Varex Imaging Corp (VREX) 2020 Q4 法說會逐字稿

Greetings, and welcome to Varex Imaging Corporation Fourth Quarter Fiscal Full Year 2020 Earnings Conference Call. (Operator Instructions) Please note this conference is being recorded.

您好，歡迎參加 Varex Imaging Corporation 2020 年第四季全年獲利電話會議。 （操作員說明）請注意，本次會議正在錄製中。

I will now turn the conference over to Howard Goldman, Director of Investor Relations.

我現在將會議交給投資者關係總監霍華德·高盛 (Howard Goldman)。

Thank you. You may begin. Good afternoon, and welcome to Varex Imaging Corporation's earnings conference call for the fourth quarter and fiscal year 2020. With me today are Sunny Sanyal, our President and CEO, and Sam Maheshwari, our CFO.

謝謝。你可以開始了。下午好，歡迎參加 Varex Imaging Corporation 2020 年第四季和財年收益電話會議。今天與我在一起的有我們的總裁兼執行長 Sunny Sanyal 和我們的財務長 Sam Maheshwari。

To simplify our discussion, unless otherwise stated, all references to the quarter are for the fourth quarter of fiscal year 2020. In addition, unless otherwise stated, quarterly comparisons are made sequentially from the fourth quarter of fiscal year 2020 to the third quarter of fiscal year 2020 rather than to the same quarter of the prior year.

為了簡化我們的討論，除非另有說明，所有提及季度的數據均指2020 財年第四季度。此外，除非另有說明，季度比較均從2020 財年第四季度到2020 財年第三季度依序進行。2020 年，而不是 上一年度的同一季度。

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。

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，包括第 1A 項、表格 10-Q 季報告和表格 10-K 年度報告的風險因素。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。

And now I'll turn the call over to Sunny.

現在我將把電話轉給 Sunny。

Thank you, Howard. Good afternoon, everyone, and welcome. Fiscal year 2020 was a productive year for us despite the headwinds created by COVID. First of all, I'm very happy to report that we renewed all of the multiyear agreements with our top 20 customers that became due during the fiscal year. Second, we completed the closure of our Santa Clara facility ahead of schedule and made additional structural changes, which together will result in $28 million of annual cost savings when fully realized. Third, we replaced our existing debt with a capital structure that provides us with increased liquidity and flexibility. And last but not the least, we launched a number of new products.

謝謝你，霍華德。大家下午好，歡迎光臨。儘管受到新冠肺炎疫情的影響，2020 財年對我們來說是富有成效的一年。首先，我很高興地向大家報告，我們續簽了與本財年到期的 20 大客戶的所有多年協議。其次，我們提前完成了聖克拉拉工廠的關閉，並進行了額外的結構調整，全部實現後，每年將節省 2,800 萬美元的成本。第三，我們用資本結構取代了現有債務，為我們提供了更高的流動性和靈活性。最後但並非最不重要的一點是，我們推出了許多新產品。

The combination of these and other actions, leave Varex well positioned for future growth once the economy recovers from the impacts of COVID.

這些行動和其他行動結合，一旦經濟從新冠疫情的影響中復甦，Varex 就能為未來的成長做好準備。

I'm also very pleased with the performance of our leadership team, our managers and our employees around the world who have navigated the turbulence from this pandemic. And through it all, we continue to fulfill our customers' needs.

我也對我們的領導團隊、經理和世界各地的員工的表現感到非常滿意，他們在這場大流行的動盪中度過了難關。透過這一切，我們持續滿足客戶的需求。

In the current environment, as we look at our financial performance, we believe our investors will get a better sense of our performance with sequential comparisons more so than year-over-year comparisons. On that note, our fourth quarter revenues were $170 million and were comparable to the third quarter of fiscal year 2020. The revenue mix between our segments was also comparable on a sequential basis.

在當前環境下，當我們審視我們的財務表現時，我們相信我們的投資者將透過連續比較比同比比較更了解我們的表現。在這一點上，我們第四季的營收為 1.7 億美元，與 2020 財年第三季相當。我們各部門之間的營收組合也按順序進行比較。

Our margins improved sequentially, largely due to the start of benefits from the cost reduction actions. On a year-over-year basis, total company revenues declined 16% in the fourth quarter due to the ongoing impact from COVID.

我們的利潤率持續提高，主要是因為成本削減行動開始帶來效益。由於新冠疫情的持續影響，第四季公司總營收年減 16%。

In our Medical segment, during the fourth quarter, CT tube sales were strong, while sales of our products used in other medical imaging procedures continued to be down. Demand for our mammography tubes increased slightly, but the demand for our general x-ray tubes and detectors was solid, presumably due to the increase in purchases of mobile x-ray systems during the early months of COVID.

在我們的醫療部門，第四季度 CT 管銷售強勁，而用於其他醫學影像程序的產品銷售持續下降。對我們的乳房 X 射線管的需求略有增加，但對我們的普通 X 射線管和探測器的需求穩定，這可能是由於新冠疫情最初幾個月移動 X 射線系統的購買量增加。

During the quarter, some of our customers acknowledged that they were seeing an uptick in selling activity in some of their dental, surgery and oncology markets. However, while this activity did not translate into significant orders for us in the fourth quarter, we are encouraged to hear this, and we are operationally prepared to respond to any increases in demand.

在本季度，我們的一些客戶承認，他們看到一些牙科、外科和腫瘤市場的銷售活動增加。然而，雖然這項活動並未在第四季度為我們帶來大量訂單，但聽到這一消息我們感到很鼓舞，並且我們已做好營運準備以應對需求的任何增長。

Our R&D teams have been actively engaged with our customers this year with new product development efforts. We recently began to make engineering prototypes of a new family of liquid metal bearing technology-based tubes available to our customers for evaluation. The initial models are designed for CT and cardiac applications, and we have a growing pipeline of customers interested in incorporating these technologies into their future products. Tubes that incorporate liquid metal bearing technologies are expected to have longer life, and we intend to market them with service contracts to the OEMs.

今年，我們的研發團隊積極與客戶合作，進行新產品開發。我們最近開始製作基於液態金屬軸承技術的新系列管道的工程原型，供客戶評估。最初的模型是為 CT 和心臟應用而設計的，我們有越來越多的客戶有興趣將這些技術融入他們未來的產品中。採用液態金屬軸承技術的管道預計將具有更長的使用壽命，我們打算透過向原始設備製造商提供服務合約來銷售它們。

We also continue to make progress with our Nanotube technology development with our joint venture partner, VEC Imaging. You may recall that about a year ago at the annual meeting of Radiological Society of North America, also known as RSNA, we exhibited a prototype of our Nanotube technology in a multi emitter mammography system configuration. And since then, we have received a lot of interest in this technology. We are very happy with the performance of the emitters and the tubes. We are engaged in early-stage product development activity with several OEMs to explore the use of our technology in their future imaging systems.

我們也與合資夥伴 VEC Imaging 繼續在奈米管技術開發方面取得進展。您可能還記得，大約一年前，在北美放射學會（也稱為 RSNA）年會上，我們展示了多發射器乳房 X 光攝影系統配置中的奈米管技術原型。從那時起，我們對這項技術產生了極大的興趣。我們對發射器和管的性能非常滿意。我們與多家原始設備製造商一起參與早期產品開發活動，探索我們的技術在他們未來的成像系統中的使用。

On the detector side, we're in the final stages of commercialization of our new Z Platform detectors. This new technology is initially targeted at cardiac, surgery, dental, and other fluoroscopy systems that need high-performance dynamic detectors that can reduce X-ray dose used during imaging.

在探測器方面，我們的新型 Z 平台探測器正處於商業化的最後階段。這項新技術最初針對心臟、外科、牙科和其他需要高性能動態偵測器的螢光檢查系統，這些偵測器可以減少成像過程中使用的 X 光劑量。

Since we introduced this platform at RSNA last year, we have released 3 new Z Platform models that are now available to all our customers. Additional models are in development, and we expect to release them to customers for evaluation and integration during fiscal year '21. I'm pleased to report that a number of OEMs have placed orders for our Z Platform detectors with initial shipments scheduled to begin in the first half of fiscal year 2021.

自從我們去年在 RSNA 上推出這個平台以來，我們已經發布了 3 個新的 Z 平台模型，現在可供所有客戶使用。其他模型正在開發中，我們預計在 21 財年將其發布給客戶進行評估和整合。我很高興地報告，許多 OEM 已訂購我們的 Z 平台探測器，首批發貨計劃於 2021 財年上半年開始。

While our sales in our Industrial segment were down year-over-year, we saw very early signs of recovery in some nondestructive testing verticals, such as electronics and battery inspection. In cargo screening, a modest increase in activity led to increased orders and backlog for some of our OEM customers, and we expect that some of this will turn into orders for us in fiscal year 2021.

