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Braintree, MA , Nov. 2, 2009 – Haemonetics Corporation (NYSE: HAE) reported second quarter GAAP net revenues of $157 million, up 8%, net income of $18 million, up 22%, and earnings per share of $0.69, up 20%. Year-to-date, Haemonetics' GAAP net revenues are $311 million, up 7%; net income is $36 million, up 24%; and earnings per share are $1.37, up 24%.
Excluding restructuring charges in fiscal 2009 which did not recur in fiscal 2010, adjusted second quarter net income growth was 20%, and adjusted earnings per share growth was 18%. Adjusted year-to-date net income growth is 18% and earnings per share are up 18%.
Haemonetics ended the second quarter with $178 million in cash and $20 million of debt, and generated $24 million of free cash flow. The Company spent $6 million on share repurchases in the quarter, against an approved $40 million share repurchase plan.
Brian Concannon, Haemonetics' President and CEO, said, "We continue to deliver solid financial results every quarter as we build the business to deliver on our blood management vision. Our blood management solutions are taking hold, driving growth in our hospital business, and leave us well positioned to meet the needs of our customers in today's environment of healthcare reform."
In addition to revenue and earnings growth, Haemonetics reported the following results, which also exclude the restructuring charges in last fiscal year. In the quarter, gross margin expanded by 30 basis points to 51.5%. Despite incremental expenses from acquired businesses, the Company managed operating expenses to $54 million, up 6%, leading to operating income of $27 million, up 13%. Operating margin was 17.2%, up 80 basis points.1
Year-to-date, gross margin is 52.7%, up 170 basis points. Operating expenses are $111 million, up 8%. Operating income is $53 million, up 18%, and operating margin is 17.1%, up 150 basis points. 1
The Company affirmed its full year guidance of 8-11% revenue growth, operating income growth of 12-15%, and earnings per share in a range of $2.75 to $2.85.
STRATEGIC AND SEGMENT GROWTH HIGHLIGHTS
Haemonetics continues to make progress expanding its business. The Company reported the following highlights:
· The completion of limited market release on its new Express plasma collection protocol, with customers consistently achieving a 20% reduction in plasma donation time
· The acquisition of Sebra® blood bank products, adding depth to the Company's blood bank product portfolio and strengthening its footprint in the whole blood collection market in advance of submitting the automated whole blood collection system to the FDA for 510k approval
· Progress implementing customized Impact Programs with 5 hospitals currently engaged in Haemonetics' hospital-wide blood management solutions and 28 hospitals having completed the baseline assessment for Haemonetics' solutions for device implementation in specific departments, for example, the OrthoPAT® orthopedic perioperative autotransfusion system for orthopedic surgery
As noted, Haemonetics' second quarter fiscal 2010 revenues were $157 million, up 8%. Excluding the effects of currency, quarterly net revenues grew 6%. Reported revenues break down as follows:
Plasma disposables revenue was $59 million for the quarter, up 19%. Year-to-date Plasma revenues are $118 million, up 22%. Haemonetics' plasma business benefited from long-term contract implementation, global growth in plasma collections, and pricing increases. Haemonetics expects its plasma business will continue to be an ongoing revenue growth driver for the Company and affirmed its annual Plasma revenue growth estimate of 19-22%.
Platelet disposables (formerly reported as Blood Bank) revenue was $37 million for the quarter, up 3%. Year-to-date Platelet revenues are $72 million, down 1%. Platelet sales recovered in the quarter sequentially against the first quarter of fiscal 2010 as the Company strengthened the distribution business in key markets. Japan platelet sales, which were down modestly in the first quarter, remained stable in the second quarter. Haemonetics expects full year Platelet revenue growth in a range of 0-2%.
Red Cell disposables revenue was $11 million for the quarter, down 2%. Year-to-date Red Cell revenues are $23 million, down 1%. Despite episodic summer blood shortages, aggregate demand for red cells by hospitals is down 2% from last year, stemming partly from the reduction in elective surgeries. The reduced demand for blood is impacting Haemonetics' automated red cell collection systems and is now expected to last through the remainder of the fiscal year. As a result, Haemonetics anticipates annual Red Cell revenue growth of 0-1%, which excludes any incremental Fenwal customer conversions which may occur in the back half of the year.
Software Solutions revenue was $9 million for the quarter, up 29%. Year-to-date Software Solutions revenues are $18 million, up 22%. Because Haemonetics provides the information management platforms for plasma centers on a per donor fee, increased plasma collections positively impacted the Software Solutions line. Additionally, Haemonetics benefited from sales from its acquired companies, Altivation® and Neoteric, whose sales were not included in the second quarter of last fiscal year. Haemonetics affirmed its annual Software Solutions revenue growth rate estimate of 9-13%.
Haemonetics' Hospital disposable systems grew in the quarter as the Company's blood management solutions began to influence hospitals' purchasing. By product line, Surgical revenues were $17 million, up 4% in the quarter, and $34 million, up 2% year-to-date. OrthoPAT disposables revenue was $9 million, up 3% in the quarter, and $17 million, flat year-to-date. Diagnostics disposables revenues grew 11% in the quarter and 10% year to date. However, including TEG® Thrombelastograph® Hemostasis Analyzer equipment sales which are reported in this line, Diagnostics revenues were $4 million, down 10% in the quarter, and $9 million, down 6% year-to-date. Haemonetics estimates revenue will be up 4-5% for Surgical, up 5-7% for the OrthoPAT system, and up 10-12% for Diagnostics for the year.
Mr. Concannon added, "I am particularly pleased to report total revenue growth rates increasing sequentially even as our Plasma business growth rates moderate as anticipated. Haemonetics is very well positioned for future sustained growth as the anticipated recovery of elective procedures intersects with the compelling value proposition of blood management solutions."
Haemonetics has posted several items on its website: fiscal 2010 guidance; income scenarios reflecting guidance ranges; and potential fiscal 2010 product line growth. The information is posted at http://www.haemonetics.com/site/content/investor/guidance.asp.
CONFERENCE CALL
Haemonetics will host a webcast on Monday, November 2nd at 10:00 am Eastern to discuss these results. Interested parties can participate at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=72118&eventID=2486290.
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.
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 (781) 356-9517
Alt.:(617) 320-2401
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=72118&eventID=2486290
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