Good morning, my name is Keena, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Haemonetics Fourth Quarter Fiscal Year 2013 Earnings Release. [Operator Instructions] Gerry Gould, Vice President of Investor Relations, you may begin your conference.

Thank you, Keena. Good morning. Thank you for joining Haemonetics' Fiscal '13 Fourth Quarter Conference Call and Webcast. I'm joined by Brian Concannon, President and CEO; and Chris Lindop, CFO and Executive Vice President of Business Development. Please note that our remarks today include statements that could be characterized as forward-looking. Our actual results may differ materially from anticipated results. Additional information concerning factors that could cause actual results to differ materially is available in the Form 8-K we filed this morning, as well as in our 10-K and 10-Qs. On today's call, Brian will review the business highlights of the fourth quarter and the full year. Chris will review operating performance for the quarter and full year and annual guidance for fiscal '14 in more detail, then Brian will close with summary comments. Before I turn the call over to Brian, I would like to mention the treatment in our adjusted results of certain items which, by their nature and size, affect the comparability of our financial results. Consistent with our past practice, we have excluded certain charges from the adjusted financial results we'll talk about today. In total, we excluded $17 million of costs from our fiscal '13 fourth quarter adjusted results, including $9 million of integration costs related to the whole blood acquisition, a $4 million noncash write-off of acquired intangibles related to the Arryx HOT technology, and $1 million for the Y connector inventory reserve we discussed in detail on our third quarter call in January. In the full year fiscal '13, we excluded $72 million of costs from adjusted income, including $34 million of integration costs, $16 million of inventory step up, $7 million for the Y connector inventory reserve, $8 million of restructuring costs within the base business, a $4 million intangible write-off and $3 million of whole blood acquisition transition costs -- transaction costs. Further details, including comparison with fiscal '12 amounts excluded, are provided in our form 8-K and have been posted to our investor relations website. Our press release and website also include a complete P&L and balance sheet, as well as reconciliation of our GAAP and adjusted results. In November 2012, we completed a 2-for-1 stock split. Accordingly, all price share amounts and share count figures cited today are stated or have been restated on a post-split basis. With that, I will turn the call over to Brian.

Thank you, Gerry, and good morning, everyone. We're pleased to report a fiscal '13 fourth quarter with continued revenue growth across most of our product portfolio. We just completed a fiscal year in which we had organic revenue growth of 4% and 23% revenue growth when you include the whole blood acquisition. We completed the $50 million share repurchase program authorized for fiscal '13. And yesterday, we acquired the assets of Hemerus Medical, including its SOLX solution for red blood cell storage. All in, it was a productive end to a very good year. In the fourth quarter, total revenue growth was 34%, including a full quarter of our recently acquired whole blood business. Acquired business, which represents our initial entry into the $1.2 billion whole blood market, performed well, delivering $55 million of revenue, in line with our original expectations. On an organic basis, we had 4% revenue growth in the quarter, with a number of notable items that I will review briefly. Our commercial plasma business had $68 million of revenue, its third highest quarterly performance ever. Compared with the fourth quarter of fiscal '12, a strong quarter in which revenue grew 13%, revenue in this year's fourth quarter was up $6 million or 10%. Blood Management Solutions continues to drive meaningful growth in our hospital business. We closed 13 new IMPACT accounts in Q4 and now have 301 IMPACT customers driving the broader acceptance of blood management solutions. Growth in IMPACT accounts continue to outpace non-IMPACT accounts. We continue to see strong organic revenue growth in emerging markets, up 29% in the quarter. This included 36% organic growth in China, where our hospital disposables business was up 61% and platelet disposables revenue increased 15%. Our TEG business had 17% growth in the fourth quarter and 18% for…

