Haemonetics Corporation

Good day and thank you for standing by and welcome to the second quarter 2024 Hamanetics Corporation earnings conference 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. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Olga Gayet, Senior Director, Investors Relations and Treasury. Please go ahead.

Good morning, everyone. Thank you for joining us for Humanetics' second quarter and first half fiscal year 2024 conference call and webcast. I'm joined today by Chris Simon, our CEO, Stuart Strong, President of our Global Hospital Business, and James Durecka, our CFO. This morning, we posted our second quarter and first half fiscal year 2024 results to our Investor Relations website, along with our updated fiscal 24 guidance. Before we begin, just a quick reminder that all revenue growth rates discussed today are organic and exclude the impact of currency fluctuations. We'll also refer to other non-GAAP financial measures to help investors understand Humanetics' ongoing business performance. Please note that these measures exclude certain charges and income items. For a full list of excluded items, reconciliations, or gap results in comparison with the prior year periods, please refer to our second quarter and first half fiscal year 2024 earnings release available on our website. Our remarks today include forward-looking statements, and our actual results may differ materially from the anticipated results. Factors that may cause our results to differ include those referenced in the Safe Harbor Statement in today's earnings release and in our other SSE filings. 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. Good morning, and thank you all for joining. Today, we reported organic revenue growth of 8% in the second quarter and 14% in the first half of fiscal 2024. as our momentum continues to build and we advance our leadership in plasma and hospital. Adjusted earnings per diluted share in the second quarter was 99 cents, 19% growth over prior year. We are raising our fiscal year 2024 total company organic revenue growth guidance from 7% to 10% to 8% to 10%, which represents an increase of 50 basis points at the midpoint of this updated range. Our performance speaks to the transformative impact of our growth strategy focused on establishing leading positions in high growth markets to generate superior financial returns. We are delivering revenue and earnings growth ahead of our long range plan, while broadening our global presence and industry leadership by investing in innovation and taking impactful steps to support growth in our plasma and hospital businesses. Our operational excellence program continues to drive our focus on efficiency and productivity, contributing to improved operating leverage and margin expansion. We continue to scale and rebalance our portfolio by investing in attractive growing markets where we can add value through unique enabling solutions. In October, we announced a definitive agreement to acquire Opsense Inc., a medical device manufacturer of optic sensor technology for use primarily in interventional cardiology. Expanding our hospital portfolio with OpsSense's products creates exciting growth and diversification opportunities, while providing immediately accretive financial benefits. Additionally, as part of our growth strategy and in consideration of increased regulatory requirements, we have made the decision to rationalize parts of our portfolio, including the ClockPro Analyzer, system and whole blood inline collection products and the associated manufacturing operations. We are committed to working closely with our customers through these transitions. Plasma revenue grew 11% in the second quarter and 22% year to date, delivering another quarter of double digit growth on top of the 50% plus growth we experienced in the same periods last year. North America disposables grew 9% in the quarter and 23% year-to-date, disproportionately driven by growth in volume and price amongst our customers on nexus with persona. Software revenue grew 38% in the quarter and 32% in the first half due to additional upgrades to the latest Nextlink software and market share gains as we advance our leadership as the only provider of end-to-end plasma collection solutions. In the U.S., the collections environment continued to be favorable, notching an eighth consecutive quarter of growth exceeding historical seasonality. Our volume growth was slightly below U.S. collection levels due to unanticipated supply interruptions with one of our vendors, resulting in enhanced inventory management measures necessary to support a strong rebound in plasma collections and our leading market share. Our customers remain focused on attracting and retaining donors and achieving higher operational efficiencies. Nexus is the industry standard helping them deliver against these priorities. With over 21 million procedures on persona, we enable our customers to collect 1.5 million liters of additional plasma in just two years. This is equivalent to the average annual volume from 33 mature plasma centers, but without the real estate overhead staffing and other associated plasma center costs. Limited market release of our new collection bowl and Express Plus technology is underway. These enhancements increase procedure speed to further optimize door-to-door times, enabling higher plasma center throughputs and improved donor satisfaction. With multiple ongoing initiatives in our R&D pipeline, we are committed to providing our customers with the tools necessary to win in this competitive market. Encouraged by the continued strong plasma market momentum we are helping to enable and with confidence in our ability to work through temporary supply challenges, we are raising our organic plasma revenue growth guidance from the range of 8% to 11% to 10% to 12%. Blood center revenue declined 5% in the second quarter and was flat in the first half. Apheresis revenue grew 3% in the quarter and 4% in the first half, driven by strong plasma and red cell collections, coupled with strong capital sales across the portfolio. We started to realize increased utilization benefits from the recent installation of Nexus plasma collection systems in Egypt. We are excited about the opportunity to collaborate with our Blood Center customers worldwide to boost the global plasma supply. Whole blood revenue declined 25% in the quarter and 11% in the first half, driven by the voluntary product recall we announced last quarter and the strategic decision to rationalize parts of this portfolio. In Blood Center, our focus remains on capitalizing on the growth opportunities within our apheresis portfolio and limiting margin and revenue growth dilution as a result of challenging market conditions in whole blood. We update our fiscal 24 revenue gut decline guidance for blood center from minus 2 to minus 6% to minus 2 to minus 4%. Now over to Stu to discuss our hospital business.