Haemonetics Corporation (NYSE:HAE) Q3 2025 Earnings Call Transcript

Haemonetics Corporation (NYSE:HAE) Q3 2025 Earnings Call Transcript February 6, 2025

Operator: Good day, and welcome to the Haemonetics Third Quarter Fiscal Year 2025 Conference Call and Webcast. At this time, all participants are in a listen-only-mod. After the speaker’s presentation, there will be a question-and-answer session. 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 Guyette, Vice President, Investor Relations and Treasury. Please go ahead.

Olga Guyette: Good morning, everyone. Thank you for joining us for Haemonetics’ third 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 third quarter and year-to-date fiscal year 2025 results to our Investor Relations website, along with our updated fiscal year 2025 guidance. As usual, a quick reminder that all revenue growth rates discussed today are organic unless specified otherwise and exclude the impact of currency fluctuations, acquisitions and divestitures. 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 third 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 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 usual 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.

Christopher Simon: Thanks, Olga. Good morning, and thank you all for joining. Today, we reported third quarter revenue of $349 million, growth of 4% on a reported basis and flat organically. Third quarter adjusted earnings per share were up 14% at $1.19. Our third quarter results reflect the positive effects of our long-range plan with another quarter of meaningful earnings growth and margin expansion. In hospital, we continue to strengthen our ability to compete in attractive high-growth markets with differentiated enabling technology. In plasma, we are gaining share, both in the U.S. and globally by providing customers with best-in-class solutions for safely lowering cost per liter. The divestiture of our whole blood business helps align our resources to higher margin, higher growth opportunities.

We are achieving significant milestones in the evolution of our business, driving improved profitability and growth momentum as we navigate external market challenges, including the temporary pullback in plasma collections, difficult market conditions in China and rapidly evolving trends in electrophysiology. We are increasingly confident in the foundation we are building for outsized transformational growth with all parts of our company contributing to sustainable and profitable long-term success. Turning to our business unit results, starting with what is now our largest business, Hospital. Revenue grew 24% on a reported basis in the third quarter and 28% year-to-date, with organic growth of 12% and 14%, respectively. In Blood Management Technologies, our largest hospital franchise, revenue grew 10% in the quarter and 11% year-to-date, driven by sustained market growth, share gains and price benefits across the portfolio.

Hemostasis management had another impressive quarter with 26% revenue growth in the U.S. after growing 35% last quarter. Growth was driven by improvement in device utilization and a growing installed base of our TEG 6s devices in the U.S. with new and existing customers following the launch of our global hemostasis heparinase neutralization assay cartridge. EMEA followed closely with strong growth across all key countries helping offset continued market challenges in China. Transfusion management achieved double-digit growth, both in the quarter and year-to-date, driven by new account openings in North America and EMEA, as well as ongoing customer upgrades to the latest version of SafeTrace Tx. Cell Saver growth was driven by competitive wins in capital sales as we migrate customers to a higher-margin product offering with enhanced features and utility to clinicians.

Interventional Technologies grew 47% in the third quarter and 58% year-to-date on a reported basis with 16% organic growth in the third quarter and 18% growth year-to-date. Growth in Vascular Closure was driven by our leadership in electrophysiology, where revenue from VASCADE MVP and VASCADE MVP XL grew in the mid-20s, both in the quarter and year-to-date. We made additional progress in acquiring new accounts and enhancing utilization within existing accounts, including accounts utilizing pulse field ablation technology. VASCADE MVP XL is a game changer, allowing us to capitalize on emerging catheter-based ablation technologies and expand our share in LAAC procedures. With the EP market opportunity remaining only halfway penetrated, we are confident we will continue to gain share.

Continued competition in coronary and peripheral procedures lowered our growth in small bore arterial closure and weighed on our overall VC growth rate. This is a mature market with low single-digit growth. It contributes less than 15% of our VC revenue, and we are now taking steps to improve our performance and drive more favorable results. Revenue from Sensor Guided Technologies and Esophageal cooling contributed 12% to hospital reported revenue in the quarter and 15% year-to-date. While we’re making progress in these markets, we acknowledge that we are falling short of our own ambitious targets, owing in part to external market disruptions. We remain confident in the potential of these products, and we are committed to realizing their commercial and financial benefits.

We see significant market opportunities and expect robust growth in this business, driven by our leadership in EP with MVP and MVP XL and continued momentum with TEG 6s. However, we need to further strengthen our commercial and clinical capabilities to establish our leadership across the newly acquired products. Accordingly, we are updating our hospital revenue guidance to a new range of 24% to 26% on a reported basis and 12% to 14% on an organic basis. Moving to Plasma and Blood Center. Due to the planned CSL transition, Plasma revenue declined 9% in the quarter and 5% year-to-date, with North America disposables revenue down 11% in the quarter and 6% year-to-date. Excluding CSL, U.S. disposables revenue grew in the quarter, driven by premium pricing from technology upgrades, share gains and collections growth.

After a slight decline in Q2, U.S. collections volumes, excluding CSL and share gains, grew low single digits for the third quarter and 4% sequentially, in line with historical seasonality as our customers focus on reducing cost per liter and benefit from increased center efficiency and 9% to 12% higher plasma yield as they transition to our latest technology. Revenue growth in Europe was in the double digits, driven by both share gains and robust collections environment. It is important to note that the CSL transition is for U.S. disposables and equipment. We continue to supply all of CSL’s DMS software in the U.S. and all of their equipment and disposables in Europe. We are excited to announce that we have signed new long-term agreements with BioLife and with Grifols, reinforcing our continued close partnership and highlighting our ability to bring innovation to plasma collections.

Both agreements are centered around gaining market share through adoption of our winning technology, both in the U.S. and globally and collaborating on innovation over the coming years. We made meaningful progress transitioning both customers to Persona and Express Plus in the third quarter. Our technologies offer unmatched opportunities for cost reduction throughout the plasma collection center while maintaining the highest standards of donor safety. With over 90 million collections on NexSys PCS, 40 million on Persona and now over 1 million on Express Plus, we are establishing real-world evidence that sets us apart from our competition. Our innovation is transforming the EBITDA profile of our collections business, making it significantly more profitable and well positioned to contribute to ongoing company-wide margin expansion.

