Q3 2020 Earnings Call
[music].
Welcome to the Q3 fiscal year 2020 resin Mad earnings Conference call.
My name is Diego and I'll be your operator for today's call.
At this time all participants are in listen only mode. Later, we will conduct a question and answer session. Please note that this conference is being recorded.
Well now turn the call or two Amy wake them, Vice President of Investor Relations and corporate communications. Thank you Amy you may begin.
Great. Thank you Diego good afternoon, and good morning, everyone. Welcome to read led third quarter fiscal year 2020 earnings call.
We appreciate you joining us and I hope you all remain healthy and faith during these times.
This call is being webcast life and the replay along with a copy of the earnings press release.
Updated investor presentation, there will be available on the Investor Relations section of our corporate website later today.
Joining me on the call today to discuss our quarterly result from various remote locations across San Diego in Sydney, Our CEO, Nick several and CFO, Brett Sandercock as well as other members of management, who will be available during the Q and a portion of our call.
During today's call, we will discuss several non-GAAP measures.
A reconciliation of these measures. Please review the notes to today's earnings press release.
As a reminder, our discussion today may include forward looking statements, including but limited to expectations about residents future performance.
We believe these statements are based on reasonable assumptions. However, our actual results may differ particularly in light of the highly uncertain global environment. We're currently operating in any effects of the cobot 19, Corona virus honor business.
You are encouraged to review our SEC filing for discussion of the risk factors that could cause our actual results to differ materially from any forward looking statements made today.
With that I'd like to go ahead, and now I'll turn the call over to Mick.
Thanks, Amy and thank you all for joining US today. These are unprecedented times as Amy just noted we're in the midst of the global pandemic.
I would just having profound effects on public health, particularly the most vulnerable among us.
During this time out top three goals here at Resmed simple gold one is the preservation of life, helping people brief with world class Resmed ventilators and ventilation mosques, while their own immune system fonts against this novel Corona virus and the disease. It causes coated no one thing.
Gold food is the safety and health of our Amazing thing of 7500, BRISMET audience, providing solutions in 140 countries worldwide because without L. people. We can't help anyone brief that and go three is the ongoing delivery of world, leading products and services to treat sleep.
Neil chronic obstructive pulmonary disease and asthma as well as the ongoing production of market, leading software to take care of over 110 million people would care delivered by home medical equipment providers skilled nursing facilities nursing homes hospice and importantly in the place where people.
Prefer to be they huh.
I've never been more proud to cool myself are resonating than I am to die every one of our global team is fully engaged in the note in the cause of 19 crisis. They are demonstrating impressive faces ingenuity compassion and drive to support patients clinicians providers health systems and beyond.
My email inbox is overflowing daily with stories of resin made heroes, including frontline work as such as our own respiratory therapist, and clinicians as well as really resonating ones, who showing up every die using all of our updated safety procedures to source been lighter components from around the world to produce spend lighter.
And masks and tubing and software and deliver these life changing solutions worldwide to shed just one example for many years the story of Resmon hero from out China team actually and we will happen in her by province, who don't a full hazmat suit every day for the first 10 weeks of the Corona outbreak in that region.
He was setting up thousands of people on Resmed had been lighters and resmed masks, including of in light of that we call. The Guardian Angel well Gee I, even lighter produced right. There in China, We don't know how many lives. This gentleman saved in Hebei province, but I have a good fortune of calling him my Resmed team, Mike So to all those Resmon heroes I see.
Thank you and then I'm inspired by you and how you stepped up to help patients at the start of this crisis there in January and for the duration now through April and beyond.
As a global company, providing solutions and over 140 countries, we have mobilized our efforts and resources to address cobot 19, as this deadly disease moves from region to region, we have accelerated production and distribution of invasive ventilators noninvasive ventilators, including by level devices as.
Well as ventilation masks for the patients who need than most no matter where they live.
We produced over 52000, noninvasive ventilators, including by levels and invasive ventilators during the quarter. This is a threefold increase on out production from the same quarter in 2019 living up to the expectations that we said publicly.
We have also driven a tenfold increase in l. ventilation mass production actually more than 10 fold. We are aligning distribution of these ventilation products worldwide using a global ethical epidemiology based model or ventilation needs based on our models of the surge of covered 19 patients around the world and.
Key guiding principle is the preservation of life.
We can and will do more over the coming days weeks months in quarters to support healthcare systems as coated 19 continues to impact countries across Asia, Europe, and North America and with future patient surge is just starting to begin in South America Africa Middle East and beyond.
We have been able to achieve these outcomes, while ensuring that we always placed the health safety and well being of our raise mid teen at the top of our priority list without our people as I said earlier, we can do nothing our actions have included work from home policies for all his job function allows for that we've instituted noncontact temperature screening mass.
Squaring policies in physical distinct distancing protocols for all of our supply chain production distribution and technical service teams worldwide.
<unk> at all times and today more than ever these capabilities enable us here at resume to support our customers with a sustainable supply products services and solutions throughout his coded 19 crisis and beyond.
I also want to express my gratitude and appreciation for the extraordinary efforts of people beyond the boundary of Resmon, especially the front line healthcare workers in hospitals worldwide respiratory therapist critical care notices critical CAD doctors and many others have demonstrated extraordinary leadership and personal sacrifices.
This time.
These clinicians <unk> people with symptoms into various therapeutic pathways, depending on the changing acuity Oh, they <unk> individual with this novel carnivores.
From C. pet therapy to buy level therapy to more advanced non invasive ventilation as well as to fool <unk> with invasive ventilation for the patients who need that.
These conditions are using resumes ventilators and resumes ventilation mosques with direct person to person engagement.
Which even with full personal protective equipment still include significant risk for that coordination, we are working with customers worldwide to draw a digital pathways to try to minimize I needed person to person interaction. Examples of this include remote monitoring of ventilation devices Tilley health solutions and virtual patient popular.
<unk> management.
We have over 11 million devices with available connectivity to our cloud by solutions, including my Air and every year, we have other 13 million patients as well as Oh that 6 billion knots.
Billion knives of respiratory medical data in the clown.
We had a running stop in the field of digital health well before discovered 19 crosses one of the future positive benefits out of this awful crosses is that has brought to the forefront the importance of digital health for the health and safety of respiratory therapists respiratory nurses and critical care physicians digital.
<unk> also brings benefits of most scalability more cost efficiency and better outcomes for patients.
Throughout the quota despite all the changes brought bodies current of ours. We have continued to execute on how long term Reds made 2025 strategy, including digital health expanding end to end pathways for sleep apnea for C.L.T.D. and full asthma.
As well as buildings, the world's best out of hospital healthcare software network.
Fundamentally we believe and continue to believe through this crisis, even more so that the future of healthcare is outside the hospital that's way Redmond competes today, and that's where resonated wins today. The covered 19 pandemic has proved an interesting point the more we can establish noncontact digital held pop lights at scale the.
