Welcome to the Hamilton Thorne Ltd. 3Q 2023 earnings conference call. Before turning the call over to your host today, please be reminded of our standard public company policy on forward-looking information and use of non-IFRS measures. Certain information presented or otherwise discussed on this call may contain forward-looking statements. These statements may involve, but are not limited to, comments relating to strategies, expectations, planned operations, product announcements, scientific advances, or future actions. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Should one or more risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance, or achievements could vary materially from those expressed or implied by these forward-looking statements. These factors should be considered carefully, and prospective investors and other parties should not place undue reliance on these forward-looking statements. The company assumes no obligation to update such forward-looking statements or to update the reasons why actual results could differ from those reflected in the forward-looking statements unless and until required by securities laws applicable to the company. Additional information identifying risks and uncertainties is contained in filings by the company with the Canadian securities regulators, including, without limitation, the company's management discussion and analysis for the quarter and nine months ended 30 September 2023, which filings are available under the company's profile at www.sedar.com. During this call, the company may reference Adjusted EBITDA, Constant Currency, and Organic Growth as non-IFRS measures, which are used by management as measures of financial performance. Please see the sections entitled Use of Non-IFRS Measures and Results of Operations in the company's management discussion and analysis for the period covered for further information and a reconciliation of Adjusted EBITDA to net income. Now, let me turn the call over to Hamilton Thorne's CEO, David Wolf. Great. Thank you very much. Good morning, and welcome to the Hamilton Thorne 3Q 2023 earnings conference call. I'd like to reintroduce myself, David Wolf, President and CEO of Hamilton Thorne, and also on the call with me today will be Francesco Fragasso, our CFO. Our call will have the following format. First, I'll provide a summary of operational and financial results for the quarter and nine months ended 30 September 2023, with a focus on our sales, markets, and operational performance. Francesco will follow with a more detailed discussion of our financial results for the periods, as well as a review of our financial position and liquidity. I will return for a few minutes to provide some information on our outlook for the balance of 2023 and a few comments on 2024. We will then open our lineup for questions. I'll begin with sales results. Sales grew 16% for the quarter and 17% for the year to date. Gross profit as a percentage of sales increased to 49% for the quarter and 50.5% for the 9 months ended 30 September versus 48.5% and 49% for the comparable periods in 2022. So a 50 basis point, 150 basis point increase, primarily due to increased sales of higher margin proprietary equipment and software, services, and branded consumables, combined with increased direct sales of products, as well as the addition of Microptic. All this was partially offset by higher material costs in the 3Q of 2023, caused by global inflationary environment. Equipment sales growth was 9% for the quarter, but was adversely affected by a somewhat higher than expected decline in equipment sales to China in the quarter due to several factors, including continued economic slowdowns in China, the enforcement of Buy China policies, combined with the emergence of some local competition and delays in regulatory clearances. While some of this reduction is transient, with our orders in Q4 are looking strong, these trends have been impacting our business for some time. We do expect we are likely reaching a bottom. Consumables, software and services grew over 20% for the quarter, reflecting continued strong demand for these largely high margin recurring revenue categories. Organic sales growth was 10% for the 9-month period and 5% for the quarter, with the lower growth in the quarter largely due to the impacts of a consumables product recall by a contract manufacturer and slower equipment sales in China, which I previously mentioned. Adjusted EBITDA increased 3% to $2.2 million for the quarter and increased 11% to $7.8 million for the 9-month period. EBITDA margins for the quarter declined about 180 basis points versus 2022, 2023, in part due to product mix, as our China sales consist primarily of high-margin proprietary products and our operating expenses spread over lower revenues than expected. Francesco will discuss operating expenses more fully in his remarks. On a geographic basis, sales in the Americas and EMEA regions were up significantly for the quarter and year to date, with sales to the Asia Pacific region down substantially in Q3, due in large part to the slowdown in China in the quarter, which I mentioned, but we're essentially flat for the year to date. As we have discussed in prior calls, due to stabilizing exchange rate, currency fluctuations, and translating financial statements to the presentation currency of U.S. dollars, had a positive impact this quarter, but a minimal impact for the year to date. Results in sales growth and constant currency were 12% for the quarter and 16% year to date. I'm also happy to report that while supply chain issues continue from time to time, they are far more normalized, leading to fewer delays in production and shipping. I'll now turn the call over to Francesco, who will provide a more detailed discussion on the numbers. Thank you, David. Good morning, everyone. I'm Francesco Fragasso, CFO at Hamilton Thorne. I will briefly highlight the 3Q of 2023 financial results. David has already provided an update on sales and gross profit, so I will focus on the other elements of the income statement, as well as