- Company Raises Annual Revenue and EPS Guidance - BRAINTREE, Mass., August 1
BRAINTREE, Mass., August 1 /PRNewswire-FirstCall/ -- Haemonetics
Corporation (NYSE: HAE) today reported first quarter fiscal 2009 GAAP net
revenues of $144 million, up 18%; operating income of $19 million, up 23%; and
net earnings per share of $0.54, up 17%.
Excluding charges in both fiscal 2008 and 2009, first quarter fiscal 2009
adjusted operating income was $21 million, up 22%, and adjusted earnings per
share were $0.59, up 17%.(1)
Brad Nutter, Haemonetics' Chairman and CEO, said, "The fundamentals of our
business continue to strengthen as we achieved our fifth consecutive quarter
of double digit revenue growth on strength across our diversified product
lines and geographies. Our prospects for growth have never been better."
FINANCIALS
As noted, Haemonetics first quarter fiscal 2009 net revenues were
$144 million, up 18%. Excluding the effect of currency, first quarter net
revenues grew 13%. Haemonetics also reported first quarter gross profit of $73
million, up 19%. Gross margin grew 30 basis points to 50.7%.
Adjusted operating expenses were $52 million in the quarter, up 18%. As
planned, nearly half of the incremental spending came from Arryx and acquired
businesses whose expenses were not included in the first quarter fiscal 2008
results.
Adjusted operating income was $21 million, up 22%, and operating margin
grew 40 basis points to 14.7%.
First quarter interest income declined due to lower invested cash and
lower interest rates. Haemonetics' tax rate was 29.5% in the quarter, lower
than the anticipated annual effective rate as the Company benefited from the
resolution of a tax contingency.
Haemonetics ended the quarter with a cash balance of $120 million, and
$15 million of debt. During the quarter, the Company generated $4 million of
free cash flow. The Company also invested approximately $25 million in the
quarter in a share repurchase program under which the Company was authorized
to spend up to $60 million. Haemonetics completed the balance of the
repurchase plan in July.
EXPANDING THE BUSINESS
Haemonetics continues to make progress expanding the business. The Company
reported the following highlights in the quarter:
-- The Company signed a preferred provider contract with Octapharma for
Octapharma's U.S. plasma collections. Octapharma is the largest
privately-owned plasma products company in the world, with production capacity
for 2.6 million liters of plasma annually and plans for expansion.
-- The Company announced an enhanced software protocol for its plasma
device which reduces plasma donation time by 20%, giving customers improved
productivity.
-- eLynx(TM), a donor floor automation system for use in blood and plasma
collection centers, entered limited market release. Information technology
platforms like eLynx are critical to improving blood supply management.
-- Haemonetics began the final phase of its global transformation efforts
to better align its Technical Operations organization with the Company's blood
management solutions vision.
PRODUCT LINE GROWTH
Plasma disposables revenue was $47 million for the quarter, up 30%.
Haemonetics' plasma business continued to benefit from global growth in plasma
collections as demand for IVIG and Albumin, which represent 60% of total
plasma-derived biopharmaceutical sales, have grown 20% in the past two years.
Based on increased market demand and collection capacity, and long-term
contract roll outs, Haemonetics expects the plasma business will be a strong
revenue growth driver for the Company over the next two years.
Blood bank disposables revenue was $36 million for the quarter, up 8%.
Haemonetics' blood bank business benefited from unit growth in Asia and from a
fiscal 2008 contract with Canadian Blood Services which made Haemonetics its
preferred provider of platelet collection systems. Haemonetics converted the
Canadian Blood Services' blood banks to Haemonetics' technology over the
course of fiscal 2008 and will continue to see the benefit of those
conversions in the first half of fiscal 2009.
Red cell disposables revenue was $12 million for the quarter, up 8%.
Growth in the quarter was driven by the U.S. business which was up 11% as the
business saw disposable unit growth in both its legacy MCS(R) mobile
collection system and its new Cymbal(R) automated blood collection system.
