Covetrus, Inc.

Good afternoon. My name is Abigail, and I will be your conference operator today. At this time, I would like to welcome everyone to Covetrous' first quarter 2022 earnings conference call. I would now like to turn the call over to Mr. Nicholas Jensen, Vice President, Investor Relations. Please go ahead.

Thank you, Abigail. Good afternoon, and thank you for joining us for Covetrous' first quarter 2022 earnings conference call. Joining me on this afternoon's call are Ben Wolin, our President and Chief Executive Officer, and Matthew Folston, our Executive Vice President and Chief Financial Officer. Ben and Matthew will begin with prepared remarks, and then we'll be happy to take your questions. During today's conference call, we anticipate making projections and other forward-looking statements based on our current expectations. All statements other than statements of historical fact made during this conference call are forward-looking. including statements regarding management's expectations for future financial business, operational performance, and operating expenditures. Forward-looking statements may be identified with words such as will, expect, believes, should, or similar terminology in the negative of these terms. Forward-looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties, many of which are beyond our control. which could cause actual results to differ materially from those contemplated in these forward-looking statements. These risks and uncertainties include those under the heading risk factors in our most recent annual report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission, which are available on the investor section of our website at ir.coveteris.com and on the SEC's website at www.sec.gov. Forward-looking statements speak only as the date hereof and except as required by law. we undertake no obligation to update or revise these forward-looking statements. You can find this afternoon's release announcing our first quarter 2022 results in the accompanying slide deck for this call on ir.covetrous.com. The release and presentation also contain further information about the non-GAAP financial measures that we will discuss today. Please refer to those documents for a reconciliation of non-GAAP measures to our GAAP financial results. With that, I will now turn it over to Ben to provide the highlights.

Thanks, Nick. Good afternoon, everyone, and thank you for joining us. I hope everyone is well and staying safe, and I look forward to seeing many of you in person at several of our events and presentations later this year. As usual, our prepared remarks are accompanied by a presentation that can be found on our IR site. Now, let's get started on slide three. The first quarter represented a strong start to 2022 for Covetris. Despite a tough year-over-year comparison, FX headwinds due to the recent strength of the dollar, and a dynamic end market, total non-GAAP organic net sales grew 6% year-over-year. Prescription management net sales grew 24% year-over-year. And non-GAAP adjusted EBITDA grew 11% year-over-year. The solid numbers are a result of of the continued focus of our team and the momentum of our solutions that drive better outcomes for veterinarians across the globe. Let me get to some specific highlights. In North America, we continue to gain market share in in-clinic distribution, and our comprehensive solution for customers is clearly resonating. Total North America organic net sales grew 9% year over year, which includes compelling performance from prescription management. As you can see on slide four, prescription management net sales increased 24% year-over-year to $140 million, and non-GAAP-adjusted EBITDA more than doubled to $13 million. Driving this growth was strength in auto-ship, where net sales increased 50% year-over-year and a 30% year-over-year improvement in sales from veterinarian-initiated prescriptions, or what we call proactive prescriptions. These KPIs not only give us visibility into future growth, but underscore the stickiness of our solution. Most important, our auto-ship customers are often more compliant with their pet's medication, leading to better health care outcomes. Our progress in proactive prescriptions is driven by the integration of our technology platforms, which we have spoken about in the past. By providing an easy-to-use platform that integrates directly into the PIMS, our customers are more likely to use prescription management, driving both better health and business outcomes for themselves and for their pet owners. Beyond the growth in North America, the company also made real progress on operating leverage as corporate costs declined on a year-over-year basis. This is the first quarter since the company's inception that corporate cost growth has not been a drag on earnings. As we have referenced in previous calls, We expected 2022 to be the year when the company would first experience a leveling out of corporate expense, and we're very proud of the progress we made in Q1. It's impossible for me to not mention that our earnings growth would have been even stronger than reported had there not been a $2 million FX headwind year over year tied to the recent strengthening of the U.S. dollar. Without this headwind, growth would have been 14%. Let me now turn your attention to some non-financial highlights and thoughts about Covetris' role in the industry and our investments going forward. As detailed on slide five, the company continues to invest aggressively into our technology platform, and in the most recent quarter, we made substantial progress against our road map. First off is the upcoming launch of Pulse, our new vet operating system that has all of Covetris' ecosystem of technology built into a single pane of glass for the veterinary practice. This includes a new enhanced e-prescribing feature that will now make it even easier to write and renew prescriptions. We've already migrated 2,500 practices under the first stage of Pulse with the full conversion expected later this month when it becomes generally available for the veterinary community. This has been an immense effort by the team, and we're thrilled to bring so many advancements to the industry. Pulse is not the only area of our technology roadmap where we made significant progress over the last four months. We also launched Covetrous Ascend, our first-ever international cloud-based practice management software solution. Ascend is coming to market internationally following several years of product development and will help fortify our leading software position in the UK, Australia, and New Zealand, as well as offer up opportunities to address new customer segments and other geographies over time. With Pulse and Ascend, we will immediately be the market leader in global cloud-based solutions for the veterinary market. With the modernization of our platform, we have the ability to drive more value for customers and high margin revenue for Covetris. For example, I'm excited about our recent rebranding and launch of Covetris Payments in the U.S., a credit card processing solution integrated directly into our industry-leading PIM solutions. By building a more seamless and integrated payment experience into the suite of software services, including Pulse, we see an opportunity to accelerate our value proposition to our customers. Another example of the power of our platform and integration capabilities is the progress we have made with our veterinary care plans, where we've now made it even easier for customers to launch care plans to their clients through our new Enroll Pro feature. This feature allows veterinarians to seamlessly sign up and manage care plan clients right out of the veterinary operating system. Although technology is the innovation in the spotlight at Covetris, I would be remiss to not mention the standout performance by our in-clinic distribution teams. In a world dominated by supply chain challenges, our in-clinic teams have not missed a beat. Delivering millions of packages per year, our in-clinic solution supports approximately 100,000 global customers and is the backbone for so many veterinarians and manufacturers. Our logistics network, combined with our marketing and sales solutions, has made Covetris indispensable for the animal health industry. As you can tell, Covetris is in a unique position. As the leading company building solutions that drive better outcomes for veterinarians, we bring an omnichannel, unparalleled capability to the market. Whether it be consumer connectivity and increased revenue per pet through prescription management, in-clinic supplies to meet the demands of a veterinary practice, or workflow simplicity leading to time saved through our software payment solutions, Covetris is squarely focused on delivering value for veterinarians across the globe. And as veterinarians continue to face labor challenges and an increasingly complex operating environment, we know our positioning in the marketplace will only strengthen over time. Now, I will turn the call over to Matthew to discuss our financials in more detail.