Varex Imaging Corp (VREX) 2024 Q3 法說會逐字稿

Greetings. Welcome to the Varex Imaging third-quarter fiscal year '24 earnings call. (Operator Instructions) Please note this conference is being recorded.

問候。歡迎參加 Varex Imaging '24 財年第三季財報電話會議。（操作員說明）請注意，本次會議正在錄製中。

At this time, I'll turn the conference over to Christopher Belfiore, Director of Investor Relations. Christopher, you may now begin your presentation.

這次，我將把會議交給投資人關係總監 Christopher Belfiore。克里斯托弗，你現在可以開始你的演講了。

Good afternoon, and welcome to Varex Imaging Corporation's earnings conference call for the third quarter of fiscal year 2024. With me today are Sunny Sanyal, our President and CEO; and Sam Maheshwari, our CFO. Please note that the live webcast of this conference call includes a supplemental slide presentation that can be accessed at Varex's website at vareximaging.com.

下午好，歡迎參加 Varex Imaging Corporation 2024 財年第三季財報電話會議。今天與我在一起的有我們的總裁兼執行長桑尼桑亞爾 (Sunny Sanyal)；以及我們的財務長 Sam Maheshwari。請注意，本次電話會議的網路直播包括補充幻燈片演示，可以在 Varex 網站 vareximaging.com 上存取。

The webcast and supplemental slide presentation will be archived on Varex's website. To simplify our discussion, unless otherwise stated, all references to the quarter are for the third quarter of fiscal year 2024.

網路廣播和補充幻燈片簡報將存檔在 Varex 的網站上。為了簡化我們的討論，除非另有說明，所有提及該季度的數據均指 2024 財年第三季。

In addition, unless otherwise stated, quarterly comparisons are made year over year from the third quarter of fiscal year 2024 to the third quarter of fiscal year 2023. Finally, all references to the year are to the fiscal year and not the calendar year, unless otherwise stated.

此外，除非另有說明，季度比較是從2024財年第三季到2023財年第三季的同比進行的。最後，除非另有說明，所有提及年份的內容均指財政年度而非日曆年。

Please be advised that during this call, we will be making forward-looking statements, which are predictions or projections about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. Risks relating to our business are described in our quarterly earnings release and our filings with the SEC.

請注意，在本次電話會議中，我們將做出前瞻性陳述，即對未來事件的預測或預測。這些陳述是基於目前的預期和假設，這些預期和假設存在風險和不確定性，可能導致實際結果與預期有重大差異。我們的季度收益報告和向 SEC 提交的文件中描述了與我們業務相關的風險。

Additional information concerning factors that could cause actual results to materially differ from those anticipated is contained in our SEC filings, including Item 1A, Risk Factors of our quarterly reports on Form 10-Q and our annual report on Form 10-K. The information in this discussion speaks as of today's date and we assume no obligation to update or revise the forward-looking statements in this discussion.

有關可能導致實際結果與預期結果有重大差異的因素的更多資​​訊包含在我們向 SEC 提交的文件中，包括表 10-Q 季報告和表 10-K 年度報告的第 1A 項「風險因素」。本次討論中的資訊截至今天為止，我們不承擔更新或修改本次討論中的前瞻性陳述的義務。

On today's call, we will discuss certain non-GAAP financial measures. These non-GAAP measures are not presented in accordance with, nor are they a substitute for, GAAP financial measures. We provided a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure in our earnings press release, which is posted on our website.

在今天的電話會議上，我們將討論某些非公認會計準則財務指標。這些非公認會計準則衡量指標並非依照公認會計準則財務衡量指標提出，也不能取代公認會計準則財務衡量指標。我們在我們網站上發布的收益新聞稿中提供了每項非公認會計原則財務指標與最直接可比較的公認會計原則財務指標的調節表。

I will now turn the call over to Sunny.

我現在將把電話轉給 Sunny。

Thanks, Chris. Good afternoon, everyone, and thank you for joining us for our third-quarter earnings call. Third-quarter revenues came in as expected with continued strength in our cargo inspection business, within our industrial segment. During the quarter, we continued to see customers in our medical segment adjust inventory levels, resulting in reduced demand for some medical products. We believe this is the result of our customers increasing inventory levels during the supply chain challenges over the past several years. We expect that these inventory adjustments should subside in early calendar 2025.