Software and services revenue was $10 million for the quarter, up 1.4%. A
decline in services revenue masked 29% growth in the software business. In the
first quarter of fiscal 2008, the Company had a large services contract which
did not repeat in the first quarter of this year. Strong software growth was
driven by implementation of contracts negotiated in fiscal 2008, a new
contract with the U.S. Department of Defense, and growth in the plasma
industry. Haemonetics has information technology contracts with several large
plasma collectors which give the Company a recurring revenue stream.
Surgical/diagnostics disposables revenue was $22 million, up 34% for the
quarter. Haemonetics acquired the TEG(R) Thrombelastograph(R) Hemostasis
Analyzer business in November 2007, and the quarterly Surgical/Diagnostics
revenues benefited from sales of the TEG system which were not included in the
first quarter of fiscal 2008. The TEG business contributed $5 million in the
quarter and grew organically 17% over the first quarter of fiscal 2008.
Haemonetics will continue to see the benefit of this comparison through
November 2008.
OrthoPAT(R) orthopedic perioperative autotransfusion system revenues were
$9 million for the quarter, up 7%. OrthoPAT disposables revenue growth was
driven by unit growth as the product line benefited from device placements in
fiscal 2008. The Company expects revenue growth for the OrthoPAT system will
gain momentum through the year as utilization improves on these devices.
Equipment revenue was $8 million for the quarter, up 19%. Equipment growth
was driven by the sale of platelet equipment in Europe and Latin America and
the Cell Saver(R) autologous blood recovery system in North America. The
Company expects that the strong first quarter sales can offset some of the
difficult comparisons to fiscal 2008, but still expects that full year
equipment sales will be level with fiscal 2008.
FISCAL 2009 GUIDANCE
The Company raised its annual revenue guidance to 10-13% growth, with
strength across multiple product lines. Adjusted operating income is expected
to grow 14-17%, and adjusted earnings per share are expected to be in a range
of $2.33 to $2.43, up 10-15%. The Company further expects gross margin
improvement of 100 basis points, operating margin improvement of 50 basis
points, and a tax rate of 33.5-34.0% in the year. Adjusted fiscal 2009
guidance excludes $7-8 million, or approximately $0.17-$0.20 per share, of
costs to restructure Haemonetics' business, including manufacturing, quality,
R&D, and Europe Phase II.
For the full year 2009, the Company expects to generate $40 million of
free cash flow.
Haemonetics updated its fiscal 2009 guidance and has posted revised income
scenarios reflecting guidance ranges as well as potential fiscal 2009 product
line growth on its website at
http://www.haemonetics.com/site/content/investor/guidance.asp.
CONFERENCE CALL
Haemonetics will hold a conference call on Friday, August 1st at 10:00 am
Eastern to discuss these results. Interested parties can participate in the
conference call by dialing 888-802-8577 (U.S. only) or (973) 935-8754
(International) with conference ID 54880152. The call will be replayed through
August 15, 2008 at (800) 642-1687 (U.S. only) or (706) 645-9291
(International) using PIN 54880152.
Haemonetics (NYSE: HAE) is a global healthcare company dedicated to
providing innovative blood management solutions for our customers. Together,
our devices and consumables, information technology platforms, and consulting
services deliver a suite of business solutions to help our customers improve
clinical outcomes and reduce the cost of healthcare for blood collectors,
hospitals, and patients around the world. Our technologies address important
medical markets: blood and plasma component collection, the surgical suite,
and hospital transfusion services. To learn more about Haemonetics, visit our
web site at http://www.haemonetics.com.
As part of this release, Haemonetics has presented supplemental non-GAAP
financial results which exclude restructuring costs in fiscal 2008 and fiscal
2009. Haemonetics believes that these non-GAAP results are useful to investors
because it allows for an evaluation of the Company with a focus on the results
of our core business.
