Strata Critical Medical, Inc.

Good morning, ladies and gentlemen, and welcome to the Strata Critical Medical Fiscal Second Quarter 2026 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this call is being recorded. I would now like to turn the conference over to Matt Schneider, CFO of Clinical Services and Vice President of Finance and Investor Relations. Matt, you may begin.

Thank you for standing by and welcome to Strava's conference call and webcast for the quarter ended June 30th, 2026. We appreciate everyone joining us today. Before we get started, I would like to remind you of the company's forward-looking statement in safe harbor language. Statements made in this conference call that are not historical facts, including statements about future time periods, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties, and actual future results may differ materially from those expressed or implied by the forward-looking statements. We refer you to our SEC filings, including our annual report on Form 10-K and our quarterly report on Form 10-Q, each as filed with the SEC, for a more detailed discussion of the risk factors that could cause these differences. Any forward-looking statements provided during this conference call are made only as of the date of this call. As stated in our SEC filings, Strata disclaims any intent or obligation to update or revise these forward-looking statements, except as required by law. During today's call, we will also discuss certain non-GAAP financial measures, which we believe may be useful in evaluating our financial performance. A reconciliation of the most directly historical, comparable, consolidated GAAP financial measures and Melissa Tomkiel. I'll now turn the call over to Melissa.

Thank you, Matt, and good morning, everyone. We are pleased to report strong results for the second quarter of 2026, highlighted by accelerating growth in our clinical business, increased cash flow generation, and great progress on our capital deployment plan. On an organic basis, excluding acquisitions made during Q2, clinical revenue increased 15.1% sequentially in Q2 2026, driven by 23.8% growth in transplant clinical revenue, while clinical growth margins rose to 26.1% in Q2 2026, up from 25% in Q1. We generated $5.7 million of operating cash flow and $2.9 million of free cash flow in the quarter, our second consecutive quarter of cash generation, and we expect even stronger cash generation in the second half of the year. This strength was partially offset by a softer result in logistics this quarter, driven largely by significantly reduced flying with one non-exclusive customer towards the end of the period. We expect the customer's lower flying levels to persist, which are specific to just one of the customer's transplant programs and involve a unique set of circumstances that we don't expect to be replicated elsewhere. In Q3, we will see the full period impact of the volume reduction. which represents about 3% of our logistics revenue before we expect it to be largely mitigated through organic growth and new customer wins during Q4. Though this is an unfortunate bump in the road, we view the impact as simply a delay in our logistics growth plan for one or two quarters, and our long-term outlook for logistics and the business as a whole remains very positive. Our capital deployment plan is running well ahead of schedule. We closed three bolt-on acquisitions during Q2. all of which fit squarely within our capital allocation framework at mid-single digit acquisition multiples and are highly strategic in nature. Within our other clinical business line, we completed the acquisitions of Louisville Perfusion Services and Ohio Valley Perfusion Associates, both regional providers of perfusion services to cardiac surgery programs that together will strengthen our competitive positioning and enable further organic growth through new customer wins. In addition, these acquisitions serve to expand our national footprint of staff and equipment available to support organ transplant customers. In our transplant clinical business, we completed the acquisition of Heart and Lung Transplant National Recovery Program, a provider of surgical organ recovery services. This acquisition strengthens and adds scale to our platform by increasing our network of experienced surgeons available to complete recoveries. especially in key markets such as Florida and California. In addition to these deals, we signed an agreement to take over Statline's Transplant Center organ placement customer relationships on a rolling basis over the next year. Though this is not material to our financial picture today, it's a great example of how we can be creative to help industry participants continue the life-saving work they do while creating opportunities to win additional business in the future. In this situation, Statline's parent company was seeking to exit organ placement, which is non-core to their broader mission. We worked hand-in-hand with the Statline team and their customers to develop a structure that prioritizes continuity for both transplant centers and Statline employees during the transition of this mission-critical service. We landed on a rolling transition structure over the next 12 months, where we will pay Statline a fee per contract. when and if customers and employees sign on our paper with unit economics that are consistent with our current business. Operationally, this is just like onboarding a new customer, rather than making an acquisition. The maximum aggregate potential fee, which approximates a low single-digit multiple of the contract's contribution margin, is under $1 million. But what we're really excited about is that this arrangement brings long-term contracted attachment points with up to eight new customers, that could lead to incremental clinical or logistics business over time. Following these acquisitions, Strata has a more attractive growth, margin, and cash generation profile. We're also more diversified with increased exposure to the fastest growing parts of the transplant ecosystem. We expect our business mix in the back half of the year to be roughly 40% clinical on a revenue basis versus 30% in Q1, 2026. and nearly 50% clinical on a gross profit basis versus 35% in Q1. As a reminder, our clinical business is less capital intensive and has higher growth margins compared to logistics in the mid to high 20% range overall with transplant clinical in a 30% range. In addition, these acquisitions have made us a stronger, more capable and more cost effective partner to the hospitals, transplant centers and organ procurement organizations we serve. Our broader geographic footprint means our clinicians spend more time in operating rooms and less time on airplanes, reducing the bill for customers and maximizing the productivity of our surgeons and perfusionists. Our captive transplant logistics services are highly differentiated versus competitors that are primarily brokers of non-exclusive aircraft. Our captive fleet of 35 aircraft includes 10 that are owned and 25 that are contractually 100% dedicated to Strata across approximately 20 airbases. We have a network of 55 ground vehicles across approximately 11 hubs and a 24-7 logistics operations center staffed with highly trained coordinators, leveraging our purpose-built technology platform. What's more, our integrated offering is compatible with a growing list of machine perfusion devices that have been recently approved and that we work with every day and even more that are expected to be approved over the coming years. Today, no one machine perfusion device represents more than a mid single digit percentage of our overall air trips, highlighting the importance of our equipment agnostic strategy. Altogether, we believe the actions we've taken this quarter, expanding our clinical footprint, executing on our M&A strategy and continuing to generate cashflow put Strata in a much stronger position with a more diversified business, setting us up for even more success in the long term. With that, I'll turn the call over to Will.