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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) October 31, 2006
HAEMONETICS CORPORATION
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(Exact name of registrant as specified in its charter)
Massachusetts 1-10730 04-2882273
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
400 Wood Road 02184
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 781-848-7100
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On October 31, 2006 Haemonetics Corporation (the "Company") issued a press
release announcing financial results for the second quarter and six months ended
September 30, 2006. A copy of the release is furnished with this report as
exhibit 99.1.
The information in this current report on Form 8-K and the exhibit attached
hereto shall not be deemed "filed" for the purposes of Section 18 of the
Securities and Exchange Act of 1934 (the "Exchange Act") or otherwise subject to
the liabilities of that section, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933 or the Exchange Act,
regardless of any general incorporation language in such filing.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
99.1: Press Release of Haemonetics Corporation dated October 31, 2006 announcing
financial results for the second quarter and six months ended
September 30, 2006.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HAEMONETICS CORPORATION
------------------------
(Registrant)
Date: October 31, 2006 /s/ RONALD J. RYAN
------------------------
Ronald J. Ryan,
Vice President and
Chief Financial Officer
3
Exhibit 99.1
HAEMONETICS(R) REPORTS SECOND QUARTER FISCAL 2007 FINANCIAL RESULTS AND
AFFIRMS ANNUAL REVENUE PRO FORMA AND EPS GUIDANCE
BRAINTREE, Mass., Oct. 31 /PRNewswire-FirstCall/ -- Haemonetics Corporation
(NYSE: HAE) reported second quarter fiscal 2007 GAAP net revenue of $108
million, up 8.0% over prior year, and year-to-date GAAP net revenue of $219
million, up 7.6% over the first half of 2006.
Brad Nutter, Haemonetics' President and CEO, said, "The growth drivers of
our business, namely plasma, red cells, and the OrthoPAT(R) system, continued to
perform well in the quarter. In fact, total disposables sales, which make up
nearly 90% of total revenues, grew 11% in the quarter. We're pleased with this
growth, particularly when we consider that equipment sales declined 33.5%, $2
million, as we compared to a very strong quarter last year."
Diluted GAAP net earnings per share were $0.05 for the quarter, down 88.5%
from 2Q:06 and $0.44 year-to-date, down 48.4%. As previously announced,
Haemonetics' financial results were impacted by three items: FAS 123R required
stock option expense, restructuring costs in connection with changes to the
Company's international operations, and an in-process R&D charge arising from
the second quarter acquisition of Arryx. Thus, GAAP financials results were
impacted as follows: FAS 123R (pre-tax) charges of $2 million, or $0.06 per
share, for the quarter, and $5 million, or $0.13 per share, year-to-date;
restructuring (pre-tax) charges of $1 million, or $0.03 per share, for the
quarter, and $3 million, or $0.06 per share, year-to date; and, an in-process
R&D (pre and after tax) charge of $9 million, or $0.33 per share, for the
quarter and year-to-date.
Excluding the charges noted above, Haemonetics' pro forma diluted net
earnings per share were $0.46 for the quarter, up 15.0%, and $0.97 year-to-date,
up 11.0%.
FINANCIAL RESULTS
Other pro forma results versus FY06 are as follows:
* Revenue of $108 million for Q2:07, up 8.0%, and $219 million
year-to-date, up 7.6%
* Gross profit of $55 million for Q2:07, up 6.7%, and $113 million
year-to-date, up 6.0%
* Operating expense of $38 million for Q2;07, up 3.2%, and $75 million
year-to-date, up 4.0%
* Operating income of $18 million for Q2:07, up 14.9%, and $37 million
year-to-date, up 10.1%
* Earnings per share $0.46 for Q2:07, up 15.0%, and $0.97 year-to-date, up
11.0%
* Gross margin of 50.9% for Q2:07, down 60 basis points, and 51.4%
year-to-date, down 80 basis points
* Operating margin of 16.3% for Q2:07, up 100 basis points, and 17.0%
year-to-date, up 40 basis points
* Tax rate of 34.6% in Q2:07 versus 33.3% in Q2:06, and 34.8%
year-to-date, level with prior year
Haemonetics also reported the following GAAP results versus FY06:
* Revenue of $108 million for Q2:07, up 8.0%, and $219 million
year-to-date, up 7.6%
* Gross profit of $55 million for Q2:07, up 6.6%, and $113 million
year-to-date, up 5.9%
* Operating expense of $50 million for Q2;07, up 36.7%, and $92 million
year-to-date, up 27.1%
* Operating income of $5 million for Q2:07, down 66.1%, and $20 million
year-to-date, down 40.2%
* Earnings per share of $0.05 for Q2:07, down 88.5%, and $0.44
year-to-date, down 48.4%
* Gross margin of 50.8% for Q2:07, down 70 basis points, and 51.3%
year-to-date, down 90 basis points
* Operating margin of 4.8% for Q2:07, down 1030 basis points, and 9.1%
year-to-date, down 740 basis points
BALANCE SHEET
Haemonetics' cash and short term investments declined $8.5 million, for a
cash balance of $242 million. In Q2 Haemonetics initiated a share repurchase
program and spent $14 million to repurchase 305,000 shares of its common stock.