We remain confident in the long-term sustainable revenue and earnings growth contribution from our plasma business. End market demand for plasma-derived therapies is strong, and we see high single-digit compound annual growth in fractionation capacity through 2032. As customer yield benefits annualize and productivity takes effect, we expect collection volumes to fully recover. We are well positioned to outperform the growth in the plasma collections market by gaining share and expanding margins through innovation that helps customers safely reduce cost and improve donor satisfaction. We are updating our organic plasma revenue guidance to a 5% to 7% decline, inclusive of approximately $100 million from CSL U.S. disposables. Blood Center revenue declined 3% in the third quarter and 2% year-to-date, primarily due to the whole blood portfolio rationalization.

Apheresis revenue grew 5% in the quarter and 3% year-to-date, driven by global plasma share gains and strong U.S. red cell collections, partially offset by fewer capital sales. International demand for source plasma is expanding. Following an in-depth head-to-head competitive evaluation in our third quarter, we were selected as the exclusive supplier of plasma collection solutions to our largest customer outside the U.S., the Japanese Red Cross. This competitive win underscores the competitive strength of our NexSys PCS technology offering. Combined with the divestiture of the whole blood business, this positions us to meaningfully improve long-term revenue and margin growth for this business. Accounting for the impact of the Whole Blood divestiture in our fourth quarter, we are updating our reported revenue guidance to a decline of 7% to 9%, while reducing organic decline to 2% to 4%.

Before I hand over the call to James, I’d like to offer a few additional remarks. While we revised our revenue guidance to 3% to 5% growth on a reported basis and flat to 3% organic, we remain confident in the steps we are taking to ensure sustainable long-term growth at attractive margins. Our record third quarter margins demonstrate that our strategy is working and we expect further margin expansion over the remainder of our long-range plan. This year has presented significant external challenges, but we take pride in how we’ve responded. We don’t control external market disruptions. However, we’ve consistently found ways to adapt and drive progress. As plasma collections slowed, we accelerated technology adoption and gained market share.

We launched new assays and bolstered our performance with TEG 6s to mitigate shortfalls in China. In vascular closure, we introduced VASCADE-MVP XL to help enable emerging ablation trends, enhancing both our product relevance and commercial capabilities. Throughout, we’ve remained focused on innovation, ensuring strong results and long-term success. We are confident in our ability to drive profitable growth and value creation, and we’re excited about the opportunities ahead as we execute our vision in FY ’26 and beyond. Now over to you, James.

James D’Arecca: Thank you, Chris, and good morning, everyone. Chris has already discussed our business units and company revenue. So now I’ll discuss the rest of our financial results and updates to fiscal 2025 guidance. In the third quarter, our adjusted gross margin was 57.7%, an increase of 240 basis points compared to the prior year, driven by favorable volume growth in hospital, improving portfolio mix and pricing across all business units, partially offset by a 30 basis point impact from foreign exchange. Year-to-date, our adjusted gross margin was 56.6%, reflecting a 210 basis point improvement year-over-year with the same growth drivers as in the quarter, but a slightly higher impact from FX at approximately 70 basis points.

Our portfolio transformation is delivering the expected impact on our margins. We anticipate continued improvement for the remainder of this fiscal year and beyond, supported by momentum in the hospital business, improving profitability of our plasma business and the divestiture of the previously margin-dilutive Whole Blood franchise. Adjusted operating expenses in the third quarter were $111.5 million, an increase of $1.2 million or 1% compared with the third quarter of the prior year. As a percentage of revenue, adjusted operating expenses were at 32%, down 150 basis points when compared with the same period last year, as additional growth investments were more than offset by increasing operating leverage and lower performance-based compensation.

Adjusted operating expenses year-to-date were $338.7 million, an increase of $23.9 million or 8% compared with the prior year and 32.9% of revenue. The dollar increase in adjusted operating expenses was primarily due to the acquisitions of OpSens and Attune Medical, as well as additional investments to support growth. As a percentage of revenue, adjusted operating expenses remained relatively flat compared to the same period last year. Adjusted operating income for the third quarter was $89.4 million, a $16.1 million increase or 25.7% of revenue, a new company record. This reflects 150 basis point sequential expansion from the prior quarter and a 390 basis point increase year-over-year, including a 40 basis point impact from FX. Year-to-date, adjusted operating income was $244 million, up $32 million or 23.7% of revenue, an increase of 180 basis points compared to the same period last year.

Key drivers included a higher-margin portfolio, increased leverage as we scale and accelerate growth and lower performance-based compensation. We are confident in our ability to deliver continued margin expansion, and we are updating our fiscal ’25 adjusted operating margin guidance to the high end of our previous range at approximately 24%. With stronger margins anticipated in the fourth quarter, this sets the foundation for ongoing margin growth into fiscal ’26 as we work towards achieving our target of high 20s adjusted operating margins outlined at our 2022 Investor Day. The adjusted income tax rates were 25% in the third quarter and 24% year-to-date compared with 25% and 23% in the corresponding periods last year. We anticipate our full year adjusted income tax rate to be approximately 23% Third quarter fiscal ’25 adjusted net income was $60.3 million, up $7 million or 13% and adjusted earnings per diluted share was $1.19, up 14% when compared with the same period of fiscal ’24.

Year-to-date adjusted net income was $169.9 million, up $12.3 million or 8% and adjusted earnings per diluted share was $3.32, up 8% when compared with the same period in fiscal ’24. The combination of the adjusted income tax rate, interest expense, net of interest income, changes in the share count and FX had a $0.13 unfavorable impact in the third quarter and a $0.33 unfavorable impact year-to-date when compared with the prior year. Despite some changes to our revenue guidance, we anticipate strong earnings performance to continue as we tighten our adjusted EPS guidance range to $4.50 to $4.70. Before discussing the balance sheet, I’d like to provide additional context on the recent sale of our Whole Blood franchise. This strategic divestiture helps us better align our portfolio with our focus on winning markets, leading positions and strong financial performance and we expect it to positively impact revenue growth and margin expansion while enabling our teams to fully focus on high-growth opportunities in line with our long-term vision.

We believe GVS is a natural owner of this business, and we look forward to collaborating with them throughout the transition and beyond. Our guidance includes approximately $49 million in revenue from Whole Blood, reflecting a 32% decline compared to the prior year on a reported basis with no impact on adjusted EPS, as we expect to fully offset the impact of this divestiture with additional planned savings in fiscal ’25 and fiscal ’26. Moving to balance sheet and cash flow. In the first 9 months of fiscal ’25, we recorded cash provided by operating activities of $65.2 million, down from $117.7 million in the same period last year and free cash flow of $49.7 million compared with $62.3 million in the same period of fiscal ’24. This decline was driven by an increase in working capital, largely due to higher inventory levels, digital transformation costs and the timing of certain payments that occurred in our fiscal first quarter.