Better the health of therapists notices and physicians and the better the effort to see the efficiency the skyline and the quality of care for patients.
We have accelerated <unk> to improve over 250 million lives in outside the hospital healthcare by 2025.
The fundamentals of our resident business, a strong even as we see until uncertainty in the changing kinetics and dynamics of the cousin 19 disease as it continues to move across geography from Asia to Europe to now North America and on to South America Africa and regions worldwide, we S.C.
Same <unk> you know business from increased demand of al ventilators, such as Astro Stella Loomis as well as Al Noninvasive, then light as air because flex and the G.I.. We also seeing increased demand for ventilation mosques solutions.
We do not know exactly how long the surge of demand will last for each hospital for each city for each country and for each region. As this coded 19 bars moves, but as patient close surges peaks and then flattens. We are there and we are getting pretty good at modeling. These demand curves using our global covered 19 epidemiology model of patient.
<unk> and the learning from each city that we sort of.
Currently a lot of short term impact also depends on our ability to keep than lie to production at its maximum capacity and as I mentioned earlier, we are already at three times last year's production capacity and we're doing our best to meet the surge and peak flow in multiple geography is worldwide a key element is it.
In in our ability to deliver is our ability to source critical components and ship product in response to the incredible demand as this kind of in 19 virus moves around the world I want to be clear on this point dark even as we face increased demand for our products. We are doing everything that we can to keep efficiency high.
And to keep out costs down.
Primary humanitarian goal is 100% locked at resonate we are committed to enabling access to ventilators <unk> in order to preserve life.
We are keeping pricing steady and we will not opportunistically increase prices or <unk> per unit profit in our response to kind of annoying thing.
We believe that there will be lessons learned during the crisis that will enhance our ability here resume to drive innovation in the coming quarters coming years throughout research and development pipeline, particularly in the fields of digital health technology, as well as our product and software innovation.
We are very competitively positioned in these fields to die, but we think we will be even more so tomorrow.
While balancing out response to the global public health crosses we have also been executing well in out cold business, we have delivered stronger us in our sleep apnea, C.L.T.D. and asthma businesses across geography with solid contributions from now software as a service business during the quarter.
In a few minutes <unk>, Brett Sandercock will provide the details all their third quarter financial performance along with our outlook for the remainder of fiscal 2020, but first all provide just a few financial highlights and briefly discuss execution towards originally 2025 strategy along with some milestones for the quarter.
So for the third quarter of fiscal year 2020, we deliver just around $770 million in quarterly revenue, which is <unk>, 17% you're out of the year, reflecting gross and positive momentum across a product portfolio software solutions and global markets.
As part of our global covered 19 response, we have seen tile wins for the increased demand for invasive than light as a non invasive ventilators, including by level devices mosques and accessories as I mentioned earlier, we estimate the incremental impact to be approximately $35 million of covered 19 delighted revenue during the quarter.
So from this $770 million and quarterly revenue, we generated a strong $240 million in cash flow from operations during the quarter and <unk>, enabling us to return cash dividends to shareholders as declared by aboard today.
We continue to invest in the future growth of <unk> enterprise with double digit increases in our research and development investments during the core.
Disarmed the investment includes shifting resources to ventilators, and then <unk> and clinical research and technical help people to help clinicians physicians inventors and people worldwide. During the cause of 19 crisis as well as keeping the ongoing innovation work going for our call sleep apnea see.
<unk> asthma and software as a service businesses.
We have said <unk> maintain out position as the global leader in digital health technology transforming the white healthcare is delivered so those suffering from sleep apnea see I pay day and ask them out as well as a nailing people to live healthier lives in a portfolio settings, a wife from the hospital.
The execution all that long term strategy drives progress against al Triple time of first slowing chronic disease progression second reducing overall health care system costs and stood improving the quality of loss for out ultimate customer the person who uses out products to help them sleep better breathe better until.
Live a high quality of life away from a hospital.
We believe that when we help a person sleep better brave better and live a better quality of life.
From acute care this positions raising it to help those people achieve their best health outcome in other chronic disease conditions, including cardiovascular disease diabetes mental health and beyond we are forming multiple partnerships to drive these long term health benefits, including a joint venture with very early and many other.
Private partnerships beyond watch this space.
We have three priorities that guy out in daily focus.
Number one to grow and differentiate at cost sleep apnea see I'd pay day and asked my businesses across global markets. That's just at cleared number one priority number two to deliver world, leading medical devices and digital health technology to engage physicians providers and patience. So that together, we can improve clinical outcomes.
Reduce costs and enhance patient experiences that's out triple line.
And a third priority is to build the world's best software solutions networks, a health care that is delivered outside the hospital and we're well on track to do that we have had to have advanced on all three of these priorities during the quarter and I'll briefly touched on a few racing highlights to demonstrate areas, where we have momentum and a driving innovation.
We had an exceptionally strong rustiest quota on a geographic and product basis, including 17% growth Bloodedly.
Team delivered strong and distributed geographic grass, including a 12% increase in the combined United States, Canada, and Latin America regions as well as an incredibly strong constant currently increase of 27% across the combined Europe Asia and the other regions.
As discussed earlier, there was an impact from the code in 19 surgeon demands that ventilation in the quarter of around $35 million in revenue. So that's around 4.5% of the $770 million in revenues for the quota in short <unk> underlying business remain robust over and above that of the ongoing surge of demand.
On a product basis during the last 12 months, we improved Oh, the 16 million lives by providing a person with a resume device or a raise made complete mosques system to help them brief better and live a better life.
Polluting add digital helps solutions for out of hospital software in this number we impacted together as a 110 million lives. During these last 12 months the ability to improve these large is supported by of the 6 billion lots of respiratory medical died during the cloud.
These data and allow us to perform sophisticated data analytics and to drive actionable insights for the benefit of customers, including patients physicians providers and healthcare systems. This makes resumes the global leader in digital health for outfield and the partner of choice for our customers, helping them increase efficiency reduce costs.
And improve outcomes.
So shifting to I. discussion about costly that new business, we are seeing significant impact from the covered 19 related lockdowns on you patient diagnoses in sleep, we have seen double digit declines in diagnosis rights in affected markets mini sleep clinics, especially hospital clinics I temporarily closed.
And many pulmonary and critical care physicians that often work in sleep clinics shifting their fuck us to treat covered 19 patience as the search comes to their city they region their <unk> their hospital.
Is important to know that we have seen the mosque and accessories resupply dimension of al business, No dialing nine times, but actually increase during the course.
As we look forward, there's uncertainty and there's not clear to what extent.
The upsurge in ventilation device and then <unk> mosque revenue will offset the decline in sleep device revenue and went asleep mosque wherever you will maintain its growth or d. sell right someone.