The Company has $26 million remaining under the $40 million Board authorization.
The Company generated $16 million in cash flow from operating activities for the
quarter and $33.5 million year-to-date.
DONOR PRODUCT LINE
For the quarter, plasma disposable sales benefited from continued growth in
U.S. and European plasma collections and from several new customer contracts.
Worldwide plasma disposables revenue was $32 million for the quarter, up 23.6%
over Q2:06, and $64 million year-to-date, up 20.0%.
Stephen Swenson, General Manager of the Global Plasma Business, said, "We're
ahead of our schedule to place 800 plasma devices in the year, having placed 600
devices year-to-date. Recent statistics show that demand for intravenous
immunoglobulin, a key driver of plasma collections, is growing at greater than
10% per year."
Worldwide blood bank disposables revenue was $32 million for the quarter,
down 1.6% from Q2:06, and $63 million year-to-date, down 2.8%. Platelet
disposables comprise the majority of blood bank sales. The platelet market is
mature with collections remaining level as collection efficiencies offset an
increased demand for platelets.
Red cell disposables revenue continues to benefit from a favorable shift in
product mix as well as from unit growth in the U.S. U.S. revenue grew 20%.
Worldwide red cell disposables revenue was $10 million for the quarter, up 16.5%
over Q2:06, and $21 million year-to-date, up 20.8%. As announced earlier in the
quarter, Haemonetics signed a multi-year agreement with the American Red Cross
to continue the use of Haemonetics' red cell collection technology at twenty-one
Red Cross regions across the U.S.
PATIENT PRODUCT LINE
The Company reported strong progress in its transition to direct U.S.
sales of the OrthoPAT system. U.S. OrthoPAT disposables revenue grew 86.8%.
Worldwide OrthoPAT disposables revenue was $7 million, up 56.2% over Q2:06,
and $15 million year-to-date, up 44.6%. OrthoPAT revenue growth was driven by
price improvement and new customers.
Surgical disposables revenue, principally sales of the Cell Saver(R)
systems, was $15 million in the quarter, down 1.9% from Q2:06, and $32 million
year-to-date, down 0.6%. As previously stated, Haemonetics is maintaining its
market share, but demand for Cell Saver 5+ continues to decline as surgical
advances allow for lower blood loss surgeries. The Cell Saver system is
principally used in high blood loss surgeries. New product sales are expected to
positively impact Surgical disposable sales in the second half of the year.
In the quarter, Haemonetics announced the U.S. market launch of the
SmartSuction(R) Solo(TM) auto-regulating surgical suction device. The
SmartSuction Solo system is Haemonetics' first product to expand its reach
beyond blood salvage into blood management. The system addresses a $230 million
market.
OTHER PRODUCTS
Equipment sales in the quarter were $4 million, down 33.5% from 2Q:06, and
$10 million year-to-date, down 21.4%. Equipment sales are not recurring and can
be opportunistic. Equipment sales comparisons were against Q2:06 when sales were
up 157% due to the introduction of the Cell Saver 5+ system and sales of ACP(R)
215 systems.
Services and Software sales grew to $8 million in the quarter, up 12.5% over
2Q:06, and $14 million year-to-date, up 11.4%. Services/software sales growth
has been strong over the past 18 months, and its revenue is now of the size
where growth is having a meaningful impact on the Company's total revenue. Sales
growth has been driven largely by software sales in our 5D(TM) Information
Management division.
