Greetings and welcome to the Varex Imaging Q2 Full Year 2024 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chris Belfiore, Director of Investor Relations. Thank you, sir. You may begin. Good afternoon and welcome to Varex Imaging Corporation's Earnings Conference Call for Q2 of fiscal year 2024. With me today are Sunny Sanyal, our President and CEO, and Sam Maheshwari, our CFO. Please note that the live webcast of this conference call includes a supplemental slide presentation that can be accessed at Varex's website at vareximaging.com. 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 Q2 of fiscal year 2024. In addition, unless otherwise stated, quarterly comparisons are made year-over-year from Q2 of fiscal year 2024 to Q2 of fiscal year 2023. Finally, all references to the year are to the fiscal year and not the calendar year unless otherwise stated. Please be advised that during this call we will be making forward-looking statements, which are predictions or projections about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. Risks relating to our business are described in our quarterly earnings release and our filings with the SEC. Additional information concerning the 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 be discussing 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 will 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. Good afternoon, everyone, and thank you for joining us for our Q2 earnings call. Sales in Q2 were in line with our expectations, resulting in revenue of $206 million. Non-GAAP gross margin of 33% was within the guided range, and non-GAAP earnings per share was $0.16 in the quarter. Revenue in Q2 was down 10% year- over- year. Revenue in the medical segment decreased 15% year over year, while the industrial segment revenue increased 6%. Non-GAAP gross margin in Q2 was 33%, which was flat compared to the same quarter last year, and non-GAAP EPS was $0.16 compared to $0.26 last year. We ended Q2 with $190 million worth of cash, cash equivalents, and marketable securities on the balance sheet, up $68 million compared to Q2 of Fiscal 2023. Now, let me give you some insights into the sales detailed by modality in the quarter compared to a five-quarter average, which we will refer to as the sales trend. Sales in our medical segment was down in the quarter due to cautious purchasing behavior by our customers, in addition to the continued softness in China. Global sales of CT tubes improved in the quarter and is now in line with the sales trend. Fluoroscopy and mammography were both in line with their respective sales trends. Oncology, radiographic, and dental modalities were all below their respective sales trends. Global sales of our industrial products were solid in the quarter and in line with our sales trend. Our cargo inspection products and industrial tubes continued to see strong sales, while we experienced some softness in other industrial end markets, primarily in semiconductor, electronics, and battery inspection. Now, I'd like to take a moment to give you an update on our photon counting technology. As we highlighted in the past quarters, photon counting detector technologies are a significant focus across the entire imaging industry. Both medical and industrial OEMs continue to explore the use of photon counting in imaging applications across various modalities, from food inspection to full-body medical CT. Engagement with our OEM customers has accelerated over the past year, and we believe Varex continues to be well-positioned to benefit from these trends, given our innovative technology and breadth of our product portfolio. Our industrial segment, where technology adoption tends to be faster, continues to be the main driver of our photon counting detector sales. The technology is being adopted in high-growth niche verticals where there's a need for high-speed and high-sensitivity imaging. Our photon counting detectors continue to be integrated into new customer systems, and we expect industrial applications to remain a solid source for sales of Varex's photon counting products in the future. In addition, last year we provided an overview of two collaborative photon counting projects in our industrial business: Parsec and GRINNA. These projects are sponsored under the Horizon Europe program, the European Union's key funding program for research and innovation. Both projects are focused on the speed of imaging and material discrimination, which are distinctive strengths of photon counting. The Parsec project, aimed at addressing the potential abuse of postal and express courier services by criminals and terrorists, is making solid progress. The material discrimination capability of our photon counting technology, coupled with AI software, is being used to test the detection of illicit substances within clusters of parcels. The GRINN project, which is aimed at preventing battery-caused fires in the electronics waste management chain, is also progressing well. A prototype incorporating our photon counting technology is expected to be deployed to an end-user facility in Europe for gathering data and field testing. Once testing at the recycling facility is complete in late fiscal 2024, we expect to work with our customer on commercialization of the final system. In our