雖然我們在工業領域的銷售額年減，但我們在一些無損檢測垂直領域（例如電子和電池檢測）看到了復甦的早期跡象。在貨物篩選方面，活動的適度增加導致我們的一些 OEM 客戶的訂單和積壓訂單增加，我們預計其中一些將在 2021 財政年度轉化為我們的訂單。

Meanwhile, China appears to have recovered from the initial shutdown due to COVID, and we are very happy with our performance there. In fiscal year 2020, the China market represented 11% of our total company revenues. Our local Chinese OEM customers have continued to successfully bring new CT systems to market. Strong sales of CT systems by local Chinese manufacturers led to a significant increase in the number of CT tubes that we shipped to China in fiscal year 2020 over the prior fiscal year.

同時，中國似乎已經從新冠疫情造成的最初封鎖中恢復過來，我們對在那裡的表現感到非常滿意。 2020財年，中國市場占我們公司總營收的11%。我們當地的中國 OEM 客戶不斷成功地將新的 CT 系統推向市場。中國本土製造商 CT 系統的強勁銷售導致我們 2020 財年向中國出口的 CT 球管數量較上一財年大幅增加。

In a couple of weeks, we will once again be showcasing our latest X-ray tubes, digital detectors, connection control devices and software solutions at the annual RSNA conference. In particular, we will be introducing 2 new photon counting detectors. More information about these and other new products will be included in our upcoming RSNA announcements.

幾週後，我們將在年度 RSNA 會議上再次展示我們最新的 X 光管、數位偵測器、連接控制設備和軟體解決方案。特別是，我們將推出 2 個新的光子計數偵測器。有關這些和其他新產品的更多資訊將包含在我們即將發布的 RSNA 公告中。

RSNA starts on November 29, and this year, it's going to be a virtual event. For those of you that are interested, after RSNA starts, we will have links to our virtual exhibit booth posted on our website and on Varex social media channels.

RSNA 將於 11 月 29 日開始，今年將採取虛擬形式。對於有興趣的人，在 RSNA 開始後，我們將在我們的網站和 Varex 社交媒體頻道上發布虛擬展位的連結。

With that, let me hand over the call to Sam to talk about our financial performance in greater detail.

接下來，讓我將電話轉交給 Sam，更詳細地討論我們的財務表現。

Thanks, Sunny, and hello, everyone. As a reminder, unless otherwise indicated, I will provide sequential comparisons of our results for the fourth quarter of fiscal year 2020 with those of our third quarter of fiscal 2020. Our fourth quarter financial results indicate that our sales have stabilized. Fourth quarter revenues were $170 million and comparable to the third quarter of fiscal 2020. Medical segment revenues were $136 million and Industrial segment revenues were $34 million.

謝謝，Sunny，大家好。提醒一下，除非另有說明，我將提供 2020 財年第四季與 2020 財年第三季業績的連續比較。我們第四季的財務表現表明我們的銷售已經穩定。第四季營收為 1.7 億美元，與 2020 財年第三季相當。醫療部門營收為 1.36 億美元，工業部門營收為 3,400 萬美元。

Compared to the fourth quarter of last year, revenues declined 16% to $170 million from $202 million due to the effects of COVID. Geographically, fourth quarter revenues were $64 million in the Americas, $55 million in EMEA and $51 million in APAC. For full fiscal year 2020, revenues in the Americas were $255 million, $231 million in EMEA and $252 million in APAC. This reflects a geographically well balanced revenue profile for us.

與去年第四季相比，由於新冠疫情的影響，營收從 2.02 億美元下降至 1.7 億美元，下降了 16%。從地理來看，第四季美洲地區的營收為 6,400 萬美元，歐洲、中東和非洲地區為 5,500 萬美元，亞太地區為 5,100 萬美元。 2020 財年，美洲地區營收為 2.55 億美元，歐洲、中東和非洲地區營收為 2.31 億美元，亞太地區營收為 2.52 億美元。這反映了我們在地理上均衡的所得狀況。

Our fourth quarter GAAP gross margin was 27%. On a non-GAAP basis, gross margin was 28%, an improvement of 2 percentage points from the third quarter of fiscal year 2020. This increase is due to a favorable product mix and initial benefits from cost reduction.

我們第四季的 GAAP 毛利率為 27%。以非公認會計準則計算，毛利率為 28%，較 2020 財年第三季提高 2 個百分點。這一增長得益於有利的產品組合以及成本降低的初步效益。

R&D expenses in the fourth quarter was $17 million on both a GAAP and non-GAAP basis. This was a decrease of about $2 million from the previous quarter. Fourth quarter SG&A expenses were $41 million. On a non-GAAP basis, SG&A expenses were $31 million, an increase of about $3 million from the previous quarter, largely due to higher year-end audit fees and pension costs in our German operations.

根據 GAAP 和非 GAAP 計算，第四季的研發費用均為 1,700 萬美元。這比上一季減少了約 200 萬美元。第四季 SG&A 支出為 4,100 萬美元。以非公認會計準則計算，SG&A 費用為 3,100 萬美元，比上一季增加約 300 萬美元，主要是由於我們德國業務的年終審計費用和退休金成本較高。

Operating expenses were $58 million. Non-GAAP operating expenses were $48 million compared to $46 million in the previous quarter. This $2 million sequential increase was primarily due to higher SG&A expenses that were partially offset by lower R&D spending.

營運費用為 5800 萬美元。非 GAAP 營運支出為 4,800 萬美元，而上一季為 4,600 萬美元。環比增加 200 萬美元主要是由於 SG&A 費用增加，但研發支出減少部分抵消了增加。

Our fourth quarter operating loss was $13 million. On a non-GAAP basis, operating loss was less than $1 million compared to an operating loss of more than $1 million in the previous quarter.

我們第四季的營業虧損為 1,300 萬美元。以非公認會計準則計算，營運虧損不到 100 萬美元，而上一季的營運虧損超過 100 萬美元。

GAAP interest expense in the fourth quarter was $14 million, which was unusually high due to various financing activities, including issuing high-yield notes and paying off our previous credit facility and associated interest rate swap. On a non-GAAP basis, interest expense was $6 million, similar to the third quarter.

第四季的 GAAP 利息支出為 1,400 萬美元，由於各種融資活動，包括發行高收益票據以及償還我們先前的信貸安排和相關利率掉期，該利息支出異常高。以非公認會計準則計算，利息支出為 600 萬美元，與第三季類似。

Other expenses were approximately $2 million. We recorded a GAAP tax benefit of $4 million in the fourth quarter. On a non-GAAP basis, we recorded an $8 million tax benefit. The CARES Act and subsequent treasury regulations allow us to apply current year net operating losses to taxable income from prior year tax filings. And as a result, we expect tax refunds from the U.S. Treasury.

其他費用約200萬美元。我們第四季的 GAAP 稅收優惠為 400 萬美元。根據非公認會計原則，我們獲得了 800 萬美元的稅收優惠。 《CARES 法案》和隨後的財政部法規允許我們將當年的淨營業虧損應用於上一年報稅的應稅收入。因此，我們預計美國財政部會退稅。

GAAP net loss for the fourth quarter was $26 million or $0.66 per diluted share. On a non-GAAP basis, net loss was $2 million or $0.04 per diluted share compared to a net loss in the third quarter of $8 million or $0.20 per diluted share. Diluted shares outstanding were 39 million shares in both the periods.

第四季 GAAP 淨虧損為 2,600 萬美元，或攤薄後每股虧損 0.66 美元。以非公認會計準則計算，淨虧損為 200 萬美元，即稀釋後每股 0.04 美元，而第三季淨虧損為 800 萬美元，即稀釋後每股 0.20 美元。兩個時期的稀釋流通股均為 3,900 萬股。

Now turning to the balance sheet. Accounts receivables increased by $14 million during the quarter. A large portion of our shipments occurred in the third month of the quarter, causing DSO to go up by 8 days to 66 days. Inventory decreased by $11 million in the fourth quarter to $272 million as we completed the transfer of manufacturing at our Santa Clara facility to Salt Lake City.

現在轉向資產負債表。該季度應收帳款增加了 1,400 萬美元。我們的大部分出貨發生在本季的第三個月，導致 DSO 增加了 8 天，達到 66 天。由於我們完成了聖克拉拉工廠的生產轉移到鹽湖城的工作，第四季庫存減少了 1,100 萬美元，達到 2.72 億美元。

Cash flow from operations was negative $12 million for the fourth quarter, but it was positive $13 million for the full fiscal year. We ended the fourth quarter with cash of $101 million on the balance sheet, an increase of $13 million in the quarter.

第四季營運現金流為負 1,200 萬美元，但整個財年為正 1,300 萬美元。第四季末，我們資產負債表上的現金為 1.01 億美元，本季增加了 1,300 萬美元。

Total gross debt outstanding was $511 million, out of which $455 million was recorded on the balance sheet due to a portion of the convertible loan being recognized as a component of equity.

未償債務總額為 5.11 億美元，其中 4.55 億美元因部分可轉換貸款被確認為權益的一部分而記錄在資產負債表上。

Let me now give you a high-level summary of our financial initiatives that have either been recently completed or are in process. I will then follow up with an overview of our initiatives for fiscal year 2021.

