LivaNova PLC (LIVN) 2024 Q2 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the LivaNova PLC second-quarter 2024 earnings conference call. My name is Emily, and I'll be moderating your call today. (Operator Instructions)

女士們、先生們，美好的一天，歡迎參加 LivaNova PLC 2024 年第二季財報電話會議。我叫艾米麗，今天我將主持您的通話。（操作員說明）

As a reminder, this conference call is being recorded.

謹此提醒，本次電話會議正在錄音中。

I would 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,

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。請先生繼續，

Thank you, Emily, and welcome to our conference call and webcast discussing LivaNova's financial results for the second-quarter of 2024. Joining me on today's call are Vladimir Makatsaria, our Chief Executive Officer and Member of the Board of Directors; Alex Shvartsburg, our Chief Financial Officer; Ahmet Tezel, our Chief Innovation Officer, and Zach Glazier, Manager 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 2024 年第二季的財務表現。參加今天電話會議的還有我們的執行長兼董事會成員 Vladimir Makatsaria； Alex Shvartsburg，我們的財務長；我們的首席創新長 Ahmet Tezel 和投資者關係經理 Zach Glazier。

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 filings and documents furnished to the SEC, including today's press release, is available on our website. We do not undertake to update any forward looking statements.

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，公司向 SEC 提供的最新文件和文件（包括今天的新聞）中討論了可能導致實際結果出現重大差異的因素發布，可在我們的網站上找到。我們不承諾更新任何前瞻性陳述。

Also, the discussions will include certain non-GAAP financial measures with respect to our performance, including but not limited to revenue results, which will all be stated on a constant currency basis. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release, which is available on our website.

此外，討論還將包括與我們的績效相關的某些非公認會計原則財務指標，包括但不限於收入結果，這些結果都將以固定匯率計算。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。

We have also posted a presentation to our website that summarizes the points in today's call. This presentation is complementary to the other call materials and should be used as an enhanced communication tool.

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。

You can find the presentation and press release in the Investors section of our website under news events and presentations at investor.livanova.com.

您可以在我們網站的投資者部分的新聞事件和簡報下找到簡報和新聞稿：investor.livanova.com。

With that, I will now turn the call over to Vlad.

現在，我將把電話轉給弗拉德。

Thank you, Matt, and thank you, everyone, for joining us. Welcome to LivaNova's conference call for the second-quarter of 2024. Let me start by addressing the judgment by the European Court of Justice that came out on Monday in connection with a smear litigation.

謝謝你，馬特，也謝謝大家加入我們。歡迎參加 LivaNova 2024 年第二季的電話會議。首先，我要談談歐洲法院週一就誹謗訴訟所作出的判決。

The ECJ responded to a question raised by the Italian Supreme Court on European de-merger law. While this is a complex matter and there are a lot more nuance here.

歐洲法院回應了義大利最高法院就歐洲分拆法提出的問題。雖然這是一個複雜的問題，而且還有很多細微差別。

The ECJ ruling effectively says that a company is spun off and a de-merger can still be responsible for liabilities prior to the spin-off. The ECJ also sells it is up to national law to decide if a company can be held responsible for liabilities that arise after the spin-off.

歐洲法院的裁決實際上表明，公司被分拆，分拆仍需承擔分拆前的負債。歐洲法院也表示，公司是否應對分拆後產生的責任負責，並應由國家法律決定。

While we're disappointed with the ECJ decision. The case now goes back to the Italian Supreme Court for to decide on all the appeals. While the timing of the decision by the Italian Supreme Court is uncertain. We do not expect a decision until at least 2025.

雖然我們對歐洲法院的決定感到失望。該案現在返回義大利最高法院，對所有上訴做出裁決。而義大利最高法院做出裁決的時間尚不確定。我們預計至少要到 2025 年才會做出決定。

Now before turning to the results for the quarter, I'd like to provide an update on the three strategic imperatives we previously highlighted. First, maximizing the strength of our cardiopulmonary and epilepsy businesses. This quarter marks the sixth consecutive quarter of double digit revenue growth. Capitalizing on this momentum to achieve sustainable above-market growth for both businesses remains a key priority.

現在，在討論本季的業績之前，我想先介紹一下我們之前強調的三個策略要務的最新情況。首先，最大限度地增強我們的心肺和癲癇業務的實力。本季標誌著營收連續第六個季度實現兩位數成長。利用這一勢頭實現兩家公司高於市場的可持續成長仍然是關鍵優先事項。

We also remain committed to margin expansion and improving cash generation. Second, setting the direction for the difficult to treat depression and obstructive sleep apnea programs.

我們也持續致力於擴大利潤率和改善現金產生。其次，為難以治療的憂鬱症和阻塞性睡眠呼吸中止症計畫確定方向。

In difficult-to-treat depression, we announced the preliminary results for the unipolar patient cohort of the RECOVER clinical study in June. Following additional in-depth analysis of the data and input from leading independent clinical scientific and reimbursement experts.

在難治性憂鬱症方面，我們在 6 月發表了 RECOVER 臨床研究單相患者群組的初步結果。對領先的獨立臨床科學和報銷專家的數據和意見進行進一步深入分析。

We decided to continue to pursue CMS coverage as we move forward. This decision includes the deployment of a new operating model that allows us to reduce investment in the program until a CMS coverage decision is made.

我們決定繼續推進 CMS 覆蓋範圍。該決定包括部署新的營運模式，使我們能夠減少對該計劃的投資，直到做出 CMS 覆蓋範圍決定。

This direction will improve LivaNova's financial profile in 2025 and allow us to continue pursuing coverage for a patient population with a significant unmet need. Alex will provide more detail on the financial impact of this decision later in the call in obstructive sleep apnea the OSPREY clinical study achieved positive predictive outcome and concluded enrollment in March.

這一方向將改善 LivaNova 到 2025 年的財務狀況，並使我們能夠繼續為需求未滿足的患者群體提供保險。Alex 將在稍後的阻塞性睡眠呼吸中止症 OSPREY 臨床研究電話會議中提供有關這一決定的財務影響的更多詳細信息，OSPREY 臨床研究取得了積極的預測結果，並於 3 月份結束了入組。

We plan to review the entirety of the OSPREY clinical data and set the direction for the obstructive sleep apnea program in the second-quarter of 2025.

我們計劃審查 OSPREY 的全部臨床數據，並在 2025 年第二季為阻塞性睡眠呼吸中止症計畫設定方向。

Third, we'll continue to explore areas of high unmet clinical need in markets with high growth potential and aligned with our strengths and capabilities.

第三，我們將繼續探索具有高成長潛力並符合我們的優勢和能力的市場中臨床需求高度未滿足的領域。

Overall, we're pleased with our progress in the strategic imperatives and to enable our success. We will continue to focus on execution, innovation and people. For the remainder of the call, I will discuss our second quarter results and opportunities in cardiopulmonary and epilepsy businesses.

整體而言，我們對策略要務方面的進展以及取得的成功感到高興。我們將繼續專注於執行、創新和人才。在電話會議的其餘部分，我將討論我們第二季度的業績以及心肺和癲癇業務的機會。

After my comments, Alex will provide additional details on our results and update 2024 guidance. I will wrap up with closing remarks before moving to Q&A. There are basically three key takeaways from our financial performance.

在我發表評論後，Alex 將提供有關我們結果的更多詳細資訊並更新 2024 年指南。在進入問答環節之前，我將做結束語。我們的財務表現基本上可以得出三個關鍵結論。

First, while marking our sixth consecutive quarter of double digit growth, in the quarter, we achieved 10% revenue growth versus prior year. Excluding the impact of the ACS segment, wind-down revenue increased 11% versus 2023.

首先，在連續第六個季度實現兩位數成長的同時，本季我們的營收比去年同期成長了 10%。排除 ACS 部門的影響，停業收入比 2023 年成長了 11%。

We achieved this while expanding margins. Second were increasing our 2024 full year revenue and adjusted earnings per share guidance. Third, we expect that our decision to difficult-to-treat depression will result in at least $0.3 of incremental adjusted EPS in 2025.

我們在擴大利潤的同時實現了這個目標。其次是提高 2024 年全年收入和調整後每股收益指引。第三，我們預計我們對難以治療的憂鬱症的決定將導致 2025 年調整後每股收益至少增加 0.3 美元。

Now turning to segment results, for the cardiopulmonary segment, revenue was $174 million in the quarter, an increase of 14% versus the second-quarter of 2023. Heart-lung machine revenue increased over 25%, driven by Essenz, we are pleased to see a sequential ramp in Essenz placements and continued strong price mix in the quarter.

現在轉向分部業績，心肺分部本季營收為 1.74 億美元，較 2023 年第二季成長 14%。在 Essenz 的推動下，心肺機收入成長了 25% 以上，我們很高興看到 Essenz 的投放量連續上升，本季價格組合持續強勁。

Oxygenator revenue grew more than 15%, driven by customer demand and price. The oxygenator business continues to see strong demand and our efforts to continuously increase manufacturing capacity remain on track.

