Haemonetics Corporation

Good day, and thank you for standing by. Welcome to Hemonetics Corporation third quarter fiscal 2024 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 1-1 on your telephone. You will then hear an automatic message advising your hand is raised. Please note that today's conference is being recorded. I will now hand the conference over to your speaker host Olga Gayet, Senior Director of Investor Relations and Treasury. Please go ahead.

Good morning, everyone. Thank you for joining us for Humanetics' third quarter fiscal year 2024 conference call and webcast. I'm joined today by Chris Simon, our CEO, and James Durecka, our CFO. This morning, we posted our third quarter 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 fluctuation and our recently completed acquisition of options. We'll also refer to other non-GAAP financial measures to help investors understand Humanatic's ongoing business performance. Please note that these measures exclude certain charges and income items. For a full list of excluded items, reconciliations to our GAAP results and comparisons with the prior GAAP periods please refer to our third quarter fiscal year 2024 earnings release available on our website. Our remarks today include forward-looking statements, and our actual results may differ materially from 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 SEC 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 third quarter revenue of $336 million, growth of 10 percent on a reported and organic basis, and adjusted earnings per diluted share of $1.04, 22 percent growth over prior year. Our results underscore our success in driving above-market growth while we are achieving critical milestones in our long-range plan to fuel the transformation of our company. Margin expansion through FY24 foreshadows the compounding impact of changes in volume and mix coupled with productivity and operating leverage. We are proud of our accomplishments and enthusiastic about the many opportunities to grow our business moving forward. Through portfolio evolution, operational excellence, and resource allocation, we've strengthened our leadership in plasma while building our high growth, high margin hospital segment to expand our scale and leverage. Looking at our business unit results, plasma revenue grew 8% in the third quarter and 17% year-to-date, driven primarily by volume. Our collections environment in the U.S. continued to be favorable with disposables growing 7% in the quarter and 17% year-to-date. With robust recovery continuing, Our operational excellence program helped us ensure delivery for our customers as they continue to collect historically high volumes, further highlighting the need for reliability, donor safety, and yield-enhancing solutions. We are working in close collaboration with our customers to provide solutions that further distinguish Humanetics as the undisputed industry leader in plasma innovation. The rollout of Persona, our proprietary technology proven to increase yield nine to 12% on average, continues to gain momentum with more than 25 million collections. The limited market release of our new Express Plus technology has been encouraging. We have performed over 50,000 collections that have demonstrated a significant reduction in procedure times, and we remain on track for full market release in early fiscal 25. Advancements in NextLink DMS Our bidirectional connectivity software are improving cycle times, reducing errors, and allowing staff to focus on taking care of donors and reducing door-to-door time, a key determinant of donor satisfaction. The combination of Persona, Express Plus, and Nextlink set the new industry standard for center throughput, cost per liter, and donor satisfaction. Due to strong year-to-date results, we are increasing our plasma guidance. from 10% to 12% to 11% to 13%. We remain bullish on plasma longer term, and we are confident in our ability to maintain leading market share while continuing to migrate customers to our latest technology. Blood center revenue declined 3% in the third quarter and 1% year to date. Apheresis revenue was down 1% in the quarter but grew 2% year to date. Both in the quarter and year to date, we continue to benefit from increasing blood center plasma collections, particularly within newly established plasma centers in Egypt and strong efforts to increase the collection of red cell units in the US. These trends were partially offset by the strong growth we experienced last year and order timing among distributors, particularly in our third quarter. Whole blood revenue declined 6% in the quarter and 9% year to date predominantly driven by lower volumes associated with our decision to rationalize parts of this business, partially offset by benefits from last-time buys. The portfolio and manufacturing network rationalization initiatives we introduced in November are critical for preserving Blood Center's ability to generate strong EBITDA as we continue to work with our customers to migrate them to alternative products. Due to price benefits and early success with customer migration, We are increasing our revenue growth guidance from a range of minus 4% to minus 2% to a range of minus 2% to flat. Our hospital business had an especially strong third quarter with revenue growth of 22% as all of our products grew double digits. Year to date, hospital grew 17% driven by the continued success of vascular closure and hemostasis management. In interventional technologies, which includes vascular closure and OpsSense products, vascular closure grew 28% in the third quarter and 29% year to date, driven by continued momentum with new account openings and improving utilization throughout the US. We are on track to be in 80% of the target top 600 US hospital accounts by the end of this fiscal year, providing us access to the vast majority of addressable procedures in this market. This footprint will also provide the foundation for future growth, particularly as we realize opportunities through our innovation and M&A pipelines. Internationally, our products are gaining recognition, contributing approximately 200 basis points of growth in the third quarter. We completed the OpsSense acquisition on December 12th. This is an exciting milestone for us as we continue to expand our hospital business with procedure-enabling technologies in high-growth areas. The integration is underway, and we plan to launch both SavvyWire and OptiWire sensor-guided technologies with our U.S. commercial team in April. These products are highly synergistic with our vascular closure products and are immediately accretive to revenue and adjusted earnings per diluted share growth with an expected three-year ROIC in excess of 10%. Now moving to blood management technologies, which includes hemostasis management and our legacy hospital products, Hemostasis management revenue grew 18% in the third quarter and 14% year-to-date, driven by increased capital sales and utilization of TEG disposables in the US and China. Growth in China rebounded in the third quarter, more than offsetting previous underperformance in that market earlier this fiscal. We anticipate sustaining our growth momentum as we capitalize on our significantly expanded R&D and clinical capabilities to further develop new and existing products and commercial infrastructure that cover the majority of our strategic accounts in the $700 million underpenetrated total addressable market. The rest of the blood management technologies portfolio, which includes transfusion management and cell salvage, grew 18% in the third quarter and 6% year-to-date. Transfusion management was up significantly year-over-year due to the completion of customer implementations for both SafeTrace TX and BloodTrack. as well as growth in recurring maintenance revenue for both products. Growth in cell salvage was driven by strong utilization of disposable kits, both in the US and China. In hospital, we expect continued revenue growth acceleration and reaffirm our previous guidance range of 16 to 18%, which is on top of the strong revenue growth we experienced in prior two years. Our transformational growth plans are working across our businesses. and we are raising our total company revenue guidance by 200 basis points to a new range of 10 to 12% to better reflect the year-to-date momentum in plasma and our success mitigating challenges in our blood center business. Now, I'll hand it over to James to discuss the rest of our third quarter results and updated FY24 guidance. James?