SRDX - Earnings call transcript Q4 2018

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Operator

Good day, and welcome to the Surmodics' Fourth Quarter 2018 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Tim Arens. Please go ahead, sir.

Timothy Arens

Thank you, Chantel. to XXXX welcome Call. Quarter and morning, Surmodics' Fourth Fiscal Earnings Good

forward-looking under we to the and will statements or call, These like I future Private results make webcast and the operating regarding are you statements. the audio on the Before issued Act disclosing surmodics.com. will would this includes this quarterly Securities remind Litigation was begin, where of also provisions be reference. reconciliation We'll investors. safe of GAAP the over to measures harbor Relations that useful the press Reform during forward-looking Surmodics' events, to statements non-GAAP they otherwise. the through statements call of a financial we recording Gary stated facts. historical and our differ now results. our Please covered results of for section information our and release is be implied XXXX other to actual and statements, website Surmodics' conference available that we for is morning developments Investor earlier of forward-looking contains could statements refer those described uncertainties, A in risks not table advised or because Gary? release being also materially our believe Surmodics results webcast resulting from update provide call archived is our accessible to as This SEC at news website, turn our new are future duty or or those certain forward-looking our result by a filings. that from any revise future disclaims including Today's I will Maharaj. information,

Gary Maharaj

team. Fiscal been and and our joining for exciting for many by significant XXXX Tim, good year thank you you, with Surmodics Thank has accomplishments an morning, us.

goal now fully for into did consistent of by to of this by our Not revenue we First fiscal XXXX. only stated sustained revenue we we're and double-digit fiscal believe year-over-year the XX% on positioned end our in double-digit achieve Surmodics previously accomplish foremost, XXXX, schedule is growing future. growth revenue ahead goal the that growth

and key commercialization balloon. us for an worldwide pipeline our that We this partner SurVeil the in-human approval And unique also developed enrollment. our we agreement And for We access initiatives for a growth. strengthened study initiated submissions platform. first sites XXX(k) clinical signed for we with Abbott X in-house. trial with our as innovative XX AVess, executed for medical novel drug-coated fourth the accomplished substantially several for differentiated We balloon. of our We regulatory acquisition for study in devices and product thrombectomy the TRANSCEND position submitted arteriovenous U.S. quarter, strategic accelerated clinical drug-coated

quarter fourth performance, line solid additional our Abbott. new $XX with growing operating revenue in our of included XX% million, over operational to million pipeline. our product quarter pleased investments report and results, to fourth SurVeil another top fiscal of from XXXX. we $X.X generated quarter on of agreement Moving This are We including of the revenue

quarter. fourth GAAP reported share of the also $X.XX a diluted per in We loss

fiscal ahead, to XX% positioned of expectations well year-over-year. issuing we're are we $XX XX% to on and build to growth between million, our XXXX Looking to reflecting $XX momentum, our million revenue

our of drive pipeline nondrug we flow DCB X enrollment IVD TRANSCEND Mark; advances cash first, meaningful coatings are: with revenue continue to continue on initiatives our to the Device device complete from second, thrombectomy our including and offerings. development; and ensure study specifically These We the us, make to to towards delivery substantial portfolio, third, the progress of core make Medical to to and acceleration our platform to existing growth CE guide continue have strategic SurVeil, in 'XX. and and objectives success fiscal to our to achieving execute the

investment these revenue growth, and even fuel ongoing to they generate on intrinsic initiatives. While return provide strategic significant they value to moderate grow while and in capital do continue funding provide invested our offerings growth

me SurVeil. very trials progress our quarter sites enrollment quarterly sites XX objectives. for with with getting and more SurVeil. U.S. XX The We're Let XX regarding in initiated, and enrollments the up TRANSCEND, perspective trial Starting pleased the these OUS been provide actively the core are fourth of since have was saw our initiated. highest pivotal some clinical running. we

with primary readmitted trial any an lesion target lesion the CE September of a vessel. we Mark, on a with planned, European safety more XX enrolled TRANSCEND pleased including pharmacokinetics of driven of complete receive to have attain data targeting retreat the to XXX% issues, path are before we As discussions the U.S. end from freedom safety. were which our Body the to Notified XXXX. revascularization. clinically all In expect by We're XXXX. XX the up the in no other clarity regulatory VIVA enrollment target obtaining and and Furthermore, primary had am to this results. presented that provided PREVEIL to performance necessary ready week. partner demand with There mark, secondary our from the at resulting are product target patient quite from and excellent. safety to the support their parallel absence Abbott ensuring months, the geographies. to XX-month subjects Recall engines Conference to pleased feasibility by was nor at endpoint the their we in all for I these approved our endpoints calendar be The SurVeil plasma CE earlier words, commercialization early In of that study data for PREVEIL production was

ankle speed and index, to in ongoing scores. stair-climbing In improvement continue patients walking significant addition, brachial distance, clinical experience walking these

feasibility of early unaware device successfully States drug are United combination to product We has the of trial also is in performed any that a been that date.