謝謝，克里斯。大家下午好，感謝您參加我們的第三季財報電話會議。第三季營收符合預期，我們工業部門的貨物檢驗業務持續強勁。本季度，我們繼續看到醫療部門的客戶調整庫存水平，導致某些醫療產品的需求減少。我們相信這是我們的客戶在過去幾年的供應鏈挑戰中增加庫存水準的結果。我們預計這些庫存調整應該會在 2025 年初消退。

In the quarter, gross margin was lower than anticipated, primarily as a result of unfavorable product sales mix in our industrial segment. The higher proportion of cargo equipment sales compared to service sales pressured gross margins in the quarter.

本季毛利率低於預期，主要是由於我們工業部門的產品銷售組合不利。與服務銷售相比，貨運設備銷售比例較高，對該季度的毛利率造成壓力。

In China, we continued to see softness in the third quarter as a result of the ongoing anticorruption actions by the Chinese government. While sales are down year over year, in the quarter, we saw modest improvement sequentially. We remain optimistic that the medical imaging market will improve in China and that Varex is well positioned to benefit when growth resumes. Particularly, we continue to see a desire by Chinese medical institutions to upgrade from value, or 16-slice CTs to performance or 64- and 128 slice-CTs.

在中國，由於中國政府持續採取反腐敗行動，我們在第三季繼續看到疲軟的情況。儘管銷售額同比下降，但本季我們看到環比略有改善。我們仍然樂觀地認為，中國的醫學影像市場將會改善，並且 Varex 處於有利地位，可以在恢復成長時受益。特別是，我們繼續看到中國醫療機構希望從價值型（16 層 CT）升級到高性能（64 層和 128 層 CT）。

Turning to the third-quarter results, revenue in the third quarter was down 10% year over year. Revenue in the medical segment decreased 15% year over year, while the industrial segment revenue increased 6%. Non-GAAP gross margin in the third quarter was 32%. Adjusted EBITDA in the third quarter was $23 million and non-GAAP EPS was $0.14, compared to $0.37 last year. We ended the quarter with $192 million of cash, cash equivalents, and marketable securities on the balance sheet, up $40 million compared to the third quarter of fiscal 2023.

轉向第三季業績，第三季營收年減10%。醫療板塊收入較去年同期下降15%，工業板塊收入較去年同期成長6%。第三季非 GAAP 毛利率為 32%。第三季調整後 EBITDA 為 2,300 萬美元，非 GAAP 每股盈餘為 0.14 美元，去年為 0.37 美元。截至本季末，我們資產負債表上的現金、現金等價物和有價證券為 1.92 億美元，比 2023 財年第三季增加了 4,000 萬美元。

Let me give you some insights into sales detail by modality in the quarter, compared to a five-quarter average, which we will refer to as sales trend. Sales in our medical segment were down in the quarter, driven primarily by inventory adjustment actions by our customers and lower sales in China. While sales in China improved slightly sequentially, the overall environment in China remained soft.

讓我向您介紹本季按方式劃分的銷售細節，與五個季度的平均水平相比，我們將其稱為銷售趨勢。本季我們醫療部門的銷售額下降，主要是由於客戶的庫存調整行動和中國銷售額下降所致。儘管中國的銷售季比略有改善，但中國的整體環境仍然疲軟。

Global sales of CT tubes improved slightly in the quarter and was in line with its sales trend. Sales in our radiographic modality was above its trend. Sales in our fluoroscopy, oncology, mammography, and dental modalities were all below their respective sales trends.

本季 CT 管的全球銷售量略有改善，與其銷售趨勢一致。我們的射線照相設備的銷售額高於其趨勢。我們的透視、腫瘤、乳房X光檢查和牙科設備的銷售額均低於各自的銷售趨勢。

In our industrial segment, sales of cargo inspection products remained solid, as our customers benefited from strong demand in the global security screening and cargo inspection markets. We continue to experience softness in other industrial end markets, primarily in semiconductor, electronics, and the battery inspection.

在我們的工業領域，貨物檢查產品的銷售保持穩定，因為我們的客戶受益於全球安全檢查和貨物檢查市場的強勁需求。我們持續經歷其他工業終端市場的疲軟，主要是在半導體、電子和電池檢查領域。

The markets we operate in remain challenging, including ongoing softness in China, inventory adjustments by our customers, and continued competition from Asia-based detector manufacturers. We continue to remain focused on our long-term priorities in innovation, particularly on photon counting as well as cost leadership, as we continue to expand our presence and footprint in India.

我們經營的市場仍然充滿挑戰，包括中國持續疲軟、客戶的庫存調整以及亞洲探測器製造商的持續競爭。隨著我們繼續擴大在印度的業務和足跡，我們將繼續專注於我們在創新方面的長期優先事項，特別是光子計數和成本領先。

With that, let me hand over the call to Sam.

