Everyone, Welcome to this next session of the 25th Annual Needham Virtual Healthcare Conference. I'm Matt Shea, and I lead Needham's value-based care and healthcare services research efforts. In this session, I'm pleased to be joined by CEO Will Heyburn, and off-camera, but still with us, CFO of Clinical Services and VP of IR, Matt Schneider. The structure of this session will be a company presentation with 25-30 minutes of prepared remarks and slides from management, and we'll save the last, call it five to 10 minutes or so, for audience questions. If you have any questions during the presentation, feel free to drop them in the chat or email me directly at mshea@needhamco.com and we can get those asked and answered. With that, I will turn it over to the Strata team. Matt, thanks so much for having me today. Will Heyburn, Co-CEO and CFO of Strata. Before we dive in, the standard forward-looking statements here, we'll talk about some things that are subject to risks and uncertainties. I encourage you to read all the language on our investor relations website at ir.stratacritical.com. Let's dive in. For those of you that are new to Strata, we are an end-to-end critical logistics and clinical service provider to the transplant community, where we are the largest air transporter of organs for transplant recipients in the United States. We also use some of this same infrastructure in terms of clinicians and equipment to deliver services to cardiac care hospitals for surgeries that are not related to organ transplant. That's open heart surgeries that can occur at regional hospitals across the United States, and we're one of the leading providers in this growing and fragmented part of the healthcare market space. Our mission on the transplant side of our business, which makes up more than 80% of our revenues, is very well aligned with regulators, with people who need organ transplants, and with the hospitals that provide them. We want to increase the number of organs that are successfully transplanted, and we want to do that by making it less expensive for our customers, which are the transplant centers that have that patient that's going to receive an organ, and organ procurement organizations, which are tasked with identifying donors. We want to make it less expensive for them to effectuate a successful transplant, and we want to make it possible for them to recover organs from a broader set of potential donors that are dispersed more broadly across the United States. That's where our logistics and clinical services really come together to help this industry save more lives, which is a critical problem for the transplant community. Sadly, the demand for donor organs far outstrips supply. 100,000 Americans are waiting to receive an organ, and sadly, 15 every day will not have long enough to wait and will die waiting for that organ to come. That's why we are so focused on leveraging top-of-the-line transplant logistics, top-of-the-line transplant clinical services to enable more of these organs that come from donors to be successfully utilized for transplants. I'll talk about how all these business lines work together. So when you think about the 84% of our business that's related to transplant, largest part of that is air logistics. Why is air logistics so important for transplant? Well, it's because you don't have very much time for that organ, and in our case, we're talking primarily about hearts, livers and lungs. You don't have very much time for those hearts, livers and lungs to remain viable outside the body before they must be transplanted into a recipient. We're talking about four to 12 hours, and this can be extended slightly with the use of some technology that's really expanding the market that we'll talk about more. So these organs fly on their own dedicated airplanes. We've got a network across the country, and we operate using an asset-light model. We only own about 30% of the aircraft that we use to fly these organs, and then we use that leverage of having an owned aircraft supply to negotiate great deals with third-party owners and operators of aircraft across the country and to also deliver the best possible service to our customers that are spread across the United States. Paired with any air logistics mission is also ground logistics. We have a fleet of lights and sirens SUVs positioned in hubs across the country that help handle that last-mile transportation between airport and hospital, or donor location and airport. Paired with this, we also provide the clinical services that are necessary to actually go and recover that donor organ on behalf of a transplant center. These are actual transplant surgeons that we employ that can be sent on behalf of our customers and can be deployed more efficiently locally to save those customers money and allow them to react more quickly to the possibility of an organ becoming available in a faraway location. At the same time, we provide services called perfusion services. It's a clinical term for pumping oxygenated blood through donor organs, and this process allows us to repair damage that has been done to organs when the donor deceases. In some cases, it can allow us to extend that period of time that a donor organ's going to remain viable outside the human body. We package all these things together to create a one-call solution for our customers that I'll talk about in a little more detail on the next page. The remaining part of our business is perfusion services, very similar in terms of what we're providing, but that are provided to regional medical centers across the country that don't have enough volume of open-heart