Harvard Bioscience Inc (HBIO) 2022 Q4 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Harvard Bioscience Fourth Quarter 2021 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dave Sirois, Director of SEC Reporting. Please go ahead.

美好的一天，謝謝你的支持。歡迎來到哈佛生物科學公司 2021 年第四季度收益電話會議。 （操作員說明）請注意，今天的會議正在錄製中。現在，我想將會議交給您今天的發言人，美國證券交易委員會報告主管 Dave Sirois。請繼續。

Thank you, Shannon, and good morning, everyone. Thank you for joining the Harvard Bioscience Fourth Quarter 2022 Earnings Conference Call. Before we begin, I would like to suggest that you take a moment and download a copy of a presentation that will be referred to during this call. The file is entitled Q4 2022 HBIO quarterly earnings presentation and is located in the Investor - Overview Events and Presentations section of our website.

謝謝你，香農，大家早上好。感謝您加入哈佛生物科學 2022 年第四季度收益電話會議。在我們開始之前，我想建議您花點時間下載一份演示文稿的副本，在本次電話會議期間將參考該演示文稿。該文件的標題為“2022 年第四季度 HBIO 季度收益報告”，位於我們網站的“投資者-概述事件和報告”部分。

Leading the call today will be Jim Green, Chairman of the Board, President, and Chief Executive Officer; and Jennifer Cote, Interim Chief Financial Officer. Before I turn the call over to Jim, I will read our safe harbor statement.

今天的電話會議將由董事會主席、總裁兼首席執行官 Jim Green 主持；和臨時首席財務官 Jennifer Cote。在我將電話轉給吉姆之前，我將閱讀我們的安全港聲明。

In our discussion today, we may make statements that constitute forward-looking statements. Our actual results and performance may differ materially from what we have projected due to risks and uncertainties, including those described in our annual report on Form 10-K for the period ended December 31, 2021, our subsequent quarterly reports on Form 10-Q and our other public filings. Any forward-looking statements, including those related to the company's future results and activities, represent our estimates as of today and should not be relied upon as representing our estimates as of any subsequent day. Also, much of today's call will focus on our non-GAAP quarterly results, which we believe better represents the ongoing economics of the business, reflects how we set and measure our incentive compensation plans, and how we manage the business internally. The difference between our GAAP and non-GAAP results are outlined in the earnings release and today's presentation.

在我們今天的討論中，我們可能會做出構成前瞻性陳述的陳述。由於風險和不確定性，我們的實際結果和業績可能與我們的預期存在重大差異，包括我們截至 2021 年 12 月 31 日期間的 10-K 表年度報告、我們隨後的 10-Q 表季度報告和我們的其他公開文件。任何前瞻性陳述，包括與公司未來業績和活動相關的陳述，均代表我們截至今天的估計，不應作為我們對後續任何日期的估計的依據。此外，今天的大部分電話會議將關注我們的非 GAAP 季度業績，我們認為這些業績更好地代表了企業的持續經濟狀況，反映了我們如何制定和衡量我們的激勵薪酬計劃，以及我們如何在內部管理業務。我們的 GAAP 和非 GAAP 結果之間的差異在收益發布和今天的演示文稿中有所概述。

These two documents as well as a replay of this call can be found on our website under Investor Overview, Events & Presentations. Additionally, any material, financial or other statistical information presented on the call, which is not included in our press release and presentation, will be archived and available in the Investor Relations section of our website.

可以在我們網站的投資者概覽、活動和演示文稿下找到這兩份文件以及此次電話會議的重播。此外，電話會議上提供的任何材料、財務或其他統計信息（未包含在我們的新聞稿和演示文稿中）將被存檔並在我們網站的投資者關係部分提供。

I will now turn the call over to Jim. Jim, please go ahead.

我現在將電話轉給吉姆。吉姆，請繼續。

Thank you, David. Hello, everyone, and thank you for joining us today. Let me start by saying that despite inflation, currency, and the lingering effects of the global supply chain, we kept our heads down and completed the previously disclosed portfolio optimization and related cost reductions. These actions are designed to support our stated goals for revenue growth with 58% to 60% gross margins and EBITDA margins in the high 'teens or better.

謝謝你，大衛。大家好，感謝您今天加入我們。首先讓我說，儘管通貨膨脹、貨幣和全球供應鏈的揮之不去的影響，我們仍然保持低調，完成了先前披露的投資組合優化和相關成本削減。這些行動旨在支持我們既定的收入增長目標，使毛利率和 EBITDA 利潤率達到 58% 至 60% 或更高。

Now let's go to Slide 3 of the presentation to look at highlights for the quarter. Reported revenue for the quarter was $28.4 million, down 14% from a very strong Q4 prior year. Adjusting for a $1 million impact from currency, we were down 11%. The majority of the impact was seen in pre-clinical revenues with order demand recovering later in Q4, though not in time for revenue shipments to catch up. Strong order growth with a substantially improved product portfolio points to a strong start for 2023.

