Haemonetics Corporation

Good morning, ladies and gentlemen. Thank you for standing by and welcome to Humanetics Corporation fourth quarter fiscal 2022 earnings conference call. At this time, all participants are in a listen-only mode. After this week's presentation, there will be a question and answer session. To ask a question during the session, you will need to press the star then the one key on your touch-tone telephone. Please be advised that today's conference is being recorded. If you require operator assistance, please press star then zero. I would now like to hand the conference over to your speaker host for today, Olga Gayet, Senior Director of Investor Relations and Treasury. Please go ahead.

Good morning, everyone. Thank you for joining us for Humanetics' fourth quarter Fiscal 22 conference call and webcast. I'm joined today by Chris Simon, our CEO, and James Durecka, our CFO. This morning, we posted our fourth quarter Fiscal 22 results to our Investor Relations website, along with our Fiscal 23 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 access to product lines, acquisitions and investitures, 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 impact from the pandemic on our results and other factors referenced in the safe harbor statement in our earnings release and our filings with the SEC. We do not undertake any obligation to update these forward-looking statements. And now, I'd like to turn it over to Chris.

Thanks, Olga, and thank you all for joining our earnings call. Today we reported organic revenue growth of 19% in the fourth quarter and 7% in fiscal 22 and an adjusted earnings per diluted share of 65 cents in the fourth quarter and $2.58 in fiscal 22, an increase of 41% versus the prior year fourth quarter and an increase of 10% versus the prior fiscal year. The past year was a challenging one, but we are proud of how our people have responded. Our fourth quarter performance reflects our resilience and our commitment to meet the needs of our customers and deliver on our purpose of improving standards of care. Our agility and perseverance helped us achieve growth in all businesses, and we continue to distinguish Humanetics for the meaningful value we are creating across our markets. As the industry leader, we delivered integrated solutions to help our plasma customers realize much needed growth in the volume of collections. In the face of unprecedented blood shortages, our blood center products help maximize the impact of donations and attract and retain donors. Hospital, including vascular closure, continued to exceed expectations and was our fastest growing business in fiscal 22, helping customers improve patient care and outcomes at less cost. As we evolve our portfolio and we expand our reach and relevance, hospital will increasingly drive our growth and diversification. Our operational excellence program proved fundamental to our resilience and ability to quickly address supply chain disruptions and serve all who depend on us. It will continue to play a critical role in sustaining our success. enabling us to be a more agile, efficient, and productive company, creating lasting cost savings and freeing resources to fund investments. Turning now to our business unit results, plasma revenue increased 31% in the fourth quarter, driven by a 12% increase in U.S. plasma volume, price benefits, and a $6 million stocking order. Excluding the stocking order, U.S. plasma volume declined 4% sequentially, which compares favorably to a typical seasonal decline of about 7% in the fourth quarter, and last year's fourth quarter decline of 13%. In fiscal 22, plasma revenue grew 10%, driven by growth in volume. We remain committed to enabling our customers to improve donor satisfaction, maximize plasma volume, and lower cost per liter collected. Our technology and ongoing product development are essential to helping our customers meet these critical needs. Nearly all of our major customers in the U.S. are now experiencing the full value of our technology through a network of bi-directionally connected Nexus PCS devices with NexLink DMS and Donor360 apps. Working closely with our customers, we have designed Nexus to streamline the collection process, These advances have proven especially important at a time when our customers are facing unprecedented staffing challenges. Our fully integrated system plays a vital role in a positive donor experience and collection center productivity. From instant check-in upon arrival through streamlined donation and expedited payment, Nexus contributes to a demonstrated 16-minute reduction in average donor door-to-door times. improved compliance, including a 98% elimination of documentation errors, and increased donor satisfaction. Our customers are also collecting an additional 9% to 12% of plasma yield on average on Nexus with Persona, enabling them to both increase plasma supply and reduce the average cost per liter. We are leveraging extensive customer experience and real-world data from nearly 30 million Nexus collections to focus our ongoing innovation agenda. Our product development efforts continue to help customers improve center operations by driving growth in collections and improving plasma volume output while increasing donor retention and satisfaction. We look forward to sharing more about these programs at our Investor Day in June. the patient need for plasma-derived pharmaceuticals has never been greater. We continue to see long-term plasma market collections demand of 8% to 10%, and we expect to see volume growth in excess of that as fractionators strive to replenish depleted plasma inventories. Moving to hospital, revenue increased 19% in the fourth quarter and 16% in fiscal 22%. All four of our product lines grew this year, despite the challenges posed by the Omicron variant outbreaks, hospital staffing shortages, and COVID-19 related lockdowns in China. Hemostasis management delivered 12% revenue growth in the quarter and 20% revenue growth in fiscal 22. In the U.S., our largest market, TAG delivered robust growth both in the quarter and in fiscal 22. We also benefited from strong growth in Europe, primarily driven by successful market penetration with our Clot Pro, the SoElastic diagnostic device, which was acquired in April of 2020. Growth in the U.S. and Europe was partially offset by weaker sales in China. As you will hear during our investor day, we remain enthusiastic about our ability to grow organically and inorganically and in what we estimate is a $700 million global market. Transfusion management revenue grew 18% in the fourth quarter and 11% in fiscal 22 and was equally strong for BloodTrack and for SafeTrace TX as we completed a series of new account installations. Our fourth quarter results also benefited from a catch-up in software implementations in the U.S., after a few months of delay due to Omicron. Self-salvage revenue increased 17% in the quarter and 8% in fiscal 22, driven by procedure recovery and strong capital sales. Growth in the quarter also benefited from backorder relief from the temporary supply chain constraints we experienced in the third quarter. Vascular closure continues to excel. delivering a record $27 million of revenue in the fourth quarter and $94 million in fiscal 22. With the integration of this business essentially complete, our focus is on accelerating our penetration into the $2.8 billion underpenetrated market, while advancing our product portfolio to continue strengthening the role of our hospital business as a growth engine for Humanetics. Blood center revenue grew 7% in the fourth quarter and declined 1% in fiscal 22. Apheresis revenue declined 1% in the quarter and fiscal 22 as the strong recovery in platelet collections in Japan was offset by lower revenue from convalescent plasma and staffing shortages that affected collection centers across the U.S., Whole blood grew 26 percent in the quarter, driven by favorable order timing among distributors in the MEA and additional opportunities in North America. Our supply chain resilience enabled us to serve customers in need. For the full year, whole blood revenue declined 3 percent, driven by blood center staffing shortages and previously discontinued customer contracts in North America. To carry our momentum into fiscal 23 and beyond, Humanetics is set for robust, transformational growth, propelled by investments in the advancement of our technologies and expansion of our global commercial capabilities. We look forward to sharing our updated long-range plans, key business initiatives, innovation agenda, and revised financial outlook at our Investor Day on Wednesday, June 29th at 10 a.m. Eastern Time. And we invite you to join us either in person, in Boston, or virtually. I'll now turn the call over to James DiRecca and take this opportunity to welcome him as our new Executive Vice President and Chief Financial Officer. James brings to Humanetics substantial experience in financial leadership from prominent global healthcare organizations, and I look forward to working together to support our company's growth, resource allocation, and long-term value creation. James?