Baxter International Inc.

Good morning, ladies and gentlemen, and welcome to Baxter International's first quarter 2020 earnings conference call. Your lines will remain in a listen-only mode until the question and answer segment of today's call. At that time, if you have a question, you will need to press the star, then the one key on your touchtone telephone. If anyone should require operator assistance during the conference, please press star zero. As a reminder, this call is being recorded by Baxter and is copyrighted material. It cannot be recorded or rebroadcasted without Baxter's permission. If you have any objections, please disconnect at this time. I would now like to turn the call over to Ms. Claire Trackman, Vice President, Investor Relations at Baxter International. Ms. Trackman, you may begin.

Thanks, Catherine. Good morning and welcome to our first quarter 2020 earnings conference call. Joining me today are Joe Almeida, Baxter's Chairman and Chief Executive Officer, and Jay Saccaro, Baxter's Chief Financial Officer. On the call this morning, we will be discussing Baxter's first quarter 2020 financial results. A supplemental presentation to complement this morning's discussion can be accessed on our website in the investor section under events and news. This presentation includes related non-GAAP reconciliations. With that, let me start our prepared remarks by reminding everyone that this presentation, including comments regarding our financial outlook, new product developments, business development, and regulatory matters, contain forward-looking statements that involve risks and uncertainties. And of course, our actual results could differ materially from current expectations. Please refer to today's press release and our SEC filings for more detail concerning factors that could cause actual results to differ materially. In addition, on today's call, non-GAAP financial measures will be used to help investors understand Baxter's ongoing business performance. A reconciliation of the non-GAAP financial measures being discussed today to the comparable GAAP financial measures is included in our earnings release issued this morning and available on our website. On the call this morning, we will be discussing operational sales growth, which adjusts for the impact of foreign exchange and the acquisition of Seprafilm, which closed on February 14th of this year. Now I'd like to turn the call over to Joe. Joe?

Thank you, Claire, and welcome to everyone joining us on the call today. I sincerely hope that you, your families, and colleagues are all safe and well during this difficult time. As we continue to deal with the evolving impact from the global COVID-19 pandemic, our Baxter team salutes the selfless healthcare providers and first responders who are rising to the enormous challenges with bravery and compassion. Their dedication inspires us all. This is uncharted terrain for the healthcare industry and society at large. At the same time, Baxter's path forward is clear. It is defined by our mission to save and sustain lives, just as it has been for nearly 90 years. We are doing everything we can to support patients, the healthcare system, our employees, and the communities we serve worldwide. Baxter's medically essential portfolio places on the front lines of this pandemic. We are experiencing extraordinary demand for many products, including our Prismac and PrismaFlex continuous renal replacement therapy devices and associated consumables. our MiniBag Plus drug delivery system, the Spectrum IQ infusion system and sets, plus IV solutions, parenteral nutrition therapies, and injectable drugs used in the ICU and across the hospital. Our efforts are focused on maximizing production to increase supply as much as possible and get our products to where they need it most as quickly as feasible. That starts with prioritizing the health and safety of Baxter's employees who are critical to our ability to successfully respond to the pandemic. We have implemented various employee protection measures, such as enhanced infection control actions, remote working arrangements, symptom screening, and further use of personal protective equipment, including masks, at all of our sites. Our manufacturing operations have also been modified to limit employee interactions where possible. We have added multiple shifts with all factories that manufacture products used in COVID-19 care, currently operating 24 hours a day, seven days a week. And as we previously announced, we are adding up to 2,000 permanent and temporary positions globally to support this effort. Baxter is utilizing objective government and academic data sources to help inform our pandemic allocation protocol, which strives to allocate additional products to the areas of greatest patient need globally. And we are supplementing our logistics infrastructure, including a newly established air bridge flying between the US and Europe to accelerate product availability. We are also taking steps to bring clinicians the widest possible array of options in this battle. For example, we worked with the FDA to secure emergency use authorization of our oxires filter set, supplementing the supply of blood filters we're able to bring to the US market. We want to thank the FDA for its collaboration as we continue to work on other potential authorizations. This is just a snapshot of what has been a truly all-encompassing effort, which also includes our philanthropic response through the Baxter International Foundation. Baxter's multi-year transformation has strengthened our ability to respond to COVID-19. We are a more effective, agile, and resilient organization, plus our focus on portfolio innovation has broadened the range of products we have available to address these situations. We're also able to maintain our emphasis on strategy and execution, even as we, like many others, step up to address an unprecedented public health emergency. This is reflected in our strong first quarter results with all six of our global business units and all three of our regional segments contributing to this positive performance. It relates specifically to the pandemic impact, particularly during the latter part of the quarter. Five of our businesses experienced heightened demand. acute therapies, renal care, medication delivery, pharmaceuticals, and clinical nutrition. As expected, given the slowdown in elective surgeries, demand for our advanced surgery portfolio declined and is expected to continue to decline throughout the second quarter. Even as we respond BEXA continues to advance key strategic growth drivers, such as research and development innovation and business development. In quarter one, we saw the close of our separate film acquisition, enhancing our advanced surgery portfolio. We also recently acquired two cents a technology company focused on developing sensors and software, advancing our emphasis on leading-edge patient monitoring. And we signed a partnership with Metaware, a specialist in clinical big data analytics, machine learning, and artificial intelligence. Our new product pipeline slated for this year and beyond has highlights spanning our businesses, including our next generation IV smart pump technology, share source analytics, specialized monitoring, and additional differentiated molecules. As you know, we have been looking forward to providing an update on our strategy, trajectory, and pipeline. We originally planned to hold our next investor meeting this September. However, the unpredictable nature and impact of COVID-19 has prompted us to delay this meeting until next year. We expect to provide a new date in the coming months. In close, I want to recognize BEX's 50,000 employees. I have never seen a team come together like this. in a global effort to make a difference for patients and clinicians. My words are not adequate to express the level of commitment I'm witnessing daily, nor can they convey the depth of my gratitude. With that, Jay will now share details on our first quarter performance, as well as commentary regarding some factors we expect to impact our performance in the second quarter and beyond. Then we'll close with your questions.