Veracyte, Inc. (VCYT) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Veracyte Annual Meeting. [Operator Instructions] I would now like to turn the call over to Ms. Bonnie Anderson. Ma'am, you may begin.

Thank you. Good morning, ladies and gentlemen, and welcome to the 2020 Annual Meeting of Stockholders of Veracyte. My name is Bonnie Anderson, and I'm the Chairman of the Board and Chief Executive Officer of the company. I will be serving as the Chairwoman of the meeting as we proceed. And Keith Kennedy, our Chief Operating Officer and Chief Financial Officer, will serve as Secretary of the meeting. Thank you for being here today. The meeting is now called to order. First, a few introductions. I would like to introduce the directors of Veracyte, who are present on the line today, Dr. Fred Cohen; Karin Eastham; Dr. Robert Epstein; Evan Jones; and Kevin Gordon. I would also like to introduce representatives of Ernst & Young LLP, our auditing firm, who are present on the line today, Surita Jolly and Ishpal Shahpuri. I would also like to introduce Alyssa Zhang from Fenwick & West LLP, our outside legal counsel. Will the Secretary of the meeting, Keith Kennedy, report on the calling and notice of the annual meeting?

Stockholders of record as of the close of business on April 14, 2020, the record date, are entitled to receive notice of and to vote at this meeting. I present to this meeting an affidavit of Broadridge Financial Solutions to evidence the mailing of this notice sent by U.S. Mail on or about April 24, 2020. The affidavit of mailing of notice will be attached to the minutes of this meeting. In addition, Napoleon Cheng has been appointed as the Inspector of Election and his oath of office will be filed with the minutes. He has a certified list of stockholders entitled to vote at this meeting. This list will be available for inspection during this meeting by any stockholder online and will be filed with the records of the company.

I declare that the meeting has been duly called and that notice has been duly given. Will the Inspector of Election please present his report?

The bylaws of the company provide that the presence, either in person or by proxy, of a majority of shares issued and outstanding and entitled to vote at the meeting shall consider quorum. Madam Chairwoman, there are present at this meeting, either in person or by proxy, 46,627,673 shares or 93% of the total shares of common stock of Veracyte entitled to vote.

I declare that a quorum is present and that this meeting is ready to transact business. The polls are now open. Stockholders may vote online at www.virtualshareholdermeeting.com/VCYT2020. If you have already returned a proxy or voted by phone or through the internet, then you need not vote again online at this meeting unless you wish to change your vote. Your vote has already been included in the proxy count. If any stockholder has not voted by proxy prior to the meeting and now wishes to vote or if any shareholder wishes to change his or her vote from that previously recorded, please vote or change your vote online on the website you have logged into to listen to the annual meeting. After you have completed or changed your vote online and we have completed consideration of the items on the agenda, we will tabulate your proxies and ballots. There are 4 items of business on the agenda for this year's meeting, which were described in our proxy statement mailed on or about April 24, 2020. There were no stockholder proposals presented in accordance of the applicable procedures. We will vote after these items have been presented. The first item of business is the election of 3 Class I directors. Based on the recommendation of the Nominating and Corporate Governance Committee, the Board of Directors has nominated the following persons to serve as Class I directors: Bonnie H. Anderson; Robert S. Epstein and Evan Jones. If elected, the nominees will serve for a 3-year term, which expires on the date of the 2023 Annual Meeting of Stockholders or until their respective successors have been duly elected and qualified. Given that the company has not received timely notice of any other nominations, as would be required by the bylaws, I hereby declare the nominations for election of directors of the company to be closed. The second item of business is the approval of the amended and restated Veracyte, Inc. Employee Stock Purchase Plan, which increases the number of shares of our common stock reserved for issuance thereunder by 1.5 million shares, enables the enrollment of part-time and temporary employees who are otherwise ineligible to participate in the ESPP and makes certain other administrative changes. On behalf of the Board of Directors and for the reasons set forth in the proxy statement, I will now present the proposed resolution. Resolved that the stockholders of this corporation hereby approve the amended and restated Veracyte, Inc. Employee Stock Purchase Plan. The third item of business is the consideration of the proposal to ratify the Audit Committee's appointment of Ernst & Young LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020. On behalf of the Board of Directors and for the reasons set forth in the proxy statement, I will now present the proposed resolution. Resolved that the stockholders of this corporation hereby ratify the appointment of Ernst & Young LLP as the company's independent registered public accounting firm for 2020. The fourth item of business is the proposal to approve, on a nonbinding advisory basis, the compensation of the named executive officers as disclosed in the proxy statement. As an advisory vote, this item is nonbinding. However, the Board of Directors and Compensation Committee values the opinions expressed by stockholders and their vote for this proposal and will consider the outcome of the vote when making future compensation decisions of our named executive officers. On behalf of the Board of Directors and for the reasons set forth in the proxy statement, I will now present the proposed resolution. Resolved that our stockholders hereby approve, on a nonbinding advisory basis, the compensation of the named executive officers, as disclosed in the proxy statement pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion and other related disclosures. If you have not already voted, please do so online right now. [Voting]

