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Thank you for standing by, and welcome to Haemonetics Corporation’s First Quarter Fiscal Year 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the call over to Olga Guyette, Vice President, Investor Relations and Treasury. Please go ahead.

Good morning, everyone. Thank you for joining us for Haemonetics first quarter fiscal year 2025 conference call and webcast. I’m joined today by Chris Simon, our CEO; and James D’Arecca, our CFO. This morning, we posted our first quarter fiscal year 2025 results to our Investor Relations website along with our fiscal 2025 guidance. Before we begin, a quick reminder that all revenue growth rates discussed today are organic unless specified otherwise, and exclude the impact of currency fluctuation and acquisitions. Our organic revenue growth guidance for fiscal year 2025 incorporates 15 weeks of revenue from OpSens due to the acquisition closing date being in December 2023. We’ll also refer to other non-GAAP financial measures to help investors understand Haemonetics 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 year periods, please refer to our first quarter fiscal year 2025 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.

[Operator Instructions] Our first question comes from the line of Anthony Petrone of Mizuho Americas.

Thank you and good morning everyone. Maybe to start with plasma and I have one on hospital. On the plasma end of the equation, maybe a little bit, Chris on where do you think we are in the cycle just coming out of COVID meaning inventory builds at the fractionators. Are we approaching some level of supply demand equilibrium? Are fractionators still building inventories? And a follow up on plasma would be, we’re seeing increasing reports of adverse events with REECA reported to the MAUDE database. Not sure if there’s any update on just where CSL is tracking in terms of their wind down. Is it in line with your expectations? Is it slower? Is it faster? And then I’ll have one follow up on hospital.

Good morning, Anthony. With regards to plasma supply demand, demand remains really robust. We look at short-term and long-term. There’s, by our estimations, an additional increase in fractionation capacity over the next decade in excess of 6% that’s already been announced where there’s confirmed commitments, it’ll grow from there, we presume. So we feel quite good about the long-term demand for IG-based replacement therapies and our customers’ commitment therein. In the near-term, I think it really does vary significantly from one customer to the next. We called out a specific set of issues at one customers collection centers early in the quarter and I think some folks took advantage of that to trim back a bit on what has been collecting hand over fist to replenish their inventories. We do see a shift and a rebalancing towards inventory rebuild combined with lower cost per liter. The benefit for that, both in the quarter and over the remainder of the year is a heightened demand for everything and anything we can do to improve productivity, increased demand for both upgrades and conversions. And you see that kind of our performance over the course of the year. So we still feel quite good about where we are in the cycle. There is a rebalancing and that will play forward as you would expect. With regards to our competitive competitor’s device, I’m going to leave that aside for now. What I would say is that in terms of the agreement with CSL, nothing has changed. They’re purchasing according to the forecast. We know there’s an $85 million floor on that based on the agreement that’s in place and really don’t have anything further to say about it at this point in the year.

Very good. And then a follow-up on hospital will be on VASSCADE MVP. Maybe just a little bit on the attach rate to pulse field ablation, PFA volumes had another good quarter in the June period. And so maybe a little bit on the attach rate of MVP to PFA. And when you look at XL, what will be the benefit of introducing that into the market? Do you get an increased attach rate to PFA with that new solution? Thanks again.

Thanks Anthony. Pulse field ablation is for sure a disruptive force in the market. We spent a lot of time modeling this, as you could imagine, both for vascular closure, but also for esophageal protection. What’s happening is very much consistent with what we forecast would happen. The advent of MVP XL is a game changer for us, and there’s a lot of speculation in the market is the TAM being reduced, et cetera. We don’t see any of that. Crystal clear, PFA is a net positive for Haemonetics interventional technologies portfolio. The new XL product has completed limited market release. Over 350 procedures across a wide range of different therapeutics products performed exceptionally well. Feedback has been truly outstanding. So we’ll get that into the market. Now, we’re going to proceed ahead of schedule with full market release because we think it’s the right technology across a range of different applications. And so one of the things quite powerful for us is not only on ablation of all forms, but also left atrial appendage closure, which is an area where the base MVP product hasn’t enjoyed a lot of success because it’s really just not the right technology. We have a 58% larger collagen plug associated with XL, and we think that’s really well positioned for the market going forward.

Thank you. Our next question comes from the line of Mike Matson of Needham.

Yes. Thanks. Just start with plasma. So I think you mentioned that you expect to upgrade the rest of your customer Express Plus and Persona by the end of a fiscal year. So is it safe to assume that there’s still kind of a pricing tailwind there in that part of the business, obviously excluding CSL?

Yes, Mike. Well, we now anticipate that all of our North American customers on Nexus will have upgraded to both Express Plus and Persona on their existing centers. And yes, the product is priced to reflect the technological advantages that are gained from both pieces of that part of the equation.

Okay, got it. And then just a couple on the interventional business. So with VASCADE MVP XL, are you getting a price premium for that? And then just in terms of the sales force, the cross training that occurred, is that completed? And to what degree do you think that was disruptive in the quarter that you just reported?

