Bruker Corporation (BRKR) Earnings Call Transcript & Summary

All right. Good morning. Welcome to the JPMorgan Healthcare Conference. I'm Tycho Peterson. It's my pleasure to introduce our next company this morning, Bruker. Just a quick reminder, if people have questions, you can submit them on the submitted questions here on the website. And with that, let me turn it over to Frank.

Thank you very much, Tycho. Pleasure to be here in virtually. I presently do not see my slides. Are they up? I will jump in with Slide 3. Although right now, I do not see our owe slides, so I'm not sure whether you can see them. We had an 8-K this morning and gave a preliminary Q4 2021 revenue range, above expectations, which is capping off a strong -- very strong growth year for us in 2021. Our Q4 2021 revenue estimate was between $665 million and $670 million, which would correspond to organic growth of roughly 8% to 9% higher than what we had previously forecasted as color of mid-single-digit organic growth for the Q4 and also above consensus. That in overall gets us to about $2.4 billion revenue this year -- sorry, last year, of course, for 2021, which was over 20% reported growth and about 18% organic year-over-year revenue growth. Could have some feedback, please whether the slides are visible. I do not see them in what I'm looking at.

Yes. Frank, the investors can see them. They're on the website.

Okay. Awesome. Then I'll just keep talking through it. I'm on Slide 3. If I -- so if you want to look at for some additional details on currency headwinds or tailwinds and M&A was very, very little. Those are all on the slide -- on our Slide 3 in the footnotes and in our 8-K from this morning. So again, quick take-home message, 8% to 9% organic growth is the preliminary estimate at $665 million to $670 million for Q4 above expectations and consensus. If I then go to our Slide 4. These are -- keep in mind that these are fiscal years and then comparing the last 12 months of 2021. But nonetheless, the trend is there. We will have -- we will -- 2021 is, in some ways, an exceptional year, with very fast revenue growth, as I said, will come in at about 20% revenue growth, 18% organic. Our margin expansion will be well over 350 bps last year, and our EPS growth will be well over -- or will be around or more than 50% bringing us over $2. That's the present expectations, and that's already the case. If you look at just the last 12 months that ended at the end of September, at the end of the third quarter. So excellent drivers from Project Accelerate. Of course, very excited about the breakout opportunity that we see in proteomics and with some and ramping up also gradually for us, the spatial biology opportunity, the other project accelerate areas plus everything that we're doing on productivity and operational excellence to drive our core with our very entrepreneurial, but also disciplined Bruker management process. I'll come to some of the other nonoperational financial drivers on another slide. So outstanding progress in 2021, we expect to detail that when we report the fourth quarter in the middle of February, and then we also expect to give 2022 guidance. Moving to Slide 5. I think as we've now seen in many areas, there's somewhat differentiated very innovative, very entrepreneurial management style that we encourage and the management process that we have at Bruker has given us new fields from MALDI Biotyper. I'll come to that in a moment. Our microbiology field, very profitable, has been growing beautifully to, of course, our proteomics opportunities to the new things we're doing in from semiconductor metrology all the way to spatial biology. And the whole buildup is also real something that we think will give us a very solid foundation with operational excellence for sustainable margin improvement and not just riding on the wave of COVID testing or something else. So we really think what we're building up gives us a lot of momentum also for 2022. If I -- just a reminder of our dual strategy on Slide 6. Many of you have seen that slide as much as we talk about the proteomics breakout opportunity in spatial biology and the Project Accelerate 2.0 fast high-growth, high margin areas that accelerate our long-term growth and also pull up our margins while operational excellence pushes up our margins and continues to drive our innovation and our competitiveness and market share in our core areas. The core areas have really also been very strong in 2021, applied markets were doing extremely well in biopharma with our NMR and mass spec tools. I'll come back to that, but all the way also to industrial tools and then again, particularly strong growth also in the second half of the year in the academic market, particularly now also in the United States. If you go to Slide 7 for a moment, I won't spend much time on it. It gives you some of the examples that we also did our June Investor Day of how we're investing in productivity and capacity in new R&D capabilities from our lower cost, lower tax, Bruker NANO site in Penang, Malaysia, where we now already have 2 facilities, very close to each other to our major site consolidation for the original and largest originally in Bruker BioSpin Group in Germany, where we had 2 legacy facilities that we've now combined into 1 high productivity, very customer-oriented facility. We're investing a lot in our business