現在讓我們轉到演示文稿的幻燈片 3，看看本季度的亮點。本季度報告的收入為 2840 萬美元，比去年第四季度的強勁表現下降了 14%。調整 100 萬美元的匯率影響後，我們下跌了 11%。大部分影響體現在臨床前收入中，訂單需求在第四季度晚些時候恢復，但還沒有及時趕上收入出貨量。強勁的訂單增長和大幅改善的產品組合預示著 2023 年的強勁開局。

Adjusted gross margin recovered to 57%, consistent with historical gross margins in spite of the remaining low-margin obsolete products as they wind down. Adjusted operating margin came in at 12%. Going forward, we'll be reporting adjusted EBITDA, which in Q4 measured 13% of revenue. In the appendix, you'll find the bridge from GAAP measurements to non-GAAP adjusted EBITDA. Adjusted EPS measured $0.04 per share, down from a very strong $0.08 last year. And cash flow from operations measured $2.7 million.

調整後的毛利率恢復至 57%，與歷史毛利率一致，儘管剩餘的低利潤過時產品逐漸減少。調整後的營業利潤率為 12%。展望未來，我們將報告調整後的 EBITDA，其在第四季度佔收入的 13%。在附錄中，您將找到從 GAAP 測量值到非 GAAP 調整後 EBITDA 的橋樑。調整後每股收益為 0.04 美元，低於去年非常強勁的 0.08 美元。運營現金流為 270 萬美元。

Now let's move to Slide 4, take a look at the revenue in the quarter by product family. This slide shows Q4 '22 revenue adjusted to reflect Q4 '21 exchange rates. Starting with the first row of the table, our cellular molecular technology revenue was roughly flat when adjusted for currency. We had solid growth in Asia Pacific, which was offset by slowness in the Americas. Cell-based testing products were up double digits globally. We saw continued rotation out of the low-margin products with revenues from discontinued products decreasing by about $300,000 versus the same quarter last year. We are seeing demand increase going forward, augmented by exciting new products with new consumables and services such as electroporation for bio-production.

現在讓我們轉到幻燈片 4，按產品系列查看本季度的收入。這張幻燈片顯示了 Q4 '22 收入調整以反映 Q4 '21 匯率。從表格的第一行開始，我們的細胞分子技術收入在調整貨幣後大致持平。我們在亞太地區取得了穩健的增長，但被美洲的放緩所抵消。基於細胞的測試產品在全球範圍內增長了兩位數。我們看到低利潤產品繼續輪換，停產產品的收入與去年同期相比減少了約 300,000 美元。我們看到未來的需求增加，令人興奮的新產品和新的耗材和服務（例如用於生物生產的電穿孔）增加了需求。

Next, our pre-clinical products were down 19% in constant currency from a historically strong Q4 prior year. Globally, telemetry and inhalation revenue shipments were down in Q3 and early in Q4. Recovering somewhat in the quarter, though much of the order improvement came later in the quarter. The China lockdown further delayed shipments with strong order demand recovering later in the quarter as lockdowns eased.

接下來，我們的臨床前產品按固定匯率計算比去年第四季度的歷史強勢下降了 19%。在全球範圍內，遙測和吸入收入出貨量在第三季度和第四季度初有所下降。本季度有所恢復，儘管大部分訂單改善出現在本季度晚些時候。隨著封鎖措施的放鬆，中國的封鎖進一步推遲了出貨量，強勁的訂單需求在本季度晚些時候恢復。

Overall, order demand recovery later in the quarter didn't help Q4 much, but strong order growth with a solid book-to-bill ratio point to a strong start for 2023. The strong U.S. dollar compared to the euro and British pound drove a currency impact of the $1 million I spoke of earlier.

總體而言，本季度晚些時候的訂單需求復蘇對第四季度幫助不大，但強勁的訂單增長和穩定的訂單出貨比預示著 2023 年的強勁開局。美元兌歐元和英鎊的強勢推動了我之前提到的 100 萬美元的貨幣影響。

Now let's move to Slide 5, so I can tell you about some of the exciting new product launches in the quarter. Before I start, let me take a minute to explain a little bit about this slide. Over the last 3 years, we've optimized our product offerings to critical areas of the drug and therapy continuum. With cellular molecular technology products focusing on enabling research and discovery of new compounds by both biopharma companies and top academic research universities. And now more recently, we're also offering a bridge to bio-production where electroporation or electrofusion is a widely used method to create the new therapy, drug, or vaccine.

現在讓我們轉到幻燈片 5，我可以向您介紹本季度推出的一些令人興奮的新產品。在開始之前，讓我花點時間解釋一下這張幻燈片。在過去的 3 年裡，我們針對藥物和治療連續體的關鍵領域優化了我們的產品供應。細胞分子技術產品專注於促進生物製藥公司和頂尖學術研究大學對新化合物的研究和發現。最近，我們還提供了通往生物生產的橋樑，其中電穿孔或電融合是一種廣泛使用的方法來創造新療法、藥物或疫苗。

Our preclinical systems primarily offer biotech, pharma, CRO, and large academics, the ability to measure and wirelessly collect critical physiologic behavioral information from animal models. This data has been utilized for longitudinal studies and for the safety and regulatory filings required prior to clinical human clinical use. Our enterprise software provides efficient access to the large data pools collected during preclinical testing for data reduction post and report generation and also for future AI-related processing as we see coming in the future.

