Masimo Corp (MASI) 2016 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to Masimo's 2016 year-end earnings conference call. The Company's press release is available at www.Masimo.com. (Operator Instructions). I am pleased to introduce Eli Kammerman, Masimo's Vice President of Business Development and Investor Relations.

女士們、先生們，下午好，歡迎參加 Masimo 2016 年年終收益電話會議。該公司的新聞稿可在 www.Masimo.com 上獲取。 （操作員說明）。我很高興地介紹 Masimo 業務開發和投資者關係副總裁 Eli Kammerman。

Thank you. Hello, everyone. Joining me today are Chairman and CEO Joe Kiani and Executive Vice President of Finance and CFO Mark de Raad.

謝謝。大家好。今天與我一起出席的還有董事長兼首席執行官 Joe Kiani 以及財務執行副總裁兼首席財務官 Mark de Raad。

This call will contain forward-looking statements which reflect Masimo's current judgment, including certain of our expectations regarding fiscal 2017 financial performance. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Risk factors that could cause our actual results to differ materially from our projections and forecasts are discussed in detail in our SEC filings, including our most recent Form 10-K and Form 10-Q. You will find these in the investors section of our website. I'll now pass the call to Joe Kiani.

本次電話會議將包含反映 Masimo 當前判斷的前瞻性陳述，包括我們對 2017 財年財務業績的某些預期。然而，它們面臨風險和不確定性，可能導致實際結果出現重大差異。我們的 SEC 文件（包括我們最新的 10-K 表格和 10-Q 表格）中詳細討論了可能導致我們的實際結果與我們的預測和預測存在重大差異的風險因素。您可以在我們網站的投資者部分找到這些信息。我現在將把電話轉給喬·基亞尼。

Thank you, Eli. Good afternoon and thank you for joining us for Masimo's 2016 fourth-quarter and full-year earnings call.

謝謝你，伊萊。下午好，感謝您參加 Masimo 2016 年第四季度和全年財報電話會議。

We are happy to report another strong quarter, with topline revenues in excess of our expectations and operating income at a new record level. As seen throughout 2016, we again experienced strong US product revenue growth due to a combination of higher utilization, new customers, and incremental revenues from our new products, such as Nomoline capnography, O3 regional oximetry, SedLine brain function monitoring, and Root patient monitoring and connectivity hub.

我們很高興地報告又一個強勁的季度，營收超出我們的預期，營業收入達到新的紀錄水平。 2016 年全年，由於更高的利用率、新客戶以及 Nomoline 二氧化碳圖、O3 區域血氧飽和度、SedLine 腦功能監測和 Root 患者監測等新產品帶來的收入增加，我們再次經歷了強勁的美國產品收入增長和連接樞紐。

We attribute our strong quarterly and full-year performance to our technologically advanced product portfolio and its proven value to improve patient outcomes and reduce costs, as well as the exceptional abilities of the Masimo team.

我們將強勁的季度和全年業績歸功於我們技術先進的產品組合及其在改善患者治療效果和降低成本方面經過驗證的價值，以及 Masimo 團隊的卓越能力。

Our Q4 product revenues grew to $175.7 million, a 10% increase. In fact, we achieved double-digit product revenue growth in each quarter in 2016, resulting in full-year product revenue growth of almost 11% to nearly $664 million. We shipped 48,600 oximeters in Q4, a new quarterly record, producing total shipments for 2016 of 186,000 oximeters, excluding our handheld and finger pulse oximeters. In fact, our Q4 driver shipments allowed us to reach an important milestone as we now estimate our total global installed base to be just over 1.5 million oximeters, further illustrating the value of our SET and rainbow technologies to our customers.

我們第四季度的產品收入增至 1.757 億美元，增長 10%。事實上，我們在 2016 年每個季度都實現了兩位數的產品收入增長，導致全年產品收入增長近 11% 至近 6.64 億美元。我們第四季度的血氧計出貨量為 48,600 台，創下了新的季度記錄，2016 年的總出貨量為 186,000 台血氧計，不包括我們的手持式和手指脈搏血氧計。事實上，我們第四季度的驅動器出貨量使我們達到了一個重要的里程碑，因為我們現在估計我們的全球總安裝基數剛剛超過 150 萬台血氧計，進一步說明了我們的 SET 和 Rainbow 技術對客戶的價值。

Our Q4 2016 GAAP earnings per diluted share were $3.97, which includes $3.37 in net benefits related to some special items which Mark will discuss in more detail in a moment. Excluding those items, our adjusted Q4 GAAP earnings were $0.60, including $0.09 from the new stock option accounting rule.

我們 2016 年第四季度的 GAAP 每股攤薄收益為 3.97 美元，其中包括與一些特殊項目相關的 3.37 美元的淨收益，Mark 稍後將更詳細地討論這些項目。排除這些項目，我們調整後的第四季度 GAAP 收益為 0.60 美元，其中包括新股票期權會計規則帶來的 0.09 美元。

For the year, our GAAP earnings per diluted share were $5.65, which includes $3.43 in net benefits related to the same special items. Excluding those items, our adjusted year-to-date GAAP earnings were $2.22, including $0.24 from the new stock option accounting rule. Earnings per share excluding the new stock option gain accounting rule was $1.98, a 33% increase from the prior-year adjusted earnings of $1.49 per share. These results, we believe, continue to demonstrate effective execution on our 10-year plan.

今年，我們的 GAAP 攤薄每股收益為 5.65 美元，其中包括與相同特殊項目相關的 3.43 美元淨收益。排除這些項目，我們調整後的年初至今 GAAP 收益為 2.22 美元，其中包括新股票期權會計規則帶來的 0.24 美元。不計新股票期權收益會計規則的每股收益為 1.98 美元，比上年調整後每股收益 1.49 美元增長 33%。我們相信，這些結果繼續證明了我們十年計劃的有效執行。

The other major event in the fourth quarter was the announcement of our partnership with Philips. While I will speak to this in more detail later, this agreement will provide both companies with the ability to help clinicians keep their patients safer as we expand the reach of Masimo rainbow, SedLine, Nomoline, and O3 to more hospitals around the world.

第四季度的另一件重大事件是我們宣布與飛利浦建立合作夥伴關係。雖然我稍後會更詳細地討論這一點，但隨著我們將 Masimo Rainbow、SedLine、Nomoline 和 O3 的覆蓋範圍擴大到世界各地更多的醫院，該協議將使兩家公司能夠幫助臨床醫生確保患者的安全。

As a reminder, fiscal 2017 represents the final year of our 10-year post-IPO plan and we are confident that the momentum we have built will allow us to finish this 10-year plan strongly. Given that this is the last year of our prior plan, it is time for us to begin discussing our next long-term plan, and to that end I'm happy to let you know that we will be hosting an investor day on May 9, 2017, at our corporate headquarters in Irvine, California. We hope that you will be able to join us for what should be an exciting and informative event as we discuss the key drivers with our new five-year plan.

謹此提醒，2017 財年是我們 IPO 後 10 年計劃的最後一年，我們相信我們所建立的勢頭將使我們能夠強勁地完成這個 10 年計劃。鑑於今年是我們先前計劃的最後一年，現在是我們開始討論下一個長期計劃的時候了，為此，我很高興地通知您，我們將於 5 月 9 日舉辦投資者日，2017 年，在我們位於加利福尼亞州歐文市的公司總部。我們希望您能夠加入我們，參加一場激動人心且內容豐富的活動，我們將討論新的五年計劃的關鍵驅動因素。

Today, of course, our focus is on providing you with additional information on our fourth-quarter 2016 financial results and then to share with you our new fiscal-year 2017 financial guidance. To that end, I will ask Mark to review both items with you, and afterwards I will provide you with some more detail on both our 2016 accomplishments and some expectations for 2017. Mark?

當然，今天我們的重點是為您提供有關 2016 年第四季度財務業績的更多信息，然後與您分享我們新的 2017 財年財務指引。為此，我將請馬克與您一起回顧這兩個項目，然後我將向您提供有關我們 2016 年成就的更多詳細信息以及對 2017 年的一些期望。馬克？

Thank you, Joe, and good afternoon, everybody.

