Haemonetics Corporation

Good day and welcome to the Hamanetics Corporation second quarter fiscal 2023 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session and instructions will be given at that time. As a reminder, this call may be recorded. I would now like to turn the call over to Olga Gayet, Senior Director, Investor Relations and Treasury. You may begin.

Good morning, everyone. Thank you for joining us for Humanetics second quarter fiscal 23 conference call and webcast. I'm joined today by Chris Simon, our CEO, George Strong, president of our global hospital business, and James Durecka, our CFO. This morning, we posted our second quarter and first half fiscal 23 results to our Investor Relations website, along with updates to our fiscal 23 guidance and analytical tables with the information that we'll refer to on this call. Unless otherwise noted, all revenue growth rates we'll discuss today are organic and exclude the impact of currency fluctuation, strategic access of product lines, acquisitions, and divestitures. Additionally, to help investors understand Humanetics' ongoing business performance, we will refer to non-GAAP financial measures. These measures exclude certain charges and income items. For additional details about excluded items, comparisons with the same periods of fiscal 22 and reconciliations during gap results, please refer to our second quarter and first half fiscal 23 earnings release posted on our IR website. Our remarks today will also include forward-looking statements, and our actual results may differ materially from the anticipated results. Please refer to the safe harbor statement in the earnings release and other filings with the SEC for a complete list of risk factors that may impact our results. Additionally, in order to protect customer confidentiality, we will not be able to discuss any customer-specific details except as disclosed previously. And now, I'd like to turn it over to Chris.

Thanks, Olga. Good morning, and thank you all for joining. Today, we reported second quarter organic revenue growth of 27%, an adjusted earnings per diluted share of 83 cents, an increase of 38%, compared to the second quarter of the prior year. Our second quarter and year-to-date results are evidence of the accelerating momentum in our businesses. The macroeconomic environment is challenging, but we have taken action and are well positioned to navigate the headwinds. Demand for our products and services has never been stronger. We are helping fuel growth in the plasma industry by setting the standard for plasma collections, enabling our customers to collect record volumes replenish depleted inventories the essential value of our hospital solutions combined with our investments are expanding our presence and accelerating growth our operational excellence program is driving new efficiencies and enhanced processes to help counter inflationary pressures through our agile flexible global manufacturing network and resilient supply chain we are consistently producing and delivering the products and technology our customers depend on. We are pursuing the goals we set in our long-range plan for transformational growth, diversification, and sustainability. In October, we welcomed Roy Galvin to Humanetics as President, Global Plasma and Blood Center. His leadership and vast experience in medical technology will help drive continued strong results and long-term value creation. Turning now to the business unit results and guidance. Plasma revenue increased 58% in the second quarter and 52% year to date. North American disposables represent 85% of total plasma revenue and increased 63% in the quarter and 56% year to date, driven by strong growth in volume and price as a result of our technology upgrades. We completed our technology upgrades ahead of schedule and the fully integrated bi-directional Nexus platform is now helping all of our long-term customers achieve effective and efficient plasma center operations while reducing their cost per liter of plasma. Volume growth was pronounced across all center types and geographies. In the U.S., volume growth was again driven by both new and mature centers with 38% growth in the quarter and 39% year-to-date for our long-term customers, and is now trending above pre-pandemic levels. Similarly, Europe delivered another quarter of double-digit growth. Our plasma business is a powerful driver of revenue growth and margin expansion, and our strong performance is a result of our market leadership. With more than 10 million commercial collections and representing nearly half of all U.S. Nexus collections today, Persona is playing a critical role in helping to drive plasma volume recovery. We are committed to providing our customers with the tools necessary to win in this competitive market, and we continue to advance our innovation pipeline to further increase collection center efficiency and plasma yield while maintaining donor safety. Encouraged by strong volume growth, In the market momentum we are helping to enable, we now expect our organic plasma revenue growth to increase from our previous guidance of 15% to 20% in fiscal 23 to a range of 30% to 35%. Moving to blood center, revenue grew 1% in the quarter and declined 3% year-to-date. Apheresis revenue declined 1% in the quarter and 7% year-to-date in both periods, This business was impacted by unfavorable order timing, lower revenue from convalescent plasma, customer staffing and donor shortages at blood centers across the globe, and geopolitical disruptions. Our technology plays a critical role in improving access to noncommercial source plasma. Consistent with our long-range plan, in the second quarter of fiscal 23, we partnered with one of our global plasma customers, to expand the network of plasma collection centers in Egypt with our Nexus PCS devices. As opportunities continue to emerge like this, we are in a strong position to advance our leadership in plasma collection around the globe. Whole blood grew 7% both in the quarter and year to date due to favorable order timing among distributors in Asia Pacific and the MEA, and additional opportunities in North America as our resilient supply chain enabled us to serve customers in need. We are confident in the continued durability of our blood center business despite the challenging macroeconomic environment and reaffirm our expectation of 2% to 5% organic revenue decline in fiscal 23. Now turn the call over to Stu Strong to discuss hospital results and strategic milestones. Stu?