Activity

Siemens & UTAK: Renewal of Pricing Agreement Pt. II - September 10 VIEW RECORDING: https://fathom.video/share/Sxt5XLLig_dvFkcGasxqi9Au7e9fYzWS Pricing agreement renewal @ 0:00 Raleigh and the UTAK team reviewed the status of the pricing agreement renewal with Siemens. They discussed the need to align on the proposed price increases and get Siemens' feedback on the reasons for the increases. Jim from Siemens acknowledged the complexity of the situation given the timing near their fiscal year end. Exploring volume-based pricing @ 5:16 Jim from Siemens inquired about the possibility of volume-based pricing tiers, given their relatively low spend with UTAK. Kevin from UTAK indicated they were open to exploring that and understanding Siemens' specific needs and volume thresholds. Providing detailed cost breakdown @ 6:44 Jim requested that UTAK provide a more detailed breakdown of the cost increases, including the specific percentages for factors like labor, packaging, etc. Kevin agreed to follow up with that information to help justify the price changes to Siemens' management. Updating the pricing agreement @ 14:07 Jim suggested it may be beneficial for both parties to update the overall pricing agreement, which was over 10 years old, to align with Siemens' more modern contracting practices. Raleigh and the UTAK team were receptive to this idea. Next steps and follow-up @ 15:31 The group agreed to schedule a follow-up meeting in two weeks, after Jim had a chance to review the cost breakdown information from UTAK and discuss with his management team. They acknowledged the timing challenges given Siemens' fiscal year transition. Siemens & UTAK: Renewal of Pricing Agreement Pt. II - September 10 VIEW RECORDING - 17 mins (No highlights): https://fathom.video/share/Sxt5XLLig_dvFkcGasxqi9Au7e9fYzWS --- 0:47 - Raleigh Gallina (UTAK Laboratories) Yeah, blue polos. Well, this is 2025. Hey, Jim. Can you hear us? 1:02 - PIACENTINI, Jim (Siemens Healthineers) Hi, Raleigh. How are you? How are you, tech team? How's it going? 1:06 - Raleigh Gallina (UTAK Laboratories) Hey, hey. Doing well. How about yourself? Great, great. Hanging in there. 1:12 - PIACENTINI, Jim (Siemens Healthineers) Hanging in there. That's all we can ask for, right? 1:16 - Raleigh Gallina (UTAK Laboratories) Exactly. Awesome. Well, just to kind of set the stage here, and then I'll turn the floor over to you, Jim. We talked about, on the last call, booking additional time to continue conversation about a potential cost agreement, pricing agreement. We know that you have your fiscal year turnover coming up upon us very quickly, so you'd indicated that you would, you know, relay that information to the team, see what was feasible. We also wanted to align and get lockstep on what agreements are floating around there as well, so I don't know if you've had a chance to connect with the team or review. The agreements that I sent your way. Yeah, sorry, Raleigh. 2:06 - PIACENTINI, Jim (Siemens Healthineers) It's been very hectic over here. I've got four suppliers now that I'm trying to change over before the end of the month. So I do apologize. I thought on your end you were going to pass over reasons of the increase, should there be an increase. Yes, yeah. 2:32 - Raleigh Gallina (UTAK Laboratories) And so I'm happy to re-forward that communication that was embedded at the bottom of the email communication that I provided before. Sorry about that. No, no, all good. I will look. 2:46 - PIACENTINI, Jim (Siemens Healthineers) Sorry. 2:48 - Raleigh Gallina (UTAK Laboratories) Hey, if there's anything that can appreciate the velocity of the work days, it's you, Jack. We joke that we work in dog years. 2:59 - PIACENTINI, Jim (Siemens Healthineers) Ha ha. ha. Ha. Ha. Ha. Ha. That's it. Let's see, okay. Old price, new price. This email here, it says old price, new price. Yes, correct. price, okay. So we're so late in the end of this fiscal year. If anything does happen, it's probably going to happen January 1 anyway. I think I mentioned that to you guys. This is just so, so late. The good news is we now know your fiscal year. Um, yes, it's been, to your point on the email, it's been over 10 years, so, um. Yes. Give me a little while to digest this. And I apologize. It's just so much going on right now. No worries. Today is Wednesday. You guys are on the West Coast. And my manager is out on the dude ranch this week. I have no idea where that is. It's out Midwest somewhere. Six, six, six, so $6.50 for each S&M. It's quite a jump. 4:42 - Raleigh Gallina (UTAK Laboratories) It is, but I have to share nothing compared to the actual price that literally everyone else pays for this too. So, and again, just to belabor my point from before, you know, for us being able to lock in this new price, then we'd be able to increment. Eventually go from there year over year, which is going to be significantly better than other pricing too. So that is still the benefit we want to extend. Yeah. Can I ask you a question, Raleigh? Sure. 5:16 - PIACENTINI, Jim (Siemens Healthineers) I know our spend is very minimal, and I see it. It's not that much with UTAK and Siemens. Is there any possibility of care pricing, or is this just flat across the board? I'm sorry. 