謝謝喬，大家下午好。

Our Q4 product revenues rose to $175.7 million, up 10% or 9.6% on a constant-currency basis versus the $159.8 million posted for the fourth quarter of 2016. The strength was the result of all of the factors that Joe just previously mentioned. The year-over-year impact of foreign exchange rates was relatively small, adding approximately $0.5 million to total revenues in the quarter. Q4 total revenues, which include royalty revenues, were $183.2 million, up 9.5% from $167.3 million in the prior-year period.

我們第四季度的產品收入增至 1.757 億美元，與 2016 年第四季度的 1.598 億美元相比，按固定匯率計算增長了 10% 或 9.6%。這一強勁勢頭是喬之前提到的所有因素共同作用的結果。外匯匯率的同比影響相對較小，本季度總收入增加了約 50 萬美元。第四季度總收入（包括特許權使用費收入）為 1.832 億美元，比去年同期的 1.673 億美元增長 9.5%。

Rainbow product revenues for Q4 totaled $16.9 million, down by 11.6% from $19.1 million in the prior-year period. The decline in rainbow sales was related entirely to a decline of $2.7 million in rainbow revenues from a large customer in Saudi Arabia, due to the country's current economic difficulties. Adjusting for the impact of this customer, our year-over-year rainbow revenues would have been up by 3%. Encouragingly, again excluding the impact of this customer, our single-use rainbow adhesive sensor revenues and unit volumes were both up approximately 23%.

Rainbow 產品第四季度收入總計 1690 萬美元，比去年同期的 1910 萬美元下降 11.6%。 Rainbow銷售額的下降完全與沙特阿拉伯一家大客戶的Rainbow收入下降270萬美元有關，原因是該國目前的經濟困難。調整該客戶的影響後，我們的 Rainbow 收入將同比增長 3%。令人鼓舞的是，再次排除該客戶的影響，我們的一次性彩虹粘合劑傳感器收入和單位銷量均增長了約 23%。

Our Q4 SpHb revenues were $4.3 million, down by 30% from $6.1 million in the prior-year period, with $2.4 million of this decline due to the same large Saudi Arabia customer. Importantly, if we exclude the impact of this large customer, our total Q4 2016 SpHb single patient use sensor sales were up 51%. For the entire year, our total SpH revenues rose 13% to a record of nearly $20 million, accounting for 30% of total fiscal-year 2016 rainbow revenues.

我們第四季度的 SpHb 收入為 430 萬美元，比去年同期的 610 萬美元下降了 30%，其中 240 萬美元的下降歸因於同一家沙特阿拉伯大客戶。重要的是，如果我們排除這個大客戶的影響，我們 2016 年第四季度 SpHb 單患者使用傳感器的總銷售額增長了 51%。全年，我們的 SpH 總收入增長了 13%，達到創紀錄的近 2000 萬美元，佔 2016 財年 Rainbow 總收入的 30%。

Our worldwide end user or direct business, which includes sales through just-in-time distributors, grew 10.8% in the fourth quarter to $152.8 million versus $137.9 million in the year-ago period. Our direct business represented approximately 87% of total product revenue in the quarter versus 86% in the prior-year period. OEM sales comprised the remaining 13% and rose by 4.8% versus the prior-year period to $22.9 million.

我們的全球最終用戶或直接業務（包括通過及時分銷商的銷售額）在第四季度增長了 10.8%，達到 1.528 億美元，而去年同期為 1.379 億美元。我們的直接業務佔本季度產品總收入的約 87%，而去年同期為 86%。 OEM 銷售額佔其餘 13%，較上年同期增長 4.8%，達到 2,290 萬美元。

By geography, total US product revenue increased by 13% to $120.5 million, compared to $106.7 million in the same prior-year quarter.

按地區劃分，美國產品總收入增長 13%，達到 1.205 億美元，而上年同期為 1.067 億美元。

Our Q4 OUS product revenues of $55.2 million rose by 3.9% versus $53.1 million in the same prior-year period and were up 3% on a constant-currency basis. Excluding our business related to the one large customer in Saudi Arabia, our OUS business in Q4 grew by approximately 12%, or 11% on an FX-adjusted basis, compared to the same year-ago period. Q4 OUS revenues represented approximately 31% of total Q4 product revenues.

我們第四季度的 OUS 產品收入為 5520 萬美元，比去年同期的 5310 萬美元增長了 3.9%，按固定匯率計算增長了 3%。排除與沙特阿拉伯一家大客戶相關的業務，第四季度我們的 OUS 業務較去年同期增長約 12%，經匯率調整後增長 11%。第四季度 OUS 收入約佔第四季度產品總收入的 31%。

Our fourth-quarter 2016 GAAP product gross profit margin was 66.5%. Our Q4 product margins were stronger than we expected, due to a favorable product mix, continued benefits from our value engineering efforts, and favorable foreign exchange rates. Importantly, if you compare it to the prior-year Q4 gross profit margin of 63.6%, adjusted for both the impact of a Q4 2015 inventory adjustment and the deconsolidation of our VIE, variable interest entity, we had a near 290 bps point year-over-year improvement in product gross profit margins. Of this amount, nearly 60 bps was due to foreign exchange rates, but the remaining 230 bps improvement was due to the combination of the factors I just noted.

2016 年第四季度 GAAP 產品毛利率為 66.5%。由於有利的產品組合、價值工程工作的持續收益以及有利的外匯匯率，我們第四季度的產品利潤率強於我們的預期。重要的是，如果將其與去年第四季度 63.6% 的毛利率進行比較，並根據 2015 年第四季度庫存調整和 VIE（可變利益實體）分拆的影響進行調整，我們的年毛利率接近 290 個基點。產品毛利率同比改善。其中，近 60 個基點是由於外匯匯率，但其餘 230 個基點的改善是由於我剛才提到的因素的綜合作用。

Reported fourth-quarter 2016 total operating expenses included a $270 million benefit from the Philips agreement, as well as a $5 million donation to the Masimo Foundation, and therefore resulted in our operating expenses being reported as a credit of $186.1 million. Without the Philips payment and the donation, adjusted operating expenses were $78.9 million, which was up 3.4% versus an adjusted $76.3 million in the prior-year quarter. This lower-than-expected spending level was due primarily to lower than previously forecasted legal expenses. We believe that these modest increases in operating expenses continue to demonstrate our commitment to controlling the absolute level of total operating expenses.

報告的 2016 年第四季度總運營費用包括飛利浦協議帶來的 2.7 億美元收益，以及向 Masimo 基金會捐贈的 500 萬美元，因此我們的運營費用被報告為貸方 1.861 億美元。如果沒有飛利浦的付款和捐贈，調整後的運營費用為 7,890 萬美元，比去年同期調整後的 7,630 萬美元增長 3.4%。支出水平低於預期的主要原因是法律費用低於之前的預測。我們認為，運營費用的小幅增長繼續表明我們致力於控制總運營費用的絕對水平。

I also wanted to take a moment to point out that, although we did receive a $300 million payment from Philips, we recognized only $270 million in the Q4 profit-and-loss statement. The remaining $30 million will be recognized in the future as nonrecurring engineering revenue as Masimo continues to deliver on its remaining product integration milestones related to our settlement agreement with Philips.

我還想花點時間指出，雖然我們確實收到了飛利浦的 3 億美元付款，但我們在第四季度損益表中只確認了 2.7 億美元。隨著 Masimo 繼續實現與我們與飛利浦和解協議相關的剩餘產品集成里程碑，剩餘的 3000 萬美元將在未來確認為非經常性工程收入。

SG&A expenses were $69.4 million, including the $5 million charitable contribution donation that I previously mentioned. Without that donation, our SG&A expenses would have been $64.4 million, which was up a very modest 1.3% versus an adjusted $63.6 million for the prior-year period, again in line with our efforts to control expense growth.

