Good afternoon, ladies and gentlemen and welcome to the Masimo Corporation's First Quarter 2009 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. (Operator Instructions). Thank you. I would now like to turn the call over to your host for today, Mr. Steve Moran, Executive Vice President, General Counsel of Masimo. Please proceed, sir.

Thank you, Tasha. I would like to welcome you to Masimo's first fiscal quarter 2009 earnings release conference call. Our press release was distributed about an hour ago. If you have not seen the release and would like to, a copy is posted on the Investor Relations page of our website at www.masimo.com. On the call today are Joe Kiani, Masimo's Chairman and Chief Executive Officer; and Mark de Raad, Executive Vice President in Finance and Chief Financial Officer. In just a few moments, Joe and Mark will deliver remarks on our results achieved during our first quarter 2009 and general comments regarding our business. After Joe and Mark offer their comments, there will be a question-and-answer session in which they will answer as many questions as time permits. Before we begin, let me remind you that this call may contain forward-looking statements. While these forward-looking statements reflect Masimo's best current judgment. They are subject to risks and uncertainties that could cause our actual results to vary. Risk factors that could cause Masimo's actual results to materially differ from our forecast are discussed in detail in our filings with the Securities and Exchange Commission. With that, I'd like to turn the call over to Joe Kiani, Chairman and CEO.

Thank you, Steve and thank you ladies and gentlemen for joining us today. Earlier today, we announced our financial results for the first fiscal quarter of 2009. As we noted in our press release today, we are happy that despite the difficult economic conditions, we saw a strong first quarter demand for Masimo's technology and products. Our revenues grew by nearly 25% and our earnings grew by 47% compared to Q1 2008. During the first quarter, we were able to ship 27,700 new Masimo SET and Masimo Rainbow SET Pulse Oximeters and Pulse CO-Oximeters. And now we estimate based from our current historical seven-year field life assumption that our total worldwide installed driver base is now 587,000 units, up from 491,000 units just one year ago and this number excludes the handheld Pulse Oximeters. In addition to our first quarter financial results, which Mark will review with you in more detail, the first quarter also includes some important business and clinical milestones that I would like to briefly mention. On March 23rd, we commercially launched SpHb. This will hopefully be remembered as a huge milestone for Masimo and medicine. We believe the trend capability of our continuous noninvasive hemoglobin monitor will allow clinicians to better care for their patients in places like the operating room, recovery room, and intensive care unit. Turning to carbon monoxide. During the first quarter the United Kingdom House of Common Safety Group recommended carbon monoxide screening by Pulse CO-Oximetry to reduce this diagnosis and prevent death. And the U.S. Federal Emergency Management Administration (FEMA) added the Masimo Rad-57 Pulse CO-Oximeter to its required medical equipment list for urban search and rescue teams. We believe that these two events along with NFPA, IAFF and AMSE should show the noninvasive carbon carboxyhemoglobin monitoring is becoming the standard…

Thank you, Joe. Hello and good afternoon to everybody. Earlier today, we reported record total first quarter revenues of $85.5 million, which consisted of record product revenues of $74.5 million and royalty revenues of approximately $11 million. This represented a 24.7 % increase in year-over-year quarterly product revenue growth, and above our expectations. As Joe mentioned, we shipped 27,700 new pulse oximeters and Pulse CO-Oximeter drivers into the marketplace. And based on these shipments, we now estimate that our total worldwide installed base, net of estimated retirements to be at least 587 drivers, up from 491,000 or about 20% from just one year ago. Our strength in our Q1 revenues came primarily from Masimo SET technology products, including a record quarter of sensor shipments. While this is due in part to our continuing expansion of Masimo SET technology into new hospitals, it is also due we believe to the impact of the traditional cold or flu season, which has resulted in both strong fiscal fourth quarter 2008 and strong first quarter 2009 sensor volumes. During the first quarter of 2009, Rainbow revenues totaled $3.1 million, up from $2.7 million in the comparable prior year quarter. While the $3.1 million in Q1 2009 revenues were up from the prior year, these results were below our own Q1 expectations. We believe this is due primarily to cuts in both local and state government budgets, resulting from the overall difficult economic environment as well as the introduction of the Medtronic Physio-Control LT15 defibrillators. We believe some of our EMS customers have put their orders on hold as they prefer to have SPCO integrated into these defibrillators. We did see an increase in Q1 2009 hemoglobin revenues. And in fact, without these increased revenues, our total Rainbow revenues would have been down compared to…

