll start it'll and there. stuff think then I

are, We -- across reaffirming board. again, and the our guidance

answer way Larry. it, So I best can that's the

Bernard Birkett

Larry, you and QX that product unusually move on to it high were see a Cook as next at of bit into little and so saw higher. we shelves QX shifts had that a QX And In bit related point, the to when in we QX you'll replenish 'XX, into of comparable little the catheter, year. sales Cook normalize QX. the demand for just then

help So the rate with there. that will growth

Fred Lampropoulos

anything hands it when recall point, you was place, that sorry, a And to from Merit, ordering that could they not And I'm took on. Yes, huge have but remember everybody was that bolus. just to Larry. get their

is seen move have think and we just of we I we talking think up, I kind Bernard few crest, were core and that business But go most how stabilized, of ago, this have now that I down. it a in catheters. also about saw we're has about retaining -- that those days what seen

than up holding you to saw -- that the on and we're that you forward. we holding product are our have business sales I no when other all, that going we're at So bolus think would expect

Larry Biegelsen

constant to helpful. I'm me, implied That's growth is understand trying lastly organic the for currency Bernard, for QX. what just

a math, my to and getting X% right? our basis, is, X% to XX%. growth organic QX implied math X% about benefit, for assuming the Is to currency the about for me So by guidance X% reported X% I'm for QX. on for currency constant acquisitions'

Bernard Birkett

Yes, I'm you're closer and currency higher. bit looking the on to X% constant at a maybe -- little

Larry Biegelsen

organic constant by implied QX-- growth So currency the

Bernard Birkett

Yes.

Larry Biegelsen

Guidance is about X%.

Bernard Birkett

Yes. Yes.

Larry Biegelsen

Okay, that's very helpful.

Bernard Birkett

would X% to think. X%, I

Larry Biegelsen

okay. Thanks X%, helpful. to Super guys. you. for X% Thank taking the questions,

Fred Lampropoulos

Larry. Thanks,

Operator

of from Thank with Mills you. Jason And our next question comes the Canaccord. line

line now open. Your is

Jason Mills

Bernard. Great. Hi, hear you me Can okay? Fred,

Bernard Birkett

Yes.

Fred Lampropoulos

We're can. We fine.

Jason Mills

Terrific.

about the like to here What lot up So those acquisitions, discussion that do on level. them, But you're are you I'd Fred, to talking percentages. on is if terrific lines smaller obviously are we're could, products. product discussion intra quarter of individual which excited XX,XXX been you sort and Fred, of foot some about then a and take

And I'd in your volume your customer launching share are -- cardiology. procedures and radiology your transient procedural developing sort specifically You you're solutions and which device products in around sphere, of the of for in hopefully, better procedures new and interventional lot growth like as of and the on hurricanes, notwithstanding position it procedural touch a medical perspective in themselves.

feel view, XX,XXX to just competing a to to get do markets gain share which markets needing X% from in the to you're growth those your So on within a business you perspective X% foot growth how and your general about now realm?

Fred Lampropoulos

Yes.

out the I we you different the the It's our that's just almost the read any guys reading in of are And reports comfortable. I've quarter something most guys. We've than third bigger rest that song's And there. the not reports too. them. softness read that of are that kind all all the all think talk of -- even from about

a a in light we're was I the mentioned, that in, electrophysiology, like where markets smaller of Endotek, record record as and in that already that the think an And was in mentioned, Jason, again, a month, that one business I -- quarter terms third this was PAE, things -- the was the area our see soft. business. of another area things the -- really part month. as light, that of but, in despite like little have we've we'll fact I a our what Again, we'll very quarter rebounded was Endotek is have

we've think talking very we're XX% year. I for about the So And something that from business almost light. still in gone

devices, So at whole radiology take interventional the inflation and we wire again, procedures, as cardiology look including our new we look procedures we look thing at look guide at at the the we a business.

for I of InQwire a wire, to that where second, optimism in products that also those and of our it's helped But a we just saw little about this our let what lot of diagnostic one one XX%, products guide it business. because the guide me we enough. of us general think guide is accelerate future. the So We those done is that go to growth make it's And again, fast is things can't called business this wire wire. a the the Amplatz quarter. the is that new Amplatz, up And gives launched

areas up our through. is contracts, call there have we're of we're where we these we in out launching other sales So are pull picking force and either all where what this between and products there, the

competitors with new I a business have. admissions And could and that tactical think that and don't add have that the These generally So we're we where strategic I more overall despite what things a fact is you don't are have view know hear the I'm down talking competitively or in procedures satisfied soft. much been in that be are. been about just of products better place we that our

it from hope that view foot the best I of that XX,XXX my question. level. answers So It's