the cash flow and liquidity of the company. Operating expenses, excluding expenses related to M&A activities, increased 27% for the quarter and 28% for the 9-month period to $8.1 million and $23.7 million, respectively. Expense increase was mainly due to the addition of Microptic expenses for a full quarter, increased costs associated with investment in sales and other personnel to support growth, and inflationary pressure across many cost items. The return to pre-COVID level for sales and marketing activity is also a factor for expense increase in Q3, 2023, compared to the same period of 2022. Overall increase in operating expenses were in line with our expectations. In light of continued inflationary pressure on our other operating expenses, we are actively looking at cost containment strategies that we expect to improve our overall financial performance. Net interest expense in Q3, 2023, increased by $265,000 - $369,000, due to additional term debt incurred to finance Microptic acquisition in November 2022, and a higher use of a bank line of credit to fund working capital, partially offset by the repayment of outstanding principal on term loans. In the quarter, income tax expense increased to $317 thousand tax recovery from $337 thousand tax recovery in Q3 2022. Primarily due to the reductions in income before taxes and to the reduction in the deferred income tax recovery of $387 thousand in Q3 2023, compared to a deferred income tax recovery of $432 thousand in the same period of 2022. The change relates to temporary differences between income tax value and the carrying value of assets and liabilities. Net loss for the quarter was $785 thousand, compared to net income of $99 thousand in the prior year quarter. Net loss for the nine-month period was $1.1 million, versus a net income of $930 thousand in the prior year period. This is primarily due to the increased operating and interest expenses I previously mentioned. Adjusted EBITDA, which we consider an important metric of our financial performance, increased by 3% to $2.2 million for the quarter, and increased 11% to $7.8 million for the 9-month period. This was mainly due to revenue and gross profit growth, offset by planned increases in operating expenses. As a reminder, adjusted EBITDA is a non-IFRS measure. Please see the reconciliation of adjusted EBITDA to net income for the quarter and the nine-month period in our MD&A report filed today on both SEDAR and on our website. Turning now to company cash flow and balance sheet. The company's cash balance at the end of September 2023 was $15.3 million, compared to $16.7 million at the end of 2022, a decrease of $1.4 million. The decrease in cash balance was primarily due to investment in working capital to support expected growth, the investment in product development, and in expanding our manufacturing capacity, and payments related to M&A activities. The company generated cash from operations of $1.5 million in the first 9 months of 2023, after having invested $1.3 million in inventories. In the first 9 months of 2023, cash used in investing activities was $2.8 million. Of this, $1.9 million related to the normal expenditures in PP&E and for ongoing investment in capitalizing tangible of product development activities, and $0.9 million leasehold improvement, equipment, and furniture related to the expansion of manufacturing capacity in some of our operating business units. Investment in inventory and capacity growth have continued longer than we originally expected. However, cash flow is expected to improve as investment in expanding capacity has been completed and inventory is decreased in the coming months. Cash used in financing activity was $70,000 for the 9 months of 2023. Those were mainly related to payment of scheduled term loan and lease obligations, net of $2.9 million proceeds from a working capital line of credit. Note payable and term loans outstanding total $14.9 million at the end of September 2023, equal to 1.4x the 12 trailing month Adjusted EBITDA. At the end of September 2023, the company had a strong liquidity position of $25.3 million, including $15.3 million in available cash and $10 million in unused borrowing capacity. This liquidity has been partially used to fund Gynetics Medical Products acquisition on 10 October. Post-acquisition, the company's liquidity position is approximately $12 million. Outstanding loans are $22.4 million, and pro forma 12 trailing month Adjusted EBITDA, including Gynetics, is $13.3 million, resulting in a 1.7 ratio debt to pro forma Adjusted EBITDA. We are in the process of discussing a renewal of our M&A line of credit with our bank, which could provide us with additional liquidity. I will now turn the call back over to David to comment on Hamilton Thorne outlook. Thank you. As Francesco mentioned, after the end of the quarter, we acquired Gynetics, based in Belgium. Gynetics is a leading manufacturer of a wide range of proprietary, high-quality devices to the global IVF market, including ovum pickup needles and embryo transfer catheters. This is an important addition for us as it expands our addressable market from the laboratory into the procedure room in a meaningful way. Gynetics has also historically enjoyed higher gross profit and EBITDA margins than our base business, which will have some impact on Q4, but is expected to be meaningfully positive in 2024. Looking forward to the balance of 2023, we continue to feel the company is in a strong position as demand for our products and services remains robust based on the positive trends in our field. We do believe that the softer organic growth in Q3 is temporary and the company should return to double-digit organic growth in the short term and maintain that kind of growth through the longer term. Company's recent investments in operating expenses and capital expenditures have been made to facilitate longer term growth and can support significant expansion of our business. That should also lead to EBITDA margin expansion in the coming years. In the short term, we are also implementing cost containment