Haemonetics Reports Double Digit Growth in Adjusted EPS of $2.85 for Fiscal 2010; Issues Guidance for Continued, Strong Growth in Fiscal 2011
BRAINTREE, Mass., May 4, 2010 /PRNewswire via COMTEX/ --Haemonetics Corporation (NYSE: HAE) today reported record revenues and earnings for fiscal 2010. The Company also announced fiscal 2011 guidance, including continued double digit growth in earnings.
For the year, Haemonetics reported GAAP net revenues of $645 million, up 8%; net income of $58 million, and earnings per share of $2.24, down 1%. Excluding transformation costs and contingent consideration income in fiscal 2010, adjusted full year net income was $74 million, up 16%, and adjusted earnings per share were $2.85, up 16%.(1)
Fourth quarter fiscal 2010 GAAP net revenues were $169 million, up 11%; net income was $4 million, down 72%, and earnings per share were $0.15, down 71%. Excluding transformation costs and contingent consideration income in fiscal 2010 adjusted fourth quarter net income was $19 million, up 15%, and earnings per share were $0.75, up 17%.(1)
Haemonetics ended the year with $142 million in cash and $22 million of debt, and generated $75 million of free cash flow. In the year, cash was used for several strategic acquisitions and a $40 million share repurchase which Haemonetics completed in the third quarter of fiscal 2010.
Brian Concannon, Haemonetics' President and CEO, said, "Fiscal 2010 was a strong year operationally and strategically. I'm very pleased with our results. We committed several years ago to top line growth and improved profitability and we've delivered. As importantly, we strengthened our leadership position in blood management and we continue to invest in our Automated Whole Blood and Arryx Blood Typing Systems, two key products for our future."
STRATEGIC AND SEGMENT GROWTH HIGHLIGHTS
Haemonetics continues to make progress expanding its business. The Company reported the following highlights:
- Four acquisitions consummated in 13 months building out blood management solutions capabilities in line with long term strategic plans. The latest acquisition, of Global Med Technologies, Inc., closed in April 2010, substantially completes Haemonetics' platform of IT software blood management solutions.
- A strategic alliance signed with Alba Bioscience for access to a comprehensive array of FDA approved blood typing reagents for exclusive use with the Arryx blood typing platform.
- The launch of IMPACT(TM) Online - a proprietary web based blood management dash board to enhance blood management by hospital leadership.
- 66 North American IMPACT customers in fiscal 2010 driving acceleration in key product lines evidenced by Q4 growth rates of 41% in TEG(R) disposables, 9% in OrthoPAT(R) disposables and 38% in cardioPAT(R) disposables.
As noted, Haemonetics' fiscal 2010 reported revenues were $645 million, up 8%. Excluding the effects of currency, full year net revenues grew 6%. Reported revenues break down as follows:
Plasma disposables revenue was $232 million for the year, up 15%. Haemonetics' plasma business growth moderated over the course of the year as expected. Haemonetics expects its plasma business will be an ongoing high single digit revenue growth driver for the Company.
Platelet disposables revenue was $151 million for the year, up 5%. The platelet business benefited from strong sales in Asia and Japan and a recovery in our ELA distribution markets in the later part of the year.
Red cell disposables revenue was $48 million for the year, down 3%. Revenue declined due to decreased demand for red cells as a result of declining surgical procedures and fewer transfusions.
Surgical disposables revenue was $70 million for the year, up 3%. The surgical business benefited from double digit revenue growth in Japan.
OrthoPAT orthopedic perioperative autotransfusion system disposables revenue was $37 million for the year, up 5%. The Company made progress later in the year advancing OrthoPAT system sales in blood management solutions accounts.
Diagnostics revenue was $22 million for the year, up 10%. Revenues related to the TEG Thrombelastograph(R) Hemostasis Analyzer business accelerated over the course of the year driven by the Company's IMPACT initiative.
Software Solutions revenue was $36 million for the year, up 14%. Software Solutions growth was primarily impacted by underlying plasma growth, acquisitions and by the cancellation of a contract by the Department of Defense in Q4 of fiscal 2009.
Equipment revenue was $49 million for the year, up 2%. Economic conditions placed pressure on customer capital budgets which was offset by the impact of the SEBRA(R) acquisition. Placements of equipment under use plans were strong with 6% growth in our installed base during the year.