surgeries to be able to employ their own trained, licensed perfusionists or to be able to own the equipment that's necessary to effectuate those services. We pool resources regionally and allow these hospitals to perform these life-saving services at much lower cost, and we're continuing to see the industry move more in that direction. Very fragmented marketplace as well, which we'll talk about all the great opportunities we see for capital deployment. Drilling in on the organ transplant side of our business, we've created what we believe is the only end-to-end offering in the transplant ecosystem, and it's completely agnostic as to what technologies our customers might choose to utilize to aid the preservation or perfusion of the organs that they're recovering. This is a really important set of services to put together because there's so many moving pieces in an organ transplant recovery process. Remember, you have a single donor, and a heart could be going one direction to one transplant center, left lung going somewhere, right lung going somewhere else, liver going a different place, and then kidneys, which have more time to remain outside the body, are often shipped, or we offer a service where they are hand-carried in the commercial cabin of a passenger aircraft, much lower cost, of course, than transporting them via private aircraft. One of the things that's really exciting about the industry landscape today is it's gone through a period of transformation that we'll talk about in more detail in a minute. But the legacy of the transformation that's still ongoing is that this is an extremely fragmented marketplace of mom-and-pop service providers that increasingly are not able to service the more complex mission requirements of today's transplant community. So there's a massive opportunity for us to continue to grow in this industry that, by the way, is already organically growing. But to continue to grow market share, both organically as we win new customers and RFPs, and also through acquisition of high-quality regional players that see around the corner and realize they're not going to be able to compete the way they used to three, four years from now. Really exciting time for us to be in this industry, and let's talk now in a little more detail about why we're excited, both to be able to continue to grow our life-saving mission, but also why this is a great time to invest in this industry and in Strata's place in it. First of all, Strata has a very differentiated model relative to the competition. A lot of players out there that have excellent capabilities in one or two or three of the areas that a transplant center or organ procurement organization needs expertise to complete their mission. We've assembled all of the pieces that are necessary to complete the organ transplant recovery process, and we've done so in a way that preserves the clinical autonomy of our customers, meaning we will support any third-party preservation or machine perfusion device, and there are many out there, that that customer wants to utilize. We leave that clinical decision in their ballpark, and we just focus on executing at the lowest cost possible and being able to react as quickly as we can. Because very little heads-up, two to four hours heads-up, when an organ becomes available, that's why our national footprint of resources is so important. Across the country, we have aircraft that are ready to launch 24/7, 365. We also have clinicians that are prepared to do the same thing. This allows our customers, when they receive an organ offer from 1,000 miles away, to know that they have a partner that can move quickly enough for them to be able to move on that opportunity and potentially save a life the very next day. We're continuing to invest in the areas across the country where we see white space for our business, and we're doing this both organically as we win new customers and also through acquisition, which we'll talk about in more detail. Our national footprint, which is unrivaled in air for this industry, is incredibly important because of our ability to route airplanes more efficiently for this procedure. If you don't have airplanes and clinicians based locally across the country, you're also often using multiple sets of airplanes, moving surgeons and equipment on one airplane, have a different airplane to move back to the donor hospital, move surgeons and equipment back to their base. We try as much as possible to be able to use airplanes that are co-located with our transplant center customer's location. That means that the airplane, when it ends its mission at the location where that organ's going to be delivered to be transplanted into the recipient, it's already home, and we don't need to charge our customers costly repositioning fees, bringing that aircraft in from a base that's not aligned with our customer's needs. We do the same thing with our surgeons and equipment. As much as possible, try to drive or fly them commercially to the location of the donor. In those 20%-30% of cases where you're recovering a donor who has not yet deceased, and it's a planned time that that donor is expected to decease, 30% of the time in these cases, which we call donation after circulatory death, the organs are not able to be utilized. If you had to fly in a team and equipment from 1,000 miles away before you found out that the organs aren't going to be able to utilized, that's an incredible expense. By keeping those teams and equipment locally, we're able to minimize the cost for this eventuality that our customers face every day and allow them to deploy that capital instead towards going after