Q4 2020 Luminex Corp Earnings Call
Ladies and gentlemen, and welcome to Lumi next Corporation's year end 2020 earnings Conference call. My name is Carmen and it'll be a coordinator for today today's call is being recorded at this time all participants are in a listen only mode. Following the prepared remarks, there will be a question and answer session. If people liked it for.
Dissipating this portion of the call. Please press star followed by one at any time during the conference. If assistance is needed at any time during the call. Please press star followed by zero and Accordingly, we will be happy to assist you.
Now I'd like to turn the call over to Harriss Currie C.
Senior Vice President and Chief Financial Officer for opening remarks. Please proceed.
Good afternoon, and thank you for joining us.
With me today is <unk>, our chairman President and CEO for.
Following our comments, we will take your questions.
As a reminder, today's conference call is being recorded and a replay will be available for six months on the Investor Relations section of our website.
Certain statements made during the course of today's call may not be purely historical and consequently may be forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 from the company claims the protections provided by section 21 E of the Securities Exchange Act for such statements. These for.
Forward looking statements speak only as of the date hereof and are based on our current beliefs and expectations and are subject to known or unknown risks and uncertainties. Some of which are beyond the company's control that could cause actual results or plans to differ materially and adversely from those anticipated in the forward looking statements.
Factors that could cause or contribute to such differences are detailed in our form 10-K for the year ended December 31, and our quarterly reports on form 10-Q filed with the Securities and Exchange Commission.
We encourage you to review these documents and we undertake no obligation to update these forward looking statements.
So certain non-GAAP financial measures as defined by SEC regulation G may be covered in this call.
To the extent that any non-GAAP financial measures are covered a presentation of and reconciliation to the most directly comparable GAAP financial measure will be included in our earnings release, which is available on our website in accordance with regulation G.
I'll now turn the call over to our chairman President and CEO <unk> Shamir, Thank you and welcome.
We ended 2020 on a strong note.
Things I called revenue for <unk>, and 11 million for the fourth quarter and 417 million for the fully up 25% over 2019.
Additionally, we improved our profitability to our highest level ever.
Hosting more than 71 million in EBITDA and generating more than 50 million in cash from operation ending with a cash balance of approximately $310 million.
Julien 'twenty 'twenty, we had the strong tailwind in mdx revenue, while we had the initial pressure on our life science revenues will recover very nicely during the third and fourth quarter sales.
We saw focused R&D effort, we developed three exciting product that not only played an important role in addressing the pandemic. They also significantly contributed to our God for the year and set a solid foundation.
For continued growth in DAU mall important assays coming.
We also expanded our manufacturing capabilities significantly we said for folding THC marine for manufacturing capacity and nine fold increase in excellent manufacturing capacity.
We are also investing in additional expense line of our facilities to accommodate future growth.
As we enter the new Hill, we have become an even more diversified rapidly growing company with several other new product expected to come to market. This new product and the planned increase in all three of these manufacturing capacity will support our growth ex.
Spectation of over 15% and they will also further expand bolt ons for stability and cash position.
Fortunately, our diversified model has positioned us well for the post COVID-19 marketplace.
We believe that coffee 10 wins, we'd be we source for the long term.
Specifically, we expect testing volume to continue to be on in the near term as we consistently hear from a cost per meal, they need more test capacity.
When the absolute volume of testing ultimately slows.
We will be well positioned to continue our growth although at a more normal growth rate.
Well I mean, both in fractal to concede, though is the number of mdx system that we place on the reagent rental agreement, we saw customer will typically off the ball and reference labs disagreement typically provide for a committed revenue stream over there.
Ex three to five for years.
At the end of the deal we had gone to a total of approximately 900 Mdx custom mail.
Also as Covid testing slow and research institutions Pharma laboratory and academic labs opened back up.
We should see growth in both partner and flow activity. Overall, we are excited about the few true and I'll focus on our execution to ensure that our success continues with that I would like to turn it over to Harris for more on the financials and then return for some.
Final comments.
Thanks Tommy.
As Tony mentioned, we closed the year with strong operating profit and record revenue in the fourth quarter of 2020.