5:35 - Raleigh Gallina (UTAK Laboratories) Would you be able to repeat that? I didn't quite hear. 5:38 - PIACENTINI, Jim (Siemens Healthineers) Is there any potential for a possibility of tier pricing, or is this pretty much flat across the board? Like, let's just say if we were 100 pieces, 200 pieces, 500 pieces, whatever, volume pricing, is there any possibility for that? Oh, gotcha. 5:55 - Raleigh Gallina (UTAK Laboratories) Okay. I'll actually turn that one over to you, Kevin. 6:05 - Kevin Kopp Yeah, I think, Jim, I think that is something that we can explore. would love to sit down and see what those tiers look like, and then see if that's even feasible from your guys' end. And then, like, what particular parts you would be eyeing that for, all, or is there, like, a specific subset of parts, specifically? I imagine the validity products are the ones we're really talking about, but if there's any other products that you see or anything like that. So, is that something that you feel like, you know, you can kind of nail it out, or? 6:44 - PIACENTINI, Jim (Siemens Healthineers) Yeah, so it's, again, the spend is so minimal here that I have to go back to my upper management team because there's four suppliers right now that I manage that proposing price increases. And what I've asked. I know you have this in a simple paragraph, labor costs, but they came back and said, okay, this is the reason why we have this increase. It's not just labor, packaging, packaging is increased by X percentage, labor is increased by X percentage, and all the way through. I know it's a lot because the spend is so minimal, but I do have to go back and say these are the reasons why these are increasing. Their packaging has gone up by 30% or whatever, and they're passing these, and supplier X is passing these costs on to us. We can also, in turn, and I know this contract is so old, we can in turn go back and say, you know, is it possible to use Siemens packaging suppliers where you benefit on some cost savings, not only for just this contract with Siemens, but you can use that Siemens packaging for other. The customers, which you may have some benefits across the board, we're not looking for savings on those customers, we're just looking for savings on us. So those type of things, I can present that to my upper management and at least express that opportunity. I don't know if that makes any sense to you guys. 8:25 - Kevin Kopp Yeah, makes sense. don't think that that's an option for us in terms of the packaging, but I'm not just saying packaging and comedy. Yeah, I understood. I think the kind of more granular increases can be shared with you. That's not necessarily a problem we can kind of share over what the percentage increase is. I mean, that's something that we can do, if that's what you mean. Yeah, let's do that. 8:58 - PIACENTINI, Jim (Siemens Healthineers) Again, the spend is so minimal. Well, it's probably cost us more money to talk about this than it is to accept the increase. But if you can do that, then I can go back to them and say, hey, look, this is the reason why these are the increases per commodity. Doesn't have to be a cost, just a percentage. 9:19 - Kevin Kopp Yeah, I can tie on to the Rollize email that she sent and find those percentages. 9:25 - PIACENTINI, Jim (Siemens Healthineers) Okay, and then going back to the issue that we had a few months ago, is there any possibility of a cost reduction because we changed over materials, design, whatever it was that we changed over, is there an opportunity in that area as well because we did change formulas or whatever? 9:52 - Kevin Kopp Yeah, I mean, I think if the pricing is going to hold through the year, then I think we're going to be okay because the expectations that we're going to get a new lot with the next year. extended expiration back to where we should have it by then, unless Nicole, I feel like that's not true. No, I think that's correct, yeah. Okay, yeah, so I think that in line with the, you know, everything will be back to normal by the time this all really takes effect, is what I'm thinking. Okay, when you say everything's going back to normal, you're saying the 24 months, or you're saying the price will drop back down? No, no, no, I'm saying that the product expectations will be back to normal, that's what I mean. 10:36 - Nicole Miller Yes, you gotta, you gotta, you gotta respect. 10:39 - Raleigh Gallina (UTAK Laboratories) Worth a mask. 10:40 - PIACENTINI, Jim (Siemens Healthineers) Yeah, well, of course you gotta, you gotta respect the vowel, the vowel ending my last name that I have to ask this. 10:48 - Raleigh Gallina (UTAK Laboratories) I understand, I understand. 10:50 - Kevin Kopp No, and I think that, like, all that being, all that being said, there's still, like, you know, we value, we do value your partnership, and we do, yes. Spend isn't, you know, isn't something that, you know, I think from your guys' end is minimal. mean, from our end, it's not as where we want it to be. You know, of course, we want to grow with you, right? So I think that volume idea is definitely a really good idea, and I'm very open to having that conversation. We just want to see what it looks like from your guys' end. Like, what other products can UTAK helps provide, if any? Well, let's see, that's another thing. 