Hello, and welcome to the Varex Fourth Quarter fiscal year 2022 earnings call. At this time, all participants are in listen only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Christopher Belfiore, Director of Investor Relations. Please go ahead. Good afternoon, and welcome to Varex Imaging Corporation's earnings conference call for the Fourth Quarter of fiscal year 2022. With me today are Sunny Sanyal, our President and CEO, and Sam Maheshwari, our CFO. Please note that the live webcast of this conference call includes a supplemental slide presentation that can be accessed at Varex's website at vareximaging.com/news. The webcast and supplemental slide presentation will be archived on Varex's website. To simplify our discussion, unless otherwise stated, all references to the quarter are for the Fourth Quarter of fiscal year 2022. In addition, unless otherwise stated, quarterly comparisons are made sequentially from the Fourth Quarter of fiscal year 2022 to the Third Quarter of fiscal year 2022, rather than to the same quarter of the prior year. Finally, all references to the year are to the fiscal year and not calendar year, unless otherwise stated. Please be advised that during this call we will be making forward-looking statements, which are predictions and projections about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. Risks relating to our business are described in our quarterly earnings release and our filings with the SEC. Additional information concerning factors that could cause actual results to materially differ from those anticipated is contained in our SEC filings, including Item 1A, Risk Factors of our quarterly reports on Form 10-Q and our annual report on Form 10-K. The information in this discussion speaks as of today's date, and we assume no obligation to update or revise the forward-looking statements in this discussion. On today's call, we will discuss certain non-GAAP financial measures. These non-GAAP measures are not presented in accordance with, nor are they a substitute for GAAP financial measures. We provide a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure in our earnings press release, which is posted on our website. I will now turn the call over to Sunny. Thank you, Chris, and good afternoon, everyone. I'm pleased to announce a strong finish to another fiscal year, with revenues reaching $231 million in the quarter, a new quarterly record for Varex. Global demand for our products were solid during the quarter, and a slowly improving supply chain and our supplier diversification efforts allowed us to convert more orders to sales. As we start a new fiscal year, I feel good about Varex's prospects to grow despite a high degree of uncertainty in the upcoming year. Revenue in the Fourth Quarter increased 8% sequentially and 2% year-over-year. Revenue in medical increased 9% sequentially, while industrial revenue increased 6%. Non-GAAP gross margin in the quarter was 33% at the low end of our expectations, primarily due to high semiconductor procurement costs. Adjusted EBITDA was $36 million and non-GAAP EPS was $0.42. Our cash position, including marketable securities, was solid at $113 million at the end of the quarter, up $3 million sequentially. Let me give you some high-level insights into the market environment based on qualitative assessment of demand for different modalities and applications during the quarter. Medical segment revenues increased 9% sequentially and were flat year-over-year. Global demand for CT tubes remained solid, but we saw some softness in Asia-Pacific as some customers experienced delays with their other suppliers. Demand across our other medical modalities was solid, led by fluoroscopy, radiography, dental, and mammography. Oncology shipments were soft in the quarter, primarily due to timing of shipments to one customer. Revenues in our industrial segment increased 5% sequentially and 9% year-over-year. During the quarter, we saw broad-based demand across various non-destructive inspection applications, including high energy sources for cargo screening at ports and borders. In the past, we have highlighted various products across our medical and industrial segments that we expect to drive future growth. Today, I wanted to take some time to reflect on the progress that we have made over the last year on these products, as well as other fronts, and our expectations moving forward. The global CT market remains a significant driver of sales for Varex. This includes new system installations as well as demand for replacement tubes from our growing installed base. During fiscal 2022, we had several new design wins with our CT customers, including local OEMs in China. These new design wins represent future sales opportunities as well as 10-15 years of subsequent demand for replacement tubes. We continue to expect China to be a key driver of growth for both CT and Varex as our local OEM partners continue to gain market share. Turning to nanotubes. To further expand our position in nanotubes, in September, we