This release contains forward-looking statements that involve risks and
uncertainties, including technological advances in the medical field and
standards for transfusion medicine and our ability to successfully implement
products that incorporate such advances and standards, product demand, market
acceptance, regulatory uncertainties, the effect of economic and political
conditions, the impact of competitive products and pricing, blood product
reimbursement policies and practices, foreign currency exchange rates, changes
in customers' ordering patterns, the effect of industry consolidation as seen
in the plasma market, the effect of communicable diseases and the effect of
uncertainties in markets outside the U.S. (including Europe and Asia) in which
we operate and other risks detailed in the Company's filings with the
Securities and Exchange Commission. The foregoing list should not be construed
as exhaustive. The forward-looking statements are based on estimates and
assumptions made by management of the Company and are believed to be
reasonable, though are inherently uncertain and difficult to predict. Actual
results and experience could differ materially from the forward-looking
statements.
CONTACT:
Julie Fallon
Tel. (781) 356-9517
Alternate Tel. (617) 320-2401
fallon@haemonetics.com
(1) A reconciliation of GAAP to adjusted financial results is included at
the end of the financial sections of this press release as well as on the web
at http://www.haemonetics.com/investors.
HAEMONETICS CORPORATION FINANCIAL SUMMARY FOR THE FIRST QUARTER FY09
(UNAUDITED DATA IN THOUSANDS, EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENTS OF INCOME
% Inc/(Dec)
6/28/08 As 6/30/07 As vs prior
Reported Reported Year
NET REVENUES $144,116 $121,936 18.2%
Gross profit 73,037 61,494 18.8%
R&D 5,8446,276 (6.9%)
S,G&A 47,859 39,439 21.3%
Operating expenses 53,703 45,715 17.5%
Operating income 19,334 15,779 22.5%
Interest expense (24)(207) (88.4%)
Interest income 6541,903(65.6%)
Other income/(expense), net 375 957(60.8%)
Income before taxes 20,339 18,432 10.3%
Tax expense 5,9985,755 4.2%
NET INCOME $14,341 $12,677 13.1%
Net income per common share
assuming dilution$0.54$0.46 16.8%
Weighted average number of shares
Basic 25,607 26,534
Diluted26,517 27,403
PROFIT MARGINS:Inc/(Dec)
vs prior
year profit
margin %
Gross profit 50.7%50.4% 0.3%
R&D4.1% 5.1% (1.0%)
S,G&A 33.2%32.3% 0.9%
Operating income 13.4%12.9% 0.5%
Income before taxes 14.1%15.1% (1.0%)
Net income10.0%10.4% (0.4%)
REVENUE ANALYSIS
First Quarter% Inc/vs
6/28/08 As 6/30/07 As prior
ReportedReported year
Revenues by Geography
United States $65,789 $54,831 20.0%
International $78,327 $67,105 16.7%
Net Revenues $144,116$121,936 18.2%
Disposable Revenues by Product Family
Donor:
Plasma $46,868 $35,955 30.4%
Blood Bank $35,659 $33,032 8.0%
Red Cell $11,842 $10,944 8.2%
$94,369 $79,931 18.1%
Patient:
Surgical / Diagnostic $22,363 $16,694 34.0%
OrthoPAT$8,796 $8,187 7.4%
$31,159 $24,881 25.2%
Subtotal $125,528$104,812 19.8%
Equipment $8,289 $6,968 19.0%
Software & Services $10,299 $10,156 1.4%
Net Revenues$144,116$121,936 18.2%
CONSOLIDATED BALANCE SHEETS
Period ending
06/28/0803/29/08
ASSETS
Cash & cash equivalents$120,287$133,553
Accounts receivable, net127,931 120,252
Inventories, net 71,196 65,388
Other current assets 34,396 40,241
Total current assets 353,810 359,434
Net PP&E119,078 116,484
Other assets135,341 133,032
Total assets $608,229$608,950
Period ending
06/28/0803/29/08
LIABILITIES & STOCKHOLDERS' EQUITY
S/T debt & current maturities$9,028 $6,326
Other current liabilities88,252 91,351
Total current liabilities97,280 97,677
Long-term debt5,882 6,037
Other long-term liabilities 11,137 11,048
Stockholders' equity493,930 494,188
Total liabilities & equity $608,229$608,950
FREE CASH FLOW RECONCILIATION
Three Months Ended
6-28-08 6-30-07
GAAP CASH FLOW FROM OPERATIONS $13,842 $14,181
Capital expenditures(12,395) (11,448)
Proceeds from sale of property, plant
and equipment2,476 1,305
Net investment in property, plant and
equipment (9,919) (10,143)
Free Cash Flow $3,923$4,038
RECONCILIATION OF NON-GAAP MEASURES
Haemonetics has presented supplemental non-GAAP financial measures as part
of this earnings release. A reconciliation is provided below that reconciles
each non-GAAP financial measure with the most comparable GAAP measure. The
presentation of non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, the most directly comparable GAAP
measures. There are material limitations to the usefulness of non-GAAP
measures on a standalone basis, including the lack of comparability to the
GAAP financial results of other companies.
