Good afternoon, everyone and welcome to the OraSure Technologies’ 2017 Fourth 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 a questioner can rejoin the queue for further questions. OraSure Technologies issued a press release at approximately 4 pm Eastern Time today regarding its 2017 fourth 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 note 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 ending December 31, 2016, its quarterly reports 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 on 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 this call over to Doug Michels.

Okay. Thank you, Jonnie. And good afternoon, everyone, and welcome to our call. I’m pleased to report that we ended the year on a high note. We delivered outstanding results for both Q4 and the full year 2017 with record revenues and strong profitability. We are delighted with our performance. With respect to Q4, the Company results were driven largely by a significant increase in molecular collection sales and continued strong growth in our HIV self-test business. There are many highlights. Our consolidated net revenues reached an all-time high for the quarter at $52 million, representing a 47% increase from the year-ago period. Product revenue growth for Q4 was an extraordinary 75%. Our molecular business delivered another record performance. Q4 revenues reached $29.8 million, which represents a 248% increase over the fourth quarter of last year. Our infectious disease revenues also rose during Q4, as a result of a 171% increase in international HIV sales, driven primarily by our HIV self-test business. The increase in international HIV sales more than offset a reduction in international HCV sales caused by the non-renewal of a large government supply contract in support of a countrywide HCV eradication program. Operating income for the fourth quarter rose 44% and we generated $7.3 million in consolidated net income or $0.12 per share on a fully diluted basis. For the full year, we had consolidated net income of $30.9 million or $0.51 per share. We ended 2017 with a $177 million in cash and cash equivalents, which represents a $56 million improvement from the end of 2016. By any measure, 2017 was truly an outstanding year for the Company. So, let me now turn the call over to Ron. And after his financial review, I’ll provide some business updates and then take your questions.

Thanks, Doug. And good afternoon, everyone. As you can see from our press release and Doug’s brief introduction, 2017 was a very successful year with our fourth quarter revenues reaching record levels. Our fourth quarter consolidated net revenues increased 47% to $52 million compared to $35.5 million reported in the fourth quarter of 2016. Notably, our consolidated net product revenues rose 75% to $50.2 million compared to the prior year period. Higher sales of our molecular products and the OraQuick HIV self-test were the main drivers of this performance. Our molecular revenues rose 248% to $29.8 million in the fourth quarter of 2017 compared to $8.6 million in the fourth quarter of 2016. Sales of our Oragene product to commercial customers increased 368% to $26.9 million, largely due to our new $143 million agreement to supply Oragene devices to a leading consumer genomics customer, coupled with higher sales to our other large customers. Microbiome sales continued to gain traction and increased 180% to $1.1 million in the fourth quarter of 2017 as compared to the fourth quarter of 2016. Academic sales decreased 29% to $1.7 million due to customer ordering patterns. International HIV sales increased to 171% to $3.6 million from $1.3 million in the fourth quarter of 2016, due to higher sales of our OraQuick HIV self-test into Africa. The tests shipped into Africa during the quarter were subject to the support payments under our Charitable Support Agreement with the Gates Foundation and included countries outside of the STAR initiative. Product revenue during the fourth quarter of 2017 included approximately $589,000 of support payments associated with this agreement. Domestic professional HIV sales decreased 9% to $4.6 million in the fourth quarter of 2017 compared to $5 million in the fourth quarter of 2016. This due to factors we have…

Okay, great. Thanks, Ron. As noted previously, our molecular business performed exceptionally well in 2017 with full year revenues more than doubling when compared to 2016. Of our top 20 customers, 17 increased their purchases year-over-year with our top two accounts growing an aggregate of 371% for the full year. Our fourth quarter molecular revenues reached an all-time record of $29.8 million, which represents a 248% increase over Q4 of last year and sequential growth over the third quarter of 61%. Our commercial genomics business continues to be the primary growth driver for our molecular business with most of the growth occurring in the direct-to-consumer and clinical genetic testing markets. For the full year 2017, 14 of our top 15 commercial genomics accounts increased purchases over 2016 with triple digit growth in nine of these accounts and strong double digit growth in five. We are seeing market adoption of personal genome services on a global scale and we believe this trend will continue and support future growth for our business. On the international front, we continue to see strong growth, particularly in Asia where our revenues grew approximately 93% in the fourth quarter of 2017 compared to the prior year period. The fourth quarter was our best quarter ever for sales in Japan where revenues grew 226% compared to the fourth quarter of 2016. Revenue in China grew 114% in Q4 and 78% for the full year 2017 compared to the prior year periods. We recently closed a large repeat order with a direct-to-consumer front [ph] in China, offering whole genome sequencing, using our Oragene device. We also acquired a new customer in China that will be offering one of the first genetic-based skin care products. We expect demand from these and other customers to continue to drive revenue growth…