more organs. It really can unlock incremental supply in the transplant space, and we're unique in the way that we set up our business across the country. Talked just about this geographic footprint difference, but we also have a very different methodology in terms of the way we think about our fleet. As we talked about, it's an asset-light model that allows us to be so much more flexible in terms of the kinds of aircraft that we have access to. We're not stuck with one type of aircraft because, as an example, if you fly two Gulfstream IVs, every day is a pretty good day to fly a Gulfstream IV. That doesn't make a lot of sense if you're flying from New York to Philadelphia, too much airplane for that trip. You're wasting time in a car getting to airports that are far away from city centers, and then you're spending too much money in the air. We'll use a helicopter for a trip between New York and Philadelphia. It'll be a fraction of the cost of a jet, and it'll also be much faster. We use turboprops when we're going on short distance trips. We use single-engine Vision Jets when it's appropriate to carry just cargo or you don't need clinicians accompanying the organ. We're able to be flexible, and over time, we're blending the cost for that customer down substantially. We talked about our open source model on the machine perfusion side of things, supporting whatever medical devices our customers would like to use. We're also differentiated in the way we choose our clinicians. We use licensed physicians to recover organs on behalf of our customers, even though the rules in America do allow individuals to be credentialed to recover organs that don't have a surgical license. We don't approach it that way, and we put all these things together in a one-call solution where any problem our customer has, we're able to solve it for them. The industry is going through an incredibly attractive period of growth, driven by a lot of new technology. We've seen in recent years about an 8% compound annual growth rate in the number of heart, liver, and lung transplants that have happened in the United States. Sadly, that waiting list has continued to grow, and we're doing everything that we can to limit that waiting list, but we're at least matching the growth in the number of folks that are on that transplant wait list. The reason we've been able to grow the number of transplants that happen in America has really been driven in large part by supply that has increased due to technology. The aperture of organs that are able to be utilized for a recipient has dramatically increased, and it's mostly about this perfusion technology that we talked about a little bit earlier in the presentation. This technology allows you to repair damage that is done to organs during the donor's dying process. Historically, the donation after circulatory death, a donor who is not yet deceased but is expected to decease in the near future, because so much damage had been done to those organs in the dying process, very rarely could you utilize that donor's liver, and never could you utilize the heart. Now we can repair damage done by donors in that category, and it has resulted in massive growth in donation after circulatory death that has significantly increased the number of organs that become available for recipients in need. Simultaneously with this exciting evolution in technology has been an evolution in regulatory landscape. It used to be that organs needed to be matched in a very arbitrary box called a donor service area. It wasn't necessarily that the sickest patient was in that donor service area, but that's just the way that it worked. We've evolved now, as recently as 2017, into a model called acuity circles that compares the distance directly from the donor in concentric circles away to try to find a more efficient matching methodology. It's resulted over the last six years, about 60% increase in distance between donor and recipient, and many more organs being successfully transplanted because you're getting it to the sickest patient first. If you skip over the sickest patient, they sadly may not have longer to wait, and you miss that opportunity to save that person's life. It's really important to expand the scope of the organ matching system, and that's what this regulation evolution has accomplished, and it's still going on. We are moving to a national distribution system called continuous distribution that uses a point-based system that will allow organs to get to the person who needs them the most, even if they're very far away. All this works together with the technology that allows you to get those organs to the recipient that's farther away. Only lungs, the smallest part of the heart, liver, lung segment of the industry that we serve, have moved to this continuous distribution model. Heart and liver are expected to transition in the coming years. There should be a significant increase in the number of organs that are successfully matched to transplant recipients and also an increase in distances. We'll talk about how that increase in distances allows Strata uniquely to grow ahead of an already fast-growing market. When we think about the unique attributes of our business that have resulted in that faster growth than what we've seen in the market, last quarter, we saw more than 35% organic growth year-over-year. Big part of this is the fact that we have relatively small penetration in an extremely fragmented market that is, every day that goes by, less able to fulfill a more complex mission. We can continue to gain market share organically and through acquisition. It's also the point that we were just