for R&D, for customers, for productivity, which, of course, again, implies margins. Let me move on and go to Slide 8 and talk about the MALDI Biotyper and our microbiology business. It's really been a delight in 2021. We had with the launch and the FDA clearance of our Sepsityper panel, which does nearly universal, very fast, identification of bacteria and from positive blood cultures in sepsis cases where time really matters. We've had excellent reception. We've trained more than 100 customers in the U.S. last year, either new MALDI Biotyper customers or existing customers who wanted to add that assay. Overall, that has led to greater than 50% year-over-year order growth in the U.S. Even globally, if you take the whole world, our MALDI Biotyper unit growth rate has gone back up to the double digits, and we have continued fast assay and consumables growth, a new high watermark, so to speak, is that we, in 2021, for the first time also for the first time, sold more than 600 MALDI Biotyper units. It used to be around 400 and inching up -- or moving up towards 500. And last year, we sold more than 600 MALDI Biotyper units. So the systems growth is also excellent, particularly in the U.S. And in the U.S., as a reminder, the installed base in the U.S. is still only about half of what it is in Europe. So in the U.S., we also think we still have a lot of runway. But our European MALDI Biotyper business has also been quite healthy. We think we continue to gain market share because of new applications like the biotyper or our work in progress, research use only selected fast antibiotic susceptibility or AST panels that will go into clinical trials in Europe we expect by middle of this year. Globally, we now have more than 5,000 MALDI Biotyper units installed. And maybe, again, as a reminder, the MALDI Biotyper and microbiology business also is one of our most profitable business gross margins and operating margins, so as that part of the business grows faster. Of course, it also helps us pull up our margins, which is the whole philosophy, our Project Accelerate initiatives that are not only accelerating growth but also pull up margins while we push productivity and would lead the operational excellence. Moving on to Slide 9, which isn't entirely new but still quite relevant. In the U.S., the National Science Foundation Network for Advanced NMR funded 2 orders for additional 1.1 gigahertz NMR systems. They will not be in '22 revenue. They'll be in '23, '24. We have 2 years of backlog. We think -- we know there is a lot of appetite for additional systems. The U.S. has -- is so far under-invested compared to Europe. There is further growth in Europe and further interest, and we think we'll get additional orders for these types of systems, our gigahertz-class NMR systems even in Europe this year, the additional countries that are moving into this technology. We know there's a lot of appetite in the U.S., hopefully that can get funded by NSF or others. And we're also now seeing pretty encouraging signs in certain countries in APAC where they wish to get funding and then hopefully place orders for this unique and very powerful and very useful technology of gigahertz NMR. So that continues to be an important growth and margin driver for us as well. Speaking on Slide 9, a little bit about our biopharma business. It's really done exceptionally well. We have a lot of different products from X-ray to FTIR that go into biopharma but particularly noteworthy, our very unique NMR biopharma products. And then also, of course, there is other mass spec companies, very good ones, but we have rather unique solutions for mass spectrometry imaging, using the timsTOF, 4D-Proteomics platform, which also in the U.S. or I think even worldwide at greater than 30%. Growth in biopharma in CROs and in biopharma companies last year. So excellent continued progress. And we are carving out quite of biopharma business driven by unique NMR and unique MS capabilities for biologics, primarily also for some small molecule screening and other operations, mass spectrometry imaging, tissue imaging, metabolite and drug imaging doing very well. Talking a little bit more about NMR on Slide 11, some of you may recall, we showed an early -- our early model in Baltimore, just in -- just before COVID began. We've now been ramping that Fourier 80 non-superconducting benchtop system that's could have democratizing FT-NMR for the benchtop and at a price point, it'll be around $100,000 or a little bit below, depending on configuration and automation with a really very robust high-performance sort of second-generation system for that market. There are some earlier entries, but we think we have something that's really very much -- will be rapidly adopted by both industrial and academic customers, and we've been launching in Europe a little bit earlier already in 2020. First half of last year was the Americas launch, second half, the various countries in APAC. So this year -- and already last year, we sold about 50 units, which is a start right. The real ramp up, the global ramp-up now that we've launched everywhere, and we'll continue to bring out additional software and other hardware capabilities will be in 2022 and beyond, but it's an important additional growth driver and make, hopefully, a benchtop FT-NMR as accessible as benchtop GC-MS or LC-MS and could make the overall FT-NMR