現在讓我向您簡要介紹我們最近完成或正在進行的財務計劃。然後我將概述我們 2021 財年的舉措。

First, I would like to discuss our new capital structure and liquidity. During the second half of fiscal 2020, we put in place a more flexible debt structure that also helped increase our liquidity. Our debt now improved $300 million of 7-year senior secured notes that bear interest at 7.875%. $200 million of 5-year convertible notes that bear interest at 4% and a new $100 million asset-based revolving credit facility that currently remains undrawn. We also carry additional debt of around $11 million in our foreign subsidiaries as well as a cross currency swap. Overall, our weighted average pretax annual interest rate should be about 6.2%, and the annual cash interest expense burden should be approximately $31 million.

首先，我想討論一下我們新的資本結構和流動性。在 2020 財年下半年，我們建立了更靈活的債務結構，這也有助於增加我們的流動性。我們的債務現在改善了 3 億美元的 7 年期優先擔保票據，利率為 7.875%。 2億美元的5年期可轉換票據，利率為4%，以及一項新的1億美元的基於資產的循環信貸額度，目前尚未提取。我們的海外子公司還承擔約 1,100 萬美元的額外債務以及交叉貨幣掉期債務。整體而言，我們的加權平均稅前年利率應約為6.2%，年度現金利息支出負擔應約為3,100萬美元。

As of the fiscal year-end, there was plenty of liquidity with $101 million of cash on our balance sheet and another $100 million through our asset-based revolver line. Also by paying off our previous credit facility, we removed the substantial doubt about our ability to continue as a going concern.

截至本財年末，我們的資產負債表上有充足的流動性，其中有 1.01 億美元的現金，還有基於資產的左輪手槍產品線還有 1 億美元的流動性。此外，透過還清先前的信貸額度，我們消除了對我們持續經營能力的重大懷疑。

Second, I would like to provide an update on our cost reduction efforts. As we shared with you previously, we targeted an annualized cost reduction of $28 million, which should be fully realized from the second quarter of fiscal year 2021. Roughly, 75% of the cost reductions are expected to benefit gross margin, and 25% are expected to benefit operating expenses on the P&L.

其次，我想介紹一下我們降低成本工作的最新情況。正如我們之前與大家分享的，我們的目標是年化成本削減2800 萬美元，這一目標應該從2021 財年第二季度開始完全實現。大致而言，預計成本削減的75% 將有利於毛利率，25% 將有利於毛利率。預計將有利於損益表中的營運費用。

We are largely complete with the closure of our Santa Clara facility with only a few minor steps left to be executed. This specific initiative is expected to provide savings of about $14 million annualized or about $3.5 million per quarter. Additionally, as part of our cost reduction efforts, we reduced 94 positions in the U.S. in the fourth quarter, which is expected to save us an annualized $15 million beginning the first quarter of fiscal year 2021.

我們基本上已完成聖克拉拉工廠的關閉工作，只剩下幾個小步驟需要執行。這項具體舉措預計每年可節省約 1,400 萬美元，或每季約 350 萬美元。此外，作為削減成本努力的一部分，我們在第四季度在美國減少了 94 個職位，預計這將為我們從 2021 財年第一季開始節省 1500 萬美元的年化成本。

Let me now move to discuss new initiatives that are in process for fiscal year 2021. The first initiative is a targeted $25 million to $30 million reduction in our inventory during the year through a combination of facility consolidations, implementing additional lean programs, further streamlining our supply chains and discontinuing low velocity products.

現在讓我開始討論2021 財年正在實施的新舉措。第一項舉措是透過設施整合、實施額外的精益計劃、進一步簡化我們的流程，在這一年裡減少我們的庫存2500 萬至3000 萬美元。供應鏈和停產低速產品。

The second initiative for fiscal 2021 is to reduce costs associated with manufacturing and servicing of our products, particularly in the areas of warranty, manufacturing yields and freight costs. Through this initiative, our target is to improve gross margin by 1 percentage point towards the end of this fiscal year.

2021 財年的第二項措施是降低與產品製造和服務相關的成本，特別是在保固、製造產量和運輸成本方面。透過這項舉措，我們的目標是在本財年末將毛利率提高 1 個百分點。

Let me now provide you our business outlook. Given the current economic environment, we are changing our prior approach of providing annual guidance in favor of providing quarterly guidance. We believe quarterly guidance will help investors better understand our business performance and progress.

現在讓我向您介紹我們的業務前景。鑑於當前的經濟環境，我們正在改變以前提供年度指導的方式，轉而提供季度指導。我們相信季度指引將幫助投資者更了解我們的業務表現和進展。

Accordingly, for the first quarter of fiscal year 2021, we expect revenues to be between $160 million to $180 million. And we expect non-GAAP earnings per diluted share to be between negative $0.15 and positive $0.10. These expectations are based on non-GAAP gross margin improvement to a range of 30% to 31%, which includes some benefit from the closure of our Santa Clara facility, non-GAAP operating expenses reduced to a range of $44 million to $45 million and non-GAAP interest expense around $8 million.

因此，我們預計 2021 財年第一季的營收將在 1.6 億至 1.8 億美元之間。我們預計非 GAAP 每股攤薄收益將在負 0.15 美元至正 0.10 美元之間。這些預期基於非 GAAP 毛利率提高至 30% 至 31%，其中包括關閉聖克拉拉工廠帶來的一些收益、非 GAAP 營運費用減少至 4,400 萬美元至 4,500 萬美元以及非公認會計準則利息支出約為800 萬美元。

With that, I would like to now hand the call back over to Sunny for some closing remarks.

現在，我想將電話轉回 Sunny 進行總結演講。

Thank you, Sam. So looking beyond COVID, we expect demand for X-ray imaging equipment and for our products to rebound once the effect of the pandemic is past us. We are confident that our continued focus on innovation will enable us to position -- expand our position as a market leader across all product lines in our core business.

謝謝你，山姆。因此，除了新冠疫情之外，我們預計，一旦疫情的影響過去，對 X 光成像設備和我們產品的需求將會反彈。我們相信，對創新的持續關注將使我們能夠擴大我們作為核心業務所有產品線的市場領導者的地位。

Our goals for the next phase of growth, which we have referred to as Varex 2.0 are focused on accelerating organic growth, improving operating margins through operational transformation and strengthening our balance sheet. With the debt refinancing actions, we've already positioned ourselves with a new capital structure that gives us operating flexibility and strengthens our balance sheet. Our next steps here are to improve our financial performance and lower our debt. To do that, we will continue to drive initiatives to improve gross margin and operating income.

我們下一階段的成長目標（我們稱之為 Varex 2.0）的重點是加速有機成長、透過營運轉型提高營運利潤率以及加強我們的資產負債表。透過債務再融資行動，我們已經為自己定位了新的資本結構，這為我們提供了營運靈活性並增強了我們的資產負債表。我們的下一步是改善我們的財務表現並降低我們的債務。為此，我們將繼續推動提高毛利率和營業收入的措施。

Our initiatives -- our investments in the R&D are aimed at enabling Varex to expand its footprint within our customer base as well as for opening new addressable market opportunities with photon counting detectors and Nanotube x-ray sources. I'm happy to say that we're making good progress in each of these areas of Varex 2.0. And these goals are reflected in our fiscal year 2021 operating plans and management incentives.

我們的舉措—我們對研發的投資旨在使 Varex 能夠擴大其在我們客戶群中的足跡，並透過光子計數探測器和奈米管 X 射線源開闢新的可尋址市場機會。我很高興地說，我們在 Varex 2.0 的每個領域都取得了良好的進展。這些目標反映在我們2021財年的營運計畫和管理激勵措施中。

With that, we will now open up the call for your questions.

現在，我們將開始電話詢問您的問題。

(Operator Instructions) Our first question is from Anthony Petrone with Jefferies.

（操作員說明）我們的第一個問題來自 Jefferies 的 Anthony Petrone。

And I hope everyone is doing well and staying healthy. Maybe a couple for Sunny, and then I'll have a few for Sam, as it relates to some of the guidance metrics that you provided, Sam.

我希望每個人都做得很好並保持健康。也許給 Sunny 一些，然後我會給 Sam 一些，因為它與您提供的一些指導指標有關，Sam。

And so Sunny, maybe from a high level, you gave updates here on where each of the businesses is trending amid the COVID sort of resurgence. And so I guess, at a high level when you consider, in particular, where you referenced Industrial, you are seeing some signs of a turnaround in select areas of industrial. So maybe describe how you see that trending into '21 from here, in particular, when you consider that we do have a resurgence in some geographies and a lot of key geographies for that matter?

桑尼，也許是從高層角度，您在這裡提供了有關新冠疫情復甦期間各業務趨勢的最新資訊。因此，我想，在高水平上，特別是當您提到工業時，您會看到某些工業領域出現好轉的跡象。那麼，請描述您如何看待從這裡進入 21 世紀的趨勢，特別是當您認為我們確實在某些地區和許多關鍵地區出現復甦時？

And then if you (inaudible) China, it sounds like its business back to usual. So is that a fair way to describe where China is exiting the quarter? And then I'll have a few follow-ups.