在客戶需求和價格的推動下，制氧機收入增加了 15% 以上。制氧機業務的需求持續強勁，我們不斷提高製造能力的努力仍在進行中。

We now expect cardiopulmonary revenue to grow 12% to 13% for the full year 2024. Our revised forecast incorporates continued HLM growth and demand for consumables, we see three key opportunities to drive long-term growth in cardiopulmonary business.

我們現在預計 2024 年全年心肺收入將成長 12% 至 13%。我們修訂後的預測納入了 HLM 的持續成長和對消耗品的需求，我們看到了推動心肺業務長期成長的三個關鍵機會。

First, HLM upgrades. We estimate our global installed base of HLMs is roughly 3,000, and we have opportunity to upgrade them to assets. While we do not provide unit sales numbers as a point of reference, we expect that Essenz will represent approximately 40% of our annual placements in 2024, and we're targeting 75% in 2025.

首先，HLM升級。我們估計 HLM 的全球安裝基數約為 3,000 個，我們有機會將它們升級為資產。雖然我們不提供單位銷售數據作為參考，但我們預計 2024 年埃森茨將占我們年度投放量的約 40%，我們的目標是 2025 年達到 75%。

Second, expanding our recurring revenue capture rate, including servicing our equipment and software upgrades. As the Essenz installed base continues to grow, we will look to drive additional revenue growth through these opportunities.

其次，擴大我們的經常性收入取得率，包括為我們的設備和軟體升級提供服務。隨著埃森茨安裝基礎的持續成長，我們將尋求透過這些機會推動額外的收入成長。

Third, consumables market share. We have a leading global market position in HLMs, and we have the opportunity to gain share in oxygenators and other disposables. We're already gaining share in disposables behind our commercial execution and ability to supply, any great organization starts with great talent. And on that note, I'm very pleased to announce that Franco Poletti has been appointed President of cardiopulmonary business.

第三，耗材市場佔有率。我們在 HLM 領域擁有全球領先的市場地位，並有機會獲得氧合器和其他一次性用品的份額。在我們的商業執行力和供應能力背後，我們已經在一次性用品領域獲得了份額，任何偉大的組織都始於優秀的人才。就此而言，我非常高興地宣布 Franco Poletti 已被任命為心肺業務總裁。

Franco has spent the majority of his career with LivaNova standing from various geographies and functions. He's most recently led the cardiopulmonary business on an interim basis. Under his leadership, the team has consistently delivered strong results while always putting patients and customers.

Franco 的大部分職業生涯都是在 LivaNova 度過的，他來自不同的地理位置和功能。他最近臨時領導心肺業務。在他的領導下，團隊始終如一地取得了強勁的成果，同時始終把患者和客戶放在第一位。

First turning to epilepsy. Revenue increased 7% versus the second-quarter of 2023. US epilepsy revenue increased 6% year over year with growth in both new and replacement implants, we've achieved 886 new patient implants in the quarter, representing 6% growth versus the prior year.

首先轉向癲癇。營收較 2023 年第二季成長 7%。隨著新植入物和替換植入物的成長，美國癲癇收入年增 6%，本季我們為 886 名新患者植入了植入物，比前一年增長了 6%。

We realized 2066 replacement implants in the quarter, also representing 6% growth versus the prior year. Epilepsy revenue in Europe and the rest of the world grew 8% versus prior year. For the full year 2024, we continue to expect global epilepsy revenue to grow 6% to 7%.

本季我們實現了 2066 顆替換植體，也比前一年增長了 6%。歐洲和世界其他地區的癲癇收入比去年增加了 8%。2024 年全年，我們繼續預期全球癲癇收入將成長 6% 至 7%。

Our forecast continues to incorporate mid-single digit growth for the US new patients. We now expect mid-single digit growth for international revenue and low to mid-single digit growth for the US replacements today, where the market leader in drug-resistant epilepsy surgery we see two key growth opportunities for the epilepsy business.

我們的預測繼續包括美國新患者的中個位數成長。我們現在預計國際收入將實現中個位數成長，而美國替代手術的收入將實現低至中個位數成長，作為抗藥性癲癇手術的市場領導者，我們看到癲癇業務有兩個關鍵的成長機會。

First, we continue to drive increased procedure penetration through market access and clinical evidence initiatives. Second, we see growth opportunity driven by innovation. And to this end, we are pleased to welcome [Holly Graham], he's our Vice President of Research and Development for neuromodulation.

首先，我們繼續透過市場准入和臨床證據措施來提高程序滲透率。其次，我們看到了創新驅動的成長機會。為此，我們很高興地歡迎 [Holly Graham]，他是我們神經調節研發副總裁。

[Holly] has a proven track record of leading high-performing teams can as an accomplished R&D executive with more than 25 years of experience. We're excited that Holly has joined LivaNova to lead the acceleration of our innovation pipeline in neuromodulation.

[Holly] 身為一位優秀的研發主管，擁有領導高績效團隊的良好記錄，擁有超過 25 年的經驗。我們很高興 Holly 加入 LivaNova 來領導我們神經調節創新管道的加速。

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

這樣，我會將電話轉給亞歷克斯。

Thanks, Vlad. During my portion of the call, I'll share a brief recap of the second quarter results provide commentary on 2024 guidance and comment on the financial impact from the difficult to treat depression decision.

謝謝，弗拉德。在我的電話會議中，我將分享第二季度業績的簡要回顧，提供對 2024 年指導的評論，並評論難以治療的抑鬱症決定對財務的影響。

Turning to results, revenue in the quarter was $319 million, an increase of 10% versus 2023. Excluding the impact of ACS segment wind-down revenue increased 11% versus 2023. Foreign exchange in the quarter had an unfavourable year-over-year impact of approximately $3 million or approximately 1% of revenue.

轉向業績，該季度營收為 3.19 億美元，較 2023 年成長 10%。排除 ACS 部門停產的影響，營收較 2023 年成長 11%。本季外匯帶來的不利年比影響約為 300 萬美元，約佔營收的 1%。

Adjusted gross margin as a percent of net revenue was 69% compared to 72% in the second-quarter of 2023. The year-over-year decrease was primarily driven by the provision taken for the Italian payback measure. As described in our press release, adjusted R&D expense in the second quarter was $41 million compared to $48 million in the second quarter of 2023.

調整後毛利率佔淨收入的百分比為 69%，而 2023 年第二季為 72%。年比下降主要是由於義大利投資回收措施撥備所致。正如我們的新聞稿所述，第二季調整後的研發費用為 4,100 萬美元，而 2023 年第二季的研發費用為 4,800 萬美元。

R&D as a percent of net revenue was 13%, down from 16% in the second-quarter of 2023. The year-over-year decrease was largely driven by the close out of the heart failure trial, excluding the costs related to the heart failure program, our R&D investments increased 4% versus the prior year.

研發佔淨收入的百分比為 13%，低於 2023 年第二季的 16%。年比下降主要是由於心臟衰竭試驗的結束，排除與心臟衰竭項目相關的成本，我們的研發投資比前一年增加了 4%。

Adjusted SG&A expense for the second quarter was $113 million compared to $113 million in the second quarter of 2023, SG&A as a percent of net revenue was 35% as compared to 38% in the second quarter of 2023.

第二季調整後的 SG&A 費用為 1.13 億美元，而 2023 年第二季為 1.13 億美元，SG&A 佔淨收入的百分比為 35%，而 2023 年第二季為 38%。

The year-over-year decrease was driven by improved operating leverage. It was favorably impacted by the wind down of the ACS segment. Adjusted operating income was $67 million compared to $49 million in the second quarter of 2023.

年比下降是由於營運槓桿改善所致。它受到 ACS 業務逐漸減少的有利影響。調整後營業收入為 6,700 萬美元，而 2023 年第二季為 4,900 萬美元。

Adjusted operating income margin was 21% compared to 17% in the second-quarter of 2023. This increase was primarily driven by higher revenue, improved operating leverage and the wind down of the heart failure program and the ACS segment.

調整後營業利益率為 21%，而 2023 年第二季為 17%。這一增長主要是由於收入增加、營運槓桿改善以及心臟衰竭項目和 ACS 業務的逐步結束所致。

Adjusted effective tax rate in the quarter was 21% compared to 10% in the second-quarter of 2023. The year-over-year increase is related to developments in the global tax landscape and is in line with our expectations.

本季調整後有效稅率為 21%，而 2023 年第二季為 10%。年比成長與全球稅收格局的發展有關，符合我們的預期。

Adjusted diluted earnings per share was $0.93 compared to $0.78 in the second quarter of 2023. Our cash balance at June 30, was $329 million, up from $267 million at year end 2023. Total debt at June 30, was $625 million, up from $587 million at year-end 2023. This increase in total debt was driven by the closing of the $345 million private offering of convertible senior notes maturing in 2029 and repurchase of the $230 million of convertible senior notes.

調整後稀釋每股收益為 0.93 美元，而 2023 年第二季為 0.78 美元。截至 6 月 30 日，我們的現金餘額為 3.29 億美元，高於 2023 年底的 2.67 億美元。截至 6 月 30 日，債務總額為 6.25 億美元，高於 2023 年底的 5.87 億美元。債務總額的增加是由於完成了 2029 年到期的 3.45 億美元可轉換優先票據的私募發行以及回購了 2.3 億美元的可轉換優先票據。

Net debt, including restricted cash at June 30, was $99 million. Adjusted free cash flow for the quarter was $42 million, up from negative $10 million in the prior year period. The year-over-year increase was primarily driven by stronger operating results and working capital improvements.