SG&A 費用為 6940 萬美元，包括我之前提到的 500 萬美元慈善捐款。如果沒有這筆捐款，我們的 SG&A 費用將為 6,440 萬美元，與上年同期調整後的 6,360 萬美元相比，僅小幅增長 1.3%，這再次符合我們控制費用增長的努力。

R&D spending of $14.5 million increased by 14.2% versus the year-ago period, due to the higher engineering project-related expenditures.

由於工程項目相關支出增加，研發支出為 1,450 萬美元，同比增長 14.2%。

And as Joe previously noted, I'm very pleased to again highlight that the combination of our strong Q4 product revenue performance, our stronger-than-expected Q4 gross profit margin results, and our continued operating and expense control all combined to allow Masimo to report our highest-ever operating income at 24.8%. Nonoperating expense in Q4 2016 was $2.9 million, compared to nonoperating expense of $1.9 million in the prior-year period.

正如 Joe 之前指出的那樣，我很高興再次強調，我們強勁的第四季度產品收入表現、強於預期的第四季度毛利率結果以及我們持續的運營和費用控制，所有這些相結合，使 Masimo 能夠報告我們有史以來最高的營業收入為 24.8%。 2016 年第四季度的營業外支出為 290 萬美元，而去年同期的營業外支出為 190 萬美元。

During the fourth quarter, due to the significant movement in the US dollar versus the yen, euro, and other currencies, we reported an unrealized $2.5 million remeasurement loss in Q4. While this remeasurement loss was partially offset by favorable FX impacts on our revenues, cost of sales, and operating expenses, the net foreign exchange loss was still approximately $1.2 million and reduced our Q4 earnings per share by $0.02.

第四季度，由於美元兌日元、歐元和其他貨幣的大幅波動，我們報告第四季度未實現的重新計量損失為 250 萬美元。雖然這一重新計量損失被匯率對我們的收入、銷售成本和運營費用的有利影響部分抵消，但淨外匯損失仍約為 120 萬美元，並使我們第四季度的每股收益減少了 0.02 美元。

Also impacting this line item was the lower interest expense related to our decision to use part of the proceeds from the settlement payment to repay our entire outstanding line of credit in the quarter.

同樣影響該項目的是與我們決定使用部分結算付款收益來償還本季度全部未償信貸額度相關的利息費用較低。

Our fourth-quarter 2016 tax rate was 30%, up from 28.4% in the same period last year. There are a number of impact -- items impacting this quarterly rate that are worth noting. First, due to the stronger-than-expected US business growth -- that is, relative to our OUS business, our prior estimated annual effective tax rate of 30.3% had to be increased to 31.5% by the end of the year. Consequently, we were forced to record a Q4 catch-up tax provision adjustment, which caused our final Q4 effective tax rate to be 35.6%. This year-to-date related catch-up adjustment effectively reduced our Q4 earnings per share by $0.04.

我們2016年第四季度的稅率為30%，高於去年同期的28.4%。有許多影響該季度利率的項目值得注意。首先，由於美國業務增長強於預期，即相對於我們的OUS業務，我們之前預計的年度有效稅率30.3%必須在年底提高到31.5%。因此，我們被迫對第四季度的稅收撥備調整進行了記錄，這導致我們第四季度的最終有效稅率為 35.6%。今年迄今為止的相關追趕調整實際上使我們第四季度的每股收益減少了 0.04 美元。

In addition, the combined effective tax rate applied against the Q4 20 -- $270 million and the $5 million charitable contribution donation was 31.1%. And finally, we were also able to reduce our Q4 tax expense by $5.2 million, or $0.09 per share, which when combined with the other items that I just noted resulted in our final Q4 tax rate of 30%.

此外，20 年第四季度的 2.7 億美元和 500 萬美元慈善捐款的綜合有效稅率為 31.1%。最後，我們還能夠將第四季度的稅收支出減少 520 萬美元，即每股 0.09 美元，與我剛才提到的其他項目相結合，我們第四季度的最終稅率為 30%。

Our average shares outstanding for Q4 rose to 54.2 million, an increase of 2.5% from the 52.9 million shares in year-ago period and up from 53.6 million in Q3 2016. The sequential increase in our weighted share count was due to the exercise of stock options and the dilutive impact that a higher stock price has on the value of stock options outstanding.

第四季度我們的平均已發行股數增至 5,420 萬股，較去年同期的 5,290 萬股增長 2.5%，較 2016 年第三季度的 5,360 萬股增長 2.5%。加權股數連續增加是由於股票行權所致期權以及較高的股價對已發行股票期權價值的稀釋影響。

Fourth-quarter GAAP net income was $215.3 million, or $3.97 per diluted share. Of this amount, $3.43 per diluted share was related to the benefit from the Philips settlement and $0.09 per diluted share came from the discrete Q4 2016 accounting stock option gain related item. This was partially offset by an expense of $0.06 per diluted share from the charitable donation. Adjusting for these three items, our adjusted earnings per share would have been $0.51, a 27.5% increase compared to the adjusted earnings per share of $0.40 in Q4 2015.

第四季度 GAAP 淨利潤為 2.153 億美元，或攤薄後每股收益 3.97 美元。其中，稀釋後每股 3.43 美元與飛利浦和解的收益相關，稀釋後每股 0.09 美元來自與 2016 年第四季度會計股票期權收益相關的獨立項目。這部分被慈善捐贈稀釋後每股 0.06 美元的費用所抵消。對這三項進行調整後，我們的調整後每股收益將為 0.51 美元，比 2015 年第四季度調整後每股收益 0.40 美元增長 27.5%。

Fiscal 2016 GAAP net income was $300.7 million, or $5.65 per diluted share. I wanted to be sure to point out that the full-year EPS benefit of the settlement payment of $3.49 is different from the quarterly benefit of $3.43, due to the different weighted average shares in the year versus the quarter. In addition, like in the fourth quarter, the full-year EPS results included the $0.06 charge for the charitable donation.

2016 財年 GAAP 淨利潤為 3.007 億美元，或攤薄後每股收益 5.65 美元。我想明確指出的是，和解付款帶來的全年每股收益 3.49 美元與季度收益 3.43 美元不同，因為當年和季度的加權平均股數不同。此外，與第四季度一樣，全年每股收益結果包括 0.06 美元的慈善捐贈費用。

Finally, the full-year results also include a benefit of $0.24 per diluted share from the new stock option gain accounting rule.

最後，全年業績還包括新股票期權收益會計規則帶來的每股攤薄收益 0.24 美元。

Adjusting for these three items, our fiscal-year 2016 earnings per share would have been $1.98, which is a 32.9% increase compared to the adjusted earnings per share of $1.49 for 2015.

對這三項進行調整後，我們 2016 財年的每股收益將為 1.98 美元，比 2015 年調整後的每股收益 1.49 美元增長 32.9%。

As of December 31, 2016, our days sales outstanding was 53, compared to 54 at the end of October and compared to 46 at the end of January 2, 2016. Inventory turns were 3.3, compared to the October level of 3.4 and the prior year-end level of 4.2.

截至 2016 年 12 月 31 日，我們的應收賬款天數為 53 天，而 10 月底為 54 天，2016 年 1 月 2 日為 46 天。庫存周轉率為 3.3，而 10 月底的水平為 3.4，之前的水平為 3.4。年終水平為4.2。

Total cash and cash equivalents as of December 31, 2016, were $306 million, compared to $132.3 million as of January 2, 2016. During 2016, excluding the $300 million settlement payment, we generated approximately $117 million in cash from operations and received $37.3 million from the exercise of stock options. During fiscal 2016, we repurchased a total of 1.4 million shares at a cost of $63.4 million.