Despite lower cash flow year-to-date, we expect to finish fiscal ’25 with strong free cash flow, and we have updated our guidance to a new range of $120 million to $140 million. Cash on hand at the end of the quarter was $320.8 million, up $142 million since the beginning of this fiscal year, primarily due to our recently completed debt transactions and partially offset by our acquisition of Attune Medical and share buybacks. There were no changes to our debt structure in the quarter and no outstanding borrowings on the revolving credit facility, resulting in a net leverage ratio of approximately 2.42 times EBITDA as defined by our credit agreement. In closing, I’d like to reiterate that we are in a stronger portfolio position than ever with every business contributing towards margin expansion and accelerating revenue growth in years to come.

In fact, all three of our business units are expected to exit fiscal ’25 at improved margins with further opportunities for growth ahead. The underlying markets are strong, and we expect growth in U.S. plasma collections to fully recover to historical average growth rate in the high single digits. In Vascular Closure, we expect PFA to have a net positive impact on our business as growth in the treatment of atrial fibrillation procedures more than offset any changes in the number of access points. We are winning with our technology, including leading in head-to-head competition in plasma, accelerating our success in Vascular Closure with MVP and MVP EXL and changing the standard of care in viscoelastic testing with our point-of-care system, TEG 6s.

And finally, with an existing capacity of nearly $1 billion and a strong balance sheet, we will remain opportunistic in capital allocation, focusing on value creation, including organic growth, synergistic tuck-ins and share repurchases. M&A is key to our long-term success, and we are committed to capitalizing on the benefits of newly acquired products and future strategic tuck-ins in our pipeline. We are excited about the future and remain focused on delivering long-term value for our shareholders. Thank you, and we are now ready to open the call for Q&A.

Q&A Session

Operator: Thank you. [Operator Instructions] And our first question comes from Anthony Petrone with Mizuho Financial Group. Your line is open.

Anthony Petrone: Thanks. And I hope everyone is well. And Chris, you have the Philly I’m pushing for you there on the Super Bowl on Sunday. So I hope your team wins. Maybe I’ll start with plasma and then shift over to VASCADE-XL. On plasma, maybe could we walk through a little bit on decoupling where CSL contribution was in the quarter? I think the math is suggesting that they’ve rolled off faster than initially forecasted earlier in the year. And then again, those underlying trends, I think you mentioned, Chris, that underlying plasma grew 4%, but you have talked about share gains. So maybe just looking at that number a little bit more closely, like how much is share gain? How much is price? And where was actually underlying volume, just to clean that up a little bit? And I’ll have a follow-up on VASCADE.

Christopher Simon: Yes. Anthony, thanks and go birds, huh, um. CSL is performing exactly on line with what we guided to last May. We thought that the – originally, it was approximately $100 million. That’s still where we believe it is. It’s a 70-30 split, meaning 70% of that was realized in the first half of our fiscal year with the remaining 30%. So that transition is largely on track and things are progressing as planned, and they’re complying with the contract. So no changes, no issues there. In terms of the rest of the field, what we saw in the second – in the third quarter was growth sequentially consistent with our historical seasonal averages in terms of volume. What we add on top of that is share gains, specifically at BioLife and at Grifols.

And then the ongoing technology upgrade, which we communicated last quarter, we expect to have substantially complete everyone on Persona by the end of this fiscal year. That’s a key milestone. For a long time now, we’ve been talking when will the rest of the field adopt. So in the next 60 days, the rest of the field will have adopted. And you see that coming through. Plasma’s role in margin expansion is quite significant because of the innovation premium there.

Anthony Petrone: Okay. And then just lastly, I guess, the last piece on base volumes, obviously, and we’ve been talking about quite a bit that there was a safety stock replenishment phase it seems like that specifically is slowed – the reason for the slowdown in volumes. Is there anything else that you can point to structurally? And then just quickly on VASCADE. Last quarter, the outlook for second half was high 20s. I think you’re coming into the mid-20s here within VASCADE. So maybe just a little bit about the XL push, how many accounts have adopted it at this point? And is there any – can you maybe walk us through the bridge from high 20s to mid-20s that shift Q-over-Q? Thanks.

Christopher Simon: Yeah. Thanks, Anthony. Look, on plasma collection volumes, I think there’s a lot of hammering out there in the market. It’s misplaced, right? What we observe our leading collectors doing in the moment is capitalizing on the innovation premium and the technology upgrades. So we give them an immediate boost that, in most cases, an excess of 10%. Now when we rolled this out to the smaller collectors earlier in the cycle, they took that 10 and added another 10 in their day-to-day productivity and we’re off to the races, and that’s what fueled the pace of the recovery. Now the focus is cost per liter as they get closer to their target inventory levels. So we’re a key enabler of that. However, as they begin to lap those productivity improvements, we expect this to return to historic seasonal averages.

And I step back from it all, there’s always been a lot of noise in the system. I said that at JPMorgan and people got kind of anxious about it. The reality is the number moves up and down in any given period based on the vagaries and the challenges individual collectors face. We look at a number of factors, including the discrepancy between the growth in demand, compound annual growth rate for IG-based therapy with the long-term growth in collections. And there’s at least a 200 basis point differential between the two with collections lagging. So we know they need to continue to run hard against that. When we look at the planned expansion between now and 2032, we know that there’s going to be a mid- to high single-digit growth in fractionation expansion, which accompanies the advancements in IG, particularly in primary and secondary immune deficiency.

It accompanies the ongoing uptick in subcutaneous, which requires 20% to 25% more plasma on a dose equivalent basis. So we look at that high single-digit growth and the capital expenditures against that and feel very confident within the existing network that with our technology, we can help restore collections growth and deliver against it. So temporary pullback, we believe it’s temporary. There’s nothing structural. Our team to their credit is capitalizing on the lull to get new technology rolled out to gain share such that as collection volumes recover, we’ll be that much better positioned. So we’re very bullish on where plasma is going intermediate to longer term. There’s no worries there. On VASCADE XL, the product is a game changer. We’re excited about what we’re doing there.

