Good afternoon, everyone, and welcome to the OraSure Technologies 2019 First 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] OraSure Technologies issued a press release at approximately 4:00 p.m. Eastern Time today regarding its 2019 first 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 Dr. Stephen Tang, President and Chief Executive Officer; and Mr. Roberto Cuca, Chief Financial Officer. Dr. Tang and Mr. Cuca will begin with opening statements, which will be followed with a question-and-answer session. Before I turn the call over to Dr. Tang, 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 ended December 31, 2018, its quarterly reports on Form 10-Q and its other SEC filings. Although forward-looking statements help provide complete information about future prospects, listeners should keep in mind that the 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 the call over to Dr. Stephen Tang.

Thank you, Gene. Good afternoon, everyone, and welcome to our call. I’m pleased to report that our first quarter revenues and bottom-line performance fell within the financial guidance we announced during our last earnings call and represents a good starting point for the second quarter and full year-2019. Our innovation driven growth strategy is working and delivering many positive developments during the quarter that we'll detail later in the call. We remain confident in our strategy and our ability to execute against our strategic priorities. During our last call, we reported that a large consumer genetics customer had recently adopted a new promotional strategy and as a result reduced its purchase forecast for the year. While that unfortunate development had a measurable effect on our Q1 results, it's important that we not let the event obscure the significant positive progress underlying our business. For example, apart from that large customer, our genomics business showed year-over-year growth in Q1 and we expect this growth to continue for the foreseeable future. Looking at accounts other than that this one customer, we expect the genomics business to grow by healthy double-digits in 2019. Genetic testing is at a much earlier stage in the Asia-Pacific market and we’re well-positioned to serve the needs of this market. We see it as a significant growth opportunity which is already contributing to our financial results. The microbiome market is also in an early stage and the potential is enormous for a company with our position in the market. Our microbiome sales are growing robustly each quarter and should also contribute double-digit growth for the year. The addition of CoreBiome has enabled us to expand and strengthen our microbiome offerings with cutting edge laboratory in bioinformatics analysis and services. Multiomics is an emerging approach to evaluating health that's…

Thanks Steve and good afternoon everyone. Our first quarter net revenues decreased 28% to $30.1 million from $41.9 million reported in the first quarter of 2018. Our net product revenues decreased 26% to $28.3 million compared to $38.3 million in the prior-year period. As Steve just described, much of this decrease was driven by the changed market approach of a single large consumer genetics customer and the uneven distribution due to ordering patterns of the strong international HIV sales we expect over the course of this year. Our Molecular net revenues including other revenues decreased 40% to $11.1 million in the first quarter compared to $20.0 million in 2018. Royalty income declined 32% to $1.1 million in the first quarter of 2019 for $1.6 million in the same period of 2018. Molecular product revenues decreased 42% to $10.6 million in the first quarter of 2019 compared to $18.4 million for the first quarter of 2018. Sales of our genomic products declined 53% to $8.1 million largely due to the lower sales to a large consumer genomics -- genetics customer as previously described. Microbiome sales increased 83% to $22.3 million from $1.3 million in the first quarter of last year due both to organic growth as well as the inclusion of lab services revenues generated by our newly acquired subsidiary CoreBiome. Domestic HIV sales decreased 14% to $4.3 million from the first quarter of 2019 compared to $5.0 million in the first quarter of 2018 largely due to decreased sales of OraQuick In-Home test and lower sales of our professional product as a result of continued product and price competition. International HIV sales decreased 30% to $4.0 million from $5.7 million in the first quarter of 2018 due to customer ordering patterns partially offset by higher sales of our HIV Self-Test…

Thanks Roberto. I'd now like to share with you some key market trends in our molecular and infectious disease businesses that substantiate our strategy and support our guidance. Let me first start discussion with the Molecular business which will continue to be a key driver of our overall business. The genetic testing market has been the largest component of our overall molecular business for some time and continues to evolve. Given the importance of the genetic testing market to our business, I would like to describe some of the trends we're seeing based on a combination of data analysis, customer feedback and market research which we recently conducted. Of most interest are the market dynamics affecting two areas within genetic testing. They are Ancestry and disease risk management. Ancestry testing consists primarily of genetic tests to provide consumers with genealogical information. This is the largest and most developed component of the genetic testing market. Historically, the growth in Ancestry testing seems to have been strongly tied to advertising spending and promotional pricing offered by the leading direct to consumer companies. It appears that the Ancestry market in the United States is maturing. As such we expect to see the growth rate of that subsector of the overall genetic testing market slowing and likely leveling-off in the next couple of years. Outside the U.S., however we’re seeing and expect to continue to see significant growth in genetic testing. As previously noted, the Asia-Pacific market is at a much earlier stage than the U.S. market. Our market analysis suggests that it may be as much as five years behind the domestic market. So there is much room for us to grow. In Q1, although the dollar amount is relatively low, we saw our sales increase 231% in Asia when compared to the…

[Operator Instructions] Your first question comes from Mark Massaro of Canaccord Genuity.

Hi, this is Max on for Mark. So the royalties from Ancestry, they came in at about $1.1 million which is down about 31% year-over-year, so I guess how do you reconcile this with your expectation for double-digit growth outside of the large customer and for the royalties do you see a situation where you return to the run rate levels that we saw in Q2 or Q4 of last year?