of our our products some pipeline. bridging to in Turning other

And first we our the innovated recently complete aiming progress In We in optimizing the delivery the balloon, BTK significant initiate our based below-the-knee for we're in-human to preclinical AVess. both have that fistula called from formulation in-human of first process top program, initiate for study at we're AVess. I and developing balloon, call the our have the made AV for the drug-coated coding study access in submitted mentioned of of the drug Sundance. the and and trial now results on first AVess XXXX, our investigations. in-human

solve on wave continue drug next make differentiated nondelivery delivery us We pipeline product are as meaningful real help create we platforms to shareholder And on innovations build -- and progress work our additional committed and problems. continually well. This value. the to will of that pipeline

U.S. to X to expect we X to more XXXX, fiscal During submit the XXX(k) clearances FDA.

development efforts, these thrombectomy committed platform. accelerate the of of our to we're part As

thrombectomy broad our treat arterial and reminder, a embolism potential pulmonary As neurovascular applications. including muscular thrombosis VSDs, platform and thrombosis, has to in multiple venous

test in methods and the to submit our with working application initial design and is XXXX. aggressive end to first vascular of clearance team an regulatory thrombosis complete for prototypes aim freeze in by first half Our fiscal XXXX the for of the calendar

approved Moving progress on the process to with wanting devices. commercially agreement the several each products. to parties We're distribution making of interested towards of evaluating our these clinically

each As the right to to exercise the appropriate potential order of patients we for devices. these partner with right the we with did maximize continue in deal sign commercial the to SurVeil,

continue commercial Finally, IVD to segments business excellence. our Medical and drive Device

By we expected outlook Tim? and business core to the details fiscal I'll to revenue Surmodics 'XX, remain from have position our Tim these Medical closer call as is double-digit market headwinds. objectives well our rate over to of 'XX, turn outperform to growth successes X%. generating our segment expiration provide in accomplishing revenue for third-generation for as broader to expected our expected is above EBITDA growth business the built XXXX. our fiscal contribute by will to XXXX coating margins flat relatively XX% to consistent important continued, in get fiscal significantly patent our Meanwhile, 'XX. as fiscal results Device revenue fiscal growth fiscal IVD fourth device at While revenue exhausting 'XX our and quarter now immunoassay double-digit continues more on or we on our X

Timothy Arens

in Gary. with fiscal fourth $XX.X fee million Revenue as license as quarter onetime quarter Thank a the you, compared $XX million. for reminder, of was which, included of XXXX of a fourth XXXX, the million $X.X

growth, X million in Device fourth XX.X% business million at quarter. $X.X to units, the Medical $XX Looking delivered solid our increasing

Vitro year ago the fiscal of XXXX comprised quarter sales, predominantly which compared fourth XX.X% business, product In is with revenue, up period. Diagnostics totaled For $X.X million,

license at Looking the up royalty million, Medical Device, within $X.X fee fourth SurVeil Abbott. million revenue $X.X prior and development and with agreement year quarter from specific comparable totaled revenue increase areas recognized reflects million license fee revenue royalty license in $XX.X the quarter. and distribution The from of fee

revenue quarter operating this expense license progress Product increased study XX.X% pipeline quarter was in quarter diagnostic expense. million quarter. gross in reflecting a Operating product balloon in volume in The in as as and quarter and growth the XXXX fee. year in reagent fourth compared in revenue ago. unit fourth a quarter increase As increase continued of fiscal costs operating result distributed the million $X.X operating quarter. the substantial customer compared prior or the $X.X XX%. a million launches a Driving product previously Impacting the increased revenue sales Device our antigen catheter onetime of sales the well $X.X sales comparable reported in Medical the in for as million Product million XXXX the in noted, scale-up future slide of of consideration to was compared impacted in lower-margin clinical as Device recent loss future product growth. by R&D was fiscal partially to a was IVD XX.X% with were product margins investment as unit skewed by were in as sales. in XX% was innovative $X.X increased reflected included $X.X in our fourth growth of fourth contingent results $XXX,XXX $X mix, to gross IVD support products increases TRANSCEND fourth operating income million we towards prepare the year quarter. DNA fourth revenue the facility for Impact versus our development the quarter. in Irish growth was an sales. essentially of product prior and These XX% as with spend, operating Medical IVD of well our products. flat increase income continued in offset of gains margin margins quarter the prior margin strong year our quarter were which year