接下來，讓我把電話轉給 Sam。

Thanks, Sunny. And hello, everyone. Our revenues in the third quarter were $209 million, slightly below the midpoint of our guidance, while non-GAAP gross margin was 32% below our guided range. Non-GAAP EPS was $0.14, slightly below the midpoint of our guided range. Third-quarter revenues decreased 10% compared to the third quarter of fiscal 2023, driven by a 15% decrease in our medical segment, in part due to continued softness in China.

謝謝，桑尼。大家好。我們第三季的營收為 2.09 億美元，略低於我們指引的中點，而非 GAAP 毛利率比我們指引低 32%。非 GAAP 每股收益為 0.14 美元，略低於我們指引範圍的中點。與 2023 財年第三季相比，第三季營收下降了 10%，這是由於我們的醫療部門下降了 15%，部分原因是中國市場持續疲軟。

Medical revenues were $149 million and industrial revenues were $60 million. Medical revenues were 71% and industrial revenues were 29% of our total revenues in the quarter. Looking at revenues by region, Americas decreased 4% compared to the third quarter of fiscal 2023, while EMEA decreased 8% and APAC decreased 17%.

醫療收入為 1.49 億美元，工業收入為 6,000 萬美元。本季醫療收入佔總收入的 71%，工業收入佔 29%。以地區來看，美洲地區營收較 2023 財年第三季下降 4%，歐洲、中東和非洲地區下降 8%，亞太地區下降 17%。

The year-over-year decline in APAC was primarily the result of lower sales in China due to the government's anticorruption campaign and investigation into its healthcare system. China accounted for 14% of overall revenues in the third quarter, compared to 18% in the third quarter of the prior fiscal year. While sales to China in the third quarter increased sequentially from the second quarter, we do not expect market conditions there to improve in the foreseeable future.

亞太地區的年減主要是由於政府的反腐敗運動和對其醫療保健系統的調查導致中國銷售額下降。中國市場佔第三季總營收的 14%，而上一財年第三季這一比例為 18%。雖然第三季對中國的銷售額較第二季連續成長，但我們預計在可預見的未來，市場狀況不會改善。

Let me now cover our results from a GAAP basis. Third-quarter gross margin was 32%, down approximately 100 basis points year over year. Operating expenses were $58 million, up $6 million compared to the third quarter of fiscal 2023. And operating income was $9 million, down $15 million from Q3 of 2023. Net earnings were $1 million and EPS was $0.03 per share, based on a fully diluted 41 million shares.

現在讓我介紹一下我們根據公認會計原則 (GAAP) 計算的結果。第三季毛利率為32%，較去年同期下降約100個基點。營運費用為 5,800 萬美元，比 2023 財年第三季增加 600 萬美元。營業收入為 900 萬美元，比 2023 年第三季減少 1,500 萬美元。基於完全稀釋後的 4,100 萬股計算，淨利潤為 100 萬美元，每股收益為 0.03 美元。

Now moving on to non-GAAP results for the quarter. Gross margin was 32%, down from 34% in the third quarter of fiscal 2023. The primary driver of the lower gross margin was decreased volume and unfavorable product mix in our industrial segment as we experienced higher equipment sales and lower service sales.

現在轉向本季的非公認會計準則業績。毛利率為 32%，低於 2023 財年第三季的 34%。毛利率較低的主要驅動因素是我們工業部門的銷售下降和不利的產品結構，因為我們的設備銷售額較高，而服務銷售額較低。

R&D spending was $22 million, up $2 million compared to the third quarter of fiscal 2023. R&D was 11% of revenues. R&D spending is expected to remain around current levels. However, R&D as a percentage of sales may fluctuate due to overall sales levels.

研發支出為 2,200 萬美元，比 2023 財年第三季增加 200 萬美元。研發佔收入的11%。研發支出預計將維持在目前水準附近。然而，研發佔銷售額的百分比可能會因整體銷售水準而波動。

SG&A expense was approximately $31 million, up $2 million compared to the third quarter of fiscal 2023. SG&A was 15% of revenues. Operating expenses were $53 million, or 25% of revenues, at the high end of our expectations for the quarter.

SG&A 費用約 3,100 萬美元，比 2023 財年第三季增加 200 萬美元。SG&A 佔營收的 15%。營運支出為 5,300 萬美元，佔營收的 25%，處於我們對本季預期的最高水準。

Operating income was $15 million, down $14 million compared to the same quarter last year. Operating margin was 7% of revenue, compared to 13% in the third quarter of fiscal 2023. During the third quarter, we saw higher losses associated with our dpiX joint venture and our investment in Micro-X, which resulted in an unusually high expense in the other income expense line.