FY07 GUIDANCE
The Company affirmed its pro forma FY07 guidance measures, with the
exception of gross margin. As noted previously, the product growth mix shift to
plasma products will affect Haemonetics' gross margins for the year. As such,
Haemonetics updated its gross margin guidance from approximately 52% to
approximately 51%. FY07 pro forma guidance will be measured against pro forma
FY06 results. Annual FY07 pro forma guidance is:
* Revenue growth of 10-14%
* Gross margin of approximately 51%
* Operating income growing approximately 17%
* Operating margins improving to approximately 18%
* Earnings per share in the range of $2.05-$2.17
Haemonetics has posted potential income and revenue scenarios reflecting the
high and low ranges of guidance on its website at http://www.haemonetics.com.
For comparison purposes, the FY06 pro forma results exclude the benefit of
an arbitration award received in the third quarter which added $26.4 million to
operating income and $0.62 to earnings per share.
The FY07 guidance is based on anticipated annual pro forma results that
exclude three items: 1) the impact from stock compensation expense (FAS 123R),
expected to be approximately $10 million (pre-tax), or $0.25 per share with
costs spread throughout the year; 2) a restructuring charge of $3-4 million
(pre-tax), or $0.07 to $0.09 per share, with costs spread throughout the year;
and 3) an in-process R&D charge of $9 million (pre and after tax), or $0.33 per
share, related to the Company's acquisition of Arryx, taken in the second
quarter.
As the Company's in-process R&D charge is lower than expected, Haemonetics
is raising its FY07 GAAP earnings per share to a range of $1.38 to $1.52 (from a
range of $1.15 to $1.29).
In FY07, the Company expects to generate $35-$40 million of operating cash
flow, Haemonetics' internal cash flow measurement.
CONFERENCE CALL
Haemonetics will hold a conference call on Tuesday, October 31st at 10:00 am
Eastern. The call will discuss the second quarter results. Interested parties
can participate in the conference call by dialing (888) 868-9083 (U.S. only) or
(973) 935-8512 with conference ID 7929614. The call will be replayed through
November 14th at (877) 519-4471 (U.S. only) or (973) 341-3080 using PIN 7929614.
Haemonetics (NYSE: HAE) is a global company engaged in the design,
manufacture and worldwide marketing of automated blood processing systems. These
systems address important medical markets: surgical blood salvage, blood
component collection, plasma collection, and blood component safety. To learn
more about Haemonetics' products and markets, visit its web site at
http://www.haemonetics.com.
Haemonetics has presented supplemental non-GAAP financial results as part of
this release which exlcude stock compensation expense, restructuring costs and
an in-process research and development charge and other unusual items associated
with the acquisition of Arryx. 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.
CONTACT:
Julie Fallon
Tel. (781) 356-9517
Alternate Tel. (617) 320-2401
fallon@haemonetics.com
HAEMONETICS CORPORATION FINANCIAL SUMMARY
(UNAUDITED DATA IN THOUSANDS, EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SECOND QUARTER FYE07
9/30/06 10/01/05 % Inc/(Dec) vs
As Reported As Reported (1) Prior Year
------------ --------------- ---------------
NET REVENUES $ 108,487 $ 100,488 8.0%
Gross profit 55,162 51,765 6.6
R&D 6,119 6,283 (2.6)
