Haemonetics Corporation

Good day and thank you for standing by. Welcome to the Haymonetics first quarter fiscal 2022 conference call and webcast. 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 1 on your telephone. Please be advised that this conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Olga Goyet. Please go ahead.

Thank you. Good morning, everyone. Thank you for joining us for Humanetics' first quarter fiscal 22 conference call and webcast. I'm joined today by Chris Simon, our CEO, and Bill Burke, our CFO. This morning, we posted our first quarter fiscal 22 results to our Investor Relations website, along with our updated fiscal 22 guidance and the analytical tables with the information that we'll refer to on this call. Additionally, we provided a complete P&L, balance sheet, summary statement of cash flows, as well as reconciliations of our GAAP to non-GAAP financial results and guidance. Before we get started, unless otherwise noted, all revenue growth rates discussed today are on an organic basis and exclude the impact of currency fluctuation, strategic exits of product lines, acquisitions and divestitures, and the impact of the 53rd week in fiscal 21. As in the past, we'll refer to non-GAAP financial measures throughout this call to help investors understand Humanetics' ongoing business performance. Please note that these measures exclude certain charges and income items. Please refer to this morning's earnings release for details on excluded items, including comparisons with the same periods of fiscal 21 and a reconciliation to our GAAP results. Our remarks today include forward-looking statements, and our actual results may differ materially from the anticipated results. Humanetics cautions that these forward-looking statements are subject to risks and uncertainties, including the potential impacts from the pandemic on our results and other factors referenced in the Safe Harbor Statement in our earnings release and in our filings with the SEC. We do not undertake any obligation to update this forward-looking statement. And now, I'd like to turn it over to Chris.