Consolidated revenue was up 23% over the fourth quarter of 2019 to $111 4 million with operating profit at 9% of revenue.
For the full year consolidated revenue was up 25% to $417 4 million with operating profit at 10% of revenue significant.
Significant growth of our molecular diagnostics portfolio as compared to the prior year significantly contributed to those results.
Looking at our revenue line items system revenue grew by 3 million to $23 8 million or 14% compared to the fourth quarter of 2019, while the full year was up half a million dollars to $70 8 million or 1% over 2019.
For the year, although system revenue was up modestly over 2019, we did have some significant movement within our respective system revenue streams as.
As we've mentioned before our flow system revenues were significantly impacted by the effects of the pandemic and were down for the year.
And our system revenue through our partners was down modestly by 2% year over year for the same reason.
Those increases were fully offset by our success in molecular diagnostics system placements, resulting from customers desiring to use the systems and assays, we had available to address pandemic testing.
During 2020, we placed over 970 multiplexing systems, not including Aries and <unk> systems.
And we placed nearly 450 sample to answer molecular diagnostic systems in the year up 118% over 2019 placements consumer.
Consumable revenue was up 11% for the quarter and 1% for the year to $13 million and $48 9 million for the quarter and full year respectively.
This increase was mainly due to higher non bulk purchases from partners.
Royalty revenue was $13 9 million for the quarter and $48 9 million for the year.
Up 3% for the quarter, but down 9% for the year.
This decline was primarily attributable to lower than expected end user sales reported by our partners as a result of the Covid pandemic with most of the reductions taking place in the back half of the year.
As a reminder, total royalty revenue includes base royalties, coupled with audit findings self reported shortfalls and accrual adjustments.
At the end of 2020, our partners were indicating a recovery in their respective businesses and we anticipate that royalty revenue will continue to grow throughout 2021.
Total assay revenue was up 41% for the quarter and 60% for the year to $51 3 million and $211 9 million respectively.
Our molecular diagnostic assay revenue comprised approximately 98% of our total assay revenue with minor contributions from both flow assays and assay sales within our research revenue stream.
Our combined respiratory related products comprised 60% of our total assay sales in the quarter and 65% for the year and was up more than 100% compared to the prior year, resulting from the pandemic.
Non automated molecular diagnostic revenue.
Was up 40% and 70%, respectively compared to the fourth quarter and full year 2019.
And sample to answer molecular diagnostic revenue was up 56, and 59% respectively compared to the fourth quarter and full year 2019.
Service revenue was up 12% and 4% for the quarter.
And full for the full year, and two $6 3 million and $23 3 million respectively.
A function of having more alumina ex instruments in the field and under service agreements.
And finally.
All other revenue was also up.
28% over the fourth quarter 2019 to $3 1 million and 74% over the full year 2019 to $13 6 million.
Included in all other revenue for the year is approximately $1 3 million of BARDA funding related to the to Covid assay development projects for when we mentioned earlier.
Gross margin expanded by 3% and four percentage points in the quarter and full year, 258% for the quarter and 59% for the full year.
Economies of scale realized from scaled up manufacturing in 2020 was a primary driver for this margin expansion as.
As we indicated in our previous calls gross margins can fluctuate modestly as a function of mix, resulting in sequential changes from previous quarters.
Operating expenses were up 15% and 5% for the quarter and full year to $53 9 million for the quarter and $205 4 million for the year. These increases were primarily driven by higher sales and marketing expenses as a direct result of our growth in sales, which experienced 25% growth in the <unk>.
<unk> and 16% growth for the full year.
Strong expansion in both our revenue and gross margins over the prior year contributed a significant improvement in operating profit, which grew by $7 5 million in the fourth quarter to $10 5 million for full year grew by $54 5 million to $42 for.
Operating profit as a percentage of revenue was 9% for the quarter and 10% for the full year.
The distribution of profit and loss across our worldwide subsidiaries significantly affected our effective tax rate for the quarter.
And year for the full year 2020, our effective tax rate was 47, 6% our fourth quarter rate refractive reflects adjustments to income tax expense to arrive at the full year rate.
This was the result of changes in our mix of earnings in the U S and foreign jurisdictions cash taxes are about half of that amount.