strategies in light of the continuing inflationary pressure on operating expense. As previously mentioned, exchange rate headwinds have stabilized, and if this trend continues, we expect foreign exchange fluctuations should provide some tailwinds through the end of the year. Based on these trends, we are expecting fourth quarter reported results to grow approximately 15%, with organic growth for the quarter between 9% and 10%. While adjusted EBITDA margins were below our expectations in Q3, we expect adjusted EBITDA margins of approximately 19% in Q4. As Francesco discussed, cash flow is expected to improve as the investment in expanding capacity has been largely completed and inventory will decrease in the following months. Regarding our M&A activities, we have an extensive pipeline and continue to actively work on multiple acquisitions. And with total liquidity of over $12 million after our most recent acquisition and further debt capacity, I believe we're well positioned to continue to execute on our acquisition program. In summary, we feel extremely positive about the market position we are in and are confident in our team's ability to execute on our strategy of driving long-term growth and EBITDA expansion by investing in our organic growth while building scale, enhancing our product offerings, and expanding our geographic and direct sales footprint through acquisitions. We'll now open the line up for questions. Operator, can you present the first question from the queue when you have it ready? We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question will come from David Martin of Bloom Burton. Please go ahead. Good morning, and thanks for taking the questions. First question, the China factors that you mentioned, you said you thought they'd be transient. I'm wondering why you think they'll be transient, instead of persisting or possibly even getting worse. And what form are they taking? Is there a ban on sales of products that aren't made in China? Are they increasing duties, and how are you adjusting to that? Yeah, thanks for the question. So, maybe I could have been clearer. M y point was, part of these are transient, but part of these, I think are in fact structural. There are three things going on. One is the decline in demand that we're seeing in China based on, again, there's not perfect reporting in China, but the information we're getting is lower cycles and lower and just generally lower economic activity and more nervousness about the economy. I'm not a great macroeconomic scholar, but again, we view those to be transient because at some point, you know, China is an economic powerhouse and that, you know, will return to, you know, even, you know, maybe not the robust growth they had through the last decade, certainly should return to good growth. Other of these, as I said, are somewhat structural in the sense that there is a Buy China policy, respectively, in certain situations. I would say maybe in quotes, "requiring" the buyer to buy Chinese products if there are alternatives available. Primarily, this is primarily exercised in state-owned hospitals and institutions. There are certainly exceptions to that rule when equivalent products are not available in China, and for some of our more, I would say, high tech products and more highly differentiated products, we continue to see strong demand. And lastly, this is kind of in the, I guess, somewhat structural and somewhat transitory, is China has clearly made it more difficult for foreign manufacturers to register their product, our products to continue to sell in China. We have, over the past couple of years, had some products that we have registered, both, renewals of existing products and new products. We've had some products that have been delayed, in one case where the authorities actually changed the class of the product from, in a renewal, which actually increased the burden of registering it pretty substantially. Nevertheless, I guess we view that to be somewhat transitory because we are working our way through these things. I would say, you know, we are not expecting robust sales in China in Q4, though, as I said, they look somewhat normalized, and we're certainly not forecasting, even though we still believe we're gonna have good growth in 2024, and we'll talk about that a little bit, later when we have finished our budgeting process. You know, we're not today expecting, you know, robust growth in 2025- in 2024 either. How many, what percent of hospitals in China are government owned or controlled? So- Is it the vast majority of them? Yeah. So the major hospitals are in some way government, government owned or controlled. But there is a large sector that doesn't necessarily operate completely in the sunlight, that is private. Last question related to this. You said high tech products or if they're not available, would circumvent these rules. What perecent of your portfolio of products would you say fall into that category? So of the products we've been selling there, I would say virtually all of them. You know, historically, have done a strong business there in our Laser Systems, our CASA systems, which I would say are highly, highly technically differentiated. We've also done strong business in our incubators and our flow hoods, which, you know, are by no means commodity products, but have a little less pure technical differentiations. Okay, thanks. That's it for me. Thank you. Once again, if you would like to ask a question, please press Star, then one. Our next question comes from Stefan Quenneville of Echelon. Please go ahead. Hi, guys. So thanks for taking the question. Can you talk a bit about, you know, why you expect things to bounce back sort of quickly, sort of in Q4? What gives you the confidence around that? I know we have a good chunk of the quarter already in. And could you give a little more color on the consumables product recall, just help us understand what's going on there? Thanks. Okay, great. Thank you. So I think you sort of answered your first question. We're almost halfway through the quarter, and certainly