XX.X% supporting XXXX expenses, studies and including was increase progress fourth well a our million as was quarter quarter AV totaled $XX.X development XXXX. of for quarter, period. and study in in regulatory activities, clinical expense million costs fiscal the the balloons. percentage solutions the clinical fourth of TRANSCEND pipeline, our As from including increased R&D R&D driven revenue, The compared ago with XX.X% fiscal preclinical up of as $X.X with R&D expense the associated our by of continued spending on access drug-coated below-the-knee whole-product year

expect during preclinical As in-human Gary drug-coated for for first enrollment drug-coated also we balloon and activities clinical the to XXXX fiscal fund our TRANSCEND mentioned, balloon. below-the-knee and clinical our AVess complete study and

XXX(k) X products to on clearances X XXXX. for fiscal also We submit to peripheral during differentiated vascular expect uniquely

we mid-XXs expense As as expect XXXX. of a in percentage a to R&D low range the fiscal result, to in revenue

quarter SG&A the totaled million the expense quarter SG&A fiscal year fourth were dollar increase fiscal of year with and XXXX compared period. in the expenses. Turning the expenses stock-based of SG&A ago. XX.X% a compensation to Impacting in In incentive in million XX.X% of On during higher the revenue $X.X XXXX, fourth a expenses. as prior quarter were versus $X.X SG&A basis,

in exercise XXXX the the fourth XXXX. million also fourth losses of strategic contingent nontax-benefited benefit as fiscal milestones. GAAP On We non-GAAP quarter in amortization, The market of discrete fiscal losses $XXX,XXX income with the in versus in stock our quarter. a share $X.XX accretion, recorded as on benefit year contingent compared and reflect expense quarterly per $X.XX earnings earnings in a year $X.XX income we of from recorded current diluted the as a activity. were share fair the achievement anticipated $X.XX fiscal quarter periods obligations reflects XXXX impact currency Ireland. current consideration prior basis, loss the prior benefit per a of or an the in tax award our year $X.X based of totaled to Both period. quarter gains $XXX,XXX of in benefit of basis, tax with marked the quarter expenses, the operating We value, fourth share compared of consideration per On foreign quarter gains and $XXX,XXX

$XX our $XX.X million make to balance from at the strategic million XXXX. of million fourth for initiatives. support investments fiscal generated Our even bringing strength cash operating quarter, of operating in investments Cash sheet and us $X.X the to activities our totaled performance as we quarter-end, reflects we significant and

$X XXXX. We fiscal in also during equipment million plant invested and

cash capacity Our current operating and corporate and cash initiatives. our adequate provide investment growth flows balances to strategic support

earnings our now revenue to performance XXXX Turning guidance. and

XXXX. we of delivering the We completion to occur is XXXX range keeps fee $XX outlook an between the compared expect $XX SurVeil study agreement to $XX with a $XX million license XX% to fiscal growth. our track revenue as year XXXX fiscal received of payment upfront with revenue. XXXX recognized well with of fiscal goal $XX distribution Included QX increase as associated to Abbott from in of includes TRANSCEND from the million, our enrollment, stated revenue during This revenue outlook million XX% of which and from and million double-digit with in our $XX clinical expect million million revenue on both as us revenue fiscal between milestone

We the diluted expect of per loss of $X.XX a fiscal range XXXX our in loss $X.XX share. to

non-GAAP expect call a earnings We like We the gain would open $X.XX. questions. Operator, prepared to from to to diluted loss of our now per a concludes remarks. share this of $X.XX to range

Operator

Instructions]. [Operator

come question Capital Brooks will Street Lake Markets. Our O'Neil, from first

Brooks O'Neil

I have a few questions.