But we know these facts number one that sleep apnea prevalence remains incredibly high over 936 million people worldwide and we know fat too that there is a backlog of diagnostic activity for sleep apnea.
See I pay day that many clinics and physicians are preparing to ramp up there has to sleep apnea testing bus now during the crisis and in the future as locked down to lifted around the world for the on premise or in Labar tree tests for sleep apnea, we are modeling how those will scale back up again customizable.
<unk> city by city and country by country as the economy opens up and primary care physician visits and elective medical procedures come back online through Telly health and beyond.
Positions and therapists will then have to work through the backlog of I'm diagnosed patients that has been built through the cousin 19 locked down in that region with a portfolio of bus home sleep apnea testing and in lab tests. The velocity of the diagnostic pathway returned right will depend on local regulations and behaviors.
And what we're calling a new normal for patient care.
We have real time experience over the I've been back up in some cities in Asia and throughout Europe, and we're starting to see them I've been up in the U.S. and we have muddled days out than ups carefully to ensure that we can best support customers as they stopped there Hunsley got me a test skyline and they're in the lab test skiles of the time to make the backlog of demand.
Even today around the world, we're working closely with our customers to accelerate these hundred slept sleep apnea testing models and remote patient set up on asleep at me a therapy, where customers are pursuing those pathways.
As well as our ongoing remote sleep apnea patient monitoring and I mentioned earlier, we have over 11 million, 100% cloud Connectible medical devices out there in the field and more than a distributed every die.
It's important to know that these types of partnerships you you to cause a 19. These are things we've been working on for years and decades in some states and we believe these types of digital health and Telly health and remote monitoring models will only increase due to kind of in 19 and as we move into a <unk>.
World.
In terms of digital health innovation, we have recently rolled out a new pilot four telly health or the video chat so that the physician could not only access information on and solutions and they have you, but it can also interact directly with the patient.
And we think that will reduce the need for recovered <unk> to return to the emergency room or a physician outpatient setting.
We view this as a trend that will be accelerated by combination of changes in reimbursement methodology and I've real focus on safety and the preventative and health benefits for about the patient and the healthcare worker.
Solutions like this can provide incredible style when leveraged across a digital health network, including a that 110 million patient lives as I noted earlier, our investment in research and development grew by double digits in the quarter and we put these are in the monies to work to expedite the tripling of they don't like the production in the quota and.
Tenfold capacity increase you know ventilation mass production, we have also form partnerships with clinicians around the world to help with the kind of the 19 crosses to help create and share clinical white pipe a best practice solutions in clinical practice to help with cozad 19, ventilation management, including tree eyes between.
<unk> <unk>.
Oxygen by level therapy, noninvasive ventilation therapy, and invasive ventilation therapy at the same time, though we have continued to invest in our core businesses for future growth in sleep apnea see everyday <unk> and software as a service.
As an example of this innovation in out costly that me a business we introduced during the quota the F.F. 30.
This is the first to see <unk> design in the full feis category.
This product now gives Reds made the most complete full face mask portfolio versus all our competition on the planet.
So what does this <unk> design of the F.F. 30 odd do for customers.
Since it gives the freedom of movement back to that ultimate customer the <unk>. So they can sleep naturally in any position that <unk> architecture follows during the night.
The F. 30, I also has an innovative cushion that prevents irritation on the nasal bridge and it has a quick release l. by that allows users to quickly disconnect and reattach the mosque from its treating making it very simple to stop therapy at the side of the night and just stop therapy in the morning.
Oh this technology built into the F.F. 30 odd supports the third tenet of out triple I'm to improve the quality of life for the patient if I have freedom of movement and don't wake up that improves their sleep and improves they'd die and improves their life clearly it is very early in the product life cycle for the F. 30.
And this product was launched and made a pretty unique global environment. However, despite some of the noise in the signal we've been able to see good early acceptance as positions respiratory therapist and that ultimate customer the <unk> recognize the benefit in functionality of the innovation in the F. 30 on.
Additionally, during the quarter, we invested $100000 in partnership with the not for profit Americans Harassing Society Foundation through a research grant the goal of the research and the study is to look at how remote monitoring can help improve the management of patience with see I'd pay day.
The study aims to detect early changes in lung function from daily recordings and to notify patience and all physicians went to come into more intensive treatment or to seek high level medical attention.
Nearly 400 million people suffer from C.R.T.D., well wine and we do not believe these people Wellstone's currently by global Health care systems Al vision of better management for C.I.P.D. patients through the use of digital health technologies will be accelerated from the findings of this study it's great to partner with the nonprofit A.T.S. Foundation to help this move forward.
As we discussed earlier covered 19 has accelerated the movement to fully remote care in our cost sleep apnea in ventilation businesses looking at outgrowing digital health solutions for C.I.P.D., an asthma. The propeller platform continues to play an important role in keeping patients out side the hospital out of acute care locations.
Merging the propellers world, leading pharmaceutical adherents technology for these diseases.
Active use of propeller technology has actually increased during the kind of annoying thing crisis. We think this is due to the rising awareness of the importance of respiratory health and the fact that people just don't want to go to acute care settings, and so they using preventative medicines more to do so.
While it's not yet material to resume its overall revenue we are seeing increased interest in propellers technology to support health systems the population health.
We'll keep you updated on any significant milestones without pharmaceutical partners as well as I work with global Health care system partners throughout calendar year, 2020, and 2021 as they adopt the propeller platform fussy I pay day asthma and be on.
Before I transition to a discussion of our out of hospital suffers a service business I'd like to recap briefly why we believe that the staff business is critical to resume as long term success and how it fits into I brought a portfolio.
<unk> consistent view of the evolution of the healthcare system is that can't will be delivered outside the hospital. The contamination of hospitals with Kevin 19 is just one of the lightest examples of the <unk> that are present in many Oscar locations worldwide.
Vision is to enable a system, where a patient can seamlessly transfer across a portfolio of outside hospital care settings from hung care providers to skilled nursing facilities to Hong health to independent living assisted senior living and beyond.
They settings have reduced costs versus the hospital as well as increased efficiency and better health comes health outcomes in the hospital people simply happier and healthier and the residential setting of their choice and the ultimate residents of choice is there huh.
<unk> business clearly leverage is the global trend for seniors to want to aging place and supports regimen <unk> residents continued execution against the Triple A.
S S businesses, and I'd love to participate more deeply and brought a chronic disease across a patient's life cycle, creating additional strategic rise options.
During the quarter Ass software as a service business group at 12% from the period a year ago.
We are integrating and optimizing this out of hospital fast portfolio to support long term <unk>. We continue to believe that the long term weighted average <unk> of the sass markets that we so is in the high single digits. We clearly date that grows this core and we plan to exceed that right in the long run as we execute to ask fast strategy.
During the Cosby 19 crisis, many out of hospital health care settings have switched they use to support other fly from hospitals and there was also being a reduction in patient flow to these out of hospital facility due to a reduction in elective surgeries at hospitals.