talking about that's being helped through regulation, which is organs are matching to sicker recipients that don't have time to wait but that are farther away. It's saving more lives, but it's also making the logistics much more challenging. We are uniquely able to both, A, meet that opportunity for our customers, help them say yes to something that maybe a small mom-and-pop provider wouldn't be able to accomplish with the equipment we have. Also, it has a positive impact on our unit economics. We charge based on hours of flight time actually flown. As the industry continues to expand to a national distribution model, we will grow faster than the underlying growth in successful transplants because of that pay-by-the-hour model that we operate under. Things that we can't control, like jet fuel prices, are passed through in our contracts. Really the main margin driver, when you think about our unit economics, are block hours flown on those aircraft. You're also continuing to see uptake in perfusion technology, particularly the kind of perfusion that we specialize in providing directly on the ground, which is called normothermic regional perfusion. We talked about those donors who have damage to their organs when their heart stops beating, donation after circulatory death. There's a number of ways to repair that damage. You can take that organ and put it in a machine outside the body that perfuses it with oxygenated blood, and that can repair that damage and extend the amount of time that you can transport the organ. What you can also do is create a closed circuit inside the body of the deceased and perfuse all the body's organs at once before you remove them and send them to the recipient. This is called normothermic regional perfusion. This is what we provide directly to customers through our Clinical Services division, and it is a much more cost-effective way to repair that damage and give hospitals time to see the function of the organs and determine whether or not they're going to accept it. A really exciting benefit is that it increases what we call the yield, the number of usable organs per donor. Turns out, when you give clinicians a chance to repair damage done to all organs at the same time, even if you're not confident you're going to be able to place them, you see that they're working, and more often you are able to place them. It's been a really great driver in the increase in number of successful transplants in the United States, and it's quickly becoming the most common way of recovering these donation after circulatory death donors. You saw in 2024, only about 20% of those DCD donors were going through the NRP, normothermic regional perfusion process. Last year, it was 40%, and in recent months, we've seen 50% of those DCD donors using normothermic regional perfusion. Again, another way that we will grow faster than the market, because the area where we're the market leader, you're seeing the mix shift towards our way of doing things. As our customers that we already have contracted continue to do this for a larger proportion of the organs, we'll see more growth than the underlying growth in the market. Finally, reliance on third-party surgical recovery continues to increase in its share in the marketplace. This is driven by all the things we just talked about. You're now recovering an organ from farther away. Sending a surgeon that works for you at your hospital is now an all-day affair. It makes them unable to perform a surgery the next day. It takes them offline. Also, these processes, particularly when you're recovering from donation after circulatory death donors, are complex, they take longer, and you often come back empty-handed. All of this means that locally based surgical resources are critical to increase the efficiency of the surgeons that are performing these recoveries. Rather than fly someone across the country to remove one organ, let's use a surgeon from one of Strata's regional hubs that can drive to the location of a donor and then drive to another one a few hours later. It makes the whole system more efficient, it makes the whole system cost less, and it allows our customers to say yes to more matching organs. We continue to see that become a larger percentage of organs that are recovered, and as a leader in that industry, that allows us to grow more quickly than the marketplace. We also have very limited overlap between our clinical business, which came to us via acquisition towards the end of last year, and our logistics business, which we've been in for six years now. That's a big opportunity for us to take customers that are focused on just one of our solutions and help them understand how they can lower their costs and increase their efficiency with utilizing all of our end-to-end offerings. Our job is never to force our customers to do that. Our job is to help them understand why they're going to save more lives when they work with us across all the elements of our offering and do so at lower cost. Finally, there's a huge opportunity to deploy our strong balance sheet, undrawn credit facility, and future cash flow generation towards roll-up opportunities. These are in our pipeline. These are established, profitable businesses that are doing an excellent job in a particular region, but are not going to be able to be competitive in the future. That integration of these businesses, it's much more akin to onboarding a new customer or onboarding a new couple of surgeons than it is to integrating a large platform. That's what we're focused on right now, things that bolt right on. We see multiple opportunities, including many that are currently