Haemonetics reported revenue growth in all geographies for the year, with North American sales up 9%, European sales up 3%, Japanese sales up 12%, and Asian sales up 13%.
FISCAL 2011 GUIDANCE(1)
Haemonetics announced its fiscal 2011 annual guidance for revenue growth of 9-12%, adjusted operating income growth of 11-14% excluding the impact of planned transformation and integration costs of approximately $7 million, and adjusted earnings per share of $3.15 to $3.25 excluding the $0.20 impact of planned transformation and integration costs. The Company expects more than 100 basis point gross margin improvement and approximately 30 basis points of adjusted operating margin improvement, and a tax rate of 30-31%. For the year, the Company expects to generate approximately $85 million of adjusted free cash flow before funding $15 million of cash transformation costs.
Mr. Concannon added, "The near term outlook for our business is strong, with balanced growth expected across multiple product lines, continued operating discipline and a strong contribution during fiscal 2011 from our latest acquisitions."
Haemonetics has posted several items on its website: fiscal 2011 guidance; income scenarios reflecting guidance ranges; and potential fiscal 2011 product line growth. The information is posted at http://www.haemonetics.com/site/content/investor/guidance.asp.
FISCAL 2011 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 13th 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 Tuesday, May 4th 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=3004348
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 at http://www.haemonetics.com/site/content/investor/investor.asp . In the quarter, Haemonetics incurred $26 million in transformation costs (related to restructuring, deal closing costs and asset write downs), and recorded $2 million in contingent consideration income, all amounts stated pre-tax. For the year, transformation costs totaled $27 million and contingent consideration income was $2 million, all amounts stated pre-tax. The total earnings per share effect of the amounts excluded from our non-GAAP earnings per share were $0.61 in FY10. Our FY11 guidance excludes $6 million of planned transformation costs and $1 million of planned integration costs, associated with the acquisition of Global Med. In total our adjusted guidance excludes $7 million of pre-tax costs and the resulting decrease of $.20 of earnings per share.
Haemonetics Corporation Financial Summary
(Unaudited data in thousands, except per share data)
Consolidated Statements of Income for the Fourth Quarter FY10
4/3/2010 3/28/2009 % Inc/(Dec)
As As vs Prior
Reported Reported Year
-------- --------- ---------
NET REVENUES $169,104 $152,397 11.0%
Gross profit 88,124 82,147 7.3%
R&D 6,662 6,958 (4.3%)
S,G&A 64,024 57,056 12.2%
Contingent consideration income (2,345) 0 ---
Asset writedowns 15,686 0 ---
------ ---
Operating expenses 84,027 64,014 31.3%
------ ------
Operating income 4,097 18,133 (77.4%)
Interest expense (20) (4) 400.0%
Interest income 90 339 (73.5%)
Other (expense)/income, net (278) (103) 169.4%
---- ----
Income before taxes 3,889 18,365 (78.8%)
Tax expense (78) 4,426 (101.8%)
NET INCOME $3,967 $13,939 (71.5%)
====== =======
Net income per common share assuming
dilution $0.15 $0.53 (71.1%)
Weighted average number of shares
Basic 25,192 25,535
Diluted 25,816 26,197
Inc/(Dec)
vs prior
year
profit
Profit Margins: margin %
----------
Gross profit 52.1% 53.9% (1.8%)
R&D 3.9% 4.6% (0.6%)
S,G&A 37.9% 37.4% 0.4%
Operating income 2.4% 11.9% (9.5%)
Income before taxes 2.3% 12.1% (9.8%)
Net income 2.3% 9.1% (6.8%)
Consolidated Statements of Income for FY10 and FY09
% Inc/
(Dec) vs
Prior
4/3/2010 3/28/2009 Year
As As
Reported Reported ---------
-------- ---------
NET REVENUES $645,430 $597,879 8.0%
Gross profit 337,481 308,169 9.5%
R&D 26,376 23,859 10.5%
S,G&A 214,483 198,743 7.9%
Contingent consideration income (2,345) 0 ---
Asset writedowns 15,686 0 ---
------ ---
Operating expenses 254,200 222,602 14.2%
------- -------