Skilled nursing facilities and nursing home volumes have been extremely hard hit by covered 19, and this will impact al matrix can't business Scruggs in the coming quarters.
We expect market growth in our current portfolio obsessed businesses the wheezes to the in the mid single digit range for the next few quarters before it's recovery to high single digit growth in the medium to long term as the cousin 19 search passes and people return to their primary care physicians returned to their elective surgeries.
<unk> volume returns.
[noise] in support of the increased growth of the sass portfolio. During the third quarter. We completed the acquisition of accompany cold Snap works Snap works provides patient contact management and will follow optimization for sleep apnea resupply for H.M.A. customers.
A combination of bright trees technology and live coal services with this new snap works Tech creates the largest resupply base in the industry with end to end <unk> automation for action may customers.
Resupply is an area of the I. chimney business that has been a strong balanced in about during the <unk> Lockdowns and these types of programs, including brought tree and snap works together set up our customers for ongoing success and better patient engagement through the cross us and beyond in summary, the fast portfolio isn't it.
<unk> about long term success and a critical enabler of our ability to impact out triple I'm, we're investing for longterm gravest incest and leadership in this space.
[noise] al performance across the entire resume portfolio during the quarter demonstrates the resiliency of our business during what I would call extremely challenging garbled times and it highlights the did the <unk> <unk> all of the world.
Indication of our customers the clinicians providers and health systems to deliver for the people who need our help.
Looking forward, we modeling impacts of Headwins and Taiwan's from the covered 19 crosses with detailed scenarios of impacts by customer by city by region and by business line.
While we face temporary headwinds in sleep apnea diagnosis and fast patient business. While I was I just talked about we're also seeing tile winds from increased demand frowned ventilation devices <unk> mosques around the world.
The fundamentals of our overall business as strong but these are uncertain times and the crosses continues to unfold across geography, and we don't know exactly how long the related headwinds and the related Ted tile ones were lost.
We don't know specifically by H. city country and region, how fast they will open up but we know they will open up and as we have seen in Asia and Europe. As these economies open up over the coming days weeks and months Resmon will be there to serve them.
And we you know one thing that as they start to open up there has been and will be a backlog of patients who need the channels help for sleep apnea see I pay day asthma and out of hospital healthcare nights, where investing now to be ready for those realities of the open up so that we can be there to support our customers with the best digital helpful.
<unk> and the most scalable solutions to help them growing now we are leading from the from.
The nature of because in 19 crosses has highlighted the importance about digital held strategies I mentioned earlier, our ability to improve over 250 million lives by 2025, an out of hospital healthcare is not not only on track. We think it's accelerated these last three months. This is the one welcome benefit and what has been an incredibly challenging.
Dies for every company I'll, just resonated and every nation every government dealing with this crisis. We're glad that we have made extensive investments in remote monitoring <unk> patients set up digital health population health management over the last 510 plus years that we can now offer and bring to the market to help them when they need it.
Combination of accelerated digital held technology and the recognition of the value of remote monitoring and the projected changes that are already happening in global reimbursement models for digital health combined with the growing acceptance of virtual diagnosis and virtual setup represents a news and significant medium to long term tiling for the resume business.
This combined with our strong pipeline of new products, and digital health solutions, including sleep apnea S.N.P., they asthma and the out of hospital <unk> gives us strong confidence in our future.
I think this is unique positioning that solidifies allergy to ship role in global digital healthy Med Tech, but will also support resmeds gratis over the medium to long term.
Before I hand, the color of the <unk> I'd like to commit that while we have already played a significant role providing tens of thousands of ventilators. Many many more ventilation mosques and clinical support to clinicians worldwide to <unk>. We have not done we will do even more in the coming quota and becoming quarters.
Deliver more ventilators more ventilation mosques for countries as they go through the patient search and we will be there to support healthcare systems around the world in respiratory medicine and digital health.
Not only during this kind of annoying growing 19 crisis, but in what we call. The new normal post coded 19 world that will be more digitally enabled and more digitally connected than ever before.
Is that Alton the call over the bread in Sydney Brett.
Right. Thanks me.
<unk> and I view about results with a quarter of fiscal year 2020, and some remarks reps useful at will.
Just make now do we had a strong quota revenue for the March quarter was 769, and you you can increase of 16% out of the project quota in constant count as he turns revenue increase boy, 17% compared to the par you're caught up.
Revenues for the court, who if I really impacted by significant south of into why did the bosses and accessories.
We have to make an incremental revenue benefits from toes at dawn chain related so it's within the order of 35 million.
Exclude English incremental impact revenue increase about 12% in cost ecology times.
I can't close to look at geographic distribution.
<unk>, excluding revenue from S. offers a service business.
Yeah solved in U.S., Canada, Latin American countries, with 394 million and increasing 12% I would probably get caught up.
And your eyes, and all the market's title 296 million to increase at 23% <unk> quota.
Oh, and constant County times, I, 27% increase.
Byproduct segment U.S., Canada in Latin America, keep ourselves for 196 million and increasing I just can't <unk>.
You know, the south where 197 million and increasing 17 to change.
Corridor.
Your advisor and all the markets do ourselves type of 195 million and increasing 26% <unk> caught up.
Cosmetology pens like 29% increase.
Boston I 1000, your eyes are album markets, with 91 million and increasing 18% <unk> quota or in constant county.
22% increase.
Globally and constant County times by people are solved and Boston all the files increased by 18 exchange par you're cool.
Software as a service revenue for the third quarter was 90 million and increase of 12% over the <unk> corridor.
Oh, and don't get vices Sass revenue increase for a non.
During my comments or should I will be retiring as long gap numbers and don't get <unk> recording tangibles.
Purchased accounting for evaluate justness to matrix Katie should revenue enhancement in payment of my allergy interesting investments.
We have provided a full reconciliation call, but you don't get to get.
<unk>.
<unk>.
How long you have crossed <unk> 17, vices points D., 60% March quota compared to 15 on points, we've seen in the sign quartet last year.
You can crises predominantly attributable to hi, real product mix in manufacturing efficiencies, partially offset by people declines your average selling crosses.
Moving to operating expenses Iris j. not expensive so that so it's a quarter of a 172 million and increase at five <unk>.
In constant County times, it's Jane I explained to the increased by 7% compared to the parties period.
It's Jane I experiences as like percentage of revenue increase to 22.4% compared to 24 point I just can't reporting <unk> caught up.
Even the volatility potential future it and you outcomes Oh, not provide a normal gardens with respect to question I I'd like to change it revenue.
However, I'm looking forward, we expect S.G.I. expenses can increase in your life single digits compared to the year period.
Aren't they expenses for the quarter with 51 million and Crazy I.
Caught up or on a constant kazee biases and increase.