Thank you, Brian. First, I'll review revenue performance for the fourth quarter and full year; then highlights of our quarterly financial results; our revenue, earnings and cash flow guidance for fiscal '14; and finally, the financial implications of our VCC initiatives. In the fourth quarter of fiscal '13, total revenue was $250 million, up 34%, and organic revenue grew 4% as reported and 6% on a constant currency basis. The recent weakness of the yen versus the U.S. dollar resulted in 170 basis points of headwind to our revenue growth rate in the quarter. As we've explained in the past, our hedges are designed to protect our operating income over a rolling 12-month period, leaving a portion of our revenue unhedged and, therefore, susceptible to changes in foreign currency rates. This is expected to continue to impact revenue growth rates in fiscal '14. Plasma disposables revenue increased 10% in the fourth quarter. Order timing can impact revenue from quarter-to-quarter. In the current year, both the third and fourth quarter plasma revenue amounts were approximately $68 million. In the third quarter, this resulted in a decrease of 1%, and in the fourth quarter, an increase of 10% compared with the prior year. The net impact was 4% increase year-over-year in the second half of fiscal '13. Plasma disposables revenue was also up 4% in the full year, including a slow start as a result of the Q4 fiscal '12 buy-in by the Japan Red Cross, as well as lower pricing in the first year of the contract extensions that we put in place late in fiscal '12. Our guidance range for plasma growth in fiscal '14 is 4% to 6%, consistent with the end market growth rates of the industry. We are well positioned with customer contracts covering over 98% of…

Thanks, Chris. I'm very pleased with our fiscal '13 performance. Our focus was on integration and serving our customers without interruption. This proved successful while simultaneously driving organic growth in the base business and investing for future growth acceleration. For the full year, our plasma business grew 4%; blood center business grew 2%, not including the acquisition; and our hospital business grew 8%. Overall revenue grew 4% organically and 23% when including the acquisition of the Pall Transfusion Medicine business. We had a solid fiscal '13, and we feel we're in a great position to embark upon our VCC initiatives in fiscal '14. With few exceptions, we're enjoying solid revenue growth, and we're confident with our expectations for both the operating income and earnings per share. In the category of business highlights, I'd like to mention just a few. The completion of the Hemerus Medical acquisition is an encouraging step as it helps us bring real value to our whole blood customers. We look forward to bringing this differentiating new science for red blood cell storage to market to help them lower the costs of collecting blood and blood components. Chris mentioned confidence in our software growth for fiscal '14. We recently entered into a contract with Nashville-based Hospital Corporation of America, whereby HCA intends to implement our SafeTrace Tx transfusion management software system at over 100 of their largest hospitals and surgery centers. Additionally, HCA has selected BloodTrack as its preferred remote inventory and point-of-care transfusion management solution and will encourage its facility network to consider adoption as a part of their blood management programs. HCA also utilizes our cell salvage and TEG products in many of its facilities, and the SafeTrace Tx, BloodTrack additions will complement existing blood management initiatives. The fundamentals of our business remain strong. With…

[Operator Instructions] Your first question comes from Larry Keusch, Raymond James. Lawrence S. Keusch - Raymond James & Associates, Inc., Research Division: A couple of questions for you guys. I guess the first one is, how do investors get comfortable, with your move to cash EPS, that you won't pursue deals that are considered to be expensive since you essentially have a free pass on amortization now? And can you remind us about management compensation metrics and whether it's aligned with a return on invested capital?

Sure, Larry. Let me take the first question. I think we've got a good track record of having bought smart over the years, and we will continue to do that, focusing on objective measures of economic return without regard to the earnings, necessarily, or the -- with or without amortization, if you understand what I mean. In terms of our management compensation, it's aligned with base compensation plus incentives, which are aligned with sales growth and operating income growth, which are very traditional measures. And then, ultimately, long-term incentive compensation aligned with shareholder value creation, which is our ultimate objective.

And Larry, this is Brian. And I would just jump in here to say we also enjoy the benefits of what I call an outstanding Board of Directors, who, on an annual basis, continues to evaluate each of the acquisitions we've made. The Hemerus acquisition is our 13th acquisition in the last 6 years, and we continue to look at every single one of those acquisitions against the metrics by which we originally acquired them. I'm pleased to say that in most cases, we have achieved or exceeded the metrics we set. Lawrence S. Keusch - Raymond James & Associates, Inc., Research Division: Okay, great. That's helpful. And then just 2 others that are related. I guess, when I look at your 2014 guidance, I look at the cash flow, and when I include your transformation and restructuring costs, that's been significantly lower than net -- or is projected to be lower than net income. And it has actually been that way, I think, at least over the last 3 years. It looks like cash flow generation is sort of $37 million when I consider those transformation costs. So I guess the real question here is when do we start to see these expenses go away and better reflect your net income? And as part of that question, how do we think about the ramp on your expected savings on the value creation and capture activities, kind of from '15 towards 2018?