Operating income 83,281 85,567 (2.7%)
Interest expense (742) (191) 288.5%
Interest income 399 2,094 (80.9%)
Other (expense)/income, net (1,668) (2,469) (32.4%)
------ ------
Income before taxes 81,270 85,001 (4.4%)
Tax expense 22,895 25,698 (10.9%)
NET INCOME $58,375 $59,303 (1.6%)
======= =======
Net income per common share
assuming dilution $2.24 $2.27 (1.1%)
Weighted average number of shares
Basic 25,451 25,389
Diluted 26,063 26,173
Inc/(Dec)
vs prior
year
profit
Profit Margins: margin %
---------
Gross profit 52.3% 51.5% 0.7%
R&D 4.1% 4.0% 0.1%
S,G&A 33.2% 33.2% (0.0%)
Operating income 12.9% 14.3% (1.4%)
Income before taxes 12.6% 14.2% (1.6%)
Net income 9.0% 9.9% (0.9%)
Revenue Analysis for the Fourth Quarter and Year-To-Date FY10
Fourth Quarter
--------------
% Inc/
(Dec) vs
Prior
4/3/2010 3/28/2009 Year
As As
Reported Reported ---------
--------- ---------
Revenues by geography
United States $78,459 $73,297 7.0%
International $90,645 $79,100 14.6%
Net revenues $169,104 $152,397 11.0%
======== ========
Disposable revenues
Plasma disposables $54,910 $51,787 6.0%
Blood bank disposables
Platelet $39,677 $35,032 13.3%
Red cell $12,746 $12,857 (0.9%)
$52,423 $47,889 9.5%
------- -------
Hospital disposables
Surgical $18,022 $16,702 7.9%
OrthoPAT $9,953 $9,118 9.2%
Diagnostics $6,770 $4,799 41.1%
$34,745 $30,619 13.5%
------- -------
Subtotal $142,078 $130,295 9.0%
Software solutions $10,109 $9,691 4.3%
Equipment & other $16,917 $12,411 36.3%
Net revenues $169,104 $152,397 11.0%
======== ========
Year Ended
----------
% Inc/
(Dec) vs
Prior
4/3/2010 3/28/2009 Year
As As
Reported Reported ---------
--------- ---------
Revenues by geography
United States $303,682 $279,045 8.8%
International $341,748 $318,834 7.2%
Net revenues $645,430 $597,879 8.0%
======== ========
Disposable revenues
Plasma disposables $232,378 $202,173 14.9%
Blood bank disposables
Platelet $151,026 $143,420 5.3%
Red cell $48,031 $49,508 (3.0%)
$199,057 $192,928 3.2%
-------- --------
Hospital disposables
Surgical $69,942 $67,697 3.3%
OrthoPAT $37,079 $35,419 4.7%
Diagnostics $21,862 $19,881 10.0%
$128,883 $122,997 4.8%
-------- --------
Subtotal $560,318 $518,098 8.1%
Software solutions $35,919 $31,604 13.7%
Equipment & other $49,193 $48,177 2.1%
Net revenues $645,430 $597,879 8.0%
======== ========
Consolidated Balance Sheets
Period ending
-------------
4/3/10 3/28/09
------ -------
Assets
------
Cash & cash equivalents $141,562 $156,721
Accounts receivable, net 118,684 113,598
Inventories, net 79,953 76,522
Other current assets 33,491 35,552
------ ------
Total current assets 373,690 382,393
Net PP&E 153,298 137,807
Other assets 227,155 129,493
------- -------
Total assets $754,143 $649,693
======== ========
Period ending
-------------
4/3/10 3/28/09
------ -------
Liabilities & Stockholders' Equity
----------------------------------
S/T debt & current maturities $17,062 $695
Other current liabilities 114,043 92,168
------- ------
Total current liabilities 131,105 92,863
Long-term debt 4,589 5,343
Other long-term liabilities 25,325 11,603
Stockholders' equity 593,124 539,884
------- -------
Total liabilities & equity $754,143 $649,693
======== ========
Free Cash Flow Reconciliation
Three Months Ended
------------------
4/3/10 3/28/09
------ -------
GAAP cash flow from operations $35,686 $47,181
------- -------
Capital expenditures (11,428) (14,184)
Proceeds from sale of property, plant and
equipment 1,175 (139)
Net investment in property, plant and
equipment (10,253) (14,323)
------- -------
Free cash flow $25,433 $32,858
======= =======
Year Ended
----------
4/3/10 3/28/09
------ -------
GAAP cash flow from operations $129,667 $116,364
-------- --------
Capital expenditures (56,304) (56,379)
Proceeds from sale of property, plant and
equipment 1,785 2,383
Net investment in property, plant and
equipment (54,519) (53,996)
------- -------
Free cash flow $75,148 $62,368
======= =======
Haemonetics Corporation Financial Summary
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, contingent
consideration income, and asset writedowns from our GAAP expenses.