entered into a technology collaboration with Micro-X, a leader in carbon nanotube-based X-ray systems for medical and security markets. This includes an exclusive global license enabling Varex to use Micro-X's technology in the field of multi-beam X-ray tubes. Varex believes in the future importance of cold cathode X-ray sources, and we're excited to invest in additional nanotube technology to diversify our product portfolio. Earlier this year, we highlighted our high-performance X-ray tubes used for cardiovascular applications. During the year, we continued to ship samples of our new liquid metal bearing-based CT and cardiovascular tubes for evaluation by potential customers. Over the upcoming quarters, we expect to receive additional feedback on the products and move towards being included in their future system designs. These tubes offer long life, noise-free operation, and increased throughput for certain applications. Moving to detectors, we were happy to see that our dynamic detector platform called Azure continues to receive high interest from our customers. In fiscal 2022, a number of customers began to design Azure detectors into their systems, and we continued to receive positive feedback. We expect to see further adoption of our Azure platform as our customers launch their product offerings. We have converted the majority of our radiographic customers to our Lumen detectors. This is a highly competitive radiographic detector platform targeted at the low end of the market, where we have historically had lower market share. We will be showcasing our current Lumen detectors as well as a new detector for advanced radiographic applications at RSNA later this November. We also continue to make progress with our photon counting technology on both medical and industrial side. In medical, our photon counting detectors are being used in various applications. Further, we're making progress with our CT customers, and are working closely with them to firm up design specifications for integration into their systems. As we have noted in the past, we do not have an offering in the CT detector market space today, making this an entirely incremental market for Varex. Finally, we have been working to establish a local presence in India. We took a similar approach in China, where we have seen our revenue grow to nearly $140 million in fiscal 2022. We believe India and Southeast Asia region will be on a similar growth trajectory, and this investment in India will establish a new local presence in the region. Later this month, along with many of our customers, we will be attending the Radiological Society of North America, RSNA conference in Chicago. Varex will be highlighting its product portfolio, including some of the products we have talked about today. Turning to industrial, we expect the cargo security market for ports and borders to continue to be strong end market for Varex Industrial. Our security business is experiencing growth as a result of increased demand worldwide for cargo screening systems and our partnership with established OEMs in this space. We expect to see continued growth here as we head into fiscal 2023, building on the success we saw this past year. Our industrial customers continued to praise the high frame rate imaging capability of photon counting detectors, and as a result, we are seeing increased adoption across various non-destructive inspection applications such as electronics, battery, and food inspection. These photon counting detectors enable faster inspection rates and better image quality through enhanced material discrimination compared to other technologies, and thus enable factories to meet increased demand in these growth industries. Last quarter, we highlighted an exciting area within our industrial market. Specifically, I'm referring to the use of X-ray or e-beam technologies to sterilize consumer-facing products. This is not a new market outside of Varex, but one that we have historically had limited exposure to. We expect irradiation to be a growing market in which our high-power X-ray sources can be used to irradiate food and other consumer-facing products. These solutions are in development and introduction stages, but we expect to have more details in fiscal 2023 as we receive feedback from our customers. At the recent American Society for Nondestructive Testing conference, ASNT, held in Nashville during early November, our OEM systems integration partners indicated strong backlog and future demand for their inspection solutions in the aerospace, defense, and automotive markets. Our customers see value in our ability to integrate new technologies like photon counting detectors, supporting system components, image acquisition, workflow software, and AI capabilities for automated inspection. We continue to be excited about the prospect of providing more integrated solutions to our industrial customers. We expect this new approach to be a key growth driver for Varex across several industrial verticals. As we move into a new fiscal