Aren't they expenses as like a <unk> with 6.7% compared to 7.2% <unk> yeah.
We continue to invest in that business, particularly targeted.
Oh.
This is evidence for the double digit crossing holiday expenses increase free.
We believe how long term commitment to mean advice and we'll do we versus find competitive advantage.
Cooking food, we expect a holiday expenses continued to go out in the high single digits to like double digits, reflecting how commitment to innovation for the economic cycles.
<unk>. According tangibles is 20 meetings with a quarter.
If they trace of 10% of the project cool what else, reflecting historical intangible assets, becoming fully amortized during a quota.
But by its compensation expansion of course, it was 14 Gideon.
Don't get operating profit for the quarter was 250, I mean, an increase of 51%.
Caught up.
Reflecting strong public life expansion of gross margin well managed writing expenses.
Putting the benefit of some type of acknowledging impacts we still continue to experience so it up writing leverage.
No one cat and getting uncomfortable caught up with 100, an I.T.I.D. and increasing 47.
Quota.
On a <unk> quarter was 14 point no I'm, just saying well on <unk> Tech strikes for the quartet was 15.1%.
Looking forward, we have to my affecting text size for the fourth quota in fiscal year 2021 will be in the range of 18% to 20%.
No one gets all the earnings per share for the quarter with $1.29 increase of 45% of the <unk> caught up.
Excluding the benefit from <unk> impacts we estimate.
Any space ship with $1.16 increases to keep saying <unk>.
Okay <unk> earnings per share for the quota as one though twirled.
Additionally, during the quarter, we recognize brought down at 9 million associated with one Archie equity investments.
Cash flow from operations for the headquarter was 240 neat, reflecting really bust on belongings and working capital management.
<unk> was 50 million.
<unk> 46 million.
During a quarterly dividend of 56 million.
During the quarter. We also I completed the acquisition about previously announced hockey acquisition of Snap works.
Yeah acquisition moving on gap E.P.S. neutral anyone expected to be tricky thing don't get G.P.S.N. you too.
<unk> pack will not be material things.
We recorded equity losses far from Union have income statement in the <unk> associated with the fairly joint venture.
Stick to record number long run right approximately haagen Univac, where your losses H. Code officer, if you squeeze twentytwenty, one SEC that'd be the joint venture operations.
Given the on place it in unprecedented nicer current events. So a lot to make some comments on that financial help.
Strong balance sheet has always been a whole market rates made and he's my site on basis in Tom's economic I'm sick.
We ended the third quarter with a cash balance a 353 me having generated 240 me and you know party in cash budgeting.
And 472 meetings.
<unk> 2020.
As of March 31 way of 1.4, beating engrossed stick on 1 billion in it.
Title assets, a full point Caucasian.
<unk> levels are nine modest than at March 31, we had a further 895 <unk> available for drawdown en route tasting revolver facility.
In some realliquidity positioning strong.
However, I also wants to <unk>, we all my Italian and disciplined approach and we are taught in managing expenses cash flow and liquidity.
Yeah, Yeah Board of directors declared a quarterly dividend 30 nonsense to share.
Dividends are important to many of our shareholders and the declaration about dividend reflects the bullets confidence you know strong acquitted <unk> upright performance.
Turning to our fourth quarter outlooks at a high level, we expect to say continued strong <unk> and expect incremental restrict it written you to significantly C.T.S. freight.
However, we expect to see I hated we need sleep <unk> in response to a temporary reduction in the dog nicest new patients.
Mathematics asked me to have shown resiliency have the possibly bombs, which reflects the value of the lodge patient Gainesville size.
Locked many other companies we are experiencing high on sitting in the car environment when circumstances any information changing almost on a diet devices as a result for passing possible future revenue outcomes remind dynamic.
And we thought Oh hand to call back to I mean.
Right. Thanks, Thanks neck.
Now turned out to Q. and a person that they call I would like to remind everyone. Please let yourself to one question.
And if you have additional question <unk>. Please feel free to return to that cost you, a diego where now ready for the Q. and a portion.
Thank you.
We will not begin the question and answer session. If you would have a question. Please press.
Are then one on your Touchtone phone, if you wish to be removed from the queue <unk>.
<unk> followed by two on your Touchstone phone, if you're using speaker phone.
We need to pick up the handset before pressing the numbers.
Once again, if you have a question press Star then one on your Touchtone phone.
Your next question comes from the N. Harrison with Bank of America, you say your question.
[noise] Hi, good morning, all and and congratulations on exactly no I'm very interested I can't see a.
Okay.
85 million.
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Yeah.
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<unk> Abel <unk> Hey.
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[laughter].
Thankfully and thanks for the question and Yeah, you're right. We we had two separate metrics that we sort of laid out there one that we we sold an extra $35 million worth of been light in the in the quarter. Those were for you know our inventory and stuff that we've produced and cuter when someone Q3, and so that was a 35 million dollar tile when <unk>.
Business and we expect some of that suddenly to continue as the search continues worldwide into queue for and and then in addition to that we we tripled out production from a year ago, and we made a the 52000 noninvasive ventilators by level devices and invasive then a light as so your question.
You know can we continue and or increase the the production capacity and the answer is absolutely. Yes, we are constrained on some key components for the invasive ventilators. So the Astro and still I had some significant constraints in the components that go into those invasive ventilator said he asked.
And Stella type products, well <unk>, an invasive intellitest still is actually a <unk>, but we really don't have significant constraints to the loomis S.T.I. other than some components a round the alarms module in the the extra components and.
<unk> of S.T.. So those non invasive been ladies can scale to five x. or 10, X. and we can really scale to whatever the demand is and so then it comes down to our ability to predict hospital by hospital customer by customer what those surges in demand going to be as the virus moves around the world and to make sure that raised.
Made is they're getting in order and making sure we can deliver those invasive ventilators, but really importantly does known him dicey been light as an alternative therapies that are also used in the different levels of security for a patient with code that 19. So the answering short is absolutely. We did all we couldn't we triple production in the quarter and we're looking to do that and more.
Q for to deliver for the needs that continue worldwide.
Mm.
Oh I see.
Yeah.
Okay.
Hmm.
Mm.
Yeah.
Okay.
[noise] [laughter] I've got a slightly and the audio wasn't fantastic during that but I think I heard you say that how would we Oh Oh, how fast would we moved from the sort of three x. increases to a five <unk> that's going to be done.
Pending upon our modeling of the different surges that happens city by city and country by country and clearly you know the mosques I used m- far more rapidly because I had changed I, they're pretty regularly suddenly passion to patient, but often die to die with these known vented ventilation mosques and so we expect the search to continue.
Enough to continue to be able to produce throughout two four and be on for the needs. As these because this virus goes around the world and continues to to to expand.
Oh cool.
Oh.