營業收入為 1,500 萬美元，比去年同期減少 1,400 萬美元。營業利益率為營收的 7%，而 2023 財年第三季為 13%。在第三季度，我們看到與我們的 dpiX 合資企業和對 Micro-X 的投資相關的更高損失，這導致其他收入支出項目的費用異常高。

Tax expense was approximately $350,000, or 6% of pretax income compared to $5 million, or 21% in the third quarter of the prior year. The lower-than-expected tax rate was primarily the result of decreased global pretax income and favorable impacts of tax reform items and tax credits in the US. We expect a tax rate of 21% to 23% for the fourth quarter of fiscal 2024.

稅收費用約為 35 萬美元，佔稅前收入的 6%，而去年第三季的稅收費用為 500 萬美元，佔稅前收入的 21%。稅率低於預期主要是由於全球稅前收入下降以及美國稅改項目和稅收抵免的有利影響。我們預計 2024 財年第四季的稅率為 21% 至 23%。

Net earnings were $6 million, or $0.14 per diluted share, down $0.23 year over year. Average diluted shares for the quarter were 41 million on a non-GAAP basis.

淨利潤為 600 萬美元，即稀釋後每股收益 0.14 美元，年減 0.23 美元。以非公認會計準則計算，本季平均稀釋股數為 4,100 萬股。

Now turning to the balance sheet. Accounts receivable was flat compared to the second quarter of fiscal 2024 and days sales outstanding improved by 1 day to 66 days. Inventory decreased $4 million sequentially in the third quarter and days of inventory improved by 5 days to 180 days. Accounts payable increased by $1 million and days payables remained at 45 days.

現在轉向資產負債表。與 2024 財年第二季相比，應收帳款持平，應收帳款天數增加 1 天，達到 66 天。第三季庫存較上月減少 400 萬美元，庫存天數增加 5 天至 180 天。應付帳款增加了 100 萬美元，應付帳款天數維持在 45 天。

Now moving to debt and cash flow information. Net cash flow from operations was $8 million. We ended the quarter with cash, cash equivalents, and marketable securities of $192 million, up $40 million compared to the third quarter of the prior year and up $2 million compared to the second quarter of 2024.

現在轉向債務和現金流資訊。營運產生的淨現金流量為 800 萬美元。截至本季末，我們的現金、現金等價物和有價證券為 1.92 億美元，比去年第三季增加 4,000 萬美元，比 2024 年第二季增加 200 萬美元。

Please note that $192 million includes $156 million of cash and cash equivalents, and $35 million of marketable securities. Gross debt outstanding at the end of the quarter was $447 million and debt net of $192 million of cash and marketable securities was $255 million.

請注意，1.92 億美元包括 1.56 億美元的現金和現金等價物，以及 3,500 萬美元的有價證券。本季末未償債務總額為 4.47 億美元，扣除 1.92 億美元現金及有價證券後的債務淨額為 2.55 億美元。

Adjusted EBITDA for the quarter was $23 million or 11% of sales. Our trailing 12 months adjusted EBITDA was $105 million and our net debt leverage ratio was approximately 2.4 times on a trailing 12-month basis.

該季度調整後 EBITDA 為 2,300 萬美元，佔銷售額的 11%。我們過去 12 個月調整後的 EBITDA 為 1.05 億美元，我們過去 12 個月的淨債務槓桿率約為 2.4 倍。

Now moving on to the outlook for the fourth quarter. We continue to navigate a challenging demand environment due to softness in China, inventory adjustments by certain customers, and continued competition from Asia-based detector manufacturers. In light of this environment, guidance for the fourth quarter is revenues are expected between $190 million and $210 million; and non-GAAP earnings per diluted share are expected between $0.00 and $0.15.

現在轉向第四季的前景。由於中國市場疲軟、某些客戶的庫存調整以及來自亞洲探測器製造商的持續競爭，我們繼續應對充滿挑戰的需求環境。鑑於這種環境，第四季度的指導收入預計在 1.9 億美元至 2.1 億美元之間；非 GAAP 每股攤薄收益預計在 0.00 美元至 0.15 美元之間。

Our expectations are based on non-GAAP gross margin in a range of 33% to 34%; non-GAAP operating expenses in a range of $53 million to $54 million; interest and other expense, net in a range of $7 million to $8 million; tax rate of about 21% to 23% for the fourth quarter; and non-GAAP diluted share count of about 41 million shares.

我們的預期是基於非 GAAP 毛利率在 33% 至 34% 之間；非公認會計準則營運費用在 5,300 萬美元至 5,400 萬美元之間；利息和其他費用淨額在 700 萬至 800 萬美元之間；第四季稅率約為21%至23%；非公認會計準則稀釋後股數約 4,100 萬股。

With that, we'll now open the call for your questions.