截至 2016 年 12 月 31 日，現金和現金等價物總額為 3.06 億美元，而截至 2016 年 1 月 2 日為 1.323 億美元。2016 年期間，不包括 3 億美元的和解付款，我們從運營中產生了約 1.17 億美元的現金，並收到了 3,730 萬美元來自股票期權的行使。 2016 財年，我們總共回購了 140 萬股股票，成本為 6,340 萬美元。

Now I'd like to discuss our fiscal 2017 financial guidance, which is based on the best information we have available to us. And having said that, the business and overall economic uncertainty surrounding the future of the Affordable Care Act, as well as the administration discussions about potential US tax reform, including possible border tax considerations, make any projections at this point in time very dependent upon these unknowns.

現在我想討論一下我們的 2017 財年財務指引，該指引是基於我們所掌握的最佳信息而製定的。話雖如此，圍繞《平價醫療法案》未來的商業和整體經濟不確定性，以及政府關於潛在美國稅收改革的討論，包括可能的邊境稅考慮，使得目前的任何預測都非常依賴於這些未知數。

With that caveat, we are projecting total 2017 revenues of $752 million, including $721 million in product revenues, of which -- 21 -- excuse me, $721 million of total revenues and $31 million in royalty revenues. Included in our product revenue projection is approximately $74 million in rainbow revenues.

考慮到這一點，我們預計 2017 年總收入為 7.52 億美元，其中包括 7.21 億美元的產品收入，其中——21——對不起，總收入為 7.21 億美元，特許權使用費收入為 3100 萬美元。我們的產品收入預測中包括大約 7400 萬美元的 Rainbow 收入。

As always, our product revenue expectations are based upon certain foreign exchange assumptions. For fiscal 2017, our projected product revenues are based on an assumption of the Japanese yen/US dollar foreign exchange rate at approximately JPY1.15, the euro at $1.05, and the British pound at $1.25. We expect our GAAP 2017 product gross profit margins to be approximately 65.7%, which reflects a 50 basis-point improvement over the final fiscal-year 2016 gross profit margin of 65.2%.

一如既往，我們的產品收入預期基於某些外匯假設。對於 2017 財年，我們預計的產品收入是基於日元/美元匯率約為 1.15 日元、歐元為 1.05 美元、英鎊為 1.25 美元的假設。我們預計 2017 年 GAAP 產品毛利率約為 65.7%，比 2016 財年最終毛利率 65.2% 提高 50 個基點。

We expect our 2017 total operating expenses to be approximately $327 million and we expect to generate approximately $1.3 million in net interest income as compared to net interest expense in 2016. Based on our outlook for the fiscal-year 2017 mix of US and OUS income, including the impact of the foreign exchange rate assumptions, we expect our effective tax rate to be approximately 30.5% to 32.5%, and based on this range, we have used 31.5% in the financial guidance that we are providing today.

我們預計 2017 年的總運營支出約為 3.27 億美元，與 2016 年的淨利息支出相比，我們預計將產生約 130 萬美元的淨利息收入。根據我們對 2017 財年美國和海外收入組合的展望，考慮到匯率假設的影響，我們預計我們的有效稅率約為 30.5% 至 32.5%，基於這個範圍，我們在今天提供的財務指導中使用了 31.5%。

As you are aware, the new stock option gain accounting rule that we elected to adopt in fiscal 2016 is now required GAAP as of the first quarter of 2017. In fiscal 2016, we received a $13 million, or $0.24 per share, benefit from this new rule. In today's 2017 financial guidance, we are including a $3.4 million benefit, or $0.06 per diluted share, based on stock-option gains we have already realized at the time of our new 2017 financial guidance.

如您所知，我們在 2016 財年選擇採用的新股票期權收益會計規則現在要求從 2017 年第一季度起採用 GAAP。在 2016 財年，我們從中獲得了 1,300 萬美元，即每股 0.24 美元。新規則。在今天的 2017 年財務指引中，我們根據我們在新的 2017 年財務指引時已經實現的股票期權收益，納入了 340 萬美元的收益，或稀釋後每股 0.06 美元。

As a result of this $3.4 million benefit, we expect our first-quarter 2017 effective tax rate to be approximately 23.5%. Because we are unable to project future stock-option exercise gains, our effective tax rate for the Q2 to Q4 period will remain at the 31.5% rate that I noted earlier.

由於這 340 萬美元的收益，我們預計 2017 年第一季度的有效稅率約為 23.5%。由於我們無法預測未來的股票期權行使收益，因此第二季度至第四季度的有效稅率將保持在我之前提到的 31.5%。

We're projecting our average weighted shares outstanding for the year to be between approximately 55 million and 56 million, and based on all of these assumptions, we're now expecting that our 2017 GAAP earnings per share will be approximately $2.30.

我們預計今年的平均加權流通股數量約為 5500 萬至 5600 萬股，基於所有這些假設，我們目前預計 2017 年 GAAP 每股收益約為 2.30 美元。

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

說完，我會把電話轉回給喬。

Thank you, Mark.

謝謝你，馬克。

Just to maybe clarify, we're projecting total 2017 revenues of $752 million [included] $721 million in product revenues, of which $4 million is attributed to the nonrecurring engineering revenues and $31 million in royalty revenues. So thank you so much, Mark.

澄清一下，我們預計 2017 年總收入為 7.52 億美元，其中包括 7.21 億美元的產品收入，其中 400 萬美元來自非經常性工程收入，3100 萬美元來自特許權使用費收入。非常感謝你，馬克。

As I mentioned in the introduction, 2016 was a significant year for Masimo, with one important achievement being the Q4 formation of the new partnership agreement with Philips that settled all prior litigation and, more importantly, created a new partnership. We anticipate a measurable impact from this agreement that builds over the succeeding years, the positive effect on the adoption of our innovative technologies, and improved outcomes for patients.

正如我在簡介中提到的，2016 年對於 Masimo 來說是重要的一年，其中一項重要成就是與飛利浦在第四季度達成了新的合作夥伴協議，解決了之前的所有訴訟，更重要的是，建立了新的合作夥伴關係。我們預計該協議將在接下來的幾年中產生顯著的影響，對我們創新技術的採用產生積極影響，並改善患者的治療結果。

Including in the agreement are our rainbow products, Nomoline capnography products, 03 tissue cerebral oximetry, and SedLine brain function monitoring. As we have noted in the past, the key factor in the adoption rate of rainbow will be availability of rainbow within the monitors of major patient monitoring companies. We believe that Philips has twice the market share of the next patient monitoring company in the world. Consequently, over the next few years, we anticipate an acceleration in growth for rainbow and a boost to the adoption rate of our other technologies. Having Philips as a truly cooperative business partner in this effort is exceptionally valuable and we believe we should have a constructive working relationship with Philips moving forward.

協議中包括我們的Rainbow產品、Nomoline二氧化碳圖產品、03組織腦血氧儀和SedLine腦功能監測。正如我們過去所指出的，Rainbow 採用率的關鍵因素將是主要患者監護公司的監視器中是否有 Rainbow。我們相信，飛利浦的市場份額是全球排名第二的患者監護公司的兩倍。因此，在接下來的幾年中，我們預計 Rainbow 將加速增長，並提高我們其他技術的採用率。在這項工作中，讓飛利浦成為真正的合作業務夥伴是非常有價值的，我們相信我們應該與飛利浦建立建設性的工作關係，不斷向前發展。

This agreement is part of the reason why we elected to increase our estimated product revenue growth rate in 2017, as Mark just noted. Over the coming years, we expect the Philips agreement to continue to result in increased deployment of our technologies all over the world.

正如馬克剛才指出的，這項協議是我們選擇提高 2017 年預計產品收入增長率的部分原因。在未來幾年中，我們預計飛利浦協議將繼續促進我們的技術在世界各地的部署。

With increasing acknowledgement of the clinical value of our measurements, we are making significant inroads. We are happy to report that another major US hospital group recently has decided to upgrade to Masimo SET pulse oximetry. We expect to be able to disclose more information on this new customer in the near future.