Thank you, Mark. On the last earnings call, we provided our annual 2009 financial guidance and given our policy to only provide annual guidance once in the year, we will not discuss guidance on this call. However I would like to make some comments on what we are seeing in the overall marketplace. As we noted in our last call, although the conventional wisdom has been that the medical industry and related medical device industry has been relatively immune to economic downturns, it is apparent that our customers are facing a growing level of uncertainties including their ability to obtain the necessary access to capital. The lower overall hospital census for pain patients and the impact of that lower census on hospital budgets. Additionally, recent healthcare reform discussions have created additional levels of uncertainly regarding hospital spending. The majority of Masimo's direct U.S. business model is based on long term sensor agreements that do not require upfront capital commitments. As a result, a large part of our U.S. business is not and continues to not be restricted by our customers ability to fund capital purchases. However, our OEM customers continue to be impacted by the capital purchase constraints and there are portions of our U.S. business including the sale of Pulse CO-Oximetry including Hemoglobin, Carboxyhemoglobin and Methemoglobin and PVI that we chosen to charge for and therefore are tied to our capital sales model. Also with our long term sensor agreements provide -- while they provide for minimum annual sensor purchases if hospital sensors levels fall it could impact the volume of sensors being purchased by our customers and as a result excuse me, as a result impact our ability to generate consumable revenues. In addition, despite our agreements and their acknowledged preference for disposable single patient adhesive sensors, due…

(Operator Instructions). Your first question comes from the line of Bill Quirk with Piper Jaffrey.

Great. Thank you. Good afternoon.

Hi Bill.

Hey. Joe, given the positive feedback for hemoglobin, I'm a little confused about some of the comments around some of the push back on the CapEx side. Are the numbers of users at this point below your expectations?

No, they are not yet below our expectations. But I do hear that some customers are finding it difficult to find the capital dollars to purchase the measurements as they wish.

And then so, I guess just kind of following on, Joe, based on the early feedback and I recognize its earlier on the alternative revenue model, should we expect that essentially (ph), what kind of bridge or the gap from an economic standpoint. In other words, we don't see a change to the number of users by the year for example because you have an alternative revenue model.

Well again, I didn't have a specific reason to bring you worries about hemoglobin. But I did want to share with you that the capital equipment being a scarce resource in hospitals these days, we need to compete for it. So, yes, so to answer your question, with this alternative way customers can begin using hemoglobin although they'll be paying a premium for sensors because they are not ready to purchase the software yet. We do anticipate having the same number of customers as we did beginning of the year using hemoglobin.

Okay. I understood. And then Mark, one quick one for you. In terms of the 4Q Rainbow number, are you willing to give us what the license component of that was. I'm just trying to get some kind of the apples-to-apples on the sensor side?

Did you mean Q1, Bill?

No, actually for 4Q... well, I mean 1Q would be great as well. But the 4Q. Obviously we had a sequential decline so I was trying to get a better sense on what..

Unfortunately here in... as you know, as we talked about last time obviously we're talking about total Rainbow revenues as one entire group simply because of the difficulty, frankly, as evidenced in this quarter of trying to predict where the different elements of Rainbow revenue are going to fall in any one particular quarter.

Okay. Understood. And maybe just last quick one here to ask the question different way. Without giving numbers, can you tell us whether or not sensor revenue is up sequentially?

Yes, we can say that.

Okay, great. Thanks, guys.

Thank you, Bill.

Thank you. Your next question comes from the line of Tao Levy with Deutsche Bank.

Good afternoon.

Hi, Tao.

Hi. So basically when you talk about, Joe, the 50 hospitals that now have hemoglobin, was that as of the end of the quarter or is that kind of a real time?

I believe over 50 is at the end of the quarter. By now we have more than that.

And roughly, how is that tracking? I asked the same question last quarter, sort of monitors for hospital. Are we still in that two to three?

I believe its hired in that now, but its not by much. My guess is average of five.

Okay.

For you to replace.

Great. And then Mark, in the product revenue, when I look at the product revenue for install on a pure number basis that went up about 4% based on that. How much of the hemoglobin is impacting that number? So basically, my understanding is that the monitors are going to flow through that line. Does that make sense?