現在，我們將開始電話詢問您的問題。

Thank you. We'll now be conducting a question-and-answer session. (Operator Instructions) Young Li, Jefferies.

謝謝。我們現在將進行問答環節。（操作員指示）Young Li，Jefferies。

I guess to start, wanted to get a little bit more color on China. I mean, it's moderately sequentially improved, still down year over year, but seemed to be better than last quarter. So it kind of bottomed last quarter. Just your comment on not seeing any improvements in the foreseeable future in China. Can you maybe reconcile that a little bit versus it's been a year since the anticorruption campaign.

我想首先是想對中國有更多的了解。我的意思是，它連續適度改善，仍然同比下降，但似乎比上季度要好。所以上季它就觸底了。只是您對中國在可預見的未來看不到任何改善的評論。您能否將這一點與反腐敗運動已經過去一年的時間進行調和一下。

Eventually it's going to go away. There's talk about stimulus in China as well, although we might not know all the details. And then also your comment on the competitive pressures there in APAC? Maybe you can just help us understand the China comment a little bit more?

最終它會消失。儘管我們可能不知道所有細節，但中國也有關於刺激措施的討論。您對亞太地區的競爭壓力有何評論？也許你可以幫助我們更多地理解中國的評論？

Hey, Young. This is Sunny. I'll get started and ask Sam to give a little bit more color. So we did see sequential -- slight uptick sequentially in our orders and sells from China, but that we don't see that as a trend for the next few quarters. As we've said, the effects of the audits are still continuing. However, look, as we go into next year, we expect that this will start to taper off. But for now in the foreseeable future, we don't see a significant movement there.

嘿，年輕。這是陽光明媚。我會開始請 Sam 提供更多的顏色。因此，我們確實看到來自中國的訂單和銷售量連續略有上升，但我們不認為這是未來幾季的趨勢。正如我們所說，審計的影響仍在持續。然而，隨著明年的到來，我們預計這種情況將開始逐漸減少。但就目前而言，在可預見的未來，我們看不到那裡有重大變化。

The stimulus by itself, it's -- there's a lot of things undefined about the stimulus program. So we are not seeing any direct impact of that yet. However, for us, any investment in healthcare that impacts -- that can have a positive impact on buying of equipment is good for us. So overall, on balance, we would say that the stimulus program should be good for us. But we don't have any indication of when that will kick in, in terms of having an effect on orders and sales for us.

就刺激方案本身而言，刺激方案還有很多未定義的內容。所以我們還沒有看到任何直接影響。然而，對我們來說，任何能夠對設備購買產生正面影響的醫療保健投資都對我們有利。因此，總的來說，我們會說刺激計劃應該對我們有利。但我們沒有任何跡象表明這種情況何時會對我們的訂單和銷售產生影響。

And then in terms of the competition from Asia-Pacific players, this is, it's -- we've talked about the competitive intensity in detectors in the past with Asian players. And we're just seeing continued intensity of competition there, particularly in the low end modalities such as radiographic, dental. And that's in a market where demand is soft and muted. This is not unusual that we find more aggressiveness from our competitors in detectors.

然後就亞太地區玩家的競爭而言，我們過去已經討論過亞洲玩家在探測器方面的競爭強度。我們看到那裡的競爭持續激烈，特別是在射線照相、牙科等低端醫療領域。這是在需求疲軟且低迷的市場中。我們發現競爭對手在探測器方面更具侵略性，這並不罕見。

This is Sam. I'd just like to add to what Sunny said. Even though there was a sequential improvement in this last quarter from China, but we are not seeing it as a durable pattern. Plus while stimulus is positive, there's also been other news that the government there has extended or expanded the anticorruption campaign from one year to three years.

這是薩姆。我想補充一下 Sunny 所說的內容。儘管中國在上個季度出現了連續改善，但我們並不認為這是一種持久的模式。此外，雖然刺激措施是積極的，但還有其他消息稱，政府已將反腐敗行動從一年延長或擴大到三年。

And you are right that we are now one year done with the campaign, but with this new knowledge that we have for a three-year campaign in a way. So that gives us some sort of a pause. And so we are expecting that the China business -- we are not expecting China business to see a meaningful improvement in the foreseeable future.

你是對的，我們現在已經完成了一年的活動，但在某種程度上，我們有了新的知識來進行為期三年的活動。這讓我們暫停了一下。因此，我們預計中國業務在可預見的未來不會出現有意義的改善。

Okay. Great. Appreciate the color there. I guess for the follow-up, I was wondering if you can provide any early qualitative thoughts for fiscal '25. It seems like on the medical side there, some of the inventory pressures might be easing. China is still a little bit of a black box, but industrial seems to be doing well. So any high-level comments on fiscal '25 would be really helpful.

