Haemonetics Corporation Reports 15% Growth in Adjusted EPS to $3.27 for Fiscal 2011

BRAINTREE, Mass., May 2, 2011 /PRNewswire/ -- Haemonetics Corporation (NYSE: HAE) today reported record revenues of $677 million, up 5% for fiscal 2011. An extra week in fiscal 2010 reduced fiscal 2011 annual revenue growth by 2% and fourth quarter revenue growth by 7%.

Fourth quarter fiscal 2011 GAAP net revenues were $170 million, up 1%, and up 8% excluding the effect of the extra week in fiscal 2010. Net income was $21 million, up more than 100%, and earnings per share were $0.81, up more than 100%. Excluding transformation costs and contingent consideration income in fiscal 2010, adjusted fourth quarter net income was $22 million, up 13%, and earnings per share were $0.85, up 12%.(1)

For the year, Haemonetics reported GAAP net revenues of $677 million, up 5%, and up 7% excluding the effect of the extra week in fiscal 2010. Net income was $80 million, up 37%, and earnings per share were $3.12, up 40%. Excluding transformation costs and contingent consideration income, adjusted full year net income was $84 million, up 13%, and adjusted earnings per share were $3.27, up 15%.(1)

Haemonetics ended the year with nearly $200 million in cash and $5 million of debt, and generated $93 million of free cash flow before funding $15 million in cash transformation costs.

Brian Concannon, Haemonetics President and CEO, said I am very pleased with our continued strong earnings growth and cash flow generation despite the challenging market environment we faced in fiscal 11. This marks the eighth straight year of double digit adjusted earnings per share growth at Haemonetics.

STRATEGIC AND SEGMENT GROWTH HIGHLIGHTS

Haemonetics continues to make progress expanding its business. The Company reported the following highlights:

• The launch of IMPACT Online 3.0 - a proprietary web based blood management dash board to enhance blood management by hospital leadership.
• 197 Global IMPACT customers in fiscal 2011 driving solid revenue growth, with rapid adoption by our European customer base.
• The successful integration of our software businesses aimed at delivering the information highway focused on the compliance, productivity, availability and safety of blood products from the donor to the patient.
• Launch of Cell Saver Elite designed to meet our customers growing blood management needs.

As noted, Haemonetics fiscal 2011 reported revenues were $677 million, up 5%. Excluding the effect of the extra week in fiscal 2010, fiscal 2011 revenues were up 7% for the year. Fiscal 2011 annual revenues break down as follows:

Plasma disposables revenue was $227 million for the year, down 2%, and flat excluding the effect of the extra week. Haemonetics plasma business growth has accelerated over the course of the year following a cyclical adjustment in the commercial Plasma business earlier this year. Plasma revenues have also been negatively impacted by a change in collection practices in Japan.

Blood bank

Platelet disposables revenue was $156 million for the year, up 3%, and up 5% excluding the effect of the extra week. Platelet revenues benefited from strong sales in emerging markets.

Red cell disposables revenue was $47 million for the year, down 3%, and down 1% excluding the effect of the extra week. Revenue declined due to decreased demand for red cells as a result of declining surgical procedures and fewer transfusions.

Hospital

Surgical disposables revenue was $67 million for the year, down 5%, and down 3% excluding the effect of the extra week. The surgical business was challenged by declining surgical procedures.

OrthoPAT® orthopedic perioperative autotransfusion system disposables revenue was $36 million for the year, down 4%, and down 2% excluding the effect of the extra week. OrthoPAT growth at IMPACT accounts was 14% reinforcing our confidence in IMPACT selling. The Company is making improvements to the reliability of our OrthoPAT system and will continue to advance Quick Connect to reinforce the value proposition of this important blood management device.

Diagnostics revenue was $19 million for the year, up 16%, and up 18% excluding the effect of the extra week. Revenues related to the TEG Thrombelastograph^® Hemostasis Analyzer business were also driven by the Companys IMPACT initiative.

Software Solutions revenue was $67 million for the year, up 86%. We integrated the Global Med acquisition and significantly enhanced our offering of software products for our Blood Bank and Hospital customers.

Equipment and other revenue was $58 million for the year, up 7%. Placements of equipment under use plans were strong with 7% total growth in our installed base during the year.

Haemonetics reported revenue growth in all geographies for the year, with North American sales up 4%, European sales up 4%, Japanese sales up 1%, and Asian sales up 20%.

FISCAL 2012 GUIDANCE(1)

Haemonetics announced its fiscal 2012 annual guidance for organic revenue growth of 4-6%, adjusted operating income growth of 8-10% excluding the impact of planned transformation and integration costs of approximately $8 million, and adjusted earnings per share of $3.50 to $3.62. The Company expects more than 200 basis point gross margin improvement and approximately 70 basis points of adjusted operating margin improvement, and a tax rate of approximately 28%. For the year, the Company expects to generate approximately $85 million of adjusted free cash flow before funding $9 million of cash transformation costs.

Mr. Concannon added. As demand for blood components returns to normal levels, we are uniquely positioned with compelling products and services to help our customers with their growing blood management needs in this period of health care reform. We are gaining traction implementing our blood management solutions and this is contributing to improved growth rates in our hospital and blood center products.

Haemonetics has posted several items on its website: fiscal 2012 guidance; income scenarios reflecting guidance ranges; and potential fiscal 2012 product category growth. The information is posted at http://phx.corporate-ir.net/phoenix.zhtml?c=72118&p=irol-guidance .

FISCAL 2012 SHARE REPURCHASE PROGRAM

The Company announced that its Board of Directors has approved a $50 million share repurchase.

ANNUAL INVESTOR DAY

Haemonetics is hosting its annual investor and analyst day on Thursday, May 12th at its corporate headquarters in Braintree, MA. Information on the event is posted on the Haemonetics website.

CONFERENCE CALL

Haemonetics will host a webcast on Monday, May 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=3909107

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.

(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 athttp://www.haemonetics.com. In FY11 Haemonetics incurred $8.3 million in transformation costs related to the integration of Global Med and the transformation of our European sales organization and certain manufacturing activities, and recorded $1.9 million in contingent consideration income, all amounts stated pre-tax. The total earnings per share effect of the amounts excluded from our non-GAAP earnings per share were $0.15 in FY11. Our FY12 guidance excludes $8 million of planned transformation and integration costs associated with the infrastructure supporting our research and supply chain organization and the integration of our software solutions business.