然後，如果你（聽不清楚）中國，聽起來它的業務恢復正常了。那麼，這是描述中國退出本季的合理方式嗎？然後我會進行一些後續行動。

Yes. Okay. So Anthony, for Industrial, the way we experienced the situation is that initially, when the full impact of COVID hit everyone around the April-May time frame, everything stopped, right? So we had lockdowns everywhere and all activity essentially seized. And then airports stopped operating most of their gates and we saw serious slowdown there.

是的。好的。所以安東尼，對於工業公司來說，我們經歷這種情況的方式是，最初，當新冠病毒的全面影響在四月到五月的時間範圍內襲擊每個人時，一切都停止了，對嗎？因此，我們到處都實行了封鎖，所有活動基本上都被取消了。然後機場停止了大部分登機口的運營，我們看到了那裡的嚴重放緩。

So that's how it started out. And then as COVID progressed and as -- what we're seeing now is that the industrial side of our business and those markets and those different verticals within Industrial are pulling away from -- in their recovery trajectory they're pulling away from the way Medical is recovering.

事情就是這樣開始的。然後，隨著新冠疫情的進展，我們現在看到的是，我們業務的工業方面、這些市場以及工業內部的不同垂直領域正在脫離——在復甦軌跡中，他們正在脫離復甦的軌道。醫療正在康復。

And what I mean by that is, look, airports have been shut down. They're going to stay shut down for some time. There's no improvement or degradation there. But meanwhile, in other verticals, as -- as you know, Industrial is very fragmented and there are many sub verticals. As you look at different verticals, they're progressing along different trajectories. So I mentioned electronics and battery inspection. We're seeing continued strength in that area, and there was strength pre-COVID, and it returned to increasing levels of activity.

我的意思是，看，機場已經關閉。他們將關閉一段時間。那裡沒有任何改善或退化。但同時，在其他垂直領域，如您所知，工業非常分散，並且有許多子垂直領域。當你觀察不同的垂直領域時，你會發現它們正沿著不同的軌跡前進。所以我提到了電子和電池檢查。我們看到該地區的持續強勁勢頭，在新冠疫情爆發之前就已經強勁，並且恢復到了越來越高的活動水平。

So what we're seeing, what we're anticipating is that within Industrial, it won't be an all or nothing. There isn't -- it isn't tied to one large group of entity's capital budgets like we have that in the Medical side. In the Medical side, we're pegged to the hospital capital budgets globally. However, on the Industrial side, given the fragmentation of the verticals, we're seeing different trajectories. And each -- sorry, different dynamics within each subvertical, and they have their own little trajectories.

所以我們所看到的、我們預期的是，在工業領域，它不會是全有或全無的局面。沒有——它不像我們在醫療方面那樣與一大群實體的資本預算掛鉤。在醫療方面，我們與全球醫院的資本預算掛鉤。然而，在工業方面，考慮到垂直產業的分散性，我們看到了不同的軌跡。抱歉，每個垂直領域都有不同的動態，而且它們都有自己的小軌跡。

So on balance, what we expect is that the government -- all the verticals controlled by government, government spending will continue to move forward. We were encouraged by the tender activity in the cargo screening area where some tenders were finalized, and our OEM customers received some orders. Similarly, we've continued to see spend on the government side or the activity continue to stay active. And now what we expect is that the other industrial verticals in food inspection, general manufacturing will continue to evolve on their own. And even if -- even with the situation with COVID, we're not anticipating a regression in any significant way. So that's the scoop on how we see industrial evolving during this recovery.

因此，總的來說，我們期望政府——所有由政府控制的垂直行業、政府支出將繼續向前發展。我們對貨物安檢區的招標活動感到鼓舞，一些招標已經完成，我們的 OEM 客戶收到了一些訂單。同樣，我們繼續看到政府方面的支出或活動繼續保持活躍。現在我們預期食品檢驗、通用製造等其他垂直產業將繼續自行發展。即使——即使在新冠疫情的情況下，我們預計不會有任何重大的倒退。這就是我們如何看待這次復甦期間工業發展的獨家新聞。

Okay. And then again, a follow-up on the China CT tools market in particular. So maybe just a follow-up there on where that business is trending. And it does sound like that is sort of completely back to business, pre-COVID levels, is that accurate?

好的。話又說回來，尤其是中國 CT 工具市場的後續行動。所以也許只是跟進該業務的趨勢。聽起來確實像是完全回到了新冠疫情之前的水平，這是準確的嗎？

Yes. So we're very happy with our performance in China. And so they were shut down for about 8 weeks this year. And when they came back up, they went right back to work, and they caught up with their prior trajectory. So from that perspective, all the things we've said about the China market have continued to play out just the way we have explained it, which is their -- Chinese government continues to make investments in health care. The purchasing of CT continues.

是的。所以我們對我們在中國的表現非常滿意。因此今年他們被關閉了大約 8 週。當他們回來時，他們立即回去工作，並且趕上了先前的軌跡。因此，從這個角度來看，我們所說的有關中國市場的所有事情都按照我們解釋的方式繼續發揮作用，那就是中國政府繼續在醫療保健領域進行投資。 CT的採購仍在繼續。

And through the COVID pandemic, while we saw an uptick in the buying of CT systems and X-ray systems in a post -- they went through a peak of their own. And beyond that peak, we didn't see the CT market subsiding or anything like that. The trajectory that they want -- that they were on previously appears to have continued.

在新冠疫情期間，雖然我們在貼文中看到 CT 系統和 X 光系統的購買量增加，但它們也經歷了自己的高峰。在這個高峰之後，我們沒有看到 CT 市場衰退或類似的情況。他們想要的軌跡——他們之前所處的軌跡似乎仍在繼續。

So we are we're happy with the way things are going in China. Our OEMs have not slowed down in their product development efforts. They're continuing on with their plans. Any slowdowns or any delays there are typical to our normal R&D cycles and processes. So for all practical purposes on the Medical side in China, it feels like business as usual.

所以我們對中國的進展感到滿意。我們的原始設備製造商並沒有放慢產品開發的步伐。他們正在繼續他們的計劃。任何放緩或延遲都是我們正常研發週期和流程的典型現象。因此，就中國醫療方面的所有實際目的而言，感覺一切如常。

And then I'll shift gears and get back in queue. Here for Sam, just up on, one on expenses and then one on the guidance range for 1Q. Just when we look at the operating expense level, and I know some of the savings are going to evolve as we head into fiscal '21. When we look at the fourth quarter level, $48 million in OpEx, should we be gradually seeing more savings on that line as we run through fiscal '21? So that would be the first question. Just how to think of the quarterly cadence on total OpEx vis-à-vis the fourth quarter?

然後我會換檔並回到隊列中。 Sam 在此，先介紹一下費用，然後再介紹第一季的指導範圍。就在我們查看營運費用水準時，我知道隨著我們進入 21 財年，一些節省的費用將會減少。當我們看到第四季的營運支出為 4,800 萬美元時，我們是否應該在 21 財年期間逐漸看到更多的節省？這是第一個問題。與第四季相比，如何看待總營運支出的季度節奏？

And then the second question would be on the guidance range, in particular, for 1Q, it's a $20 million spread on the top line and a $0.30 or $0.25 kind of range on the bottom line. And so maybe walk us through the lower end of that range would sort of you kind of factoring in the variables that can drive it to the upper end of the range?

第二個問題是關於指導範圍，特別是對於第一季度，頂線的價差為 2000 萬美元，底線的範圍為 0.30 美元或 0.25 美元。因此，也許讓我們穿過該範圍的下限，您會考慮一些可以將其驅動到該範圍上限的變數？

Sure, sure. Let me address your questions one at a time. So in terms of OpEx, we are guiding a significant improvement for Q1 versus Q4. So Q4 was at $48 million. There were certain expenses in there that should go away as we round out the audit and the 10-K filing and all of that stuff.

一定一定。讓我一次一個地解答您的問題。因此，就營運支出而言，我們預計第一季與第四季相比會有顯著改善。所以第四季的營收為 4800 萬美元。當我們完成審計和 10-K 歸檔以及所有這些事情時，其中的某些費用應該會消失。

So essentially, we are guiding $44 million to $45 million beginning with Q1. So all the positions that we eliminated in the July, August time frame, they are beginning to give result -- big -- starting from, say, October. So that's why that run rate is going to go straight from 48% to, say, 44%, 45%. And then it should remain at those levels throughout the year.

因此，從本質上講，我們將從第一季開始指導 4400 萬至 4500 萬美元。因此，我們在七月、八月時間範圍內消除的所有頭寸，從十月開始，它們就開始產生巨大的結果。這就是為什麼運行率會從 48% 直接上升到 44%、45%。然後它應該全年保持在這些水平。

And if you would remember, last quarter, I had guided OpEx for the full year in the range of about $175 million in that range for the year. And say $43 million to $45 million per quarter by Q2 of 2021. So I'm glad to say here that we are already at that range, $44 million to $45 million and that's how that will build up.