year, we're happy with the progress that we have made with supply chain initiatives and look forward to our prospects in fiscal 2023 and beyond. With that, let me hand over the call to Sam. Thanks, Sunny, and hello, everyone. As a reminder, unless otherwise indicated, I will provide sequential comparison of our results for the Fourth Quarter of fiscal year 2022, with those of our Third Quarter of fiscal 2022. We are pleased with our ability to grow both revenues and earnings this year despite supply chain challenges that constrained our sales and inflationary pressure from raw materials and logistics that compressed our gross margins. Revenues for the year grew 5% year-over-year to $859 million, and non-GAAP EPS grew 9% to $0.43 for the year. Adjusted EBITDA increased 5% year-over-year to $140 million, and we finished the year with cash and securities of $113 million. Turning now to the Fourth Quarter. Our supply chain initiatives enabled us to ship more in the quarter, leading to sales of $231 million above the midpoint of guidance. Non-GAAP gross margin was 33%. Non-GAAP EPS was near the top of our guidance at $0.42. Fourth Quarter revenues increased 8% compared to the Third Quarter. Medical revenues were $181 million, and industrial revenues were $50 million. Sequentially, medical sales increased 9%, and industrial sales increased 6%. Medical revenues were 78%, and industrial revenues were 22% of our total revenues for the quarter. Looking at revenue by region, Americas increased 26% sequentially, while EMEA increased 5% and APAC declined 4%. The increase in the Americas was primarily driven by sales into our radiographic and fluoro markets, while the decline in APAC was primarily the result of some softness in CT as customers saw delays with their other suppliers. Sales to China finished the year strong at approximately $140 million in revenue, or 16% of total Varex sales. Let me now cover our results on a GAAP basis. Fourth Quarter gross margin was 32%, down 200 basis points from the previous quarter. Operating expenses held steady at $50 million, and operating income was $25 million, up $2 million sequentially. Net earnings were $13 million, and GAAP EPS was $0.32 based on fully diluted 41 million shares. Moving on to non-GAAP results for the quarter. Gross margin of 33% was down 200 basis points from the previous quarter and at the low end of our guidance. There were two primary drivers of the lower gross margin. First, higher semiconductor-related material costs, which we expect to continue through fiscal 2023. Second, our industrial business mix was somewhat unfavorable. R&D spending in the Fourth Quarter was $20 million, flat compared to the prior quarter, and represented 9% of revenue. SG&A was $27 million, also flat compared to the prior quarter, and represented 12% of revenue. As a result, operating expenses were $47 million, in line with the prior quarter and represented 20% of revenue. Operating income was $29 million, and operating margin was 13% of revenue, similar to the previous quarter. Tax expense in the Fourth Quarter was $4 million or 17% of pre-tax income, compared to $6 million or 29% in the previous quarter. The lower tax rate in the Fourth Quarter was primarily the result of favorable U.S. tax items and international valuation allowances. Net earnings were $17 million or $0.42 per diluted share, up $0.05 from the Third Quarter. Average diluted shares for the quarter on a non-GAAP basis were 40 million. Please note that ASU 2020-06, related to the accounting for convertible instruments, became effective for us from Q1 of fiscal 2023 onwards. Under this accounting standard, the EPS calculation adds back the after-tax convertible loan interest expense to net income and adds shares underlying our convertible notes and associated bond hedge to the diluted shares outstanding. For Varex, on an annual basis, we add back approximately $6 million of after-tax interest expense to net income and approximately 8 million shares to otherwise outstanding diluted shares. For an illustrative view on potential scenarios, please see the appendix of our Q4 earnings slide deck. Now turning to the balance sheet. Accounts receivable increased by $16 million, and DSO increased 1 day to 68 days in the quarter, primarily due to higher sales in the second half of the quarter. Inventory increased modestly by $3 million as we target to improve inventory turns while balancing supply chain risk. As a result, days of inventory decreased to 176 days. Accounts payable decreased by $5 million. Now moving to debt and cash flow information. Cash flow from operations was $17 million in the Fourth Quarter, and we ended the quarter with cash and securities of $113 million, an increase of $3 million from the prior quarter. Gross debt outstanding at the end of the quarter was $450 million, and debt net of $113 million of cash and securities was $337 million. Adjusted EBITDA for the quarter was $36 million, and adjusted EBITDA margin was 16% of sales. Our net debt leverage ratio was 