Well, yes, you're correct. In that calculation I'm not exactly sure of your specific calculation, but most people that are doing that calculation actually include all Rainbow revenues as a separate element of that calculation and to buy that revenue into the total number of outstanding drivers. So, I think that the background to your question... we also noticed the increase. And again, we believe the primary driver of that is that we simply continue to see a higher level of revenues relative to sensors versus the other components of our product mix. So it's a mixed issue that continues to drive that. Having said that, as we've said for a while now, we are taking a very serious look at the actual useful life within the hospital of these products, and doing some exhaustive research working with our customers both on the OEM and direct side, and doing that all in order to determine whether or not our current seven-year life is in fact the proper life to be using. And hopefully within the next couple quarters, we'll have some definitive feedback enough so such that if we're in a position to possibly move that neither or we will do that. We also...

Move ahead. Sorry.

So, obviously the reason for stating that was that we think that the increase in dollars per driver that we've been seeing is also partly related to the fact that these units are being used for longer than seven years.

Right. So, you might have more out there than you think?

More than what we're suggesting the number just because of our conservative use for life assumption.

Okay. Now, that's helpful. And if I look at the P&L now you're kind of breaking out this non-controlling interest number. Is that Masimo labs?

Yes.

So if I do very unsophisticated math. I mean, is it fair to say 2.4 million in Rainbow disposables is kind of what I back into assuming your 10% royalty that you have to pay to Masimo labs, I'm sure there is an R&D offset. But why can I do that math?

No, I don't think that math really works because the profit that's generated on the Masimo labs P&L is profit that relates to their royalties which at this point are primarily minimum royalty payments.

Okay.

If you recall, the royalty across licensing agreement requires certain minimum payment. So as a result, there is really not a way to back into the number and the way that you just attempted to.

Okay. Great. Thanks a lot of guys.

Thank you two. Nice try.

Thank you. Your next question comes from the line of Matthew Dodds with Citi.

Hi, thanks. A couple of question. First, Joe when you look at the early demand of the hospitals that are customers, are they focusing on all three areas of trauma ER, surgical operating room or is there one area where maybe the economics work better and you're seeing more interest. That's the first question.

Matt, mostly we're seeing the interest in OR and then ICU and then the emergency departments. And I'm not sure if its economically driven but that's where we're seeing it currently.

Okay. And then the second question. You mentioned there could be a benefit for Rad-57 for some government related mandates. Do you have any timing and when we might see that benefit. We're talking next quarter? Or is it kind of few months out?

Well, I believe actually probably will be in the next quarter. But, it's not significant numbers. FEMA does not have thousands of rescue operations. There is a limited number. So it really for us that decision to make the Rad-57 a standard in every one of their rescue units is more a statement about how noninvasive carbon monoxide monitoring in the blood is becoming a standard of care in the EMS environment.

All right. Thank you, Joe.

Thank you, Matt.

Thank you. Your next question comes from the line of Daryl Hold (ph) with Thomas Weisel Partners.

Thanks a lot. Could you talk about the competitive landscape in hemoglobin There is a potentially another company on the market as early as 2010. So, is the decision to go without selling the boxes and just selling the disposables in order to just capture as much territory as you can, is that one of the strategies here?

Not at all. We won't believe there is a competitor until we see it. Measuring hemoglobin noninvasively is a very difficult task. And many companies in the past have thought they've done it. They make one or two units, and that's all they can make. So, we're not at all changing our strategies due to any competitive rumors.

Okay. And is -- are you going to be amassing some sort of data set from your hemoglobin users comparing the outcomes between your sensor and the traditional and the gold standard of the CBC, is that something that we can be looking out for, or is that going to be a case-by-case basis?

I'm sorry, could you repeat the question. I'm not sure I understand it?

Sure. So, is the company going to be running a trial, comparing the outcomes of the hemoglobin tests to CBC hemoglobin levels, or is this going to be something that we're going to have to get from individual hospitals?

We are not doing any studies ourselves. But we are and we have provided equipment to several hospitals -- at least nine, if not more that are doing clinical studies on hemoglobin. I don't know when and which one of them will come out with outcome results, but I think their focus initially will be to see how well we trend with changes in hemoglobin in the OR and other places, and how that trend helps them maybe manage things like blood transfusion and care of the patient.

Okay. And then just lastly, where do you see the most relative and addressable market for hemoglobin. I mean, it's not going to be applicable for all patients or all procedures here. So if you had to identify the market based on what you're seeing so far, outside of specific areas; what type of patients are going to be receiving the hemoglobin over the CBC? Thanks.