Yeah, I've got to say I <unk> I think I heard you say you can can we <unk> increase the ventilation mass production, we've increased tenfold and will continue to do so I think we should go to the next question <unk>.
Our next question comes from Survivor Scalia with Northland Securities. Please stay your question.
[laughter].
Good afternoon, everyone hope, everyone, a safe and healthy <unk> just one from my side and forgive me field mentioned. This can you will help care Christ your investment in like show, how you'll thinking about the new robot market specifically for sleep apnea, what is the construct of rest Mets investment.
<unk> appreciated. Thank you for taking my question.
[laughter] <unk>, it's a great question and as as you know a you fill it out stuff for a long time, we look at a portfolio of investments to trade sleep apnea and around 10 years ago, we actually invested in the three day printing all I sleep apnea dental device called now.
And that's now great part about portfolio and traits a great number of patients in France and across Northern Europe. Then you are simulation market is an interesting one an excel or we think is a leader in that space and we decided to make a minority equity investment in them I was actually hand over to Jim Hollings had who's the <unk>.
All of our global sleek business to talk about how neural stem dental see pap and how it all fits together.
Thanks, <unk> just just very briefly all since I know, we're probably short on time now the gold standard therapy for sleep apnea continues to be so you've got therapy and you know that we think that will continue for the foreseeable future, we get a chance to seal a wide range of technologies as they emerge and we've we always like.
Carefully at anything we think it an alternative.
As as Mick mentioned, we obviously have a fantastic world device, which we've selling your a brace successfully in our ball device high tax reading printed very low volume of them out very comfortable we've looked at the nerve stem space for quite a long time, there's been a number of companies that have tried to succeed in in the nerve stem space. We think next so it has a novel offer and.
It's potentially disruptive, but it's very early days, it's a minority investment and what's effectively a startup company. So we'd like to technology, we like to play the we'll have to see outplay them.
Thank you.
Mhm. Our next question comes from Christopher with Goldman Sachs.
Hi, I'm morning, and afternoon <unk>.
Can you just remind us of the approximate pay a mix in the city.
And stuff I. Appreciate this is a highly dynamic situation, but if you just say your thoughts on how you respect the the higher rate of unemployment was sitting in the U.S. the impact that basically.
Yeah, Chris Thanks, Thanks for the question and Yeah, certainly you know every country around the world is different I presume you you're asking about the U.S. pay a mix Chris.
Maybe you're on me all the time anyway I mean.
I I <unk>, yeah. So obviously, we sell in a in 140 countries outside the U.S. and and on the reimbursed caught about business. The the non south pot. It's it's you know close to that 60 40 range, 60% thing within the U.S. and 40% beyond that didn't if you include sass businesses, it's more like 65%.
Businesses, the U.S. I'll start with that so we don't have contracts directly with <unk> our portfolio of her medical equipment customers do and there's around 5000 customers in the U.S., a medical equipment providers and they have high a mix for the field of sleep apnea and see a P.D. that we so he's.
Around 20, maybe 25% for some regions Medicare and around 70, 580% private pie and as we've seen through the <unk>, we have seen ongoing payments from the does the government and privatized through to Resmon we.
Carefully watching our accounts receivable and his Brett said, we carefully watching a cash flow to make sure that pious pay on time, and we have time, but we haven't seen any issues as yet clearly unemployment you know has increased in in the country from a single digits to double digits through this crisis and it's something that Oh companies are looking at very carefully.
But we haven't seen any issues is yet, but we are seeing the cash flow very carefully to make sure that we have continuing flow of capitol and cash throughout business.
[laughter].
Thank you.
Our next question comes from Mike Mattson with need them in company. Please their question.
Yeah. Thanks, So I guess.
Just wanted to ask about the the resupply business. You know wondering you know why you think that that's been so strong is there any kind of demand poll for it happening. There do you think that can be sustained as long as the pandemic continue.
Yeah, Mike Thanks for the question and certainly you know there's it's it's quite interesting <unk> as you know you followed us for a long time to Mike our installed by all see Pap patient sleep apnea patience is a very strong part of that mosque business. You know, we're talking north of I.D.
Plus percent.
Of al mock styles across the U.S. to that installed base of a diagnose patient who loves their therapy to change their life and they're going to go and reorder every time I think the focus of <unk> and then it's a respiratory medical issue and that has you know rise the importance of making sure that your lungs are well taken care of and that you breathe.
Well your overall health as well has increased people to make sure they get their prescriptions for everything including you know heart attack <unk> detect patients are getting more prescriptions are pills as I noted earlier the propel aside C.O.P.D. medicines anathema medicines were saying increased use of those in respiratory medical health and we've seen a similar thing.
I think in the <unk>. When you are capable of getting a mosque you are more likely to click, yes, I would like that and we haven't seen any reduction and people, saying all the code ties too high or I don't want to go there we've sent actually the reverse where people are saying Wow, it's been Nani dies I'm on Jew for.
For a therapy for asleep at mosque, choosing et cetera, and they're clicking, yes, and they're getting those those devices delivered to the movie so very strong balanced in the <unk> customers and you know yeah. The I Ching may customers themselves are really focusing on this part of their business because it's a good opportunity for them. We think is look they will be some the seller.
<unk>, if there's some sort of that surge of the sort of the toilet paper model, where I'm gonna over enjoy having to make sure I've got enough mosques they might do sell right someone but we don't think we think there's a lotta balanced in that and people, who honestly about therapy and loving to seep out therapy are going to want to get new mosques and through cause it N.B. on the importance of respiratory medicine will only.
The increase because of this so we think that part about business is very steady through the process and or even stronger beyond I think it'll change. The height is that will last will be on <unk>.
Okay. Thanks, and then just just with regard to to see diagnostic testing.
You know can you provide any more detail around the decline that you're seeing kind of way in the March quarter, and then you know to what degree could increase use of home test for any kind of some sort of remote tele medicine model offset that and are you doing anything to try to you know enable let's see blobs to to implement.
To ramp up I guess their homes like testing sex.
Yeah, great Great follow up question, Mark and we were doing a lot in that space on focused a lot with rubbed Douglas on our global Task Force on <unk>, Jim hauling said in the same time has been running asleep business strongly Jim do you want to follow up on the the follow up there on hunsley about testing and skyline.
Sure. It thanks, <unk> I I think it's very difficult to quantify the effects in the balances the decline in in lab testing an increase of homes, suggesting in general and it's very different country by country, both because of the timing of the pandemic and then how different health care systems are structured and so on so I'd like you know trying to get to the qualification I think it's quite difficult well, we do know is.
We have seen some declining and lab testing, that's that's not a surprise I health care systems around the world have shifted their focus to come in 19.
Many countries I've got a locked down much of the U.S. It got locked down. So we know that inland testing <unk> has declined indepth. We have some evidence to suggest to stabilize at a lower level. It's hard to know exactly what that level is but we think it's potentially stabilized at this point, but in parallel. We also know there's been an increase in home suggestion in in a remote testing and number the labs around the U.S.
