Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you walk me through the assumptions for the Q2 guidance, particularly what leads to the low and high end of the range?
A: (Raul Parra, CFO and Treasurer) For Q2, we expect revenue growth of 4% to 5% year over year on a GAAP basis and 4.7% to 5.8% on a constant currency basis. The midpoint includes about $4.3 million in organic revenue from the Angio acquisition. The EPS guidance considers regular seasonality with Q1 and Q3 as softer quarters and Q2 and Q4 as stronger. The SKU rationalization and the impact from China are also considered, with the latter expected to influence the second half of the year more.
Q: Regarding the SKU rationalization, what was the impact in Q1, and how should we think about its impact for the rest of the year?
A: (Raul Parra, CFO and Treasurer) The impact of SKU rationalization is about $15 million for the year, with the most significant effects in Q1, Q2, and Q3, tapering off in Q4 as we decelerate from those products.
Q: Can you clarify the timing and expectations for the RHAPSODY PMA submission and potential FDA approval?
A: (Raul Parra, CFO and Treasurer) We are on schedule to file the PMA by the end of Q2. Post-submission, the FDA review process, which typically takes 180 days, will dictate the timeline. We haven't projected a specific approval or launch date as it depends on the FDA's review process.
Q: How should we think about the growth through the rest of the year, especially considering the softer OEM sales in Q1?
A: (Raul Parra, CFO and Treasurer) We're optimistic about our business performance but maintain our guidance unchanged after Q1. We'll review after Q2, which will provide better visibility into the impacts from China and inventory adjustments affecting OEM sales. We continue to expect solid growth in OEM sales for the year.
Q: What are the expectations for gross margin trends and the main drivers for the remainder of the year?
A: (Fred Lampropoulos, CEO) We anticipate continued improvement in gross margins, driven by favorable revenue mix, pricing uplift, and efficiencies from product line transfers. Our guidance suggests operating margin expansion will primarily come from gross margin improvements and some operational expenditure leverage.
Q: With the acquisition of Endomagnetics by Hologic, how do you view the competitive landscape for your SCOUT products?
A: (Joe Wright, Chief Commercial Officer) We've competed with Endomag's products for years and remain confident in our market leadership and technology. Our focus continues on innovation, like the recently approved SCOUT MD, to maintain and extend our market position.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