Well initially we believe patients that are at risk of blood loss in the or patients at risk of hemorrhage in the intensive care unit. ED patients coming in that will be triaged to see if it's -- anemia an issue or not. But long-term we actually do believe that it will become ubiquitous in the hospital being first to make noninvasive continues hemoglobin we're seeing interesting things about hemoglobin that may have a more profound impact on people's care. So we'll have to see. Operator: (Operator Instructions). Your next question comes from the line of Joanne Wuensch with BMO Capital Markets.

Hello?

Showing in the second half of your launch how-- help me understand where you foresee that product being used?

Joanne, sorry you started in a little bit late. At least in the sound we got here, could you repeat the question?

Of course. In Acoustic Respiratory Monitoring, when you start rolling that out and doing your beta testing of it, how do you foresee that product being used?

We initially believe that'll be used on the general floor to assess respiration along with oxygenation from our pulse oximeter to a avert sentinel events. These are patients that are on patient-controlled analgesia that could stop breathing. So that's the initial target market.

And when will we be seeing this device, at a particular trade show?

Well we are hoping to begin limited market release in the second half, probably in Q4 and trade show that we're targeting to hopefully have it ready by will be the ASA -- American Society of Anesthesiologists meeting. If not that will be at the AARC, which is the respiratory therapists conference in December.

Very helpful. You've done a fabulous job of pulling down your tax rate year-over-year. Is there more to come on that over the next year or two?

It depends on our growth internationally.

Okay. And then my final question, you mentioned something about Medtronic's Physio-Control LIFEPAK re-launch. I got a little bit confused there, can you explain again how that may or may not be affecting uptick of some of your products?

Sure. Medtronic Physio-Control which is one of our OEM partners had recently introduced a product called the LP15 internationally and I believe they've got FDA clearance recently on it for the U.S. But the LP15 is the first product that has Masimo Rainbow SET technology inside of it and basically you can measure carbon monoxide with our sensors or (ph) technology noninvasively. So what I was what I think Mark was referring with the EMS market, some of the people that are used to carrying defibrillators everywhere they go, they'd rather see the seal measurement within the defibrillator so that they don't have to carry another product like our handheld Rad-57. So as a result ever since that product has been announced internationally, we have seen some of our customers who are about to give us the order for the handheld Rad-57 to instead say we're going to hold it until, we can buy the defibrillator with your technology inside of it.

And do you know when that'll be out in the United States?

Well I don't. I know Medtronic Physio-Control has been under a consent decree for over a year. But despite that they of course have been selling products under the rules and regulations of the FDA to government related agencies. So, I shouldn't take a guess of when they're going to start in the U.S.

Okay very helpful. Thank you.

Thanks

Thank you Joanne. Any other questions?

Yes your next question comes from the line of Sara Michelmore with Cowen And Company.

Hi good evening.

Hi Sara.

Mark there was something if you could just clarify a comment you made about the impact of the flu season on your sensor shipments. Was there a rather weak flu season year-over-year. So, I just was wondering, if you could clarify the impact there? And what should we think about, if that's the case sequentially going into the second quarter what the comparison issues may or may not be? Thanks.

Sure Joanne. I think in general, the reason why we highlighted that is obviously as Masimo has continued to grow over the last three, four years. We've been growing at a rate obviously, where sequential revenue growth has not been an issue. As we're becoming larger and larger obviously, the reality of the winter flu season is one that is on our minds and given this relative strength that we saw in both the fourth quarter last year, and the first quarter this year we're highlighting that fact now to make sure that everybody is aware that in general that is the season in which this particular industry has traditionally seen the strongest revenue growth. That doesn't necessarily imply that there is any change of flow, we're simply just highlighting that fact given the fact that we had such a strong fourth quarter and first quarter '09 sensor volume.

Okay. And then in terms of the OEM orders in the quarter, it sounded like was a little bit lower than your expectation. What's exactly going on, on that end and how we should we think about the outlook there?

Well, I think in general the good news as we said was from a revenue standpoint, we're actually up year-over-year. So while last year we were talking about a couple of quarters where that wasn't the case from a revenue standpoint we're up a little bit. Having said that I think as Joe alluded to in his comments, the feedback that we're getting from our OEMs is that their world continues to be very difficult one. The reality of selling 10 to $25, 000 multi-parameter devices into this economic environment is tough. And as a result obviously, we get impacted because of our Board's been included in those multi-parameter devices. So, frankly we haven't really seen a dramatic change in the feedback that we're getting from the OEMs is that directionally they don't expect much of a change either moving forward.