medical segment, our photon counting technology is being used in full-body scans and panoramic dental imaging. As we noted on our Q1 earnings call, we're working with a major OEM to integrate our photon counting technology in their next generation of CT scanners. This process is moving along as planned. We also now have other prospects in the pipeline who are in various stages in assessing our technology for CT application. We expect new and existing applications of our photon counting technology to contribute strong sales growth over the next five years. Specifically, we expect additional applications in medical, including CT, to add over $100 million of revenue over this timeframe. Coupled with traction in our industrial markets, we expect our photon counting portfolio to contribute more than $150 million of revenue annually by fiscal 2029. We continue to be encouraged by the acceptance of photon counting technologies for medical and industrial applications. With that, let me hand over the call to Sam. Thanks, Sunny, and hello everyone. Our revenues in Q2 were $206 million at the midpoint of our guided, while Non-GAAP gross margin was 33% within our guided range. Non-GAAP EPS was $0.16 below the midpoint of our guided range. Q2 revenues decreased 10% compared to Q2 of Fiscal 2023. Medical revenues were $149 million, and industrial revenues were $57 million. Medical revenues were 72%, and industrial revenues were 28% of our total revenues for the quarter. Looking at revenues by region, Americas increased 1% compared to Q2 of fiscal 2023, while EMEA increased 2% and APAC decreased 27%. The decline in APAC was primarily the result of lower sales in China due to the government's anti-corruption campaign there and investigation into its healthcare system. China accounted for 12% of overall revenues in Q2 compared to 17% in Q2 of prior fiscal year. Further, sales to China in Q2 declined sequentially from Q1. Given this trend, we no longer expect a pickup in China sales before the start of our next fiscal year. We remain optimistic about the prospects of long-term healthcare-related growth in China. Let me now cover our results on a GAAP basis. Q2 gross margin was 32% flat year-over-year. Operating expenses were $58 million, up $1 million compared to Q2 of fiscal 2023, and operating income was $8 million, down $8 million from Q2 of 2023. GAAP net earnings were $1 million, and EPS was $0.03 per share based on a fully diluted 41 million shares. Moving on to the non-GAAP results for the quarter. Gross margin was 33% flat compared to Q2 of fiscal 2023. Gross margin benefited by approximately 1% point due to a reclassification of fixed expense related to our joint venture DPIX from cost of goods sold to SG&A expense. This change is expected to remain in place for a foreseeable future, and we are assessing ways to reduce this expense. This benefit to gross margin was offset by approximately 1% point of higher warranty expense in the quarter. We expect the higher warranty expense to taper off and return to historical levels by the end of our fiscal year. R&D spending was $23 million, flat compared to Q2 of fiscal 2023. R&D was 11% of revenue. In Q2, we made the fourth milestone payment of $1 million to Micro-X. Generally, our target for R&D spending is 8% to 10% of revenue on an annual basis. R&D spending is expected to remain around current levels, however, R&D as a percentage of sales may fluctuate due to overall sales levels. SG&A expense was approximately $32 million, up $3 million compared to Q2 of fiscal 2023. SG&A was 16% of revenue. The increase in SG&A in the quarter was primarily the result of the aforementioned reclassification of fixed expense related to our joint venture dpiX. Operating expenses were $54 million, or 26% of revenue, above our expectations for the quarter. Operating income was $13 million, down $10 million compared to the same quarter last year. Operating margin was 6% of revenue compared to 10% in Q2 of fiscal 2023. Tax expense was $2 million, or 19% of pre-tax income, compared to $4 million, or 28% in Q2 of the prior year. We continue to expect a tax rate of 21% to 23% for full fiscal year 2024. Net earnings were $7 million, or 16 cents per diluted share, down $0.10 year-over-year. Average diluted shares for the quarter were 41 million on a non-GAAP basis. Now turning to the balance sheet. Accounts receivables increased by $12 million from Q1 of fiscal 2024, primarily the result of higher sales in the quarter. Days' sales outstanding remained flat at 67 days. Inventory decreased $4 million sequentially in Q2, and days of inventory decreased by 13 days to 185 days. Accounts payable decreased by $5 million, and days' payable decreased five days to 45 days. Now moving to debt and cash flow information. Net cash flow from operations was $3 million. We ended the quarter with cash, cash equivalents, and marketable securities of $190 million, up $68 million compared to Q2 of the prior year, and down $5 million compared to Q1 of fiscal 2024. Please note that $190 million includes $142 million of cash and cash equivalents, and $47 million of marketable securities, which is now broken out as a separate line item on our balance sheet. Gross debt outstanding at the end of the quarter was $447 million, and debt net of $190 