We’re enthusiastic, and we set bold and aggressive goals for our team to deliver. We see VASCADE MVP and VASCADE XL tracking very powerfully to AF ablation, including with the newer modalities on PFA. We’ve had a bit of a lag on VASCADE, which is predominantly used in PCI. And I think we just got – there is competition. There’s always been competition. And we have a young and relatively inexperienced sales team that’s working up the learning curve of multitasking across. We will deliver against it. And anything we’re not getting done in the current period will be that much more of an opportunity for us in FY ’26 and beyond. So the product is excellent and the market is ripe. And so we need to just execute against it, which I’m confident we will going forward.

Anthony Petrone: Thank you.

Operator: Thank you. Our next question comes from Rohan Patel [ph] with JPMorgan. Your line is open.

Unidentified Analyst: Hi. Thanks so much for taking the question. I guess the first one I had was just following up on Anthony’s question on VASCADE. I think you mentioned a roughly 12% revenue contribution from new products, which by my math and maybe just this might require a clarification, gets to – still doesn’t really get us to the mid-20s vascular closure growth in the quarter. So maybe you could just clarify that to start. And then also just if you could provide any commentary on the PFA attach rate, I guess, what are you hearing from doctors now that you have MVP XL in the market? And what’s the relative growth contribution from PFA and closure?

Christopher Simon: Yes. Rohan, thanks for the question. The mid-20s that we talked about in the prepared remarks and that I just touched upon is a breakout of MVP and MVP XL, which really constitutes the portfolio’s role in ablation therapy. The additional number and your back of the envelope math is not far off, is adding in VASCADE, which is really – is kind of pulled that back. The new products that you spoke about, yeah, there is a challenge with the new products, and we’re working our way through getting those on track. They are falling short of our own ambitious expectations. There’s nothing wrong with the products. There’s nothing wrong with the market. It is challenging. PFA is a disruptive influence for ensoETM specifically, but there’s a way to work through that, and we’re actioning that now.

Olga Guyette: Yeah. Rohan, this is Olga Guyette. I am jumping into action here. The 12% that you’re referencing, that’s the contribution from M&A products to the reported growth rate. So I just wanted to make that clear. So it’s a very different number than the Vascular closure growth in VASCADE MVP and MVP XL.

Unidentified Analyst: Got it. That’s helpful. Thank you. And then I guess my follow-up was just on margins and free cash flow. You had pretty healthy operating margin expansion in the quarter, but obviously had a bit of a shortfall in free cash flow and brought that guide down for the year. I guess, can you just talk a bit more about the discrepancy there? How much of that is temporary? And I guess you mentioned an increase in working capital, but what gives you confidence that you can eventually improve free cash flow beyond the quarter and into fiscal ’26?

James D’Arecca: Yeah. Thanks, Ryan. Yeah, we had a very strong operating margin performance in the quarter. We were very pleased with that. It sets us up nicely for our future goals in ’26. In terms of cash flow, what gives me confidence there really on that working capital number is that this fiscal year, there were a lot of dynamics, mostly in inventories. And we used the year to replenish our NexSys inventory. So in our accounting, whenever we purchase a new NexSys system, it goes into inventory first. And that’s the biggest chunk of the increase in inventory. The other thing that I don’t expect to replicate or duplicate next year is when we started the year, our plasma inventories were very, very low. And we were at a point where we were essentially hand to mouth.

We had depleted our finished goods inventories as we were supplying the market. And we used this year to replenish those inventories, which, as you know, is a use of cash. So I think those are the two biggest drivers. Beyond that, there’s always going to be issues with timing on collections and payments. So those will go up and down. But the inventory piece of it is the one that shouldn’t recur, and we’ll look to see improvements in free cash flow as we move forward.

Unidentified Analyst: Thank you.

Operator: Thank you. Our next question comes from Marie Thibault with BTIG. Your line is open.

Marie Thibault: Hi. Good morning. Thanks for taking the questions. I wanted to start here maybe on the Blood Management Technologies segment. You mentioned increased utilization, increased installed base and it’s a bit of a tailwind from this new assay cartridge with strong performance in the U.S. and EMEA, but weakness in China. I wonder if we could get a little bit more detail around some of that. How sustainable do you think this tailwind is for the U.S. and EMEA with the new assay cartridge? What is your expected time line on the China weakness? Any other details around that business would be helpful.

Christopher Simon: Yeah. Thanks, Marie. We are very bullish on Blood Management Technologies. We have – we made a leadership change there last year. That team has dialed in and they are really delivering. They’ve taken the heparinase neutralization, the global assay and just run with it here in the States, which is what you see in terms of 35% last quarter, mid-20s this quarter. So I think there’s room to run with that team and with that product, and you’re seeing that delivery, which is really helping. The European team has found their stride as well and is picking up. We will bring that assay to Europe. There’s plans underway that we’re executing against that. So we expect continued robust growth across the base of those two.

We’re also getting good growth from our other products, transfusion management and in the quarter, at least Cell Saver. So it’s a nice overall package that, that team is delivering against. China is unique, right? China is less than 5% of our global revenue. That revenue is split 50-50 between blood center and hospital. The blood center business is intact and doing well. Within hospital, it’s split roughly 50-50, again, between transfusion – hemostasis management and Cell Saver. Cell Saver is fine. The issue very specifically is hemostasis management. And it’s evolved over the course of the last year from the various localization efforts, kind of specific controls and confusion in the market to significant cutbacks in reimbursement. And we don’t expect that to get better.

We think that that’s a really challenged market, and we’re grateful that our exposure is quite minimal there. So from our vantage point, we’ll deliver in the markets where the product is valued and reimbursed appropriately. And as we lap the China comparables, I think you’ll see that performance in our FY ’26 really come to the fore.

Marie Thibault: Okay. Got it. And then I wanted to ask a follow-up here on the BioLife and Grifols contracts. Any more quantitative details that you can offer around that in terms of how long those are for, what amount of market share that opens you up to? Any details on what this might add to kind of core plasma growth year-over-year? Any other details, I think it’s an encouraging sign.

Christopher Simon: Yeah. We agree, Marie. It’s a very encouraging sign. And I’d say more broadly, again, about the team and about the product, anyone who has done a detailed assessment of our NexSys platform has chosen NexSys, period full stop. So we’re optimistic about that. The wins at Grifols and BioLife are long-duration contracts, I think 5 to 7-plus years. They tend to be tiered pricing that works in our benefit in two ways. More volume is better for everybody involved, and we reflect that in the pricing and then higher utilization, better churn rates, better return on invested capital. And we’re really pleased with the nature of the partnerships that have evolved in and around these extended agreements. And so we would be surprised and disappointed if we weren’t the majority share players in each of those accounts going forward.