Jason Mills

up Thanks. Fred. couple helpful, A for That's me. follow

you've business. HeRO used the Perhaps little got to you in start give which trivial recent DFINE us a over hands. bit, sense and those quite you a update I off on acquisitions, give had good about businesses, to us year. You talked -- an could to for talk your your device for aren't know that a a The but more now about that standalone

Fred Lampropoulos

for the question. you Thank Yes.

Let's HeRO. talk about the

HeRO We expect about that XX%. the year will grow this

now all and when we aware we XX% our I in about past, closer that we as they're the our And in hands. to the and it when think about So think we're all, you're XX%, quite satisfied were margins I'm XX%. talked have to gross with -- this HeRO bought in

we that a were year. you of bookends as R&D think instance, the it we rolling the do was we you some which for one that And those like did started and in we people some have XXX time next we are July a I things with it and that it It's enhanced then good with DFINE that. to have it's will first good that. last challenges summer we're that a is these year lot some I We that be in acquisition, And up transaction, convinced go still ago And in Osseon up, know, history of let that but DFINE acquisition, a then going. had that demonstrated to at acquisition. out If projects in areas. we've firmed have did of Medical, we had the -- look adds first we employees. the think quarter

So are out of excited. the a we catheter look take cath business, connections I'm satisfied we at there. If

growing that We're big continue opening which We the I years, cycle. a that level. about talked see we that that year is We've to for had accounts. along we're think X gone up business at And I a through business new tracking think distribution at XX% -- number.

be time you we it, just out new that's second least in be And something guys patents in to move have breakthrough product and new infection I We will be about going and that year. on have quarter heard on next the filed that early is this, you'll at have hearing particular next we first but area -- have believe year. that's into as out developed management that a We in this we this a we we of coming that think have several product area. the

filed so And particular just on I one We proven that that's to We ideas. the on the think a this We've hold point. phone patents. I'll the And finally, issue, going We've our that have big competitors to concept. Argon. have then be always opportunity.

I in into for than quickly think we've issue, people. in of as with surprise about play very probably terms we talked the it more thing expected has Argon has been the a I biggest And could the big think as actually opportunity. transducer that about I come think this that think that performed us I business, earlier

I and issue not So done one with other of and with. issues challenges, these we and in in I that take summer than weather to think a all our doing of there's employees finishing I'm a rest to -- year. stuff. quarter. bit And get were them just And lot these trying things, we and the had of think Jason, I related that unhappy break the up but work other the mean Listen, of door product for lot of a we've out the a us time little the it's middle and all this here

have most I I them. of So you -- all think that's

Jason Mills

year-over-year. another the in success a I'll some that's second one geographically; give That's sense is margins, ask you opportunity the more is for the Could China, way performing Two questions here; I'll and just get you've view, your Yes. No, geographically. helpful, good out business, bps XXX Gross first how of now. there? Fred. the helpful. us what had in

impacted operating outlook to us You've from Maybe driver you couple view year-over-year revenue income greater basis. the of XX,XXX as year-over-year gross to gross to done etc., foot profit next well. quarters. any give your comment than for But on of looking your slowness forward, a couple expansion years the a Perhaps you little bit the be as could margin of me the better seem on there Perhaps hurricanes, that. could last that. doesn't you're in a