我們的臨床前系統主要為生物技術、製藥、CRO 和大型學術機構提供測量和無線收集來自動物模型的關鍵生理行為信息的能力。該數據已用於縱向研究以及臨床人類臨床使用前所需的安全和監管備案。我們的企業軟件提供對臨床前測試期間收集的大型數據池的有效訪問，用於數據減少後和報告生成，以及我們未來看到的與未來人工智能相關的處理。

Starting with Cellular Molecular Technologies. In Q4, we received a large order from a top pharma company for our BTX Electroporation system configured for bio-production. This order began significant shipments in Q1 of 2023 and is expected to quickly ramp to $1 million annually, primarily driven by consumption of our unique flatpack reaction chambers and augmented by expanded services.

從細胞分子技術開始。在第四季度，我們收到了一家頂級製藥公司的大訂單，要求我們為生物生產配置的 BTX 電穿孔系統。該訂單于 2023 年第一季度開始大量出貨，預計每年將迅速增加到 100 萬美元，這主要是由於我們獨特的扁平反應室的消耗以及擴展服務的推動。

We're excited about this emerging value proposition for the BTX system in bio-production, which is often used today in pharmaceutical research and development to create the initial strength of therapeutics and vaccines. BTX Electroporation has the potential to provide substantial ongoing stream of flatpack and other consumable revenue that benefits from production quantities in addition to those historically required in research and discovery.

我們對 BTX 系統在生物生產中的這一新興價值主張感到興奮，該系統如今經常用於藥物研究和開發，以創造治療藥物和疫苗的初始強度。 BTX Electroporation 有可能提供大量持續的扁平包裝和其他消耗品收入，這些收入除了研究和發現的歷史需求外，還可以從生產數量中獲益。

Second, we introduced the new U7500, our premium spectrophotometer building on our well-known ultra-spec name. This system replaces three existing models and is designed to better penetrate pharma and CRO companies and top academic sites and started shipping late in Q4.

其次，我們推出了新的 U7500，這是我們以我們著名的超規格名稱為基礎的優質分光光度計。該系統取代了三個現有模型，旨在更好地滲透製藥和 CRO 公司以及頂級學術網站，並於第四季度末開始發貨。

Lastly, continuing to drive market leadership in preclinical wireless continuous monitoring, we launched our "exclusive" continuous monitoring glucose implant. This new implant allows for continuous monitoring of glucose levels and avoids the cost, inconvenience, and variability inherent in periodic manual blood draws for sampling. Glucose monitoring is expected to be an incremental growth driver in academic labs and government labs and pharma companies in the pursuit of solutions for the ever-growing problems of obesity and diabetes. This new line of implants began shipping late in Q4 and will augment new growth of our consumables and services in 2023 and beyond.

最後，為了繼續推動臨床前無線連續監測的市場領導地位，我們推出了“獨家”連續監測葡萄糖植入物。這種新的植入物允許連續監測葡萄糖水平，並避免了定期手動抽血取樣所固有的成本、不便和可變性。在尋求解決日益嚴重的肥胖和糖尿病問題的過程中，葡萄糖監測有望成為學術實驗室、政府實驗室和製藥公司的增量增長動力。這種新的植入物系列於第四季度末開始發貨，並將在 2023 年及以後促進我們的消耗品和服務的新增長。

Now I'll turn the call over to Jennifer Cote, our interim CFO, for a quick look at key financials.

現在，我將把電話轉給我們的臨時首席財務官詹妮弗·科特 (Jennifer Cote)，以快速了解主要財務狀況。

Thank you, Jim. I'm pleased to be able to share our financial results in greater detail. If you can please refer to Slide 7. As a reminder, my discussion will focus on adjusted results for P&L performance, which aligns with measurements we use to internally manage the business. Jim has already taken you through our revenue performance, and I will take you through additional details on our expenses, balance sheet, and cash flows.

謝謝你，吉姆。我很高興能夠更詳細地分享我們的財務結果。如果可以，請參閱幻燈片 7。提醒一下，我的討論將集中在 P&L 績效的調整結果上，這與我們用於內部管理業務的衡量標準一致。 Jim 已經向您介紹了我們的收入表現，我將向您介紹有關我們的支出、資產負債表和現金流量的更多詳細信息。

Q4 adjusted gross margin was 57.2%, as discussed earlier, this was consistent with the full year 2021 adjusted gross margin but was 2.4 percentage points below that of last Q4 2021. Q4 2021 was a near record quarter for revenue, and this drove favorable absorption of fixed overhead costs. Our gross margin for Q4 2022 was also impacted by increases in certain components costs. In general, our gross margin will fluctuate from period to period based on revenue mix and volume, inflation, impact to supply chain, among other factors.

第四季度調整後毛利率為 57.2%，如前所述，這與 2021 年全年調整後毛利率一致，但比 2021 年第四季度低 2.4 個百分點。2021 年第四季度的收入接近創紀錄的季度，這推動了有利的吸納的固定間接費用。我們 2022 年第四季度的毛利率也受到某些組件成本增加的影響。一般來說，我們的毛利率會根據收入組合和數量、通貨膨脹、對供應鏈的影響等因素在不同時期波動。

We initiated the discontinuation of nonstrategic products in Q3 and also implemented pricing updates during Q4. We will enter Q1 of 2023 with lower labor and overhead costs as the headcount reductions related to our portfolio rationalization are realized. With the implementation of these improvements, together with our pricing increases, we expect to see initial margin improvement in Q1 and to achieve the full benefit of these changes in Q2.