And so I’ll leave it at that for now. But the relationships across the board have never been stronger. The product is delivering fully, and we expect to capitalize on it.

Marie Thibault: Okay. Appreciate the details. Thanks so much.

Operator: Thank you. Our next question comes from David Turkaly with Citizens JMP. Your line is open.

David Turkaly: Hey. Good morning. I apologize I been jumping around on a couple of calls. But Chris, I wanted to just make sure I heard something correctly. So you said looking out over the next 7 years, mid to high single-digit growth in collections for plasma is sort of what’s anticipated. And I guess, I know you don’t want to give forward guidance. But that should sort of be a floor for what your growth there looks like as we look ahead, correct? I mean like there’s not a reason – once you’re past CSL?

Christopher Simon: Yeah. Dave, it’s – let me just be clear, the mid to high single-digit compound annual growth rate through 2032 is in committed fractionation capacity. So this is what our customers have announced publicly is their intention in terms of expanding their capacity. We like the number, you know, I can quote just several thousand clinical trials for IG. I can talk about the fact that the existing network is operating still at 80%, which gives meaningful room to expand without new center openings, although some of our customers are stepping up their new center openings again now. They’re all interesting stats, powerful stats. I can talk about the growth in primary and secondary immune. But at the end of the day, they don’t commit to multibillion-dollar capital expansions unless they believe there’s end market demand.

So that’s when we go back, test this over decades, the fractionation capacity tends to be a very good proxy for what you described as the floor. And then we build on that based on what we can achieve, whether it’s more plasma needed productivity through those centers, which – through those plants, which we know is the case and has been communicated by our customers on top of meeting the added demand for subcutaneous, us being able to collect ahead of the fractionation demand, our ability to gain share. And then, of course, the price premium, which we’re very pleased we’ve been able to command for our superior technology.

David Turkaly: And then just one other quick clarification. The change in the guide for hospital, I think you said it was not related to TEG and Vascular Closure. Is that correct?

Christopher Simon: Yeah. TEG and Vascular Closure are doing – TEG is doing exactly what we needed to do and then some covering its own challenges in China, which we will lap here shortly, and it gets more favorable. Vascular Closure is just – it’s a multifaceted, right? We’re very pleased with MVP and MVP XL, which is our primary ablation play. So despite the PFA disruption, we’re doing what we need to, delivering where we can, growing commensurately, where we need to get better is on VASCADE, which is primarily in interventional cardiology. And I think it’s the product has competition. It’s a very good product, but it needs attention, and that’s why we’re doing the expansion and the development work clinically and commercially to make sure VASCADE delivers fully on its potential as well. It’s 15%, 1-5 of the Vascular Closure opportunity, but it is a large market, and it is still very much an untapped market. So we know we can do better there.

David Turkaly: Thank you.

Operator: Thank you. Our next question comes from Andrew Cooper with Raymond James. Your line is open.

Andrew Cooper: Everybody. Thanks for the time. I’m going to maybe stick with that VASCADE discussion here for a second. So I want to make sure the math is right and maybe get a little bit more context to the degree you can offer it on EP [ph] growth essentially being in the mid-20s. It implies that regular VASCADE, if we’ll call it that, or the IC component there was down pretty substantially. I don’t think we’ve necessarily known that to be the case. So maybe just a little bit more color on what’s driving declines there? Are you losing competitive share? Is there something that’s changed in that competitive environment over the last couple of quarters? Or what’s going on in that admittedly smaller subsegment of the market?

Christopher Simon: Yeah. Andrew, you’ve got it right. The 85% on ablations doing well will continue to propel us. On that 15%, I think we’ve got a couple of few things going on. One is there is a step-up in competition. When a product as VASCADE is now in all its forms approaches $200 million in the hospital, you start getting attention from competitors, and we’ve clearly woken them up. And that’s a good thing when you capitalize on it because that’s more share of voice and we just need to up our game in terms of competitive wins. I think the other factor is an internal factor. It’s as we build out, we will solve this. But from where we sit, we are slightly under-resourced in interventional cardiology, particularly in structural heart.

And we’re committed to delivering, for example, on SavvyWire as one of the acquired products. We’ve really ramped up. It’s extensive training. There’s real time in procedures, working with the interventionalists as they go through. And the unintended consequence of that has been a temporary loss of focus on VASCADE, same target set and same sales force, but a different procedure base. And so we’ve got to correct for that. We are. And I think the investments we have planned that are part of our ongoing commercial build will give us the mind share and the resources to correct that problem in short order.

Andrew Cooper: Okay. That’s helpful. Maybe next, knowing full well, the tariff situation is, let’s say, dynamic. What’s the latest thinking in terms of potential contingency plans if something major goes into effect in Mexico or how a tariff, whether it’s, let’s just say, 25% or that range might translate to an impact on profitability given the manufacturing presence you have south of the border?

Christopher Simon: Yeah. Andrew, I think we’re grateful that we are running on a fiscal year basis and don’t have to guide for the year to come at this point, given how dynamic the situation is. We’re obviously paying close attention and have done a bunch of modeling. I’d say three things upfront that weigh in our favor because we’ve seen something some news out there, which is just erroneous about our relative exposure. The first thing is we have no exposure to China, zero, right? I talked about the revenue base there. That’s separate. It’s very modest. We don’t manufacture in China. We do not supply from China, and we have zero exposure to the tariffs that have gone into effect there on top of what was already there before.

As we think about Mexico and Canada, we have exposure, and I’ll talk about that. But it’s important to remember, we made a $30 million capital investment in our Pittsburgh, Pennsylvania facility, and that is the home and a state-of-the-art operation for plasma bowls and for TEG cartridges, our two fastest-running SKUs. So we feel very good about that, fully automated operation. It’s an absolute hub for us. I think the third thing I’d say positively that seems to be getting missed is the divestiture of Whole Blood is very helpful. That was a product that was predominantly produced in Mexico, assembled in Mexico and transferring that to a more rightful owner, better positioned to deal with the opportunity set there eliminates that threat. What we have left is the blood center business in TJ [ph] and Tijuana, and that’s an exposure for us because we don’t have a ton of price elasticity on that business.

