BRAINTREE, Mass., Jan. 31 /PRNewswire-FirstCall/ -- Haemonetics Corporation today reported third quarter fiscal 2008 GAAP net revenues of $135 million, up 18.6%; net income of $14 million, down 15.1%; and net earnings per share of $0.54, down 12.1%.
Third quarter fiscal 2008 adjusted net income, excluding charges in both fiscal 2007 and 2008 and certain tax benefits in 2007, was $15 million, up 12.5%, and adjusted earnings per share were $0.57, up 16.4%.(1) Haemonetics also reported year-to-date net revenues of $378 million, up 13.5%; adjusted net income of $41 million, up 11.2%; and adjusted net earnings per share of $1.53, up 15.3%.(2)
Brad Nutter, Haemonetics' Chairman and CEO, said, "Q3 performance was strong, and we are especially pleased to report our third consecutive quarter of double digit revenue growth. Our 19% growth comes from strength across multiple product lines and geographies. The outlook for these markets continues to be positive. As such, we are adjusting our annual revenue guidance from 10-12% growth to 11-13% growth."
"We are making good strides on our strategic vision to be the global leader in blood management solutions for our customers. Haemonetics is providing customers with a value proposition that includes an extensive depth and breadth of products, services, and software across the blood bank and hospital markets," Mr. Nutter added.
The Company has attached a reconciliation of GAAP to adjusted results at the end of this release. A copy of the reconciliation is also posted on the web at http://www.haemonetics.com/investors.
FINANCIALS
In addition to revenues and earnings per share, Haemonetics reported third quarter gross profit of $67 million, up 18.0%, and gross margin of 49.5%, down 20 basis points. Gross margin was impacted by product mix as lower gross margin contributors, plasma and equipment, had very strong sales growth. Year-to-date gross profit is $188 million, up 11.2%, and gross margin is 49.8%, down 100 basis points.
Adjusted (1,2) operating expenses for the quarter were $46 million, up 16.8%, with nearly half of the increase coming from three areas: 1) planned enterprise resource planning ("ERP") spending; 2) the acquisition of IDM, Infonale, and Haemoscope, whose expenses were not included in Q3FY07 financial results; and 3) continued investment in Arryx R&D. Year-to-date adjusted operating expenses are $134 million, up 11.7%.
Haemonetics' tax rate was 31.0% in the quarter and 31.7% year-to-date. In the quarter, Haemonetics benefited from resolution of certain tax contingencies.
Haemonetics ended the quarter with a cash balance of $117 million, and $12 million of debt. During the quarter, the Company generated $25 million of cash flow from operations and invested $15 million in capital expenditures.
EXPANDING THE BUSINESS
Haemonetics continues to make progress expanding the business. The Company reported the following highlights:
QUARTERLY PRODUCT LINE GROWTH
Brian Concannon, Haemonetics' Chief Operating Officer, said, "A diverse product portfolio drove the Company to nearly 19% revenue growth. Our product line growth drivers continue to do well. I am also pleased to announce that our geographic growth was strong. In the quarter, Asia, a $32 million business, grew 21.2% and Europe, a $135 million business, grew 26.5%. Our reorganization of these businesses is paying off."
Among the product line growth drivers, plasma disposables revenue was $41 million for the quarter, up 27.5%. Year-to-date plasma disposables revenue is $115 million, up 19.3%. Plasma disposable sales benefited from continued growth in U.S. and European plasma collections. Haemonetics expects that growth in the plasma market will continue to drive strong plasma sales for the next several years.
Blood bank disposables revenue was $33 million for the quarter, up 7.3%. Year-to-date blood bank disposables revenue is $100 million, up 6.8%. Blood bank growth was driven by strong sales in Europe and Asia as the Company sees early benefits from last year's reorganization initiatives.
Red cell disposables revenue was $12 million for the quarter, up 12.1%. Year-to-date red cell disposables revenue is $34 million, up 6.7%. Strong equipment sales of the newest generation Cymbal(R) automated blood collection system and the MCS(R)+ mobile collection system in the first half of the year are driving stronger disposable sales in the second half of the year. Including equipment sales, total revenues for the red cell product line grew 15.0% in the quarter and 12.7% year-to-date.
Software and services revenue grew to $11 million for the quarter, up 18.0%. Year-to-date software and services revenue is $30 million, up 26.4%. In the quarter, Haemonetics Software Solutions completed the integration of the Surround software suite into the operations of Hema Quebec. With that software installation, all Canadian blood testing is now being processed through Haemonetics' Surround software.
OrthoPAT disposables revenue was $9 million for the quarter, up 21.3%. Year-to-date OrthoPAT disposables revenue is $25 million, up 13.5%. The Company has placed more than 130 OrthoPAT devices in the field this fiscal year. Equipment placements are expected to continue to drive disposables growth into fiscal 2009.
Equipment revenue was $8 million for the quarter, up 63.4%, and $22 million year-to-date, up 46.6%. Equipment sales growth was driven by sales of plasma devices in the growing European and Asian markets and by sales of platelet equipment in Europe.
FY08 GUIDANCE
Haemonetics raised its FY08 revenue growth guidance from 10-12% growth to 11-13% growth, narrowed its expected gross profit to a range of $250-$253 million, and affirmed adjusted operating income growth of approximately 10%. The Company also affirmed the range for its adjusted earnings per share of $2.07-$2.12.
Adjusted FY08 guidance excludes approximately $4-5 million, or approximately $0.11 per share, of costs to restructure Haemonetics' European business.
FY08 GAAP earnings per share guidance is $1.96-$2.01.
For the full year, the Company expects to generate $20-$25 million of free cash flow.
Haemonetics has posted potential income scenarios reflecting guidance ranges on its website at www.haemonetics.com.
CONFERENCE CALL
Haemonetics will hold a conference call on Thursday, January 31st 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 30405896. The call will be replayed through February 15, 2008 at (800) 642-1687 (U.S. only) or (706) 645-9291 (International) using PIN 30405896.
Haemonetics is a global healthcare company dedicated to providing innovative blood management solutions for our customers. Together, our devices and consumables, IT products, 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 and an in-process research and development charge. 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.
fallon@haemonetics.com
CONTACT: Julie Fallon of Haemonetics Corporation, +1-781-356-9517, or
Alternate Tel., +1-617-320-2401, fallon@haemonetics.com