under exclusivity, where we can execute at mid-single-digit adjusted EBITDA or free cash flow multiples, and that's pre-synergy. Lots of opportunity for us to cross-sell to targets that really only offer one of our many offerings. We're very excited to continue to share more about our progress executing on those active deal opportunities. There's also opportunities outside of transplant, and it too is an extremely fragmented industry of providing regional cardiac perfusion businesses. We're going to deploy capital in that area and continue to grow market share in a very fragmented industry. With that, I'll hop off the soapbox here for a second, Matt, and see if there's any questions. Okay, great. Thanks, Will. Just as a reminder, if anyone has any questions, feel free to submit those into the chat and we will get those asked. Maybe just to kick things off, would love to follow up on that capital allocation strategy. You announced the credit facility in February, which builds on the plan you laid out at the Investor Day of deploying capital through 2029. I guess as you execute on this roll-up strategy, what has the valuation trend been like for these acquisition targets, and are others trying a similar strategy, or is that in any way influencing multiples or regions you might go after? Yeah, we're seeing opportunities in mid-single-digit free cash flow multiples, and that's been pretty consistent across what we've looked at. I would say that we're very unique as an acquirer here. We're not a private equity-backed roll-up. Our strategy here is not to go into businesses and fire everybody. We're acquiring them because we want the people, we want the practitioners, we want them in the specific geography we're focused on. In fact, we have more work for them to do, which is going to make them more efficient. Given our strategy, given the white space we have in the map, it's a pretty unique offering in terms of an acquisition opportunity for an entrepreneur that frankly, in this day and age, is maybe a little bit anxious about the idea of private equity. The public currency is also a really nice benefit because the type of folks that we're focused on partnering are not ready to quit yet. No, they're excited to keep growing, and so it's a nice middle ground of giving them a currency into which they can roll, but also not have to worry about having completely lost control of their ability to get liquidity. It's a really nice balance, and we're finding that it's a very significant differentiator for us as we look across the universe of potential targets. Just given our approach of being agnostic and still believing in that old phrase, the customer is always right, from a values perspective, we're finding that we're really well-aligned with a lot of the targets out there. We're thrilled with the pipeline that we've developed and hope to continue to providing updates on our execution of the opportunities that we've talked about that are under exclusivity today. That's great. Yeah, I think the early efficiencies you can drive really speaks to some of the synergies that these acquisitions help drive in a rather rapid fashion. I guess maybe as we think about your four segments, how do you prioritize acquisitions across those four segments? Do you see a similar opportunity set across each? Are there any areas more than others? Seems like regulation changes in particular could cause a large jump in air demand. Just curious how you think about where you're prioritizing the capital deployment. Yeah. Well, look, we have active opportunities in all of our verticals right now, and it's much more driven by is this team hungry? Are they excited to continue selling? Are they excited to really dive into the cross-sell opportunity that's an important synergy for us? Are they filling a gap, mostly geographically, but it could, in some cases, be a capability that we want to fill? That's what kind of puts something higher up on the list vis-à-vis other opportunities. We're really excited about all the areas that we're currently in. The one thing that we didn't put on the priority list because it's not on the priority list yet is that kind of other time-critical logistics marketplace. We talked a little bit on our earnings call. We are moving radiopharmaceuticals every week now, but we're really viewing that as a pilot program today. We like to do things organically, win some RFPs organically for larger pieces of business, understand that we can sustain profit margins over time and be differentiated relative to competition before we put a lot of capital behind it. That's the stage we're in on that part of our business, which is not a material revenue driver today, but it is something that we're doing every week, but not something we're targeting for M&A right now. Got it. Okay. Maybe on that geographic footprint point about looking to expand in geographies where maybe you aren't obviously very dense in the Northeast, the footprint slide seems to imply a lot of opportunity to move westward. Granted, some of those markets are pretty rural and maybe block you from wanting to enter there. Is there a lot of untapped roll-up opportunity in Western markets, or how do you sort of think about that regional diversification? I suppose as or in the event that you do start to move westward, maybe how would that change your competitive set? It's definitely a softer area in terms of our capabilities today. At the end of the day, the way the industry works today, the vast majority of the time, is you are flying out resources from a hub to go complete a recovery. Right now in the West, we're able to effectively serve our customers