market, I think, will grow very, very nicely. I don't think this will cannibalize the higher-end superconducting magnet systems at all, but I really think it will give it an additional base of routine benchtop systems. And we're part of that and with a very, very good product offering that's also automated and robust and what industrial customers want. A lot of applied and industrial market applications under development that will drive demand even more so probably than just the product, the hardware product itself. Let's talk about proteomics. Proteomics has done really well. Again, in 2021, this is not for our -- overall proteomic is more like $250 million or more, including NMR and other tools. timsTOF, 4D-Proteomics for the platform is now greater than $100 million per year. Our installed base is now greater than 425 systems, even the new $1 million single-cell proteomics system that we just launched in early June and where nobody had grants ready or so because we kind of surprised the market. We already have something like 10 orders in the first 7 months, which is very good from a high-end system like this, where there was no prior funding. So people really repurposed existing budgets and grants and whatever to buy this type of instrument. So making very good progress with our unbiased D proteomics now also for single cell applications plus the mass spec imaging combined with electrospray multiomics on the same instrument, the fleX system, also about $1 million instruments with MALDI electrospray. That's in the second year after its launch, and that's also already at about 2 dozen orders per year. So you will see a lot of big push in 2022 into large cohort plasma proteomics and post-translational modifications. I think mass spectrometry with the increasing robustness, particularly of our solution and throughput can make a big play with that. There are some front-end solutions by other companies that also facilitate that, and we're happy to collaborate with them. And just keep in mind that if you wanted to look at well over 1,000 or 1,500 peptides and hundreds of proteins in a targeted fashion actually by far the most cost-effective way to do that is also, again, with the timsTOF platform where your consumables cost per run is well, well below $50, probably below $20 compared to that to some protein panels with sequencing where it's more like of the order of $1,000. So I think in terms of -- not only in terms of research, but also in terms of clinical and translational research and eventually probably laboratory developed tests, I think we have a very bright future front biased, timsTOF-based 4D-Proteomics. Looking briefly at Slide 13, I already mentioned the single-cell proteomics instrument, very unique, very relevant, perfect and needed complement to single-cell RNASeq and about 10 orders or so, more than 10 orders in the first 7 months as long as a surprise to us given that people did not have budgets ready for that. And we think a lot of brand proposals in for this type of capability worldwide really in -- from China to Japan, to U.S. and Europe, of course. And so that's a very unique and I think also another fast-growing market single-cell proteomics. We're doing single-cell proteomics on Slide 14. You may be familiar with that. These are our various tools for spatial biology, including targeted spatial proteomics. And I'll jump straight to Slide 15 because we have now started launching some of the validated antibody kits for our spatial biology targeted proteomics ChipCytometry platform that looks at single-cell targeted proteomics of 10,000s' or 100,000 cells in C2 with single cell or better resolution with very, very high dynamic range and looking at mid- to high plex dozens of protein biomarkers, very, very complementary to what we're doing, of course, in the unbiased deep proteomics and single-cell proteomics with the timsTOF platform. We did an acquisition, as you will see on Slide 16 in our -- for a preclinical imaging business. We bought a company in Belgium called MOLECUBES that have beautiful benchtop systems, these cubes as they call them, for NMI, which stands for Nuclear Molecular Imaging, it complements our preclinical imaging. That company had about $5 million in revenue, about 70 systems installed, beautifully enhances our portfolio. Finally, I'll wrap things up on Slide 17. You'll see that we continue to do significant R&D investment. You'll see significant R&D investment, even further ramp up in 2022, a 9% to 10% of revenue, also in marketing and sales in order to leverage the historical breakout opportunity, particularly in proteomics, but also in spatial biology. We've done and continue to do the CapEx to leverage all of that. We do -- we're not a very acquisitive company, but we do strategically focused M&A and minority investments about $60 million, $65 million per year in the last 2 years. And yes, we've also done some favorable private placement financing at fixed 10-year rates with a bit of inflation protection. We're raising our dividend. We have a share purchase program, and we've been added to the MidCap 400 Index. So I'll conclude on Slide 18 that I think we're building very nice momentum in just about every aspect and setting ourselves up for a solid 2022 after very, very exceptional improvements in just about every category in 2021. With that, I thank you and open for questions.