好的。偉大的。欣賞那裡的顏色。我想對於後續行動，我想知道您是否可以為 25 財年提供任何早期定性想法。似乎在醫療方面，部分庫存壓力可能正在緩解。中國仍然有點黑盒子，但工業似乎表現良好。因此，任何關於 25 財年的高層評論都會非常有幫助。

Yeah, sure, Young. It's a bit too soon for FY25 for us, but I would try to provide, or I would try to say that China has been -- China business has now been almost 12 months that it has been operating at a low level. So from that perspective, we expect '25 versus '24, we are not seeing -- we are not expecting a whole lot of meaningful improvement there.

是的，當然，楊。對我們來說，25 財年還為時過早，但我會盡力提供，或者我會嘗試說，中國業務一直在低水平運行，現在已經有近 12 個月了。因此，從這個角度來看，我們預計「25」與「24」相比，我們沒有看到——我們預計不會有很多有意義的改進。

However, on the destocking side or the inventory normalization side, as you said, it's supposed to be a temporary phenomenon. And as Sunny said in his prepared remarks, that we are expecting that situation to improve over there from the beginning of 2025.

但是，從去庫存方面或庫存正常化方面來說，正如你所說，這應該是一個暫時的現象。正如 Sunny 在他準備好的演講中所說，我們預計從 2025 年初開始，那裡的情況將會有所改善。

So at this point, we are expecting that there ought to be a gradual improvement and '25 ought to be slightly better than '24. But the China situation continues. And so we are not baking that in for '25 at this point.

因此，在這一點上，我們預計應該會逐步改善，並且「25」應該會比「24」稍好一些。但中國的情況仍在持續。因此，我們目前不會將其納入 25 年。

Suraj Kalia, Oppenheimer.

蘇拉吉·卡利亞，奧本海默。

Hi, Sunny and Sam. This is actually Jacob on for Suraj. Thank you for taking our questions. So just quickly coming back on the topic of China for a little bit of granularity. You've mentioned inbound orders being the biggest indicator on your end of things moving into a positive direction. So just wondering what, if anything, had changed from 2Q to Q3? And I know you said in the foreseeable future, no improvement, but how does this push out expectations as we look past this fiscal year?

嗨，桑尼和山姆。這實際上是雅各替補蘇拉傑。感謝您接受我們的提問。那麼，我們就快速回到中國這個話題，稍微詳細一點。您提到入庫訂單是您的事情朝著正面方向發展的最大指標。所以只是想知道從第二季到第三季發生了什麼變化（如果有的話）？我知道你說過在可預見的未來不會有任何改善，但是當我們回顧本財年時，這會如何推動預期？

Yeah. So as I said, Jacob, that in terms of order pattern and sales, yes, it did improve a little bit, but again, we are not seeing a durable pattern here that the orders are continuing to improve. So I think they are not worsening, but they have kind of stabilized at the low levels. And we are obviously hoping for order pattern and sales to improve on a sustained basis, but that's not what we are seeing. So we just want to say that one quarter data point is not an indicator for a sustained improvement here.

是的。正如我所說，雅各布，就訂單模式和銷售而言，是的，確實有所改善，但同樣，我們沒有看到訂單持續改善的持久模式。所以我認為它們並沒有惡化，但已經穩定在低水平。我們顯然希望訂單模式和銷售持續改善，但這並不是我們所看到的。因此，我們只想說，四分之一的數據點並不是持續改善的指標。

And going into the next year, at this point, we are expecting that the next year is probably be in line with where FY24 has been for us for China. We are not expecting a significant improvement there. But we'll see. We'll monitor the situation. It is possible after six or nine months things improve, but this is where we are as of now. And we are just expecting that this current situation in China to continue at these low levels.

進入明年，我們預計明年可能與 2024 財年中國的情況一致。我們預計不會有顯著改善。但我們會看到。我們會監視情況。六到九個月後情況可能會有所改善，但這就是我們目前的情況。我們只是預計中國目前的情況將繼續保持在較低水準。

Great. Thank you. And then just one quick question on the traction you see in industrial. You mentioned that it's driven by cargo with industrial softness outside of cargo. Could you remind us the percentage of industrial that is cargo and maybe what indications of stability there you see going forward?

