LivaNova PLC (LIVN) 2023 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the LivaNova PLC fourth quarter and full year 2023 earnings conference call. My name is Emily, and I'll be moderating your call today. (Operator Instructions) As a reminder, this conference call is being recorded. I'd now like to introduce your host for today's conference, Mr. Matthew Dodds, LivaNova's Senior Vice President of Corporate Development and IT. Please go ahead, sir.

女士們、先生們，美好的一天，歡迎參加 LivaNova PLC 2023 年第四季和全年收益電話會議。我叫艾米麗，今天我將主持您的通話。（操作員說明）謹此提醒，本次電話會議正在錄音。現在我想介紹一下今天會議的主持人，LivaNova 企業發展和 IT 高級副總裁 Matthew Dodds 先生。請繼續，先生。

Thank you, Emily, and welcome to our conference call and webcast discussing LivaNova's financial results for the fourth quarter and full year of 2023. Joining me on today's call are Bill Kozy, our Chair of the Board of Directors and Interim Chief Executive Officer; Alex Shvartsburg, our Chief Financial Officer; Stephanie Bolton, President of Global Epilepsy; and Briana Gotlin, Director of Investor Relations.

謝謝 Emily，歡迎參加我們的電話會議和網路廣播，討論 LivaNova 2023 年第四季和全年的財務表現。與我一起參加今天電話會議的還有我們的董事會主席兼臨時執行長 Bill Kozy； Alex Shvartsburg，我們的財務長；全球癲癇協會主席史蒂芬妮·博爾頓；和投資者關係總監 Briana Gotlin。

Before we begin, I would like to remind you that the discussions during this call will include forward-looking statements. Factors that could cause actual results to differ materially are discussed in the company's most recent financial filings and documents furnished to the SEC, including today's press release that is available on our website. We do not undertake to update any forward-looking statements. Also the discussion to include certain non-GAAP financial measures with respect to our performance, including but not limited to sales results, which will all be stated on a constant currency basis.

在我們開始之前，我想提醒您，本次電話會議期間的討論將包括前瞻性陳述。本公司向 SEC 提供的最新財務文件和文件（包括我們網站上提供的今天的新聞稿）討論了可能導致實際結果出現重大差異的因素。我們不承諾更新任何前瞻性陳述。此外，也討論了與我們的業績相關的某些非公認會計原則財務指標，包括但不限於銷售業績，這些指標都將以固定匯率計算。

Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release, which is available on our website. We have also posted a presentation to our website that summarizes the points of today's call. This presentation is complementary to other call materials and should be used as an enhanced communication tool. You can find the presentation and press release in the Investors section of our website under news events and presentations at investor.livanova.com. With that, I will now turn the call over to Bill.

與最直接可比較的 GAAP 財務指標的調整可以在今天的新聞稿中找到，該新聞稿可在我們的網站上找到。我們還在我們的網站上發布了一份演示文稿，總結了今天電話會議的要點。此簡報是其他電話資料的補充，應用作增強的溝通工具。您可以在我們網站投資者部分的新聞事件和簡報下找到簡報和新聞稿，網址為investor.livanova.com。現在，我將把電話轉給比爾。

Thank you, Matt, and thank you, everyone, for joining us. Welcome to LivaNova's conference call for the fourth quarter and full year of 2023. Before turning to results in the fourth quarter and full year, I'll start off with some comments on the naming of Vlad Makatsaria as CEO. Our decision to wind down the Advanced Circulatory Support segment and an update on the cybersecurity incident.

謝謝你，馬特，也謝謝大家加入我們。歡迎參加 LivaNova 2023 年第四季和全年的電話會議。在討論第四季和全年業績之前，我將首先對任命弗拉德·馬卡察裡亞 (Vlad Makatsaria) 擔任執行長一事發表一些評論。我們決定結束高級循環支援部分並更新網路安全事件。

Earlier this month, the Board appointed Vlad as the company's CEO and a member of the Board of Directors effective March 1. Vlad most recently served as a company Group Chairman at J&J MedTech, leading its global Ethicon surgery business. He's a respected leader in the medical technology industry with a 27-year track record of delivering results, driving innovation, and leading high-performing teams.

本月早些時候，董事會任命 Vlad 為公司執行長和董事會成員，自 3 月 1 日起生效。Vlad 最近擔任 J&J MedTech 公司集團董事長，領導其全球 Ethicon 手術業務。他是醫療技術行業備受尊敬的領導者，在交付成果、推動創新和領導高績效團隊方面擁有 27 年的業績記錄。

The Board and I have great confidence that Vlad is the right CEO to advance LivaNova's strategic plan and achieve our goals for long-term growth. I will continue in my role as LivaNova Board Chair and of course, look forward to supporting Vlad as our new CEO.

董事會和我非常有信心，Vlad 是推動 LivaNova 戰略計劃並實現我們長期成長目標的合適執行長。我將繼續擔任 LivaNova 董事會主席，當然，我也期待支持 Vlad 作為我們的新執行長。

In January, we announced the wind-down of the ACS segment. As part of this decision, ACS stand-alone cannula and accessories will move into our cardiopulmonary segment during the first quarter. This portfolio decision allows us to focus on our core cardiopulmonary and neuromodulation businesses, which are well positioned for growth and value creation. We expect to wind down to result in a positive contribution to adjusted operating income in 2024 as compared to 2023.

一月份，我們宣布逐步結束 ACS 業務。作為該決定的一部分，ACS 獨立插管和配件將在第一季進入我們的心肺領域。這項投資組合決策使我們能夠專注於我們的核心心肺和神經調節業務，這些業務處於成長和價值創造的有利位置。與 2023 年相比，我們預計 2024 年的調整後營業收入將減少。

We delivered strong performance despite the previously disclosed cybersecurity incident. Later in the call, Alex will provide comments regarding the estimated impact to our financial results during the quarter. Importantly, we were able to bring all our manufacturing operations back online as noted in our prior disclosures. I must extend sincere appreciation to our LivaNova colleagues around the world who responded with urgency and extraordinary dedication. Thank you.

儘管先前披露了網路安全事件，但我們仍表現強勁。在稍後的電話會議中，亞歷克斯將就本季對我們財務表現的估計影響發表評論。重要的是，正如我們之前所揭露的那樣，我們能夠使所有製造業務恢復線上。我必須向世界各地的 LivaNova 同事致以誠摯的謝意，他們的緊急回應和非凡的奉獻精神。謝謝。

For the remainder of the call, I'll discuss our fourth quarter and full year results and then turn to our strategic portfolio initiatives. After my comments, Alex will provide additional details on our results and 2024 guidance. I'll wrap up with some closing remarks before moving on to Q&A. In the quarter, we achieved 12% revenue growth versus the prior year.

在電話會議的其餘部分，我將討論我們第四季度和全年的業績，然後轉向我們的策略性投資組合計劃。在我發表評論後，Alex 將提供有關我們的結果和 2024 年指導的更多詳細資訊。在進行問答之前，我將做一些結束語。本季度，我們的營收較上年增長 12%。

This performance was driven by the cardiopulmonary and neuromodulation businesses, with particular strength in the Europe and US regions. On a full year basis, we achieved 13% revenue growth versus the prior year, marked by double digit growth across all regions. Notably, we delivered on our commitment to modest leverage, achieving 17% growth in both adjusted operating income and adjusted diluted earnings per share.

這一業績是由心肺和神經調節業務推動的，尤其是在歐洲和美國地區。全年營收較上年成長 13%，所有地區均達到兩位數成長。值得注意的是，我們兌現了適度槓桿的承諾，調整後營業收入和調整後稀釋每股收益均實現了 17% 的成長。

Now turning to segment results. For the cardiopulmonary segment, revenue was $162 million in the quarter, an increase of 17% versus the fourth quarter of 2022. Heart-lung machine revenue increased more than 40%, primarily driven by Essenz sales in the Europe and US regions. We were pleased to see a meaningful sequential ramp in Essenz, sales during the quarter with strong placements and pricing execution.