Thanks. Just Fred. update that, on us

Fred Lampropoulos

Well, star, China. think, Geographically Southeast it's I Asia. of be just Jason, the Sure. right. that to continues you're not China but all It's

all been have Thailand, into Vietnam, growth. So if really areas very, consistent have us, in performing of Malaysia, and those for look you that Indonesia, been very well very

we're think happy there. I So

know, I I kind like think, come force and and China, been affected to that's They've of And slower as many and most the of -- the think been the I the in the products reorganization go haven't Europe. think started deck. you don't And point out But these jump there's these disruption that really places just of some in haven't on. has the U.S. there's just U.S., acquisitions U.S. training off the that probably been because affected in has sales

train salespeople. You have to

and yourself You there. have to out introduce compete

So one will I of looking that some to. think acceleration I areas the we're I that is the U.S. you'll something in to see you forward see start And think that's think

and, talked exciting out Form including be HeartSpan, things call, the are number think in other that more those out, of I as Tau. of True because, about coming see you'll in I floating these and the previous of products our here, the inflation to U.S. mentioned think a including the the we've I devices products some including going So

device a in expect new Tau about the system first be hearing and So a lot quarter, that we is you'll the to inflation that. out come

acquisition products going because -- we're year. the of the the because of that acquisition accelerate have into the development rolling of that's or what national the seeing think of but that that only I to contract, first in not new not two but we are

So those as are going mentioned to up drive earlier, double I business, into digits. that

said then is remind the when margins, we met comes bottoms XXX -- deal. into back, have like down a our this of do our we bps. the that's finish something more. you is guidance, this exactly In single think I'd as it or we'll and this, look really and And to done all up We exactly year, I accomplished every look really next said call, we XXX everybody have on and again, And would terms to what year we of and again, would said that back one gross to that we we numbers.

got gross bottoms to efforts. Officer. real from sitting globally. the Ron margin have I've of we the this efforts Operating of He's And manufacturing real our with He's Chief those Frost for of So that up contribute here. in all terms improvements model built improvement responsible

So you and those those a take issues efficiencies, logistics, a things these at ups costly. business. we look been are are have to, sometimes that on all hitting committed savings, ramp have efficiencies cost throughput, when as But and of and you in are they're guys

to we do X%, to we've we're and 'XX. and then XXX to year, 'XX exceed say told we going to add XX% profits basis So XX%, and going our points I'm meet you exceed will or those, XXX not but from that will somehow this in what

So we're been as know, just we've pretty good at getting with sticking it. Jason, And this you done.

pipeline. we that I do we've think great think And in we've people also have I -- have have we discipline. have didn't proven said that product we demonstrated think it. Well, I the past, a

conversation So you other far said today the even get come I to from mirror And we guys back. we it. no in so we're now about everybody, X did. and be what rearview will side remember months this however, what will having remind one on the will

So doing reporting said, we I'm looking and we forward and exactly what to will.

Jason Mills

Fred. you, Thank

Fred Lampropoulos

Thanks, Jason.

Operator

with the Thank from comes you. next Charles our question Craig-Hallum. And of line Haff

Your line open. is now

Charles Haff

lot I taking have That's guys. a wanted Hi to ITL me. and Thanks a for A of asked to answered. about questions. interesting them my pretty acquisition been talk for minute.

in big a way. You haven't been in Australia

does wondered Australian going terms of your just Southeast the future presence about Australia, what says plans of understand there. And facilities be the the your expanding guess You're road. today, And from the could couple clean but I research manufacturing it ITL else one that forward. just Asia our and of I so can of something rooms in down it only it's be business pack what it continent you for the down in in

Fred Lampropoulos

Charles, good question. thank a It's And you.

that a has clean you mentioned, as it's of ITL One things room is, operation. the

a that they're and One that business, they're things that pricing that just we pricing, to we one, day If products of -- Charles, applied our of the if in the we've existing just purchased boom, we very our like that. the assessment that products things the to took same saves the buying used just was $XXX,XXX words, and other pricing buy. buying our it $XXX,XXX on year in took

it The it's told, I've of been the in other that what from X one country. does, sterilizers, only thing

its enormous first these that to it customize, and certified. So ability time. turnaround Merit of things us for to take amounts put -- able own to facility gives sterilizer products time, in be And the and together has the the the

it not, I a else there. flying is product to as fly think And that's the get everybody boat the issue. expensive that's if to very It in a critical days XX you takes facility.