截至 6 月 30 日，淨債務（包括限制性現金）為 9,900 萬美元。本季調整後自由現金流為 4,200 萬美元，高於去年同期的負 1,000 萬美元。同比成長主要是由更強勁的經營業績和營運資本改善所推動的。

Capital spend in the first-half of 2024 was $19 million compared to $13 million in the prior year period. The year-over-year increase was driven by cardiopulmonary capacity expansion initiatives and the IT investments.

2024 年上半年的資本支出為 1,900 萬美元，而去年同期為 1,300 萬美元。同比增長是由心肺能力擴張計劃和 IT 投資推動的。

Now turning to our revised 2024 guidance. As Vlad mentioned, based on our performance in the second quarter, we're increasing our full year 2024 revenue and adjusted diluted earnings per share guidance, while maintaining the range on adjusted free cash flow, we now expect 2024 revenue growth on a constant currency basis between 7% and 8% and between 9% and 10% when excluding the portion of the ACS business that we are exiting.

現在轉向我們修訂後的 2024 年指引。正如Vlad 所提到的，根據我們第二季的業績，我們正在增加2024 年全年收入和調整後稀釋每股收益指導，同時維持調整後自由現金流的範圍，我們現在預計按固定匯率計算2024 年營收將成長當不包括我們正在退出的 ACS 業務部分時，基準利率在 7% 至 8% 之間，以及在 9% 至 10% 之間。

In the first half of the year, we observed favorable comparisons, which are not expected to continue for the remainder of the year. We expect revenue growth to be lower in the second half of 2024 compared to the first half of the year.

今年上半年，我們觀察到了有利的比較，預計這種情況不會持續到今年剩餘時間。我們預計 2024 年下半年營收成長率將低於上半年。

We continue to expect foreign currency to be a 1% headwind based on current exchange rates. We continue to expect the full year adjusted effective tax rate of approximately 21%. We now project adjusted diluted earnings per share in the range of $3.10 to $3.20 with adjusted diluted weighted average shares outstanding to be approximately $55 million for the full year.

根據當前匯率，我們繼續預期外幣將面臨 1% 的阻力。我們繼續預計全年調整後有效稅率約為 21%。我們現在預計全年調整後稀釋每股收益將在 3.10 美元至 3.20 美元之間，調整後稀釋後加權平均流通股約為 5,500 萬美元。

Our forecast contemplates higher operating expenses in the second half of 2024 compared to the first half of the year as we invest to maintain above market growth in epilepsy and cardiopulmonary businesses. This includes a higher R&D investment based on our plans to accelerate innovations.

我們的預測是，由於我們進行投資以維持癲癇和心肺業務高於市場的成長，因此 2024 年下半年的營運費用將高於上半年。這包括根據我們加速創新的計劃進行更高的研發投資。

Additionally, we expect SG&A as a percent of net revenue in the second half of 2024 to be more consistent with what we saw in the first quarter of 2024, adjusted free cash flow is still expected to be in the range of $95 million to $115 million, an increase of approximately 9% and midpoint versus the prior year. This range includes a meaningful step-up in capital spending versus the prior year, which we forecast to be approximately $60 million. As a reminder, our cash flow projections include costs associated with the ACS wind-down in the range of approximately $15 million to $20 million, the majority of which occurs in 2024.

此外，我們預計 2024 年下半年的 SG&A 佔淨收入的百分比將與我們在 2024 年第一季度看到的更加一致，調整後的自由現金流仍預計在 9500 萬美元至 1.15 億美元之間，比上年增長約9% 和中位數。這一範圍包括資本支出較前一年大幅增加，我們預計約為 6,000 萬美元。提醒一下，我們的現金流量預測包括與 ACS 縮減相關的成本，範圍約為 1,500 萬至 2,000 萬美元，其中大部分發生在 2024 年。

Now turning to the financial impact of the difficult to treat depression decision. In our 2024 guidance, we forecasted investing in net $40 million in DTD. We will maintain that level of investment this year. As we optimize the program, the DTD investment will be reduced in 2025. While we continue to pursue CMS coverage.

現在轉向難以治療的憂鬱症決定的財務影響。在我們的 2024 年指導中，我們預計 DTD 淨投資為 4000 萬美元。今年我們將維持這項投資水準。隨著我們優化方案，到2025年DTD投資將會減少。同時我們繼續追求 CMS 覆蓋範圍。

By optimizing program investments, we expect to deliver at least $20 million in pre-tax savings in 2025, which is equivalent to $0.3 in earnings per share accretion. We also expect additional savings that will be allocated toward select high-value initiatives in our cardiopulmonary and epilepsy businesses to sustain their growth and long-term value creation.

透過優化計畫投資，我們預計到 2025 年將節省至少 2,000 萬美元的稅前成本，相當於每股收益增加 0.3 美元。我們還預計額外的節省將分配給我們的心肺和癲癇業務的精選高價值計劃，以維持其成長和長期價值創造。

These investments include new product development, manufacturing capacity and IT systems infrastructure. In summary, I'm pleased with our team's continued execution, which has led to consistent growth and margin expansion.

這些投資包括新產品開發、製造能力和 IT 系統基礎設施。總之，我對我們團隊的持續執行力感到滿意，這帶來了持續的成長和利潤率的擴大。

We remain well positioned to deliver our financial commitments in 2024, including roughly 350 basis points of operating leverage over 30% growth in adjusted operating income and approximately 12% growth in adjusted diluted earnings per share despite the significant step-up in our effective tax rate.

儘管我們的有效稅率大幅提高，但我們仍然有能力兌現 2024 年的財務承諾，包括約 350 個基點的營運槓桿、調整後營業收入增長超過 30% 以及調整後攤薄每股收益增長約 12% 。

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

然後，我會將電話轉回弗拉德。

Thank you, Alex. Just one correction to what I said earlier, our installed base of HLMs is 8,000, of course, not 3,000, what I said, which represents a significant opportunity for growth for us.

謝謝你，亞歷克斯。對我之前所說的做一個更正，我們的 HLM 安裝基數是 8,000，當然，不是我所說的 3,000，這對我們來說是一個重要的成長機會。

So moving forward, we continue to execute on our three strategic imperatives. This quarter marks our sixth consecutive quarter of double digit revenue growth, driven by strength in our cardiopulmonary and epilepsy businesses.

因此，展望未來，我們將繼續執行我們的三大戰略要務。在心肺和癲癇業務實力的推動下，本季標誌著我們連續第六個季度實現兩位數收入成長。

Maximizing the strength remains our key priority, deciding the path forward for the difficult-to-treat depression program represents a key step in the evolution of our company as we continue to plan for the future. We're exploring areas of high unmet clinical need in markets with high growth potential and aligned with our strengths and capabilities. Our success will continue to be enabled by the quality of our execution, innovation and people.

最大限度地發揮實力仍然是我們的首要任務，在我們繼續規劃未來的過程中，決定難治性憂鬱症專案的前進道路是我們公司發展的關鍵一步。我們正在具有高成長潛力且符合我們的優勢和能力的市場中探索高度未滿足的臨床需求領域。我們的成功將繼續依靠我們的執行品質、創新和人才。

And in closing, I would like to reiterate my gratitude for my colleagues around the world for their unwavering commitment to patients and customers.

最後，我想再次感謝世界各地的同事對患者和客戶堅定不移的承諾。

And with that, operator, we're ready to open the call for questions.

接線員，我們已經準備好開始提問了。

(Operator Instructions)

（操作員說明）

Rick Wise, Stifel.

瑞克懷斯，史蒂菲爾。

Good morning to you all. Good to see the quarter. Let me start off with guidance. So you gave us a lot of detail, a lot of commentary, but after, as you emphasized several times, a strong, solid double-digit first half growth outlook. And you said it yourself guide for the second half implies a slowdown to more mid-single digits. And Alex highlighted as well, it sounded like, and I don't want to put words the wrong words in your mouth access. It sounds like sort of maybe more aggressive spending on investment on the SG&A side.

大家早安。很高興看到這個季度。讓我從指導開始。因此，您向我們提供了許多細節和評論，但正如您多次強調的那樣，上半年成長前景強勁、穩定，達到兩位數。你自己說過下半年的指南意味著經濟放緩至更多的中個位數。亞歷克斯也強調，這聽起來像，我不想把錯誤的話放在你的嘴裡。聽起來，SG&A 方面的投資支出可能更加積極。

Just to help us better understand your thinking in setting us up for the second half and the degree to which we should view this as a potentially or possibly conservative. Thank you.

只是為了幫助我們更好地了解您為下半年做準備的想法，以及我們應該在多大程度上將其視為潛在或可能的保守派。謝謝。

Hey, Rick, thanks for the question. So first half of 2024 had favorable comparisons. If you recall, we really started to ramp our essence of revenues in the second half of the year. So we do expect we had a significant step-up in the second half of 2023. And so we expect slower sales growth in the back half of the year.