Thank you, Olga. Good morning, everyone, and thank you all for joining. Today, we reported organic revenue growth of 6% and adjusted earnings per share of 50 cents, up 4 cents, or 9%, compared with the first quarter of the prior year. We are encouraged by our overall performance despite the impact of the COVID pandemic. We are trending favorably and anticipate continued improvements in plasma collection volumes. Strong procedure recovery is fueling outsized growth in our hospital segments and the blood center market is resilient. I want to share some updates about how we are evolving our approach to managing the businesses to meet our growth commitments. Chad Nichol has been named President, Global Plasma and Blood Center Businesses. Chad is a business builder who has been an integral part of Humanetics for 12 years. His vast knowledge of our products and our markets across the globe make him uniquely qualified to lead this business. Under Chad's leadership, we can leverage our expertise in collection and donor management to achieve a broader global footprint. David Wilson will be leaving Humanetics, and I would like to thank him for helping us build a world-class team that will continue to deliver excellence to our customers. Two years ago, we unveiled our operational excellence program to improve quality and service by transforming the way we source, make, and deliver products. Our goal was to achieve 80 to 90 million in gross savings by the end of fiscal 23. I am proud to share that despite the headwinds of the past two years, we are planning to meet our savings target and save an additional 35 million by extending this program through the end of fiscal 25. This will further strengthen our financial health and help offset losses from the anticipated transition of CSL in fiscal 23. rising inflationary pressures, and the effects of the pandemic. Expanding the program allows us to take a fresh look at our operations, identify new opportunities, and make new investments in sustainable solutions that will have a positive impact on our daily operations, customer support, and longer-term financial performance. We look forward to sharing more insight into our long-term plans at our Virtual Investor Day later this year. Finally, we announced earlier this week Lloyd Johnson has joined our board of directors. Lloyd brings significant financial management, international operations, and business development insight. Additionally, Ellen Zane has been elected chair of our board. These updates reflect Hamanetics' ongoing commitment to refreshment, diversity, and augmenting our experience base. Now on to the business units. Plasma revenue increased 6% in the quarter as the pandemic and the associated government subsidies continued to have a pronounced effect on the U.S. source plasma donor pool. North America disposables revenue increased 3% in the quarter, driven by improvement in collections volume, partially offset by price adjustments, including the expiration of fixed-term pricing on a historical PCS2 technology enhancement. Sequentially, U.S. source plasma collection volumes declined 6%. compared with about 6% seasonal improvement historically as additional economic stimulus hindered recovery. Plasma collections in Europe showed continued recovery in the first quarter, specifically in the Czech Republic and Hungary, driven by fewer COVID-related restrictions and plasma center growth. We had double-digit growth in our plasma software revenue in the quarter, supported by additional recovery in plasma collection volumes and our Donor360 app. which enables Plasma donors to register at home and streamline the pre-collection process with enhanced safety, efficiency, and convenience. Software is a strategic lever for our customers, and we continue to invest in value-adding innovation to support their recovery and growth. NextLink is a key enabler and differentiator for Nexus, and we believe our combined technologies offer the most benefit to our Plasma customers through improved collection yield, faster and more efficient center operations, improve compliance and donor satisfaction. As we emerge from the pandemic, the sustained increases in available donors, the operational benefits of Nexus PCS integrated with NexLink DMS will be a valuable tool to help collection centers accommodate greater donor traffic. Collection center conversions are on track as we plan to upgrade our customers to the latest version of NexLink DMS software later this year and complete the transition of our major customers to Nexus PCS devices by mid-fiscal 23. We've made significant progress with our persona technology, and early adopters are benefiting from an additional 9 to 12 percent plasma yield per donation. Their positive feedback and real-world data validate the value proposition of our technology and confirm that there is no impact on repeat donations and donor deferral rates. We anticipate additional persona conversions in the second half of our fiscal 22. The demand for plasma-derived medicines remains strong, and our customers continue to take steps to recruit and retain donors. As the industry recovers from the pandemic, we expect a return to the long-term 8% to 10% growth of U.S.-sourced plasma collections, and we see potential to grow in excess of that as customers strive to replenish depleted plasma inventories. As we approach the midpoint of our second quarter, Collections have improved 21% compared with a 14% improvement in the first quarter. This increased growth is consistent with the high end of our fiscal 22 plasma guidance. We remain vigilant about potential disruptions caused by new COVID variants and recent reinforcement of the U.S. border policy, but we anticipate strong plasma collection recoveries in the second half of the year and a firm fiscal 22 organic revenue growth of 15% to 25%. Moving to hospital, revenue grew 26% in the quarter, primarily due to continued improvements in hospital procedures driving increased utilization of disposables, strong capital sales in North America, and new business opportunities in Europe. We saw continued recovery across all of our key markets, although recovery trends outside of the U.S. were uneven due to concerns about new COVID variants and slower vaccine distributions. Hemostasis management revenue grew 31% in the quarter. U.S. led the charge with growth in the adoption and utilization of Teg disposables and strong instrument placements. We also increased market share in Europe, including the award of a new tender for the use of our Clot Pro technology acquired in fiscal 21. Cell salvage revenue was up 27% in the quarter with double-digit growth across all of our key markets. Growth was supported by continuous recovery in procedure volumes, and capital sales as we continue to upgrade our customers to our latest technology. Transfusion management grew 11% in the quarter, primarily driven by strong growth in SafeTrace TX as we completed new account installations in the U.S. BloodTrack also shows significant growth in the U.S. with a slight decline in international markets as new COVID concerns delayed implementation. We affirm our expectation for 15% to 20% organic revenue growth in hospitals. including hemostasis management organic revenue growth in the mid-20s. This growth rate assumes hospital procedures continue to improve throughout the year and will be fully recovered across all geographies by the end of fiscal 2022. Our newly acquired Vascaid vascular closure business delivered $22 million of revenue in the first quarter, exceeding our expectations. Both FastGate products delivered meaningful results through accelerated penetration into new accounts and increased utilization within existing accounts. We are enthusiastic about the continued growth of this business, supported by greater procedure volumes, higher diagnosis rates, increased hospital efficiency, and an overall move to standard of care. We are also expanding internationally by securing regulatory approvals and developing go-to-market strategies for faster and broader penetration. We are increasing our fiscal 22 revenue guidance from $65 to $75 million to $75 to $85 million as we look to accelerate additional growth through further investments. Blood Center revenue declined 6% in the first quarter. Apheresis revenue declined 3% in the quarter was impacted by unfavorable order timing and lost revenue from the previously announced customer loss included in our first quarter fiscal 21 results. We are encouraged by the resilience of this business and the altruistic nature of blood donors. Platelet collections in Japan fully recovered, although that growth was partially offset by a reduction in plasma collections due to prolonged COVID-related state of emergency. We also experienced strong market demand for platelets in China, driven by our expansion in Tier 2 markets. Whole blood revenue declined 14% driven by lower collection volumes and discontinued customer contracts in North America. Our expectations for the Buzz Center business are unchanged, and our fiscal 22 revenue guidance is a decline of 6 to 8 percent. I'll now turn the call over to Bill.