Great. Thanks, Frank. Maybe I'll start with the preannouncement. Obviously, you've guided mid-single-digit coming in quite a bit above. Can you just provide a little bit more color on what you saw in the quarter?

Gerald, I'll let you take that.

Sure. Hi, Tycho. Hello, everyone. Yes, I mean, we saw a stronger performance in a number of areas. We'll talk more about that, of course, in February when we deliver the full year detailed results. But yes, overall, demand continues to be solid, and we saw that reflected in the fourth quarter revenue performance.

Particularly B Nano, so a lot of -- and CALID -- so diagnostics, proteomics, single-cell spatial biology is still small and then very strong industrial and also semiconductor metrology. Those were probably the strongest in the fourth quarter.

And I know you talked about academic labs being back to kind of normal utilization midyear in '21. How are things more recently with Omicron in universities sending students home, has there been any impact on the near-term demand on the academic side?

We haven't -- we don't have enough color on that yet. The Omicron wave here in the U.S. is ramp and, of course, so many people have it. It could lead to some short-term disruptions for -- in the first quarter. We don't really know. We don't have specific indications of that yet, but that's something that -- that's a sensible thing to assume that it could be a bit choppy in Q1. We don't see any lab closures, at least, not at a large scale. Everybody is trying to model through it and manage through it rather than go to full closures. But even from our factory, so many people all of a sudden call in sick or have to quarantine because they get up to quarantine. So it does affect productivity. It does affect customer sites, but nothing pervasive. I don't think it will endanger our year 2022, but it could make for a choppier start in Q1. That's not a specific comment, but we're just seeing it everywhere in Europe and U.S. and of course, Asia will not be immune from that either.

And you and your peers have largely navigated supply chain constraints fairly well. You did call it, coming out of 3Q about some conservatism in the guidance. Can you just touch on supply chain logistics, any constraints that have flared up coming out of 3Q in the year-end?

Oh, yes. I mean we're in the middle of that. I mean the supply chain and logistics issues are a major headache. I mean there's just no way of saying it any other way. We're not walking on water. We're swimming very hard in upstream, but we're managing. And you've seen we've delivered a good Q4, could we have delivered even more. That would have been challenging given the supply chain constraints. So we're very pleased with our Q4. But accordingly, we will have an excellent backlog going into 2022. And I think for the first half of the year, I think the logistics and supply chain problems will be -- will continue and it's very difficult work and lots and lots of extra action to work through them. We have higher buffer inventories. We have -- for once, it's really good to be in that systems business with a very high backlog. It gives us a lot of planning flexibility. And Tycho, I can tell you, there will be 1 or 2 things at Bruker that -- where we'll have some delays, but I hope you will never hear about them because -- and our investors won't hear about them because we have so many ways of managing through that. But it is very challenging supply chain and logistics issues out there. And I think it will be for at least another half year.

And then how are you thinking about China? Just over 15% of revenues, you had a good third quarter there. There was a little bit of pull forward. You did flag the tax exemption certificates as creating some administrative delays. And obviously, there's been noise around procurement initiatives and tenders and encouraging local competition. So what -- as we think about the year ahead and the setup in 2022 for China, can you maybe just talk about some of those gives and takes and what you're assuming for growth?

Sure, do you want to take that, Gerald?

Sure. Well, look, as you know, Tycho, we're not talking specifically about '22 here, but just anecdotally, at a high level. I mean, you know I believe that China is an important market for us. It represents about 15% of the total revenue for Bruker. It's a very important market for us for a number of opportunities, particularly in the breakout space and our core business. So I would say -- we've seen a little bit of improvement in the VAT exemption certificate issue in the fourth quarter. Our expectation is we're going to continue to have good progress with respect to that issue. The market itself in China, both from an orders and revenue perspective, has been quite solid. We've seen good market demand performance, particularly in the industrial side, in the core Applied elements of our business, very strong performance in the -- these breakout opportunities, particularly in the proteomics space. So I mean we have really positive expectations with respect to China going forward. And even the buy-China initiatives and generally speaking has a limited impact on us partly because of our premium instruments that we offer and of course, there are going to be some units or some parts of our business where there's kind of knockoff products in a smaller space and smaller impact. But generally speaking, we think we're really well positioned for our China business at the moment.