So thanks for the question, Max. So with regard to the royalty, one of the things we've been hearing from market participants is that consumers have essentially been trained to wait for holiday periods, when they know that the big consumer suppliers will provide discounts. So what we're expecting from that is that the seasonality is that you’ve seen in the past is likely to become even more amplified going forward such that the revenues that we expect from the consumer genomics customers are likely to be even more backloaded. And what we expect happened is that for the first quarter, some of the demands that otherwise would have been there was drawn into the fourth quarter of 2018 and some of it's likely to be delayed later into the year around the typical holiday buying period.

Okay. And regarding your full-year guidance. So can you help us understand, what gave you the confidence to provide your first full-year guide or are you now receiving longer term forecasts from the large DTC customers? I believe you previously communicated you had 90 days of visibility within DTC. Has this increased at all?

So there are a number of drivers of our growing confidence about our ability to forecast. So one is that as the International HIV market has become larger, the variability in that on a percentage basis has become a bit smaller. And the communications that we've set up with existing customers are better and permit us to better forecast demand over the course of the year for those sorts of products. As Steve has pointed out, there's still likely to be some lumpiness quarter-to-quarter in our HIV and HCV numbers but for the year, we have a pretty good sense of where things will come in. As Steve also mentioned in his prepared remarks now that that one the largest consumer genomics customer has revised their approach to the market and reduced their purchasing closer to their annual minimums, we're able to rely on that contractual provision as a better guide for what that particular customer is likely to be purchasing.

Great, that is helpful. And one more if I can. Could you just help us understand the assumptions around molecular collections in Q2 and in the full-year guide, could you just point any particular factors that will help you return to growth in Q4? Thanks.

So as we stated, we expect that both in the infectious disease business and in molecular -- and in genomics generally excuse me excluding the effect of the two acquisitions and the one big customer, we expect double-digit growth year-over-year. As is probably evident from the combination of the second quarter guidance and the full-year guidance, a lot of that will be backloaded in the year and that reflects as I just mentioned what we understand to be happening in the customer and to the market, the consumer end of the market which is that consumers have learned to delay their purchasing until around holidays when discounting occurs. So all that put together, we do have a positive view of the full-year. We took a bit of a lump in the first quarter here because of that one change due to customer buying patterns but we expect to see a good strong growth over the course of the year in those core business lines.

Great. That's it from me, thanks.

Thanks Max.

Thanks Max.

Your next question comes from Brandon Couillard with Jefferies.

Hey guys, this is Mike on for Brandon. Thanks for taking our questions. So I wanted to return to some of the comments you've made previously about that one customer leaving. I think you've said in the past that you expected some other competitors to kind of fill that void. I'm just wondering if you could provide any update or further commentary about that from the first quarter and kind of how you see that playing out?

Sure. Thanks for the question, Mike. So as you probably know, our first quarter is historically the lightest quarter for the consumer genomics business again historically even putting aside this training of consumers to buy even more around Holidays, most of the revenues come in later in the year. And so we wouldn't have expected to see much shift from that one large customer to competitors in the first quarter, there’s just not as much volume for that to happen and we do expect that other competitors will pick up some share. But the other dimension to this is that big customer had a large marketing and promotional budget and discounting budget and to the extent that they’re pulling that out of the market, they may be driving less demand to the overall market even as some of the remaining demand does shift to competitors. So we'd expect to see that dynamic occur later in the year, if it does in fact transpire. But it could be again blunted by the drawing away of the marketing and promotion budget of that one big customer.

Got it. That makes sense. And then could you just comment on your sense for the level of inventories in the DTC channel and how do you feel about that, is it looking positive for the rest of the year?

We don't have a whole lot of visibility into that. And one of the challenges for us is that the DTC products are sold through a number of different channels, so via Internet sales, directly through some of these customers via Internet sales from Amazon which we’re holding inventory and then you can walk into a drugstore to buy these products as well. So there are inventories at the retail level as well. So we don't have a whole lot of insight into it. But based on the orders that we have been seeing from our own customers, we don't believe that there's any unusual build of inventory.

Got it, got it. Thanks guys. That's all from me. Appreciate it.

Thanks Mike.

[Operator Instructions] Your next question comes from Matt [ph] with UBS.

Yes, I have a question, I noticed that they’re now doing DNA testing on the border. They're using a Cheek Swab type device. Is that a product that's yours or is there royalty being paid to OraSure on that?

So we have a broad range of products that include our ORAgene saliva collection kits as well as our ORAcollect products. We don't have visibility on what exactly is being used at the border but it's likely that if those samples are going to be preserved that they would use some version of our test or a license test. So I can't answer your question specifically because we don't know the specific use for our products.

They're not saving the collection, they're just using it, they're just using it at the moment and it's a 90, it's a 90-minute test or something like that.

They could do buccal swabs which have a minimum amount of DNA there for one use purposes and buccal swabs are not our product, sure.

Thank you.

[Operator Instructions] That brings to an end the Q&A session of today's call. I will now turn the call over to Dr. Tang for closing remarks.

We thank you very much for participating in today's call and for your continued interest in OraSure. Have a good evening or good afternoon. Thank you.