Haemonetics Reports Double Digit Growth in Earnings for Second Quarter Fiscal 2010
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%.(1)
In addition to revenue and earnings growth,
Year-to-date, gross margin is 52.7%, up 170 basis points. Operating expenses are
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
STRATEGIC AND SEGMENT GROWTH HIGHLIGHTS
-- The completion of limited market release on its new Express(TM) 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(TM) 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,
Plasma disposables revenue was
Platelet disposables (formerly reported as
Red Cell disposables revenue was
Software Solutions revenue was
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.
CONFERENCE CALL
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
(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. In the second quarter and first half of fiscal 2009,
Haemonetics Corporation Financial Summary
(Unaudited data in thousands, except per share data)
Consolidated Statements of Income for the Second Quarter FY10
9/26/09 9/27/08 % Inc/(Dec) vs
As Reported As Reported Prior Year
----------- ----------- ---------------
NET REVENUES $157,070 $145,919 7.6%
Gross profit 80,967 74,689 8.4%
R&D 6,475 5,217 24.1%
S,G&A 47,469 45,863 3.5%
------ ------
Operating expenses 53,944 51,080 5.6%
------ ------
Operating income 27,023 23,609 14.5%
Interest expense (255) (16) 1493.8%
Interest income 103 506 (79.6%)
Other (expense)/income, net (801) (1,290) (37.9%)
---- ------
Income before taxes 26,070 22,809 14.3%
Tax expense 8,020 8,002 0.2%
------- -------
NET INCOME $18,050 $14,807 21.9%
======= =======
Net income per common share
assuming dilution $0.69 $0.57 20.1%
Weighted average number
of shares
Basic 25,685 25,038
Diluted 26,321 25,917
Inc/(Dec) vs
prior year
Profit Margins: profit margin %
-----------------
Gross profit 51.5% 51.2% 0.3%
R&D 4.1% 3.6% 0.5%
S,G&A 30.2% 31.4% (1.2%)
Operating income 17.2% 16.2% 1.0%
Income before taxes 16.6% 15.6% 1.0%
Net income 11.5% 10.1% 1.4%
Consolidated Statements of Income for FY10 Year-To-Date
9/26/09 9/27/08 % Inc/(Dec)
As Reported As Reported vs Prior Year
----------- ----------- --------------
NET REVENUES $311,158 $290,035 7.3%
Gross profit 163,910 147,726 11.0%
R&D 13,252 11,061 19.8%
S,G&A 97,308 93,722 3.8%
------- -------
Operating expenses 110,560 104,783 5.5%
------- -------
Operating income 53,350 42,943 24.2%
Interest expense (463) (40) 1057.5%
Interest income 253 1,160 (78.2%)
Other (expense)/income, net (1,135) (915) 24.0%
------ ----
Income before taxes 52,005 43,148 20.5%
Tax expense 15,882 14,000 13.4%
------- -------
NET INCOME $36,123 $29,148 23.9%
======= =======
Net income per common share
assuming dilution $1.37 $1.11 23.7%
Weighted average number
of shares
Basic 25,671 25,323
Diluted 26,273 26,218
Inc/(Dec) vs
prior year
Profit Margins: profit margin %
---------------
Gross profit 52.7% 50.9% 1.8%
R&D 4.3% 3.8% 0.5%
S,G&A 31.3% 32.3% (1.0%)
Operating income 17.1% 14.8% 2.3%
Income before taxes 16.7% 14.9% 1.8%
Net income 11.6% 10.0% 1.6%
Revenue Analysis for the Second Quarter and Year-To-Date FY10
Second Quarter
--------------
9/26/09 9/27/08 % Inc/(Dec)
As Reported As Reported vs Prior Year
----------- ----------- --------------
Revenues by geography
United States $74,856 $66,511 12.5%
International $82,214 $79,408 3.5%
------- -------
Net revenues $157,070 $145,919 7.6%
======== ========
Disposable revenues
Plasma disposables $59,423 $49,924 19.0%
Blood bank disposables
Platelet $37,250 $36,294 2.6%
Red cell $11,484 $11,758 (2.3%)
------- -------
$48,734 $48,052 1.4%
------- -------
Hospital disposables
Surgical $16,631 $15,984 4.0%
OrthoPAT $8,678 $8,393 3.4%
Diagnostics $4,282 $4,763 (10.1%)
------ ------
$29,591 $29,140 1.5%
------- -------
Subtotal $137,748 $127,116 8.4%
Software solutions $9,100 $7,079 28.5%
Equipment & other $10,222 $11,724 (12.8%)
------- -------
Net revenues $157,070 $145,919 7.6%
======== ========
Six Months Ended
----------------
9/26/09 9/27/08 % Inc/(Dec)
As Reported As Reported vs Prior Year
----------- ----------- --------------
Revenues by geography
United States $149,869 $132,300 13.3%
International $161,289 $157,735 2.3%
-------- --------
Net revenues $311,158 $290,035 7.3%
======== ========
Disposable revenues
Plasma disposables $118,293 $96,792 22.2%
Blood bank disposables
Platelet $71,557 $71,953 (0.6%)
Red cell $23,263 $23,600 (1.4%)
------- -------
$94,820 $95,553 (0.8%)
------- -------
Hospital disposables
Surgical $34,056 $33,253 2.4%
OrthoPAT $17,262 $17,189 0.4%
Diagnostics $9,279 $9,857 (5.9%)
------ ------
$60,597 $60,299 0.5%
------- -------
Subtotal $273,710 $252,644 8.3%
Software solutions $17,554 $14,337 22.4%
Equipment & other $19,894 $23,054 (13.7%)
------- -------
Net revenues $311,158 $290,035 7.3%
======== ========