嘿，瑞克，謝謝你的提問。因此，2024 年上半年的情況較有利。如果你還記得的話，我們在下半年才真正開始增加我們的收入。因此，我們確實預計 2023 年下半年將有顯著進步。因此，我們預計今年下半年的銷售成長將放緩。

As it relates to investments, we're really putting those investments towards critical capabilities to support innovation, growth and infrastructure. And the related spend will be higher in the remainder of the year. And our goal is to continue to drive sustainable above market growth and why we expand our margin in both businesses. So we're targeting to spend to help us achieve that.

就投資而言，我們實際上將這些投資用於支持創新、成長和基礎設施的關鍵能力。今年剩餘時間的相關支出將會更高。我們的目標是繼續推動可持續的高於市場的成長，以及我們擴大這兩項業務利潤率的原因。因此，我們的目標是投入資金來幫助我們實現這一目標。

And there's so much to this quarter. But I guess I'll focus on the DTD decision. It's good to see that. And thank you for being so clear about the decision, but maybe help us better understand the decision. Are you and I'm going to ask this sort of expansively, you know, negative on the DTD outlook or potential of how does the bipolar clinical trial figure into all this decision.

本季有很多事情。但我想我會關注 DTD 決策。很高興看到這一點。感謝您對這個決定如此清楚，但也許可以幫助我們更好地理解這個決定。你和我是否會廣泛地問，你知道，對 DTD 前景或雙相臨床試驗如何影響所有這些決定的潛力的負面看法。

And just left with the sense from Alex's comment that is there actually might be more upside to EPS if you weren't choosing to invest help us maybe better understand that this whole package on decisions on DTD. Thank you again.

從 Alex 的評論中我們可以看出，如果您不選擇投資，每股盈餘實際上可能會有更多的上漲空間，這有助於我們更好地理解整個 DTD 決策方案。再次感謝您。

Hi, Rick. This is Ahmet. I'll kind of summarize what we have done since June when we first communicated our preliminary results. So as we communicated back then we demonstrated through the pivotal trial that is it statistically significant and clinically meaningful patient benefit in certain select endpoints despite us not being able to show the primary endpoints being successful.

嗨，瑞克。這是艾哈邁德。我將總結一下自 6 月我們首次通報初步結果以來我們所做的工作。因此，正如我們當時所傳達的那樣，我們透過關鍵試驗證明，儘管我們無法證明主要終點是成功的，但在某些選定的終點上，患者獲益具有統計意義和臨床意義。

So since then what we have done is that we conducted additional analysis. We looked at things like are there certain subgroups that performed better. We investigated the high response rate in the control arm. While we did our internal analysis, we also worked with a consortium of external experts in clinical medical and reimbursement.

所以從那時起我們所做的就是進行了額外的分析。我們研究了是否有某些表現較好的小組。我們研究了控制臂的高響應率。在我們進行內部分析的同時，我們也與臨床醫療和報銷的外部專家聯盟合作。

And we had them also do an independent assessment of the data. And it's important to emphasize that it was independently done. We firewall that group from the internal group. So we had an internal assessment and an external assessment of the comprehensive data.

我們也讓他們對數據進行了獨立評估。需要強調的是，這是獨立完成的。我們將該組與內部組隔離開來。所以我們對綜合數據進行了內部評估和外部評估。

And what we saw for both the internal and external assessment was that there is a strong positive benefit for difficult-to-treat patients with VNS therapy. And because of the internal and external assessment and the strong unmet medical need, we decided to continue to pursue CMS coverage.

我們從內部和外部評估中看到的是，VNS 療法對難以治療的患者有很大的正面益處。由於內部和外部評估以及強烈的未滿足的醫療需求，我們決定繼續推行 CMS 保險。

And Rick, with regard to the savings, as I said, it's at least $20 million on a pre-tax basis. As we look, it's still early in the year we're looking at, we're doing our planning for 2025 and our long-range planning. So as Ahmet Tezel coming in as our Chief Innovation Officer, we're looking at opportunities to invest behind our cardiopulmonary and epilepsy innovation programs. So we are, at this point allocating some portion of the DTD savings into kind of the core CP and epilepsy businesses?

Rick，關於節省，正如我所說，稅前至少有 2000 萬美元。從我們看來，現在還處於今年的早期，我們正在製定 2025 年的規劃和長期規劃。因此，隨著艾哈邁德·特澤爾 (Ahmet Tezel) 擔任我們的首席創新官，我們正在尋找投資心肺和癲癇創新項目的機會。那麼，我們目前是否將部分 DTD 節省資金分配給核心 CP 和癲癇業務？

Hey, Rick, this is Ahmet again. I forgot to mention about the bipolar since you asked, we had an independent third party look at the data, as you know, because the study is still enrolling. It would be inappropriate for LivaNova internally to look at the data carefully, but the external assessment had no reason to stop the trial. Therefore, we're continuing to enroll into that study despite a different operating model at a lower expense rate in terms of our recruitment.

嘿，瑞克，我又是艾哈邁德。既然你問了，我忘了提及雙相情感障礙，正如你所知，我們有一個獨立的第三方查看數據，因為該研究仍在招募中。LivaNova內部仔細查看數據是不合適的，但外部評估沒有理由停止試驗。因此，儘管我們的營運模式不同，但招募費用較低，我們仍將繼續參與這項研究。

Thank you.

謝謝。

Matt Taylor, Jefferies.

馬特泰勒，杰弗里斯。

This is Mike Sarcone on for Matt. Thanks for taking the question. Just a quick follow-up around the DTD expense save. Could you elaborate a little more on kind of where specifically you're pulling back and for next year?

我是邁克·薩爾科內 (Mike Sarcone) 替馬特 (Matt) 發言。感謝您提出問題。只是圍繞 DTD 費用節省進行快速跟進。您能否詳細說明一下明年具體要撤回哪些方面？

Yeah. So the good portion of our spend is this year is focused on getting us to a publication phase. So we're obviously still recruiting the bipolar cohort, but the unipolar recruitment will be is completed now. So there's savings in that portion.

是的。因此，今年我們支出的很大一部分集中在讓我們進入出版階段。因此，我們顯然仍在招募雙相人群，但單相人群的招募現在已經完成。所以這部分可以省。

We're also scaling back sort of preparation investments for commercialization, which we expected towards the second half of this year. So in large, it's really just getting us to a final CMS decision, which is what our primary focus in terms of our 2025 investments are currently targeted for.

我們也縮減了商業化的準備投資，我們預計在今年下半年進行。因此，總的來說，這實際上只是讓我們做出最終的 CMS 決定，這也是我們目前 2025 年投資的主要目標。

Got it. Thank you. And just another question on OSA, I guess how are you thinking about that strategically and if it does come to the point where you are getting to commercialization, what kind of investment spend that you have to have there, you know, to build out a commercial organization or just help us think about what that all looks like on the P&Ls as you get ready to move commercialize care?

知道了。謝謝。關於 OSA 的另一個問題，我想您是如何從戰略角度考慮這一點的，如果它確實達到了商業化的地步，那麼您必須在那裡進行什麼樣的投資支出，您知道，才能建立一個商業組織或只是幫助我們思考當您準備將護理商業化時損益表上的所有內容？

Hey Mike, it's Matt. So for OSA, nothing's changed on the time lines. We're still in the follow-up phase the on the seven month data, again, one month plus six months of actual follow-up. We'll get that late in the year that will help, I think directionally tell us where we are. That's our primary endpoint, and that's what we will submit to the FDA. We also have to submit 12-month safety data which is more around April 2025 and then also April 2025, we'll have the 12 month results.

嘿，麥克，我是馬特。所以對 OSA 來說，時間線上沒有任何改變。我們仍處於七個月數據的追蹤階段，同樣是一個月加上六個月的實際追蹤。我們將在今年晚些時候得到它，這將有幫助，我認為方向性地告訴我們我們在哪裡。這是我們的主要終點，也是我們將向 FDA 提交的內容。我們還必須提交 12 個月的安全數據，大約是在 2025 年 4 月左右，然後在 2025 年 4 月，我們將得到 12 個月的結果。

And that's really what I think will be the most likely comparator to the other two companies that have similar clinical trials in terms of length. So yeah, our decision is likely to come in the beginning of '25 when we get that 12 months data, just to understand where we sit competitively, that will have a big impact on where we expect to spend on the commercial side. So you expect to see the more firm decision on that program in early 2025.

我認為這確實是最有可能與其他兩家在長度方面進行類似臨床試驗的公司進行比較的公司。所以，是的，我們的決定可能會在 25 年初做出，屆時我們將獲得 12 個月的數據，只是為了了解我們的競爭地位，這將對我們預期在商業方面的支出產生重大影響。因此，您預計會在 2025 年初看到對該計劃更加堅定的決定。

Alright, thanks, Matt.

好的，謝謝，馬特。

Mike Polark, Wolfe Research, LLC.

麥克‧波拉克 (Mike Polark)，沃爾夫研究有限責任公司。

Good morning. Thank you. I have a three-part follow-up on depression. So I'll just ask this one topic and then I'll get back in queue.