如果您還記得的話，上個季度，我指導全年營運支出約為 1.75 億美元。假設到 2021 年第二季每季達到 4,300 萬美元到 4,500 萬美元。所以我很高興在這裡說，我們已經處於這個範圍，4,400 萬美元到 4,500 萬美元，這就是這個範圍的累積。

Some of the other cost reduction initiatives that we've been taking on, for example, Santa Clara and some other position eliminations, you are going to see that benefit in the continuous improvement in gross margin. So we just did 28% and guiding 30% to 31%. And as Santa Clara benefits fully begin to get realized, I expect gross margin to sequentially improve during the year couple -- 1 or 2 percentage points from one quarter to another. So I expect gross margin to be nicely building up during the year based on our initiatives.

我們一直在採取的其他一些成本削減舉措，例如聖克拉拉和其他一些職位削減，您將看到毛利率持續改善的好處。所以我們只做了 28%，並指導 30% 到 31%。隨著聖克拉拉的效益開始完全實現，我預計毛利率將在這一年中連續改善——從一個季度到另一個季度提高 1 或 2 個百分點。因此，我預計，根據我們的舉措，今年的毛利率將會得到很好的提高。

Then lastly, in terms of your guidance range. Yes, so the revenue is $20 million on the top line and the bottom line is at about $10 million. And what really is happening here is we are in quite uncertain environment, given COVID and all of that. But at the same time, there are a few things that can change on us, which is -- which you know, Anthony, you've been with us for some time here, given the mix, the mix can change. The lockdowns have started to happen in Europe, et cetera. So we don't really know what exactly the type of mix that would come.

最後，就您的指導範圍而言。是的，因此營收為 2000 萬美元，淨利潤約為 1000 萬美元。考慮到新冠疫情等所有因素，這裡真正發生的情況是我們處於相當不確定的環境。但同時，有一些事情可以改變我們，那就是——你知道，安東尼，你已經和我們在一起有一段時間了，考慮到混合，混合可以改變。歐洲等地已經開始實施封鎖。所以我們真的不知道到底會出現什麼樣的混合類型。

We feel good about the quarter in terms of where we are. We are halfway done with the quarter. So we feel good. And the next quarter is also beginning to Form on a similar trajectory as this quarter. So we feel good about that quarter also. But you never know, there can always be a shipment push out by any one of our customers. So that's the revenue difference. And then mix can drive a change to our gross margins. And then lastly, taxes can be different because we are closer to breakeven. So taxes on a GAAP basis start to behave in very unpredictable manner in a way. So that's the reason for some of this range essentially.

就我們所處的位置而言，我們對本季的情況感覺良好。我們這個季度已經完成一半了。所以我們感覺很好。下個季度也將開始遵循與本季類似的軌跡。所以我們對季度也感覺良好。但你永遠不知道，我們的任何一位客戶總是可能推出一批貨物。這就是收入差異。然後混合可以推動我們毛利率的變化。最後，稅收可能會有所不同，因為我們更接近收支平衡。因此，以公認會計原則為基礎的稅收在某種程度上開始表現得非常不可預測。這就是這個範圍的一些本質原因。

Our next question is from Larry Solow with CJS Securities.

我們的下一個問題來自 CJS 證券的拉里·索洛 (Larry Solow)。

Just a few follow-ups. First on Anthony's question. On the cost side, did you see any benefit, I guess, on the, I guess, would be from the closure of the facility in Q4 at all? It sounds like the operating expenses and the headcount reductions were all going forward. But did you get any benefit at all? Or do we still get that full $14 million benefit coming?

只是一些後續行動。首先是安東尼的問題。在成本方面，我想您是否看到了第四季度關閉該設施帶來的任何好處？聽起來營運費用和裁員都在繼續進行。但你有得到任何好處嗎？或者我們還能獲得 1400 萬美元的全額福利嗎？

So Larry, there were some benefits, but very, very small. The bulk of the benefits would begin to show up from Q1 for the positions that we eliminated. And Santa Clara, the $14 million, I expect half of it because it's kind of a situation where we are ramping the cost savings in a way during Q1.

拉里，有一些好處，但非常非常小。我們取消的職位的大部分好處將從第一季開始顯現出來。聖克拉拉，1400 萬美元，我預計其中一半，因為在這種情況下，我們在第一季以某種方式加大了成本節約的力度。

So essentially half of Santa Clara benefits are going to roll through Q1. And when you look at that $28 million cost reduction program, 25% of that is in OpEx and 75% is in COGS or gross margin. And when you look at that, and if you just take simple numbers, Santa Clara is half of it and position eliminations is half of it.

因此，聖克拉拉的福利基本上有一半將在第一季延續。當您查看 2800 萬美元的成本削減計劃時，您會發現其中 25% 屬於營運支出，75% 屬於 COGS 或毛利率。當你看這個時，如果你只看簡單的數字，聖克拉拉是其中的一半，位置淘汰是其中的一半。

So half of Santa Clara is going through in Q1. Remaining will go through completely through the P&L in Q2. And then all of the position eliminations, they would benefit our OpEx in Q1.

因此，聖克拉拉的一半地區將在第一季經歷這種情況。剩餘部分將在第二季完全通過損益表。然後所有職位的消除，都會使我們第一季的營運支出受益。

Got it. Okay. That makes sense. And could you -- just a question. I know you don't break out the adjusted gross margin between Medical and Industrial. But I just -- I noticed that the GAAP Industrial number was over 41%. So that you never -- you didn't put up a non-GAAP 40% number and going back 2 years. So I'm just trying to -- was there something in that number that unusually benefited?

知道了。好的。這就說得通了。你可以——只是一個問題。我知道您沒有詳細列出醫療和工業之間的調整後毛利率。但我只是——我注意到 GAAP 工業數據超過 41%。所以你永遠不會--你不會提供 2 年前的非 GAAP 40% 數字。所以我只是想——這個數字中是否有一些東西異常受益？

Yes. So Larry, the way to understand it is that at these low levels, as you remember, in our industrial business, we have machine sales as well as services. Services are on contracts and all of that. So what happens is these margins behave somewhat erratically when the machine sales are low. And we are really going through a very low period in the Industrial business from a new machine shipments or installation perspective. And that is what explains that type of gross margin behavior there. I would not suggest that the margin profile overall for the business is trending in that direction. It was...

是的。拉里，理解這一點的方法是，正如你所記得的，在我們的工業業務中，在這些低水平上，我們有機器銷售和服務。服務是基於合約的。因此，當機器銷售較低時，這些利潤會表現得有些不穩定。從新機器出貨或安裝的角度來看，我們確實正在經歷工業業務的一個非常低的時期。這就是解釋這種毛利率行為的原因。我並不認為該業務的整體利潤率正朝著這個方向發展。它是...

I was actually more concerned that maybe that was a one timer? Or on the flip side, the Medical margins are worse than I thought potentially. So that's really why. I was just -- yes.

我實際上更擔心那也許是一個計時器？或者另一方面，醫療利潤比我想像的還要差。這就是真正的原因。我只是——是的。

Yes. It's just the mix within the Industrial segment of machines versus service and time and material type of service.

是的。這只是工業領域中機器與服務以及服務時間和材料類型的混合。

Okay. Okay. No, fair enough. And then just switching gears just to the revenue trends. I realize you're a components business and somewhat down the -- not front end has the elective surgery start to come back, you won't see that benefit probably for a little while.

好的。好的。不，很公平。然後根據收入趨勢進行調整。我知道你們是一家零件企業，而且有些落後——不是前端選擇性手術開始恢復，你們可能在一段時間內看不到這種好處。

So -- but in that vein, elective surgeries, that certainly come way off their bottoms. I realize COVID's consensus is not improving anytime soon, although it does seem like in most of the medical world, people are -- maybe there was some pent-up demand that causes, but people are at least trying to get back to, especially for things they absolutely have to do.

所以——但從這個角度來說，選擇性手術肯定是遠遠超出他們的底線的。我意識到，新冠疫情的共識不會很快得到改善，儘管在大多數醫學界看來，人們確實——也許是一些被壓抑的需求導致了這種情況，但人們至少在努力恢復，尤其是對於他們絕對必須做的事情。

Have you seen any, at least anecdotally customers that hospitals may start to purchase things as we go out to '21? Will you get any better visibility maybe with capital budgets coming out in the beginning of hospital fiscal years or any better clarity on that? Or are you still kind of very uncertain on timing?

您是否見過任何（至少是傳聞中的）顧客，醫院可能會在我們進入“21”時開始購買東西？在醫院財政年度開始時公佈資本預算，或對此有更清晰的了解，您是否會獲得更好的可見性？或者您對時機仍然非常不確定？

Larry, this is Sunny. So the activity that our customers are seeing varies by geography and varies modality. So as we mentioned in activity in China has been, for all practical purposes, seems like every day normal business. But that's not so in rest of Asia, rest of Asia is slower.