million of cash and marketable securities was $257 million. Regarding capital structure, we implemented a $155 million revolver on March 26. Separately, we recently secured an additional $20 million financing as a delayed draw term loan. Both of these actions put us in a comfortable liquidity position as we approach refinancing of our convertible bonds. Now moving on to the outlook for Q3 and the remainder of fiscal 2024. As discussed by Sunny, due to cautious purchasing behavior by our customers broadly, in addition to continued softness in China, we are reducing our expectations for the remainder of the fiscal year. Based on our current visibility, we expect revenue in the fourth fiscal quarter of 2024 to be flat with that of Q3. While demand is soft in the near term, we continue to be optimistic in the long term and continue to invest in promising technology such as photon counting. With the above context, guidance for Q3 is: Revenues are expected between $200 to 220 million, and non-GAAP earnings per diluted share are expected between $0.05 to 0.25. Our expectations are based on: non-GAAP gross margin in a range of 33% to 34%, non-GAAP operating expenses in a range of $52 to 53 million, tax rate of about 22% for Q3, and non-GAAP diluted share count of about 41 million shares. With that, we'll now open the call for your questions. Thank you. We will now conduct a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star one1 to ask a question at this time. One moment while we pull for questions. Our first question comes from Suraj Kalia with Oppenheimer. Please proceed. Hi Sunny and Sam, this is Sam for Suraj. Hey Sam, how are you? Doing fine, doing fine. Just to get started, you know, China kind of, you know, any more color you can give there, what's, you know, what are you seeing on the ground? You know, obviously it's kind of pushed out from your initial, initial expectations of second half of the year, of a calendar year kind of getting started. You know, kind of can you talk a little bit more about the delay, pushing out through, you know, the remainder of your fiscal year and, you know, when we may start seeing some pickup? We, as you might recall, a couple of quarters ago we started talking about softness in China, and based on early signals that we were getting from our customers. T his was driven by the audit process that the Chinese government had launched on the hospitals there, and it was anticipated that it would take about 12 months to complete that process. T he signals that we were getting from our customers broadly on the ground was that, you know, by late spring, early summer, this thing should start to free up and buying would begin again. T hat was that's what led us to give you the indications that we would expect to start to see recovery in the second half of the year. I think that was somewhat consistent with what others were seeing as well. What we, you know, and we are not seeing the early indicators at this time that would lead us to believe that the recovery will happen in with any significant volume in the second half in our second half. You know, as you know, we're always 90 to 120 days ahead of in the value chain of our customers. W ith that in mind, we are giving a cautious view of the second half and as far as China is concerned. Now, that said, as we continue to keep our ears to the ground there and work with our customers, what we expect is likely to happen is there are multiple factors at play here. One was the audit, but secondly, there may be some impact of the stimulus package that's being in the wings. It's not clear what that is, and it's not clear what the impact is, but there's some general confusion. All of this leads us to believe that the recovery in China will be more of a gradual, steady recovery as opposed to any significant, burst of pent-up recovery. We're not anticipating that, but again, it's very fluid there, and we're staying close to it. Got it. Appreciate that. K ind of, you know, what's can you describe the environment you're kind of seeing outside of China? You know, I think, Americas' growth was, I think, 1%. EMEA was 2% or 3% somewhere there. You know, kind of what kind of environment are you seeing outside there? You know, is it kind of so yeah, sorry. Let me add one more point regarding China. We have seen no shift or no change in the Chinese government's intent or their policy or their intentions to expand healthcare delivery, continue to expand healthcare delivery services throughout China. T o the contrary, it seems like the intention of the stimulus is also to continue to support that. Now, what we're seeing outside of China, ex-China, is that there continues to be a general softness in demand. And this is what we characterized as some cautious buying behavior by our customers. Our customers, you know, they predict, they forecast their needs, and then they place orders with us within our prescribed lead times. A s they get closer to when they need the product, that's when they give us delivery dates. What we've seen is general cautiousness around volumes of shipments that they would like from us. T hey're asking us, you know, across the board, several many customers have asked us to defer, delay, slow down shipments as they adjust their stocking levels and inventory