Vericel Corporation

Good day and thank you for standing by. Welcome to the VeriCell Corporation fourth quarter 2024 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Eric Burns, Vice President of Finance and Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. Joining me on today's call are Verasol's President and Chief Exec. Officer Nick Colangelo and our Chief Finance Officer Joe Marks. Before we begin, let me remind you that on today's call we will be making four looking statements covered under the Private Securities Litigation Reform Act of 1995. These statements may involve risks and uncertainties that could cause actual results to defer materially some expectations and are described more fully in our columns of the SEC. In addition, all forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. Please note that a copy of our fourth quarter financial results press release and a short presentation with highlights from today's call are available in the investor relations section of our website. I'll now turn the call over to Nick.

Thank you, Eric, and good morning, everyone. As highlighted in our preliminary results released last month, the company delivered outstanding financial and business results in 2024, generating top-tier revenue growth and even higher profitability growth, along with significant operating cash flow. The company also achieved several key business objectives for the year, including FDA approval and commercial launch of Macy Arthro, approval of a pediatric indication for Nexibrid, and completing construction of our new corporate headquarters and manufacturing facility, which will support the company's continued growth in the years ahead. From a financial perspective, total revenue was more than $237 million as the company delivered another year of 20% total revenue growth, as well as growth at 20% or more for both the Macy and Burncare franchises. The company also delivered significant profit growth in operating cash flow. As adjusted EBITDA increased to over $50 million, the company achieved GAAP profitability for the year, and operating cash flow increased to nearly $60 million. For the fourth quarter, the company delivered record quarterly revenue of over $75 million, as well as record profitability, highlighted by gross margin of 78%, adjusted EBITDA margin of 40%, and net income of nearly $20 million. Macy had a very strong close to the year, with record fourth quarter revenue of more than $68 million, representing 21% growth versus the prior year, and 53% sequential growth versus the third quarter. Macy's fourth quarter performance was driven by strong underlying fundamentals as we had the highest number of Macy implants, implanting surgeons, surgeons taking biopsies, and biopsies in any quarter since launch. For the full year, Macy's results were driven by strength in its key growth drivers, including growth in biopsy surgeons and biopsies per surgeon, as well as a slight uptick in the overall biopsy conversion rate. Based on these results, Macy sales rep productivity increased significantly to $2.6 million per rep in 2024, as our commercial team continues to execute at a very high level. The strength of these key growth drivers, together with another quarter of significant increases in the number of peer-to-peer programs and attendance at those programs, which are at the highest level at any time since launch, demonstrates that surge in interest in Macy remains extremely high. In addition, as I'll cover following Joe's comments, several key performance indicators for the Macy-Arthro launch have been very strong to date, providing significant momentum for Macy-Arthro to begin the year. We also developed BurnCare into a second high-growth franchise in 2024, with full-year revenue increasing 22% to approximately $40 million. In the fourth quarter, although we had more epi-cell biopsies compared to the third quarter, EpiCell revenue was below recent run rates due to a lower number of patient treatments as a result of patient health issues and fewer grafts per patient. While EpiCell quarterly results can be variable given the relatively small patient population and the critical nature of their injuries, overall demand for EpiCell was strong in 2024 as EpiCell revenue grew 16% for the year and we generated business in several dormant accounts as a result of our expanded burn care sales force. Nexabrid ended the year with strengthening underlying demand, as hospital orders in the fourth quarter increased 42% versus the third quarter, a strong leading indicator of continued adoption of Nexabrid. Overall, the company executed very well in 2024, and we expect continued high revenue and profitability growth as well as an inflection in cash generation as we move into 2025 and beyond. I'll now turn the call over to Joe to provide a more detailed review of our financial results in guidance for 2025.