現在轉向細分結果。對於心肺領域，本季營收為 1.62 億美元，較 2022 年第四季成長 17%。心肺機收入成長超過40%，主要受到Essenz在歐洲和美國地區銷售的推動。我們很高興看到埃森茨的銷售額在本季度實現了顯著的連續成長，並且具有強勁的佈局和定價執行力。

Oxygenator revenue grew in the mid-single digits, driven by customer demand and price. As previously noted, the oxygenator business faces capacity constraints and the team made significant efforts in the quarter to mitigate the disruption from the cybersecurity incident, including working additional shifts on weekends and holidays.

在客戶需求和價格的推動下，制氧機收入實現中個位數成長。如前所述，制氧機業務面臨產能限制，該團隊在本季度做出了巨大努力，以減輕網路安全事件造成的干擾，包括在週末和假日加班。

Cardiopulmonary revenue for the full year was $589 million and grew 18%. We expect cardiopulmonary revenue to grow 6% to 7% for full year 2024. Our forecast incorporates strong HLM growth, which will be offset by slower growth in disposables due to the current capacity constraints. Our recent efforts to expand oxygenator capacity are now expected to provide some benefit in the second half of the year. Epilepsy revenue increased 8% versus the fourth quarter of 2022. The US epilepsy revenue increased 8% year-over-year, with growth in both new and replacement implants.

全年心肺收入為5.89億美元，成長18%。我們預計 2024 年全年心肺收入將成長 6% 至 7%。我們的預測包括 HLM 的強勁成長，但由於當前產能限制，一次性用品的成長放緩將抵消這一成長。我們最近為擴大充氧器產能所做的努力預計將在今年下半年帶來一些好處。癲癇收入較 2022 年第四季成長 8%。美國癲癇收入年增 8%，新植入物和替換植入物均有成長。

We achieved 856 new patient implants in the quarter, representing 6% growth versus the prior year. We realized 1,982 replacement implants, representing 10% growth versus the prior year, an unusually high growth rate. Epilepsy revenue in Europe and the rest of the world grew 7% versus prior year. For the full year, epilepsy revenue increased 10%. Notably US epilepsy achieved 3,300 new patient implants in the full year, representing 7% growth versus the prior year.

本季我們實現了 856 例新患者植入，比上年增長 6%。我們實現了 1,982 顆替換植體，比前一年增長了 10%，增長率異常高。歐洲和世界其他地區的癲癇收入比去年增加了 7%。全年癲癇收入增加了 10%。值得注意的是，美國癲癇症全年實現了 3,300 名新患者植入，比前一年增加了 7%。

Replacement implants reached 7,608 for the full year, also a 7% increase, which was higher than expected. For the full year 2024, we expect Global Epilepsy revenue to grow 6% to 7%. Our forecast incorporates a continued mid-single digit growth for US new patients and more normalized low single digit growth in replacement. ACS revenue was $10 million in the quarter, an increase of 5% versus the fourth quarter of 2022. ACS revenue for the full year was $40 million and grew 3%. As previously noted, the wind-down in the ACS segment is anticipated to be substantially complete by the end of 2024.

全年替換植體數量達 7,608 顆，同樣成長 7%，高於預期。2024 年全年，我們預計全球癲癇收入將成長 6% 至 7%。我們的預測包括美國新患者的持續中個位數成長和更正常化的低個位數成長。ACS 本季營收為 1,000 萬美元，較 2022 年第四季成長 5%。ACS 全年營收為 4,000 萬美元，成長 3%。如前所述，ACS 業務的縮減預計將在 2024 年底前基本完成。

Alex will comment on the financial impact of the ACS wind down later in the call. DTD revenue for the fourth quarter was $2 million and for the full year was $7 million. For 2024, we anticipate DTD revenue of approximately $7 million, primarily from the RECOVER study. The RECOVER study does continue. As a reminder, enrollment for the unipolar cohort of this study has been completed. We anticipate the receipt of the 12-month follow-up data for the 500 unipolar patients in June of 2024, after which we will conduct a final analysis. We continue to expect the publication of this study results by late 2024. The bipolar cohort continues to enroll as expected.

Alex 將在稍後的電話會議中評論 ACS 終止的財務影響。第四季 DTD 營收為 200 萬美元，全年營收為 700 萬美元。2024 年，我們預計 DTD 收入約為 700 萬美元，主要來自 RECOVER 研究。RECOVER 研究仍在進行中。提醒一下，本研究的單極隊列的入組工作已經完成。我們預計在2024年6月收到這500名單相患者12個月的追蹤數據，之後我們將進行最終分析。我們仍預期研究結果將於 2024 年底發布。雙極性情感障礙組繼續如預期入組。

Moving to OSA, the OSPREY trial continues to progress with all 25 study sites recruiting patients. In heart failure, the closeout of the ANTHEM clinical study is substantially complete. Overall R&D spend related to heart failure in 2023 was $25 million, the majority of which occurred in the first half of the year.

轉向 OSA，OSPREY 試驗繼續取得進展，所有 25 個研究中心都在招募患者。在心臟衰竭方面，ANTHEM 臨床研究已基本完成。2023 年與心臟衰竭相關的整體研發支出為 2,500 萬美元，其中大部分發生在上半年。

With that, I'll turn the call over to Alex.

這樣，我會將電話轉給亞歷克斯。

Thanks, Bill. During my portion of the call, I'll share a brief recap of the fourth quarter results. I'll offer additional details on the one-time charges in connection with the cybersecurity incident and the wind-down of the ACS business. I'll also provide commentary on the 2024 guidance.

謝謝，比爾。在我的電話會議中，我將簡要回顧第四季度的業績。我將提供與網路安全事件和 ACS 業務縮減相關的一次性費用的更多詳細資訊。我還將對 2024 年指南提供評論。

Turning to results, revenue in the quarter was $310 million, an increase of 12% versus 2022. Foreign exchange in the quarter had a favorable year-over-year impact of approximately $3 million or 1% of revenue. Adjusted gross margin as a percent of net revenue was 68% compared to 69% in the fourth quarter of 2022. The cybersecurity incident impacted adjusted gross margin by approximately 100 basis points due to unfavorable labor costs and fixed overhead absorption. This was partially offset by higher volume and favorable product mix.

轉向業績，該季度營收為 3.1 億美元，較 2022 年成長 12%。本季外匯帶來的年比影響約為 300 萬美元，佔營收的 1%。調整後毛利率佔淨收入的百分比為 68%，而 2022 年第四季為 69%。由於不利的勞動成本和固定管理費用吸收，網路安全事件影響了調整後毛利率約 100 個基點。這被銷量增加和有利的產品組合部分抵消。

Adjusted R&D expense in the fourth quarter was $42 million compared to $43 million in the fourth quarter of 2022. R&D as a percent of net revenue was 14%, down from 16% in the fourth quarter of 2022. The year over year decrease was largely driven by lower costs associated with the closeout of the ANTHEM trial. Excluding the costs related to ANTHEM, our R&D investment increased 9% versus prior year. Adjusted SG&A expense for the fourth quarter was $120 million compared to $100 million in the fourth quarter of 2022.

第四季調整後研發費用為 4,200 萬美元，而 2022 年第四季為 4,300 萬美元。研發佔淨收入的百分比為 14%，低於 2022 年第四季的 16%。年比下降主要是由於 ANTHEM 試驗結束相關的成本降低。排除與 ANTHEM 相關的成本，我們的研發投資比去年增加了 9%。第四季調整後的 SG&A 費用為 1.2 億美元，而 2022 年第四季為 1 億美元。

The year-over-year increase was driven by targeted investments supporting the Essenz launch, legal expenses, and variable costs such as freight and commissions associated with increased revenues. Additionally, our short-term incentive plan accrual increase resulting from the business overperformance. SG&A as a percent of net revenue was 39% as compared to 36% in the fourth quarter of 2022.