11:33 - PIACENTINI, Jim (Siemens Healthineers) There may be some other opportunities down the road with the SEVA program, because now it's just starting. I know at one point it was at the infancy stage, and now it's grown a little bit more towards, you know, we're past the launch. And now our customer base is growing a little bit more, not only on the SEVA side, but on the Italica or Italica behemoth side, that they may The opportunities maybe outside of that SIVA project where, you know, our customers may be looking for products that UTAK has to offer. So this, you know, who knows? This portfolio could grow. I don't know that offhand. I would have to talk to R&D folks to say if there's any other opportunities to make this grow. So, but if I do that, it wouldn't be something that they would be interested in if we're going to continue to grow it, you know, these price increases. 12:32 - Kevin Kopp Yeah, and that's definitely where we'd want to have that conversation. And I understand that completely, right? So that's like, hey, if we can grow this, you know, to here, then, you know, that's a different structure. Yep, sure. 12:50 - PIACENTINI, Jim (Siemens Healthineers) So let's do this. If you can get that information to me, Kevin, I'd appreciate that as far as, you know, the reasons behind each commodity and, you know, the... The reasons, but the percentages in each commodity, why the $6.50 per SMN, I can certainly approach that with my manager and his team. And then maybe we have a follow-up either next week or the week after, because I know he is coming back Monday, and he's going to be slammed for the first three days of his return. So next week might be a little tough, but the week after, if we can have a follow-up. If you could send me that prior to the follow-up, it would be easier for us to look, you know, to review it and then have the call and have something ahead of time. Yep, that's it. All right, does that make sense? 13:48 - Raleigh Gallina (UTAK Laboratories) All right, Go ahead and I'll book something for the 24th then, so that, you know, the team has time to settle in, and for you to talk through what we've provided. you. Thank You and what Kevin will provide to you, but feel free to move that calendar block around if needed. Sure. Yeah, I'll do that. 14:07 - PIACENTINI, Jim (Siemens Healthineers) And then the agreement itself. I know, again, this is 10 years. These agreements are so old. It might be a benefit to both sides if we just update the agreement to more of what we have today with all of our supplies. There's either we go back to, I can't remember if Siever is on the Walpole side of Siever Corning or if they were on the other side with the other sides of Siemens, because we were Siever Corning at one time. We went over to Bayer, and now we're Siemens, but there were other divisions that were called something else. Please don't quote me on this, because there were Glasgow, New York, Tarrytown, and a few others. I'm from the Walpole, Massachusetts side, which was Siever Corning. Thank you. Thank you. So I'm hoping to try and update these agreements so that they're more on the modern side rather than, you know, history. Well, we're receptive. 15:16 - Raleigh Gallina (UTAK Laboratories) Yeah, no, I appreciate that, Raleigh. 15:19 - PIACENTINI, Jim (Siemens Healthineers) That would make much better sense. And those agreements may take a while, but at least we have something in the interim until that agreement can be established. 15:29 - Raleigh Gallina (UTAK Laboratories) Precisely. Yeah. 15:31 - PIACENTINI, Jim (Siemens Healthineers) So can we maybe have a follow-up? Today's Wednesday, two weeks from today? 15:39 - Raleigh Gallina (UTAK Laboratories) You got it. I'll book some time for us. Okay. 15:44 - PIACENTINI, Jim (Siemens Healthineers) And again, our fiscal year starts October 1, but I don't see any price changes happening until January 1. It's just too late in the game to make that happen. Understood. 15:55 - Raleigh Gallina (UTAK Laboratories) Okay. Okay. 15:58 - PIACENTINI, Jim (Siemens Healthineers) Anything else from anybody? Nicole, I know you said this whole thing about the changeover is going to happen within the next few months, but anything else from your side? No, I think just the update. 16:11 - Nicole Miller Like, we have started the testing for the accelerated stability to validate that the expiration date will still be valid for 24 months. So that's working, moving along. So once we get results back for those, then we should have a better idea of what the actual timeframe is for that new lot. But yeah, we're on it. Okay, great. All right, then. 16:33 - PIACENTINI, Jim (Siemens Healthineers) Raleigh, you can set something up from two weeks from today, I'd appreciate that. And I'll review the email a little bit more now. I'm sorry I didn't go over the whole email, but I'll look at it now. And hopefully I have some answers for you, better answers in two weeks. 16:49 - Raleigh Gallina (UTAK Laboratories) Awesome. Well, we'll chat with you in two weeks. Try to catch your breath where you can. Great. Thanks. You as well. Have a great rest of the day, people. You too. Bye. Bye.