偉大的。謝謝。然後是一個關於你在工業領域看到的吸引力的簡單問題。你提到它是由貨物以外的工業軟性貨物驅動的。您能否提醒我們工業貨物的百分比以及您認為未來穩定的跡像是什麼？

Yeah, so industrial business grew quite a bit last year. And this year also, we expect it to grow over last year. So there is a decent bit of traction there. Within industrial, though, there are pockets, particularly in semiconductors and electronics, where we've been seeing some softness, predominantly because of the capacity digestion that happened -- the capacity being digested as it was shipped. So we are seeing some softness there in the last quarter, this quarter. However, as we mentioned, cargo business is strong and we have reasonably good visibility for that strength to continue over the next few quarters for sure.

是的，去年工業業務成長了很多。今年，我們預計它也會比去年有所成長。所以那裡有相當大的吸引力。不過，在工業領域，特別是在半導體和電子產業，我們看到了一些疲軟的情況，這主要是由於產能消化所發生的——產能在發貨時被消化。因此，我們在上個季度和本季看到了一些疲軟的情況。然而，正如我們所提到的，貨運業務強勁，我們有相當好的預見性，這種強勁勢頭肯定會在未來幾季持續下去。

So cargo business, we have disclosed full-year fiscal '23 numbers for cargo area previously, although that cargo business is proportion in our overall FY -- fiscal year sales has been increasing. I think you just need to give us one more quarter when we complete our full year and be able to disclose those proportions to you. But we did disclose FY23 previously, and we expect in FY24 cargo business proportion would be much higher than what it was in '23.

因此，貨運業務，我們之前已經披露了 23 財年貨運區域的全年數據，儘管貨運業務在我們整個財年中所佔的比例——財年銷售額一直在增加。我認為當我們完成全年工作時，您只需要再給我們一個季度的時間，並能夠向您披露這些比例。但我們之前確實揭露了FY23，我們預期FY24的貨運業務比例將遠高於23年。

Jim Sidoti, Sidoti & Company.

吉姆‧西多蒂 (Jim Sidoti)，西多蒂公司。

I think what I hear you saying is China business, you don't expect it to improve in the near term. But I think I'm hearing you say you don't expect another step-down over the next couple quarters. Is that right?

我想我聽到你說的是中國業務，你不希望它在短期內有所改善。但我想我聽到你說你預計在接下來的幾個季度內不會再次降級。是這樣嗎？

That's correct, Jim. I think that's what we are saying, yes. It's already running at low levels. And we need to see very specific and definitive indicators before we are able to say that it's going to improve on a sustained basis.

沒錯，吉姆。我想這就是我們所說的，是的。它已經在低水平運行。我們需要看到非常具體和明確的指標，然後才能說它會持續改善。

And Jim, our comment about -- sorry, Jim, our comment about the program -- audit program continuing, that's -- our understanding is that the current audit is a pretty drastic type of an action. But then on an ongoing basis for another two years, at least, that there will be oversight of the purchasing process. Now that's not going to shut it down like the way it has happened so far, but it's going to allow for ongoing purchasing but at a much more slower level. And we haven't quite yet seen when that transition will occur.

吉姆，我們的評論——抱歉，吉姆，我們對該計劃的評論——審計計劃仍在繼續，我們的理解是，當前的審計是一種相當激烈的行動。但至少在接下來的兩年內，將對採購過程進行監督。現在，這不會像迄今為止發生的那樣將其關閉，但它將允許持續購買，但速度要慢得多。我們還不清楚這種轉變何時會發生。

All right. Any update on the new products with the photon counting technology? You've talked about that in the past. On the medical side, are you making any headway there?

好的。採用光子計數技術的新產品有更新嗎？你過去曾談到這一點。在醫療方面，你們有進展嗎？

Yeah. So as you know, that's part of our long-term strategy and making very good progress there. And last quarter, we had given some color in terms of what we expect its contribution to our growth in the longer term. And that's still looking good for us and we're very optimistic and excited.

是的。如您所知，這是我們長期策略的一部分，並且在這方面取得了非常好的進展。上個季度，我們對它對我們長期成長的貢獻做出了一些預期。這對我們來說仍然很好，我們非常樂觀和興奮。

I think, in the near term, though, as once we get past these destocking levels, the thing that we are continuing to be excited about is the cost-out initiatives that we've launched with our investments in India. We expect that to give us ability to regain market share in radiographic, dental, and areas where we have lost share and lost ground. We expect to make those up in the mid-term time frame. So all these investments, both in the near term -- mid term and long term are looking good and we're continuing to be optimistic about it.