隨著人們越來越認識到我們測量的臨床價值，我們正在取得重大進展。我們很高興地報告，美國另一家大型醫院集團最近決定升級到 Masimo SET 脈搏血氧儀。我們預計在不久的將來能夠披露有關該新客戶的更多信息。

2016 was a great year for major hospital organizations converting to Masimo SET, including Cedars-Sinai Hospital in Los Angeles, Stanford Healthcare in Palo Alto, and Walter Reed Army Hospital in Washington, DC. Our ability to convert hospitals to Masimo SET extended around the world and 2016 was a year of substantial growth for the Company in many international regions. Our global strength was evident in Q4 with growth of 20% to 40% in many outside the US regions. For fiscal 2016, total international sales for Masimo rose by nearly 12%, with very strong growth in both Latin America and Asia.

2016 年對於轉向使用 Masimo SET 的大型醫院組織來說是豐收的一年，其中包括洛杉磯的 Cedars-Sinai 醫院、帕洛阿爾託的斯坦福醫療中心和華盛頓特區的 Walter Reed Army Hospital。我們將醫院改造成 Masimo SET 的能力擴展到世界各地，2016 年是公司在許多國際地區實現大幅增長的一年。我們的全球實力在第四季度顯而易見，在美國以外的許多地區增長了 20% 至 40%。 2016 財年，Masimo 的國際總銷售額增長了近 12%，其中拉丁美洲和亞洲的增長非常強勁。

Additional evidence of our market strength is seen in the fact that we are realizing higher utilization across our installed base, with a growing number of customers adopting our new rainbow technology and sensors. Other Masimo technologies are now gaining traction with clinicians based upon their innovative and unique capabilities.

我們的市場實力的另一個證據是，我們的安裝基礎實現了更高的利用率，越來越多的客戶採用我們的新彩虹技術和傳感器。其他 Masimo 技術現在因其創新和獨特的功能而受到臨床醫生的關注。

Our ability to innovate has led to the introduction of many new products over the past 12 months, such as MightySat, Root with vital signs, O3 organ oximetry or regional oximetry, second-generation SedLine brain functioning monitoring, second-generation SpHb, ORI, and Rad 97.

我們的創新能力在過去 12 個月內推出了許多新產品，例如 MightySat、Root 生命體徵、O3 器官血氧飽和度或區域血氧飽和度、第二代 SedLine 腦功能監測、第二代 SpHb、ORI、和拉德 97。

Our new Rad 97 monitor has received a CE mark and is well positioned for success as a compact and highly versatile choice for the outpatient setting and for deployment in developing regions of the world. The Rad 97 has a smaller form factor than our established Radical 7 monitor. In addition to a rotatable screen, this monitor also has extensive communications abilities, including Wi-Fi, Bluetooth, nurse call interface, ethernet, an optional built-in camera for telemedicine, and telepresence with Patient SafetyNet. The Rad 97 should allow more patients to have access to our life-saving technologies.

我們的新型 Rad 97 監護儀已獲得 CE 標誌，作為一款緊湊且高度通用的選擇，適合門診環境和世界發展中地區的部署，它已取得成功。 Rad 97 的外形比我們現有的 Radical 7 顯示器更小。除了可旋轉屏幕外，該監視器還具有廣泛的通信功能，包括 Wi-Fi、藍牙、護士呼叫接口、以太網、用於遠程醫療的可選內置攝像頭以及患者安全網的遠程呈現。 Rad 97 應該讓更多患者能夠使用我們的救生技術。

As we extend continuous monitoring to the general floor setting, our Root with vital signs monitor is an important component of this strategy. Root with vital signs enables clinicians to capture blood pressure, temperature, oxygen saturation, and pulse rate with a single monitor unit that is also upgradeable to incorporate rainbow and other Masimo measurements. Further, we have now entered into multiple collaborative agreements with third parties for some novel measurements that can be plugged into Root. We expect to see market introduction of at least two of these technologies within the next six months.

當我們將持續監測擴展到一般樓層設置時，我們的 Root 生命體徵監測器是該策略的重要組成部分。 Root 具有生命體徵功能，使臨床醫生能夠通過單個監測裝置捕獲血壓、體溫、血氧飽和度和脈搏率，該監測裝置還可升級以納入 Rainbow 和其他 Masimo 測量值。此外，我們現在已經與第三方簽訂了多項合作協議，以實現一些可以插入 Root 的新穎測量。我們預計在未來六個月內將至少看到其中兩種技術被引入市場。

Another important new product in the early stages of adoption is our O3 organ oximetry tissue and cerebral oximetry monitor. This measurement is unique in that it can be hosted on an existing Root monitor and is responsive to changes in cerebral oxygen saturation. O3 sensor is useable with Root and further extends the utility of the device for monitoring patients during surgery or in the critical care setting.

處於早期採用階段的另一個重要新產品是我們的 O3 器官血氧飽和度組織和腦血氧飽和度監測儀。該測量的獨特之處在於它可以託管在現有的 Root 監視器上，並且對腦氧飽和度的變化做出響應。 O3 傳感器可與 Root 一起使用，並進一步擴展了該設備在手術期間或重症監護環境中監測患者的實用性。

Early adoption of O3 has been encouraging and this product is helping to drive sales of Root, which can be used to incorporate other Masimo monitors such as Nomoline capnography or SedLine brain function monitoring and take advantage of its connectivity hub to connect legacy devices in every room to the EMR and make the data flow and more useful.

O3 的早期採用令人鼓舞，該產品有助於推動 Root 的銷售，Root 可用於整合其他 Masimo 監視器，如 Nomoline 二氧化碳圖或 SedLine 腦功能監測器，並利用其連接集線器連接每個房間的舊設備到電子病歷，讓數據流動起來，更有用。

Our SedLine brain function monitor was upgraded significantly last year to version 2.0 and is being sold outside the US. SedLine 2.0 includes advanced capabilities for filtering out motion artifact using methods similar to our SET technology and with the ability to work on geriatric patients. As with O3, SedLine works with Root, which can be useful in the OR, as well as other settings.

我們的 SedLine 腦功能監測儀去年大幅升級至 2.0 版本，並在美國境外銷售。 SedLine 2.0 包括使用與我們的 SET 技術類似的方法過濾運動偽影的高級功能，並且能夠對老年患者進行治療。與 O3 一樣，SedLine 與 Root 一起使用，這在 OR 以及其他設置中很有用。

Finally, our newest measurement, Oxygen Reserve Index, or ORI, is a relative index that correlates with changes to PAO -- PAO2 for patients on supplemental oxygen and can provide an early warning for imminent desaturation, which can be very valuable in many situations, including to anesthesiologists performing intubation and extubation procedures.

最後，我們最新的測量值，氧氣儲備指數 (ORI)，是一個相對指數，與補充氧氣患者的 PAO（PAO2）變化相關，可以為即將發生的飽和度降低提供早期預警，這在許多情況下非常有價值，包括麻醉師執行插管和拔管程序。

All of these newer products have significant growth potential as clinicians become more familiar with their benefits from improving patient outcomes. A specific example of Masimo technology improving outcomes has been seen in the results of a recent, large, 18,000-patient study at University Hospital Center of Limoges, France, involving the entire hospital, which investigated the value of a combination of PVI and SpHb monitoring for improving mortality. For this study, Masimo Radical 7 rainbow SET pulse co-oximeters were installed in all operating rooms, recovery rooms, and intensive care units.

隨著臨床醫生越來越熟悉這些新產品改善患者治療效果的益處，所有這些新產品都具有巨大的增長潛力。 Masimo 技術改善結果的具體例子可以在法國利摩日大學醫院中心最近一項涉及 18,000 名患者的大型研究的結果中看到，該研究涉及整個醫院，該研究調查了 PVI 和 SpHb 監測相結合的價值以提高死亡率。在本研究中，所有手術室、康復室和重症監護室均安裝了 Masimo Radical 7 Rainbow SET 脈搏血氧儀。

In addition, the Radical 7s were connected to Masimo Patient SafetyNet for trend data collection. The study showed results of a 30% and 25% mortality reduction at 30 days and 90 days after surgery, respectively, for the group that had SpHb and PVI monitoring. The researchers concluded that monitoring SpHb and PVI integrated in a vascular filling algorithm allowed earlier transfusion and reduces mortality at a scale of a whole hospital with different clinical practices and unselected patients.