我們在第三季度啟動了非戰略產品的停產，並在第四季度實施了定價更新。隨著與我們的投資組合合理化相關的裁員實現，我們將以較低的勞動力和間接成本進入 2023 年第一季度。隨著這些改進的實施以及我們的價格上漲，我們預計第一季度的初始利潤率將有所提高，並在第二季度實現這些變化的全部收益。

Now moving to operating margin. Q4 adjusted operating margin was $3.4 million or 11.9% compared to $5.3 million or 16% in Q4 2021. The decrease was primarily driven by lower revenue and as a result, lower gross margin, partially offset by lower operating expenses in Q4. We continue to work diligently to optimize our cost structure across our global functions.

現在轉向營業利潤率。第四季度調整後的營業利潤率為 340 萬美元或 11.9%，而 2021 年第四季度為 530 萬美元或 16%。下降的主要原因是收入減少，因此毛利率也較低，部分被第四季度營業費用的減少所抵消。我們將繼續努力優化我們全球職能部門的成本結構。

Planned restructuring is largely behind us as we exit 2022, although we will continue to look for opportunities to improve the operating effectiveness of our company going forward. We do expect an increase in capital expenditures in 2023 as we invest in the consolidation of certain business tools and also invest in tooling and capital equipment related to new products.

計劃中的重組在我們 2022 年退出時基本上已經落後，儘管我們將繼續尋找機會來提高公司未來的運營效率。我們確實預計 2023 年資本支出會增加，因為我們投資於某些業務工具的整合，還投資於與新產品相關的工具和資本設備。

As we enter 2023, we will start to report on adjusted EBITDA, as Jim mentioned, in replacement of operating income and margin. The primary difference for Harvard Bioscience is depreciation on our fixed assets, which is approximately $300,000 each quarter and we believe this change aligns more closely with our focus on cash flow improvements and is consistent with the presentation of other comparable companies. Interest expense was $900,000 in Q4 2022 as compared to $400,000 in Q4 of 2021. We executed an interest rate swap during Q1 of 2023 to fix the majority of the interest on our floating rate bank debt, and this mitigates further expense growth in 2023.

隨著我們進入 2023 年，我們將開始報告調整後的 EBITDA，正如 Jim 提到的那樣，以取代營業收入和利潤率。 Harvard Bioscience 的主要區別在於我們的固定資產折舊，每季度約為 300,000 美元，我們認為這一變化更符合我們對現金流改善的關注，並且與其他可比公司的陳述一致。 2022 年第四季度的利息支出為 900,000 美元，而 2021 年第四季度為 400,000 美元。我們在 2023 年第一季度執行了利率互換，以固定浮動利率銀行債務的大部分利息，這減輕了 2023 年的進一步支出增長。

Now turning my attention to cash flow. As Jim mentioned, cash flow provided by operations was $2.7 million in Q4 of Fiscal '22 compared to $100,000 in last Q4. Primary drivers for this change related to accruals for variable compensation. Cash provided by operations for the full year was $1.2 million, consistent with 2021 despite $4 million of cash payments related to the final resolution of SEDAR litigation, which we put behind us early last year.

現在將注意力轉向現金流。正如吉姆所提到的，22 財年第四季度運營提供的現金流為 270 萬美元，而上一季度為 100,000 美元。這一變化的主要驅動因素與可變薪酬的應計費用有關。全年運營提供的現金為 120 萬美元，與 2021 年持平，儘管 400 萬美元的現金支付與 SEDAR 訴訟的最終解決方案有關，我們去年初將其擱置。

Over the course of the year, we saw strong improvements in our days sales outstanding and reduced our accounts receivable balance by $4.8 million over the course of 2022. Inventory remains relatively flat despite the headwinds of higher component costs and spot purchases to secure raw materials needed to produce our products. We expect to make meaningful progress against our days' inventory on hand metric in 2023.

在這一年中，我們看到未償銷售天數有了顯著改善，並且在 2022 年期間我們的應收賬款餘額減少了 480 萬美元。儘管組件成本上升和現貨採購以確保所需原材料的逆風，但庫存仍然相對平穩生產我們的產品。我們希望在 2023 年的庫存量指標方面取得有意義的進展。

While our net debt is slightly higher at the end of 2022, we did reduce our outstanding debt by $1.8 million over the course of the year. This will be a focus and a strategic priority for us in 2023, and we are targeting solid reductions in our outstanding debt. Jim will cover this in the next section as he discusses 2023 guidance.

雖然我們的淨債務在 2022 年底略高，但我們確實在這一年中將未償債務減少了 180 萬美元。這將是我們 2023 年的重點和戰略重點，我們的目標是大幅減少未償債務。 Jim 將在下一節討論 2023 年指南時介紹這一點。

Back to you, Jim. Thanks, Jen. Now moving to our summary on Slide 9 and a look at what we see for the year 2023. With the market headwinds of 2022 behind us, our lean cost structure, and our exciting new product portfolio in hand, we expect a strong 2023 for Harvard Bioscience.