Yes. So the XL product is a 58% larger plug, as I mentioned a moment ago. We do command a modest premium for that. We want to be cost effective, and it’s one of the things that we look at, same day discharge, time to ambulation, et cetera. It’s an incredibly cost effective therapy. There is price increase, but relative to the base ablation RF or especially now PFA, it’s a really economical form of closure. In terms of the training, Mike, you’re exactly right. This was a big lift, right? We went from a sales force that was exceptionally good at closure across a variety of procedures, and we’ve now introduced both guidewire technology – sensor-based guidewire technologies and Esophageal Protection. It is a classic portfolio sale. And I think, if anything, in reflection, I’d say we took our time. We are going slow to go faster further over time, and we want to get this right. If you think about the nature of TAVR procedures, for example, where SavvyWire plays a critical role, it’s a much more involved procedure. The role of the representatives, both our territory managers and our clinicals is much more critical, and we want to make sure they are fully equipped and confident to be able to provide the support. We think we’re there now. It did probably take a little more time in the quarter than we had originally anticipated. But again, going slow to go fast further is the right answer for us here.

Okay. Got it. Thanks.

Thank you. Our next question comes from the line of Andrew Cooper of Raymond James.

Hi, everybody. Thanks for the questions. Maybe first, just on plasma. Thinking back to the commentary last quarter and into the year, you talked about the non-CSL business, I think, growing 8% to 12%. Now you’re talking about converting more of those customers to Express Plus and Persona. So just would love an update on that metric and how you think about the remaining customers and the growth, as well as maybe a little more color on some of the share gains you seem increasingly confident about.

Yes. So look, we guided at the beginning of the year. We’re looking at a combination of underlying collection demand, our ability to command a price premium for the new superior technology and share gains. And I think all three of those forces are at work. There’s going to be puts and takes amongst them, Andrew on a quarter-to-quarter basis. We left the guidance unchanged because we are confident, particularly those latter two factors, upgrades and share gains are back end loaded and we knew that and we expect that to build over the course of the year. So we feel confident leaving the guidance as is. There’s probably a bit of – it’s our first quarter and as a general practice, I’d prefer we don’t change guidance after one quarter. We just built the forecast 90 days ago and we want to live into it a bit. If there’s an opportunity to change it as the year progresses, we will. But for where we sit right now, we feel quite good about both CSL and the non-CSL forecast.

Okay, helpful. And then maybe just on hospital. You called out a couple of items that really are going to help with the acceleration from sort of the – near the lower end of the guide to start the year. Can you maybe size for us new product contribution versus revenue synergies for some of the efficiencies of the sales force that you talked about to help us think about that, again, acceleration from the low teens, maybe closer towards the mid-teens in terms of the midpoint of guidance.

Sure, Andrew. Vascular closure is the real engine within the portfolio, particularly in North America, and particularly in utilization, given that we are now well north of 80% of account penetration across the T600. So we’ll drive utilization. That’s critical. That is the biggest single driver. The additional product overlay we called out, there’s an additional $18 million of revenue in the quarter that’s included, and it will be meaningfully accretive to our gross margins as the year progresses. In the quarter, it was actually dilutive to our operating income margins. I can let James comment more on that, but we – again, just go slow to go faster further. We didn’t act more aggressively on the cost synergies because we’re in a process of listening and learning. They’re both quite good companies. They were good at what they do. We wanted to make sure we understood at a more intimate level what they do, what’s their secret of success, and how do we make sure we incorporate and build upon that? So that’s what you see in the quarter. As the year progresses, both synergies – both cost synergies and sales synergies will really come into effect, and that’s what’s reflected in our guidance.

Okay, I will stop there and jump back in the queue. Thank you.

Thank you. Our next question comes from the line of Larry Solow of CJS Securities.

Good morning, everybody. I guess, just a couple of follow ups on the plasma side. Chris or James, just give us the volume price, the breakdown in the quarter. I don’t know if that’s available, just approximately. And then on the Persona, how much – approximately how many have already switched to or adopted Persona already of your customers?

Got you. So not much on the price side, mostly volume. Got you. Okay. And then just could you just speak real briefly just on the VASCADE, the MVP XL system, the larger bore, sort of the market opportunity there and your rollout plans? Thanks.

Yes. So just to reiterate, we went into limited market release. We want to make sure that we had proper use case, really understood the device’s performance. We’ve obviously done extensive animal testing and have very good level of comfort, but we wanted to do the limited market release, make sure that it’s performing as expected. But as I said, feedback has been absolutely outstanding, now north of 350 procedures across a number of very high performing centers. Feedback’s been extraordinary, as good as anything we’ve seen or heard. So the device performs as advertised. It’ll get broad spectrum use as appropriate. And where we don’t yet have indications on our label for certain appendage size – whole sizes, we are actively pursuing that with the regulatory authorities and we expect that to be forthcoming. But the device is intact. It’s performing well. We’re now compiling real-world evidence and we’ll do that even more extensively when we go into full release now to be able to get a broader label expansion.

Got you. Great. Thanks, Chris. Appreciate it.