此外，Radical 7s 連接到 Masimo Patient SafetyNet 以收集趨勢數據。研究顯示，進行 SpHb 和 PVI 監測的組在術後 30 天和 90 天的死亡率分別降低了 30% 和 25%。研究人員得出的結論是，在血管充盈算法中集成監測 SpHb 和 PVI 可以更早地進行輸血，並在整個醫院的不同臨床實踐和未經選擇的患者範圍內降低死亡率。

If these results can be repeated at other institutions, it should create a standard-of-care argument for SpHb and PVI.

如果這些結果可以在其他機構重複，那麼它應該為 SpHb 和 PVI 提供護理標準論據。

Regarding our outlook, now that we are on the final stretch of our 10-year plan, we are rolling out a new five-year business plan, which, as I noted earlier, we will share at our upcoming investor day here in Irvine on May 9. The day will also include a product fair and demonstrations of our advanced technologies.

關於我們的前景，現在我們正處於十年計劃的最後階段，我們正在推出一項新的五年業務計劃，正如我之前指出的，我們將在即將於歐文舉行的投資者日上分享該計劃5 月 9 日。這一天還將包括產品博覽會和我們先進技術的展示。

In closing, our 2016 financial results exceeded our projections and have provided us with confidence as we enter 2017. We're excited about our new five-year plan and look forward to sharing it with you all in May. We are excited about fulfilling our mission to improving patient outcomes and reduce the cost of care with our breakthrough noninvasive monitoring technologies. We hope to see you in Irvine in May.

最後，我們 2016 年的財務業績超出了我們的預測，並為我們進入 2017 年提供了信心。我們對新的五年計劃感到興奮，並期待在 5 月份與大家分享。我們很高興能夠通過突破性的無創監測技術來實現改善患者治療效果並降低護理成本的使命。我們希望五月在爾灣見到您。

With that, we'll open the call to questions. Operator?

至此，我們將開始提問。操作員？

(Operator Instructions). Tao Levy, Wedbush Securities.

（操作員說明）。陶·利維，韋德布什證券。

Thanks. Good afternoon, everyone. So maybe we can just touch on the guidance on the revenue side. What are you assuming in there regarding sort of rainbow sales? And also, how should we think about how the agreement with Philips rolls out? How much of that agreement do you feel like is contained within your 2017 guidance? And the question is kind of related to, if it's just a little bit, are we going to see potentially more of a benefit from that agreement in 2018 and following years?

謝謝。大家下午好。因此，也許我們可以只討論收入方面的指導。您對彩虹銷售有何假設？另外，我們應該如何考慮與飛利浦的協議如何實施？您認為 2017 年指南中包含了多少該協議？問題是，如果只是一點點，我們是否會在 2018 年及接下來的幾年中看到該協議帶來更多潛在好處？

Yes. Sure. First of all, we're projecting about a 10% increase in our rainbow revenues, and as for Philips, while we delivered better than 10% growth in 2016, you may recall we had projected 6% to 7% increase in our revenues in 2016, so because of Philips, we actually increased our projections in 2017 where we are now projecting an 8% increase in revenues. So we increased our revenue projections by 1%. We hope to beat that, but conservatively these are numbers we feel good about.

是的。當然。首先，我們預計 Rainbow 收入將增長 10% 左右，而對於飛利浦來說，雖然我們在 2016 年實現了超過 10% 的增長，但您可能還記得，我們​​曾預計 2016 年收入將增長 6% 至 7%。 2016 年，由於飛利浦，我們實際上提高了 2017 年的預測，目前預計收入將增長 8%。因此我們將收入預測上調了 1%。我們希望能夠超越這個目標，但保守地說，這些數字讓我們感覺良好。

And I think, Tao, as far as your final question, the Philips agreement should hopefully accelerate as the years continue because of not only rollout of new products with the technology, but also rollout of other technologies. So while Philips has rainbow now in their high-end monitor and one of their low-end monitors, rainbow is going into many other products, and then with a strong partnership, we expect further penetration in the market than we've had historically with them, and yet we have a new opportunity, too, with Philips integrating SedLine brain function monitoring, 03 regional oximeter, and the Nomoline capnography technology. So we think hopefully we can increase the base and the growth rate over the next few years.

我認為，Tao，就你的最後一個問題而言，飛利浦協議有望隨著時間的推移而加速，因為不僅推出了採用該技術的新產品，而且還推出了其他技術。因此，雖然飛利浦現在在其高端顯示器和其中一款低端顯示器中配備了 Rainbow，但 Rainbow 正在進入許多其他產品，然後通過強大的合作夥伴關係，我們預計該市場的滲透率將比我們歷史上的水平進一步提高但我們也有一個新的機會，飛利浦集成了 SedLine 腦功能監測、03 區域血氧計和 Nomoline 二氧化碳圖技術。因此，我們希望未來幾年能夠提高基數和增長率。

Larry Keusch, Raymond James.

拉里·科伊什，雷蒙德·詹姆斯。

Good afternoon, everyone. So, Mark, I wanted to touch on product gross margin. I think if I caught this correctly you said you were looking forward to increase 50 basis points in 2017. Could you just help me -- so, A, is that correct? And then, B, can you just help me bridge if you were to take out the FX benefit from product gross margin in 2016 what the actual underlying gross margin expansion is that you are looking for? So that's question one.

大家下午好。所以，馬克，我想談談產品毛利率。我想，如果我沒理解錯的話，你說過你希望在 2017 年加息 50 個基點。你能幫我一下嗎——那麼，A，這是正確的嗎？然後，B，如果您要從 2016 年的產品毛利率中扣除外匯收益，您能幫我解釋一下您正在尋找的實際潛在毛利率擴張是什麼嗎？這是問題一。

And then, question two, DSOs, you did 54 days in the third quarter. I think you said you did 53 this quarter. I know in the 2Q it was down around 47 days, so still a little bit elevated from where we were kind of at the mid-point of the year, so again if you could provide any color as to where you think that can go and why you've elevated.

然後，問題二，DSO，你們在第三季度做了 54 天。我想你說過這個季度你做了 53 件。我知道第二季度下降了大約 47 天，所以與今年中點的情況相比仍然略有上升，所以如果您能提供任何顏色來說明您認為可以去往的地方，為什麼你提升了。

Sure, Larry. Let me take the first one first, on gross profit margins. As I said earlier, we ended up -- even though the fourth quarter was obviously a very, very strong 66.5%, the full-year number was 62.5%, and if you look at that full-year number of 62.5%, approximately 40 bps was included relative to favorable FX rates. So if you exclude that, you walk back down to about 64.8% versus the 65.5% guidance that we -- sorry, 65.7% guidance that we provided today. So excluding FX, we're actually looking for about a 90-bip increase year over year.

當然，拉里。讓我先談談第一個，毛利率。正如我之前所說，我們最終得出的結果是——儘管第四季度顯然是非常非常強勁的 66.5%，但全年的數字是 62.5%，如果你看看全年的 62.5% 數字，大約有 40基點是相對於有利的外匯匯率而言的。因此，如果您排除這一點，您會回落至約 64.8%，而我們今天提供的指導為 65.5%，抱歉，為 65.7%。因此，不包括外匯，我們實際上預計同比增長約 90 個基點。

Okay. Perfect.

好的。完美的。

And then on the days sales outstanding question, yes, if you remember the last couple quarters, we've highlighted the increase essentially from the high 40s to the low 50s was as a result of the large customer in Saudi Arabia that we alluded to in the prepared remarks today, and so we constantly are monitoring that situation.