anywhere they want to recover an organ by flying resources to that area. Our goal, and frankly, the way the industry has to work if we're going to solve this big problem, and we're going to close the gap of those 15 people that aren't getting the organ they need every day, is you need to have resources that are closer to the donor that hopefully most of the time you can drive. That's what we're trying to create. We're trying to create that national infrastructure. We have it in a lot of locations already. The acquisition pipeline is a really great way to be able to have that capability, to be able to tell your customer when they want to go recover. If they want to recover in an area where we have a lot of resources right now, it's great news. We're going to drive someone to the donor location. If that donor does not progress to produce an organ that's suitable for transplant, we're not going to charge you $35,000 to fly a private airplane in because we just drove those folks. We'll have a plane on standby. It'll be a couple of thousand dollars, which is the cost of getting a crew ready to go. You're going to save tens of thousands of dollars because we had those local resources. There's still a lot of places where we're not able to deliver that important answer to our customers, and that's what we can fix. The benefit to your second part of your question is far beyond just the multiple arbitrage of picking something up at a mid-single-digit multiple that doesn't have all the capabilities we have, so you can get the revenue synergy of hopefully convincing those customers that they should use us for other capabilities. It's also being able to tell our existing customer base, we can do this for you faster, less expensive, and more efficient. We can react more quickly and maybe say yes to something that has a ticking clock attached to it, which, because of the nature of this business, happens all the time. You've got a heart that's destined for a particular recipient. After the procurement process begins, it's determined that that recipient is not actually healthy enough today to undergo the transplant process. You got a very limited window to find a new home for that life-saving organ. Our national network of airplanes and clinicians can enable our customers to say yes to those kind of situations more often. Makes a lot of sense. That's a good answer. Maybe a little bit of a different question. As complexity increases in this space, what's the value of being agnostic to third-party perfusion devices? Seems like a lot of competitors push their captive option, which might not always be the best. A lot of innovation is happening, so clearly more devices are expected to come to market. Maybe your agnostic stance will enable outcomes to outpace peers as you can take a portfolio management approach to whichever is best. I'm curious as to how you think about the agnostic advantage that you guys have. We think it's so important to be able to say yes to your customer. Your customer is a renowned transplant surgeon that has reasons for wanting to use a particular piece of equipment on a particular case. We have some customers that want to use the same equipment on every case, and that's great, and we support it. We have other customers that are taking organs on ice as much as they possibly can with great outcomes. We're not here to second-guess the clinical decision that our customer's making. Also when we look out on the roadmap of devices that are going to get approved in the future, you're going to have many more options. When we think about where can we have scale, it's on airplanes and geographies that are capable of moving, if the device is compatible with air movement, any device that comes to market, because the way that we get fixed cost leverage is flying those airplanes more. We wouldn't want to preclude any device. If our customer wants to use it, we want to support it. As the marketplace becomes broader on perfusion technology, we really believe that that's going to be the winning strategy, and I think for a lot of customers, it's going to start to become a prerequisite that you have familiarity with these devices. For many of these devices, but not all, our clinicians are trained on them. We can put the organ on the circuit. We can clean the machine. We can maintain it for the customer. We can troubleshoot problems in flight as they happen, or on the ground. We really put in the extra effort, proactively trying to work with these device companies, and we think it's a win-win because we think we can be a force multiplier for all of these companies. Even if a company has some of their own resources on the clinical side or the logistics side, use ours for this case and then use your existing resources to do even more volume and save more lives. We really view it as a collaborative opportunity, and we want to be a force multiplier for everybody, even folks that maybe have some options that look similar to some of the things we have. There's, of course, a lot of device companies that don't have any of that, and I think we can be a really powerful partner to them or to their customers that want to utilize those devices in a high-tempo kind of way. Makes sense. That's great color. Well, with that, I'm not showing any further questions, so we'll park it there. Thank you everyone for tuning into this session, and thank you to the Strata team for joining our conference and delivering a great presentation. Good luck to everyone else with the rest of the conference. Great. Thanks so much for having us, Matt. Really appreciate it. Thanks for all the great questions. Yeah. Thanks again.