levels to match their more recent forecasts of when they expect to deploy these products into new systems for shipment. T hat's a broad-based view that we're getting of the overall medical segment. It's hard for us to tease apart where some of that softness is coming from because, as you know, our customers are global customers. We ship products to them, and then they send those products all over the world. So it's hard to pinpoint any specific sources of softness. Got it. Thank you. Y ou know, just one last one from me from our side and, you know, Photon Counting, we appreciate the color and quantification. You know, I think you noted somewhere in that slide deck, it's about $150 million in revenues by about 2029. I guess kind of can you describe how you're expecting the growth? Is this going to be kind of, you know, a slow burn? Is it going to, is there going to be some inflection point, where in the year, you know, everything's going to kind of start to accelerate? You know, any, any color there? Thank you. Our photon counting detectors, first of all, it's a new platform. Anytime a new technology is introduced in the healthcare environment, the time to adoption is fairly long. That's why this, you know, our R&D cycles are long and our customers' R&D cycles are long and then their regulatory cycles. With that said, that's the backdrop on the medical side. Our photon counting sales are coming from industrial and medical, both. On the industrial side, which is currently our largest chunk of photon counting sales, the uptake there is steady and it's growing and it's accelerating. In this trajectory from where we are today in $20-ish million of sales, going up to the $150 million-ish that we talked about in the slides, we expect to see steady, accelerating uptake on the industrial side and driven by new applications that are coming out. A doption in industrial tends to be much faster than medical because they just when they have a product, they just put it out there and they try it out. On the medical side, we have customers currently that have designed our photon counting detectors in certain applications. T here are a variety of applications that these, this technology, these detectors are going into. A few of them are out, and we mentioned that during the earnings call. And then there are more that are in the pipeline. These tend to, you know, in the early stages of these applications, design-in process, we see low volumes, largely prototypes that we ship. Then, customers take a couple of years to bring the product to market. And then we see initial pilots. I n a year after that, we see run rate, higher volumes. T hat's the, I'd say, the general modality. Most of the modalities behave that way. Now, CT detectors, we expect, will have a different trajectory. T hat's because they are much larger, higher-priced, bigger detectors. T here, it'll be, we will be in design phase and implementation phase for at least two to three years, after which we expect acceleration to be fairly rapid as our customers take their new CT systems to market. It'll be driven by the pace of adoption, really, of CT systems more so than the new CT system that our customers bring to market versus just photon counting technology at that point. Our photon counting technologies are being driven towards mainstream markets. W e're, you know, we're confident that once our customers bring these products to market, it won't be a very narrow niche application. It will be we are targeting at the mainstream CT market. T owards that outer end of our trajectory that we showed you in the walk, it's going to be driven by CT. In between now and 2028, it's going to be 2026, 2027, 2028. It's going to be driven by industrial and a few other medical modalities. I hope that gives you the color you were looking for. It's harder for us to get more specific because there's no challenges in predicting that far out on products that are in design phase with the customers. Appreciate it. Thank you very much. The next question comes from Young Li with Jefferies. Please proceed. Hello, Yong. Great. Hey there. Thanks for taking our question. I guess to start, maybe to follow up on China a little bit. I mean, it sounds like most, if not all, the impact is due to the anti-corruption campaign. Wondering if there's any, you know, local competitive dynamics that's playing at play there as well. No, that's we don't see that as the reason for any of this slowdown. The slowdown is, it's a substantial slowdown, and it's, most of, as you know, most of our business in China is driven by X-ray tubes. W ithin X-ray tubes, the majority of our volume comes from the, you know, the CT systems where we are. It's a highly engineered product that's designed in. W hat we are experiencing is a result of our customers not needing the products because their sales have dropped pretty significantly. Okay, great. Very helpful. I guess, just, separate question. I'm just related to Photon Counting. You know, that generates a lot more images and data. I'm curious, is there a software play or AI play for Varex? Y ou know, how's your software business doing recently? Photon counting, depending on the application, what you just described, would be certainly true for CT. For CT, first of all, high-resolution detectors