然後，在銷售懸而未決的問題上，是的，如果您還記得過去幾個季度，我們強調了從 40 多歲到 50 多歲的低增長基本上是由於我們在沙特阿拉伯的大客戶所提到的。今天準備好的發言，因此我們一直在關注這一情況。

The good news is that the days have not increased at all, and we're certainly hopeful that things will come to some positive outcome in the next couple of months or quarters in that part of the region of the world so that we will get repaid on some of the receivables that we have outstanding. Our situation, obviously, is no different than the rest of the world and we're still very, very confident that ultimately things will get resolved there and that ultimately we will receive payment on those receivables.

好消息是，天數根本沒有增加，我們當然希望世界該地區的未來幾個月或幾個季度能夠取得一些積極成果，以便我們得到回報我們尚未清償的一些應收賬款。顯然，我們的情況與世界其他地區沒有什麼不同，我們仍然非常非常有信心，事情最終會得到解決，最終我們將收到這些應收賬款的付款。

It's somewhat analogous to four or five years ago. We had the same situation with the countries of southern Europe. If you remember, they were going through some very difficult times. They ultimately told us they weren't sure when they were going to pay us, but they would pay us, and sure enough, two to three years later we ended up getting paid. So, we don't know when that payment will come relative to the Saudi customer, but we're hopeful that we'll see something soon.

這與四五年前有些相似。我們與南歐國家也有同樣的情況。如果你還記得的話，他們正在經歷一些非常困難的時期。他們最終告訴我們，他們不確定何時向我們付款，但他們會向我們付款，果然，兩三年後我們最終得到了付款。因此，我們不知道沙特客戶的付款何時會到，但我們希望很快就能看到進展。

Okay, perfect. And if I could just sneak one last one in here quickly, just obviously flu has been spiking up here lately. How are you thinking about that relative to the first quarter? I believe there is a fairly easy comp versus a year ago, but just hoping that you can help calibrate us a little bit on kind of what you are building in for flu?

好的，完美。如果我能快速地把最後一顆偷進這裡的話，顯然流感最近在這裡加劇了。與第一季度相比，您對此有何看法？我相信與一年前相比，有一個相當簡單的比較，但只是希望你能幫助我們校準一下你為流感所做的準備？

If you're talking about the relatively easy comp relative to the flu season, I think you might be right because last year there was a late flu season, where I think this year people would categorize it as more of a normal flu season.

如果您談論的是相對於流感季節相對容易的補償，我認為您可能是對的，因為去年有一個較晚的流感季節，我認為今年人們會將其歸類為更多正常的流感季節。

And you're also right that the data that we've seen has suggested a very strong flu season this year. In general, as you know, Larry, that is -- that provides some anecdotal support to our numbers, plus or minus a little bit, but really our core revenue strength continues to come from the successful utilization of those 1.5 million drivers all over the world, plus the impact of new customers that Joe alluded to in his comments. So the flu season, again, is helpful or hurtful essentially on the fringe. It really doesn't drive the overall movement of our topline revenues that much.

您說得也對，我們看到的數據表明今年的流感季節非常嚴重。總的來說，拉里，您知道，這為我們的數字提供了一些軼事支持，略有增加或減少，但實際上我們的核心收入優勢仍然來自於全球 150 萬司機的成功利用。世界，再加上喬在評論中提到的新客戶的影響。因此，流感季節本質上是有利還是有害。它確實並沒有多大程度地推動我們總收入的整體變動。

Okay. Very good. Thank you, guys.

好的。非常好。感謝你們。

Bill Quirk, Piper Jaffray.

比爾·奎克，派珀·杰弗裡。

So first question, I guess, is just picking up off of one of Larry's. So, Mark, the FX-neutral 90 basis-point gross margin improvement in 2017, I guess, should we read into that, combined with your favorable mix comments, that the RD sensor rollout is going at least as well as expected, perhaps better than expected?

所以我想第一個問題只是從拉里的一個問題中摘取的。因此，馬克，2017 年外匯中性毛利率提高了 90 個基點，我想，我們是否應該考慮一下這一點，結合您有利的混合評論，RD 傳感器的推出至少與預期一樣好，也許更好比預期的？

In essence, not really. That's the good news. We have just begun, in fact, the rollout of the RD product that we've been talking about and we expect that product to continue, obviously, much more sizable influence on our 2017 numbers.

本質上，並非如此。這是個好消息。事實上，我們剛剛開始推出我們一直在談論的研發產品，我們預計該產品顯然將繼續對我們 2017 年的數字產生更大的影響。

But having said that, we're expecting a relatively modest transition in the first year. We think that will accelerate in years two, three, and four, so certainly there's a little bit of benefit of the RD transition in the product gross margin numbers that we just provided to you, but it's not, honestly, a huge part of that. Most of that increase comes from the collective continuing benefits of our value engineering efforts, as well as other cost-reduction initiatives that we have going on around the world in that area of cost of sales delivery.

但話雖如此，我們預計第一年的轉變相對溫和。我們認為這將在第二年、第三年和第四年加速，所以我們剛剛向您提供的產品毛利率數字中，研發轉型肯定會帶來一些好處，但老實說，這並不是其中的很大一部分。 。大部分增長來自我們價值工程工作的集體持續效益，以及我們在世界各地在銷售交付成本領域開展的其他成本降低舉措。

Okay. I appreciate the color, thank you. And then on the remaining $30 million from Philips, Joe, I think I heard you say at the tail end of your comments that I think $4 million of that would be recognized in 2017. So I guess, one, could you just clarify if I heard you correctly? And then secondly, if I did, how should we think about, I guess, the pace of that $30 million? Is it going to be fairly ratably over the next several years or are there any boluses here we should know about? Thanks.

好的。我很欣賞這個顏色，謝謝。然後，關於飛利浦剩下的 3000 萬美元，喬，我想我聽到您在評論的最後說，我認為其中 400 萬美元將在 2017 年得到認可。所以我想，第一，您能否澄清一下，如果我你沒聽錯吧？其次，如果我這樣做了，我想我們應該如何考慮那 3000 萬美元的進度？在接下來的幾年裡它會相當明顯嗎？或者這裡有什麼我們應該知道的推注藥物嗎？謝謝。

I think we expect $30 million over the next three years and it won't be linear. Obviously, we have $4 million that we believe will come in this year and we're still looking at what it will be for 2018 and 2019, but it will be over the next three years.

我認為我們預計未來三年的收入將達到 3000 萬美元，而且不會是線性的。顯然，我們相信今年會收到 400 萬美元，我們仍在考慮 2018 年和 2019 年的金額，但會在未來三年內到位。

Okay. Got it. Thank you.

好的。知道了。謝謝。

Brian Weinstein, William Blair.

布萊恩·韋恩斯坦、威廉·布萊爾。

Thanks for taking the question. I apologize for any background noise here. I'm just curious about the utilization per driver this year. It looks like the installed base was up about 6% or so, and from the best we can tell, it looks like utilization was up closer to maybe 10% or so. I'm just trying to understand the difference there. Why do you think you guys are seeing an increase in utilization per driver (multiple speakers)? Thanks.

感謝您提出問題。對於這裡的任何背景噪音，我深表歉意。我只是好奇今年每個司機的利用率。看起來安裝基數增加了約 6% 左右，而據我們所知，利用率似乎接近 10% 左右。我只是想了解其中的區別。您認為為什麼每個驅動程序（多個揚聲器）的利用率有所增加？謝謝。

I believe it's a mixture of items. One is a census increase that we saw in 2016 in the US compared to 2015. The other is we think customers are recognizing the limitations of the reprocessed sensors from third parties and purchasing more of their sensors from us, and also new customers with higher consumables business orientation.

我相信它是多種物品的混合物。一是我們在 2016 年看到美國人口普查數量較 2015 年有所增加。二是我們認為客戶正在認識到第三方再處理傳感器的局限性，並從我們這裡購買更多傳感器，而且新客戶也擁有更高的消耗品業務導向。

Okay. That's helpful. And then, sorry to go back to something that you might have said before on rainbow, but there are minimums in the Philips agreement, as I recall. Is that what you assumed in your guidance are the minimums? And it looks like rainbow and SpHb specifically was down sequentially. I believe the Saudi Arabia comments were year over year, but not -- was there anything that impacted kind of the sequential comp on rainbow? Thanks.