Our balance sheet remains strong with approximately $310 million in cash and investments.
This reflects a net cash proceeds of $217 6 million from the issuance of convertible debt in the second quarter of 2020 and cash flow generation from operations of $49 9 million in the year, while also absorbing the payment of almost $17 million of dividends and capex purchases of nearly <unk>.
<unk> million dollars.
Finally, some additional visibility for 2021.
As a result of a lingering amount of uncertainty surrounding the short term revenues, resulting from the continuation of the Covid pandemic and.
And various new strains emerging we have decided to pull away from forward quarter guidance for the short term until more certainty around the absolute volumes of testing.
Lasting effects of Covid for the longer term and the effects of those issues on our respective revenue streams becomes more predictable we remain confident in our full year projections and anticipate that we will return to for quarter guidance sometime soon for.
For the full year. However, we currently expect 2021 to be another strong year for Illumina ex we anticipate a minimum of 15% growth to at least $480 million in revenue.
As we mentioned before the completion of our areas expansion to a capacity of around 5 million tests per year will be the primary enabler here.
As a result, the primary driver from a line item standpoint will be assay revenue growth in excess of 20% most of which will be molecular diagnostic products.
As a result of the partner recovery I mentioned earlier, we also expect royalty revenues to return to growth at around 10%.
Systems and consumables should be in line with 2020 as a result of partner recovery offset by a reduction in the absolute number of molecular diagnostic systems placed.
Obviously, new product launches, including those requiring EUA for approval from the FDA are also key to our success, but.
But we are extremely confident in our ability to execute and deliver on a going forward basis gross margins to remain at 60% range for the year with continued control of operating expenses, we anticipate both increased profitability and cash flow.
With that I'd like to turn it over to <unk> for some final comments.
<unk> 2020 was even like nor do we have excellent experience low magnetics performed outstanding and we are grateful to all employees and their families for dedicated therefore to fight this global pandemic.
The safety profile employee is the utmost important to us but at the same time, we must continue delivering product to our customer.
As we begin 2021, we anticipate that the pandemic will continue to play a major all this as a win.
We are confident in our projection of 15% growth <unk>, coupled with improved profitability and cash flow and the launch from several other new and exciting product that will help us fight the COVID-19 pandemic as well as expanding our best portfolio.
We are looking forward to time, when we get off the impact of COVID-19, but we'll do everything we can until then to continue to help address the challenges this from Danny being received.
Let's all be LTE and safe with that I would like to turn it over to the operator for your question.
Thank you and Brad before we open the line for questions I would like to turn the call back to me for some additional comments.
Finally.
I wanted to give a quick real time update on the EBITDA.
We continue to make good full days on the warning letter and are almost done in the hands of scheduled to complete all our deliveries will be there.
Deliverable and committed to the agency.
Concerning the two pending EUA is it the next day golf BP plus COVID-19.
We believe we are on track for approval very shortly.
With respect to the Virgin sales Covid assay that they start to see small puzzling as we are in active review of this submission and then receive a letter last Thursday afternoon, explaining that the agency most declining two day review the EUA for managing one COVID-19 may be.
This time, because you're always sizing task that day.
<unk> will increase spacing ex us stability, such a bunch of care.
On test.
We are reviewing options to challenge. These decision since we believe getting this product in the hands of the hundreds of customers who have requested lead it will be rapidly increase accessibility.
At this point, we cannot say, whether we will be six phase volume is advancing this decision. However, we are still planning to submit additional knee ways to the EBITDA. During this quarter. Thank you operator, let's get the question.
Thank you and as a reminder, ladies and gentlemen, simply press star one on your telephone for Jack in the care and service.
A question for pound our hospital assay.
Question comes from seeing Lam with <unk> Your question. Please.
Hi, Thanks for taking my questions could you just clarify the guarantee in Q.
Flow.
I guess impacting the review process.
I'm sorry.
What happened to a very good one.
It's <unk>.
Yeah go ahead.
Alright, they're reviewing both or or or very young one in Idaho.
Yeah, and the momentum we have tool active EUA review with the agency.