it So turn also a in It Zealand. will which gives quickly the area. that products around and to nobody also for our ability sterilization really Asia us use for New It's else that gives unique capability customers. a Southeast we capability has us for

been been a couple Australia to into of pricing we years a time, facility. products volume So the It's was a Australia. us in bought we've ago. distributor. bring facility decided That to And distributor our with to out one very we've our gives it And for more go then actually in in bring have We when already last there comment. but and direct. a long opportunity an in

do take with be pack But do. a our see, customers, that able others business. the facilities, the for we products that can't into view to the about great there's be from think not the to a and excited with region, and so was a of all And something them opportunity. big cost point a tactical I'm strategically deliver opportunity getting able we ability us it for to to improvements Listen, to

example. I'll So give one last you

is the direct. has to -- nice those we a things kind take if delivery that And to what's we and packers. That it What TRAM. these in Australia. opportunity big of advantage. gives in I'll going all a gives you advantage, of consolidate we built a And things. really, it's a price a at and we is make So use it we're us I I product on it of us on question, think hadn't packaging for through goes sell and do But a asked go other control going transducer. make think advantage, again, word, the it, down called us manifold a It and but that look as to the take business profits wouldn't

Charles Haff

Yes.

Fred Lampropoulos

gives It us opportunity. huge

Charles Haff

the are going kind Yes, that it of XX how employees do that that see you strategic. at that had And very you you to facility, so expand seems ramping? or dramatically, or

Fred Lampropoulos

the Well, a we're the an we couple deal. points. with an It's didn't facility. all and There we're this. at -- XX that end into are split existing other and it out was the And office take because facility. that that and a we come of that keep But a have thing manufacturing, to another is but this not warehouse, going doing combine employees

you'll the capacity. gives that cost -- look of a deck, going you'll at to this see So you'll if Merit And is by slide consolidating. and quality having see And again shave facility. the it substantial we're us off X facilities simply

start about fair probably this -- to Ron? we're going we out, XX%, that say a number? Is just I'm As

Ronald Frost

A little less.

Fred Lampropoulos

XX% capacity. A than little less

a that is or service, is it this it's yours. a then there's products have So sterilizer other growth into our consolidating control, facility services management, customer warehousing a again, this XX lot facility, you there, those and X? taking and of and opportunity you and pallet, -- when And

Ronald Frost

XX.

Fred Lampropoulos

of can We XX, XX product. lot sterilizer. around turn pallet a

You're going to in this hear about a future. lot the

Charles Haff

saying said since Okay, revenues I correctly of great. you And other million that then just few bought that it. you've in it? owned Osseon, million Osseon And weeks you've cats On it of doing did a when couple from was hear the you had here. revenues of dogs you and first about $X $X

Fred Lampropoulos

true. No, not no, no, it's that, you'd if But okay but say no. to no. -- like But it's

say We $X balloon. have it's -- they about have kyphoplasty what did the is is one that a million steerable I products that of --

Charles Haff

Yes.

Fred Lampropoulos

the have other came expect steerable It a else balloons. just people of -- -- they Nobody have guys one knowledge, our it, out And we've my To it a as the sales that has balloon. it done they a that's an balloon. right ramped balloon. of now up we we've demand it. balloon. Do as know, that the this we're XX% didn't market and shelves what just there's now out. you I think is $X,XXX The In our with best uses nobody just that -- started business, -- steer And lot cleaned soon of you a because showing as of the really steerable. is XX% opportunity steerable us And for for what, Ron? you a product, know? the a cement osteotome, getting can our probably, fact had gives DFINE gross all now products. that steerable It's but And margin XX%, that

Ronald Frost

know. don't I

Fred Lampropoulos

Okay. But it exceeds our corporate margins substantially.

story, So that's the yes.

Charles Haff

business, the that kit that hearing you the business. there. Did been on kit Great. as And We've industry I the if characterize on wondered pricing the have could was you some prices others in quarter? how been in well see raising

Fred Lampropoulos

We did not.

caught capabilities I've our present end, there as you to packs may know people we're front this raised not have be late going that's opportunity this kits take don't if and think next of not to those able on to the opportunity having is to transducer advantage going to year early But with but mentioned, our We some prices. that I here an that an going itself for deliver transducers. and lack or have be of year, we

early already out seeing going this we hole think of there. present itself, we We're something that year. open there's is that next here late and or signs So that year to up think

Charles Haff

questions. my taking for Thanks great. Okay,

Fred Lampropoulos

Thanks, Charlie.