Maybe jumping into some of the products and some of the update's you guys have provided. I guess starting with NMR, you've talked -- I think you mentioned this fall, you're about 1/3 through the NMR backlog. How large is that backlog? And how soon do you think you can kind of work through that? And then how are you thinking about manufacturing capacity? I know you have 4 to 6 systems per year. Are you planning to expand capacity given the order funnel?

So you're referring to the gigahertz-class NMRs presumably? And yes, we did ramp up. We were able to get into our second facility in Switzerland for that in the second half of last year. Last year, we shipped and took revenue of -- while we shipped more, but we took revenue on 4 systems. We're not giving 2022 guidance today. But as -- we have more than 2 years of backlog at the moment and ramp, so ramping that up to 4, 5, 6 systems this -- in 2022, 2023, that type of -- those type of numbers. There are some further -- we're working very hard on the -- there is continued good funding in Europe, which is wonderful. So I think we're optimistic that we're getting additional orders this year in Europe as well. And then there's just a lot of demand and appetite in the academic government -- primarily academic research community in the U.S. Everybody has noticed this network for Advanced NMR, but it only funded 2 systems. And 1 other system had previously been ordered for Ohio State University, still that's nowhere close to what the U.S. needs. So hopefully, the customers can, and customer consortia can convince primarily federal agencies this year to put a lot more funding into that from our orders, which should then really would go into our 2024 revenue. And we have seen in at least a couple of countries, major countries in APAC, interest in now getting into these things because they do need it for functional structural biology. They're just things that you can only measure with the dynamics and binding capabilities and looking at things under physiological conditions in structural biology that you can only do with GigaHertz NMR and so there's really very strong scientific drivers now also in Asia and an organized efforts to get funding for these types of systems. So I don't think it's going to double or triple or anything like that, but I think you'll see continued solid growth. And I think you see a lot of appetite in -- the additional appetite in Europe and a lot of appetite in the U.S. and I think with a little bit of a delay also in APAC for this.

And then how do you size kind of the market opportunity for the Benchtop Fourier 80? I know you talked about 50 units last year, kind of early in the ramp, but how are you sizing that market opportunity?

Yes, it's still a modestly sized market. I mean there's some -- overall, this maybe of the order of 300, 400 systems a year or so across all vendors. Again, we're coming in with that second-generation system. I think overall, I think we'll gain market share in that space because we have a really good system. We have now launched everywhere. But in addition, I think it's -- eventually, this could become an 800 to 1,000 unit per year market over the next several years and hopefully will be one of this -- we will be one of the significant players in that.

One that came in on e-mail. So kind of a follow-up to all that is, how are you thinking about the sales force strategy in the U.S. between NMR and MALDI Biotyper cell analysis like -- it seems like there's an opportunity to kind of expand the sales force? Could you just talk a little bit about what you're doing with the sales growth recently?

I very much agree with that comment and question. And in fact, we have greatly invested even during the pandemic, particularly in our U.S. sales force because even in things areas like proteomics or MALDI Biotyper or other mass spec or NMR -- mass spec solutions for biopharma. Our -- we had more upside on market share here in the U.S. And for instance, our U.S. biopharma mass spec business last year 2021 grew tremendously. But overall, our non-MALDI Biotyper U.S. mass spec business was the strongest growth last year, not only because of strength in the market but because also things -- we have good products, but we also invested a lot in our channel and in our distribution and applications and support capabilities. And we will continue to do that in 2022. We, Bruker, that's a Bruker idiosyncrasy have a lot of additional opportunity in the U.S., and we're really investing heavily in that. You'll see that in some of our OpEx investments. They're not only in R&D. They're also in channel and marketing and sales.

And you flagged timsTOF being over $100 million business, 425-plus units. How does the biopharma market-driven uptake around timsTOF Pro and fleX? And how do you see the runway for growth in that end market?