回到你身邊，吉姆。謝謝，珍。現在轉到幻燈片 9 的總結，看看我們對 2023 年的看法。隨著 2022 年的市場逆風、我們精益的成本結構和令人興奮的新產品組合在手，我們預計哈佛 2023 年會表現強勁生物科學。

We expect reported revenue growth in the low to mid-single-digit range, inclusive of approximately 4 percentage points of discontinued product revenue. We also expect improved gross margins with significant expansion in adjusted EBITDA margins. With our expanded EBITDA combined with improved working capital cash flow, we plan to significantly pay down our debt. We target reducing our debt leverage to the 2x level by the end of '23.

我們預計報告的收入增長在中低個位數範圍內，包括約 4 個百分點的停產產品收入。我們還預計，隨著調整後的 EBITDA 利潤率顯著擴大，毛利率將有所提高。憑藉擴大的 EBITDA 以及改善的營運資金現金流，我們計劃大幅償還債務。我們的目標是到 23 年底將我們的債務槓桿率降低到 2 倍水平。

Thank you. Now I'll turn the call back over to the operator and open the line for questions. Thanks.

謝謝。現在我將把電話轉回給接線員並打開問題熱線。謝謝。

Thank you. (Operator Instructions) Our first question comes from the line of Bruce Jackson with Benchmark Company.

謝謝。 （操作員說明）我們的第一個問題來自 Bruce Jackson 與 Benchmark Company 的對話。

So you mentioned that we would potentially be seeing some gross margin improvement during 2023. I was wondering if maybe you could give us an idea of the cadence on that margin improvement. So is going to continue to rise off the fourth quarter number? And where do you think it could get to by the end of the year?

所以你提到我們可能會在 2023 年看到毛利率有所改善。我想知道你是否可以讓我們了解毛利率改善的節奏。那麼第四季度數字會繼續上漲嗎？你認為到今年年底它會到達哪裡？

Thanks, Bruce. That's a great question. We expect to see gross margin improve almost immediately. We would expect to see the margin move into the 58% to 60% region and I mean even in early in the year, and then improving through the year, especially as we get to late in the year with higher volumes, certainly, I would expect to be bouncing up against 60% or some are right in that area.

謝謝，布魯斯。這是一個很好的問題。我們預計毛利率幾乎會立即提高。我們希望看到利潤率進入 58% 到 60% 的區域，我的意思是甚至在今年年初，然後在今年有所改善，尤其是當我們在今年年底達到更高的銷量時，當然，我會預計會反彈到 60%，或者有些人在那個領域是正確的。

Okay. And then the other question I had is on the noncash expenses when we're looking at the new EBITDA number. Will the stock comp or the amortization numbers change meaningfully during 2023 compared to 2022?

好的。當我們查看新的 EBITDA 數字時，我遇到的另一個問題是非現金支出。與 2022 年相比，2023 年的股票價格或攤銷數字是否會發生有意義的變化？

I don't think so. I think they'll probably remain pretty stable. So there, you already see those adjustments made in what we've always used for adjusted operating margin. What you'll see by moving to EBITDA is really also adding the depreciation and for us, depreciation is not a great big number. We're not highly capital intensive but we do think it gives us more of a pro-forma view of basically the cash generation of the company.

我不這麼認為。我認為他們可能會保持相當穩定。所以在那裡，你已經看到了我們一直用於調整後的營業利潤率的那些調整。通過轉向 EBITDA，你會看到實際上也增加了折舊，對我們來說，折舊不是一個很大的數字。我們的資本密集度不高，但我們確實認為這讓我們對公司的現金產生能力有了更多的形式上的了解。

And that's where we're really focusing this year is driving up EBITDA, reducing our multiple on our leverage ratio, paying down the debt, and really positioning -- getting this business back into great shape just like we started to do back when I first joined here, but now that we've completely changed the structure and the cost of the business and really made these changes have a much stronger portfolio, this is going to improve throughout the year. And like I said, even starting in Q1, you're going to -- I believe you're going to see measurable improvement in the overall business.

這就是我們今年真正關注的地方是提高 EBITDA，降低我們的槓桿倍數，償還債務，以及真正的定位——讓這項業務恢復到良好狀態，就像我們剛開始做的那樣加入這裡，但現在我們已經完全改變了業務的結構和成本，並真正使這些變化具有更強大的產品組合，這將在全年得到改善。就像我說的，即使從第一季度開始，你也會——我相信你會看到整體業務的顯著改善。

There is going to be some rotation out of revenue, this revenue that we're working out of the things that we've obsoleted. And we project that to be somewhere around $5 million or 4 percentage points. Much of that is going to rotate out in Q1. And then as we get into Q2 and forward, we certainly see expansion of our core revenues, offsetting that number early in the year and then driving the overall growth as we get to more like Q3, Q4. But all through the year, you'll see a much better operating leverage on this business.

收入會有一些輪換，我們正在從我們已經過時的東西中獲得收入。我們預計這一數字約為 500 萬美元或 4 個百分點。其中大部分將在第一季度輪換。然後，當我們進入第二季度和未來時，我們肯定會看到核心收入的擴張，在今年年初抵消了這一數字，然後隨著我們進入更接近第三季度和第四季度而推動整體增長。但全年，您會看到這項業務的運營槓桿要好得多。

Okay. Then last question for me is on China. Sometimes historically, the revenue number has shown some sensitivity to market conditions in China. What are you seeing right now? And what do you anticipate for 2023?