拉里，這是桑尼。因此，我們的客戶看到的活動因地理位置和方式而異。因此，正如我們在中國的活動中提到的那樣，出於所有實際目的，似乎每天都正常進行。但亞洲其他地區的情況並非如此，亞洲其他地區的發展速度較慢。

Pre -- before the second wave or these lockdowns that began in Europe, our customers were saying that they were encouraged by seeing increased tender activity. And so there was more quote activity and quotes were going out. And so that was a positive thing, and they were feeling good about it. Now, of course, with these current set of lockdowns that'll probably slow down a little bit because communication slows down, et cetera. And then in Americas, North America -- Americas was slower and slowest. So that's on a region basis.

在第二波浪潮或歐洲開始的封鎖之前，我們的客戶表示，他們因看到招標活動的增加而受到鼓舞。因此，報價活動增多，報價不斷流出。所以這是一件積極的事情，他們對此感覺很好。當然，現在，由於目前的一系列封鎖，由於通訊速度減慢等原因，速度可能會稍微減慢。然後在美洲，北美——美洲的速度最慢。這是按地區劃分的。

From a modality perspective, what we saw was, mammography was one of -- mammography and dental were the 2 that initially stopped very quickly, right, because these were in outpatient areas. But then the return also feels like it seems like as a modality, they respond quicker. They stop quicker -- sooner, they come back faster. So that's how we're seeing -- so we did see an uptick in mammography.

從模式的角度來看，我們看到的是，乳房X光檢查是其中之一——乳房X光檢查和牙科是最初很快停止的兩個，對吧，因為這些是在門診區域。但回歸也感覺像是一種形式，他們的反應更快。他們停下得更快——更快，回來也更快。這就是我們所看到的——所以我們確實看到乳房X光檢查增加。

Now that's coming largely because, as you mentioned, as these elective -- I'll just call it mammography screening as elective in that context. As people go back to -- the offices open up and people go back to their screening activities, the usage of the systems then drives the replacement tube revenues for us. So we've begun to see an uptick in -- as hospitals have become more active and outpatient imaging centers are more active, we're seeing replacement tubes volume picking up. So that's where we're seeing it.

現在這主要是因為，正如您所提到的，作為這些選修課——我將其稱為乳房X光檢查篩檢，在這種情況下作為選修課。當人們回到辦公室時，人們又回到他們的篩檢活動，系統的使用就會為我們帶來更換管的收入。因此，隨著醫院變得更加活躍，門診影像中心更加活躍，我們已經開始看到替換管數量的增加。這就是我們所看到的。

In terms of capital equipment purchases, we haven't seen anything conclusive one way or another. But we have seen pockets of increased activity, which are encouraging.

在資本設備採購方面，我們還沒有看到任何決定性的消息。但我們看到一些活動增加，這是令人鼓舞的。

Okay. Just take one on the product side, Sunny, you mentioned the Nanotube technology, and you sound very excited about that. When might we actually see some commercialization of this? It sounds like we still -- are we still several years out from that or?

好的。就拿產品方面來說，Sunny，你提到了奈米管技術，你聽起來對此感到非常興奮。我們什麼時候才能真正看到這種技術的商業化？聽起來我們仍然——距離這個目標還需要幾年的時間？

Yes. So Larry, as you look at our -- this is the -- can be a frustrating part of our business, right? That time to revenue tends to be long. If you look at the product life cycle from the point where we have -- first, we developed the foundational technologies. And when we have it, we take into our OEMs and they start evaluating it, and then they start designing their imaging applications around it. And then they bring it to market.

是的。所以拉里，當你看到我們的——這就是——可能是我們業務中令人沮喪的一部分，對吧？實現收入的時間往往很長。如果你從我們擁有的角度來看產品生命週期——首先，我們開發了基礎技術。當我們擁有它時，我們會諮詢我們的原始設備製造商，他們開始評估它，然後開始圍繞它設計成像應用程式。然後他們將其推向市場。

So we're at that stage, where we feel good about the foundational technologies. That initial phase of development is moving along very well. And now we're making samples available to our customers who are now characterizing them. And then -- so this R&D process continues on. So directly to your question, frankly, it'll be 2-plus years before we see anyone bring a system to market. But the good news is once they bring it to market in the next 15, 20 years, we stay engineered in there, right? So that's the upside...

所以我們正處於這個階段，我們對基礎技術感覺良好。開發的初始階段進展順利。現在我們正在向正在表徵它們的客戶提供樣品。然後，這個研發過程就會持續下去。所以直接回答你的問題，坦白說，我們需要兩年多的時間才能看到有人將系統推向市場。但好消息是，一旦他們在未來 15、20 年內將其推向市場，我們就會繼續進行設計，對嗎？這就是好處...

Yes, absolutely. Yes. That's right. Yes, fair enough. And obviously, hopefully, several, you can -- perhaps several come to market, and that would be great.

是的，一點沒錯。是的。這是正確的。是的，很公平。顯然，希望有幾個，也許有幾個進入市場，那就太好了。

Right.

正確的。

Yes. Absolutely. Just last question, just on the cost again. I guess the 100 bps gross margin targeted improvement will be a gradual type thing that you hope to sort of reach full run rate as we head into fiscal '22? Is that fair enough? And that would be like a 6 -- $7 million, $8 million type thing, if we just base it on run rate revenue?

是的。絕對地。最後一個問題，又是關於成本的。我想 100 個基點的毛利率目標改善將是一個漸進的事情，您希望在我們進入 22 財年時達到全面運行率？這樣夠公平嗎？如果我們只根據運轉率收入計算的話，這就像 6 - 700 萬美元、800 萬美元類型的東西？

Yes. So Larry, I think we -- as I said, we started working on them, but these are -- these things move slowly. I'm hoping that it has a beneficial impact in the second half of fiscal 2021 here. So our target would be that for sure, FY '22 gets the help of a full 1 percentage point. But I'm hoping even for Q4 of this fiscal year, we are able to get the full percentage point for.

是的。所以拉里，我認為我們——正如我所說，我們開始研究它們，但這些——這些事情進展緩慢。我希望它能在 2021 財年下半年產生有益的影響。因此，我們的目標是，22 財年肯定會獲得整整 1 個百分點的幫助。但我希望即使在本財年的第四季度，我們也能夠獲得完整的百分點。

Okay, great. So you'll get some gradual improvement, maybe not in Q1, but maybe a little bit even in Q2, Q3 or if you going to get to that full...

好的，太好了。所以你會得到一些逐步的改進，也許不是在第一季度，但即使在第二季度、第三季度也可能有一點點，或者如果你要達到全面的水平…

We are going to go a little bit slow in Q1, Q2 and then pick up in Q3, Q4. So Q1, Q2, I will not count too much on that.

我們將在第一季、第二季放緩一點，然後在第三季、第四季加快腳步。所以Q1、Q2，我不會太指望這一點。

Our next question is from Suraj Kalia with Oppenheimer & Company.

我們的下一個問題來自 Oppenheimer & Company 的 Suraj Kalia。

Sunny, Sam, Howard, I hope everyone is safe and healthy. Can you hear me all right?

Sunny、Sam、Howard，希望大家都平安健康。你聽得到我說話嗎？

Yes, we can.

我們可以。

So Sunny, a bunch of questions for you and some for Sam. Let me start out on a high level, Sunny. Obviously, you guys were forced into a tricky position with this whole nonsensical China tariff thing.

桑尼，我想問你一些問題，也問薩姆一些問題。讓我從高層次開始吧，桑尼。顯然，你們在這整個荒謬的中國關稅問題上被迫陷入了一個棘手的境地。

Now with the new administration on the horizon, do you anticipate any realignment that potentially could offer some incremental benefits, whether it's in workflow logistics, product streamlining, and locally manufactured product? Any additional color there would be great.

現在，隨著新政府的出現，您是否預期任何可能帶來一些增量效益的調整，無論是在工作流程物流、產品簡化和本地製造產品方面？任何額外的顏色都會很棒。

Okay. So let me take that. As you -- Suraj, you might recall, that we got hit by tariffs in the beginning, and we reacted very quickly to that. And one of the things we did was set up local manufacturing. We said today, it's China, tomorrow it might be India, somewhere else, how do we make ourselves local-for-local. So good news here is that our local-for-local initiative, which is the manufacturing in Wuxi is up and running for detectors and tubes, we've had multiple models, many models of tubes, many models of detectors being built.