It is now approximately 9:08 a.m. Pacific Time on June 5, 2020, and I now declare the polls for each matter voted upon at this meeting closed. Will Napoleon Cheng, Veracyte's Assistant Controller, please tally the proxies and ballots and prepare the report of the vote. I will ask that Mr. Cheng give us the results of the tabulation.

I, the Inspector of Election appointed for the 2020 Annual Meeting of Stockholders of Veracyte, Inc. report that having taken an oath to conduct the election partially, I did receive the vote of the stockholders by proxies and ballot. I report that shares are voted for the election of Board of Directors as follows: The following Class I directors were elected to serve until the 2023 Annual Meeting of Stockholders or until their successors are duly elected and qualified. Bonnie H. Anderson: for, 40,379,109; withheld, 919,810; broker non-votes, 5,328,754. Robert S. Epstein: for, 37,461,268; withheld, 3,837,651; and broker non-votes, 5,328,754. Evan Jones: for, 40,368,567; withheld, 938,352; broker non-votes, 5,328,754. Proposal #2, to approve the amended and restated Veracyte, Inc. Employee Stock Purchase Plan: For, 40,394,570; against, 900,066; abstained, 4,283; broker non-votes, 5,328,754. Proposal #3, the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2020: for, 46,587,055; against, 2,604; abstained, 38,014. And for Proposal #4, the approval on a nonbinding advisory basis of the compensation of our named executive officers: for, 39,733,134; against, 1,228,494; abstained, 337,291; and broker non-votes, 5,328,754. These votes are respectively submitted this 5th day of June 2020.

Based upon the final tabulation of the vote, those persons nominated as Class I directors have been elected, the stockholders approved the amended and restated Veracyte, Inc. Employee Stock Purchase Plan, the appointment of Ernst & Young LLP as the company's independent registered public accounting firm has been ratified and the stockholders approved on a nonbinding advisory basis, the compensation of the named executive officers. The final report of the Inspector of Elections will be included as part of the record of this meeting. The final voting results will be included in a filing with the Securities and Exchange Commission. This concludes the formal agenda of the 2020 Annual Meeting of the Stockholders of Veracyte. We appreciate your interest and support. We thank you very much for joining us this morning. I will now entertain a motion to conclude the formal business portion of the meeting.

I so move.

I second the motion.

All those in favor, please say aye. All those opposed, please say nay. [Voting]

Aye.

Aye.

The motion is carried, and the meeting is now concluded. I will now turn the meeting over to Bonnie Anderson.

At this point, I'd like to entertain any questions that you may have. [Operator Instructions] Before doing so, I would like to remind everyone that during the course of this Annual Meeting of Stockholders, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. I wish to caution you that these statements are only predictions, and that actual events or results may differ materially. We are under no obligation to update or revise any forward-looking statements. I refer you to documents the company files from time to time with the Securities and Exchange Commission specifically the company's annual report as filed on Form 10-K for the year ended December 31, 2019, and quarterly report as filed on Form 10-Q for the quarter ended March 31, 2020. This contains important factors in a discussion of risks that could cause the actual results to differ materially from those contained in our projections or forward-looking statements. Copies of our 10-K for the year ended December 31, 2019 can be found on our website at veracyte.com as well as copies of our latest 10-Q for the quarter ended March 31, 2020. Before asking your question, please stand and specify your name and that you are a stockholder. If you are not a stockholder, please wait until after this meeting is closed. You will have an opportunity to ask questions at that time. There appear to be no more questions. So thank you for joining us today.

This does conclude today's conference call. Thank you for your participation. You may now disconnect.