Thank you. [Operator Instructions] Our next question comes from the line of Joanne Wuensch of Citi.

Thank you very much. Can you hear me okay?

Yes, Joanne.

Excellent. Good morning, everybody. I want to just spend a minute more on vascular closure, please. I’m under the impression that there’s still a large percentage of procedures that are manual compression procedures. Could you sort of quantify what’s using a closure device at this stage and what moves people towards manual compression? And then I also want to go back to the PFA opportunity. I think that a little bit of clarification of why you think VASCADE XL could be better for PFA would be really great. Thank you so much.

Yes. Thanks for the questions, Joanne. Yes, our biggest competition in vascular closure worldwide is some combination of compression and suturing, figure of eight, typically. And so, we are looking – we penetrated, as I said, more than 80% of the T600 that does 90% of the procedures in the U.S. Within those, our utilization rates are still in the low to mid-40s. And that’s our biggest single opportunity is converting folks off of manual compression or suturing to our more sophisticated, clearly superior technology. And so that’s the process that’s underway. When we say we’ve penetrated an account, we may have one set of clinicians or one EP lab within that account using our closure device. We still have to work our way through the others. In some cases, there are challenges with value-added committees. What’s their cycle for meeting? Do we have the approval? Are clinicians aware that they’re able to use the technology? And then what we do see with VASCADE in all forms is that once a clinician has adopted, it’s incredibly sticky. It’s just a better procedure. And you see that in all the use cases, in terms of the outcomes, in terms of patient satisfaction, we hear that, the nursing staff hears that. And then after the fact, when they start to accumulate some volume, they can see how beneficial it is to the economics of the hospital overall. So it really checks all boxes, Joanne. It’s better clinically, it’s better economically, and we have an increasing body of evidence, real-world evidence, to support that case. So we feel quite good about it. With regard to PFA, we’ve done extensive animal testing before we brought MVP to the market for regulatory approval. We got the PMA, as I mentioned before, in our last call, and we wanted to proceed with a limited market release just to make sure we have firsthand experience on the use case before we do what we’re doing now, which is roll it broadly. Does that answer your question?

It’s close enough. Thank you very much.

Thank you. Our next question comes from the line of Michael Petusky of Barrington Research.

Good morning. Hey, Chris, I think last quarter you had talked about some progress for vascular closure in Japan in terms of active accounts, and also talked about, hey, Europe’s been a little bit slower in terms of penetrating, and you talked about vagaries around reimbursement from country to country and some differences in treatment methodologies. So I’m just wondering, any learnings in any of those markets that would be interesting to share? Thanks.

Thanks for the question, Mike. So, VASCADE in Japan is an unmitigated success. We were able to secure not only the market release from the regulatory authorities, but very favorable reimbursement. And you see that, Japan has always been a safety-first medical device market, and VASCADE is an incredibly safe product. The data they have there in market has been really helpful. So we’re in excess of 100 accounts now. We work through a third-party distributor that just continues to go from strength to strength. We’re really delivering in the Japanese market and I think there’s additional upside for us as the year progresses there. Europe is a more mixed story. The reimbursement’s been a challenge. There’s some vagaries with the reimbursement profile that same-day discharge doesn’t have the same reimbursement benefits that it would have in the U.S. So we’re working our way through that, changing it where appropriate. And there’s a hybrid model of organic sales team, but some joint work with distributors. So very confident in the profile, very confident in the long-term success. We are converting from a market that does primarily suturing as opposed to compression, and therefore some of the discussion around the economic benefits and time to discharge, et cetera, is more nuanced. We have a lot of confidence that we’ll be successful. It’s just going to be a slower build, which is what we’re experiencing.

Okay. All right, thanks guys. Appreciate it.

Thank you. I would now like to turn the conference back to Chris Simon for closing remarks. Sir?

Again, thank you all for your time this morning. I hope what you take away from our results is the resilience and the diversification of our portfolio, particularly across our three value drivers. If I start with Nexus, there’s clearly a rebalancing amongst our customers in terms of cost per liter, in addition to having ample inventory supply. It really favors our value proposition and we’re seeing that in terms of accelerated upgrades, and we anticipate additional share gains as the year progresses. TEG, TEG continues to hum along. There are geopolitical challenges, particularly in China, and we saw some headwinds there that we are working our way through. They are unlikely to get resolved in the short-term. We will continue to work at it. And fortunately, we have really outsized strength in both North America and EMEA, much larger markets, and a really highly energized team that’s fully committed to delivering against that. And then interventional technologies, as I called out earlier, PFA is a disruptive and very positive influence in the market but it is also a net positive for us, particularly now with the launch of MVP XL. And we’ve largely completed the integration and the training that was all part of the original plan. And I think you’ll see that team really find its footing and move forward with a much more sophisticated at portfolio sale that is part of the long-term plan that we had delivered. So across our three big value drivers, we’re coming into our own. I’m excited about what we were able to do even when each of those faced external challenges in the quarter with the rest of the portfolio. And I think as those three come back online, as expected, we just go from strength to strength. So thanks for the time this morning. Appreciate the questions.