2.4 times at quarter end. Now moving to outlook for Q1 of 2023. We see demand patterns running higher than pre-COVID levels but lower than what we experienced six months ago. Given our strong backlog and supply chain initiatives, we expect to grow sales in fiscal 2023 over 2022. However, we expect inflation-driven higher material and labor costs to keep our gross margin around the 33% level. Moving to guidance for the First Quarter of fiscal 2023. As a reminder, the first fiscal quarter is generally a seasonally low quarter for shipments for us. With that in mind, our guidance for the First Quarter is as follows. Revenues are expected between $195 million and $215 million. At the midpoint of $205 million, this is up 3% from Q1 of fiscal 2022. Non-GAAP earnings per diluted share are expected between $0.10 and $0.30. Our expectations are based on non-GAAP gross margin of about 33%, non-GAAP operating expenses in a range of $46 million-$47 million, tax rate of about 28%-30% for Q1 and fiscal 2023. Non-GAAP diluted share count of about 41 million shares. Please see slide 22 with the title Illustrative Impact of ASU 2020-06 in our earnings presentation for more details on the various scenarios for non-GAAP diluted shares under this accounting standard. With that, we will now open the call for your questions. Thank you. We'll now be conducting your question and answer session. If you'd like to be placed into question queue, please press star one on your telephone keypad. One moment please, while we poll for questions. Our first question today is coming from Larry Solow from CJS Securities. Your line is now live. Great. Thanks, guys. Just to clarify, just on the guidance real fast for the Q, I know you only give the one quarter guidance. In light of the new convertible tax law accounting rules, it's essentially for Q1, you're still assuming the 41 million shares, so it's essentially only the lack of add back of that interest expense, right? That non-cash interest expense. Is that correct? Just for Q1. Larry, this is Sam. Good to talk to you. You know, the way this accounting standard works, it makes EPS calculation a little bit more complicated. Right. What happens on a non-GAAP basis. You know, if your model is saying, say, less than $0.21-$0.22, you're still using 41 million shares for the diluted share count. Okay. If you are looking at more than $9 million in non-GAAP net income or say about more than $0.21-$0.22, then you'll add back $1.4 million of interest expense, which is after-tax interest expense to the numerator, and then add 8 million shares to the denominator. Essentially, beyond $0.21-$0.22 of non-GAAP diluted EPS, you are mentally assuming as if the convertible has converted. You no longer have to pay the interest expense, and then the share count goes up by eight million dollars. That's the way to think about it. Hope that clears for you or Yeah. No, it does. I get. I looked at some of your charts. I'm just trying to simplify it 'cause I know I get how it kind of skews up. Your guidance is kind of then. It's kind of taking in a range of those scenarios, I guess. Yes. Right. Yes, our guidance is $0.10-$0.30 as we just guided. Towards the higher end of that guidance between, say, $0.22 and $0.30, it would go towards the scenario where we add back the interest expense and add the dilutive shares. Right. $0.21-$0.22, you know we're not. Like in theory, hypothetically, if you just on an operating basis reach the high end of your operating profit, right? Which would in theory put you at the high end of your operating EPS, assuming nothing else changes, you're actually impacting yourself on a quarter-to-quarter basis, that's like an $0.08 sequential difference, right? Because you're not. You're adding back the $0.03 of interest expense and like $0.05, $0.06 of, you know, you're adding your share counts increasing 20%, right? So that's simple math. That's, you know, on $0.30, that's $0.06, right? And then. Yeah, Larry, on an annual basis. I'm just trying to make it simple, you know? Yeah. 'Cause these charts that you can look at, they don't do anything. They're just, I know you put them up there, but there's so many numbers. I'm just trying to make it simple. On a high-end scenario, your guidance could have been $0.38. Isn't that right? $0.39? That's a little bit high, Larry. $0.40. Yeah, that's a little bit high, Larry. This guidance is. Close to that, right? Directionally, I feel like that's right? I mean. Right. Let's ask it this way. If you had the impact in Q4 of this 8 million shares, and you couldn't add back the interest expense, you would have done $0.34. Correct? $0.33. No. 32. The impact is about $0.04 a quarter, Larry, because the numerator is a positive thing and the denominator is a negative thing. Oh, okay. Okay. Yeah. You're taking. Yeah. Yeah. Okay. Annualized impact is $0.12-$0.14 in that range. Okay. For a given quarter, it's about $0.03-$0.04. Okay. I gotcha. I suppose. Okay. That's fair. Understood. Okay, just a question for Sunny, switching