同比成長的推動因素包括支持 Essenz 啟動的針對性投資、法律費用以及與收入增加相關的運費和佣金等可變成本。此外，由於業務表現優異，我們的短期激勵計畫應計增加。SG&A 佔淨收入的百分比為 39%，而 2022 年第四季為 36%。

Adjusted operating income was $48 million compared to $47 million in the fourth quarter of last year. Adjusted operating income margin was 16% compared to 17% in the fourth quarter of 2022. The cybersecurity incident negatively impacted adjusted operating income margin by approximately 100 basis points due to the disruption to our cardiopulmonary manufacturing sites. Adjusted effective tax rate in the quarter was negative 3% and in line with the fourth quarter of 2022.

調整後營業收入為 4,800 萬美元，而去年第四季為 4,700 萬美元。調整後營業利益率為 16%，而 2022 年第四季為 17%。由於我們的心肺製造基地受到干擾，網路安全事件對調整後營業利潤率產生了約 100 個基點的負面影響。本季調整後有效稅率為負 3%，與 2022 年第四季一致。

The tax rate was impacted by the release of a valuation allowance. Adjusted diluted earnings per share was $0.87 compared to $0.81 in the fourth quarter of 2022. Our cash balance at December 31 was $267 million, up from $214 million at year-end 2022. Total debt at year-end 2023 was $587 million, up from $542 million at year end 2022. The increase in total debt was driven by the delayed draw of $50 million on the Term Loan A facility that we put in place in July 2022.

稅率受到估價津貼發放的影響。調整後稀釋每股收益為 0.87 美元，而 2022 年第四季為 0.81 美元。截至 12 月 31 日，我們的現金餘額為 2.67 億美元，高於 2022 年底的 2.14 億美元。2023 年底的債務總額為 5.87 億美元，高於 2022 年底的 5.42 億美元。總債務的增加是由於我們於 2022 年 7 月設立的定期貸款 A 設施延遲提取 5,000 萬美元所致。

Net debt, including restricted cash at year end was $48 million. Adjusted free cash flow for the quarter was $60 million, up from $31 million in the prior year period. The year-over-year increase was driven mostly by higher income and improvements in working capital. Capital spend was $35 million in 2023 compared to $27 million in the prior year. The increase was driven by IT systems and cardiopulmonary manufacturing infrastructure investments.

截至年底，淨債務（包括限制性現金）為 4,800 萬美元。本季調整後自由現金流為 6,000 萬美元，高於去年同期的 3,100 萬美元。年比成長主要是由收入增加和營運資本改善所推動的。2023 年的資本支出為 3,500 萬美元，而前一年為 2,700 萬美元。這一成長是由 IT 系統和心肺製造基礎設施投資所推動的。

In connection with the cybersecurity incident, the company incurred costs of approximately $2.6 million in the fourth quarter, which are excluded from our adjusted operational results. These costs primarily included external cybersecurity experts, legal counsel, and system restoration costs. We continue to monitor developments of the ongoing investigation and may incur additional costs related to this incident.

由於網路安全事件，該公司在第四季度產生了約 260 萬美元的成本，該成本不包括在我們調整後的營運業績中。這些成本主要包括外部網路安全專家、法律顧問和系統復原成本。我們將繼續關注正在進行的調查的進展，並可能產生與此事件相關的額外費用。

With respect to the wind-down of the ACS business and transition of certain products into cardiopulmonary, We recorded a pretax noncash impairment charge of $103 million during the fourth quarter, which is excluded from our adjusted operational results. We expect to incur additional restructuring charges in the range of approximately $15 million to $20 million, the majority of which will be recognized and paid in 2024.

關於 ACS 業務的縮減以及某些產品向心肺業務的過渡，我們在第四季度記錄了 1.03 億美元的稅前非現金減損費用，該費用不包括在我們調整後的營運業績中。我們預計將產生約 1500 萬至 2000 萬美元的額外重組費用，其中大部分將在 2024 年確認和支付。

Also effective in the first quarter of 2024, we are reorganizing our operating and reporting structure from three to two segments, cardiopulmonary and neuromodulation. The ACS standalone cannula and accessories will be included within the cardiopulmonary reportable segment. The remaining ACS business will be included within other.

同樣在 2024 年第一季生效，我們正在重組我們的營運和報告結構，從三個部門重組為兩個部門：心肺部門和神經調節部門。ACS 獨立插管和配件將包含在心肺報告部分。剩餘的 ACS 業務將納入其他業務。

Now turning to 2024 guidance. We forecast 2024 revenue growth on a constant currency basis between 4% and 5%, and between 6% and 7% when excluding the portion of the ACS business that we will be exiting. Foreign currency is expected to be negligible based on the current exchange rates. We expect the wind-down of the ACS business to result in a positive contribution to adjusted operating income in 2024 as compared to 2023 with an impact of approximately $0.1 in EPS.

現在轉向 2024 年指導。我們預計 2024 年以固定匯率計算的營收成長將在 4% 至 5% 之間，如果不包括我們將退出的 ACS 業務部分，營收成長將在 6% 至 7% 之間。根據當前匯率，外幣預計可以忽略不計。我們預計 ACS 業務的縮減將對 2024 年調整後營業收入（與 2023 年相比）產生積極貢獻，對每股收益產生約 0.1 美元的影響。

With the closeout of the ANTHEM clinical study substantially complete, we expect the reduction in R&D spend related to the heart failure program to result in a positive contribution to adjusted operating income in 2024 as compared to 2023, with an impact of approximately $0.35 in EPS. The global tax landscape continues to evolve and will impact our adjusted effective tax rate in 2024. We anticipate a full year adjusted effective tax rate of approximately 21%. Applying this rate to 2023 earnings resulted in an unfavorable impact of approximately $0.45 in EPS.

隨著 ANTHEM 臨床研究基本完成，我們預計與心臟衰竭項目相關的研發支出的減少將對 2024 年調整後營業收入（與 2023 年相比）產生積極貢獻，對每股收益產生約 0.35 美元的影響。全球稅收格局不斷變化，並將影響我們 2024 年調整後的有效稅率。我們預計全年調整後有效稅率約為 21%。將此比率應用於 2023 年收益會對每股收益產生約 0.45 美元的不利影響。

We are projecting adjusted diluted earnings per share in the range of $2.95 and $3.05, with adjusted diluted weighted average shares outstanding to be approximately $55 million for the full year. Despite the unfavorable impact caused by the step-up in our adjusted effective tax rate, this EPS range represents growth of 7% at midpoint. We recognize that there are a number of moving parts in our 2024 EPS guidance.

我們預計全年調整後稀釋後每股盈餘將在 2.95 美元至 3.05 美元之間，調整後稀釋後加權平均流通股約為 5,500 萬美元。儘管我們調整後的有效稅率的提高造成了不利影響，但這個每股收益範圍的中位數成長了 7%。我們認識到 2024 年 EPS 指導中有許多變化的部分。

To be clear, the step-up in our effective tax rate will have an unfavorable impact on our EPS results. However, our portfolio optimization actions, including the wind-down of the ACS segment and the heart failure program enable us to manage this impact.

需要明確的是，有效稅率的提高將對我們的每股盈餘產生不利影響。然而，我們的投資組合優化行動，包括 ACS 業務的逐步結束和心臟衰竭計劃，使我們能夠應對這種影響。

Adjusted free cash flow is expected to be in the range of $95 million to $115 million, an increase of approximately 9% at midpoint versus the prior year. This range includes a meaningful step-up in capital spending, which we forecast to be approximately $60 million. This increase is driven by critical investments to support innovation, growth, and infrastructure. In addition, our cash flow projections include the costs associated with the ACS wind-down.

調整後的自由現金流預計在 9,500 萬美元至 1.15 億美元之間，比上年中位數成長約 9%。這一範圍包括資本支出的有意義的增加，我們預計約為 6000 萬美元。這一成長是由支持創新、成長和基礎設施的關鍵投資所推動的。此外，我們的現金流量預測還包括與 ACS 停業相關的成本。

In summary, I'm encouraged by the company's execution and financial performance in 2023, which included double-digit revenue growth, along with a 50 basis points of operating margin improvement. Since 2023 performance was achieved while investing in critical capabilities for the company, including manufacturing, infrastructure and IT modernization, as well as managing the impact of our business operations as a result of the cybersecurity incident.