XXXX. the that hoping think you just I during off, be end way the XXXX? of SurVeil key But was might for mark I you I First are And believe CE to the extend what product in year, to just heard say, you fiscal approval might all get milestones for it calendar could you maybe review you the year. think just not the going you

Gary Maharaj

Yes.

quite SurVeil of the on and enrolled that. to straightforward. Get pretty that's important the we're the the So by us are track objectives trial completely year, for end fiscal and

of second can mark revenue the obtain product. commercialization The get we so one is that into CE to the

dramatically. clarity notified VIVA at regulatory of was to that we about how regulations many bodies environment you hurdle pathway and European the issue and What are to just feel of get get these notified adopt -- Brooks, of the are better over mark. know, CE And it? new the and the the Conference for is Now lot as I there a we've the much change, was changing European about The us. to do is received I our biggest discussion. body to the clarity was trying as adapt from

by calendar we believe And XXXX. the of so we can this end get

to the variance on that there's clearly, But to because revenue, Now and XXXX. bit end, the seems would earlier a on by like end of calendar that, we little it beat commercialization we of back achievable certainly can better. get the

beat keep until on we we the we'll course, if updated in second that. really half And wouldn't you fiscal of Now can it of know 'XX. sometime

more share. more we -- will the the get So we the information, quicker

to The you, are time third eager and our aspect tell they sales going. for get commercialization and is the scale. marketing I commercialization partner, preparing and I've with can their European Abbott spent team, is

have And ripe ready the believe drive our subsequent produce as partner they the and will commercialization have mark. so follow market production can the markets quantities to CE European and them to that the engine other is commitment to that through to they we

And so facility another is sure go our making really to key Irish ready objective. production is

production the get and actual get those we enrollment, the the CE achievement dataset get and ready. of and get things complete and So clarity run: mark clear X system

Brooks O'Neil

great. That's

misunderstood, to very well have sounded was further making but with similar with that big through a So did it I partners. like just a AV sounds fistula product. correctly, on some DCB, if could I you you're comment you as go process potential the what might to progress you're listening it and discussions with Maybe as going have like little

remember Abbott I through. has process could maybe go right refusal the you're first the that on about think talk product. And of maybe I you just to going

Gary Maharaj

Sure. body in get wouldn't hopeful yet. product, the give quarter. and filed studies the I We that that AV good clarity accomplished. environment our completed from filed for in so waiting to felt an But because watchfully with GLP fourth regulatory we first preclinical and approval and regulatory -- it trial really our in I'm in-human which we

to about that first endpoint. finishing finishing so the mean We'd year. feel like And now we fiscal to within enrollment trial really of the able the be And good that. trial the data finish in-human doesn't primary --

if as of patients, we enrollment might example, X finish be an So to from anywhere X XX primary endpoint to out. XX the months

be view to an option at looking the at. they a have the so And right on Abbott form first will is that data to what short in it a it. look of of window very exercise And

enrollment. to necessary could It'll completion And the which X out. be months so dataset, of is be tied the to to the completion X not of that tied

like early. And as in trial not. hear more -- start we gotten hear so bodies feel to from likely could whether the I get than our really mean, regulatory the good. early second we I'd approval or the to we've while as quarter, first it's quarter going we will the

Brooks O'Neil

I'll Okay, and just good. over. And ask one turn more then it that's then

maybe or alluded of overview core the and Generation sort where commented, outlook, expiration, And third-generation particularly flatness your of us you about You coatings patent to you with coatings in particularly Tim quick business, But patent just where patents. give to a you're related I tell Can us beyond. the at you're think on X business? just you or stand. core and did,

Timothy Arens

much million Gen is with terms quarter. through question. patent somewhere to XXXX. should headwind fiscal of of it's the at this then headwinds. in $X.X million the a Generation $X.X expiration. in the pretty experienced impact looking X Thank coatings, we impact the regard in that's And headwinds vicinity X maybe We're be tapering an Tim. in we And of Brooks, that the you XXXX for Yes, Sure. under from in

in we rate with that and -- who work flattish the evaluating to X development years that's Serene several at as coatings coatings, out. of some the growing the And coatings but Surmodics' revenue. next probably digits, utilizing most once we overall be in at we a initiatives, are our customers looking future generation We headwind Generation of X growth through probably are years, issues regard we're leveraging think feel for We the their through the more coding. have should mid-single

Operator

next Matson, Needham & Company. Our will question from come Mike

David Saxon

is this Tim, and Gary on Mike. for David

contribution or about just products from So any XXX(k) OUS one ask include it survey guidance. the wanted to Does revenue? any

Timothy Arens

It's XXX(k) associated proprietary includes outlook with does question, in associated but cleared products, The include of revenue with Europe. great sale for David. drug-coated the the XXXX a balloons not revenue SurVeil

David Saxon

Okay, so that's VIVA, out guess, helpful. then, some I I And a came there BTK backed balloons. with mean, concern were Lutonix, into at data just

Just on wanted your to thoughts hear that.