gears. Everything sounds pretty good. Obviously, you have some supply chain, more macro issues and some higher SG&A, some executive costs and stuff. But in general, it sounds like, you know, things are pretty good. I realize that the macro headwinds in general, the economy is not great. Just trying to see specifically for you, what else kind of concerns you? Is it just macro, these macro supply issues that are maybe not impacting you, but your customers and, you know, how do hospital budgets spending look? I know, I think there was some concern a few weeks ago. I think somebody, Omnicell maybe, reported, and they talked about a capital budget. Hospital budgets are not looking as good as maybe some people thought. Can you just give us sort of a broad brush on, you know, you mentioned, you know, just some, you know, a tough environment, and I get the macro is tough, but trying to figure out Varex specifically, what kind of concerns you. Thanks. Yeah. Larry, our customers had very strong bookings in both our fiscal 2021 and fiscal 2022. They all had a very strong year, and they're sitting on quite a bit of orders that they've taken that are in their backlog. As you know, for us then, that represents the call-offs that we would get to the extent that they have deliveries in this year. You know, as I look forward and just looking at where we are from a supply chain perspective, I feel good about that. We've made quite a bit of progress with our supply chain initiatives. You might recall, we jumped on them early. We got going really fast. Sure. We qualified a lot of suppliers. I feel good about our ability and, you know, to progressively have a good year going forward. I think the risk for me is sitting here not quite fully understanding the situation that our customers might be in with their supply chains and whether they'd be able to get the products out as, you know, as we would want them to. That's the risk that we're looking at, and that's the unknown here, to be fair. Okay. Your concerns on the revenue side, whether it be the medical side or even maybe industrial from custom. It sounds like industrial, up until now, is doing great for you guys or a lot better than, you know, sequentially over the last few quarters. Does a slowing economy necessarily, you know, you would think that would curb spending a little bit. Does that concern you? Yeah, it does. You know, you used the example of Omnicell. I believe Omnicell makes pharmacy cabinets and products like that. Right. They're selling directly to end users, and then their situation is different from ours in the sense that our customers have longer shipment cycles. Given the volume of business that's already in their backlog, I feel like we're in a different place. Our uncertainty is if the economy starts to slow down and order intake by our customers softens, then, you know, that impact is likely to be at the tail end of the year or next year. We don't quite know how to model that in this year. This year, you know, we feel good about at least the current position. Q1, as Sam mentioned, Q1 tends to be a historically soft quarter for us because, you know, of the fiscal year-end of our customers. They've already, you know, bought a lot of the things that they need for this quarter. Q1 is cyclically a little soft, but then we improve as the year goes by, and you would have seen that from last year as well. We had a soft Q1, and then progressively, it got better during the year. Does the CT concern, and that's obviously one of your bigger growth drivers, sounds like that's more of a well, a timing issue, but also, I guess, a supply chain issue? Do you assume in your guidance that you make up most of that through the year, or are you kind of holding that back a little bit because of continuing supply chain issues? We're expecting to make that up during the year. The thing you asked, what else could be on our minds and from a risk perspective, in this type of an environment, our mix might move to the more of the lower-end CT products, you know, as people look at what it is that they're gonna buy during the year. In a tough recessionary environment, that tends to happen. We're not quite sure exactly what the mix will look like in the second half of the year for CT. Got it. Oka`y, great. I appreciate all that color. Thanks, Sunny. Thank you. Next question is coming from Suraj Kalia from Oppenheimer. Your line is now live. Hello, Suraj. Hi, Sunny, Sam, Chris, can you hear me all right? Yes, we do. Yeah. Perfect. Hope everyone is safe and healthy. Hey, Sunny, one question for you, two for Sam. Let me start out with the partnership with Micro-X, Sunny. Maybe you could talk to us about the complementarity that Micro-X their carbon nanotube offers, you know, with your platform, especially the multi-beam. You know, what are the implications and, you know, what gap are you trying to fill with this partnership? Yeah. Suraj, first of all, our technology work has made good progress. As you know that, we've talked a lot about that. We feel