Yes, Larry. Let me take that and then I'll ask Chris to add any additional comments. I think it's very fair to say that we're spending a fair amount of money to transform our company. Let's remind ourselves that this is a company that over the last decade has gone from a $300 million medical device manufacturer to the leading blood management company in the world. And if we hit the upper end of our range next year, it'll be $1 billion. In that sense, I had mentioned earlier, we've acquired, now with the Hemerus acquisition, 13 companies. So we've assembled a lot of pieces. Many of these, as you know, we slapped on the side of the business. It's now time to take what we've assembled and really focus it in a meaningful way, not only putting ourselves in a cost position to compete, but putting ourselves in a position to drive go-to-market strategies that will accelerate our growth as we go forward. These are not just any new products that we're bringing to market. I'm very pleased with the OrthoPAT Advance and what's happening with that relative to the limited market release. I'm very pleased with where we stand right now on the launch of the first phase of our automated whole blood product and what that looks like. I'm pleased that we received 510(k) approval, as we just recently did. So this puts us in a position to continue to move this into the market. In all of this, we have to establish a manufacturing structure that allows us to compete internationally. And that's what this focus is. This is not unlike what many large companies go forward with. I would say we're being bold. But when you look at, directionally, where we're going, I would say that it's going to drive some very significant savings that will improve the profitability of this company over the longer term. And just in terms of timing, you'll start to see that come in fiscal '15, and that will begin to ramp pretty rapidly up to that $35 million to $40 million of savings that we identified by fiscal '18. We'll give more visibility to that as we move into that transformation throughout this fiscal year, get to the end of the year as we look to fiscal '15.

Your next question comes from David Lewis.

Chris, I wonder if you could talk a little about growth visibility. You did a very nice job of getting us through the fourth quarter and into the first quarter. If I think about your segment guidance in the '14, it looks like the segments themselves add more up to the low end of that 5% to 7% versus sort of the midpoint. I'm wondering if there's anything in equipment that could be making up that difference. But specifically, you lose the blood contract you specified, and Brian, obviously, talked about HCA contract. I'm wondering if those 2 businesses sort of cancel each other out because with the low blood banking number in fiscal '14, you do need a fair amount of acceleration in the other business segments to get to your guidance. And I'm just wondering if you can give us some more visibility on that, and then I had a follow-up.

Well, we continue to feel good about the opportunity in the hospital business. We're bringing OrthoPAT Advance out. We now have a completely refreshed hospital product set under the umbrella of IMPACT, and we saw good growth there this year. We continue to feel ambitious about that segment. We feel good about acceleration in our software business based on the contracts that we have visibility to and the momentum that we see there. And plasma, it has got a really strong momentum trend based on end market demand for the drugs. We're focusing on market share gains in the blood center business, which is challenged by underlying slow demand for red cells, and we believe we're well positioned to do that, both with the product suite that we have today and more so with the advances that we're bringing to market. One of the drivers that's going to help move that blood center business forward in North America is the Acrodose product set, which is an opportunity to really change or influence how blood centers collect platelets as a recovered product out of a whole blood collection. And Acrodose is a differentiated product offering that helps them to do that, so we're delivering significant value to our customers as we accelerate that. And that gets counted as whole blood revenue market share gains because every time you sell an Acrodose kit, you sell 6 whole blood kits.

And David, this is Brian. I'd add just a couple of points of clarification. Our guidance for sales is 3% to 5%. And so I don't know that our growth guidance in our product categories, Plasma, 4% to 6%; blood center, flat; hospital, 6% to 9%; software, 5% to 7%, would put us at the low end of that range. I think it puts us right dead in that range. And in terms of offsetting that, the loss of the whole blood business, I'd tell you that the share gains that we're going to gain elsewhere within whole bloods will really offset that, bringing us to the -- where we guide to, about $210 million for our whole blood business next year.

Okay, very helpful. And then Brian, maybe just 2 quick ones here. First, on Hemerus. You said in the past, you want to transition to the Pall filter to maximize the commercialization plan. Is that still sort of the expectation, we should assume that, even post approval, you'll work to get integration with the Pall filter, maybe in '15 and beyond? And then Brian, just the EPS spread from first half to second half, still more second half weighted, as was last year. Is that tied to some of the upfront investment spending, which begins to sort of anniversary into the back half of the year?