好的。那麼就讓我接受吧。正如你——蘇拉吉，你可能還記得，我們​​一開始就受到關稅的打擊，我們對此反應非常快。我們所做的事情之一就是建立本地製造廠。我們說今天是中國，明天可能是印度，其他地方，我們如何讓自己在地化。好消息是，我們的本地化舉措，即在無錫的探測器和管子的製造已經啟動並運行，我們已經製造了多種型號、多種型號的管子、多種型號的探測器。

So in a way, we're in a situation where, at this point, for what we need to sell in China, we feel confident that should there be a reverse -- I mean, if there's a turnaround and it's reversed, that's great. It will be helpful. But if the tariffs continue or if the tariffs increase, we are hoping that what we have done by putting in local manufacturing and local sourcing in China that we will offset some of that risk and create a bit of a hedge for ourselves. That's how I'm looking at it.

因此，在某種程度上，我們現在所處的情況是，對於我們需要在中國銷售的產品，我們有信心，如果出現逆轉，我的意思是，如果出現逆轉並且逆轉，那就太好了。這會有幫助的。但如果關稅繼續下去或關稅增加，我們希望透過在中國進行本地製造和本地採購所做的事情能夠抵消部分風險，並為自己創造一些對沖。我就是這麼看的。

Hard to tell which way things are going to go with the tariffs. I don't think -- I mean this -- it will be totally speculative for me to say something. I mean, I really don't know. All I can say is we saw that we -- this is not something that would allow for -- to dog our business in the future, and that's why we took the steps of local-for-local like we did.

很難判斷關稅將走向何方。我不認為——我的意思是——我說的話完全不是推測性的。我的意思是，我真的不知道。我只能說，我們看到我們——這是不允許的——在未來繼續我們的業務，這就是為什麼我們像以前那樣採取本地化的步驟。

Fair enough. Sunny, you and I have talked a number of times about your cold cathode technology. Obviously, there is a lot of buzz about this new approach and potentially paradigm-shifting approach to photon generation and X-ray generation.

很公平。 Sunny，你和我已經多次談論過你的冷陰極技術。顯然，這種新方法以及潛在的光子生成和 X 射線生成範式轉變方法引起了許多關注。

So Sunny, you made some comments specifically, if I heard you right, you said it will be ready in 2 years. You guys are in life cycle testing. Let me frame the question a little differently. How do you balance the cannibalization that could occur of existing versus new sockets with this new approach? Have you all done the internal price points? How would this work? Any color there would be great.

Sunny，你具體說了一些意見，如果我沒聽錯的話，你說兩年內就準備好了。你們正在進行生命週期測試。讓我稍微改變一下這個問題。如何使用這種新方法平衡現有套接字與新套接字可能發生的蠶食？內部價位你們都搞定了嗎？這將如何運作？任何顏色都會很棒。

Yes. Yes. So in terms of life cycle testing and those things, those are all stuff that's underway, and they will continue on. So the work that we're doing now is in parallel with that. So now we're giving these samples of tubes, so to say, engineering samples to our customers. So they can understand how they behave, how they operate, so they can start thinking about what types of applications and modalities would be useful for this.

是的。是的。因此，就生命週期測試和這些事情而言，這些都是正在進行的事情，而且它們將繼續下去。所以我們現在正在做的工作是與此並行的。因此，現在我們向客戶提供這些管樣品，即工程樣品。這樣他們就可以了解它們的行為方式、操作方式，這樣他們就可以開始思考哪些類型的應用程式和模式對此有用。

Now in terms of, would this cannibalize existing product line and technologies. Look, first of all, I expect -- what I expect will happen out of this is that we will get a lot of new customers. That -- obviously, that's what we would be pushing for. OEMs that didn't use our technologies, and there are people that are lining up to evaluate these are -- I'm really happy to see that a lot of new pins, right? So that's -- from my perspective, that's a good thing.

現在來看，這是否會蠶食現有的產品線和技術。瞧，首先，我期望——我期望由此發生的是我們將獲得許多新客戶。顯然，這就是我們所要推動的。沒有使用我們技術的原始設備製造商，以及正在排隊評估這些技術的人 - 我真的很高興看到很多新引腳，對吧？所以從我的角度來看，這是一件好事。

Then in terms of cannibalization of existing technologies, well, there -- that could happen. If one of our existing customers decides that their next version of XYZ modality will use the Nanotube-based tubes. So be it. What we are going to do is to -- we have -- we're not at that stage to have set pricing in those other parameters, but the intent here is that this thing has very significantly different and new value proposition.

然後就現有技術的蠶食而言，嗯，這可能會發生。如果我們的現有客戶之一決定他們的下一版本 XYZ 模式將使用基於奈米管的管。就這樣吧。我們要做的是──我們已經──我們還沒有在那個階段為其他參數設定定價，但這裡的目的是這個東西有非常顯著不同的新價值主張。

So I would expect that this would be a net very positive thing for us to rather cannibalize ourselves and put out something that's technologically far superior and brings a lot of additional value and advantage. So it'll be that positive thing for us, even if it replaces our existing product line.

因此，我認為這對我們來說是一件非常積極的事情，我們寧願自我蠶食，推出技術上遠遠優越的東西，並帶來許多額外的價值和優勢。因此，即使它取代了我們現有的產品線，這對我們來說也是一件積極的事情。

Now we still have -- remember, we have that any customer that builds this into their new application still has a very large installed base of the other technologies, right, which we will continue to supply. So this becomes a new -- in a way a new revenue stream for us for the future. People -- but I guess what I mean is people are not going to retrofit this into an existing product line. It's going to be mainly a new application and a new revenue stream.

現在我們仍然——記住，任何將其建置到新應用程式中的客戶仍然擁有非常大的其他技術的安裝基礎，對吧，我們將繼續提供這些技術。因此，這在某種程度上成為我們未來的新收入來源。人們——但我想我的意思是人們不會將其改造到現有的產品線中。這將主要是一個新的應用程式和一個新的收入來源。

Right. No, I get it. I was just curious if you'll anticipate any of the existing sockets when the equipment life cycle is up. And the new -- the new machine of the replacement would that incorporate? If at all, it incorporates the cold cathode technology and then there are ramifications for replacement cycle and all that. But I get your point.

正確的。不，我明白了。我只是好奇當設備生命週期結束時您是否會預期任何現有的套接字。新的－替代品的新機器會包含在內嗎？如果有的話，它採用了冷陰極技術，然後會對更換週期等產生影響。但我明白你的意思。

I guess a couple of follow-ups, if I could, for Sam. Sam, just following up on Anthony's question about the $20 million spread on the top line. I'm not sure I heard about your implicit expectations for the Medical versus Industrial. And the reason I ask is, if I look at the Medical -- or for that matter, Industrial, right? It isn't clear to me that things have bottomed out, especially on the Medical? But maybe you can sort of give us a flavor of how you are thinking in terms of this guidance?

如果可以的話，我想為 Sam 做一些後續工作。 Sam，我只是在跟進 Anthony 關於 2000 萬美元頂線差價的問題。我不確定我是否聽說過您對醫療與工業的隱含期望。我問的原因是，如果我看看醫療產業——或者就此而言，工業產業，對吧？我不清楚事情是否已經觸底，尤其是在醫療方面？但也許您可以向我們介紹一下您對本指南的看法？

And the second part of my question, and I'll just plug that in now. Sam, you all mentioned about improvements. I was just making notes. You said streamlining existing manufacturing operations. Would this offset any gains from the Santa Clara shutdown? And as I was scribbling notes, what I wrote was about 1% to 2% incremental improvement in gross margins every quarter. So should I think that as we exit next year, we are probably talking gross margins, GAAP gross margins in the 31%, 35-ish-percent range? Or did I get that wrong?

我的問題的第二部分，我現在將其插入。薩姆，你們都提到了改進。我只是做筆記。您說精簡現有的製造業務。這會抵消聖克拉拉關閉帶來的任何收益嗎？當我亂寫筆記時，我寫的是每季毛利率大約有 1% 到 2% 的增量改善。那麼我是否應該認為，當我們明年退出時，我們可能會談論毛利率，GAAP 毛利率在 31% 到 35% 左右的範圍內？還是我弄錯了？

Sure. So Suraj, I'll address your second question first here. So the bit where I talked about, improving manufacturing yields, warranty, et cetera. That's what I think you were referring to. That is incremental to Santa Clara related cost savings. That's one. I do -- and I just want to highlight that, that entire initiative for FY '21 will give us an improvement of 1 percentage points in gross margin. So I just want to make sure that it is not 1% every quarter.

當然。 Suraj，我首先在這裡解決你的第二個問題。所以我談到的是，提高製造產量、保固等等。我想你指的就是這個。這是聖克拉拉相關成本節省的增加。這是一個。我確實這樣做 - 我只是想強調一點，21 財年的整個計劃將使我們的毛利率提高 1 個百分點。所以我只是想確保每個季度不是 1%。

So the way gross margin is lining up here is that, this coming quarter, we have some benefits from Santa Clara shutdown. The following quarter, we would have full benefits from Santa Clara shutdown. And the following quarter, we would have some benefits coming in from our warranty and yields and some of those initiatives. And so that is how gross margin is ramping up.