Okay. And then last clarification, Joe you mentioned when were kind of talking about the cautious side of the ledger things just you are you did mention that may be some hospitals were re-using sensors that type thing. How predominant is that and have you seen any notable shift in reusable centers or is that something that you are keeping in the back of your mind as you look at here? Thanks.

Thanks Sara. Its the lateral really be indulged in any shift so far its probably been even its not better than even in terms of hospitals that switch from re-useable to disposables due to worries about contamination in MRSA and so forth. However, I know there was talk about healthcare reform I guess during President Clinton's first term, some hospitals did worried about what's going to happen and they did try to switch to re-usable. And I know at that time may be not even a year passed before they all switched back to disposable. But still given the environment, I just want to share with you some of the potential risks and not that it's happened in anyway like I said for everyone that's for every case that I have heard that have gone in certain course of the areas from disposable to usable. I have heard more that have gone from or the same at least has gone from reusable to disposable.

Okay. That's helpful, thank you so much.

Thanks.

Thanks Sara.

Thank you. Your next question comes from the line of Spencer Nam, with Summer Street.

Thanks for taking my questions. Just a couple of quick here on, in terms of the Rainbow product revenues you mentioned that the hemoglobin test contributed more significantly in this quarter. I was just curious kind of how the hospitals are viewing hemoglobin test versus other Rainbow products right now? And its -- whether there is a difference in terms of their willingness to buy or that their concerns of weak economy that's determining their buying decisions idea. Are you seeing any difference or is it pretty similar right now but it so happens that you had just launched the hemoglobin test and there is some traction there initially?

Well, let me try to answer your question Spencer. The first thing I want to tell you is that we have not seen this much excitement about any measurements that come up with since we introduced measure to motion pulse oximetry. And in some regards, I would say the excitement has probably been higher than measure through motion pulse oximetry. So therefore compared to the other Rainbow parameters like carbon monoxide, med hemoglobin or PVR, hemoglobin by far has been the most exciting. The only place I would say that will not be the case, which was not your question, you asked about hospital, but the only place that may not be the case is EMS. In the EMS environment, they're more excited about CO than hemoglobin. But and to try to answer the second part of your question and may be what you're getting at the question might be the fact that we saw some nice head to our Q1 even though we announced the product two weeks before the quarter ended. The question is, is this pent-up demand or is this further demand that we should we see. I am going to start off by saying I'm not sure. But I can tell you that given that we have several hundred hospitals that are in the coding stage for hemoglobin. I don't expect that will just pent-up demand. I think hemoglobin is going to do well for us. I wish the economic environment we're launching hemoglobin was better, but regardless I think it's going to work for us.

That's very helpful. And then second question is on guidance. I know you guys already stated that you will not talk about guidance this quarter as you indicated you had already addressed that last quarter. But given all the commentaries that you made in this call about the economic factors and just that changing dynamics within the hospital spending environment; should we -- I mean, based on all of that the fact that you are not talking addressing guidance specifically, could be considered that as you guys are remaining firm on your outlook and you don't see much of at this point, all the data points you're gathering point towards having a story for the year that's consistent with what you had paid within in Q1, or in January of 2009?

Well, we did script before we heard Chairman of (ph) estimates of the economy. So may be things are going to be good. But, look I know a lot of companies are not even giving guidance in this economy. But we don't know what were in store for. We don't know how bad it's going to get. But I can tell you, if the recession doesn't end, it's going to affect us. I mean, think about it. If the OEMs quarter-after-quarter are doing less than we expect, that will eventually catch up to us with sensor revenues because the OEMs are big part of our drivers in the market. So I think that's all I can say at this point about that and lets hope that the Chairman was right.

Yeah, I guess and I am just curious about that, because you had lot of these risk factors over the concerns that you have with OEMs as well as just the overall environment. But then you also indicated at the end of all of that, however, things are looking as consistent as we thought that they would be though clearly you put together very strong solid quarter. So I am just curious kind of how you guys have really thinking about the next few months or the rest of the year with respect to all these risk factors having given some guidance in January of this year?

Well, we run our business based on a long-term outlook and we as much as been love for our shareholders to have quarterly wins. This is the fact and your outlook for us and we're feeling very good. I don't have a better crystal ball than you, all I could do is share with you some of the risks I see. And at the same time, it's more recent to our quarter, so it is no I could predict even this quarter what's going to happen but I hope that helps. I think we're going to move on to the next question.

Thank you. Your next question comes from the line of Bill Quirk of Piper Jaffray.