好的。最後一個問題是關於中國的。從歷史上看，有時收入數字對中國的市場狀況表現出一定的敏感性。你現在看到了什麼？您對 2023 年有何期待？

China is -- we see that this as a major growth driver for our business, and we see it we're driving across the spectrum of our product lines, both in -- we see growth coming very nicely on the CMT side and on the pre-clinical. We did with the shutdowns that happened last year, it caused some fluctuation and delays in ordering at times and then impacts on shipment and shipment revenues.

中國 - 我們認為這是我們業務的主要增長動力，我們看到我們正在推動我們的產品線的範圍，無論是 - 我們都看到 CMT 方面和臨床前。我們處理了去年發生的停工，它有時會導致訂單波動和延遲，然後影響出貨和出貨收入。

But there was probably some buildup in late in Q4 with the book-to-bill really moving, so we couldn't ship things fast enough. But the demand line, the demand stream really has dramatically improved in China. They've opened up. There's also a lot more investment in China now in advanced research for discovery. We're seeing that driving our outlook for China. We see significant opportunity growing also on the preclinical side because that's an area that the Chinese really want to grow that area, both in research, and then in the ability to actually produce these new drugs and therapies. So yes, China is definitely going to be a big growth driver for us in 2023.

但在第 4 季度末可能會有一些積累，訂單出貨量確實在移動，所以我們無法足夠快地發貨。但需求線，需求流在中國確實有了顯著改善。他們打開了。中國現在也有更多的投資用於發現的高級研究。我們看到這推動了我們對中國的展望。我們在臨床前方面也看到了重要的增長機會，因為這是中國人真正想要發展的領域，無論是在研究方面，還是在實際生產這些新藥和療法的能力方面。所以是的，中國肯定會在 2023 年成為我們的重要增長動力。

Thank you.

謝謝。

Our next question comes from Harrison Schrage with KeyBanc. Harrison.

我們的下一個問題來自 KeyBanc 的 Harrison Schrage。哈里森。

First question for me is just on the guide. So low to mid-single digits was about 4% of the portfolio optimization. Would you say that, that high single digit to low double-digit range that, that kind of implies on the base business is a good way to think about it going forward in the longer term?

對我來說，第一個問題只是關於指南。如此低到中等的個位數大約佔投資組合優化的 4%。你會說，高個位數到低兩位數的範圍，這對基礎業務的暗示是從長遠來看考慮它的好方法嗎？

I do. And that's really consistent with what we wanted -- what I wanted to be able to underpin for targets to start with. And again, like I said, we'll see a little rotation out with the $5 million coming out in Q1 and maybe some in Q2. But that gets replaced almost as that comes out, it replaces with the new growth. And then new growth, as you know, is it's much, much better mix of business.

我願意。這與我們想要的完全一致——我希望能夠支持目標的開始。再一次，就像我說的那樣，我們會看到第一季度有 500 萬美元，第二季度可能會有一些輪換。但這幾乎在它出現時就被取代了，它被新的增長所取代。然後，如您所知，新的增長是更好的業務組合。

So yes, I think you've kind of hit that right, kind of high single digits on a reported basis, maybe it's close to 10% and then that would be on the core business. We done on a reported basis kind of in that, I don't know, maybe it's flat or a little better than flat to 5-ish percent, maybe a little better. And I'll give better updates as we get a little further into the year, and I'm able to give more -- better visibility into further points into the year as those funnels develop in the pipeline.

所以是的，我認為你說對了，在報告的基礎上是高個位數，也許接近 10%，然後就是核心業務。我們是在報告的基礎上完成的，我不知道，也許它持平或比持平到 5% 好一點，也許好一點。隨著今年的進一步深入，我會提供更好的更新，並且隨著這些漏斗在管道中的發展，我能夠提供更多 - 更好地了解今年的更多點。

Got it. That's helpful. And then on the portfolio optimization and new products that you're rolling out. I guess, could you kind of talk to strategically how you're thinking about the different end markets that you're going to be catering to and the new business and new portfolio compared to the old portfolio maybe in terms of is it more biopharma compared to academic government? And what are you kind of thinking there?

知道了。這很有幫助。然後是您正在推出的投資組合優化和新產品。我想，你能否從戰略上談談你是如何考慮你將要迎合的不同終端市場以及新業務和新產品組合與舊產品組合相比，也許是生物製藥相比更多？到學術政府？你在想什麼？

Yes. I think of them in many ways, is somewhat independent activities, but the focus is in key areas. So our technologies in discovery, like electroporation and the cell-based testing, those sell through are and report through our molecular and cellular molecular side. Those that we expect nice expansion there. We know what all is happening in the use of electroporation, electrofusion, for creation of these new exciting new drugs and large molecule therapies and vaccines. So that's going to drive growth into academic research and discovery.

是的。我覺得他們在很多方面，是有些獨立的活動，但重點是在關鍵領域。因此，我們在發現方面的技術，如電穿孔和基於細胞的測試，通過我們的分子和細胞分子方面進行銷售和報告。那些我們期望在那裡有很好的擴展。我們知道在使用電穿孔、電融合來創造這些新的令人興奮的新藥和大分子療法和疫苗時發生了什麼。因此，這將推動學術研究和發現的發展。

And the new introduction of the ability for us to provide bio-production -- bridge to bio-production, especially where they used us to create the initial compound, that's a natural for us to be able to expand. And for us, it's new. It's a lot of white space, and it's a place that we're putting the effort in and the time to make sure that, that drives growth for our business.