Of increase or your so called C. testing devices and routines.
And where that studying Europe and can be done in Europe. It continues to be down and we think it will turn on faster in Europe and the final putting your question is what are we doing we're actually working very hard to enable home sleep testing to figure out how to help our lab customers in our position customers virtualized their model I'm, not just throw device offerings, but true workflows through.
Webinars and trainings and and we're working hard to see if we can virtually some of that was software, which will take a little bit more time, we do think that that shift down sheep testing is which has been going on worldwide for years will be accelerated by this and just as mix evidence for third comments.
One of the things, we think will come out of the crisis generally for the sleep business is increased adoption of our already very brought offerings virtualized care offerings and so we think that will accelerate through the crisis, and then had to new normal coming out of the crisis.
Thank you.
Next question comes from Margaret category with William Blair. Please do your question.
And you get afternoon, and good morning, Brett add to you and just one of the follow up on the comment you guys had on production an I.D.'s analyses I think I heard you guys say produced 52000 and those like isn't a quarter <unk> you guys don't give <unk>, but it seemed like it could be two or $300 million worth.
Ended by side versus the $35 million benefit you sound a quarter. So I guess long intro, but the question is where those made to order or advance and demand and how should we think about that product and trying to steal thanks.
Margaret that's that's a great question and yes, certainly we we did you you had correctly, we we made 52000 non invasive ventilators and invasive enlightened so that that includes everything across the Astro Stella Loomis.
So G.I. and they could all those devices. So we included a across all that good 52000, and they have very different pricing, but clearly it's a lot more than just the $35 million of styles in that quotas. So we are prepared for demand ahead. The only thing on really willing to say on a public coal like this is.
That we have I public capability with Z., a public capability with the U.S. government through H.H.S. and Sema all of the 30 million dollar contract and so that's a fixed contract that we will fulfill mostly in Astros and but we have.
Many other contracts with hospitals stites governments nations around the world I'm not going to go in and quantify any of those and they're usually one or two one directly to those countries and directly to those hospitals, but what I can tell you is all the demand that they have an all the supply that we have asked supply just cannot keep up.
With the demand as it moves around the world and so what we're doing is maximizing production in advance and then making sure we get through the peeking through the search but not have an over amount of inventory at the other saw into a carefully managing the <unk>. The surge the flattening and then making sure we get back to normal C.L.C.D., you're a muscular disease, I L.S. and others.
Files with has been a light is because I was patients will be there beyond and that's how we're looking at it <unk>. Yes, clearly we are preparing for for more styles in the future of does then lightest and inhalation mosques that that does Taiwan's will last through queue for an unlikely beyond.
Yeah, I I, just sat quickly make 'em model, yeah, there's a lot doesn't meaningful amount in this in transit so to speak as we're trying to get started thinking about the U.C.'s and then ultimately to customers. So there's that that.
It as well so that will continue to produce and it makes it <unk>, it's just a matter of getting it getting it through the logistics.
Thanks, guys congrats.
And like sex my restroom.
Wiener with Evan.
See see the question.
Yeah. Good up then good morning, just a question on D.F.T.A. in terms of its response because it nonsame. It was a losing to the use of c. pet as being something that could be utilized.
What they experience was there and then the other awesome E.S.T.R.S.T.I. John was to remove then to light is from the competitive bidding process I, just and and that has it appears to be some pressure to get like eating in the latest trends just any comments on a dice ratings.
The very useful thanks.
Yeah stays that does a great questions and I've had actually quite a lot of conference calls with the F.D.I. Commission Uh Huh and I just secretary eyes. During this crisis resumes with caught his eye defense production Act that was put in place by the White House too soon.
Q components supply for enlightened so that we can supply I chanced femur and beyond and so I had a lot of interaction there look the F.D.F.D. I have really been a great partner through this process. They helped us get emergency use authorized <unk> you I for a number of our products to be used in.
Different contexts, so for instance, and non invasive ventilators, which were very scalable and as we we talked about we may tens of thousands this quarter, we had doctors wanting to use them in various wise invasive wise and others and so the doctors needed an easy way to be able to do that and they have got that and the F.B. I was very quick to Los and other manufacturers in providing does.
Emergency youth authorizations, simple Tenuously Secretary, <unk> health and human services and C.M.S. They did tyke non invasive ventilate is out of a competitive bidding around 2021 and that was a very good shine trout I Jimmy customers. It really took a load off for them knowing that they.
They know they and then <unk> businesses will be good ongoing concerns fold them. So we so good partnership from both the F.D.I. and I chess as part of this crisis and I Chess also worked with female to make sure that we got the demand and that was the 30 plus million dollar contract I talked about two off and there were five other manufacturers had got contracts as well I think the government's not.
In the U.S., but in Oh hundred plus countries that we're working with here through this crosses have done a great job in contacting us working with us, helping us with supply chains, and helping us with delivery of Intellitest to people in the need to this crisis.
And and sorry, the photo part was just the pressure that thing or the attempt to to like competitive getting the likelihood of that.
Yeah, I'll hand that other to dive he's got more insight on that <unk>.
Yeah. So thanks, Steve we along with the rest of the industry have been suggesting to C.M.S. that day, either delay for a year. The introduction of the 2021 round entirely or at least the respiratory offerings frustrate product codes within that.
<unk> 2021 round a competitive bidding we have we have had a dialogue with C.M.S. on that topic. So they are listening, but I can't really handicap, the likelihood that it'll happen or not I would echo what mix. It earlier that she must have been very responsive and I think it has highlighted the importance of D.N.A. and.
Based care in ensuring that as few people are in the hospital is not and that's a real positive we hope that that cooperative working relationship will continue.
Right.
Our next question comes from David's, though with J.P. Morgan. Please see your question.
Thanks very much.
Follow up on the use of <unk> <unk> <unk> <unk> <unk> <unk> <unk>, yeah, I've seen some if it's too I become that do you think that's going to be and I mean.
Excuse me about you know manufacturing capacity has your expectation that there'll be continued strong demand that you'd ones I some little.
Yeah <unk>, it's it's it's it's a great Christian David and I'm certainly you know through this cross is one of the leading countries early on this was the <unk> and the National Institute the National Health Service. This are the N.H.S. and they created a protocol, which looked at the <unk>.
Security levels, all a cousin 19 patient because the disease you know the crown of ours gets into the lungs, and then causes the cause they'd 19 disease, which is where mucus builds up as the the I'll be all like react and try to fight off the virus and it creates mucus in the lungs and build it up and so different levels of build up different.
Levels of acuity different therapies, and <unk> and so the and I just created a very strong protocol of using but see <unk> with some supplemental oxygen from the wall as well as by level therapy, and then upgrading to more aggressive noninvasive ventilation therapy 'cause bought level is non invasive positive pressure ventilation therapy, but.