The next day COVID-19 to add the COVID-19 to the next day ill COVID-19 for less volatile day.
For the next day, and we have a standalone COVID-19 for <unk>, one we have not submit yet the vintages tool and <unk> and together with COVID-19.
Flow AMB, which is scheduled to be submitted later on drilling to spoke to us and we will go negative for review of managing one and we received a letter on sales day from a different department and the FDA that state that day.
Declining gate view to our they're way below your OLED for testing.
Obviously think seats.
Okay.
Correct, because the vintage and while I'm, adding NSA on managing one COVID-19 tool, we have close to 800 customer using day.
Managing one installment and all of them are major hospital that caused the nation is substantial.
Needs for them as the metal fact, requesting us to do so so I'm, hoping that we will write a letter to the FDA and hopefully day revisit that decision.
And we wanted to be upfront and <unk> It took us all by surprise.
Okay got it.
Any updates in terms of IBD assay.
Non-GAAP respiratory the robot.
The FDA.
So put on hold on hold everything is on hold.
Okay, and you think about it in terms of window now start regained growth momentum.
The idea and my feeling is that windows per Pollo will do a deal we'll saw slowdown in pandemic EUA approval et cetera.
So it couldn't be fuller for one.
Okay, and then lastly from me.
We'd love to hear kind of the latest feedback on Wynn Palace, what how that launch is going.
Thank you guys for a target on kind of a broader commercial lines for <unk> I mean ma'am.
Actually all of our major bulk sales.
In <unk> life science and for the product now.
For two of them all of the training them sense phones and are ready to launch it I don't think beyond that any more.
Common tools provide about there but from the initial comment they're all excited about the product and then we have a large installed base that day.
We are looking to <unk>.
Great. Thank you so much thank you.
Thank you.
No.
Steven Mah with Piper Sandler your question for you.
Okay, great Yeah. Thanks, Hillman Harriss, yes, maybe just a follow up question on <unk>.
SBA.
So.
Did they give any other color.
Why because you said point of care and but they are not prioritizing barraging one.
So does that mean that they are focusing on the at home lateral flow, yes, yes, that's what yeah.
In the last day of the say they'll play only sizing task.
And that will increase testing accessibility, such a point of care I made on test that's what they say to us.
Okay. So that was that it took us all by surprise and I don't want to go behind that.
It took us all by surprise.
As I said this is day not came even from a review whether it was reviewing that came from a completely different part of the agency. So we will approach them and talk with them because there is a very big installed base, who need it. So sometimes you know they can make also human missed.
Stake.
Yeah.
Oh, Okay, Okay, great and then.
Maybe just a couple of questions.
On your guidance.
Customer demand suggests that COVID-19 is going to be strong.
<unk> in the next.
A very near term and there seems to be a lot more belief.
Amongst people that we have not yet peaked in terms of COVID-19.
Testing yet.
So that and then plus a given given the new Bided administration stance will likely increase COVID-19 national testing.
Why would you reiterate guidance from what would it take create increase.
The year end guidance or are you just being conservative.
First we would like to be conservative in this time and if you look what happened in Q4. Initially we went a little bit from centers that the guidance for that we gave for the fully with reducing 5 million in debt, we beat and <unk> 7 million.
It's very good.
At this stage to try to predict what's happening and whether we are going just a matter of argument. We all on this line for example flow testing is very minimum almost not exist on the other end if I go to life science, we need to go in order to recognize the revenue install system at customers.
System, that's coming mainly I'm not talking about Mds in the life science countries. Some countries have closed some institutional clause provident and et cetera. So you really don't have the flexibility to know from day to day, what's happening okay.
And even if I use the village and one day issue with agency. We were an active review we were hoping to receive it almost say any day and suddenly out of the Blue. We got this a letter from the FDA. So all of other way of saying is we are feeling very confident that we lead our full AP.
But we rather not to be bound into trying to predict what happened next month or the next two weeks. So I'd say topical is behind everybody control. Yes, we can provide the guidance, but we will be very conservative from there then we don't want to repeat what happened in Q4, when we do see.
And then we beat it.
Essentially.
Yes, yes, okay.
Hum.
The contribution from from Barraging, one COVID-19 testing.