Consolidated Balance Sheets
Period ending
------------------------
9/26/09 3/28/09
------- -------
Assets
------
Cash & cash equivalents $178,322 $156,721
Accounts receivable, net 118,668 113,598
Inventories, net 77,136 76,522
Other current assets 31,999 35,552
------ ------
Total current assets 406,125 382,393
Net PP&E 152,954 137,807
Other assets 155,215 129,493
------- -------
Total assets $714,294 $649,693
======== ========
Period ending
------------------------
9/26/09 3/28/09
------- -------
Liabilities & Stockholders' Equity
----------------------------------
S/T debt & current maturities $15,181 $695
Other current liabilities 97,642 92,168
------ ------
Total current liabilities 112,823 92,863
Long-term debt 4,974 5,343
Other long-term liabilities 17,065 11,603
Stockholders' equity 579,432 539,884
------- -------
Total liabilities & equity $714,294 $649,693
======== ========
Free Cash Flow Reconciliation
Three Months Ended
------------------
9/26/09 9/27/08
------- -------
GAAP cash flow from operations $35,773 $27,935
------- -------
Capital expenditures (11,676) (16,380)
Proceeds from sale of property,
plant and equipment 182 321
--- ---
Net investment in property,
plant and equipment (11,494) (16,059)
------- -------
Free cash flow $24,279 $11,876
======= =======
Six Months Ended
----------------
9/26/09 9/27/08
------- -------
GAAP cash flow from operations $61,479 $41,777
------- -------
Capital expenditures (32,880) (28,775)
Proceeds from sale of property,
plant and equipment 383 2,797
--- -----
Net investment in property,
plant and equipment (32,497) (25,978)
------- -------
Free cash flow $28,982 $15,799
======= =======
Haemonetics Corporation Financial Summary
Reconciliation of Non-GAAP Measures
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 our fiscal years 2009 and 2008. This transformation resulted in the formation of a shared service center in
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 Second Quarter of FY10 and
FY09
-------- --------
09/26/09 09/27/08
-------- --------
Non-GAAP gross profit
GAAP gross profit $80,967 $74,689
Restructuring costs 0 0
------- -------
Non-GAAP gross profit $80,967 $74,689
======= =======
Non-GAAP S,G&A
GAAP S,G&A $47,469 $45,863
Restructuring costs 0 (319)
------- -------
Non-GAAP S,G&A $47,469 $45,544
======= =======
Non-GAAP operating expenses
GAAP operating expenses $53,944 $51,080
Restructuring costs 0 (319)
------- -------
Non-GAAP operating expenses $53,944 $50,761
======= =======
Non-GAAP operating income
GAAP operating income $27,023 $23,609
Restructuring costs 0 319
------- -------
Non-GAAP operating income $27,023 $23,928
======= =======
Non-GAAP income before taxes
GAAP income before taxes $26,070 $22,809
Restructuring costs 0 319
------- -------
Non-GAAP income before taxes $26,070 $23,128
======= =======
Non-GAAP net income
GAAP net income $18,050 $14,807
Restructuring costs 0 319
Tax benefit associated with
restructuring costs 0 (112)
------- -------
Non-GAAP net income $18,050 $15,014
======= =======
Non-GAAP net income per common
share assuming dilution
GAAP net income per common
share assuming dilution $0.69 $0.57
Restructuring costs after tax per
common share assuming dilution $0.00 $0.01
----- -----
Non-GAAP net income per common
share assuming dilution $0.69 $0.58
===== =====
Reconciliation of Non-GAAP Measures for the First Six Months of FY10
and FY09
-------- --------
09/26/09 09/27/08
-------- --------
Non-GAAP gross profit
GAAP gross profit $163,910 $147,726
Restructuring costs 0 72
-------- --------
Non-GAAP gross profit $163,910 $147,798
======== ========
Non-GAAP S,G&A
GAAP S,G&A $97,308 $93,722
Restructuring costs 0 (2,100)
------- -------
Non-GAAP S,G&A $97,308 $91,622
======= =======
Non-GAAP operating expenses
GAAP operating expenses $110,560 $104,783
Restructuring costs 0 (2,100)
-------- --------
Non-GAAP operating expenses $110,560 $102,683
======== ========
Non-GAAP operating income
GAAP operating income $53,350 $42,943
Restructuring costs 0 2,172
------- -------
Non-GAAP operating income $53,350 $45,115
======= =======
Non-GAAP income before taxes
GAAP income before taxes $52,005 $43,148
Restructuring costs 0 2,172
------- -------
Non-GAAP income before taxes $52,005 $45,320
======= =======
Non-GAAP net income
GAAP net income $36,123 $29,148
Restructuring costs 0 2,172
Tax benefit associated with
restructuring costs 0 (762)
------- -------
Non-GAAP net income $36,123 $30,558
======= =======
Non-GAAP net income per common
share assuming dilution
GAAP net income per common
share assuming dilution $1.37 $1.11
Restructuring costs after tax per
common share assuming dilution $0.00 $0.05
----- -----
Non-GAAP net income per common
share assuming dilution $1.37 $1.17
===== =====
SOURCE
Julie Fallon of Haemonetics Corporation, +1-781-356-9517 or +1-617-320-2401, fallon@haemonetics.com