Immucor Inc. (BLUD)

F4Q10 (Qtr End 27/06/10) Earnings Conference Call

July 23, 2010 08:30 am ET


Michele Howard - VP, IR

Dr. Nino De Chirico - President and CEO

Rick Flynt - CFO


Quintin Lai - Robert W. Baird

Bill Quirk - Piper Jaffray

Daniel Owczarski - Avondale Partners

Scott Gleason - Stephens, Inc.

Kelley Roche - Jefferies & Company, Inc.

Craig Yeshion - Accipiter Capital

James Sidoti - Sidoti & Company, LLC



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Good morning, ladies and gentlemen. Thank you for standing by and welcome to the Immucor Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Michele Howard, Immucor's Vice President of Investor Relations. Ms. Howard, you may begin.

Michele Howard

Good morning and thank you for joining us to discuss our fourth quarter fiscal 2010 results. Participating with me on this call are Dr. Nino De Chirico, our President and Chief Executive Officer, and Rick Flynt, our Chief Financial Officer.

Before we begin, I'd like to read the following Safe Harbor statement. Many statements on this call constitute forward-looking statements that reflect our judgment about future events and circumstances, including statements or projections about future financial results or economic performance or statements about plans and objectives for future operations.

Actual results could differ materially from these forward-looking statements. The company does not intend to update these forward-looking statements unless required to do so by the Federal Securities Laws. For a detailed discussion of factors that could cause actual results to differ from these forward-looking statements, please refer to yesterday's press release and the company's most recent SEC filings.

We'll make some brief comments and then go to Q&A. I would now like to turn the call over to Nino.

Dr. Nino De Chirico

Thank you, Michele. Good morning. I would like to start this morning by discussing NEO and the initial success we have had with this next-generation high volume instrument. As you may recall, we received CE Mark approval in February and launched the NEO at that same month in our European and distributor markets.

As you can see from our release last night, we had a strong quarter for NEO orders. All 18 orders in the fourth quarter were in our European and distributor markets. All of these orders, except for one, were competitive takeaways.

In the four months since its European launch, we have had 29 NEO orders in the European and distributor markets, which I believe is a very good start.

As we discussed last quarter, we received the FDA clearance for NEO in April and its launch in the United States is underway. We will be showing NEO at the ACC next week and have had strong customer interest. We believe NEO is more appealing to a large portion of the high volume market in Galileo, our previous high volume instrument because of new functionality such as start capabilities as well as fast turnaround time and improved reliability.

We are very encouraged by the strong start and positive customer reaction that we have had to NEO. We continue to expect to receive between 100-130 NEO orders in fiscal 2011.

The Echo continues to have good momentum. In retrospect, we were aggressive with our recorded expectations for fiscal 2010 given the economy. We also underestimated the lengthening of the sales process as we moved deeper into the market past the early adopters.

Having said that, we had a good performance in fiscal 2010 receiving 248 orders which is the same number of orders we received in fiscal 2008, the first year Echo was introduced. We had 100 Echo go live during the fourth quarter, which is a record. We have realigned the sales and the implementation team to ensure more coordination in the process of getting an instrument live.

Our new approach has required more focus from our sales team initially, but has paid off with a process that should speed the time between when an order is received and when the instrument goes live. We remain excited about the significant opportunity for Echo in the small to medium-sized hospital market as well as with integrated leader in networks that are looking to standardize their operation and implement best practices. We continue to expect to receive between 200-240 Echo orders in fiscal 2011.

Turning to our molecular offering, we announced last week that we received CE Mark approval for our HEA product, which is our largest volume product. Our HEA product performs an extended typing for 32 red blood cell antigen at the same time. We received a full CE Mark for our test for all the 32 antigens and we are the first company to achieve this for the molecular immunohematology product.

Previously we received CE Mark approval for our HPA product, which performs genotyping for platelets, as well as CE Mark approval for our current instrument.

The CE Mark for our molecular product is an important milestone for us as we work to expand our footprint in the European market. Our timing for our next-generation molecular instrument remains the same. We expect to have a research (inaudible) the instrument available in the first half of calendar 2011.

Before I turn the call over to Rick, I would like to give you a brief update on FDA. Last month FDA conducted an inspection of our facility. We had been anticipating a re-inspection by FDA as they had not been to our facility since January 2009.

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