Cell Saver is also there, but we’re talking about in aggregate slightly more than $200 million in revenue. We care about it. We want to manage it, but it’s an exposure. I think the other thing to think about is Interventional Technologies, which is a mix of Mexico and Canada. In that case, we have plans to expand our manufacturing footprint. That’s part of the ongoing integration, and we’ll get out of that exposure because the expansions aren’t in either of those two geographies. In the interim, that’s where we do have the most price elasticity if we need to go there. The products are priced competitively today, so we can achieve the ambitious share gains and uptake. But if need be, we do have price latitude on those products in Interventional.

Andrew Cooper: Perfect. And then maybe just lastly, I know you talked a little bit about some of the moving parts there, but just to clean it up a little bit. Can you sort of lay out this move from 23% to 24% in the guide to 24%? Or as we think about heading into the fiscal ’26 and the high 20s bogey that you’ve laid out in the past, just how much removal of Blood Center represents of at least this year and how we should think about kind of the apples-to-apples movement from – I’m sorry, not Blood Center, but Whole Blood, the apples-to-apples movement on margins from the sale of Whole Blood.

Christopher Simon: Yeah, Andrew, I’m going to let James walk you through the math. But let me say this at the outset because I remember the conversations pretty vividly. After we did our long-range plan and provided the guidance, high 20s for end of fiscal ’26. One comment I think we received from you and others was, wow, right? People don’t do that. They don’t grow 1,000 basis points on their operating income in a 4-year period. Is that realistic? Can that be done? And I think in a quarter where we’re not living up to our own high aspirations with regards to hospital revenue, yet you still see 25.7. And I think the reason for that, first and foremost, as James said at the beginning of the year when we guided is gross margin.

And within gross margin, it is both mix and volume. There’s productivity and there’s price with the innovative new products, but it’s a gross margin story that then passes through our P&L. In the quarter, we had some favorable OpEx, and that’s just a function of pay-for-performance and the fact that we’re not where we need to be across the portfolio. And therefore, the incentive comp reflects that. But we think this is very sustainable, and this is our long-range plan at work. This is the impact you can expect from this portfolio and company transformation. But I’ll let James give you the math.

James D’Arecca: Yeah, sure. Thanks, Chris. So Andrew, overall, if you look at our year-to-date operating margin through Q3, it’s at 23.7%. So we expect Q4 to add some more benefit to that. Q4 should be at least what Q3 is and maybe a bit better overall. And the drivers are the same. It’s the same things that I’ve continued to talk about. As we convert plasma centers, we have higher margins there for sure. And the mix issue as more and more of our revenue becomes hospital revenue, that’s a tailwind for us as well. So those are the key drivers as we get into Q4 and then even beyond as we get into fiscal ’26. On your question on Whole Blood, that’s certainly helpful as well. And we look at that as around 30 to 40 basis points on operating margin in terms of improvement overall.

Andrew Cooper: Great. I’ll leave it there. Thanks, guys.

Operator: Thank you. Our next question comes from Joanne Wuensch with Citi. Your line is open.

Unidentified Analyst: Hey. Good morning. This is Anthony on for Joanne. Thanks for taking our questions. Are you able to share a little bit more in detail what steps you’re taking with the OpSens and Attune businesses just to get those back to your targets? Is it just resource and sales force reallocation? Is there going to be more hiring? Just any more detail would be helpful.

Christopher Simon: Yeah, Anthony. Thanks for the question. I’m happy to add some more color there. I want to be clear, PFA, as powerful and as disruptive as it is, is the primary challenge we’re facing with ensoETM. Accounts that were using enso to augment RF when the RF is switched over to PFA, the business goes away, and that’s just the reality of the market. However, if we step back from all of this, even the leading PFA suppliers are talking about converting up to 60% of the market. In our model, we had them at 65%. So what we are looking for is that remaining one third of the market where RF is the modality of choice or in combination with PFA in certain use cases. And so when we acquired the product a year ago, it was doing roughly 9% and used 9% of the procedures.

If we can grow that 9% to 15%, 1-5, we are more than successful. And success, a lot of metrics, we think it’s the most appropriate therapy. We think it’s the right thing for patients and their physicians. But quantitatively, it’s a double-digit ROIC in year 3. So what we need to do now is identify the RF as it exists in the account. Even when an account goes PFA, it rarely is 100%. And so how do we make sure that enso is being added to RF in the remaining percentage, whatever that is. In some cases, that’s caused us to go beyond the T600, and that’s fine. We have the capacity to do so. Our ability to train our folks to find that opportunity to have the upstream discussion about which modality are you using? And if it’s RF, add enso because RF and enso together is every bit as fast.

It is for sure, as safe and it costs about third as much to the center and to the hospital. So there’s a very strong use case to be made. We need to make sure that our commercial and clinical teams are fully trained and have ample resources to be able to have those discussions, crash through the noise, get to the VAC committees, get the product approved. And these are all normal and addressable challenges. It helps that we’re making the additions we are to feet on the street and the upgrade in our training as such. But we were probably overly ambitious in terms of how fast we could make all that happen. We don’t back off of the original expectations. We don’t back off of the fact that these are attractive products and have an important role to play in the market.

We need to up our game on execution, and that’s both resources and mind share.

Unidentified Analyst: Got it. That’s helpful. And then on the Japanese Red Cross win, was there any impact from that this quarter? And could you maybe characterize what that could contribute moving forward?

Christopher Simon: No, that’s – we called it out in the quarter because it was a major milestone achievement for us. It will take several years to implement. We have a large volume of business with the Japanese Red Cross today. This will be a reconfiguration and a long-term commitment there. We think this is really an FY ’27 and beyond commercial impact. But it speaks to – the Japanese Red Cross is a very long duration, largest non-U.S.-based customer. They’re incredibly rigorous in their assessment of technology. And we’re proud that in a head to head comparison with the market, they came back and said, this is a superior plasma collection system. This is the system we want 100% of our collections being done on over essentially the next decade.

And so we called it out because it is a big win for that team, and it is an important proof point that what we’re putting in the market is a winning platform and will be successful against our bold aspirations for majority share.

Unidentified Analyst: Thank you.

Operator: Thank you. Our next question comes from Mike Matson with Needham & Company. Your line is open.

Mike Matson: Yeah. Thanks for taking my questions. Just want to ask one on plasma. So you’ve had this multiyear period where you’ve had some innovations with NexSys and Persona and you’ve gotten some pricing benefit from those things. It sounds like, at least with regard to those two, that’s largely almost done. And I know you still have Express Plus. But just going forward, as we look into fiscal ’26 and beyond, are there new innovations, product launches planned that can support additional price increases in that business beyond just kind of the pure volume growth in collections?