Can we assume that's baked into the guidance you provided for the year.
For please.
For sure there is there because we build it but the game the most day.
Don't forget it so far the contribution from COVID-19 on the village in 90 day average and one with zero. Okay. A saw we assume something into the guidance, but on the other then.
The range in the guidance as I said a lot of areas.
Is the ramp up for for this production that incorporate and I think we have enough space in there.
To either it will add to non auto although I believe it.
Should that band.
And to deliver the guidance.
Confirming the guidance again, we have to remember that the guidance also like every I believe we provide the guidance.
Similar things happen in.
2020, probably 45% of the guidance or the revenue opening in defense off of them and 55 for spending in the second bulk of the ASO.
Feeling it will be the same story all the same threat in DCM.
Okay got it and then my last question, yes, similar similarly on guidance on life Science and research tools business Mr.
Mr full year revenue guidance does it bake in some conservatism given that there were some lockdowns for example, like in California back in January.
Hey, how are you guys thinking about about that especially given vaccine rollout seems to be less than optimal.
They're making it more outbreaks.
So the way you have to think about Stephen is that what we've built into the guidance as I believe I said in my comments was a moderate recovery of the life science size of business both in flow and in our partnership businesses spanned a variety of different different verticals within the life science landscape. So we're.
Moving some recovery, although there are new strains the vaccine in places as reported and not be working as well as they might expect people are actually learning to live with it youre beginning to see traffic again, youre beginning to see more people out and so as they learn to live with it as they allow us to come in to their facilities in <unk>.
For all systems, we will see growth in life sciences in both flow and our partnerships recover maybe not 20% growth rate in those businesses, but there'll be some modest growth there that coupled with.
With the significant expansion of Aries manufacturing that we believe will be significantly utilized gets us to the to the for IV <unk>.
And after that when you think about upsides there is a variety of things that could happen, but we certainly don't want to bake those into Hanmi says, we get better visibility on that.
Okay got it okay. So it sounds like you've baked in quite a bit of conservatism, okay, alright I appreciate.
Got it thank you.
Thank you.
We have Brandon courtyard exactly your question Paul.
Thanks, Good afternoon.
Home your home or your Harris is the new areas capacity effective in place effective now is in the first quarter such that sample to answer reps should be up sequentially from that expanded capacity in the first quarter.
Yes.
We are ramping it up as we speak obviously carefully ramp up you have some small league cup and et cetera, but it's for sure you will see.
Q1 last scale compared to.
Q1, this is a substantial increase but really.
The biggest increase you'll start seeing Q2, and a further increase in Q3 and Q4.
When we get more and.
More than we get there but.
Yes, we you will see a substantial increase during this quarter all of the ethane.
Okay.
Thanks for the Harriss could you quantify.
The backlog that you exited with coming out of the fourth quarter, I think mostly tied to the simple answer.
And would you expect to.
To recoup that or a ship against most of that excess backlog in the first quarter and then any color as far as just how to think about the seasonality of gross margins as we as we move through the year understanding the mix is kind of a wildcard but is there any difference between the first half of second half we should think about.
As Jaime mentioned think about first half second half like 45 55, when you think about the split of revenue certainly we are if we were to deliver all of the close to $15 million of Aries backlog in the first quarter.
Then you wouldn't then also buy that same volume of purchases of your schedule. Because now you have exploration issues and inventory issues to manage so what you would expect is a tick up in volume you would expect us to add accounts at a more rapid rate. So the overall volume of Aries assay revenue you would expect to go.
But you certainly wouldn't expect two to satisfy all that backlog plus.
Sort of a standard forecast for the quarter that would that would weigh oversupply. The the people that are what we know is that we have a number of people that want product.
They want us to get as fast as we can we've allocated as best we can that we'll be able to more fully supply those and over time that number will work down to.
Almost meaning less level, if you will as we move except for orders that are placed for future delivery that happens on a regular basis right scheduled orders from from customers that that order, we don't once a month once a quarter once a week.
Have those delivered and they make moderate minor modifications for those as we go.
Super and then do you have to have.
Target number of new sample to answer placements do you expect to make in 'twenty, one and any color as far as the timing of the <unk> launch.