Gary Maharaj

Yes. I a nice thought presented very Mustapha Dr. I mean, outcome.

We are was that and deployable there between an drug-coated see the happy efficacy effect to arm. balloon

you BTK As to disease primary know, is hard endpoint. a so derive

team that did and Lutonix views think these improvement simplifying remarkable job complex in mind and least Dr. I definitely it. saw but keep could of endpoint, a you a take of did And for -- at a Mustapha XX% X very patients. a

look You doesn't at point from a limb resort could huge patients, of a the ischemia these any limit improvement. actually critical that But for like magnitude data huge they're the say because is viewpoint. of improvement last

a impact that as for quite were happy these we balloons So to drug-coated positive category patients. a see demonstrated

David Saxon

customers, going if not week in I strategy? kind But Terry guess, to Okay, just I as was can you since And some Sides signals give I I maybe this the or last guess, is just the shift her so, that's then last selling role of hired mean, I one be it what helpful. more mean, you're CMO. and color one. guess, end on to you direct

Gary Maharaj

She previous over with of internally Terry So R&D so Head almost Marketing for our one my years, architects last of importantly, programs. -- balloon more Terry XX X the years. company. the has really at Terry drug-coated of But our worked was and been I've

have and last and she with capacity. so least in So company a year, in more the at been been working half-time full-time she's since and capacity XXXX, her a at her team working us

is, for platforms little that to we paused, our more for her in doing AV what but as pipeline her choices that that run these up on they operational make on we which ante job his and and component internally. team, development, not our TRANSCEND have made directions So then Gregg technology getting pipeline go. are can the all really sense also really call, is, of really the trial. the we're It's many applicable our a neurovascular. trying is actually color about strategic to that R&D, Gregg in for the applicable fistula, second and venous information our real to take It's technology applicable thrombectomy. And to in -- and I VP we for team arterial. of in vascular the We were of And pulmonary the meds. vasculature talk It's lung DVT. is applicable embolism And it

so have we I engine applied have would what market-driven to make, so R&D the direction. can that call, choices And we right the in

So better opinion, in in XX really there's than in that my Terry. this none years -- industry my

she did And is direct alignment future. last as the coming she drug-coated balloon portfolio help the years over into so the that with X to

And well. you that. do do Device really have, marketing a know, IVD And job. job divisions We of so business-to-business nice our her those that's in as Medical and as

job really that programs and is some play that. drug-coated her real will But pipeline balloon Terry the in So have development.

Operator

Our & Sidoti, Sidoti next Company. Jim come question will from

James Sidoti

a things. want just I of clarify couple to

end enrollment expect of year, the fiscal the DCB You talked for about much mark trial end calendar in -- XXXX. of the CE then which after said by by And enrollment. isn't completing the time you the you

U.S. or just want Or trial enrollment does -- completing that mean, could in that -- complete CE not? the does you or contingent happen enrollment happen I So on does whether mark clear, enrollment? the to I be

Gary Maharaj

No.

U.S. endpoint. trial primary the So

be the -- for for FDA. pivotal U.S. would PMA the the approval one for So

is is XX in in XXXX. patient of until September within enrolled and the when the window efficacy the data endpoint say, calendar XX trial, primary is up September composite endpoint, really let's data that not primary XXXX, patient So enrollment, part that to followed we last viewable complete the

clinical and and is file where for PMA your then data you -- and that and forth. So supplement so that data

the The they that the So a of not are mark completely bodies. is tethered European to working enrollment. CE with we're completion dataset different

James Sidoti

Okay.