因此，毛利率的排列方式是，在下個季度，我們從聖克拉拉的關閉中獲得了一些好處。接下來的季度，我們將充分受益於聖克拉拉的關閉。在接下來的季度，我們將從我們的保固和產量以及其中一些舉措中獲得一些好處。這就是毛利率上升的方式。

So if you take all of these numbers that I have highlighted here, I think you are going to see that you'll probably be looking at 32%, 33% type of gross margin by the time the year is ending as opposed to, say, around 33% as opposed to 35% that you mentioned. So that is one thing I want to highlight, and these are all non-GAAP numbers.

因此，如果你看一下我在這裡強調的所有這些數字，我想你會發現，到今年結束時，你可能會看到 32%、33% 的毛利率，而不是說，大約33%，而不是你提到的35%。這是我想強調的一件事，這些都是非公認會計原則數字。

And then coming back to your first question in terms of the top line and the variability around that. In that, Christmas season is coming in and COVID is also flaring up here and there. And this is why we are highlighting a $20 million range on the top line. It is possible that some facilities that our customers have, they may or may not be able to take our shipments. So, so far, there is no such news or knowledge that we have, but we are just being cautious about it. And that is why we are giving this range. It's really the known unknown, so to say, at this point, which is what we are incorporating. But in general, our guidance, both for top line and also for our EPS guidance, we track towards the midpoint of the guidance.

然後回到你的第一個問題，即營收和相關的可變性。聖誕節即將到來，新冠疫情也四處蔓延。這就是為什麼我們在營收上強調 2000 萬美元的範圍。我們的客戶擁有的某些設施可能無法接收我們的貨物。所以，到目前為止，我們還沒有這樣的消息或知識，但我們只是對此持謹慎態度。這就是我們給出這個範圍的原因。這確實是已知的未知，可以說，在這一點上，這就是我們正在合併的內容。但總的來說，我們的營收指引和每股盈餘指引都朝著指引的中點前進。

Our next question is from Jim Sidoti with Sidoti & Company.

我們的下一個問題來自 Sidoti & Company 的 Jim Sidoti。

Can you hear me?

你聽得到我嗎？

Yes, yes.

是的是的。

Good. Hope everyone's well. A couple of quick questions. You talked a little bit about the samples or prototypes that you have out in the field now with some of your old and young customers, how long does it take for that to convert into orders?

好的。希望大家都好。幾個簡單的問題。您與一些老客戶和年輕客戶談到了您現在在現場的樣品或原型，需要多長時間才能轉化為訂單？

If -- first of all, if it's an existing technology like on existing tubes, existing detectors. Usually, that process is between 12 to -- somewhere between 12 and 24 months. Tubes take longer to integrate. Detectors are usually faster. This is a brand new technology. I think you're referring to our Nanotube based, it's brand new technology. It's something entirely different and new. So my expectation, Jim, is that it'll take a little longer.

如果－首先，如果它是現有的技術，例如現有的管線、現有的偵測器。通常，該過程需要 12 到 12 到 24 個月之間。管子需要更長的時間才能整合。探測器通常速度更快。這是一項全新的技術。我認為您指的是我們基於奈米管的全新技術。這是完全不同的、新的東西。所以，吉姆，我的期望是需要更長的時間。

First of all, customers have to figure out what the heck this thing can do for them, and they have ideas, then they have to do a lot of design work and redesigning of the modality and maybe a whole different way of thinking about what they're going to do.

首先，客戶必須弄清楚這個東西到底能為他們做什麼，他們有想法，然後他們必須做大量的設計工作和模式的重新設計，也許還有一種完全不同的思考方式將會做。

So it'll take some time. It'll take longer than normal. So we're not putting out -- anything out there in terms of our trajectory or time lines or revenue trajectories. All I'm saying is that it'll take 2 to 3 years for people to bring something to market with this technology.

所以這需要一些時間。這會比平常需要更長的時間。因此，我們不會發布任何有關我們的軌跡、時間表或收入軌蹟的資訊。我想說的是，人們需要 2 到 3 年的時間才能將採用這項技術的產品推向市場。

And Sam, did you indicate whether you think you'll be cash flow neutral, cash flow positive next year? Or did you make any comments regarding that?

山姆，你是否表明你認為明年你是否會實現現金流中性、現金流為正？或者您對此有何評論？

I did not make any comments, but I'm happy to provide some color on that. In terms of with our cost reductions in, I think at current levels, after this next quarter passes, we should be cash flow breakeven at these levels, essentially.

我沒有發表任何評論，但我很高興對此提供一些顏色。就我們的成本削減而言，我認為在目前的水平上，下個季度過後，我們基本上應該在這些水平上實現現金流盈虧平衡。

Obviously, what all we are working on is to reduce costs and improve gross margin, and that should begin to play. But the bigger thing is we would like and we would and everybody does want recovery to happen. So we are nicely positioning ourselves from a cost structure and gross margin perspective to be able to receive the recovery well, and that should really improve the cash flow performance of the business.

顯然，我們所做的一切就是降低成本並提高毛利率，這應該會開始發揮作用。但更重要的是，我們希望、我們願意、每個人都希望復甦能夠發生。因此，我們從成本結構和毛利率的角度很好地定位自己，以便能夠很好地實現復甦，這應該真正改善業務的現金流績效。

Okay. And were there any additional staff reductions in the fourth quarter?

好的。第四季是否有進一步裁員？

Yes. We -- early in fourth quarter -- sorry, not early, say around mid of fourth quarter. We had about 94 positions that were eliminated in the U.S. So that staff reduction was there. And then a little bit of -- there are a few other small actions that are still being worked on. We haven't completed them fully, but they are a minor piece compared to what was done in July, August.

是的。我們 - 第四季初 - 抱歉，不早，大約是第四季中期。我們在美國裁減了大約 94 個職位，因此人員減少了。還有一些其他小行動仍在進行中。我們還沒有完全完成它們，但與七月、八月所做的相比，它們只是一個小部分。

So is it fair to say the bulk of the staff reductions are -- you're past the bulk of the staff productions at this point?

那麼，可以公平地說，大部分裁員是──目前你們已經完成了大部分員工生產嗎？

Yes. I think that is very fair to say that bulk of the staff reductions are behind us at this time. That is fair to say.

是的。我認為，可以公平地說，目前大部分裁員已經成為過去。可以這麼說。

So I mean if we look at the guidance you gave for the first quarter of fiscal '21, it sounds like you're pretty comfortable with the level of the staff like we have right now. I know you don't want to go out and give long-term guidance, but is it fair to say that you think that things are pretty much bottomed out the last 2 quarters and that you don't expect the business to deteriorate significantly from the level it is right now?

所以我的意思是，如果我們看看您為 21 財年第一季提供的指導，聽起來您對我們現在的員工水準非常滿意。我知道您不想出去提供長期指導，但可以公平地說，您認為過去兩個季度的情況已基本觸底，並且您預計業務不會從現在是什麼水平？

So Jim, in general, we would never say never again type of a thing. But in terms of our business, look, Q3, Q4, we have -- that it has stabilized. It has stabilized, although at a lower level. We are just waiting for the recovery to happen. So I think your understanding or your interpretation is correct. We are not seeing any further degradation of our business.

所以吉姆，總的來說，我們永遠不會再說類似的事情。但就我們的業務而言，第三季、第四季度，我們的業務已經穩定下來。儘管處於較低水平，但它已穩定下來。我們只是等待復甦的發生。所以我認為你的理解或解釋是正確的。我們沒有看到我們的業務進一步惡化。

It seems to me we kind of bottomed out, maybe, say, July in terms of the month-to-month performance. And so that's where we are. But at the same time, major piece of recovery, we are still waiting for, and we will be ready for it as it comes. We are taking this time to get our cost structure and gross margin structure all in line. And as top line increases from where we are currently, it should provide a nice tailwind to our overall performance, including gross margin and operating margin.

在我看來，就月度表現而言，我們可能在 7 月觸底。這就是我們現在的處境。但同時，我們仍在等待重大的復甦，我們將為它的到來做好準備。我們正在利用這段時間來讓我們的成本結構和毛利率結構保持一致。隨著我們目前的營收成長，它應該為我們的整體業績（包括毛利率和營業利潤率）提供良好的推動力。

We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing remarks.

我們的問答環節已經結束。我想將會議轉回管理階層進行閉幕致詞。

Thank you for your questions and participating in our earnings conference call for the fourth quarter and fiscal year 2020. A replay of this quarterly conference call will be available through December 1 and can be accessed at the company's website or by calling (877) 660-6853 from anywhere in the U.S. or by dialing (201) 612-7415 from non-U.S. locations. The replay conference call access code is 13712445. Thank you, and goodbye.

感謝您提出問題並參加我們 2020 年第四季和財年的收益電話會議。本季電話會議的重播將持續到 12 月 1 日，您可以透過公司網站或致電 (877) 660 進行存取。從美國任何地方撥打6853 或從美國以外地區撥打(201) 612-7415。重播電話會議接入碼是 13712445。謝謝，再見。

Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.

謝謝。今天的會議到此結束。此時您可以斷開線路，感謝您的參與。