不過，我認為，在短期內，一旦我們超過了這些去庫存水平，我們繼續興奮的是我們在印度的投資中推出的成本削減計劃。我們預計這將使我們有能力重新獲得放射照相、牙科以及我們失去份額和失地的領域的市場份額。我們預計將在中期時間範圍內彌補這些。因此，所有這些投資，無論是短期、中期還是長期，看起來都不錯，我們將繼續對此保持樂觀。

And then last one for Sam. What's the update on refinancing some of that debt?

最後一張是給山姆的。部分債務再融資的最新情況是什麼？

Yeah, sure. So, Jim, we -- a few months ago, we completed credit financing. And so we have sufficient flexibility around that. And our revolver -- our convertible bonds are maturing in June of 2025. So we have some time here. And as and when we make a decision, we'll be sure to inform you. But we have a reasonably good flexibility at this time when it comes to refinancing.

是的，當然。所以，吉姆，我們——幾個月前，我們完成了信貸融資。因此我們對此有足夠的靈活性。我們的左輪手槍—我們的可轉換債券將於 2025 年 6 月到期。所以我們在這裡有一些時間。當我們做出決定時，我們一定會通知您。但目前在再融資方面我們有相當好的彈性。

Okay. And do you think you'll make that decision sometime in early 2025?

好的。您認為您會在 2025 年初的某個時候做出這個決定嗎？

I cannot say at this time what would be the time when we will make that decision. Obviously, it will be before June, but you'll just have to give us some time to hear the final decision from us. Jim, the way it works is when a decision is made by the Board of Directors, then we have a few days before we inform everybody. And so as the decision is made, we'll be sure to inform you.

我現在還不能說我們什麼時候會做出這個決定。顯然，這將在六月之前，但您只需要給我們一些時間來聽取我們的最終決定。吉姆，它的運作方式是，當董事會做出決定時，我們有幾天時間通知所有人。因此，一旦做出決定，我們一定會通知您。

Young Li, Jefferies.

年輕的李，傑弗里斯。

All right. Thanks for the follow-up. I guess maybe just following up on the prior question, Jim's question. I guess, what is your capital allocation priorities after the balance sheet becomes stronger from the refinancing?

好的。感謝您的跟進。我想也許只是跟進之前的問題，即吉姆的問題。我猜，再融資後資產負債表變得更強之後，你們的資本配置重點是什麼？

Yes. So right now, between now, say, next 12 months, our priorities are to continue to fund all of the business needs, operating needs, completely fund all the capital expenditure requirements. We are right now investing CapEx in India and also for automation in our factory in Salt Lake here. So beyond the operating need, priorities are deleveraging. We expect to deleverage.

是的。所以現在，從現在開始，比如說未來 12 個月，我們的首要任務是繼續為所有業務需求、營運需求提供資金，完全為所有資本支出需求提供資金。我們目前正在印度投資資本支出，並在鹽湖城的工廠進行自動化投資。因此，除了營運需求之外，首要任務是去槓桿化。我們預期去槓桿化。

The quantum of the deleveraging is yet to be decided, but we do want to deleverage in the next 12 months. And beyond that, I think we would -- once we are at an optimal debt structure, which we have said in the past, anywhere between $300 million to $350 million in total debt, once we are there, then I think we would be looking at growth opportunities in terms of M&A and also further deleveraging at that time. So those are the two main areas of deployment of cash beyond operating needs, beyond the 12 months' time frame.

去槓桿的幅度尚未確定，但我們確實希望在未來 12 個月內去槓桿。除此之外，我認為，一旦我們達到最佳債務結構，正如我們過去所說，總債務在 3 億至 3.5 億美元之間，一旦我們達到那裡，我認為我們會尋找併購和當時進一步去槓桿方面的成長機會。因此，這些是超出營運需求、超出 12 個月時間範圍的現金部署的兩個主要領域。

Thank you. At this time, we've reached the end of our question-and-answer session. And I'll turn the floor back to Christopher Belfiore for closing remarks.

謝謝。此時，我們的問答環節已經結束。我將邀請克里斯多福貝爾菲奧裡 (Christopher Belfiore) 致閉幕詞。

Thank you all for your questions and for participating in our earnings conference call today. The webcast and supplements, the slide presentation will be archived on our website. A replay of the quarterly conference call will be available through August 16 and can be accessed at vareximaging.com/investor-relations. Thank you and goodbye.

感謝大家提出問題並參加我們今天的收益電話會議。網路廣播和補充資料、幻燈片簡報將存檔在我們的網站上。季度電話會議重播將於 8 月 16 日截止，可造訪 vareximaging.com/investor-relations。謝謝你，再見。

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful day.

今天的會議到此結束。此時您可以斷開線路。感謝您的參與。祝你有美好的一天。