Good afternoon, everyone. And welcome to OraSure Technologies’ 2016 Third Quarter Financial Results Conference Call and simultaneous webcast. As a reminder, today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer period. [Operator Instructions] To allow time for as many questions as possible, questioners are asked to limit themselves to only a single question with no more than one follow-up question related to the same topic. Once the follow-up is completed the questioner can rejoin the queue for further questions. OraSure Technologies issued a press release at approximately 4 PM Easter Time today regarding its 2016 third quarter financial results and certain other matters. The press release is available on our website at www.orasure.com or by calling 610-882-1820. If you go to our website, the press release can be found by opening the Investor Relations page and clicking on the link for press releases. With us today are Doug Michels, President and Chief Executive Officer; and Ron Spair, Chief Operating Officer and Chief Financial Officer. Doug and Ron will begin with opening statements which will be followed with a question-and-answer session. Before I turn the call over to Doug, you should know that this call may contain certain forward-looking statements, including statements with respect to revenues, expenses, profitability, earnings or loss per share and other financial performance, product development performance, shipments and markets, business plans, regulatory filings and approvals, expectations and strategies. Actual results could be significantly different. Factors that could affect results are discussed more fully in the Company's SEC filings including its registration statements, its Annual Report on Form 10-K for the year-ended December 31, 2015, its Quarterly Report on Form 10-Q and its other SEC filings. Although forward-looking statements help to provide complete information about future prospects, listeners should keep in mind that forward-looking statements are based solely information available to management as of today. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after this call. With that, I would like to turn the call over to Doug Michels.

Thank you, Rena. Good afternoon, everyone and welcome to our call. We are very pleased to report solid financial performance on both the top and bottom lines for the third quarter of 2016. Consolidated net revenues for the third quarter were $32.3 million, an 8% increase from the third quarter of 2015. This increase resulted primarily from higher international and molecular collection systems sales and higher exclusivity revenue under our HCV co-promotion agreement with AbbVie. International HIV sales, driven primarily by increased demand in Africa rose 147% from the third quarter of last year. International sales of our OraQuick HCV test increased 35% compared to last year. Molecular collection systems revenues rose 14% from the prior year quarter, continuing the strong growth trend for this part of our business. We exceeded our bottom line guidance with $6.2 million and consolidated net income for the third quarter. This represents a $4.8 million improvement from the year-ago quarter. Later in this call, I’ll provide some business updates, but before I do that Ron will review our third quarter financial performance in more detail and Ron will provide our guidance for the fourth quarter. So with that, let me turn the call over to Ron.

Thanks, Doug, and good afternoon, everyone. Starting with revenues. Our third quarter 2016 consolidated net revenues increased 8% to $32.3 million, compared to $29.9 million reported in 2015. Our consolidated net product revenues of $25.5 million increased 1%, largely as a result of the absence of sales of our OraQuick Ebola product, lower domestic sales of our OraQuick HIV and OraQuick HCV products and lower sales of our cryosurgical systems and risk assessment products. These declines are almost entirely offset by higher sales of our molecular collection systems product and increased international sales of our OraQuick HIV and OraQuick HCV products during the current quarter. Other revenues were $6.8 million in the current quarter, of which $6.1 million represents the recognition of exclusivity revenue under the AbbVie HCV co-promotion agreement and $677,000 represents funding we received from BARDA related to our Rapid, Ebola and Zika products. Other revenues in the third quarter of 2015 included $3.4 million of exclusivity revenue from the AbbVie agreement and $750,000 of BARDA funding. International sales of our HCV test in the third quarter of 2016 rose 35% to $1.3 million from $957,000 in the same period last year primarily due to the expansion of our business in Asia, higher sales to a multi-national humanitarian organization and a new testing program in Africa. Domestic OraQuick HCV product sales decreased 20% in the third quarter of 2016 to $1.5 million from $1.9 million in the prior year period due to customer ordering patterns and induction in funding of certain testing projects. International sales of our professional HIV product increased to 147% to $1.1 million in the third quarter of 2016, compared to $450,000 in the third quarter of 2015. This increase was due to higher sales in Africa and reflects the timing of orders placed and…