早安.謝謝。我對憂鬱症進行了三部分的追蹤。所以我只會問這個主題，然後我會回到隊列。

So on the unipolar data, when might we expect or when should we expect to see more of this data publicly? That, question one. Two, on the path to CMS coverage like timing milestones. And as part of this decision to pursue coverage.

那麼，就單極數據而言，我們預計什麼時候或應該何時公開看到更多此類數據？那，問題一。第二，在 CMS 覆蓋的道路上，如時間里程碑。作為追求覆蓋範圍的決定的一部分。

Have you had any preliminary engagement with CMS? If so, what does that sound like or look like? And then three and on the $40 million of net depression done. So if I'm doing are the math correct for 2025, $20 million comes down to the bottom line or that loud and clear, which leaves another $20 million. Would it be fair to assume that? Yeah, $10 million of that is reallocated to epilepsy and cardiopulmonary innovation.

您是否已與 CMS 進行初步接觸？如果是這樣，那聽起來像什麼或看起來像什麼？然後三、四千萬美元的淨憂鬱症就完成了。因此，如果我對 2025 年的計算是正確的，那麼 2000 萬美元就歸結為底線，或者說響亮而清晰，還剩下 2000 萬美元。這樣的假設公平嗎？是的，其中 1000 萬美元被重新分配給癲癇和心肺創新。

And then $10 million is still needed to fund bipolar, any color on that bridge would be great. Thank you so much.

然後仍然需要 1000 萬美元來資助雙相情感障礙，那座橋上的任何顏色都很棒。太感謝了。

So this is Ahmet again. I tried to answer your first two questions. First question was when will you be able to see the data. So what we are planning to do is that the pivotal trial data would be published in Q4 of this year.

這又是艾哈邁德。我試著回答你的前兩個問題。第一個問題是你什麼時候能夠看到數據。所以我們計劃要做的是，關鍵的試驗數據將在今年第四季發布。

So we will do the submissions and at that point, you will have full access to the actual data from the primary and secondary endpoints. And our secondary analysis that we've done since June enabled us to produce really interesting results and we will submit them into for publication. I can't speculate when they will be available to be a public, but our submission plans are to be to have them submitted in Q4, this additional analysis that I talked about.

因此，我們將進行提交，屆時您將可以完全存取主要端點和次要端點的實際資料。自六月以來我們進行的二次分析使我們能夠產生非常有趣的結果，我們將提交它們以供出版。我無法推測它們何時可以公開，但我們的提交計劃是在第四季度提交它們，這是我談到的附加分析。

So those are the two data sets. The primary data would be available in Q4 because the publications will be available and the secondary analysis we have done, we will submit them in Q4.

這就是兩個數據集。主要數據將在第四季度提供，因為出版物將提供，我們所做的二次分析將在第四季度提交。

Now in terms of CMS, the gating items are those publications. We do need to have those publications peer reviewed. So that will be the scientific validation of the data. Once they're peer-reviewed and published, we will compile that data and submit to CMS. And in terms of timing, it will be inappropriate for me to speculate, CMS's timing.

現在就 CMS 而言，控制項就是那些出版品。我們確實需要對這些出版物進行同儕審查。這將是數據的科學驗證。一旦經過同行評審並發布，我們將編譯該數據並提交給 CMS。至於時間安排，我不適合猜測 CMS 的時間安排。

And Mike, in terms of the capital allocation for DTD, you're right, we're targeting about $10 million of investment in DTD for 2025 and the $10 million or balance reallocated to cardiopulmonary and epilepsy.

麥克，就 DTD 的資本分配而言，您是對的，我們的目標是 2025 年在 DTD 上投資約 1000 萬美元，並將 1000 萬美元或餘額重新分配給心肺和癲癇。

Thank you so much.

太感謝了。

Adam Maeder, Piper Sandler.

亞當梅德，派珀桑德勒。

Hi, good morning, and thank you for taking the questions and congrats on the nice quarter. I wanted to ask the first one on guidance and was just hoping to get some incremental color on quarterly cadence as we look to the back half of the year, both for the top line and EPS and I show Q3 consensus revenue I think of $297 million consensus EPS of $0.71 for Q3. Any reaction to those figures? And then I had a follow-up. Thanks.

您好，早上好，感謝您提出問題，並祝賀您度過了美好的季度。我想詢問第一個關於指導的問題，只是希望在我們展望今年下半年時，能夠獲得一些關於季度節奏的增量色彩，無論是營收還是每股收益，我顯示了第三季度的共識收入，我認為是2.97 億美元第三季的共識每股收益為 0.71 美元。對這些數字有何反應？然後我進行了跟進。謝謝。

Adam, thanks for your question. Look, I think the street consensus looks reasonable for Q3. We don't guide quarters, but you know from my vantage Q3 looks very reasonable.

亞當，謝謝你的提問。看，我認為第三季的街頭共識看起來是合理的。我們不提供宿舍指導，但從我的角度來看，Q3 看起來非常合理。

Maybe just to add one. So Adam, thanks for the question and add a little bit color to what Alex said and also kind of go back to Rick's question on -- I think you said the word conservative. You know, we also made an assumption that over the past few quarters, the industry witnessed a disruption from supply from various competitors.

也許只是添加一個。所以，亞當，謝謝你提出的問題，並為亞歷克斯所說的話添加一點色彩，同時也回到里克的問題——我認為你說了保守這個詞。您知道，我們也假設在過去幾個季度中，該行業見證了來自各個競爭對手的供應中斷。

And one of the assumptions that we've made and our view for the rest of the year as those competitors will come back on the market in a healthier with a healthier supply. And obviously that is maybe the element of conservatism in our view.

我們所做的假設之一以及我們對今年剩餘時間的看法是，這些競爭對手將以更健康的方式回歸市場，提供更健康的供應。顯然，我們認為這可能是保守主義的要素。

That's helpful color, guys. Thank you for that. And then maybe just for the follow-up, wanted to ask on the innovation front, and curious if you can just give some more details in terms of what you're looking to improve upon in the in the epilepsy technology as well as cardiopulmonary, we found a couple of new trademarks for epilepsy that, you know, look, interesting.

夥計們，這顏色很有用。謝謝你。然後也許只是為了後續行動，想詢問創新方面的問題，並且好奇您是否可以提供更多關於您希望在癲癇技術和心肺方面改進的細節，我們發現了幾個關於癲癇的新商標，你知道，看起來很有趣。

Maybe just anything you can share on kind of the plans to accelerate innovation there and what you're looking to achieve in the pipeline? Thanks.

也許您可以分享一下加速創新的計劃以及您希望在管道中實現的目標？謝謝。

Yeah, Adam, this is Vlad, thank you for the question. I'll start and then turn it over to Ahmet. But you know, as I said in my opening innovation, as you know, one of the top three key priorities for us are enablers for success. And for me, a great organization starts with great people and so that has been a big focus of our leadership team is to bring and really top experts thought leaders on the innovation front.

是的，亞當，我是弗拉德，謝謝你的提問。我先開始，然後把它交給艾哈邁德。但你知道，正如我在開放創新中所說，我們的三大關鍵優先事項之一是成功的推動者。對我來說，一個偉大的組織始於優秀的人才，因此我們領導團隊的一大重點是在創新領域引入真正的頂尖專家和思想領袖。

So we're very pleased that Ahmet made the decision to join us as Chief Innovation Officer. As I mentioned, [Holly Graham] has joined us as VP of R&D for epilepsy, we have two, really stellar leaders in global strategic marketing that joined us from, you know, from our experience in really leading MedTech companies prior to joining LivaNova.

因此，我們非常高興艾哈邁德決定加入我們擔任首席創新長。正如我所提到的，[Holly Graham] 已加入我們，擔任癲癇研發副總裁，我們在全球策略行銷方面有兩位非常出色的領導者，他們加入我們的原因是，您知道，他們在加入LivaNova 之前擁有真正領先的醫療科技公司的經驗。

And most recently, we announced that Phil Kowalczyk is joining LivaNova in August, until he's joining us as Head of Strategy and Business Development. And again, incredible experience over many years in some of the great eminent on players in the tech industry.

最近，我們宣布 Phil Kowalczyk 將於 8 月加入 LivaNova，直至他加入我們擔任策略和業務開發主管。再說一遍，科技業一些傑出人物多年來擁有令人難以置信的經驗。

So for me, the key focus was kind of complement our exceptional capabilities and scientists that we have at LivaNova today with new leaders that can really accelerate the innovation agenda.

因此，對我來說，重點是用能夠真正加速創新議程的新領導者來補充我們今天在 LivaNova 擁有的卓越能力和科學家。

So this is all about again, as we are thinking about innovation in VNS Therapy, just like any medical device, there's kind of three areas you can focus on and this is general for medical devices, the safety of the device, the effectiveness of the device and the convenience for both the patient and the physician in terms of how that device works.

所以這又是一遍，當我們正在考慮 VNS 治療的創新時，就像任何醫療設備一樣，您可以關註三個領域，這對於醫療設備來說是通用的：設備的安全性、治療的有效性設備以及該設備的工作方式為患者和醫生帶來的便利。

So VNS Therapy safety is well established. So where we are focusing on is are there things we can do to improve effectiveness. We have some ideas around improving the effectiveness of the fee they need to be tried. But where we have a real opportunity to take opportunity is the convenience factor for both the patient and the physician and what I mean by that is that we are investing in accelerating our digitization of the therapy.