These restructuring and other items result from a significant
transformation of our business during our fiscal years 2010 and 2009.
Our fiscal 2010 restructuring is related to the integration of Global
Med Technologies and the reposition of our sales force. 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 Fourth Quarter of FY10
and FY09
04/03/10 03/28/09
-------- --------
Non-GAAP gross profit
GAAP gross profit $88,124 $82,147
Restructuring costs - -
Non-GAAP gross profit $88,124 $82,147
======= =======
Non-GAAP S,G&A
GAAP S,G&A $64,024 $57,056
Restructuring and deal closing costs (10,364) (4,359)
Non-GAAP S,G&A $53,660 $52,697
======= =======
Non-GAAP operating expenses
GAAP operating expenses $84,027 $64,014
Restructuring and deal closing costs (10,364) (4,359)
Contingent consideration income 2,345 -
Asset writedowns (15,686) -
Non-GAAP operating expenses $60,322 $59,655
======= =======
Non-GAAP operating income
GAAP operating income $4,097 $18,133
Restructuring and deal closing costs 10,364 4,359
Contingent consideration income (2,345) -
Asset writedowns 15,686 -
Non-GAAP operating income $27,802 $22,492
======= =======
Non-GAAP income before taxes
GAAP income before taxes $3,889 $18,365
Restructuring and deal closing costs 10,364 4,359
Contingent consideration income (2,345) -
Asset writedowns 15,686 -
Non-GAAP income before taxes $27,594 $22,724
======= =======
Non-GAAP net income
GAAP net income $3,967 $13,939
Restructuring and deal closing costs 10,364 4,359
Contingent consideration income (2,345) -
Asset writedowns 15,686 -
Tax benefit associated with non-GAAP items (8,202) (1,381)
Non-GAAP net income $19,470 $16,917
======= =======
Non-GAAP net income per common share assuming
dilution
GAAP net income per common share assuming
dilution $0.15 $0.53
Non-GAAP items after tax per common share
assuming dilution 0.60 0.11
Non-GAAP net income per common share assuming
dilution $0.75 $0.65
===== =====
Reconciliation of Non-GAAP Measures for FY10
and FY09
04/03/10 03/28/09
-------- --------
Non-GAAP gross profit
GAAP gross profit $337,481 $308,169
Restructuring costs - 72
Non-GAAP gross profit $337,481 $308,241
======== ========
Non-GAAP S,G&A
GAAP S,G&A $214,483 $198,743
Restructuring and deal closing costs (10,814) (6,964)
Non-GAAP S,G&A $203,669 $191,779
======== ========
Non-GAAP operating expenses
GAAP operating expenses $254,200 $222,602
Restructuring and deal closing costs (10,814) (6,964)
Contingent consideration income 2,345 -
Asset writedowns (15,686) -
Non-GAAP operating expenses $230,045 $215,638
======== ========
Non-GAAP operating income
GAAP operating income $83,281 $85,567
Restructuring and deal closing costs 10,814 7,036
Contingent consideration income (2,345) -
Asset writedowns 15,686 -
Non-GAAP operating income $107,436 $92,603
======== =======
Non-GAAP income before taxes
GAAP income before taxes $81,270 $85,001
Restructuring and deal closing costs 10,814 7,036
Contingent consideration income (2,345) -
Asset writedowns 15,686 -
Non-GAAP income before taxes $105,425 $92,037
======== =======
Non-GAAP net income
GAAP net income $58,375 $59,303
Restructuring and deal closing costs 10,814 7,036
Contingent consideration income (2,345) -
Asset writedowns 15,686 -
Tax benefit associated with non-GAAP items (8,359) (2,320)
Non-GAAP net income $74,171 $64,019
======= =======
Non-GAAP net income per common share assuming
dilution
GAAP net income per common share assuming
dilution $2.24 $2.27
Non-GAAP items after tax per common share
assuming dilution $0.61 $0.18
Non-GAAP net income per common share assuming
dilution $2.85 $2.45
===== =====
CONTACT:
Bryanne Salmon
Tel. (781) 356-9613
bsalmon@haemonetics.com
SOURCE Haemonetics Corporation