Upgrading to high levels of non invasive ventilation therapy, and even upgrading all the way to the full <unk> through the through the trachea, all invasive mechanical ventilation and all those different knowledge can be moved up and down by the doctor as they move out through the process you a question about and it was a big question and concern early on.
That Oh gosh, what if we have some <unk> some of the <unk> will come out well before you put on it and invasive mechanical ventilator, if a patient <unk> sneezes. The room is already contaminants, so even with invasive ventilation, they're awesome. Some contamination protocols and so what you need is a <unk> you know P.P.A. for everybody and you need.
Established this floor of the hospital is because the 19 with negative pressure and take care of it that way and that's what they've done in the U.K. and actually that moved to different parts of New York, New Jersey, and and as we see this go round. The world people are learning how to do that what you have is a non vented mosque, so ventilation mosque with an enlightened outlet and then I filter on the outlet of the device.
And so out Chief Medical office <unk>, New New is has been working with keeping in late as well wide and we have a clinical white paper with best practice from <unk> from Milan from London from Munich, but they're doing it really well in Germany end from New York and around the World and that protocol does include a seat.
But does include by level does include known anybody to ventilation with positive pressure or with specific mosques. Some specific circuit set up all the way out too invasive mechanical ventilation now the second part of your question. After the cross this will people continue to use more <unk> Oh I think the answer is yes, I think it's gonna be similar to digital health where.
We have had to use home sleep apnea testing you've had to use remote patient monitoring during this crisis and you don't want to go to a patient time, you don't want them to have to come to hospital and so that's driven digital help I think people darkness in critical care units of seeing how noninvasive ventilation, including by level has very well treated patients with covered 19.
Why can't it very well trade C.L.C.D. patience will guess what it can so I think the adoption of n. or they will increase <unk> because of the learnings during kind of annoying thing I can't quantify that exactly it's more a million long term thing, but anyway I have I've that answers your question die, but it's a very good one deserves a longer answer on I know it.
10 minutes ago, we might just type two more questions and and let everyone get back to they worked I three more questions. Okay.
Thank you are next question comes from Matthew Mission with Keybank. Please do your question.
Chicken questions and also it's really remarkable the efforts of you and and in place of your company to support. This crisis. So thank you for for for that as well.
Because most of my questions have been asked I've heard that there's potential long term respiratory implications from from Coca 19 exposure. How did you see that patient transition two two postacute.
Yeah, It's a great question, Matthew Oh hand that to our President and Chief operating officer rubbed to talk about <unk> discharge, what's what are the next steps Rob.
Yeah.
Thanks messy that's a good question.
You know, it's still up still an uncertain world in terms of what sees a post Ah.
Calls are going to pay it across the board was saying different trials and testing carried out in some areas. We are seeing patients get discharge with oxygen and we are noticing it up so he can demand for oxygen around the place Andy Nowadays, we I see some these charges with both see pets, but I think.
Still lie too early to say probably the earliest data. We've got is in China away, you know things normalizing a little bit to sleep legs aren't yet I 10, but was saying continued ongoing demand for so long term ventilation. So that's probably laying off the dynamic that make mentioned earlier that ventilation.
They should ventilation and chronic ventilation is recognized as a more relevant treatment than what it had thing before.
Thank you.
Next question comes from Sean Neighmond with Morgan Stanley Tastier question.
Uh-huh, <unk>, Hello, everybody and and well the mic clearly doing a great joke navigating sorry, if I missed it but my question is this the $35 million coded revenue, what's there any geographic sort of break up all that and you know just to clarify ones that old fan rather than you think snake.
[laughter] showing that that's a great question not comfortable going into details of where the 35 million came from that sort of our global number and and and it's truly a an estimate it's it's the vast majority of it is ventilation and so it's Astros Stella's Loomis Echo there's two types of products.
Oh handed over to Brett Sandercock I see if I had to see if he wants to provide any any further detail on on that on that 35 million.
Yeah. Thanks make I mean, you only have it in every some that we <unk> in in that as well it it might might yeah, like maybe that account that kind of 10% of that number and the rest would be the bosses.
Great. Thank you gentlemen.
Thanks, Sean.
Your last question comes from Gretel, Jon you with credit Suisse. Please to your question.
Thanks, very much until you mentioned, the double digit decline and diagnoses right.
Locked down I'm, just wondering when he saw or anything like out in the actual <unk> <unk> <unk> <unk> <unk> from the smallest link diagnosis impact.
Okay.
Yeah Gretel, Thanks, a lot look as as you.
Can understand is a lot of moving places going on right at the moment and we're watching it through the quota and in different countries and even in some countries in the world. We've seen that declined like in in China. We saw that the gone in January February and we're actually starting to pick up on the rights as you started to exit the quarter and some regions of China starting to.
Open up and then diagnoses starting to open up again, but and similarly in in South Korea, and some other areas that have kind of in 19 under control now, but I'll hand to have at a gym hauling said to see if he wants to provide any further details the sort of kinetics of the double digit reduction in diagnostics and and the impact on sort of that head.
I get some sleep <unk> why we have the neutral element of sleep mosques continuing through.
<unk>.
Yeah. Thanks.
With a little bit of a lag you can also she had a bit of a drop off and new patients starch, which we have the ability through our connected solutions to see as I said before I think we're seen diagnosis stabilize a bit and I expect some countries to start to turn back on and in the near term and and we're seeing patients.
Starts also stabilize a bit so hopefully, we'll hopefully we're going to bounce off of the floor here, it's very difficult to predict what that will look like it will be different country by country, and even even metro area by Metro area.
[laughter].
Great well, thanks for all the questions and thanks to everyone for for continuing the 15 minutes over here I think we'll all agree. This was a very unique quarter for not just for as men, but for all.
Ah companies worldwide <unk> I'll I'll go with the close now I think here and and and clothes on up I'd like to think again to allow shareholders who are joined US for this cool I'd also like to shout out again to the 7500 Red <unk>, helping people in 140 countries. You guys are also shareholders into my.
Pot and I Wanna. Thank you for your dedication and hard work, helping people breeze bed asleep better live better lives outside the hospital. Thanks for all that you do all day every day things, especially to those front lawn heroes the people, making the products distributing the products and getting those events. So that 140 countries to somebody who's suffocating and needs our help.
I look forward to talking to all that psychologist again here and know any dice and with that I won't close it up thank you D. I got.
Right. Thanks, Thanks, Mick Thank you all again for joining us today and just remind her if you have any additional questions. Please don't hesitate to reach out to me or two investor relations and accurately they mentioned all the documents along with the transcript and a replay will be available on our website later today.
Thanks, Diego you can now close to call.
Thank you just can't clues resumes third quarter of fiscal year 2020 earnings live webcast you may now disconnect.
[laughter].
[laughter].