These measures are used by management to monitor the financial performance
of the business, inform business decision making, and forecast future results.
Performance targets for management are established based upon these non-GAAP
measures. In the reconciliations below, we have removed restructuring costs
from our GAAP expenses. These restructuring costs result from a significant
transformation of our business during the first quarter of our fiscal years
2009 and 2008. This transformation resulted in the formation of a shared
service center in Europe, the exiting from various offices across Europe and
Japan and, most recently, the re-positioning our technical operations
organization. We believe this information is useful for investors because it
allows for an evaluation of the Company with a focus on the performance of our
core operations.
-- Non-GAAP Gross Profit
The use of these non-GAAP measures allows management to monitor the level
of total gross profits without the costs of our business transformation. We
establish our budgets, forecasts, and performance targets on this basis.
-- Non-GAAP S,G&A and Non-GAAP Operating Expenses
The use of this non-GAAP measure allows management to monitor the ongoing
level of spend that is necessary to support the business in a period when we
are not transforming our business or completing an acquisition of in-process
research and development. We establish our budgets, forecasts, and performance
targets excluding these costs.
-- Non-GAAP Operating Income and Non-GAAP Income Before Income Taxes
The use of these non-GAAP measures allows management to monitor the level
of operating and total pre-tax profits without the costs of our business
transformation. We establish our budgets, forecasts, and performance targets
on this basis.
-- Non-GAAP Net Income and Earnings Per Share
The use of these non-GAAP measures allows management to monitor the level
of net income and earnings per share excluding both the costs of our business
transformation, as well as any related tax effects. We establish our budgets,
forecasts, and performance targets on this basis.
RECONCILIATION OF NON-GAAP MEASURES FOR THE FIRST QUARTER OF FY09 AND FY08
06/28/08 06/30/07
Non-GAAP Gross Profit
GAAP Gross Profit $73,037$61,494
Restructuring Costs 72 0
Non-GAAP Gross Profit $73,109$61,494
Non-GAAP S,G&A
GAAP S,G&A $47,859$39,439
Restructuring Costs (1,781)(1,629)
Non-GAAP S,G&A $46,078$37,810
Non-GAAP Operating expenses
GAAP Operating Expenses$53,703$45,715
Restructuring Costs (1,781)(1,629)
Non-GAAP Operating Expenses$51,922$44,086
Non-GAAP Operating income
GAAP Operating Income $19,334$15,779
Restructuring Costs 1,853 1,629
Non-GAAP Operating income $21,187$17,408
Non-GAAP Income before taxes
GAAP Income before taxes $20,339$18,432
Restructuring Costs 1,853 1,629
Non-GAAP Income before taxes $22,192$20,061
Non-GAAP Net Income
GAAP Net Income$14,341$12,677
Restructuring Costs 1,853 1,629
Tax benefit associated with
restructuring costs (650) (558)
Non-GAAP Net Income$15,544$13,748
Non-GAAP Net Income per common
share assuming dilution
GAAP Net Income per common share
assuming dilution $0.54 $0.46
Restructuring Costs after tax
per common share assuming
dilution$0.05 $0.04
Non-GAAP Net Income per common
share assuming dilution $0.59 $0.50
SOURCE Haemonetics Corporation