Christopher Simon: Yeah, Mike, thanks for the question. And you are right. With the upgrades this quarter, we will largely have achieved the rollout of this platform and successfully achieved premium pricing against that superior innovation. We’re far from done. And one of the things that we’re excited about is the partnership we have across our leading collector customers. Where we go next? We’re not done with yield enhancements. We’ve studied the science. We have the benefit of getting data across 80% of the U.S. collection market. We know over decades of experience now, what the upper limits in yield are, we will go there. And that will probably be the next thing you hear the company talking about explicitly as appropriate.

We’re not done with speed. Our equipment can go faster. And at the end of the day, we’ll bump up against the natural limits of the human anatomy in terms of how fast we can return red cells and platelets to our donors. But if customers want more procedure speed, we’re there. I think the third thing I’d highlight, which touches upon door-to-door speed and really the ultimate differentiating advantage, which is employee and donor satisfaction. We have 80 share of the U.S. market on our donor management systems. And that gives us visibility and an opportunity to really influence procedure SOPs. And whether it’s helping the centers operate more productively or make more targeted outreach to the individual donors or just driving phlebotomist and donor satisfaction, that is the most elastic and opportunistic piece of our offering.

And we’re not just the best at doing that, Mike. We’re the only ones doing that on a proprietary basis. So from our vantage point, that’s the unmatched potential. And we’ve really turned our attention on that software, SaaS, digital, AI. It’s just a really exciting frontier for us. And stay tuned. We’ll have more to say as we bring those products to market over the coming quarters and years.

Mike Matson: Okay. Great. Thanks. And then just want to ask one on – there were a lot of questions already about VASCADE, but I didn’t really hear you comment on the international launch of VASCADE. So can you just give us an update there in terms of how that’s going?

Christopher Simon: The international piece is a very positive contributor to our growth, particularly in Japan. The product is extraordinarily safe. We were successful in securing not just approval, but very favorable reimbursement on that safety and efficacy profile. So Japan continues to still be a really nice contributor to our growth. Europe has gone slower. It’s a different starting point. They’re much more using suturing as a base and there’s some vagaries around reimbursement that makes our powerful same-day discharge more nuanced. We’ve addressed that. We’ve begun to build out of our physical presence in those markets. We expect Europe to be very successful going forward, particularly as it adopts new modalities, but it’s a work in progress for us. It’s delivering against our plans, but it’s a more modest contributor.

Mike Matson: Okay. Got it. Thanks.

Operator: Thank you. Our next question comes from Craig Bijou with Bank of America Securities. Your line is open.

Craig Bijou: Good morning. Thanks, guys, for taking the questions. I wanted to ask a couple of follow-ups. So on plasma, and I appreciate some of the moving parts. But it sounds like volumes were better, normal sequentially and better year-over-year than they were in last quarter. So I guess maybe just help us reconcile the lower guidance for the year and what you’re seeing there? And then maybe when do we expect a rebound in kind of in growth there, assuming CSL fully rolls off?

Christopher Simon: Yeah. Appreciate the questions, Craig. From our vantage point, we held the guide on plasma last quarter in part because we expected a more robust recovery towards above historical seasonal averages. It was in line with seasonal averages, but not better than that. And we also had anticipations. We’re right on track for center upgrades to the new technology and the price premium there, where things are progressing, but it’s just – it’s a stepwise progression is on the center conversions, competitive share gains. They’re contributing. But based on the conversations we were having at the time and the rollout plans, we thought there would be more opportunity realized in the second half of this fiscal year. What we know now based on – and there’s meaningful work that has to happen.

The centers have to make not one, but two changes to their standard operating procedures, one for Persona and one for Express Plus. That’s happening. The returns are there. The opportunity is real. It will be more of an FY ’26 event for us than we had originally anticipated in the second half of the current fiscal FY ’25. So it’s very real. It’s there. It will just be more measured and take place more heavily in FY ’26 for us.

Craig Bijou: Got it. That’s helpful. And I did want to follow up on VASCADE and maybe a little bit on – just specifically on VASCADE and not MVP versus XL. So is this – is some of the pressure that you saw on the original VASCADE, did that start in this quarter? Were you seeing it in Q2? And then how should we think about the franchise growth for VASCADE going forward? And just with the mid-20s for MVP and XL? And then just what do we – or what should we expect from the Interventional Cardiology side and when that can return to growth?

Christopher Simon: Yeah. So it’s been building for a while. And I think some of that is the competitive landscape. And some of that’s the fact that it’s the last 15% and therefore, didn’t get as much attention in a rapidly growing kind of expanding footprint. So the product works exceptionally well. It’s well positioned in that sector. And while the growth rate, PCI procedure growth rate is low single digits, the TAM is one of the largest TAMs that we have for Vascular Closure. So we’re keen to get after it and return the focus there as we are. And so I think I like where we are going forward. I think we will be able to deliver against it. It is tied to our overall presence in interventional cardiology. And today, the presence has increased.

It’s just a relative mind share is going more heavily into structural heart as we open new accounts. We’re pleased with the rate of new account openings. It’s a lengthy process. It takes real time and real effort on behalf of the commercial team, both commercially and clinically. And so it’s been a little bit of a drain in that regard as we come up to speed and are able to balance all priorities we’ll be in a much better place. We do still have Vivasure on the horizon. And Vivasure, the PerQseal product and PerQseal Elite will be an outstanding answer for TAVR closure. So it will improve by its presence, it will improve our focus on closure more broadly in interventional cardiology. That’s all part of the original strategy. So we’re keen to get VASCADE to join the party and get back in and delivering fully.

We think what we’ll do eventually with PerQseal and what we’re doing with SavvyWire should be highly synergistic. It’s a common call point, and we just need to make sure we have adequate resources there to deliver. In terms of your question, like when did this start, how do we think about it? I guess what I’d offer is if you go back and look over the course of our fiscal 25, you’d see the growth rate for MVP and MVP XL has tracked really over the prior two quarters in the mid-20s. So that’s – you can separate out the VASCADE piece from that. It’s been a drag relative to that performance. And candidly, I think the mid-20s is a good number, but we can do better. And part of that is the resourcing level and the attention we’re giving the full family of products.

Craig Bijou: Got it. Thanks for taking the questions.

Operator: Thank you. Our next question comes from Michael Petusky with Barrington Research. Your line is open.