Operator

comes of line next the And Mike of from question our Barrington Thank you. Petusky Research.

open. now is line Your

Michael Petusky

guys, I'll quick I to make the Hey as taking to you thanks much right. want for Okay. How can. pay Laurane? did try sure for I I time. be as guys all heard just

Fred Lampropoulos

Laurane, for which times million about $XX would be their X revenues. paid existing We

we quickly. So is demand. never that There national basis, it's Laurane ramp salespeople pretty launch on cannot had but and And rich -- pretty the on think they The They some demand. had problem could that options biggest can side, some on a it we have additional technology in globally. they is deal. meet they we X can't meet

up at that look in we down largest the to product, Mountains, But the the are centers and Mike, the either have -- at prices, Coast. and margins at sold I these nothing, products they look the capacity as in Britain. other is do little there mentioned that have they country As the there's technology, are East France is in once patented Appalachian earlier, not cancer the just those or have have don't sales What the go the look Europe products. you But And good than we nothing what had resources, have they simply and Great and but marketing. substantially. and manufacturing a bit in things they

Michael Petusky

you. Got

Okay, aggregate, aggregate it of your through you become think of at in great. accretive when look 'XX? 'XX, these deals, then as what X Is to point kind these kind you in do numbers? And kind of, maybe

Fred Lampropoulos

come is a -- going terms in, We're it is lower of in Well, move of We have Osseon, go contributors. will and situation. environment cost, up inventory, of instance, launch We're all for launched we and we'll because to I to models to our first in the goal our after to kind quarter. building same until lower got it have Ireland. to those next the revenues year, quarter globally that tax show there. it. to move these that we'll the And being think not deprecation be But in able to Osseon move and all first Laurane. of the product of with

so, X we'll it right in the their we've -- by selling manufacturing -- And to outsourced of because X done other of we product are X now. accretive for that should margins or is All because weeks manufacturers. again, become fact ITL, or that owned weeks.

that. be IntelliMedical, should and And developing we I is I start other and once that project. really developed, that it's will contribute by And expense being the that important current addressed a so development developed we'll on is in saying the structure to But immediately. think that's place. And under be have hand, something very

disciplined that of are numbers same number. will those in use R&D going increase into be So it numbers. not spending of terms X.X%, to our absorbed We'll around we and

we development will one keep within cost priorities said. the for numbers we So where existing just the will of but become This those structure.

Michael Petusky

Right.

Okay.

laid guys pretty to terms have accretive earnings, out these. I you yes, deals But the potential with you in what is think So aggregate, well of all correct? aren't just these in 'XX think

Fred Lampropoulos

-- that one? No, Bernie, ahead and you I why would don't go hit

Bernard Birkett

to, an the have margin some numbers on and company, impact going Yes. think revenue profile right are an Laurane Osseon we're impact margins that's our to they higher can -- on in of Mike, the improvement corporate see overall have But change. average to now. I have The what margins we drive than to you're them so gross until the for actually getting wait

you see from so, of accretive into backend you're And 'XX, the yes, probably real impact going before to a XXXX them.

Michael Petusky

only and go for Okay. And Osseon, but for would obviously that IntelliMedical-- it not Laurane go would certainly

Bernard Birkett

Yes.

Michael Petusky

well. as Obviously

Bernard Birkett

Yes.

Michael Petusky

as a 'XX in ITL to or accretive numbers that about no? What Is standalone?

Bernard Birkett

margin have that from It's on numbers not of a aren't in profile effect overall gross just high. because really the our to going 'XX an revenues level

dramatic have when blend so you a doesn't it in, effect. And it

through start technologies to 'XX impact. to backend demand. can meet I scale we revenues plus some is you'll think the of market we start that other up when Then the big the two and to with 'XX see the production grow when

Michael Petusky

just, you, earlier. have may All great. then this right, Got okay. missed And Bernard, I

CapEx Forgive for cash me and did. flow the I What if was from ops quarter? the

Bernard Birkett

CapEx was was operating $XX.X And the million. quarter then for $X.X flow cash So the the million quarter. for

Michael Petusky

it. tonight; thanks really so appreciate okay. it, time Guys, again, the much Got all for

Fred Lampropoulos

Thanks, Mike.

Operator

Thank you. And of our next with question comes the line from Raymond Jayson Bedford James.

now is line Your open.