因此，VNS 治療的安全性已得到充分證實。因此，我們關注的是我們可以採取哪些措施來提高效率。我們有一些關於提高收費有效性的想法需要嘗試。但我們真正有機會抓住的機會是為患者和醫生提供方便的因素，我的意思是我們正在投資加速治療的數位化。

We do want to work on things like remote patient programming, for example, that will have a significant improvement for both the patient and the physician as they use VNS Therapy. So that will be on the neuromodulation side.

例如，我們確實希望進行遠端患者程式設計等工作，這將為患者和醫生在使用 VNS 療法時帶來顯著改善。所以這將是在神經調節方面。

On the CP business, very similar. There's a lot more we can do with the HLM our system in terms of providing additional guidance, additional data to the profession is to achieve better outcomes for that. We need to continue to actually adopt digitization of the HLM system as well. And we do see this as part of our ongoing innovation where we continuously upgrade Essenz in terms of its performance so Essenz;, as we move throughout the years, we'll have more and more benefits and feature sets as we digitize the technology.

在CP業務上，非常相似。我們可以利用 HLM 我們的系統做更多的事情，為業界提供額外的指導和額外的數據，以實現更好的結果。我們還需要繼續實際採用 HLM 系統的數位化。我們確實將此視為我們持續創新的一部分，我們不斷升級Essenz 的性能，因此Essenz;，隨著我們多年來的發展，隨著我們對技術進行數位化，我們將擁有越來越多的優勢和功能集。

Anthony Petrone, Mizuho Securities.

安東尼‧佩特龍，瑞穗證券。

Thank you, and congrats on the quarter and maybe I'll stick with a couple on guidance. One on CP, maybe when we think about just some of the cost savings you laid out here in terms of just the depression path forward. Maybe just to clarify, as you engage in CMS and bipolar is still ongoing, is there variability in timing as when a decision is going to be made from a commercial standpoint as to whether or not the company is going to pursue. This is a next indication in VNS.

謝謝，恭喜這個季度，也許我會堅持一些指引。其中之一是關於 CP，也許當我們考慮您在這裡列出的蕭條前進道路的一些成本節省時。也許只是為了澄清，當您參與 CMS 且雙相情感障礙仍在進行時，從商業角度做出決定公司是否要追求的時間是否存在變化。這是 VNS 中的下一個指示。

So that would be one. In other words, what would be the variability going forward also from a bottom line perspective, whether costs are going up or down when the final decision is made on depression.

所以這就是其中之一。換句話說，從底線的角度來看，未來的可變性是多少，當對憂鬱症做出最終決定時，成本是上升還是下降。

And then on the CP business, maybe just a little bit in the second half guidance as it relates to the competitive landscape. Maybe just an update there. It seems like the feedback from competitors is still that it's a little bit for us out there in terms of when they'll fully be back on to the market. So, to what extent was the competitive landscape baked into the guidance for the second half for CP? Thanks.

然後在 CP 業務方面，可能只是下半年的一點指導，因為它與競爭格局有關。也許只是那裡的更新。競爭對手的回饋似乎仍然是，就何時完全重返市場而言，這對我們來說有點困難。那麼，競爭格局在多大程度上納入了CP下半年的指引呢？謝謝。

Yeah, okay. So why don't let me start with the first one on this on the CMS and the DTD decision. So right now, our full energy is focused on partnering with CMS to get the reimbursement path forward and our commercial plans or our decision to build up some in other commercial arm depends on that decision. So we will not ramp up any commercial activity until we get the CMS decision. And so that's number one.

是啊，好吧。那麼為什麼不讓我從關於 CMS 和 DTD 決策的第一個開始呢？因此，現在，我們的全部精力都集中在與 CMS 合作，以推動報銷道路向前發展，我們的商業計劃或我們在其他商業部門建立一些的決定取決於該決定。因此，在獲得 CMS 決定之前，我們不會增加任何商業活動。所以這是第一。

On the second one, I think we've dialled the return of the competitors. I think we don't want to make assumptions for our competitors. And I think it's healthy for the market if the market has a healthy supply of products. And so we made an assumption that competitors are in full supply.

在第二個方面，我認為我們已經撥通了競爭對手的回歸。我認為我們不想為我們的競爭對手做出假設。我認為如果市場有健康的產品供應，這對市場來說是健康的。因此我們假設競爭對手供應充足。

If that doesn't happen and we have to step up, so you know, there's two sides to that one, obviously an opportunity for us to grow faster. But the second one is also not as a kind of a need for us to manufacture more. And at this point, like we've said in the previous calls, it's a two-step approach for us to improve our capacity.

如果這種情況沒有發生，我們必須挺身而出，所以你知道，這有兩個方面，這顯然是我們更快成長的機會。但第二個也不是我們需要製造更多的東西。在這一點上，就像我們在之前的電話會議中所說的那樣，我們可以採取兩步驟的方法來提高我們的能力。

The first step is to take our current network and do better for in terms of productivity, what we have today and the original target for us was to go from the end of last year to the end of this year, a gradual improvement that would lead year on year improvement of 10% in terms of capacity in terms of output, with slightly ahead of that target right now. And that allows us to, you know, a deliver life-saving products to the market, but we also accelerate our growth.

第一步是利用我們現有的網絡，在生產力方面做得更好，我們今天所擁有的，我們最初的目標是從去年年底到今年年底，逐步改進，這將導致產能和產量同比提高10% ，目前略超前目標。你知道，這使我們能夠向市場提供救生產品，同時我們也加速了我們的成長。

The second step, which is more mid and long term is we're looking at our manufacturing strategy and network strategy that will allow us to build a significant yet flexible capacity moving forward. And so that the even if there are disruptions on the market that our customers are receiving products so that I think is more 25 and beyond.

第二步是中長期的，我們正在研究我們的製造策略和網路策略，這將使我們能夠建立一個重要且靈活的產能。因此，即使市場出現混亂，我們的客戶也會收到超過 25 種或更多的產品。

Thank you, I will backend.

謝謝，我去後台。

Mike Matson, Needham & Company.

麥克馬森，李約瑟公司。

Yeah, thanks. So just given the European Court of Justice decision, and I know it's going to be moving with the Times Square in Q4, that will be the next and final step.

是的，謝謝。因此，鑑於歐洲法院的裁決，我知道它將在第四季度與時代廣場一起移動，這將是下一步也是最後一步。

But can you just remind us on your balance sheet? I think you have cash to completely fund this, but what I think you've also been excluding the interest expense or can maybe quantify what that would be either in terms of dollars or EPS if you did have to start or stop excluding it from there for their adjusted earnings. And then just wanted to see if you're comfortable with the cash balance you'd have once that is paid out? Or would you wanted to maybe raise additional capital at that point?

但您能在您的資產負債表上提醒我們嗎？我認為你有現金來完全資助這一點，但我認為你也已經排除了利息費用，或者如果你確實必須開始或停止從那裡排除它，也許可以用美元或每股收益來量化利息費用調整後的收入。然後只是想看看您是否對支付後的現金餘額感到滿意？或者你想在那時籌集額外的資金嗎？

Yeah. Thanks for your question, Mike. So let me just make sure that we're clear on sort of the background of the ECJ decision, some in 2022, detained Supreme Court referred a question related to the European demerger laws to the ECJ. So the ECJ decision is focused on the EU, the merger laws. It is not a ruling on LivaNova, right? So it's up to the Italian Supreme Court to apply the ECJ decision to LivaNova decision as it works on the appeal process from us.

是的。謝謝你的提問，麥克。因此，讓我確保我們清楚歐洲法院裁決的背景，一些裁決是在 2022 年被拘留的最高法院向歐洲法院提交了與歐洲分拆法相關的問題。因此，歐洲法院的決定重點在於歐盟的合併法。這不是對 LivaNova 的裁決，對嗎？因此，義大利最高法院在處理我們的上訴程序時，應將歐洲法院的裁決適用於 LivaNova 的裁決。

So as Vlad said, we're disappointed by the decision, but the judgment really now goes back to the Italian supreme court to decide. As we've said, the timing on the decision from the Italian Supreme Court is uncertain, but we don't expect that until 2025 now as it relates to our capital that we've set aside for a potential negative ruling, we have EUR270 million or $300 million that's sitting in our restricted cash balance.

正如弗拉德所說，我們對這一決定感到失望，但判決現在確實回到了義大利最高法院來決定。正如我們所說，義大利最高法院做出裁決的時間尚不確定，但我們預計要到 2025 年，因為這與我們為潛在的負面裁決預留的資本有關，我們有 270 歐元我們的受限現金餘額中有100 萬或3 億美元。

We also have operating cash of roughly $330 million, and then we have access to $225 million in a revolver which remains undrawn. So we have plenty of capital to deal with a potential demand for payment if it goes against us.