Okay. David, I'll take the first question and I'll let Chris answer the second one. But the answer to your first question is, yes, absolutely. We talked about that in the script. So we will immediately begin to work to qualify the Pall filter technology with the SOLX solution and bring that to market with that filter.

With regard to the front half, back half, it's -- I think if I were to single out one factor, it's gross margin improvement as we move through the year. And a part of that is mix and part of that is to do with cost savings initiatives unrelated to our VCCs that are ramping through the year.

Your next question comes from Jim Sidoti from Sidoti & Company. James Sidoti - Sidoti & Company, LLC: With regards to the integration of the whole blood business, you said it's ahead of schedule. When did you originally expect that to be complete?

So we looked at that as being a sort of 18- to 24-month activity. At the, I would say, the end of it, that was our, I'd say, our conservative estimate to deal with all eventualities. We hit a big milestone and we had moved that business onto an instance of SAP that was sort of the exact same system it had been running on in a way to make the initial transition smoother. And the sort of final step in the IT integration was moving that SAP instance to Oracle, so that we're dealing with one manufacturing system end-to-end. And that just happened yesterday. Not coordinated for this conference call but, nonetheless, a happy event. So what's left is really around labeling. When you take a business like this and pull it out of another business, you end up licensing the use of labels, and the whole manufacturing plan has to be very finely tuned as you move forward because it's really driven by different countries giving different approvals at difference times for the transition of labels. And we're working through that. But we have an excellent plan, and we anticipate that we'll be substantially weaned off those labels and through all of our transitions by the end of this calendar year.

So, and Jim, I'd add, it's gone very well in all of these that I've done. I'm very pleased with the performance of the team. And not to be lost, this has positioned us to move more rapidly with the rest of these VCC initiatives. We've been introducing that concept to you, but I'm pleased to say that we're able to move a little faster than we had originally expected when we began thinking about this some time ago. So we're in a good place. James Sidoti - Sidoti & Company, LLC: Okay. And then my second question, with regard to SOLX. The initial approval now is for 8 hours prior to processing. And I think the big selling point of SOLX is to get to that 24-hour processing time. What are the steps involved to get that approval?

Yes, Jim. There's -- basically, our plan is to use the data we have already from the clinical trial that was done by Hemerus and to run through an incremental protocol that's been agreed by Hemerus with the FDA to get 24-hour hold on the Hemerus filters. So that's the next step, and we'll move forward to do that aggressively now that we own the company. James Sidoti - Sidoti & Company, LLC: Okay. And do you think that takes another year or so? Or could you give any rough estimate?

I hope it's inside the year, but I hate to speak for my clinical brethren and the regulator. But I'm hopeful it's going to be faster than that.

Your next question comes from Larry Solow, CJS Securities.

I missed some of the call, in balance [ph] and a couple others. Could you just discuss maybe sort of more -- like I don't know, a 50,000-foot look. You sort of gave your whole blood outlook for, I guess, about $210 million in sales and that's about, I guess, flat, give or take, year-over-year. Do you expect Hemerus to -- then I realize it's not going to happen overnight, but the contribution from Hemerus, I guess, to be anything this year? Or does that sort of grow over time? And when do you start -- and I realize you have a lot of plans for -- in the product expansions or what not. But when do you start to see growth in whole blood above this sort of this run -- this $200 million, slightly above run rate as we look out?