fairly good and very believe in the future prospects of cold cathode technology. Our conviction there remains strong, and I wanted to make sure that you know that comes across pretty clearly. Now, these are new technologies, as you know, and there are many different kinds of cold cathode technologies, and there are different ways to make these emitters. What we wanna do was make sure that we were. There were two things here. One, we wanted to make sure that we had access to a couple of different emitter technologies. One of them is through our joint venture, VEC, and the second one, we wanted to make sure that we, that we had it ourselves as well. This was in addition to our joint venture having the emitter technology and we making multi-beam tubes with that technology, we wanted to also, for the long term, make sure that we had access to, a slightly different type of, carbon nanotube-based emitter technology that we could also continue to evolve on our own. This was mostly a diversification play for us and where we get to own the technology ourselves, in addition to, through our JV partner. Okay. Got it. Sam, I'll throw a couple of things your way, and I'll pose both of these together if I could. Sam, gross margins, right? I'm specifically referring to GAAP gross margins. They seem to be sort of stuck in a 32%-ish, 34%-ish range. Are we in a position to sort of compartmentalize, okay, here is the impact of supply chain, these many basis points, these many basis points is FX, these many basis points is, you know, inflationary costs or product mix. Just help us walk us through, you know, what is the more acute impact you are seeing and, you know, any efforts to mitigate that. Sam, if I could also throw it in there, you know, maybe if you could just walk us through how cargo costs are currently shaping up, you know, which are presumably embedded in your OpEx. Any color would be great. Gentlemen, thank you for taking my questions. Yes, thanks, Suraj. Yes, in terms of, specifically answering from the GAAP gross margin perspective, and actually these impacts pretty much apply to non-GAAP gross margin results as well. It's the effect is the same for GAAP and non-GAAP. I would say compared to pre-COVID times, our freight is running high. Higher freight costs are impacting our gross margin by 100, even 150 basis points. In terms of cost, you know, they are up quite a bit. Cost is up 7%-10%, if you look at, say, three or four quarters ago cost versus where we are now. Essentially we are looking at 200-300 basis points cost increases, which is impacting the gross margin. That gets you to, say, 35%-36% gross margin if these were not there. We've also been increasing prices, and we have been slowly realizing increased prices to offset this. So far, because the price improvement efforts have been slow and we've not been fully able to mitigate the cost increases or the freight increase to price realization. Slowly we are trying to defray that, and we have been somewhat successful in that, but not fully. From a price perspective, we are looking at, you know, 100-200 basis points improvement back towards the higher end of the gross margin. That is how the bridge is working in terms of freight and the materials cost and then clawing it back through price increases. That's that. Your second question related to freight, as I said, freight is impacting 100-150 basis points currently. It has been that way for last 3, 6, 9 months, I would say. Lately we are beginning to see some improvement in freight, but given the current supply chain situation in many areas, we are still very tight in terms of. I would not say we are hand-to-mouth anymore, but things are still tight. We are leveraging or utilizing higher cost-oriented freight modes. Freight probably will take another quarter or maybe 1-2 quarters for us to normalize in terms of, having its effect begin to show up on gross margin. Thank you for the additional color. Thanks, Suraj. Thank you. As a reminder, that's star one to be placed into question queue. Our next question today is coming from Anthony Petrone from Mizuho Securities. Your line is now live. Thanks, gentlemen, and congrats on a good execution here in the quarter. I'll start with a few demand questions. Sunny, Sam, you have CT as you know, sort of listed as neutral demand in the quarter, just the backdrop in the environment. I mean, how much of that geographically is linked to the United States, Europe? How much of that is linked to China? And then when you sort of look at dental, that's actually more of a tailwind in 3Q. We're hearing some mixed data points just on the backdrop of dental volume still being impacted from labor shortages from some of the other publicly traded companies that have solutions in dental. So do you see any risk to dental, you know, slowing down in the next couple of quarters? I'll have a few follow-ups. Thanks. Thanks, Anthony, and good to hear your voice back, and welcome back on our call. Thank you. So yeah, what I would say in terms of CT, you