我們還有大約 3.3 億美元的營運現金，然後我們可以使用尚未提取的左輪手槍中的 2.25 億美元。因此，如果情況不利於我們，我們有足夠的資金來應對潛在的付款要求。

Now your final question was related to the to the interest expense. So the interest expense kind of on a gross basis is roughly at $27 million to $30 million on an annual basis. Now today, we actually generate interest income that's related to the bank surety. This guarantee that's sitting in restricted cash that's roughly, call it $16 million to $19 million.

現在你的最後一個問題與利息支出有關。因此，每年的利息支出總額約為 2,700 萬至 3,000 萬美元。今天，我們實際上產生與銀行擔保相關的利息收入。該擔保包含約 1,600 萬至 1,900 萬美元的限制性現金。

So the net range impact today is around $10 million to $12 million. And that's -- if the ruling went against us and we'd obviously be dealing with the interest expense as part of our as part of the operating EPS and we wouldn't be able to generate the interest income that I just described.

因此，今天的淨影響範圍約為 1000 萬至 1200 萬美元。也就是說，如果裁決對我們不利，我們顯然會將利息支出作為營運每股收益的一部分來處理，我們將無法產生我剛才描述的利息收入。

That makes sense.

這是有道理的。

Okay. Got it. Yeah, so the change would essentially be that $10 million to $12 million annually roughly, the net change I know you have to pay it in terms of what's hitting your EPS.

好的。知道了。是的，所以變化基本上是每年大約 1000 萬到 1200 萬美元，我知道你必須根據每股收益的影響來支付淨變化。

The net debt interest impact would be $27 million to $30 million on a pre-tax basis? You're right, we wouldn't be getting the benefit of the interest income that we generate today on the bank guarantee.

以稅前計算，淨債務利息影響將達到 2,700 萬至 3,000 萬美元？你是對的，我們不會從今天透過銀行擔保產生的利息收入中受益。

Okay. All right. Got it. And then just in the epilepsy business. I mean, it's good to see that the business has kind of recovered into the high single digits, but that market is really underpenetrated. There's a lot of folks out there where the drugs just aren't working well, and I've always wondered why that that business can grow even faster.

好的。好的。知道了。然後就是癲癇領域。我的意思是，很高興看到該業務已經恢復到高個位數，但該市場確實滲透不足。有很多人的藥物效果不佳，我一直想知道為什麼這項業務可以成長得更快。

So I guess a question for Vlad. I know that the business is headed in the right direction. And there's been some changes made in the past in terms of how the products are sold and not, .but are there any additional and there are strategic changes that you could potentially make there to drive even faster growth in epilepsy?

所以我想問弗拉德一個問題。我知道業務正朝著正確的方向發展。過去在產品銷售方式方面做出了一些改變，但是否有任何額外的策略性改變可以推動癲癇的更快成長？

Yeah. no, it's a great question. So and again, I'll maybe take it in two steps, one step is what can we do better today with the current portfolio and accelerate our growth and then really comes down to two things which you said correctly, one, is that penetration procedure penetration today procedure penetration is below 5% and are obviously there are other analogs in MedTech that are similar to this and really, you know, education, patient awareness, clinical evidence, real life evidence of, you know, various market access activities around the world. They will help to continue to drive this procedure penetration up.

是的。不，這是一個很好的問題。一次又一次，我可能會分兩步進行，第一步是我們今天可以利用當前的投資組合做得更好並加速我們的增長，然後真正歸結為您說正確的兩件事，一是滲透程序今天的滲透率程序滲透率低於5％，並且顯然醫療技術領域還有其他類似的東西與此類似，而且實際上，您知道，教育，患者意識，臨床證據，現實生活中的證據，您知道，周圍的各種市場准入活動世界。他們將有助於繼續推動這項程序的普及。

So you know, there's a playbook on how to do that, and we're very much focused on that as our number one driver.

所以你知道，有一本關於如何做到這一點的手冊，作為我們的頭號驅動程序，我們非常關注這一點。

The second one is, and I'm a diluted of some of that is once we make product once we bring new innovation to our stores on to our current platform, that will make the adoption of the procedure even easier and you know that will, that is a second growth driver.

第二個是，我稀釋了其中的一些內容，一旦我們生產產品，一旦我們將新的創新帶到我們目前的平台上的商店，這將使該計畫的採用變得更加容易，你知道這會，這是第二個成長動力。

And then the third one for me is then look into the second step beyond our current portfolio and this work is ongoing right now is other ways for us to expand our portfolio in epilepsy or in neuromodulation. And that is what I refer to kind of our work in terms of what's next in terms of areas of high unmet clinical need and the high-growth markets. And so we intend to finish that work by the end of this year.

對我來說，第三個目標是研究我們目前產品組合以外的第二步，這項工作目前正在進行中，是我們擴大癲癇或神經調節領域產品組合的其他方式。這就是我所說的我們的工作，在臨床需求高度未滿足的領域和高成長市場的下一步工作。因此，我們打算在今年年底前完成這項工作。

Okay, great. Thank you.

好的，太好了。謝謝。

David Rescott, Baird.

大衛雷斯科特，貝爾德。

So, great. Thanks for taking the questions. I just wanted to clarify that higher comment, just on the difference between what the total kind of net interest income is versus the net interest income specifically toward that restricted cash. But my first question was going to be generally on Italy and the Italian litigation and that $6.6 million number that was in there, a whole lot of net revenue.

那麼，太好了。感謝您提出問題。我只是想澄清更高的評論，只是關於淨利息收入總額與專門針對限制性現金的淨利息收入之間的差異。但我的第一個問題一般是關於義大利和義大利訴訟，以及其中的 660 萬美元數字，這是一大筆淨收入。

Just curious if that's something that should be repetitive, meaning, is that a net amount that should come out on a quarterly basis going forward? And then the second part to that entire kind of question here on this EUR453 million, I think was the euro number. Is that kind of the cap or max amount or is there potential for higher liability associated with the Italian kind of judgement?

只是好奇這是否應該重複，也就是說，這是否應該是未來每季公佈的淨額？然後，關於 4.53 億歐元的整個問題的第二部分，我認為是歐元數字。這是上限或最大金額嗎？

Yeah, so let me just take this in part, David. Let's start off with this Italian payback measures. So we took a provision in the quarter. It's related to a recent ruling that was issued by the Italian Constitutional Court. So this is a this is a MedTech industry issue goes all the way back to 2015.

是的，大衛，讓我來談談這個部分。讓我們從義大利的投資回報措施開始。因此，我們在本季採取了撥備。這與義大利憲法法院最近發布的一項裁決有關。這是醫療科技產業的一個問題，可以追溯到 2015 年。

It's been litigated in Italian courts, basically what it is the law that requires companies selling medical devices in Italy to repay a percentage of health care expenditures exceeding regional maximum caps for medical devices. So this translates to anyone any MedTech company that participates in the Italian market.

它已在義大利法院提起訴訟，基本上是法律要求在義大利銷售醫療器材的公司償還超出醫療器材地區最高限額的一定比例的醫療保健支出。因此，這適用於任何參與義大利市場的醫療科技公司。

So we took a true-up provision of $6 million in the quarter. As I said, this is a true up going back to 2015. So we have been accruing and sort of on an ongoing basis. But this ruling sort of clarifies what sort of level of provision that's required. So it's going to continue, but it's going to be a much lower rate on an incremental basis as we move forward. So that's on the Italian payback measure.

因此，我們在本季撥備了 600 萬美元的真實撥備。正如我所說，這是 2015 年以來的真正上漲。因此，我們一直在不斷累積。但這項裁決澄清了需要何種程度的規定。所以它會繼續下去，但隨著我們的前進，它的速度會逐漸降低。這就是義大利的回報衡量標準。

Now going back to your clarifying question regarding the capital and the interest expense related to the SNIA Litigation. So if you look at our if you look at our balance sheet today, we have a capital reserved sitting in restricted cash that's related to the bank guarantee, which was related to this the appeal that we filed several years ago.

現在回到您澄清的有關 SNIA 訴訟相關資本和利息費用的問題。因此，如果你看看我們今天的資產負債表，我們有一筆與銀行擔保相關的受限現金儲備資本，這與我們幾年前提出的上訴有關。

And so that's the portion that is currently earning interest income, so if we were to pay this out and if there was a payment amount that was similar to what at the lower Court or the Court of Appeals ruling was which was EUR453 million several years ago, obviously you had that portion of cash would go towards that payment. We wouldn't be earning that interest income.

這就是目前賺取利息收入的部分，如果我們要支付這筆款項，並且支付金額是否與下級法院或上訴法院幾年前的裁決類似，即 4.53 億歐元，顯然你有那部分現金將用於付款。我們不會賺取利息收入。

So what we'll be left with is interest expense with an annual interest expense of $27 million to $30 million, which would be impacting. We would then include that as part of our operating earnings as we move forward because it would be part of our permanent capital structure.

因此，我們剩下的就是利息支出，每年利息支出為 2,700 萬至 3,000 萬美元，這將產生影響。然後，隨著我們的發展，我們將其納入我們營業收入的一部分，因為它將成為我們永久資本結構的一部分。

That makes sense.

這是有道理的。

Yeah, that that's helpful. And then just on the for the EUR453 million, is that based on your understanding that a [cap] or max amount? Or is there additional pieces that ruling that that suggests that could go higher? Thank you.