Yes.
I would tell you is this year, we did a tremendous number 450 last year, we did right at 200, we're going to be somewhere in the middle most likely with those.
Unlikely I would say to be maybe as high as we were but certainly it will be a healthy number for sample to answer placements, but keep in mind.
That.
If you have had an opportunity to see some of our a recent investor discussions that 75% of our revenue comes from recurring items, whether it's beads royalties or assays every system. We place almost every system, replacing let's just for replacement layers on additional revenue.
On top of that so you end up with a compounding effect as you go as you sell more and more systems and so growth happens.
Naturally if you will as we continue to place systems and layer, the new new customers volumes on top of the existing customers volumes and customers that we only add for a portion of the year annualized in the following year. So a lot of math. If you will that goes on there that helps us drive revenues upwards.
Gotcha. Thank you you bet.
Thank you.
Next question from Brian Weinstein of William Blair. Your question. Please.
Hey, guys. Good afternoon. This is Chris on for Brian. Thank you for taking my question.
Just first can you help us understand the trend in molecular diagnostics a bit down sequentially over the last few quarters is that pricing coming in are really buying them and then how can we marry that up with the capacity expansion you're building areas.
Ares.
Yes.
It's a good question, we have to remember Ian monocular diagnostic lumina, except for three or four in the COVID-19 overall, it's the.
The next day is the Belgian one amenities.
Religion, one we did not really have.
Any solution yet as we have the other earlier, but we demo day of any solution for the COVID-19, as a matter of fact, we felt pressure there because there is less blood culture testing, obviously, less gi testing and less.
Yes.
And so thats put a price shale on the revenue in this product because.
There is less hospitalization as win.
On the air as we ramp up very quickly and from Q1 and Q2, we were in maximum production until now that we are doubling or continue to expand it and felt there. So thats will give us the ramp up and really day.
Fairly tremendous.
Revenue of the air is coming on line because of the expansion of manufacturing and the next day again, it's having the same issue we had very low in the beginning of the pandemic everybody had onto by respiratory products.
Now they are more concentrating on the corporate maintain and so we have the COVID-19 solution, but that's become a little bit more stagnant in the number its not growing beyond what we saw before and non declining so really the growth for us will be coming out of the range moving forward.
<unk>.
Yes, we have.
Same day at the end you know one more thing about pricing, we have not seen any pressure on price because in any in most of the cases, we were family.
Keeping our prices to what we used to sell them before the pandemic.
Okay.
And on the Aries.
On the guide you're looking for about $63 million in incremental here in 'twenty, one most of that coming from Ares They.
Call. It 4 million tests at $30 per year, that's a pretty big bump from 2020.
Uh huh.
Why is the mid single digit assumption on.
The base.
Number and just can you talk a little bit more about that builds are for <unk>.
You're talking on the life Sciences side of the business the partner business in a flow business correct mid single digit growth per well.
Yes, well first of all the we talked about seeing some modest recovery on the life science side, we believe that.
Covid is going to be with us for a while and especially is going to affect this year, maybe not totally the way affected last year, but it's certainly going to affect this year and as it does.
People learn to live with it we're going to see recoveries, there from where they bottomed out effectively in the third quarter of last year, we began to see recovery.
Should continue to see recovery there, we don't want to over call that to higher end the aggregate growth rates of the markets that our partners plan were only growing in the mid to high single digits to begin with anyway, that's $150 million.
Our pharma and our business the flow business.
Was growing at a little slower around or a little higher low 10% much smaller number flow got hit hard this year, we'd be flow recovers.
Sorry for plug is hard last year will recover some this year you add all that together and you're in the mid single digits in what we'll call. The the life science business in electric.
Diagnostics growth at 20, plus because of the manufacturing names.
And we need to be conservative because part of the challenges look in Europe, we cannot profit now to install from system, Okay, and how long that's going to be initially when we you know you can think about Q1, but then people will stocking about Q2 now we sold the new stream of COVID-19.
So you need to be conservative if we beat the non ban.
We beat the number we will be OLED piece. So we did not want to call me, saying, Okay life signs is going to grow 10%.