know, CT demand is still high. The graphic color that we provide is really compared how we saw the business this quarter versus the last quarter. You know, CT has been a growing business for us for quite a few number of quarters here. It's still from a historical perspective, this line is still running towards the higher end. It's just that it is not as high as what it was last quarter or the prior quarter. We feel good about the CT business. You know, as we've talked about, you know, we've qualified a number of new OEMs in China, and so our demand for CT from China, Japan, et cetera, is quite strong. Overall, CT is good, but compared to the prior quarter it's a little bit down. We look forward into the remaining quarters of the year, as Sunny was mentioning, we need to think about in terms of the product mix, whether any recessionary pressure forces our customers to shift down on the product mix in terms of, you know, saving dollars, yet the quantities remain good. We just need to watch out for that, going forward in CT, but overall, we feel pretty good about CT. Your next question comes from dental. Maybe, Sunny, you want to add on dental? Yeah. I wasn't, Anthony, it wasn't clear to me what you meant by labor pressures. Were you saying that in your other calls or you've been hearing that- Due to labor pressure. Shortage in labor. Yeah, due to continued labor pressures at the site of carriers. At the clinic? Correct. Some of the dental companies that have exposure to procedures, they talked about a slowdown through this current quarter. Yeah. See, our I'm wondering if that translates back to? We have good market share in dental. We're fairly diversified across many geographies. We haven't felt that yet. I mean, we're not seeing any specific softness in any way that I can call out specifically. You know, Europe continues to be strong for us in dental. I really don't have any way of verifying or validating what you're saying. No, no worries. No worries. A couple of follow-ups would be one on currency. The U.S. dollar here is obviously strong year-over-year, elevated now for almost six months. It hasn't appeared to have any impact in demand on Varex Solutions. Just wondering what the latest is on the currency discussion, you know, as we're just dealing with an elevated U.S. dollar here. Yeah. Let me provide some color on that, Anthony. Our business on an annual basis, about 25% is in foreign currencies as sales comes in, and 75% is in U.S. dollars. We've looked at it, and the top line impact of, you know, compared to how we started this last fiscal year, 2022, it's been about $18 million-$20 million. Obviously, dollar has strengthened across every major currency, whether it's yuan, Japanese yen or the euro. That impact on the top line to us has been about $20 million. At the same time, from a margin and a bottom line perspective, as you know, we do have operations in Europe in terms of our R&D facilities as well as production facilities, and we also do have production in China. What ends up happening for us is that the top line has been compressed by, say, for the full year by about $18-$20 million, but the gross margin becomes a little bit more difficult for us. I would say we are more somewhat less impacted because our costs also go down along with the revenue impact. I would say we are reasonably buffeted. I would say probably, you know, less than 50 basis points impact on gross margin percentage for the full year due to the dollar strengthening. I would probably guess towards that. It's probably not more than that. Whether it is really 30 basis points or 50 basis points, I do not have that level of accuracy, but I do have good clarity around top line impact. Don't know if that is exactly what you were looking for or you were questioning from a different perspective. No, that's clear. The last one for me, just on capital allocation. The company has done tuck-in M&A, you know, in the past several years. We haven't seen anything on the activity front, although prices in public and private markets have shifted here a bit. Just the latest thoughts on tuck-in M&A activity. Thanks again. Anthony, we've still been focused on strengthening our balance sheet, paying down debt and we expect to continue to do that to get to our target leverage levels. For fiscal 2023, we'll continue down that track of supporting the investments that we need to make in India, in our factories and the capital budget deployed in that direction. No particular specific plans for moving off of that trajectory at this time. Yeah, I would just add, Anthony, a little bit more color to what Sunny just said, that, you know, first priority for us is to keep on investing in our business organically, which would be through investing in working capital and fully funding R&D and other priorities. At the same time, as we look forward to this upcoming year, we would need to invest a little bit more CapEx than what we have traditionally done in the past. We are looking at high capacity utilization for our tubes factory