Okay. Thank you, Ron. Let me first turn to our infectious diseases testing business. The primary takeaway is that the trends seen in recent quarters are continuing with continued strong growth in our international business largely offsetting declines in the domestic markets. Increasing international sales is an important strategic priority for the Company. The largest contribution in this area during the third quarter came from sales of our professional OraQuick HIV test particularly in Africa. As indicated in prior calls, we believe a significant growth driver will be HIV Self-Testing in Africa and other developing countries. Today, the primary purchaser of our HIV self-test is Population Services International or PSI, a leading global health organization which has launched the Self-Testing in Africa or STAR project in collaboration with UNITAID, the World Health Organization and health officials from Malawi, Zambia and Zimbabwe. Phase 1 of this program is designed to deploy approximately 750,000 OraQuick HIV self-tests that we designed specifically for developing markets. Our tests are now being successfully deployed by PSI and our understanding is that Self-Testing has been well received and is providing a means for individuals to know their HIV status who've never tested before. PSI generally orders in large quantities and then deploys the tests over a several month period. As a result there were no PSI purchases during the third quarter. However, we expect an additional PSI order to be placed here in Q4 was scheduled delivery sometime during the first quarter of 2017. As previously noted, we are aggressively pursuing prequalification of our HIV self-test by the WHO. I am happy to report that our prequalification submission was completed and filed in September and our submission is currently under review by the WHO. This prequalification is critical for our customers to obtain sustainable funding from…

Thank you. [Operator Instructions] Our first question comes from the line of Nicholas Jansen with Raymond James. Your line is open. Please go ahead.

Hey, guys. A couple questions, first on just the implied profit margin in the fourth quarter. I know you have the $1.4 million kind of one-time impairment charge type of severance. But even factoring that out, it does look like relative to what we were expecting a little bit off and I'm just trying to get a better understanding of is it more on gross margin being more internationally tied, so it's a mix issue or was something in 3Q on a sales and marketing line that's not sustainable. Just trying to better understand how we think about kind of the near-term P&L moving parts? Thanks.

That's a great question Nick, and I think it's a little bit of number, the one thing that you mentioned mix will play a part in it and we are expecting some additional international revenues and potentially higher rate than we had in the third quarter. And we're also expecting some increased sales and marketing expenditures plus as we mentioned incurring the restructuring charge in the fourth quarter of approximately $1.4 million.

Okay. That's helpful. And then I think Doug in your – you mentioned kind of strong kind of run rate savings tied to these initiatives and it looks like on the manufacturing side bringing automation should bring more efficiencies into the business. I know you guys don't like to provide kind of more than a quarter out guidance, but just thinking about the initiatives in place how do we think about the kind of the operating expense profile heading into next year once all these things are fully up and running.

So I'll take that Nick, as far as the benefits that we will see as a result of moving into the automated manufacturing the second line being brought on board. That's not likely to be validated until probably around about midyear and next. And so we have an opportunity in the second half of the year, enjoy some benefits from having that automated line in place. And as we talked about in some of the prepared remarks we put forth, we do expect some of the operating expenses incurred in 2016 do not be recurring in 2017. So we expect a better expense profile for the Company in 2017 than we had in 2016.

Okay, great. And then my last question will be tied to revenue tied to some of these announcements that you've had over the last let’s call it 90 days. First, on the large international HCV country contract, I think you said $1.6 million revenue in the fourth quarter maybe it’s too early to provide kind of the cadence of – the rest of the revenue, but just your thoughts on how quickly that could be deployed and potential for that to be extended beyond year-one. And then secondly on BARDA, is there any BARDA Zika funding included in the license and product development revenue that we should be expecting in the fourth quarter and again how do we expect that multimillion dollar contract to roll out on the P&L that would be helpful? Thanks.

So let me take the first question on large government contract. As we mentioned in our prepared remarks, we will provide more color on how that's going to play out in 2017 once all these final documents are secured and finalized which we would expect shortly. And then relative to – the second part of your question was regard to Zika and Ebola. We will see ongoing BARDA funded revenues for both of those products through the remainder of the year and through 2017. Relative to product revenues we’ll try to provide guidance on that as we go, we do expect the contribution in the fourth quarter from Ebola revenues, Zika revenues obviously will be dependent on us locking down the design in getting the product submitted for EUA approval. I don't have a specific timeline on that right now but we'll work as furiously as we possibly can to get that done as quickly as possible.

I’ll hop back in queue. Thank guys.

Okay. Thank you, Nick.

Thank you. Our next question comes from the line of Mark Massaro with Canaccord Genuity. Your line is open. Please go ahead.

Hi, gentlemen thank you for the question and congrats on another good quarter.

Hi, Mark, thanks.

Thanks.

I was wondering if you could maybe help us understand some of the key areas for the Analyst Day. I have to imagine. I understand that you're working hard to complete the paperwork with the large customer outside the U.S. for Hep C. But to what extent should we be thinking of this Analyst Day as blockbuster news announcements as opposed to incremental color across some of your product lines any insights would be helpful as we think about that?