以及我們提供生物生產的能力的新引入——通往生物生產的橋樑，特別是在他們利用我們創造初始化合物的地方，這對我們來說是自然而然的。對我們來說，這是新的。這是很多空白，這是我們正在努力的地方，也是我們投入時間來確保這一點的地方，它推動了我們業務的增長。

You'll also see that there's a much more focus on us identifying and showing the annuity-based growth in the business. It turns out we haven't in the past, in many ways, even had much of the tools to be able to properly report it. But some of our product lines in a product line like AAA or our electroporation, I mean those revenue lines, half of that is likely we see as consumables and services. So we're expanding the consumables piece, the new products that we're introducing are designed primarily to go in as a system that has the pull-through of consumables and new services.

您還會看到，我們更加關注識別和展示基於年金的業務增長。事實證明，我們過去在很多方面都沒有，甚至沒有很多工具能夠正確地報告它。但是我們的一些產品線在 AAA 或我們的電穿孔等產品線中，我的意思是那些收入線，其中一半可能被我們視為消耗品和服務。因此，我們正在擴展消耗品部分，我們推出的新產品主要設計為作為一個系統進入，該系統具有消耗品和新服務的拉動能力。

We're expanding our service offerings, a lot of our products that are used -- if they're used in bio-production, we can go out and offer and help the pharmaceutical company or the biotech, get through the GMP process that had to be qualified, so they can produce product with our technology

我們正在擴大我們的服務範圍，我們使用的很多產品——如果它們用於生物生產，我們可以出去提供幫助製藥公司或生物技術公司，通過 GMP 流程合格，才能用我們的技術生產產品

And then on the preclinical side, you have to have GLP compliance to be able to collect the data for submitting your regulatory submissions. We do that also. So expanding the services to these companies once they buy our equipment -- in the past, we often we're seeing it just selling a piece of capital equipment, and that was the end of it. That's no longer the strategy here, and we're seeing this change. So the systems go in, we now are offering and expect to see much more growth on the consumable side. We also with new expanded service offerings. We're involved with going out now and offering the calibration and the installation services and the support services going forward once they use our equipment.

然後在臨床前方面，您必須符合 GLP 標準才能收集數據以提交您的監管申請。我們也這樣做。因此，一旦他們購買了我們的設備，就將服務擴展到這些公司——過去，我們經常看到它只是出售一件資本設備，這就是它的結束。這不再是這裡的策略，我們正在看到這種變化。所以系統進入，我們現在提供並期望在消耗品方面看到更多的增長。我們還提供新的擴展服務。一旦他們使用我們的設備，我們現在就開始提供校準和安裝服務以及支持服務。

So again, I'd highlight maybe three or four areas where we see real opportunity to grow and much of it here in the short term, not long term -- not a long time, wait for it. I would also say though that the long-term value proposition, we see access to the large data pools that are collected with our enterprise software solutions and our Ponemah software. That's what's been used for the majority of pharmaceutical companies, CROs for creating, for collecting all the data during the preclinical phases. And we all know that there's going to be a hard push to use historical data and longitudinal data to be able to be able to submit and show that new drugs can leverage on testing that's maybe already been done in a line.

因此，我要再次強調我們看到真正增長機會的三個或四個領域，其中大部分是短期的，而不是長期的 - 不是很長一段時間，等待它。我還要說的是，儘管從長期價值主張來看，我們可以訪問通過我們的企業軟件解決方案和 Ponemah 軟件收集的大型數據池。這就是大多數製藥公司、CRO 在臨床前階段用於創建、收集所有數據的方法。我們都知道，將很難使用歷史數據和縱向數據來提交和證明新藥可以利用可能已經在線完成的測試。

They'll still have to go through the final. We believe they still have to go through all the final talks and safety pharmacology tests, which there, of course, that's a big part of our business and very stable. But the ability for us to offer access to large data pools that were collected, we know that some of the new advanced data processing is coming, AI-based applications, and getting access to that data is going to be -- that will be another area of expansion in the business.

他們仍然需要通過決賽。我們相信他們仍然需要通過所有的最終會談和安全藥理學測試，當然，這是我們業務的重要組成部分，而且非常穩定。但是我們提供對收集到的大型數據池的訪問的能力，我們知道一些新的高級數據處理即將到來，基於人工智能的應用程序，並且訪問這些數據將是——那將是另一個業務範圍擴大。

That's probably a little bit further down the road. But we have to -- we aim what we can here. So can't invest in everything at the same time, but picking out the key ones, bio-production, I think advancements that we see coming in moving to organoids. That's an area where we're very well positioned, and we already have the technology that where you put the organ on the chip, we already build those kinds of chips.

這可能有點遠。但我們必須——我們的目標是我們能做到的。所以不能同時投資所有的東西，但要挑出關鍵的，生物生產，我認為我們看到的在轉向類器官方面的進步。這是我們處於非常有利位置的領域，我們已經擁有將器官放在芯片上的技術，我們已經構建了這些類型的芯片。

Again, we've got three or four very interesting areas, and I'm looking forward to my next -- roadshow where I can really show the shareholders where these investments are going and show that there is an opportunity to dramatically grow this business and improve it.