and imaging at high frame rates produces a lot of data. Yes, there is. T he good news is in there that, with the high-resolution images, the amount of information that's now available in, in these images is, is gives opens up a lot of opportunities for, for, AI plays and for material discrimination and more precise, pinpointing of, of artifacts and reasons to and, and to be able to distinguish between, one type of artifact versus another. Our, our software group is, is very capable with CT reconstruction, and applying image processing and, techniques to, to look into and extract more and more information out of the data that's received. We certainly expect that our software group will continue to benefit from photon counting. We have quite a bit of technology that we offer currently with our detectors for image processing, and those are actually a key part of our photon counting detector offerings. A s we take our products to market for CT, they are certainly playing a role in the image processing and image construction. All right. Got it. Thanks very much. Once again, to ask a question, that's star one on your telephone keypad. Our next question comes from Jim Sidoti with Sidoti & Company. Please proceed. Hi, good afternoon, and thanks for taking the question. On the situation in China. There's been a couple of losses. Do you think there'll be some pent-up demand because of the, you know, the slowdown in buying now, or? P P rocedures are still getting done. Tubes are still wearing out. W hen these restrictions get lifted, do you think there'll be an increase in demand? Jane, procedure volumes are continuing. If people need care, they go get care. W hat we are seeing is sales of replacement tubes. T hat, that's for us, that's a recurring revenue stream. The pent-up demand is results when we get increased procedure volumes. T hat is, I don't know whether we can predict that at this point. However, what we believe will drive the return to growth is the continued push to expand healthcare services in China. That they have not come off of that. That is, everything that we hear from our customers is that the Chinese government's continuing to press forward. What is unclear at this stage is what effect the stimulus package that is sort of in the sidelines will have on how that pent-up demand will play out. There's very little. We're not getting much transparency around what hospitals will have to do in order to be able to take advantage of the stimulus program that's being rolled out. Once there's more clarity on that, we'll be able to assess how we, you know, the trajectory of the demand. Y ou know, one thing that we have noticed over time is when there is any kind of a slowdown or stoppage for economic reasons or other reasons, when the demand comes back, the pent-up demand doesn't go away. It comes back. T he question is whether it'll be a gradual ramp-up, which we think it's more likely, versus is there going to be a sharp inflow of orders. That we don't know yet, honestly. That's what in the next 90 days or so, we expect to get more clarity on that, and we will continue to share that with you. Okay. All right. C an you talk about, you know, your options regarding the refinancing, the convert? You know, are you looking at another convert for that or possibly going with straight debt? You know, when do you need to do it, and how are rates comparing now to the existing loan? Yes, sure. T hank you, Jim. Y ou know, we just recently closed about $175 million of new financing. One is a revolver, $155 million, and another $20 million of delayed draw term loan. F rom our current position, we feel we are in a very strong position, from the liquidity perspective, to address the refinancing. A t this time, you know, the existing convertibles are maturing next June, so June of 2025. W e are going to monitor the situation and make the right decision for us. Y ou know, we'll share with you as the board makes that decision. There are a lot of factors that go into it, including interest rates, stock price, and various other things. So that's the way we are thinking about. And then, in terms of interest rates, our current loan is at 4%. The current convertible bonds are at 4%, based on what we have seen from the convertible market. It's around there. It's probably a little bit less than that, if there were to be a new convertible loan. But as you know, convertible loans can be structured with, with various dimensions and various outcomes. So the interest rates can vary depending upon how it is structured. At the same time, we feel we have good cash on the balance sheet. We are in an excess cash position. W ith this extra liquidity that we now have raised, I think there is also the possibility that we can pay it down, partially or completely. W e'll share with you as and when we make the decision. All right. That was going to be my next question. How much cash do you, you know, do you need on the balance sheet, you know, to comfortably run the business? We, you know, if you go back four or five years ago, we were running the business with about $50 to 60 million. Since COVID, we've decided to have $100 million or thereabouts, in terms of the cash that we would like to carry on the balance sheet. W ith $190 million, we have about $90 million of excess