Yes. So when we talk about the whole blood business, Larry, it is $210 million. And what you see is the loss of a European collector business, about $12 million, and share gains of about 6%, which is about $12 million. So you kind of see that offset. So the good news is, is that we're losing very low margin business and continuing to gain as we take our solutions to the market elsewhere. Now as it relates to SOLX, all along we said we expect that to be a fiscal '15 event, as we acquire it this year, take us about a year to go through the approvals of the Pall filter and everything associated with that. To Chris's point, we're at the mercy of the FDA approval of the 24-hour hold, but that's defined now. I mean, the good news is we know what that's going to take. We know what we need to do to provide the FDA with the information and the data that they want. So we'll begin that process immediately. And at the same time, we'll begin the process of qualifying the filter technology we acquired last year. So we own this now, and we have the control of it. So when do you expect to see this happen? Recognize, we're not sitting still in whole blood. Disappointed in the loss of that business, but recognizing that's part of what we're doing to position ourselves from a cost position as we go forward, the manufacturing infrastructure changes that we have spoken about. But we continue to make strides elsewhere with this business, and we'll do that. The launch of automated whole blood, which the milestones we've achieved are right on track. I'm really pleased that we're now going to be able to go into limited market release on paperless phlebotomy. That will follow later this year with the communications tower. So when you think about it, we look to be in, call it, maybe 3, maybe 4 blood centers this year, which doesn't sound like a lot. But that'll be well over 100 mobile drives. I've said all along, we want to move slowly here. This is a not-for-profit customer, risk-averse, change-averse in many respects. We need to walk them through that the right way and help them gain confidence in this solution. So I'm very pleased with where we are. I think you can start to see some benefits in fiscal '15. We've said all along, the real benefits to our automated whole blood product, you'll start to see in fiscal '16 and beyond.

Okay. And just a quick follow-up on -- just on OrthoPAT. I think the quarter and the year shaped up -- it was slower than expected, but I guess the back half of the year sort of -- inevitably came in sort of in line. What are your expectations as we look out? I noticed -- do you see some growth in '14? Is that sort of a back-end loaded number? And how do you look at it over the next few years at OrthoPAT?

Yes. OrthoPAT is a back end-loaded number. But there's a couple of things that we're doing here. The first is, is that we're launching a new product, that will be in the second half of this year, that addresses a number of concerns raised by our customers. The limited market release of that is going very well. But again, as I said before, we're guilty of moving more cautiously here. Why? Because we've screwed this up in the past. I want to make sure that this is done right and that our customers are very involved in making sure we do it right. But what else are we doing? We're coming to the market a little bit differently. We're involving a distributor model, different than the one that we used to enjoy from an orthopedic standpoint, that will broaden our touch of this product and, more importantly, the follow-up of this product in the clinical care setting. So I think we're doing a number of things that give us confidence that we will see this accelerate. It is going to be a front half, back half story, with the back half recognizing the higher growth profile.

Your next question comes from Raymond Myers, Benchmark.

Brian, I was hoping you might be able to give us a little bit more detail in the $35 million to $40 million of manufacturing savings that you're anticipating by fiscal '18? Can you describe how much of that is from tax savings due to offshoring some manufacturing? As well as describe how much of that savings we might anticipate starting by next year?

Well, first of all, this is all -- the $35 million to $40 million is all pretax, so understand that. But we're going to begin these initiatives this year, Ray, and really be prudent about how we take this transfer across our manufacturing network. Why not, then, this year? Because we're going to build redundancy as we go through this. This has to be done without customer interruption. We've built a very good business here. We're transforming an industry. We have to be extremely responsible in our approach to that. So that's why you're not going to see any significant impact from those savings this year. It'll begin in fiscal '15. We'll give you those numbers as we get closer to fiscal '15. Certainly, the progress we make this year will inform that. But we're not trying to be coy, though we're trying to be responsible, so we tell you something that you can hang your hat on.

But one other thought, Ray, to add to that, is that not included in the $35 million to $40 million is a trend we anticipate in our tax rate, which would be down about 200 basis points over this period. And that's really just driven by the fact that we'll be moving more o U.S. business manufacturing that is currently being done in Braintree, yes, at 2 other locations.

Chris, did you say that there's an additional 200 basis points decline beyond the decline that you were experiencing this year?

Yes. Our rate this year will end up, all in on an adjusted basis, 26.8%, 26.9%, something like that. And we'll see, over the next 2 -- over the next 3 or 4 years as we execute on this plan, targeted savings of about 200 basis points.

And that's above the 35% to $40 million. That's all pretax.

That's great. And then you really intrigued us with the announcement of this HCA win for SafeTrace and BloodTrack. Could you give us a little more detail as to how much revenue impact or revenue contribution that would provide? And how soon does that convert to revenue recognition?