[Operator Instructions] Our first question comes from Brandon Couillard with Jefferies. Your line is now open.

Hey, thanks. Good afternoon. Doug, I appreciate all the details around the Asian customers and the DNA Genotek business. I guess, two-part question there. Could you give us a relative sense of how big the top five customers are as a percent of revenue for that segment? And then, secondly, anything you can share in terms of the mix between U.S. and O-U.S. customer, just so we can sort of think about where Asia is in terms of -- part of the overall size of that business today?

Yes. Thanks, Brandon. We don’t break out our customers by business or by business segments. So, unfortunately, I can’t give you that level of granularity in terms of our top five customers. I think, you’ve certainly got a sense from our prepared remarks that we’re seeing broad-based growth across our top customers across the whole genomics business with our commercial customers. The majority of our revenues today continue to be generated in the United States, although the international business is growing significantly. Obviously, it’s smaller. So, growing as a significant percentage for sure. We do believe that the Asian market represents a very significant opportunity, and we also believe that it’s perhaps several years behind the development of the U.S. market. And so, consequently, we believe that there is going to be significant future growth coming out of Asia.

Thanks. And two-part question for Ron. Number one, the DSO spike in the fourth quarter, any color you can add there? And then, number two, the gross margin deterioration year-over-year, could you help us bridge the step-down year-over-year in terms of the contribution from mix, any other factors? I would think, given the growth in the DNA Genotek business that would be at a higher margin business that actually would have been helpful in the fourth quarter?

Right, right. So, addressing DSOs, so, we did have a pretty significant amount of revenues as we move through the quarter. So, as we got into the holiday season, Brandon, and into -- then through Christmas, there were a lot of demands put on us as far as our -- from our customers which had us with a significant balance of receivables at year-end which we have for the most part subsequently collected. So, I was checking on that just today and a fair amount of cash is already coming here. So, I would imagine that at March 31, the DSOs will be down pretty significantly from where they sit today. From a gross margin perspective, biggest single driver in the gross margin reduction from the fourth quarter of last year to the fourth quarter this year was the AbbVie exclusivity amortization. That amount had accounted for approximately 600 basis points. Then, we also had, as I think we telegraphed in our last quarter call, charges associated with the nonrenewal of our contract for the HCV eradication program and also the discontinuation of a product that we had been selling for some time, and that’s the Western Blot product and we wrote that off in the fourth quarter. That accounted for another about 250 basis points of margin. And so, they are items -- all of those actually are items that we don’t anticipate going forward. And we expect as we move into and through Q1 here that we will see more of an uptick in our gross margin from the approximate 55% that we reported. We also, as Doug pointed out, enjoyed higher sales of our HIV self-test in the fourth quarter compared to the year-ago quarter. And if you recall our objective with that test is to drive operating income and concede on the gross margin line. And so that accounted for approximately 170 basis points of margin loss. And that’s something we’ll need to keep our eye on as our revenues are expected to grow well in 2018, over levels that we achieved in 2017. But again, all-in, I think, we’ll see a pickup in gross margin in Q1 over where we ended in Q4. Hope that’s helpful.

Thank you. Our next question comes from Nicholas Jansen with Raymond James. Your line is now open.

Hey, guys. Thanks for all the color. First, on the DNA Genotek side, certainly, the demand in 2017 surprised everyone. And so, I guess I’m trying to get sense of your level of visibility today based on the ordering patterns of your biggest customers. How do we feel about the near-term to medium-term kind of growth trajectory off of that phenomenal growth that we saw exiting the near? Any color there will be appreciated. I am sure you are expanding capacity right now in preparation for growth, but any color on visibility would be helpful.