是的，這很有幫助。然後就 4.53 億歐元而言，這是基於您對[上限]或最大金額的理解嗎？或者是否有其他證據表明這表明價格可能會更高？謝謝。

Yeah, I'm not going to speculate on the amounts and the caps that I mean, that's a number that you know that we know the Court of Appeals ruled against us back in 2021. So that's really the number that's we're sort of zeroed in on, but I'm not going to speculate on whether this is a, you know, a cap on the liability.

是的，我不會猜測金額和上限，我的意思是，這是一個你知道的數字，我們知道上訴法院在 2021 年對我們做出了不利於我們的裁決。所以這確實是我們關注的數字，但我不會猜測這是否是責任上限。

Matt Miksic, Barclays.

馬特·米克西奇，巴克萊銀行。

Hi, good morning. Wanted to get a sense of on the core businesses. And maybe as we exit this year and into next year, the kinds of investments, the kinds of actions you can take, you've mentioned innovation, optimizing performance, particularly in the epilepsy business and then one quick follow-up if I could.

嗨，早安。想要了解核心業務。也許當我們今年退出並進入明年時，您可以採取哪些投資、哪些行動，您提到了創新、優化績效，特別是在癲癇業務方面，然後如果可以的話，我會進行快速跟進。

Yeah. I mean, if I go back to kind of the first imperative, and that is to maximize our performance in cardiopulmonary and epilepsy businesses and successful meeting in those two businesses would mean to in a sustainable way, grow faster than the market in both of those businesses. And then I think the levers are pretty straightforward, you know, for cardiopulmonary, it's to continue to accelerate upgrade to Essenz, it's to bring our service and our software upgrades a quality to our benchmark.

是的。我的意思是，如果我回到第一個當務之急，那就是最大限度地提高我們在心肺和癲癇業務方面的業績，而這兩項業務的成功實現將意味著以可持續的方式，在這兩個方面比市場成長得更快企業。然後我認為槓桿非常簡單，你知道，對心肺來說，就是繼續加速升級到埃森茨，就是讓我們的服務和軟體升級品質達到我們的基準。

And then finally, you know, we have a significant opportunity to gain share in disposables and you know, is leading with oxygenators, and you know, the if you ask me where are the key investments are going, I would say one is commercial excellence across the world.

最後，你知道，我們有一個重要的機會來獲得一次性用品的份額，你知道，在製氧機方面處於領先地位，你知道，如果你問我關鍵投資在哪裡，我會說其中一個是商業卓越世界各地。

Number two is in our ability to manufacture more products and supply the market in an uninterrupted manner. And number three on that talked about innovation. So I think those three levers will enable cardiopulmonary business to continue to grow faster than the market.

第二是我們有能力生產更多產品並不間斷地供應市場。第三點談到了創新。所以我認為這三個槓桿將使心肺業務繼續以比市場更快的速度成長。

And you know, we're starting from a position of strength, which is really makes me confident on our future that, on the epilepsy business. And again, our investments are heavily going into driving procedure penetration.

你知道，我們正處於一個強勢地位，這確實讓我對我們癲癇業務的未來充滿信心。再說一遍，我們的投資大量用於推動程序的普及。

So we're really focused on market access on clinical evidence on education, on one hand and on the other hand. Again, I talked about our innovation pipeline and with [Holly Graham], on our Board know, she has a tremendous track record as an R&D lead in various businesses and technologies. And you know, we count on her to come in and really help the team to accelerate our innovation and down. So, those are really big that's kind of the areas of our key investments on both CP and neuromod.

因此，我們一方面真正關注教育臨床證據的市場准入。我再次與[Holly Graham]討論了我們的創新管道，我們董事會知道，她作為各種業務和技術的研發領導者擁有出色的業績記錄。你知道，我們指望她加入並真正幫助團隊加速我們的創新和進步。所以，這些確實很大，這是我們對 CP 和 Neuromod 的關鍵投資領域。

Thanks so much, Vlad. And then just one follow-up, if I could. On some of the decisions you're making are investments and you talked a bunch about them on the call, it sounds like, as you've described that the sleep apnea decision will come maybe a little further than originally at least we had hoped so come this late this year into early next year.

非常感謝，弗拉德。如果可以的話，然後再做一次後續行動。您正在做出的一些決定是投資，您在電話中談到了很多這些決定，聽起來就像您所描述的那樣，睡眠呼吸中止症的決定可能會比最初的情況更進一步，至少我們是這樣希望的今年年底到明年年初。

I guess maybe help us understand the metrics of that decision just because you're about to open the 12 month safety data and trying to make a decision, what are the key aspects of your program that you're looking for as you decide whether you're going to move forward with that or reallocate that spend to something else in the portfolio. And thanks again for taking question.

我想也許可以幫助我們理解該決定的衡量標準，因為您即將打開 12 個月的安全數據並嘗試做出決定，當您決定是否進行該計劃時，您正在尋找的計劃的關鍵方面是什麼我們將繼續推進這項工作，或將這筆支出重新分配到投資組合中的其他項目。再次感謝您提出問題。

Yeah. Thank you, Matt, thank you for asking the question. And Matt, I'll start and then I'll turn it over to Matthew to build on this. But first of all, let me start. It's obstructive sleep apnea is a massive unmet needs. And this is the population that's growing. And then the market that's growing there is obviously, as you know, is one big player in the market today. I think there's a massive opportunity for a number of companies to come in with innovative technologies and participate in that market.

是的。謝謝你，馬特，謝謝你提出這個問題。馬特，我將開始，然後將其交給馬修，以在此基礎上繼續發展。但首先，讓我開始吧。它的阻塞性睡眠呼吸中止症是一個巨大的未滿足的需求。這就是不斷增加的人口。正如您所知，那裡不斷增長的市場顯然是當今市場上的重要參與者。我認為許多公司有巨大的機會帶著創新技術進入這個市場。

So it's I think the market has attractive. This space is attractive. And if you like, the fact that there's one competitor there makes it even more attractive to be in that market. Automatically our decision on how to enter this market is going to depend on the clinical results.

所以我認為這個市場具有吸引力。這個空間很有吸引力。如果你願意的話，事實上，那裡有一個競爭對手，這使得進入該市場更具吸引力。我們自動決定如何進入這個市場將取決於臨床結果。

And what we count on is equivalent or better clinical outcome to the current standard on. And the degree of that difference will determine our commercial strategy on. So I'll turn it to Matt, maybe on some of the comments or maybe bring a little bit color to my comments.

我們所指望的是與當前標準相當或更好的臨床結果。而這種差異的程度將決定我們的商業策略。所以我會把它交給馬特，也許是關於一些評論，或者可能為我的評論帶來一點色彩。

Sure, Vlad, you know, nothing changed on the time line remember, our trial is randomized. The other two trials competitor trials were not. That's the data we're going to get at year end, six month randomized data. But if you truly want to have head to head in OSA, it's much more simple than DTD. It's really AHI reduction is the focus.

當然，弗拉德，你知道，時間線上沒有任何改變，記住，我們的試驗是隨機的。其他兩項試驗的競爭對手試驗則不然。這是我們將在年底獲得的數據，六個月的隨機數據。但如果您真的想在 OSA 中正面交鋒，它比 DTD 簡單得多。AHI 降低確實是重點。

We're going to have the 12-month data of therapy arm in April '25. And that will really tell us how competitive our data is versus the competition is there, but meaningful swing there in terms of superior line inferior. And we'll also look at some of the subsets, including complete concentric collapse, which only our trial looked at those patients.

我們將於 25 年 4 月獲得治療組 12 個月的數據。這將真正告訴我們，我們的數據與競爭對手相比有多有競爭力，但在優劣線方面有意義的搖擺。我們還將研究一些子集，包括完全同心塌陷，只有我們的試驗研究了這些患者。

So it's going to be two sets of data. I think the original day will be very informative. But in terms of the ultimate competitive profile, again, April '25 is when we'll have a lot more information. And then also we're building out our technology roadmap there as well in terms of how we become more competitive and ultimately, hopefully past the competition on the actual technology side.

所以這將是兩組數據。我認為最初的一天會提供很多資訊。但就最終的競爭概況而言，25 年 4 月我們將再次獲得更多資訊。然後，我們也在製定我們的技術路線圖，以提高我們的競爭力，並最終希望在實際技術方面超越競爭。

Great. Thanks so much for the color.

偉大的。非常感謝你的顏色。

We have no further questions, and so I will turn the call back to Vladimir Makatsaria for closing remarks.

我們沒有其他問題了，因此我將把電話轉回弗拉基米爾·馬卡察裡亞 (Vladimir Makatsaria)，讓其結束語。

Emily, thank you. You did a great job facilitating the call and thank you to everyone for joining today's call. On behalf of the entire team, we really appreciate your support and interest in LivaNova. Have a great day or evening ahead. Bye-bye.

艾米麗，謝謝你。您在促成此次電話會議方面做得非常出色，感謝大家參加今天的電話會議。我們謹代表整個團隊，衷心感謝您對 LivaNova 的支持和興趣。祝您有美好的一天或一晚。再見。

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。