So any in it then? affect the the enrollment there's approval if shouldn't changes schedule, CE

Gary Maharaj

No.

point. In this fact, completely they separate at

James Sidoti

to revenue Will fiscal at some on be in expect mentioned accrued 'XX. Tim that payment one it's spread Okay. be Then quarter? a point out Or you the that $XX you guidance. all several going million in over quarters? that will

Timothy Arens

great we get the completion, same Jim, question. whatever recognize exactly how recognize in million that P&L. upfront, will then of reporting, we $XX way that flowing we $XX period And million the is the we're through estimate which and the is, cost we percentage and the

So the if basis study one in with than TRANSCEND we've incurred associated the that. I time a hundred we that points communicated the higher million of about step moment, just $XX will I frankly, the be of just be we XX% payment, to previously think, And it's get by to completion. received couple the probably back when going past, for expenses quite

follow, guidance $X.X you in sheet deferred the look for So completion, think be the we $XX to you'll probably the to that way at -- $XX is you there's provided million. of of easy XX-some if if think, million, time million. see at terms receiving the our million revenue it's An for $XX we the we'll you the balance million about receive Jim, I release, $XX that of in SurVeil, percent

$XX the upfront. So million the $X.X revenue to deferred pertains million

the isn't actually range because, can going a be minus of for in will a $XX be portion up of But enrollment. $X.X when receive as that frankly, upon the in the dependent incurring. of It's quite million The completion level math. million with associated show million you also a kind $XX the that -- of revenue we to we're recognizing $XX million, you we'll view gives recognized of milestone a the deferred Now what the do really $XX expenses million, bit to cash, item. it's what TRANSCEND

-- of revenue-matching So that a it's expenses. concept

and balance will look get So a at pull But you sheet kind a taking lot I there the of guidance the think, revenue apart. there. to help

James Sidoti

to Okay. year it And us sense could that any the can of million when or you in be... year achieve on expect $XX the in give half Is milestone? that second fact you

Timothy Arens

Gary I say, of remarks, to end by as Yes, a as I'd it's think half event. thinking XXXX. very his fair expect second fiscal we described the be of in it it prepared

the be it lot In we're is a There's event. looking I of as rate best it's enrollment. event. enrolling think a QX of goes completion could really fact, But it would which say, the has about Obviously, into the QX a that patients as probably Gary mentioned. good, to

James Sidoti

should and back quarterly So into we the much get too know year? that -- royalty we up to you don't line want but I we step weave give on this the the guidance, should expect of in

Timothy Arens

way good be I a really would say about that's thinking to it.

James Sidoti

quarter. right, Okay. you All great. the in And then see I booked for consideration contingent

quarters. of little booked the couple in you've past a bit booked than You higher

think $X.X Creagh things are Is well the million. positive with was NorMedix and acquisitions? going a sign that it about I that

Timothy Arens

Yes. Right.

So a couple of things. Yes.

of we as in the gain, is NorMedix, with associated the reflecting certain earnouts view expense accomplishment being in that the basically, particular. contingent So increase what consideration, and milestones successful

we're had to X of Gary to to that you submissions expecting think I XXXX. would in some that as innovative highly really fiscal XXX(k) are book us devices of the the a things that expense. to leading comment in made X achievements point that terms I of

James Sidoti

preliminary the a AV any on balloon AV there? Or is, a you sign the one some for required partner fistulas? for to data drug-coated the prior before seeing then the And could last partner you balloon, for me data Okay. sign

Gary Maharaj

highly doubt No, I that.

agreement because powered significant in studies but PREVEIL of the safety show -- in-human results it trial, are of was first require Our to the first as Abbott statistically look, the first data they would not But efficacy They're we to really the in-human with look. see was a study. show didn't have And the Recall, it's obviously, a database it these design design strong. lot statistical so to efficacy, efficacy. studies.

negotiation So knowing part to in position the of at ourself to the believe we'd deal. look data. like our like we'd also no, of the data at And a as look such I strength

James Sidoti

Okay.

have seems like going the in lot quite on fourth of to and it fiscal going a third So quarter 'XX. you're

going of of then this fistula CE You're have achievement completion data mark payment, and the from possible the to AV milestone the trial, possible balloon.

So going more back terms it will weighted seems that like of the towards the announcements, things to correct? things Is year of weighted be in more are for fiscal -- 'XX. be

Gary Maharaj

The that stress is correct. correct. now. right Yes, is Yes, that is curve

is like of outcomes But in workload up. a it pretty half. So I the the -- a lot linear be It's outputs first year. of But workload second say, not are going half probably of the the fact, goes workload. the fronted certainly to would in

Operator

Instructions]. [Operator

Petusky, question Mike Barrington next come Our will Research. from

Michael Petusky

So Tim, to understand. sure want I guidance, this to top get I make line into just