I think that’s certainly an indicator of how bullish we are on the molecular business. I think, our first quarter guidance from a revenue perspective again doesn’t have any HCV revenues related to the countrywide eradication program. So, we anticipate continued strong demand across our molecular as well as our HIV self-testing business. One of the things that we telegraphed and certainly enjoyed was the seasonal impact that we saw in our molecular collections business in the fourth quarter. Obviously, we expect that will continue in 2018. We’re going to have to continue to learn how that plays out across our different consumer DTC genomics customers both here and the United States as well as abroad. So, continue to stay tuned on that. But the bottomline is, as you saw based on the stats that we shared, we’re seeing broad-based growth across our molecular business.

That’s helpful. And maybe just thinking about and this might be a better question for Steve Tang but just thinking about the portfolio of the Company, the cryosurgical and substance abuse continue to be somewhat drags on growth. You’re now sitting on a record cash pile. It sounds like DSO is coming down and once you would give even more credits to that cash pile growing. So just trying to get a sense of how we should be thinking about strategically putting that capital to the work or perhaps looking to maybe divesting some of the none-core stuff to plough back into what could be a very differentiated molecular collections opportunity? Thank you.

So, I think that’s all part of a process that Steve and the team will undertake as we move through the early part of 2018 here in a strategy refresh that is being conducted. And that will involve using outside advisors as well as our own internal folks to take a look at the whole business and determine the path forward. And certainly, all of that is fair game and up for discussion. So, I think probably more on that to come down the road, Nick, little premature at the moment. But, it’s certainly something that’s under consideration. And also, we’ll drive some additional cost in the first quarter, so just as a heads up.

Thank you. Our next question comes from David Westenberg with C.L. King. Your line is open.

Hey, guys. Thanks for taking the question and congrats on retirement. It’s great to work with you, guys. So, I know I asked this on a prior call but I am still trying to kind of figure out that baseline for HCV. Can you talk about the -- you mentioned there was a little bit of step down in HCV ordering in Asia. Can you give us a sense in terms of the magnitude and the step down of ordering ion Asia and what you might expect in terms of coming back? And as kind of a follow-up to that question, how is it going with other kinds of HCV projects in maybe that region?

Yes. So, relative to the step down in Asia, it was primarily related to our business in Korea. We do anticipate that that’s going to improve in 2018 and we’re working to make that happen. That’s been the primary contributor there. We continue to be focused on opportunities globally. Like I said multiple times since our last call, we’ve basically stripped out some of these large countrywide eradication programs, given the difficulty we have in predicting when they’re going to translate into significant contribution to revenues and to the P&L. It doesn’t mean we’re not working on opportunities. And we are in discussions with a number of different governments. But right now, I don’t have anything subjective to report on that or at least I can’t predict when that may translate into future revenue. So, it’s out of our guidance at this point in time. And at the same time, you see our projections for total revenue growth for the business is quite handsome. And we expect 2018 is going to be a good growth year for OraSure.

So, yes, I know we’re only a month into it, but can you give us a sense on what the licensing payment might look like, or if you legally can?

We’re precluded from providing that level of detail on our settlement with Ancestry. Those revenues will be recorded in other income. We will report on total other income for the first quarter in our first quarter call in May. And we do provide some granularity in other income, specifically as it relates to other income received from BARDA and those Gates income items that are not product subsidy related. So, you’ll get some sense of what the total revenues are related to royalty payments, but we can’t be specific on that either in terms of the specific dollars or the royalty rate. We’re just precluded from sharing that by the contract.

Perfect. But I would, in that particular payment, assume that it would probably have the same sort of cadence as the rest of the consumer genomics industry.

I would anticipate that there will be some element of seasonality associated with that. Again, we’ll have to learn through experience.

And then, I’ll squeeze in one more if I can. Is there any update on the pipeline whether with Zika or Ebola, and when we should expect kind of the next -- if there would be anything after that?