The primary focus of the Analyst Day Mark is going to be our infectious diseases business and our molecular business. And what we're really looking forward to is allowing some of our senior leaders to share their thoughts on those specific businesses to give you a little bit more insight into a number of these programs that we talk about here on the call. But to give you a lot more color on those and detail we'll be talking about some of the operational improvements that we're making in the Company to really give you a perspective both on our confidence in the future as well as our enthusiasm for where the business is heading. And you know it's really about growth and innovation here at OraSure and that's what we hope to talk about on the 29th we're really looking forward to.

Great. And just a housekeeping question for Ron. The restructuring charges for Q4 is that entirely related to the AbbVie co-promote?

We took the opportunity to look at the business profile that we put in place when we had the AbbVie relationship there and we made some changes and we also look to adopt a more globalized footprint with respect to certain of the shared services that we have across OraSure and DNA Genotek, the two combined are really where the costs are being extracted from the company.

Great. And I wanted to ask a question on the molecular collections business. To what extent do you continue to see strong adoption of your oral fluid collections devices? I ask I know that there is some competitive product in the marketplace that uses buccal swabs or at least one? So can you just walk me through your confidence to continue to grow that business relative to products that may be inferior to your products and any thoughts on your competitive differentiation rather relative to alternatives would be helpful?

Sure. Well you know our molecular business is certainly poised for sustainable growth for a number of different reasons. One we're competing and selling in a market that continues to expand both here as well as on a global basis with genomics and genetic testing services continuing to grow. I think the fact is and the market has demonstrated this. We provide a product that produces an extremely high quality sample with a high quantity of DNA in a reproducible easy to collect and highly efficient collection system. And so if you think about that product profile. In essence we're providing solutions to in the academic research market. We're basically taking sample variation out of the equation by providing such a high quality product. In the commercial market the very fact that were FDA approved and manufacture our products under cGMP conditions certainly enables our commercial customers and partners to ensure the highest quality product is being offered to their customers. So I think if you look at all of that together along with the great service that our team provides these customers, it's the reason why we're seeing continued growth in that business as well as why we believe that growth is sustainable. And now with the expansion of our product offerings into the microbiome as well as into the infectious disease area with TB, we continue to remain very bullish on the prospects for our molecular business.

Great. And just last one for me more housekeeping for the model. You said that microbiome revenue was up 164% year-over-year, if you could provide the dollar that would be really helpful? Thanks.

So we actually are somewhat reluctant to provide that level of granularity, Mark. I think just generally speaking, we had spoken about the fact that we are looking at probably a 3X on revenues for the year versus where we were in 2015 and I think we spoke about it being in the range of about $500,000 or so last year. So I think that's generally what you want think that we’re trending towards for our performance in 2016.

That's helpful. Thanks.

Welcome.

Thank you. [Operator Instructions] Our next question comes from the line of Brandon Couillard with Jefferies. Your line is open. Please go ahead.

Good afternoon. This is Sachin in for Brandon.

Hi, Sachin. How are you?

Doing well, thanks. Will you discuss the segment endorsement of the human longevity case study and the demand and interest on the microbiome revenues?

Discuss the impact of the human longevity paper on the demand for the microbiome collector.

Yes. Thanks for that question. That was a huge endorsement for OMNIgene Gut which is our microbiome collection and stabilization product. And immediately after that study, the study results were published, we received an extraordinary number of incoming inquiries about the product and its availability. We continue to see a growing interest in our microbiome business and that's not just here in the United States, but outside the U.S. And these kinds of studies that validates the quality and integrity of the products that we sell and the value of having some kind of standard form of specimen collection particularly so that research can do comparative research. And in essence take that sample variability out of the equation. So that's really been the big message here and we're delighted that this been recognized by human longevity and of course now by others.

Got it. Thanks. And will you discuss like the cultural mix of that business like what sort of trends are you seeing with regard to commercial and academic customers relative to initial executions?

In the microbiome business it's virtually all research right now, whether that's academic research or if you will commercial research I mentioned that we continue to see a high level of interest and revenue contribution from folks in the pharmaceutical industry who got microbiome projects. But in virtually every case, this is research that's going on right now, but that continues to expand and we're in great position to capitalize on that.

Got it. Thanks. End of Q&A

Thank you. And that brings the Q&A session to today's call to a close and I'd now like to turn the conference back over to Mr. Doug Michels for closing remarks.

Okay. Just thank you everybody for joining us on the call this afternoon, this evening and for your continued interest in OraSure. I want you to for sure have a good afternoon and evening and I hope you all enjoy Game 7 of the World Series tonight. I'm a big cup fan and I'll be cheering hard. Hope you enjoy it. Good night.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.