總之，我對公司 2023 年的執行力和財務表現感到鼓舞，其中包括兩位數的收入成長，以及營業利潤率提高 50 個基點。自 2023 年以來，我們在投資公司關鍵能力（包括製造、基礎設施和 IT 現代化）以及管理網路安全事件對我們業務營運的影響的同時，取得了業績。

These actions position us well for 2024. Our guidance implies adjusted operating income growth of approximately 25%, an improvement of 300 basis points in adjusted operating income margin. Excluding both heart failure and ACS benefits, adjusted operating income growth would have been 10%. This builds upon our consistent three-year trend of operating leverage improvement with 14% operating margin in 2022, 15% in 2023, and a commitment to achieving greater than 17% in 2024.

這些行動為我們在 2024 年做好了準備。我們的指導意味著調整後營業收入成長約 25%，調整後營業收入利潤率提高 300 個基點。排除心臟衰竭和 ACS 福利，調整後的營業收入成長將為 10%。這是建立在我們三年來一貫的經營槓桿改善趨勢的基礎上的，即到 2022 年營業利潤率將達到 14%，2023 年營業利潤率將達到 15%，並承諾在 2024 年實現超過 17%。

And with that, I'll turn the call back over to Bill.

然後，我會將電話轉回給比爾。

Thank you, Alex. In 2023, we exceeded full year guidance on the top and bottom line and did generate operating leverage. We realized these results while maintaining full investment in our pipeline initiatives, investing in critical capabilities for the company, as mentioned, and taking actions related to portfolio optimization.

謝謝你，亞歷克斯。2023 年，我們的營收和利潤超出了全年指引，並確實產生了營運槓桿。我們在實現這些成果的同時，保持對管道計畫的充分投資，投資於公司的關鍵能力（如上所述），並採取與投資組合優化相關的行動。

Certainly, I want to take the chance to thank our entire organization for their hard work and dedication demonstrated in 2023. Under interim leadership, the organization embraced some change and seized performance opportunity as reflected in these results, and that has been very much appreciated.

當然，我想藉此機會感謝我們整個組織在 2023 年所展現的辛勤工作和奉獻精神。在臨時領導下，該組織接受了一些變革並抓住了這些結果所反映的業績機會，這一點受到了高度讚賞。

Looking ahead, our core businesses are focused on targeted innovation, sustained growth, and value creation. Additionally, our SPIs are fully funded with data milestones approaching. With Vlad as CEO, I have great confidence in his leadership and that LivaNova will maintain momentum, achieving our commitments to serving patients while creating shareholder value. With that, Emily, we're now ready to open the call for questions.

展望未來，我們的核心業務將專注於有針對性的創新、持續成長和價值創造。此外，隨著資料里程碑的臨近，我們的 SPI 已獲得全額資助。在 Vlad 擔任執行長的情況下，我對他的領導能力充滿信心，而 LivaNova 將保持發展勢頭，實現我們為患者服務的承諾，同時創造股東價值。艾米麗，現在我們準備開始提問了。

(Operator Instructions) As we enter the Q&A session, please limit yourself to one question and one follow-up question and then return to the queue if you have additional follow-ups.

（操作員說明）當我們進入問答環節時，請限制自己提出一個問題和一個後續問題，如果您還有其他後續問題，請返回隊列。

Rick Wise, Stifel.

瑞克懷斯，史蒂菲爾。

Hi, good morning, everybody. Hi, Bill, and welcome, Vlad. Maybe it partially, just starting off, this is first time I'm having the pleasure of speaking to you. Maybe you could talk us through at a high level your priorities as you step into the role as broadly or deeply? Just like on in terms of operational goals or innovation, the strategic pipeline, who are you? And what should we expect from your leadership? Thank you so much.

嗨，大家早安。嗨，比爾，歡迎，弗拉德。也許是部分的，剛開始，這是我第一次有幸與你交談。也許您可以在高層上向我們介紹您在廣泛或深入地擔任該職位時的優先事項？就像在營運目標或創新、策略管道方面一樣，你是誰？我們對您的領導力有何期望？太感謝了。

Hey, Rick, it's Matt. When I gave the initial intros, Vlad was not on there. He starts March 1, so he's not on the call, but Bill could go on -- it's okay, but Bill can comment briefly on -- initially on some thoughts on Vlad.

嘿，瑞克，我是馬特。當我進行最初的介紹時，弗拉德並不在場。他從 3 月 1 日開始，所以他沒有參加電話會議，但比爾可以繼續——沒關係，但比爾可以簡短地評論——最初是關於弗拉德的一些想法。

Sure. Let me jump in and we talked to you over several months about the specs that the Board had and the standard that they had created for this hire. As I mentioned a little bit, we've got somebody, Vlad, coming into lead the company with 27 years of experience, including significant time living and working around the world internationally. A career that moved Moscow to Singapore to London to New York in a major health care company.

當然。讓我介入，我們花了幾個月的時間與您討論了董事會的規格以及他們為這次招聘制定的標準。正如我剛才提到的，我們的領導者 Vlad 擁有 27 年的經驗，其中包括在世界各地生活和工作的大量時間。他的職業生涯從莫斯科到新加坡、倫敦、紐約，在一家大型醫療保健公司工作。

He not only checked all the boxes on the spec. He's been accountable for a multi-billion-dollar global business with more than 15,000 employees, overseeing all commercial R&D, operational and supply chain activities. He has a proven interest in vision strategy, innovation, talent, market access, and execution, closely aligned with the requirements that we have set in place for the role.

他不僅檢查了規格上的所有方框。他負責管理一家價值數十億美元、擁有超過 15,000 名員工的全球業務，監督所有商業研發、營運和供應鏈活動。他對願景策略、創新、人才、市場進入和執行有著濃厚的興趣，這與我們為該職位設定的要求密切相關。

As you know, Rick of we took a lot of questions about the timing of the hire. I just wanted to emphasize that we intentionally tried to stick to our specification. And speaking on behalf of the Board, I know that the entire Board is extremely pleased with Vlad's decision to join LivaNova.

如你所知，我們的里克提出了很多關於招募時間的問題。我只是想強調，我們有意嘗試遵守我們的規範。我代表董事會發言，我知道整個董事會對 Vlad 加入 LivaNova 的決定感到非常高興。

That's a great overview. And Bill, I should have started with congratulations on all you've done and taking LivaNova to this point. It's really impressive. Just as a follow-up question, maybe take us through the current competitive situation on the oxygenator side. And again, help us think through your capacity expansion. Where are you -- where it can be -- I think you said, if I heard correctly, with the expansion in the second half, but do you have any sense that competitors are coming back? Just a level set up in that whole business. Thank you so much.

這是一個很棒的概述。Bill，我應該先祝賀你所做的一切以及帶領 LivaNova 走到這一步。這確實令人印象深刻。作為一個後續問題，也許可以帶我們了解目前製氧機方面的競爭狀況。再次幫助我們思考您的產能擴張。如果我沒聽錯的話，你在哪裡——它可能在哪裡——我想你說過，隨著下半年的擴張，但你是否感覺到競爭對手正在捲土重來？只是在整個業務中設定了一個等級。太感謝了。

Yes. Thanks, Rick. That's a good question and one -- and it's front and center here on. First of all, at this point in time, nothing has really changed on the competitive side. We still, as we've mentioned to you before, we had one smaller competitor whose position, it continues to dissipate. We have a major competitor who has not yet returned to the market. We don't have a timeframe on that.