Just a couple of housekeeping questions actually. Mark, just I didn't see in the release what's your diluted cap this quarter?

About 60.2 million.

60.2, okay great. And then, also just because you didn't mentioned obviously the impact of ForEx on the international business. Can you tell us as what the overall impact at both the top and if you have at bottom line as well please?

Well, directionally were you talking about actual Q1 versus actual Q1 of '08 versus Q1 of '09?

If you have that Mark that'd great.

Well directionally obviously...

Year-over-year?

Yeah, the quick answer is that we were impacted fairly, insignificantly on the top line, but you're talking about a figure below about $0.5 million in total revenues that was offset by actually, essentially savings on the operating expense side because remember our current structure internationally is one in which we actually only have a part of our revenues subject to foreign exchange risk. But essentially all of our operating expenses are subject to that same risk. So actually from a bottom-line standpoint, the impact of those two was negligible.

Very good, thanks guys.

Thank you. I think we have time for one more question.

Your next question comes from the line of Matthew Dodds with Citi.

Hi Joe, hi Mark. This is actually Greg with a couple of follow ups for you. Just one as it relates to the license revenue in the quarter, Mark I know you mentioned specifically that it's based certainly on your estimation of net (ph) quarter sales and of course this year particularly in this quarter. They did seem to put -- post a pretty solid quarter at least relative to your outlook for license revenue for the year. I'm just wondering when we should expect this trend to continue that we'd see some type of update in your outlook for that estimate?

All right. I mean again I think as Joe alluded to we only provide guidance once. I think I would put our perspective on Covidien's possible royalty payments to us in '09 under the same guise. I mean we obviously are trying to do what we can to take a look at their historical revenues, dial-in the current economic environment as well as some other factors and that's really how we ended up with the number that we reported in this current quarter. So we don't anticipate changing that number from the guidance that we suggested in our last call, until we get to a point where changing that number is warranted and I don't think we're there since we've not yet seen the first quarter.

Got you. I didn't mean I'm sorry I didn't really mean that as it relates to the guidance for the full year, just if it related to kind of adjusting your revenue recognition over the course of the year and if you'd see a -- if there have been adjustment for that in Q2 if those trends continue?

Well, I think as you know our accounting policy is such that we make our best estimate and accrue that in the current quarter and then when we actually receive the payment from Covidien, any difference to that estimate whether it's up or down is actually reflected in the next quarter.

Got you.

So we would continue to do that.

Okay. And then just another one on the -- just a follow up on Joanne's question about reprocessing the sensors. If you could just share your thoughts as to what the potential demand there is for reprocessed sensors and what your longer term objectives are if you see that there is an opportunity there for yourselves and what the economic implications might be for reprocessing your own sensors? Thank you.

You're welcome Matt. I'll try to answer that. First of all I think our dialogue so far has been about reusable sensors versus disposables, not reprocessed. But to answer your question about reprocessed sensors, we have heard of heightened activity by a couple of companies that have recycled sensors, and which is I think different than the reprocessed sensors. We think of reprocessed sensors are sensors that, they actually throw away the parts that are going to become problematic; like the light emitting dials and photo detectors and start anew. And so far that activity has not resulted in partly any -- I mean it would be -- my estimate to assign 0.1% (ph) is even best of our revenue. But we do have plans to bring out reprocessed sensors. Because the problem with recycled sensors that we've seen so far is that their quality is very low, basically from what we hear about six out of 10 reprocessed or recycled sensors end up working and therefore it frustrates customers and what they think of as cost savings ends up just being an annoyance. We do plan to create every a reprocessed sensor direct for Masimo for those customers. We're really more worried about the green issue as well as to get some amount of cost savings and we have submitted our file 10-K for the reprocessed sensors as we expect shortly to make the product available to our customers. And as far as how that will impact our revenue, I think it will be de minimus because reprocessed sensors are by definition you can't do it on every sensor. It's a small percentage of a sensor that get corrected, that can be reprocessed. So, if you can imagine you can't reprocess every processor of reprocessed sensors. So, eventually it becomes not a big part of what hospitals use. So with that I answered your question and I can't thank you all enough for joining us today and we look forward to our next opportunity to speak with you, thank you.

Thank you that's concludes our Q&A portion I will now like to turn the call back over to Mr. Joe Kiani.

Well, thank you so much. Back at you again. Have a great-great evening bye-bye.

This concludes today's conference. You may now disconnect your lines.