Certainly, we expect to continue to benefit from the BARDA contract through 2018 and beyond for both of those products. Ebola revenues that we receive from BARDA are going to be primarily related to the payment for clinical studies that we’re conducting this year to secure 510(k) approval. On the Zika front, revenues are primarily directed to paying for the development cost. We did make some good progress on the Zika development during the fourth quarter. We mentioned previously that we had a couple of technical issues that appeared to be largely resolved right now. So, we’re moving that into further development where we can build some clinical lots that will be used as the basis for our submission for emergency use authorization on the Zika test. Beyond that as it relates to other emerging diseases, I think Ron indicated that we’ve got the strategy refresh activities in process right now. And certainly as we look across the board and our R&D strategies, new product development strategies, that will be one area of focus in that effort.

[Operator Instructions] Our next question comes from Mark Massaro with Canaccord. Your line is now open.

Thanks. It’s Mark Massaro from Canaccord. Congratulations guys on a great quarter; and Doug, best of luck in retirement.

Thank you, Mark.

First question is on HCV eradication, I know there are a lot of questions on the other parts of the business. But, Doug, where are we in terms of the number of countries that continue to evaluate your rapid Hep C product? I know, in the past it was at least maybe a half dozen or so, and would just love an update as to whether or not you expect to deliver another Hep C eradication later this year?

Yes. We continue to be engaged with the vast majority of those governments that we’ve spoken about previously. And like I said, we will give you more color and more specifics when we’ve got something substantive to say about those. At this point in time, we don’t. And so, I prefer to keep the focus on those other parts of the businesses that frankly are a little easier to model and project as to when significant revenues are going to come, like the molecular business, like our HIV self-testing business.

Got it, okay. We’ve got microbiome of 1.1 million as a record at your Company. I feel like it’s very much underappreciated. I think a lot of people don’t even know what it is. You did provide a lot of examples of contracts that you’re involved in. As I think about this bucket in context to your larger molecular collections business, obviously, the vast majority of that revenue is coming from commercial customers. But, can you just speak to your confidence of maybe the academic or even the pharma piece with the clinical trial development? But specifically, on the academic side, do you expect microbiome research to expand to other biobanks guys as you contemplate this product over the next year?

Yes. So, thanks, Mark. I think it’s important, just to be clear, most of our microbiome revenues are coming out of either academic research market or the pharmaceutical commercial research market. But still even in pharma, it’s largely either applications in clinical studies or clinical trials. Right? And we think that’s going to continue for sure. We had a great year with our microbiome business in 2017, more than tripling the business year-on-year. We have indicated publicly that we believe that we can do in excess of 6 million in 2018. So that’s off 3.5 million, so almost doubling again. Hopefully, we will be better than that. Some of the commentary that we’ve provided in our prepared remarks, inclusion in the Harvard nurses study cohort, inclusion in this Mosaic project where thought leaders in the space are choosing our technology for all the benefits that were highlighted in the Human Longevity Study that was published in Nature in 2016 that it’s critically important that samples are collected and stabilized so that you get the most benefit out of this comparative research. And we are in discussions actually with some of the largest pharmas, talking about the utilization of our microbiome products to standardize their specimen collection across their multiple programs that they have going on. Our goal in this space is to establish OMNIgene as the gold standard in specimen collection and stabilization for comparative research. And I think that the examples we’ve put out there, highlight that we’re making good progress in that regard. And we’re going to continue to support the research community, so that once these applications move out of research and into commercial opportunities, there is going to be no question are going to use -- they are going to use OMNIgene. So, we’re very excited about it, like it sounds like you are Mark. And even though it’s a relatively small part of our genomics business, it’s growing substantially and we believe can be a big contributor down the road.

Thank you. I’m showing no further questions in queue. So, I’d like to turn the call back over to Mr. Michels for closing comments.

Okay. Thanks everybody for being on the call with us tonight for your support in 2017. We’re looking forward to delivering just the super 2018 and look forward to future calls. Have a good evening and afternoon everyone.

Thank you. Ladies and gentlemen, that does conclude today’s conference. Thank you very much for your participation. You may all disconnect. Have a wonderful day.