是的。謝謝，瑞克。這是一個很好的問題，也是這裡的首要問題。首先，在這個時間點上，競爭方面沒有任何真正的改變。正如我們之前向您提到的，我們仍然有一個較小的競爭對手，其地位仍在不斷削弱。我們有一個主要競爭對手尚未重返市場​​。我們對此沒有時間表。

All of our best efforts in the field to determine that remain just still uncertain. For the capacity thing, we told you we were going to work, and we've identified several process improvements within the manufacturing operations to increase capacity, and we're right now taking actions to implement those. We're not ready yet to predict the level of improvement that we'll get, but we are confident that in the second half of the year, these benefits will start to have some positive impact to upscale our ability to supply.

我們在該領域盡了最大努力來確定這一點仍然不確定。對於產能問題，我們告訴您我們將要開展工作，並且我們已經在製造業務中確定了幾項流程改進以提高產能，我們現在正在採取行動來實施這些措施。我們尚未準備好預測我們將獲得的改善程度，但我們有信心在今年下半年，這些好處將開始對提升我們的供應能力產生一些積極影響。

Great. Thank you.

偉大的。謝謝。

Thanks, Rick.

謝謝，瑞克。

Anthony Petrone, Mizuho.

安東尼佩特隆，瑞穗。

Thanks, and congratulations, Bill on the role as interim and Vlad coming in here shortly as of March 1.

感謝並祝賀 Bill 擔任臨時職務，Vlad 將於 3 月 1 日來到這裡。

Thank you.

謝謝。

You're welcome. First question would be a follow-up on oxygenators, just as we look over the next few years. And again, wondering how much share actually has the company gained and how sticky can that be, if and when competitors do come back? And then I'll have a couple of follow-ups on guidance.

不客氣。第一個問題是氧合器的後續行動，就像我們對未來幾年的展望一樣。再次，想知道該公司實際上獲得了多少份額，如果競爭對手真的捲土重來，那麼該份額的黏性會有多大？然後我將進行一些後續指導。

Sure. We -- there's no external data. And of course, when you get into particularly the growth markets around the world, it becomes very difficult. But if you kind of trying to benchmark us, Anthony, at 30%, maybe about 15 to 18 months ago, our best guess, and let me underline the words best guess, is we might be sitting right now in the mid 30s somewhere.

當然。我們——沒有外部數據。當然，當你進入世界各地特別是成長型市場時，它會變得非常困難。但如果你試圖以30% 的標準來衡量我們，安東尼，也許大約15 到18 個月前，我們最好的猜測，讓我強調一下最好的猜測，是我們現在可能正處於30 多歲的某個地方。

We know that about half of our high-volume business is tender based, and so we know that we've got a good and steady position there. Our challenge will, of course, be to sustain our current revenue position in the non-tender oxygenator business and our sales force is highly aware of that and has got significant focus on that. You'll get nothing but a best effort to sustain that business. And we are particularly well organized in those growth markets I talked about before to do that.

我們知道大約一半的大批量業務是基於招標的，因此我們知道我們在那裡擁有良好且穩定的地位。當然，我們的挑戰將是維持我們目前在非招標制氧機業務中的收入地位，我們的銷售人員高度意識到這一點，並高度重視這一點。除了盡最大努力維持該業務之外，您將一無所獲。我們在我之前談到的那些成長型市場中組織得特別好，可以做到這一點。

That's helpful. Maybe, Alex, just a little bit on guidance. When we look at the earnings bridge for 2024, you have additional tax inflation in there, but you are seeing some benefits still residual from heart failure. And then ACS, I think you called $0.1 out for ACS.

這很有幫助。也許，亞歷克斯，只是一點指導。當我們查看 2024 年的收入橋樑時，會發現其中存在額外的稅收通膨，但您會看到心臟衰竭仍然殘留著一些好處。然後是 ACS，我認為您為 ACS 支付了 0.1 美元。

Just maybe to look at that relative to where that business has been running from a cost standpoint, is that the early benefits? And should we expect, you know, sort of a bigger step-up once that's fully annualized again? Because the timing here is suggesting that the operations won't be fully wound down until the end of the year. So just a little bit on the earnings bridge and the moving pieces. Thank you.

也許從成本的角度來看，相對於該業務的營運情況，這就是早期的好處嗎？一旦再次完全年度化，我們是否應該期待更大的提升？因為此時的時機表明，這些業務要到今年年底才會完全結束。所以我們只簡單介紹一下獲利橋樑和動態部分。謝謝。

That's right, Anthony. So the ACS wind-down, this is -- I'll call it a transition year. In 2023, the business incurred approximately $14 million of losses. So we're essentially as a part of the wind out, we expect to see significant improvements in that year over year. And then next year realize the full benefit of that.

沒錯，安東尼。所以 ACS 結束，我稱之為過渡年。2023 年，該業務損失約 1,400 萬美元。因此，我們本質上是退出的一部分，我們預計這一年會出現顯著的改善。然後明年就會體會到它的全部好處。

That's helpful. And then just one quick one, then I'll get back in queue. Just the phasing of that, is it gradual or are there certain, you know, sort of features of that wind-down that can happen sooner? Or should we just be thinking this is all back-end loaded just in terms of phasing it out through calendar 2024? Thanks again.

這很有幫助。然後快速地講一首，然後我就回去排隊了。只是它的分階段，漸進的還是有某些，你知道的，可以更快發生的逐步結束的特徵？或者我們應該認為這一切都是後端加載的，只是為了在 2024 年日曆上逐步淘汰它？再次感謝。

It's going to be -- it's not fully back-end loaded, but it's going to happen in the last three quarters of the year.

它不會完全後端加載，但會在今年最後三個季度發生。

Thanks again.

再次感謝。

Sure.

當然。

Michael Polark, Wolfe.

麥可波拉克、沃爾夫.

Hey, good morning. Question on the cardiopulmonary guidance for 2024, 6% to 7% growth. Can you confirm, Alex, does that -- that's apples-to-apples. It has no benefit from the cannula and accessories from ACS?

嗨，早安。關於2024年心肺指導成長6%至7%的問題。你能確認嗎，亞歷克斯，確實如此——這是同類的。它沒有從 ACS 的插管和配件中受益嗎？

That's correct, Mike. The cannula business, we will recast all the results at the end of Q1, so we'll have apples-to-apples comparisons. This guide is assuming an apples-to-apples comparison. The growth profile of that line of products is roughly the same as the broader cardiopulmonary portfolio. So from a from a growth perspective, it's apples to apples.

是的，麥克。對於插管業務，我們將在第一季末重新計算所有結果，因此我們將進行同類比較。本指南假設進行同類比較。此產品線的成長概況與更廣泛的心肺產品組合大致相同。因此，從成長的角度來看，這是同類的。

And ACS, is $40 million last year if I look at how you guided this year, kind of implies $20 million of ACS's being exited the 2%, give or take. Does that mean this cannula and accessories in total on a full year basis last year was about $20 million?

ACS 去年的收入為 4000 萬美元，如果我看看你們今年的指導情況，這意味著 ACS 的 2000 萬美元退出了 2%，無論多少。這是否意味著去年全年該插管和配件的總價值約為 2000 萬美元？

I'll give you the exact numbers, $15 million.

我會給你確切的數字，1500萬美元。

Okay. I think that was my first topic. The second is just the step-up in CapEx. I heard critical investments and innovation growth infrastructure; those are fairly generic terms. What exactly does it mean? It sounds like oxygenator capacity definitely, is there anything else? And I'm thinking specifically about depression and or sleep readiness investments. Thanks for taking the questions.

好的。我想這是我的第一個話題。第二個只是資本支出的增加。我聽說了關鍵投資和創新成長基礎設施；這些都是相當通用的術語。它到底是什麼意思？聽起來肯定是氧合器容量，還有其他嗎？我正在特別考慮憂鬱症和/或睡眠準備投資。感謝您提出問題。

Hey, Mike, it's Bill. Let me let me grab that one. You hit the first one perfectly. Yes, it's oxy-capacity and significant planning going on right now and particularly in the main facility, [Miranda would love to] address that. Additionally, we already had some commitment to improve our IT infrastructure. The event, the cyber event really encouraged us very serious way, okay, to look even more broadly at our systems.