同樣，我們有三四個非常有趣的領域，我期待著我的下一次路演，在那裡我可以真正向股東展示這些投資的去向，並表明有機會大幅發展這項業務，改進它。

Got it. Thanks Jim.

知道了。謝謝吉姆。

Our next question comes from the line of Christopher Sakai with Singular Research. Christopher.

我們的下一個問題來自 Singular Research 的 Christopher Sakai。克里斯托弗。

This is [Asim] for Chris. I was wondering with the restructuring done and operating margins improving, you have committed to reducing the debt. But I was wondering, in terms of new product development, would you look at business development, like acquisitions also? Or you're going to -- you're thinking mostly de novo pipeline?

這是 Chris 的 [Asim]。我想知道隨著重組的完成和營業利潤率的提高，你已經承諾減少債務。但我想知道，就新產品開發而言，您是否會關注業務發展，例如收購？或者你打算 - 你主要考慮從頭開始管道？

Yes. No, good, great question. We're -- what I really wanted to do was to first make sure that we made these changes that we could show a stable growth business with far improved operating leverage. As I get through the next couple of quarters, a couple of things will happen. One is we'll be in a much better position to, first of all, know where those real growth opportunities and improvement opportunities are. We are really figuring this out now.

是的。不，很好，很好的問題。我們 - 我真正想做的是首先確保我們進行了這些更改，以便我們可以展示穩定增長的業務以及大大提高的運營槓桿。當我度過接下來的幾個季度時，會發生一些事情。一是我們將處於一個更好的位置，首先，知道那些真正的增長機會和改進機會在哪裡。我們現在真的在想辦法。

And then secondly, figure out what's the right way to fund it. How do we want to do that? Do we want to do it mostly through organic? Do we want to use maybe do some M&A or some teaming and licensing, all those opportunities we'll be developing here this year. In my mind, there's no question we need to grow the business, continue -- of course, the best growth is always organic, but we really want to be able to augment and get into some of these newer spaces. Then we'll look at what's the best way to accomplish those growth factors.

其次，弄清楚什麼是正確的資助方式。我們要怎麼做？我們想主要通過有機來做到這一點嗎？我們是否想利用一些併購或一些團隊合作和許可，我們今年將在這裡開發所有這些機會。在我看來，毫無疑問我們需要發展業務，繼續——當然，最好的增長總是有機的，但我們真的希望能夠擴大並進入其中一些較新的領域。然後我們將看看實現這些增長因素的最佳方式是什麼。

Perfect. And I know inflation and currency have adversely affected your current results. In terms of guidance, how you have kind of factored those two things in, if you can give some color.

完美的。而且我知道通貨膨脹和貨幣對您當前的結果產生了不利影響。在指導方面，如果你能給出一些顏色，你是如何將這兩件事考慮在內的。

Yes. Well, I mean, first of all, we started dialing in new pricing, which we see that starting already to come into our revenue streams. So pricing is going to help us offset any inflation. The currency in general, we kind of think it's starting to stabilize and ease. But to me, the best way for me to do this is to continue to just keep driving my overall cost structure down, see where I can expand both pricing and volume and really get through this the right way.

是的。好吧，我的意思是，首先，我們開始調整新定價，我們看到這已經開始進入我們的收入來源。所以定價將幫助我們抵消任何通貨膨脹。總的來說，我們認為貨幣開始趨於穩定和寬鬆。但對我來說，對我來說最好的方法是繼續降低我的整體成本結構，看看我可以在哪裡擴大定價和銷量，並真正以正確的方式度過難關。

And as we pay the debt down, and I'll be paying that down quite a bit this year, we're not going to see such an impact from interest rates. And then again, as things kind of stabilize on the currencies, that will help us on a currency translation basis. So again, we should start to see an ease of currency impacts, inflation. Again, we'll improve that against that with pricing and as we grow and get more leverage in the business. The drop down leverage is much better now with this new growth and not to mention, with the new product portfolio, the mix of products is dramatically improving.

當我們償還債務時，我今年會償還相當多的債務，我們不會看到利率帶來的這種影響。然後，隨著貨幣的穩定，這將在貨幣換算的基礎上幫助我們。因此，我們應該再次開始看到貨幣影響和通貨膨脹有所緩解。再一次，我們通過定價來改進這一點，隨著我們的成長，我們將在業務中獲得更多的影響力。隨著這種新的增長，現在下降槓桿要好得多，更不用說，隨著新產品組合的出現，產品組合正在顯著改善。

Perfect. Thank you.

完美的。謝謝。

This concludes the question-and-answer session. I would now like to hand the call back over to Jim Green for closing remarks.

問答環節到此結束。我現在想將電話轉回給 Jim Green 以作結束語。

Thank you, and thanks for joining us, everybody. This ends today's presentation. Certainly, I hope that you'll join us in May for our first quarter results for our fiscal 2023, and we look forward to this being such a great business that we'd envisioned it to be. And again, thanks again for your patience and sticking with us as investors. Thank you.

謝謝大家，也謝謝大家加入我們。今天的介紹到此結束。當然，我希望您能在 5 月加入我們，了解我們 2023 財年第一季度的業績，我們期待這是我們所設想的如此偉大的業務。再一次，再次感謝您的耐心等待並堅持作為投資者。謝謝。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。