cash compared to that threshold. Okay. Theoretically, you could pay down almost 25% of the outstanding debt. Outstanding debt, meaning the high yield? Right. No, W e could theoretically pay down 50% of the convert because the convert is about $200. Between now and June, we are targeting to generate cash, so we might be able to pay down 50% from balance sheet. Right. Right. Which should, you know, theoretically lead to lower interest rates in 2025 and beyond. Lower interest expense. Right. All right. Thank you. Thank you, Jim Sidoti. The next question comes from Larry Solow with CJS. Please proceed. Great. Thanks, guys. G ood evening, good afternoon. Good evening. I guess first question, in terms of the guidance, or the, you know, the lower outlook, is it principally it sounds like it's China, but it's also US or ex-China? Because China's only 10% of your med or your overall revenue, right? A re there other drivers? I guess the US or ex-China is also weaker in medical, and how is that, industrial? Is that change at all? Just trying to kind of piecemeal the reduction. I think when you started the year, you had said you thought medical, I think, was going to be flattish overall sales, if I remember correctly. Is there kind of a revised number to that? I know you kind of only got to the quarter, but it sounds like as a whole, your whole year is clearly coming down. But any, any more pieces to that kind of puzzle would be great. Yes. Thanks, Larry. Y es, China is soft. But on top of that, we did say that the broader market in medical is also soft, particularly driven by what we said, cautious customer behavior. And that's that phenomenon is not just China. So yes, there is the effect of China. As well as, ex-China, there's also softness in medical. So medical, we expect it to be down this year, year-over-year. T hat's what we are currently seeing in medical. In terms of overall revenue, what we are saying, we have provided the guidance for Q3. A t this time, we are seeing Q4 to be flattish to Q3. T hat gives you almost the entire year. We are expecting industrial business to be a slight growth, flattish to slide up year-over-year. It was, it's a pretty strong comp for the last year for what industrial did. At this time, you know, the cargo business in industrial is doing very well, and we expect it to continue to do well. T here is softness in industrial outside of cargo. W ith all of those puts and takes combined, we expect industrial to be a growth area for us, but very slightly for full year 2024 compared to fiscal 2023. W e expect medical to be down. The caution for, I guess, is your OEM customers, right? That you're referring to. That is true. I guess you're kind of down the supply chain, but does that start from the hospital? Because my understanding, hospitals are actually doing okay. They're doing pretty fine. I mean, their volumes have been good post-COVID. I think concerns about hospitals' finances are probably overblown, even though I know interest rates are a lot higher, and that doesn't help them. A s far as I understand, capital spending hospitals has been doing okay. So are your customers cautious because there's too much inventory still? You know, is there any kind of, you know, common theme that's driving this caution? All right. It's all of the above. The conversation starts with, "Hey, we have, we have what we need, and we just need to adjust our stocks and stocking levels. Can we slow this down? Can we, can you push out?" And then, you know, and then if you dig into, "Well, why do you have so much inventory?" Well, we had, you know, we had expected a different trajectory for, and of orders. T he COVID buying behavior post-COVID, where people were worried about, you know, their factories were clogged and supply chain issues. So it's kind of a myriad of things that have come together, causing some amount of destocking and inventory adjustments. Clearly, what they had, what they had in mind when they bought, the components didn't match up with all the way with their current fiscal, you know, current quarter production needs. I t's, it's, it's several of those. It's hard to reconcile, see, most of our customers ship from backlog. It's not that, you know so that the hospitals' health is, that's a good thing. W e're glad that, procedure volumes are there and growing because that's going to drive in replacement of these modalities in our tubes. That is not necessarily that doesn't correlate with, directly with hospitals accepting shipments of large systems, which require then other work on the side of the hospital, civil works, construction, and things like that. V ariety of variety of reasons why their, shipments have slowed for certain customers. Okay. All right. I guess that's fair. Okay. I guess I'm all set then. Thanks. Thank you, Larry. Thank you. At this time, I would like to turn the call back over to Chris Belfiore for closing comments. Thank you for your questions today, and for your continued support of Varex. The webcast and supplemental slide presentation will be archived on our website. A replay of this quarterly conference call will be available through 16 May and can be accessed at vareximaging.com/investorrelations. Thank you, and have a great night. Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.