嘿，麥克，我是比爾。讓我讓我抓住那個。你完美地擊中了第一個。是的，目前正在進行氧氣容量和重大規劃，特別是在主設施中，[米蘭達很樂意]解決這個問題。此外，我們已經做出了一些改善 IT 基礎架構的承諾。這個事件，網路事件確實鼓勵我們以非常嚴肅的方式，好吧，更廣泛地審視我們的系統。

So you will see an uptick in our IT investment. As a percent of sales for LivaNova, you'll see us moving a couple of basis points north of where we've always operated as we, number one, strengthen our security position. And number two, modernize a number of targeted systems, which were natural entry points for other threat actors. Those are high priorities for us.

因此，您將看到我們的 IT 投資增加。作為 LivaNova 銷售額的百分比，您會看到我們將我們一直運營的位置向北移動了幾個基點，因為我們第一，加強了我們的安全地位。第二，對一些目標系統進行現代化改造，這些系統是其他威脅行為者的自然切入點。這些對我們來說是重中之重。

Yes, I would just add to that, Mike, in that we're really focused on modernizing our ERP systems as well. We have that in kind of our long-range three-year plan. We're also accelerating those efforts into 2024.

是的，麥克，我想補充一點，我們也確實專注於 ERP 系統的現代化。我們的長期三年計畫中有這樣的內容。我們也將在 2024 年加快這些努力。

Thank you.

謝謝。

Thanks, Mike.

謝謝，麥克。

Matt Taylor, Jefferies.

馬特泰勒，杰弗里斯。

Hi, thanks for taking my question. I just wanted to clarify on your comments on the depression. So you mentioned that you'll get the results in June. Are we still going to see the results in June or might we have to wait till July? So that's the first question.

您好，感謝您提出我的問題。我只是想澄清一下你對憂鬱症的評論。所以你提到你會在六月得到結果。我們是否仍能在六月看到結果，還是必須等到七月？這是第一個問題。

And then I guess just thinking about the different scenarios, can you talk about what you might do and kind of middle of the road or less good scenarios? We know what you'll do if the trial is successful and build behind that. But what are you going to do if you have kind of a mixed result or a poor result? Could we see savings like we've seen with heart failure in ACS? Or what's the middle of the road scenario mean for spending?

然後我想只是考慮不同的場景，你能談談你可能會做什麼以及中間道路或不太好的場景嗎？我們知道如果試驗成功您會做什麼並在背後進行建構。但是，如果您的結果好壞參半或較差，您該怎麼辦？我們能否像 ACS 心臟衰竭患者那樣節省開支？或是中間的情況對支出意味著什麼？

So let me start, Matt, it's Matt. So for the timing, as Bill said, we'll get the data in June. Our plan is to release the top line data, but we still have to get confirmation from other critical parties, including just publishing at CMS before we can confirm that. So worst case again, as we've said you'll see it when the publication comes out likely at the end of the year. But the hope is we can release it in a timely manner.

讓我開始吧，馬特，是馬特。因此，就時間而言，正如比爾所說，我們將在六月獲得數據。我們的計劃是發布主要數據，但我們仍然需要得到其他關鍵方的確認，包括在 CMS 上發布，然後才能確認。最糟糕的情況再次出現，正如我們所說，當該出版物可能在今年年底出版時，您會看到它。但希望我們能夠及時發布它。

In terms of the way to think about the trial, there's a lot of data points, right? We've talked about the primary endpoint time in response. There's multiple other endpoints and multiple other things we're looking at. CMS cares about several other endpoints. So it's really hard to say right now how we can -- what we would do with the data until we see it. I don't know Bill, if you want to comment on if the data doesn't readout in a favorable way at all, if there's a different path.

就思考試驗的方式而言，有很多數據點，對吧？我們已經討論了主要終點響應時間。我們正在研究多個其他端點和多個其他事物。CMS 關心其他幾個端點。因此，現在真的很難說在我們看到數據之前我們會如何處理這些數據。我不知道比爾，如果你想評論數據是否根本沒有以有利的方式讀出，是否有不同的路徑。

Yeah, well the only thing we'd add to that, as everybody knows the whole way that this was a high bar set by CMS. And the number of endpoints in a randomized clinical trial of this type, again confirms the high expectations that were there. We've already had Jonathan and his team taking the time to just take a look at scenarios that might depict the data outcome.

是的，我們唯一要補充的是，因為每個人都知道這是 CMS 設定的高標準。此類隨機臨床試驗的終點數量再次證實了人們的高期望。我們已經讓 Jonathan 和他的團隊花時間研究了可能描述數據結果的場景。

And of course, you could say, well, we're going to hit every endpoint. And by the way, that's a possible scenario, but let's wait and see. You may not hit a couple of those and then you're into that ambiguity situation, which I think you were starting to get at. That's the work that we still got to do.

當然，你可以說，好吧，我們將達到每個終點。順便說一句，這是一種可能的情況，但讓我們拭目以待。你可能沒有達到其中的幾個，然後你就陷入了模棱兩可的境地，我認為你已經開始意識到這一點了。這就是我們仍然要做的工作。

But without the data and without some specific direction from CMS, it's really hard for us to say exactly what's going to happen. Because we want to do the work once we've seen the data too. We are blinded. We've told everybody a number of times that this is the part where it gets a little more frustrating to wait.

但如果沒有數據，也沒有 CMS 的具體指示，我們真的很難準確地說出將會發生什麼。因為我們也想在看到數據後就開始工作。我們被蒙蔽了。我們已經多次告訴大家，這是等待的時候會變得有點令人沮喪的部分。

But we're getting closer.

但我們越來越近了。

We're getting there.

我們快到了。

Great. Thanks for the talk, guys.

偉大的。謝謝你們的談話，夥計們。

Adam Maeder, Piper Sandler.

亞當梅德，派珀桑德勒。

Hey, guys, congrats on the finish to the year and thank you for taking the questions. I wanted to pick up on that same topic on depression and SPIs, and maybe I'll ask it a little bit differently. But just trying to understand what is the level of SPI spend for depression and OSA that's baked into the guidance for 2024? And specifically, wondering if the guidance accounts for some of the preparatory costs you know, to push forward assuming a positive trial in depression? And then I'll add a follow-up or two. Thanks.

嘿，夥計們，祝賀今年結束，感謝你們提出問題。我想繼續討論有關憂鬱症和 SPI 的同一主題，也許我會提出稍微不同的問題。但只是想了解 2024 年指南中針對憂鬱症和 OSA 的 SPI 支出水準是多少？具體來說，想知道指南是否考慮了您所知道的一些準備成本，以推動對憂鬱症進行積極的試驗？然後我會添加一兩個後續內容。謝謝。

Hey, Adam, it's Alex. So we spent roughly $32 million in 2023. We are anticipating a modest increase on that spend in 2024. The level of spend really depends on just how compelling the data is. And once we know as to how the trial is trending and the results in June will make a definitive decision around the level of investment.

嘿，亞當，我是亞歷克斯。因此，我們在 2023 年花費了大約 3,200 萬美元。我們預計 2024 年該支出將小幅增加。支出水準實際上取決於數據的說服力。一旦我們了解試驗的趨勢和六月的結果，我們將就投資水準做出明確的決定。

And the market debt. There was an interest -- there was a sub-question here about, is there anything in?

還有市場債務。有人有興趣──這裡有一個子問題，裡面有什麼嗎？

There's a small amount of market development spend incorporated into the guidance.

該指南中納入了少量的市場開發支出。

And OSA.

還有 OSA。

Yeah. And as far as OSA goes, we spent roughly $27 million in 2023. We expect a modest step-up in investment in that program as well as we continue to enroll and follow patients through the end of the trial.