Well, I think it's safe to say that a fair amount of the 5% to 7% guidance upside that you see in our software business is being driven by this. This is 100 hospitals or larger blood centers. HCA has not been shy about their focus on blood management. And many of you have queried us at times as to our work with HCA. We have not talked publicly about this. We're pleased to be able to speak to this today. They are being very aggressive in their approach to blood management, and we're pleased to be a part of it. So I think it's safe to say that a fair amount of that 5% to 7% upside -- or growth, I should say, in the software business is being driven by that. BloodTrack is -- we have the opportunity now to supplement what we've done. They have chosen us as the partner of choice. We now need to go in and improve the value of that system, not unlike we've done in a number of other large institutions thus far. So this is a real significant opportunity for us with a customer that's focused on blood management. Remember what we said. They're already using a number of our other blood management products, our cell salvage, our TEG products. And we believe that the addition of the software will only continue to provide greater visibility on the solutions we can offer. So I think the upside is possible there elsewhere.

Your final question comes from Steven Crowley from Craig-Hallum.

Just a couple of things. In terms of the hospital business and your guidance for 6% to 9% growth. I'm thinking to some of the comments you've given us about the growth in installed base of TEG and Cell Saver. And I'm quite frankly having a tough time getting the math to only work down in that range. I mean, at some point, you should see faster growth in TEG, given all the seeds you're planting. And with the Cell Saver installed base going up, how is it only 6% to 9%? Help me understand what's working against you.

Well, we obviously are dealing with some headwinds in OrthoPAT in the early part of the year that we believe will reverse with the launch of Advance in the back half of the year. So you're seeing a year of transition there. We continue to feel bullish about TEG growth around the world. It's been a very consistent product. They have -- it's probably the product with my highest confidence level. And we had good strength, if you remember, in our surgical business this year in part due to the headwinds suffered by a competitor who had earthquake damage. And we're going to have to lap that strength as we move forward.

If you think -- Steven, just to add there, is if you look at our overall growth in hospital, up 8% this year, 10% in the surgical product line that Chris talked about, that's the one where you'll see that come back just a little bit because a part of that 10% growth was not only the launch of Elite, which we feel really good about, but it is that competitor who suffered as a result of an earthquake in Italy in May of last year.

And then on the whole blood business, where you saw the weakness or the loss of a contract, how intense -- and with the intensity of those competitive pressures, are you concerned about more instances there? And how quickly do you need to change your manufacturing structure to respond if that becomes a broader initiative? So really, 2 questions there.

Steve, great question. We find this market to be very localized. And it's really quite diverse around the world. There are some great pockets of opportunity in some geographies where cost is clearly not the issue and it's all about quality. There are other markets where cost becomes more of an issue, and therefore, in order for us to be well positioned to compete everywhere, we're taking these steps. But it's not something that we're worried about in a major way. It's something that we have to deal with in a surgical way in certain markets. Our strategy is still to differentiate through value add through a new product offering, and that's what we're going to do.

And there are no further questions at this time. I will now turn it back over to Brian Concannon for closing remarks.

Thanks, Keena. Look, one year ago, we told you about our bold plans for fiscal '13, plans that included acquiring and integrating the largest acquisition in the history of the company; introducing the first phase of our automated whole blood product paperless phlebotomy; accelerating key growth drivers of Blood Management Solutions, diagnostics and emerging markets; and doing this while delivering mid single-digit organic revenue growth and double-digit operating income and earnings per share growth. I'm pleased to say that we accomplished all of this and more. Today, we're introducing equally bold plans for fiscal '14, plans that include: integrating the acquisition of Hemerus Medical and pursuing FDA approval of the SOLX solution 24-hour hold claim; successful launch of the first phase of our new automated whole blood product and OrthoPAT Advance; execution of manufacturing network transformation, commercial excellence and other VCC endeavors that will drive substantial cost savings, savings of $35 million to $40 million per year by fiscal '15; and doing all -- I'm sorry, fiscal '18, and doing all of this while continuing to deliver mid single-digit organic revenue growth and double-digit operating income and earnings per share growth once again. This team has proven it can execute and will put in place the necessary resources and structure to ensure success. We look forward to sharing more details with you at our Investor Conference here in Boston on May 16. We'd hope you'll make plans to join us then. Thanks for your time this morning.

This concludes today's Haemonetics' Fourth Quarter Fiscal Year 2013 Earnings Release. You may now disconnect.