$X.X so recognized be saying $XX of revenue you 'XX So being million, of this revenue million recognized million million saying. SurVeil/Abbott, $X in hear to what I $XX million essentially, $XX with or I associated million think is, will $XX to think recognized. associated of $X I $X million that about million of with Meaning, original hear the you and maybe $XX million what fiscal I is that

Timothy Arens

'XX that there $XX that, upfront million the from $X.X Mike. deferred deal million me is be from the the revenue million sheet more to of $XX the bit is little a upfront. the with balance we And received year. It's recognition coming million revenue on really associated recognize that Let Of that's last of clear $XX to expect that, in we fiscal $XX million on SurVeil. remainder

Michael Petusky

Okay.

associated million 'XX? that fiscal So recognized to you're revenue $XX in with saying $XX million of

Timothy Arens

correct. That is

Michael Petusky

I the revenue Then don't understand guidance. really Okay.

million. So you finish $XX 'XX at

from going hey, $XX from saying, XXX(k). to million to revenue the to $XX we're going You're just We're this piece. also million get get

up but really You Is baked this? assuming into that you didn't some. year? just revenue this that backs what's how product disclose Are much,

Timothy Arens

about the if so device the Yes, which -- back of X% out to revenue to you talking impact, you're in SurVeil been and the business saying what consistent yes, is IVD. rest from really regard have we with growth med X%,

Michael Petusky

to anyway, the completely But have I'm may let I me take off-line Right. still this All onto next. tracking. not get because

activated, are -- activated, them in you So getting like of XX activated? some and you're what was... OUS, process think all all you those are and Are of something Or Gary, said were them said or them up when getting I the saying running. you

Gary Maharaj

Yes.

U.S. we're up XX so So complete in FDA the mean, much sites. -- you gives the difference the pretty I to

months. have regulatory per we contracting the it this, a they takes and country. up not have each a running few budgeting, regulatory may the bodies more. FDA territory. though add blessed Getting quite outside XX. own their But you X is We and Even U.S., to site in seek of trivial have So is approval

it's pan-European you go a thing to. not So

the German approval. we're believe Italy, -- enrolling a sites just got up I Australia, in we So B-Form got currently in Belgium. we Austria,

that getting takes longer countries to than lot -- give Germany you most approval. So a

sites X we're have that enrolling. there get we so And racing to up

up be But don't and rest the So we just and -- have have country in come have can't the I the outside to in, sites at are they've they initiated. it's have enrolling come a count approvals of all or all of next I that. been the of least U.S., the months. couple now guess but initiated. verify got should in in or not you've would how X but X, sites -- running I many they -- get

Michael Petusky

back you. around then, are Okay, fiscal it share what have it the are 'XX? for count What if and taxes may to Tim, the assumptions I great. -- And gave you missed assumptions,

Timothy Arens

Right.

not as $X.X rather, we're best in an would but I thinking think a to So tax rate, the million to talking think $X.X way effective probably million. about tax be somewhere about about the taxes be benefit range to of it

Michael Petusky

So a benefit?

Timothy Arens

count the I share think hundred finished in going XXXX. then to a higher count, how we probably than And shares couple of the maybe Yes. terms is thousand be of share

somewhere outstanding. Mike, in million had shares million XXXX. SurVeil in $XX.X 'XX. $X.X XX.X of the we just remember, on So revenue, million that revenue just around probably

maybe help that your might you so with And math.

Operator

time, this no we at Speakers, have further questions.

So to any it management I'd turn like back to closing remarks. for

Gary Maharaj

the In EBITDA We past Thank you of questions. quarter we double-digit and margins at the and consistent closing, throughout the by committed year. pleased fiscal extremely our providing during growth performance for fiscal fourth all remain or your with XX% generating XXXX. top are to above line fiscal

work We'll Ireland first thank I'd same fiscal like our and 'XX. we enduring U.S. our and clinical, earnings We're Device for the hard and regulatory of pursue performance product to strategic you, forward the assets deliver operational with quarter solutions objectives disease. best-in-class achievements, our call. by Thank key ongoing We combining as courage medical perseverance. continue leading device coupled customer our line with encouraged their speaking for talented become in a our by again top key innovative spirit in vascular relationships track collaboration to development are team on progress. and to and our with our technology innovator to Medical and I'm everyone. on looking you

Operator

at much. Ladies Thank concludes time, this you today's very this gentlemen, and conference.

and the weekend. great your disconnect a you. phone lines, Thank may have rest You of

Surmodics (SRDX) 9 Nov 182018 Q4 Earnings call transcript