on our capital equipment business, you know, we typically have orders pretty much in at this point for almost everything that we're gonna ship during the quarter. And for the consumables business, there's a steadiness to the business. So we have, again, there can always be variations, but we have what we believe are reliable forecasts from our, you know, sales and marketing teams of the sales that we should see in the quarter. So, I mean, we certainly have confidence in the numbers, but that's the whys behind it are, you know, I think in fact Q3 was somewhat, and maybe Q2 to a lesser degree, was somewhat of the exception quarter, where we did see some slowdown in the organic growth. I will say, as you well know, certainly on the capital equipment side, particularly, there's some serious significant lumpiness to our business and, you know, an order of even a couple hundred thousand dollars that potentially slips from one quarter to another, given the size of our company, actually has a meaningful impact. But that being said, we do feel confident that everything that we have teed up, we can get out the door. On the recall side, so I think we've been pretty clear on most of our... Capital equipment is manufactured, or probably more accurately assembled, in-house by our own teams because it's a relatively, you know, high value but relatively low volume equipment, so it doesn't really make sense to outsource that for a number of reasons. On the consumable side, we generally use contract manufacturers or outsourced labor to make those products. One, maybe two product lines, I don't want to get into too many specifics, that we had outsourced or maybe I should say, had a contract manufacturer make for us. We did have a recall due to... They declared a recall due to some testing issues. Those two product lines were out of the market completely in part in Q4. And we've started receiving back in and shipping one of those product lines in Q4, so we'll certainly see some of those revenues because there's still strong, strong demand for it. The other, we haven't yet cleared the recall, but we're hopeful that we'll see at least some of that happen in Q4. To give you a size of scale, this is a, you know, several $100,000 a quarter set of product lines, and I would say we'll recover maybe less than a third of it in Q4, but we do expect and certainly are hopeful in 2024, we'll be able to begin recommence full sales and shipping. Okay, and just a quick follow-up. In terms of the margin impact of sort of China and the product recall, just can you give me a vague sense of which ones had more of a EBITDA impact? Yeah. So I mean, just numerically, if you compare Q3 versus Q3, the China number was much... Just a bigger absolute number. Margins were roughly similar, because of the mix. I will say there's a little bit of fuzziness in there because we're comparing a Q3 that was certainly below what we, you know, averaged during, you know, 2022, but to a particularly high quarter in 2022. So, you know, if you had more normalized, it probably would have had roughly equal, equal, equal significance. Got it. And maybe just one last question on China. I think there's a view that maybe you're under-indexed to, you know, Asian markets in your overall business. You know, China, you know, obviously included as a major driver. Yeah. In Asia Pac. With these issues, like, I'm certain they're not just affecting you, and you sound like you're still sort of long-term bullish on China for a number of reasons, which makes a lot of sense. You know, despite the challenges here in the near term, over the next little while, which you've been facing the last few quarters, is this providing any opportunities for you in terms of M&A opportunities or, you know, just product focus, given that other people might be having the same challenges? Yeah, so it's a good question. So clearly, we have been under-indexed in China and in Asia. And as I mentioned, you know, it's gonna be roughly flattish in Q1 for the year to date. And so as on a percentage of sales basis, you know, that little slice of the pie is gonna go down, even more. So, you know, to the extent you're under, as you say, under-indexed in a growing market, that does provide opportunity. You know, exercising that opportunity can be challenging. You know, as we've discussed in the past, India is, you know, I'll say, an attractive growth market. We're clearly seeing growth in some of the more secondary and tertiary markets. And maybe that's a function of slowdowns in some of the core markets like China. So we've seen significant growth in Vietnam and Thailand, where there's a lot of medical tourism. We're seeing you know, good, solid growth in Australia. Now, that shouldn't be surprising because we do our own direct sales there, so hopefully we should do better there. You know, we still think, I guess I should say we still think that Asia Pac is an important region. You know, roughly half the world's population is in that area. Our wealth is growing, which means affordability. IVF is growing, so it's clearly an area we continue to focus on. Great. That's it for me. Thanks. Thank you. Once again, if you would like to ask a question, please press star, then one on your telephone. This will conclude our question and answer session. I would like to turn the conference back over to David Wolf for any closing remarks. Thank you very much. As I usually end our calls, I'd like to, you know, give my thanks to all of our employees for the great work they do and their dedication they've shown to our business and to our customers. I'd like to also thank our business partners, shareholders, and all those on this call, for the support they've shown our company. I'd like to encourage anybody who is interested in learning more to go to Our website, www.hamiltonthorne.ltd, for more information on Hamilton Thorne's products, initiatives, and further investor information. With that, I'll end the call and look forward to seeing you after speaking with you after Q4 results. The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.