Michael Petusky: Hey. Good morning. A number of my questions not surprisingly have already been asked. But Chris, I was wondering if you could just talk about – and this almost sort of circles back to like the Super Bowl. These coaches certainly have sort of priorities of things they want to do within their game plan for Sunday. And I’m just curious, as you look over, not just the next five quarters to the end of fiscal ’26, but over the next few years, what are the things that are within your control? You can’t control Trump’s tariffs or some of these other things in terms of evolution of procedures, et cetera. But the things that are within your control, like what are the top 2, 3, 4 things that, hey, this is within our control, these are priorities that if we execute, we will create long-term shareholder value. Thanks.

Christopher Simon: Yeah. Thanks, Mike. Look, I’m not sure I can do the Super Bowl analogy justice. When you think about Haemonetics and the investment thesis behind that, lots transpired over the last 3 years. We are winning in plasma. We are committed to plasma. We will come out the other side very soon with the majority share worldwide and a demonstrated ability to not only drive adoption and advance productivity, but get appropriately compensated for that innovation. So we are very bullish on plasma and the collections business more broadly as an engine of EBITDA for our corporation, growing in the high single digits, throwing off meaningful profit and cash flow. We’re using that – the proceeds of that business, the stability and the durability of that business to drive diversification and expansion into what is now our largest business in MedSurg.

It’s Interventional Technologies, it’s Blood Management Technologies. It’s whatever comes next when we’re satisfied we’re delivering against this opportunity. And that has the potential to grow double digits and will look like a traditional MedSurg business with gross margins in excess of 70% and rapidly expanding operating income margin, high 20s and better. And so that’s the play. And I think as some of you guys have summarized in prior notes, you don’t see mid-teens or better organic growth and an expansion in profitability. When we guided to the LRP in June of 2022, we had just finished the year where we earned $2.58 per share. Today’s guidance that we are reaffirming has us at $4.60 a share, more than $2 improvement, an 80% build on that with 1 year remaining in the LRP.

That is the power of the portfolio evolution and the company transformation that’s behind it. We’ve got this durable engine, and that’s going to keep humming given our leadership position there. And then we’re going to intelligently expand organically and inorganically to create an at-scale MedSurg business that has the ability to propel the company’s growth beyond high single digits with the associated profitability. And I think a lot of that, the dust will settle and a lot of the noise will fade. And I think sitting here certainly this time next year, it will be very obvious the transformative power of the impact of this LRP at work.

Michael Petusky: Thank you.

Operator: Thank you. Our next question comes from Larry Solow with CJS Securities. Your line is open.

Larry Solow: Good morning. Good afternoon. I’m just kidding. Long call here, lots of moving parts. Most of my questions like Mike have been answered. I guess maybe with all the moving parts, I could just give a quick summary of where I’m reading things. So plasma, Chris, it sounds like basically essentially in line with expectations. Collections, we know have been a little slower this year. No reason to believe they’re not going to pick up just based on the capacity build outlook. And it sounds like your transition to Express Plus and Persona are all on target, but maybe you get a little more of that benefit next year. But otherwise, nothing has really changed there. Is that fair to say on the plasma side plus the couple of market share gains you called out?

Christopher Simon: Yeah. I think you’ve got it exactly right, Larry. And again, kudos to that team. They’ve used this short-term lull in the growth rate of plasma collections to expedite the conversions fully on track about to be completed and uptick the expansion of share with the largest customers, both U.S. and globally. So stay tuned for more on that. But I think that this bodes very well for the recovery that comes in terms of the ongoing uptick in demand.

Larry Solow: And the BioLife and Grifols that you called out, so those are extensions and they are actually incremental more centers. Is that correct?

Christopher Simon: Technically, they are new agreements, long duration, and they’re all based on full-scale adoption. These are agreements that were written for NexSys with Persona and Express Plus. There are some commitments around ongoing development that we’ll do together going forward. And they are global in scope, as robust internationally as they are in the U.S.

Larry Solow: Okay. And any color, just I know the last couple of quarters, you’ve been talking, obviously, with MVP XL talking about entry into PSA, but also the left arterial appendages. Any color on the left arterial appendages side? And also just on the ablation side, access points, has there been any material change or any color on that?

Christopher Simon: No. Look, we have the label for left atrial appendage, and that’s really helped us because it’s given our folks the ability to go in and have the direct conversation. So as the leading companies continue to drive adoption of that therapy, we’re right there with them, and we’ll see the appropriate uptake because the product works exceptionally well in those use cases. So I think we’ve got the ability to – from where we sit, when I think about the TAM, we are less than or right at 50% utilization. That still means half of the closure procedures in ablation, for example, are being done with manual compression or suturing. This technology, we had 80 share of the half that’s converted. We need to go get the other half.

And it’s entirely a utilization game at this point. It’s about our footprint. It’s about our clinical presence and helping the half of the market that’s not at the party to get there because it’s just a better treatment, a better outcome for their patients. And typically, the competition that we’ve attracted, typically, that helps the category. It helps drive the medical adoption message. And we would expect that over time here as the excitement around PFA normalizes. So stay tuned, but we think there’s meaningful room to run in both left atrial appendage and in Afib with the product portfolio we have today.

Larry Solow: Right. And just in terms of Vivasure and the PerQseal you mentioned, just what’s sort of the next milestone that we can look for on that program?

Christopher Simon: FDA submission, right? If you go back to TCT, the PAC trial readout, truly excellent results. And we’ve worked with them over the last 2 months to kind of scrub and clean up the data and get it prepared for submission. They’ve done all the right things in terms of pre-submission dialogue with FDA and preparation. So fully expect that submission to go in probably this month, and then that will start a clock for FDA review and us to take the next steps in partnership with Vivasure.

Larry Solow: Got it. If I could just squeeze one more, James, on the margins it sounds like well on the way to your LRP, a little bit better this quarter, or maybe just some benefit of a little bit lower on the variable comp, but everything sounds like it’s moving in the right direction for you. Is that all fair to say?

James D’Arecca: Yes, that’s fair. Pleased with the margin performance. And like I said earlier, we should expect this level or a bit better next quarter with those continuing drivers. The story is playing out pretty much like we thought it was.

Larry Solow: Great. Thanks, guys, I appreciate it.

Operator: Thank you.

Larry Solow: Thanks, Larry.

Operator: I’m showing no further questions at this time. This does conclude our question-and-answer session, and you may now disconnect. Thank you for your participation. Everyone, have a great day.