Jayson Bedford

got are I good guys. if the in in some late for But these contribution call asked. the taking deals these Hey the Thanks on -- were Apologize a of been expected that questions aggregate, and announced, XXXX revenue? have here. what's evening. little

Fred Lampropoulos

If rates, about It's ITL about you million. now, we them Laurane about $XX Medical million; what they where $X Osseon; run were. million we'll at just of for right give look $X their

So run going to you that's rate? $XX about what, take be those, million

Jayson Bedford

Yes.

Fred Lampropoulos

project those R&D IntelliMedical, it's mentioned, -- For in development that as is an development. a we is three?

Jayson Bedford

push year, piqued from assume couple Fred. account this things, solely some Okay, win, in or this contribution growth perfect. that just does new And inflation my to devices digit interest on a Tau? then due national account, is you it next and The new double

Fred Lampropoulos

also on X the one at what, And upside device over accelerating introduced that come The a that but that runs show really -- today. in I above is first think so to saw to of basixTOUCH, Again, really going and Jayson, be going qualification addressing product this runs this production, production really Tau. that from national TCT, not we've -- the And account. just pocket maybe in to was I this about seen have our which I'll as well. can that's you. the I'm to -- I'm account. I based is potential we Yes, years But ago, that my

Jayson Bedford

Okay.

is account national And you the gets So to double what then-- growth. digit

Fred Lampropoulos

then if you And the kind Tau correct. the is of frosting, will. That's

Jayson Bedford

Okay. lastly, or just probability the is I'm I to happen you transducers, But happening. hope it it on is And to the then just of I to happen? trying opportunity. something the gauge understand going that think actually

Fred Lampropoulos

transducers? the terms You mean in of

Jayson Bedford

Yes, and the opportunity there.

Fred Lampropoulos

a me that Rico. but labs just just XX% it's little Puerto produced color. of bit in complicated, produced more more even Yes, are transducers you cath give critical all care the let for are

at we of We're difficulties having for those of one Merit that our -- getting product One producers some all Singapore. the there produces need. facilities the

However, have through own we capability manufacturing wafer our fab.

transducers, As but to of that that we substrates, ceramic that the circuits the to The going only in also the well. build you many the there look at intelligence used Puerto difficulties not where is that includes we're inks produced which having as see It that are are signs are resistors, difficulty. have are this, have we those we Rico. receiving is be

the on. Merit, sensor our of TCT, these we of show for we when Again, come I'll It's kind put have the Japan. produce but the you one I -- this is these to -- and Fortunately are again, what ours produced in substrates. your

And that sensors, going it's a have so we be hole. my to at we and belief that there have the the substrates, is least

all a that deliver who out. for personally. it's a seeing element it it of for it creates see because So shakes problem. real kit, a we're an an But be signs have opportunity again, Merit. how who essential to and completed And will have those don't can't We'll transducer

a going as I not And be making through can get we're a you of And up. handicap meet will time? over We're to going opportunity this they help are telling being So an much that But think and in yes, seeing. that's has things Cook going they're hole. I hole, be go to not have opportunity. Merit us able answer in. it able there's to to terms recover wishing the need to stuff to we're very mentioned, it. that again, The the hoping. but We're best the way and like, I to And is

Jayson Bedford

Okay. Thanks, Fred.

Fred Lampropoulos

Okay. Thanks, Jayson.

Operator

Thank you. Kenmare. our McGrath And with the Mark next of question comes line from

line is open. now Your

Mark McGrath

Oh, are thank you. answered. My questions

Fred Lampropoulos

Okay. Thanks, Mark.

on then. move Let's

so you're wrap let's one think, queue, your up the I in Bruce, last question. it with

Operator

queue. left looks like the It has Mr. Nudell

Fred Lampropoulos

clarify answer appreciate deliver slower a All you. everything said for follow I as positive I lot would do, you've for demonstrated next deliver to I little wanted, and discipline time Well, gross very even gentlemen. in that hope numbers questions. and right, Again, we for margins. I taken. any Again, than Okay. we the for around we've ladies of other and hour asked and ability the and were you to ups these questions so answer listen, be a the thank our opportunities we we mentioned, issues those or We to able Bernard that will commitment our much. situations think but things to you've hit years, to that to Merit.

now, date you a the you go good as keep to reporting ahead night. very So look evening. off and develop. forward sign in to we'll future, up wishing we'll We'll and things Good

Operator

for you a today's great thank may call. gentlemen, This Everyone you in does participating disconnect. and Ladies the and conclude have day. program, all

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