好的。這很有幫助。然後，很抱歉回到您之前可能在 Rainbow 上說過的話，但據我記得，飛利浦協議中有最低要求。這是您在指導中假設的最低限度嗎？看起來 Rainbow 和 SpHb 具體是依次下降的。我相信沙特阿拉伯的評論逐年增加，但不是——有什麼影響彩虹的連續比較嗎？謝謝。

I think excluding Saudi Arabia our rainbow revenues were up and SpHb specifically was up, if you look at it from a revenue percentage, about 23%. If you look at it from a sensor volume basis, about 50%.

我認為，排除沙特阿拉伯，我們的彩虹收入增加了，特別是 SpHb，如果你從收入百分比來看，大約增加了 23%。如果從傳感器體積來看，大約為 50%。

I was referring to sequential. I thought they may be down sequentially, but we can go over that, I guess, off-line. But what you assumed in the rainbow guidance for next year, does that reflect the minimum contractual royalty -- the contractual amount that you have for Philips or is there something above that that you are assuming in your rainbow number?

我指的是順序。我認為它們可能會按順序下降，但我想我們可以離線進行。但是，您在明年的彩虹指導中所假設的，是否反映了最低合同特許權使用費——您與飛利浦的合同金額，或者是否有高於您在彩虹數字中假設的金額？

We really don't have a minimum contractual obligation. This is a partnership, and Philips sees the value of rainbow and they really want to get the value out to their customers.

我們確實沒有最低合同義務。這是一種合作夥伴關係，飛利浦看到了 Rainbow 的價值，他們真的希望將這種價值帶給客戶。

Philips has been working diligently on informatics and algorithms that can bring all the data together to give a more holistic warning to clinicians, and the rainbow parameters are essential to it because many of the measurements are orthogonal to the other measurements they had before. So, no -- I don't know if I'm answering your question.

飛利浦一直在努力研究信息學和算法，這些數據可以將所有數據整合在一起，為臨床醫生提供更全面的警告，而彩虹參數對此至關重要，因為許多測量結果與他們之前進行的其他測量結果正交。所以，不——我不知道我是否在回答你的問題。

The bottom line is we overall see about a 1% increase in our revenue year over year. Because of Philips, we think much of that actually will be rainbow related. We're being conservative with our forecast on rainbow, given that it's not a market that's out there; it's a market that's being developed, but we hope there is optionalities and hope we project it.

最重要的是，我們的收入總體上同比增長了 1% 左右。因為飛利浦，我們認為其中很多實際上都與彩虹有關。我們對 Rainbow 的預測比較保守，因為它不是一個現成的市場。這是一個正在開發的市場，但我們希望有選擇，並希望我們能夠對其進行規劃。

Chris Lewis, ROTH Capital Partners.

克里斯·劉易斯，羅仕資本合夥人。

Joe, you mentioned in your prepared remarks about another large major hospital group potentially upgrading. I was wondering if you could provide any additional color on how big that opportunity may be and expected impact we can see from that (multiple speakers)

喬，您在準備好的發言中提到了另一家大型醫院集團可能進行升級。我想知道您是否可以提供任何額外的信息來說明這個機會有多大以及我們可以從中看到的預期影響（多個發言者）

First of all, they're not the size of Kaiser, but not too far behind. Out of respect for them for their permission to announce their name, we didn't mention it, but hopefully very soon we will.

首先，它們的體型雖然不如凱撒，但也相差不遠。出於對他們允許公佈自己名字的尊重，我們沒有提及，但希望很快我們就會提及。

But it's not just a sizable hospital system on the eastern front of the United States, but one of the top 10 hospitals in the U.S. News report, a very, very high-quality business, and 2016 was a record year for us for new hospitals, as well as renewing with hospitals, and this particular system was probably about 15%, 20% of at least the new business that we contracted. So it's quite exciting and we're hoping to announce the entity very shortly here.

但它不僅僅是美國東線的一個相當大的醫院系統，而且是美國新聞報導中排名前10的醫院之一，是一個非常非常高質量的業務，而且2016年對於我們來說是新醫院創紀錄的一年，以及與醫院續約，這個特定的系統可能至少占我們簽約的新業務的 15%、20% 左右。所以這非常令人興奮，我們希望很快在這裡宣布這個實體。

Okay. Congrats on that. And then, in terms of the installed base, it grew about 6% in 2016 over 2015. As we look ahead, how should we think about the growth rate of the installed base going forward?

好的。對此表示祝賀。然後，就安裝量而言，2016年比2015年增長了約6%。展望未來，我們應該如何看待未來安裝量的增長率？

We believe our installed base hopefully will be exceeding 200,000 units in the future, due to both the partnership with Philips, as well as many other OEMs around the world integrating Masimo technology.

我們相信，由於與飛利浦以及世界各地許多其他 OEM 廠商的合作，我們的安裝量有望在未來超過 200,000 台。

So I think the growth rate will hopefully sustain, if not increase, and the only reason I say that is because we have an assumption, which may not be exactly right, and that is that we retire whatever we shipped 10 years ago. So we know a lot of our OEMs products remain in use for 15 years or more, so as we retire the prior 10 years and those numbers are starting to look higher and higher, it makes our installed base growth seem smaller and -- which may not be true, but it is what we set out to do and we don't want to change the way we measure it.

因此，我認為增長率即使不會增加，也有望維持下去，我這麼說的唯一原因是因為我們有一個假設，這可能並不完全正確，那就是我們將淘汰 10 年前發貨的任何產品。因此，我們知道我們的許多 OEM 產品仍在使用 15 年或更長時間，因此當我們淘汰前 10 年時，這些數字開始看起來越來越高，這使得我們的安裝基數增長看起來更小，而且 - 這可能這不是真的，但這就是我們打算做的事情，我們不想改變我們衡量它的方式。

What it might end up doing, Chris, over time it may make the utilization look stronger because maybe the installed base isn't shrinking as fast as we think historically.

克里斯，它最終可能會做什麼，隨著時間的推移，它可能會使利用率看起來更強，因為安裝基礎可能不會像我們歷史上想像的那樣快速收縮。

I understand. And just one more for me, given you paid down all of your debt in the quarter and you ended the year with over $300 million in cash, can you talk about kind of cash deployment strategy, whether it's potentially getting more aggressive on the M&A front or continuing on the stock buyback plan or other avenues? Thanks.

我明白。對我來說，考慮到您在本季度償還了所有債務，並且您在年底擁有超過 3 億美元的現金，您能否談談現金部署策略，是否可能在併購方面變得更加積極或繼續股票回購計劃或其他途徑？謝謝。

Yes, of course. While I don't have an imminent deal, we haven't taken a deal to the Board, we have as part of our new five-year plan looking at M&A more strongly. Despite expected strong organic growth that we've been having and we think will continue, we think we're in a situation where acquisitions might be good for us. So to the best of my projections, I think we'll be using the cash towards acquisitions, but, again, nothing imminent and it's just a strategy for the next five years.

是的當然。雖然我沒有迫在眉睫的交易，但我們也沒有向董事會達成協議，但作為新的五年計劃的一部分，我們更加強烈地關注併購。儘管我們一直在預期強勁的有機增長，並且我們認為這種增長將持續下去，但我們認為收購可能對我們有利。因此，根據我的最佳預測，我認為我們將使用現金進行收購，但同樣，這並不是迫在眉睫的事情，這只是未來五年的戰略。

Okay. Thanks for the time.

好的。謝謝你的時間。

Thank you so much. Thank you all for joining us. I wish you all a happy Valentine's Day.

太感謝了。感謝大家加入我們。祝大家情人節快樂。

Ladies and gentlemen, thank you for participating in today's conference. You may all disconnect. Everyone, have a great day.

女士們、先生們，感謝你們參加今天的會議。你們都可以斷開連接。大家，祝你有美好的一天。