Operator: One moment for our next question. And our next question will come from Andrew Cooper of Raymond James. Your line is open, Andrew.
Andrew Cooper: Hey, everybody. Thanks for the question. A lot asked already, but maybe first just hoping you could give a little bit more color. You had actually pretty substantial dollar step up in adjusted cost of goods quarter-over-quarter with pretty steady revenue. So just trying to get a sense for the gross margins and where we can see that stabilize relative to, like you mentioned, some of the fixed costs versus some of the pieces that will come in and out as revenues grow?
Dorian LeBlanc: Yes. So part of that is mix. As the COVID antigen declines and we mentioned it was a volume increase actually on COVID antigen in the — from third quarter to fourth quarter. But actually a lower average selling price just based on the geographic mix of where those sales occurred. So a little less in the US, a little more in the Middle East and in Europe. So that was a portion of that difference, Andrew. And the other pieces that we still had beyond the impairments that we had, we still did have some inventory write offs to kind of get rid and flush through the last piece of the legacy dealing with the very variable demand of COVID. So I think we’ve put that behind us now between the impairment in the fourth quarter inventory reserves and we’re looking forward to having a focus on products that are much easier to predict, the growth rates and the consumption of and will be much easier on our manufacturing processes to stay efficient versus the challenges we’ve had and everyone’s had on trying to predict demand in planned raw material purchases and production schedules around various waves during the pandemic as we kind of transition into what we’re used to as a business with our legacy of just dealing with the respiratory seasons.
Andrew Cooper: Okay, great. That’s helpful.
Ron Zwanziger: Andrew, just to add, we did a thorough spring cleaning of the balance sheet and — but the company itself in the fourth quarter to transition us to the non-COVID, which was, obviously, the original plan of the company and the 1,500 instruments that we referred to primarily in Europe, they were essentially all for the beginning of non-COVID sales, as we mentioned, particularly around CRP and A1c. And so, I think the impact of that is going to flow in the numbers in the next few quarters.
Andrew Cooper: Okay, helpful. And then, Dorian, I think you mentioned also just if necessary more room on OpEx to continue to trim throughout the year. I guess, what do you need to see to decide, hey, it is necessary? And then how do we think about where some of those potential areas are? And again, sort of what the thresholds or benchmarks might be to make some of those decisions if necessary?
Dorian LeBlanc: We’re focused on strengthening the balance sheet and Ron already mentioned that we’re underway with very productive conversations that are really all anchored around the fact that we can generate tremendous performance on this very inexpensive to manufacture form factor in our test strip. So, as we’ve got this menu that now is very compelling, meets a lot of the needs of a physician office trying to really run-in a decentralized way, your comprehensive care for primary care. The value proposition of the platform has never been stronger and that’s really driving a number of great conversations that we’re having. So I think strengthening the balance sheet is the core part of the answer to your question, Andrew.
We need to focus on that, which we have been doing as we updated in the prior call and we’re confident that we’re going to work through that so that we can continue the momentum of populating the platform and growing the installed base. That’s really what the focus is to grow the enterprise.
Ron Zwanziger: You asked about the criteria we would use. One of them, which is probably very hard for you from the outside to see is the progress we’re making around getting sort of changes in countries to major changes in their programs. Now we’ve talked a great deal about the Virtual Ward because that’s already implemented, but there are similar ideas running elsewhere. And so, the state of play of the effectiveness of the Virtual Ward program, the changes we’re seeing in Germany and Austria already similar changes that likely to happen. And so the nature of how we look at it will depend very much on how some of those go. And I should say that the advanced indications we’re having about changes that come to help us are all coming in our directions and particularly, importantly, in large geographies.
So the authorities dealing with help in much the same way that, obviously — there were obviously decisions made around why the UK is running this Virtual Ward program. There are similar things in countries that are dealing with different ways and they’re all coming in our direction because authorities everywhere are recognizing that it is — the rapid testing in the community helps to lower cost to the various troubled healthcare systems around the world. And I’m focusing particularly on the larger geographies. And so partly an answer to your question about how we think about it, it depends how those are moving. At the moment, they’re all coming — they seem to be all coming in our direction.
Andrew Cooper: Okay. Very helpful. And then maybe just one more kind of on the pipeline. I just want to make sure when we think about the combo test, COVID and Flu A/B, is that form factor a COVID — is it an Ultra product? Is that one that we could think about the time — the run time being five minutes? Is it more like your traditional 12? Is it something different? Just want to understand kind of where that’s going to fit in the competitive stack versus what’s out there and what may be to come from others as well?
Ron Zwanziger: Dorian, do you want to answer that question?
Dorian LeBlanc: Yes. So the test strip design is a similar design to the 12 minute COVID antigen using the independent channels. So it’s a 12 minute runtime on the flu COVID. And what’s nice is, if you think about the most significant competitor that we see in the space for truly point of care, being able to get that result in 20 minutes or less and getting really high sensitivity, that competitive offering is two separate cartridges that require you to run them in series. We’re accomplishing that on the single test strip in 12 minutes. So we’re very bullish on the competitive positioning and the feedback that we’re getting from customers on the workflow, usability and time to result, it gives us a lot of confidence about how that will play out in the respiratory season in the back half of this year.