Yes. So that's right. Biopharma is a strong contributor to the timsTOF platform overall, the various models that we now have, right, including the fleX and including even some of the earlier SAP systems, they're not only going into academic or academic medical centers, as you would expect, of course, but they're also early on going into some specialty biologics company and some very large biopharma companies that are among the top 10, particularly with an oncology focus that's where the single-cell proteomics and looking at the heterogeneity of the tumor microenvironment and infiltrating in human cells, et cetera, are particularly useful and important also in biopharma research. To the second part of your question, Tycho, we -- right, I mean the -- we expect the timsTOF platform to continue to outgrow -- to continue to grow in the double digits, grow faster than the Bruker average. And I think we've outlined that the TAM in this instrument space is probably, including some other tools for us is of the order of -- well, the TAM is probably on the order of $5 billion to $6 billion, the [ TAM ] that we can serve with our more and more instruments has grown from a few years ago, maybe $500 million to probably about $2 billion. And we just have a very long runway and a very long ramp. And so with the existing product, with the commercial ramp or channel ramp, but then also further capabilities that we keep bringing out from new methods and workflows, now also for targeted proteomics on the timsTOF platform, the single-cell proteomics and a very rich roadmap and pipeline for the next several years. So we expect that to be our single largest growth driver, and it's also will be a very good margins.

Project Accelerate has been very successful. It's over 50% of revenues. You talked a lot about this at the Analyst Day, newer markets like spatial expected to grow double digits, well above kind of the corporate average. As we think about some of the initiatives around Project Accelerate, the particular segments you think have more room for upside versus others? And then how do you think about kind of next steps for Project Accelerate going forward?

Well, they're all pulling their weight, quite honestly. Of course, proteomics is -- proteomics in the next 10 to 15 years and proteomics will be incredible. I mean that's really the age of proteomics. Spatial biology maybe not quite as -- well, partially overlapping first of all, of course, there's spatial proteomics. We're coming to that a little bit later, but with some very cool technologies and very advanced optical and microscopy and imaging technologies. So we think that is still modest size, but I think it will ramp up nicely in the next few years as well. So those are the 2 historical breakout opportunities. As you know, we've been in business for slightly over 60 years at Bruker overall, but we've never had such dramatic breakout opportunities in markets that just will -- that will absolutely take off. And you see all the excitement in proteomics, of course, in many areas. It's not only a single technology. It's a number of technologies, but I don't think there's a technology or a platform that's more exciting than the timsTOF 4D-Proteomics. For proteomics, epiproteomics, post-translational modifications, but also for lipidomics, metabolomics. We are also doing quite well in semiconductor metrology. We don't talk about it as much. It's not part of -- typically part of a healthcare or life science conference. But that area has grown very nicely, has good margins. Our other industrial core businesses, Applied markets are doing very well. And then -- and that I wanted to highlight that with this slide, we really are doing very well in biopharma. I know we don't have 30%, 40%, 50% exposure to biopharma, but because of our unique NMR solutions useful for biologics and small molecules and our small molecule and mostly biologics-oriented mass spec specialty solutions, including the timsTOF Pro, timsTOF fleX with mass spec imaging are really doing very well to where our biopharma business is now also well over $250 million. So it has different components and a big part of that was also a significant investment in what we call pharma, biopharma tiger team, so a dedicated channel that we built for that. So -- and that has paid off along with the dedicated applications and solutions development and marketing. So it's pretty well balanced. The project accelerate with its 6 initiatives. We talked about MALDI Biotyper and diagnostics, and of course, the proteomics being just the something that if I combine Applied proteomics on the MALDI Biotyper with our other proteomic tools, that combination of research and Applied proteomics is already about $0.5 billion for us. And over time, that's -- that will grow very dramatically in this next decade. And the timsTOF platform will be a key driver of them.

Great. I know we're bumping into time. Maybe one last one actually for Gerald before we hop off. You didn't buy back stock in the third quarter. I know you've got, I think, $500 million authorized through '23. So how are you thinking about repurchases? And then should we expect the kind of pace of both plan M&A to continue going forward?

Yes. So just very quickly, so as you likely know, we do not talk specifically about timing of share buybacks specifically, but we do have an authorization of up to $500 million, which is authorized by the Board in May of '21. I mean we're executing on that along with normal capital deployment strategies. And just to remind folks, our capital deployment strategy is pretty straightforward. It's first invest in the business, whether it's R&D, capital expenditures or M&A bolt-ons that fit the Project Accelerate strategy. I mean that's kind of the short version we have. We have share buybacks. We have a broader dividend program. We've now increased and fundamentally, we're sticking to that capital deployment strategy we followed for many years.

Probably our M&A and minority investments will probably be higher in 2022 than it has been in the last 2 years. So it ran about $60 million to $65 million.

Great. I think we'll leave it at that. Thanks for taking the time today. Good to see you.

Yes. Thank you very much, Tycho.

Yes. Thank you. Thanks very much, Tycho.