是的。就 OSA 而言，我們在 2023 年花費了大約 2700 萬美元。我們預計該計劃的投資將適度增加，並且我們將繼續招募並追蹤患者直至試驗結束。

That's great color. Thank you for the clarification there. And if I -- for my second question, wanted to flip over to CP and the outlook for '24, the 6% to 7% growth. I heard some of the prepared remarks, but I was hoping you could put a little bit of a finer point on what's assumed in that guidance for HLM growth versus Oxy's? What are you assuming for the oxygenator competitor issues? And then just one clarification on the cybersecurity incident in Q4 of last year. What was the revenue impact? And reasonable to assume that was more on the CP side of the business? Thanks for taking the questions.

那顏色真棒。謝謝你的澄清。如果我——對於我的第二個問題，想轉向 CP 和 24 年的前景，即 6% 到 7% 的成長。我聽到了一些準備好的發言，但我希望您能對 HLM 成長與 Oxy 成長指南中的假設進行更詳細的闡述？您對氧合器競爭對手的問題有何看法？然後對去年第四季的網路安全事件進行了澄清。對收入有何影響？可以合理地假設這比較是在業務的 CP 方面嗎？感謝您提出問題。

All right. Let's take this one at a time. So as far as the guide goes, we expect double digit growth in the heart-lung segment in our guide. This -- the guide also assumes that due to the capacity constraints and our expected benefits, as Bill mentioned, in the second half in modest sort of low to mid-single digit growth rate on the consumables. (multiple speakers)

好的。讓我們一次拿這個。因此，就指南而言，我們預期心肺領域的成長率將達到兩位數。正如比爾所提到的，該指南還假設，由於產能限制和我們的預期收益，下半年消耗品的成長率將呈現適度的低至中個位數成長率。（多個發言者）

Yes, go ahead.

好，去吧。

Sorry.

對不起。

What was the second part --

第二部分是什麼--

Yeah, sorry. Cybersecurity impact in Q4 from a revenue standpoint, what does that look like, and I think that was on the CP side of the business but wanted to confirm that. Thanks.

是的，抱歉。從收入的角度來看，第四季度網路安全的影響是什麼樣的，我認為這是在業務的 CP 方面，但想確認這一點。謝謝。

That's right. So the incident impacted the oxygenator production. We lost about a week of production. Kind of hard to track exactly the impact on revenue because it really depends on how the inventory flows and when would you expect to see the sort of the capacity constraint or the inventory constraint that would result in lost revenue.

這是正確的。因此，此事件影響了充氧器的生產。我們損失了大約一周的生產。很難準確追蹤對收入的影響，因為這實際上取決於庫存流動方式以及您期望何時看到會導致收入損失的產能限製或庫存限制。

It wasn't --

原來不是--

Thank you. Got it. Thanks, Alex.

謝謝。知道了。謝謝，亞歷克斯。

Mike Matson, Needham.

麥克馬森，李約瑟。

Yes, good morning or good afternoon. So just in terms of the tax rate, I think before you talked about kind of 15% to 20%. Now you're looking at like 21%. So I guess, why did it ended up being higher than you expected? And is this mainly through the Pillar 2 or is there something else going on? And then have you -- I'm assuming you haven't baked anything in for the stock-based compensation benefits into that 21% guidance.

是的，早上好或下午好。就稅率而言，我認為您之前談到過 15% 到 20% 的稅率。現在你看到的大約是 21%。所以我想，為什麼它最終會比你預期的要高？這主要是透過第二支柱還是還有其他原因？然後，我假設您沒有將任何基於股票的薪資福利納入 21% 的指導中。

So when we are looking at the range it at a point in time, Mike, it was really difficult to predict because the tax rate is a function of jurisdictional profitability. So as we got closer to exiting 2023 and looking at projections for '24, we got a better sense for how the mix of profitability will work out. 21% is our best estimate at this point in time. And I'm not sure I understand your question around the stock-based compensation.

因此，麥克，當我們查看某個時間點的範圍時，真的很難預測，因為稅率是司法管轄區獲利能力的函數。因此，當我們越來越接近 2023 年並審視對 24 年的預測時，我們對盈利能力的組合將如何發揮作用有了更好的認識。 21% 是我們目前的最佳估計。我不確定我是否理解你關於股票薪酬的問題。

I just thought that typically there's some kind of tax benefit from stock-based comp, but companies generally don't factor that into their guidance. Your tax rate is kind of unpredictable.

我只是認為基於股票的補償通常會帶來某種稅收優惠，但公司通常不會將其納入其指導中。您的稅率是不可預測的。

Yes, let us come back to you and I will follow up on that, if that's okay with you.

是的，如果您同意的話，讓我們回覆您，我會跟進此事。

Yeah, sure. And then just wondering if what you've assumed in the guidance for gross margin benefit from Essenz, just given the price premium there, is that going to help your gross margins in '24? And how much do you think that'll help?

好，當然。然後只是想知道，考慮到埃森茨的價格溢價，您在毛利率指南中所假設的內容是否會有助於您 24 年的毛利率？您認為這有多大幫助？

Yeah, it absolutely supports a gross margin improvement. We're expecting a modest gross margin improvement of about, call it 100 basis points year-over-year overall as a company. So Essenz plays a major role in that.

是的，它絕對支持毛利率的提高。我們預計公司整體毛利率將年比小幅提高約 100 個基點。因此，埃森茨在其中扮演重要角色。

Okay. Got it. Thank you.

好的。知道了。謝謝。

You're welcome.

不客氣。

David Rescott, Baird.

大衛雷斯科特，貝爾德。

Hey, guys, thanks for taking the questions. I wanted to start on the Neuromod segment. I think the guide that you called out maybe was this mid-single digit new patient growth and low-single digit replacement, but ultimately getting to I think the 6% to 7% guide for the segment as a whole. So I think if you do the math there, you're getting something at or below that 6% to 7%. So wondering if pricing is a piece there, if I'm understanding the way in which you laid out guidance for Neuromod specifically.

嘿，夥計們，感謝您提出問題。我想從 Neuromod 部分開始。我認為您提出的指南可能是中個位數的新患者成長和低個位數的替換，但最終我認為整個細分市場的指南為 6% 到 7%。所以我認為如果你在那裡進行數學計算，你會得到等於或低於 6% 到 7% 的結果。所以想知道定價是否是其中的一部分，我是否理解您專門為 Neuromod 制定指導的方式。

And then you know, I think the segment itself has done better in 2023, and you've talked about the inability for that kind of higher level of growth to be sustainable. So just wondering where we stand from that point, you know, are we at a point at which Neuromod, you know, is seeing some structural changes to the replacement cycle or the new implant cycle where we can start to think about better growth in Neuromod? Just any color there would be helpful.

然後你知道，我認為該細分市場本身在 2023 年表現更好，你已經談到了這種更高水準的成長無法持續。因此，只是想知道我們從這一點上的立場，你知道，我們是否正處於 Neuromod 看到更換週期或新植入週期發生一些結構性變化的時刻，我們可以開始考慮 Neuromod 更好的增長？任何顏色都會有幫助。

Steph will take that.

史蒂芬會接受的。

Hi, David. I'll take that. So in regard to the epilepsy business for US NPI, so we're continuing to forecast that would be mid-single digit. You're right, when you talk about the US sort of end of service element. So we expect to return to a more normalized low-single digit rate, but we still expect to see the international region continuing to grow low double digits.

嗨，大衛。我會接受的。因此，就美國 NPI 的癲癇業務而言，我們繼續預測該業務將達到中個位數。當您談論美國的服務終止元素時，您是對的。因此，我們預計將恢復到更正常化的低個位數成長率，但我們仍然預期國際地區將繼續保持低兩位數成長。

So that's why you've got the sort of 6% to 7% there. We do continue to model end of service. And every quarter, we do a bit of a refresher on some of our expectations there. And as I say, our latest data tells us that we'll be experiencing more normalized end of service in '24. As a reminder, '22 is a really favorable comparison to '23, and our performance in '23 has been very positive, so we do expect to see the growth rates become much more normalized as we move through '24.