We think mid single digit number something between five to seven is at this stage.
Under this situation the best call, we can put out.
Got it that's helpful. Thank you and just squeeze one more here on capital deployment and this is really an attempt to.
Driven capital raise with that convert over $300 million cash can you give us an update on how youre thinking about targets and M&A, giving.
The valuations that we're seeing in space today.
Yes, we are seeing.
Tremendous number of over priced options today, a lot of options, but a lot of options that we believe are over price and because we've been very careful diligent.
The acquisitions, we've made we've tended to pay a pretty reasonable price for the acquisitions. We've made we continue to look for those we believe those opportunities will present themselves and if they don't then obviously, we estimate other decisions around.
Share buybacks or increased dividends or other things that we can do to to ensure that our shareholders realize a reasonable amount of value.
Great. Thank you.
Matt.
Okay.
Ladies and gentlemen for joining the queue simply press star one on your tower from keep up our next question comes from Tycho Peterson with Jpmorgan. Your question. Please.
Hi, This is Casey on for Tycho, maybe just going back to the 2021 guide can you maybe talk a little bit about what you are baking in for new product Rollouts, the Intel snacks and beverages to how much upside maybe could you know a new product cycle contribute to 2021.
Maybe just talk a little bit about that dynamic.
We obviously put some in teleflex as an upside.
But its a bake as Eric said in the five 7% goal of the life science Okay.
And we thank you Dale relative.
Moving to <unk>, because it's a new product within the bank too much into that and obviously when we go day to agency approval on the EUA, which we are planning to submit and we'll take it from there, but as we keep saying in order to get to the guidance is the life science and durations of $5 seven per se.
And really ramp up out of there is manufacturing.
There is a lot of other opportunities.
I'm alone.
That's really the way we look at the budget.
And all the guidance for this year.
Very modest contributions from new products with an opportunity.
Covid resolves better than any of us ever thought that maybe we can move faster because number one more opportunities open up to for placements for those that are on the on the fringe and for on the edge and secondly, the FDA speeds up there clearance of non COVID-19.
Related products one for instance that would go on the verging to the gastro product.
So more of the bigger faster, we can increase the menu on emerging too faster for successful have number one acquire new customers whether that number two converting <unk> customers, who use Virgin won on the version two.
Got it and then maybe just one more for me on Opex I think you guys had been guiding to around flat Opex for 2020, and it came in a little above what should our expectation be for 2021 Opex E.
Thanks also for sure yeah Yeah.
Kim.
Are we able to guiding for on to Andre to own within one came in around 205, if I'm not mistaken, mainly because commission and other things.
We had to pay don't forget when we start the day guidance was mid of the guidance was 357. So when you finish the like for 17, you need to pay more commission you needed to do other things, but yeah. I think the company has done and also we increased housing day activity.
Depreciation that's already took place.
<unk> signed certain item.
Getting ready for <unk>. So, yes, I think we have done an amazing way.
Joe to controlling all Opex in this pandemic.
And we all game.
Looking at the obviously when you look at for 80, and we assume we assume in the guidance that we will see more clinical plans for them.
And toward as we are preparing to the day. Many on the village Inn tool, but also in day rates as we are preparing to the day after day of the pandemic.
Some throw advance obviously.
Obviously commission et cetera, so it's all been taken into <unk>.
Sales.
The accounts for 2021, so expect growth.
The growth that is less than the level of revenue growth that we're talking about so that we end up path.
Passing some of that incremental profitability with appropriate margin maintenance down to operating profit. So we increased operating profit and of course here and as a result as you may have.
Again seen some of our recent investor presentations, where we've been calling an expectation of.
EBITDA for the year or two to grow as well. So you would expect growth and earnings growth in revenue margin maintenance control of Opex for all resulting in the growth of of earnings.
Got it thank you.
You bet. Thank you.
And this concludes our Q&A session for today I would like to turn the call back to Hermes Shamir for his final remarks.
Thank you operator, and thank you everyone for your attendance on our earnings call. We look forward to seeing you in person in developing future.
Yeah.
Thank you, ladies and gentlemen for your participation in today's conference you may now disconnect per month.
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