here in Salt Lake City. We are investing a little bit more in tubes factory here in Salt Lake, as well as elsewhere in the world. CapEx, we expect to run a little bit higher in fiscal 2023 than what it was for fiscal 2022 for us. You know, Anthony, we've always had a fairly good visibility to prospects and opportunities in organic opportunities. We have, as you know, we stay in touch with a lot of the companies in this space. We'll continue to stay, you know, stay connected and in touch with the opportunities. You know, we'll if something does materialize, then of course, we're not gonna look away from it. At this point, no, we're not actively pursuing any particular M&A opportunities. Thanks. Thank you. Next question today is coming from Jim Sidoti, from Sidoti & Company. Your line is now live. Hi. Good afternoon. Thanks for taking the questions. Can you talk a little bit more about pricing? You know, the price increases you put in earlier this year seem to be sticking. Do you think that there's room to increase pricing again in fiscal 2023 if your costs continue to rise? Hi, Jim. We rolled out price increases and they've had some effect, and they've offset some of the cost increases. However, the cost increases, the input material cost increases that we've seen have outpaced our ability to realize to offset fully the price increases that we've realized during the year. A part of the reason for that is many of our customers have multi-year contracts and some of them also place, you know, large frame orders with us. Until those run out and they and we get to a renewal point, you know, we're not able to realize the benefit of those price increases. We will continue to roll out price increases in fiscal 2023 as well, and the timing of when they go into effect will impact how much we can realize. All right. On the balance sheet, a couple questions. First one, PP&E is up about $5 million from the June quarter. Is that the investments to increase capacity or what else is in that? Jim, it was mostly lumpiness in terms of when the payments go out and stuff like that. If you remember last year, we had highlighted to you that this fiscal year in 2022, that we just completed, we are looking at CapEx of around $25 million. It was not straight line throughout through every quarter of fiscal 2022. Overall, we came out a little bit. We ended fiscal 2022 with around $21-$22 million. We did not spend as much CapEx as we had hoped to, partly because of supply chain and continued delays from equipment providers. We were not able to execute all the CapEx plans that we had planned to complete in 2022. In 2023, we will be higher than $25 million. We just have to see, you know, how what kind of progress we are able to make in terms of a number of initiatives that we have for us. Mostly these are growth initiatives in terms of adding new machines or adding higher productivity machines in and mostly around our tube factory. All right. Just a quick one on cash. You reported in your presentation $113 million in cash and equivalents. You're only showing $ 89 million on the balance sheet. Is that other $ 24 million in other assets? Yes. Jim, thanks a lot for asking that question. Yes. Our cash is really $113 million, but one of the GAAP rules for presenting cash on the balance sheet is that any investments, say, in fixed deposits or CDs or other securities that we do, which is more than 90 days, then we need to present it elsewhere in the balance sheet. Given the interest rate environment, obviously we want to, you know, generate some interest income from our cash portfolio. The balance sheet presented cash is $89 million, but once you add all the other, call it securities or fixed deposits and stuff like that we have invested in commercial paper and all of that added up, that's $113 million. From my perspective, I look at it as $113 million. Understood. Thank you. Thanks, Jim. Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Chris for any further closing comments. Great. Thank you for your questions. Sunny, any final comments? Yeah. Thank you, Chris. Look, in closing, we're very happy with the solid results, which we have posted for a second consecutive year with both top line and earnings growth. Our internal efforts to diversify our supply chain was a key enabler for these results, and I'm very proud of the effort that our 2,300 employees globally make on a daily basis to make these results possible. I mean, to that end, I feel that we are well-positioned to grow our top line again in fiscal 2023, in what's expected to be a very dynamic environment. Thank you for your continued interest in Varex. Thank you, Sunny. Thank you all for participating in our earnings conference call for the Fourth Quarter of fiscal year 2022. The webcast and supplemental slide presentation will be archived on Varex's website. A replay of the quarterly conference call will be available through November 29th and can be accessed at the company's website, or by calling 877-660-6853 from anywhere in the U.S. or 201