這就是為什麼你有 6% 到 7% 的比例。我們確實繼續對服務終止進行建模。每個季度，我們都會對我們的一些期望進行一些回顧。正如我所說，我們的最新數據告訴我們，我們將在 24 年經歷更標準化的服務終止。提醒一下，「22 年」與「23 年」相比確實是一個有利的比較，而且我們在「23 年」的表現非常積極，因此我們確實預計，隨著「24 年」的到來，增長率會變得更加正常化。

Okay. And then just to follow up. I know it's been a while since we talked about the Italian reserve. So just wondering where we stand, and can you give us an update around what's the timeline is there? And then maybe what you're potentially thinking about longer-term around the flexibility on the balance sheet as that could open up if and when that kind of move to the rearview? Thank you.

好的。然後只是跟進。我知道我們已經有一段時間沒有談論義大利儲備了。所以只是想知道我們的立場，你能給我們更新一下時間表嗎？然後，也許您對資產負債表靈活性的長期考慮是什麼，因為如果這種情況發生後，這可能會出現？謝謝。

Hey, David, it's Alex. So with regard to the SNIA litigation, we're awaiting a binding decision from the European Court of Justice. We actually expect that readout in 2024. That will then funnel its way into the Italian Supreme Court, and so we expect the Italian Supreme Court to incorporate and issue a decision in response to a to all of the appeals of LivaNova and the counter appeals. So that may make its way into 2025.

嘿，大衛，我是亞歷克斯。因此，關於 SNIA 訴訟，我們正在等待歐洲法院做出具有約束力的裁決。我們實際上預計 2024 年會公佈這一結果。然後，該案件將進入義大利最高法院，因此我們預計義大利最高法院將合併並發布一項裁決，以回應 LivaNova 的所有上訴和反上訴。所以這可能會持續到 2025 年。

With regards to the capital structure around this, as you know, we have to fund the Term Loan A in 2022. That was the funding that we kind of ring-fence to serve a potential liability. At this point in time, from an accounting perspective, we haven't booked the liability because we not have any indication that we will be liable. But we have the appropriate funding and cash to support a negative judgment against us.

關於這方面的資本結構，如您所知，我們必須在 2022 年為定期貸款 A 提供資金。這就是我們為了應對潛在負債而設定的資金。此時，從會計角度來看，我們尚未記入負債，因為我們沒有任何跡象表明我們將承擔責任。但我們有適當的資金和現金來支持對我們的負面判斷。

Okay. Thank you.

好的。謝謝。

Matt Miksic, Barclays.

馬特·米克西奇，巴克萊銀行。

Hey, good morning. Thanks for taking the questions, and congrats on a great finish to '23. I had one follow-up on the neuromodulation business and epilepsy. And just wondering if you could give any sense, and following up on the comments on market trends and sort of market sort of stabilization, I guess, normalization in '24.

嗨，早安。感謝您提出問題，並祝賀 23 屆圓滿成功。我對神經調節業務和癲癇進行了後續行動。只是想知道您是否可以給出任何意義，並跟進對市場趨勢和某種市場穩定的評論，我想，24 年的正常化。

Where are we or how are you feeling about the changes that you've made to the sales organization, to the selling process, to the way in which you're focusing your folks on the different centers around epilepsy in the US and the benefits that you're seeing there, how sustainable they are? And then one follow-up.

我們在哪裡，或者您對您對銷售組織、銷售流程、您將員工集中在美國不同癲癇中心的方式所做的改變以及這些改變的好處有何感受？然後是一個後續行動。

Sure. Thanks for that, Matt. I continue to be really pleased around the consistent execution and our financial performance certainly reflects that. And I think when we look towards how we're structured, it's -- I've dug in a lot over the past nine months since being in this role. Where we are fully staffed and disciplined in our execution, we do see consistent growth over the base business with our key accounts and how we've structured ourselves over the past couple of years.

當然。謝謝你，馬特。我仍然對一貫的執行感到非常滿意，我們的財務表現無疑反映了這一點。我認為，當我們審視我們的結構時，自從我擔任這個職位以來，我在過去的九個月裡進行了許多研究。在我們人員配備齊全、執行紀律嚴明的情況下，我們確實看到我們的主要客戶以及我們在過去幾年中如何建立自己的基礎業務持續成長。

So I'm really pleased to see that group continued to perform well and performance at the base. One point I would like to make is that strategy is sort of broader than the sales force structure. And in combination with our territory design, we've been making a big effort around expanding our partnership with our physician base.

所以我真的很高興看到該小組繼續表現出色，並在基地表現出色。我想指出的一點是，策略比銷售隊伍結構更廣泛。結合我們的區域設計，我們一直在努力擴大與醫生群體的合作夥伴關係。

In fact, we have our first Scientific Advisory Board coming together for the first time over this coming weekend. And you've been highly impressed by the caliber of those members. So more to come. So consistent execution is the way forward for us in the epilepsy side of the business, but also more to come in regards to our partnership with our physician base as well.

事實上，我們的第一個科學顧問委員會將在下週末首次聚集在一起。這些成員的才華給您留下了深刻的印象。未來還會有更多。因此，一致的執行力是我們在癲癇業務方面的前進之路，而且在我們與醫生基礎的合作方面也有更多的發展方向。

Well, thanks for that. And I've been hopping back and forth here between a couple of calls. So I apologize Bill and Alex, if you've already kind of talked about it, but I would love to get a sense of where things stand with the STRAP plan as Vlad gets ready to step into his new role. Is that a first quarter call kind of communication for us? Or is that a second quarter? Any kind of update? And again, apologies if you've already gone through that, Bill.

嗯，謝謝你。我在幾個電話之間來回跳動。因此，如果比爾和亞歷克斯已經談論過這件事，我向他們表示歉意，但當弗拉德準備好擔任新角色時，我很想了解 STRAP 計劃的情況。這是我們第一季的電話溝通嗎？或者說這是第二季？有什麼更新嗎？比爾，如果你已經經歷過這件事，我再次向你道歉。

No, Matt, I'm glad to take that call. At this point with -- we're just a little over a week away from Vlad, starting. All the orientation discussions we've had, he seems pretty comfortable with the current state of the company, but he will, of course, be fully encouraged by the Board, and personally, by me to bring any and all ideas forward. The company would traditionally go a little deeper on its strategic planning effort as the early summer approaches.

不，馬特，我很高興接到這個電話。此時——我們距離弗拉德出發只有一週多一點的時間。在我們進行的所有入職培訓討論中，他似乎對公司目前的狀況相當滿意，但當然，董事會和我個人都會充分鼓勵他提出任何和所有想法。傳統上，隨著初夏的臨近，該公司會進一步深化其策略規劃工作。

So the timing for him is great. He gets here May. He's got a couple of months to get grounded. That process starts up pretty active in June, July. And to be clear, he has full CEO responsibility, including strategy. And so the process and the approach that he wants to bring on March 1 is going to get full support from the Board.

所以對他來說時機非常好。他五月到這裡。他還有幾個月的時間被禁足。這個過程在六月、七月開始相當活躍。需要明確的是，他承擔執行長的全部責任，包括策略。因此，他希望在 3 月 1 日提出的流程和方法將得到董事會的全力支持。

Got it. I look forward to that. Thanks so much.

知道了。我對此很期待。非常感謝。

Sure. Thanks.

當然。謝謝。

We have no further questions. I'll turn the call back to Bill Kozy for closing remarks.

我們沒有其他問題了。我將把電話轉回給比爾·科齊（Bill Kozy）做結束語。

Thank you. We thank everyone for joining us on today's call. On behalf of the entire team, we appreciate your support, your interest in LivaNova. Thanks again.

謝謝。我們感謝大家參加今天的電話會議。我們謹代表整個團隊感謝您的支持以及對 LivaNova 的興趣。再次感謝。

Thank you, everyone, for joining us today. This concludes our call, and you may now disconnect your lines.

謝謝大家今天加入我們。我們的通話到此結束，您現在可以斷開線路了。