S,G&A 34,741 30,103 15.4
In-Process R&D 9,073 0 ---
Cost to Equity 73 187 (61.0)
Operating expenses 50,006 36,573 36.7
Operating income 5,156 15,192 (66.1)
Interest expense (421) (522) (19.3)
Interest income 1,951 1,083 80.1
Other income/(expense), net 425 481 (11.6)
Income before taxes 7,111 16,234 (56.2)
Tax expense 5,845 5,476 6.7
NET INCOME $ 1,266 $ 10,758 (88.2)
Net income per common share
assuming dilution $ 0.05 $ 0.39 (88.5)%
Weighted average number of shares
Basic 27,087 26,395
Diluted 27,969 27,354
Inc/(Dec) vs
prior year
9/30/06 10/01/05 profit margin
As Reported As Reported (1) %
----------- --------------- -------------
Profit Margins:
Gross profit 50.8% 51.5% (0.7)%
R&D 5.6% 6.3% (0.7)%
S,G&A 32.0% 30.0% 2.0%
Operating income 4.8% 15.1% (10.3)%
Income before taxes 6.6% 16.2% (9.6)%
Net income 1.2% 10.7% (9.5)%
CONSOLIDATED STATEMENTS OF INCOME FOR FYE07 YEAR TO DATE
9/30/06 10/01/05 % Inc/(Dec) vs
As Reported As Reported (1) Prior Year
------------ --------------- ---------------
NET REVENUES $ 219,161 $ 203,661 7.6%
Gross profit 112,535 106,289 5.9
R&D 11,541 11,824 (2.4)
S,G&A 71,649 60,591 18.3
In-Process R&D 9,073 0 ---
Cost to Equity 225 362 (37.8)
Operating expenses 92,488 72,777 27.1
Operating income 20,047 33,512 (40.2)
Interest expense (846) (1,063) (20.4)
Interest income 3,977 2,396 66.0
Other income/(expense), net 1,337 1,345 (0.6)
Income before taxes 24,515 36,190 (32.3)
Tax expense 12,093 12,723 (5.0)
NET INCOME $ 12,422 $ 23,467 (47.1)
Net income per common share
assuming dilution $ 0.44 $ 0.86 (48.4)%
Weighted average number of shares
Basic 26,993 26,338
Diluted 27,948 27,279
Inc/(Dec) vs
prior year
9/30/06 10/01/05 profit margin
As Reported As Reported (1) %
------------ --------------- ---------------
Profit Margins:
Gross profit 51.3% 52.2% (0.9)%
R&D 5.3% 5.8% (0.5)%
S,G&A 32.7% 29.8% 2.9%
Operating income 9.1% 16.5% (7.4)%
Income before taxes 11.2% 17.8% (6.6)%
Net income 5.7% 11.5% (5.8)%
REVENUE ANALYSIS FOR THE SECOND QUARTER FYE07
9/30/06 10/01/05
As Reported As Reported % Inc/(Dec)
------------ ------------ ------------
Revenues by Geography
United States $ 46,811 $ 37,930 23.4%
International 61,676 62,558 (1.4)
Net Revenues $ 108,487 $ 100,488 8.0%
Disposable Revenues by Product Family
Donor:
Plasma $ 32,072 $ 25,938 23.6%
Blood Bank 31,678 32,193 (1.6)
Red Cell 10,373 8,903 16.5
$ 74,123 $ 67,034 10.6
Patient:
Surgical 15,108 15,394 (1.9)
OrthoPAT 7,085 4,536 56.2
$ 22,193 $ 19,930 11.4
Subtotal $ 96,316 $ 86,964 10.8
Equipment $ 4,405 $ 6,623 (33.5)
Misc & Service 7,766 6,901 12.5
Net Revenues $ 108,487 $ 100,488 8.0%
REVENUE ANALYSIS FOR FYE07 YEAR TO DATE
9/30/06 10/01/05
As Reported As Reported % Inc/(Dec)
------------ ------------ ------------
Revenues by Geography
United States $ 93,231 $ 76,153 22.4%
International 125,930 127,508 (1.2)
Net Revenues $ 219,161 $ 203,661 7.6%
Disposable Revenues by Product Family
Donor:
Plasma $ 63,891 $ 53,241 20.0%
Blood Bank 63,044 64,883 (2.8)
Red Cell 20,973 17,358 20.8
$ 147,908 $ 135,482 9.2
Patient:
Surgical 32,309 32,490 (0.6)
OrthoPAT 14,641 10,125 44.6
$ 46,950 $ 42,615 10.2
Subtotal $ 194,858 $ 178,097 9.4
Equipment $ 10,013 $ 12,734 (21.4)
Misc & Service 14,290 12,830 11.4
Net Revenues $ 219,161 $ 203,661 7.6%
CONSOLIDATED BALANCE SHEETS
Period ending
-----------------------
09/30/06 4/1/06(1)
---------- ----------
Assets
Cash & cash equivalents $ 242,200 $ 250,667
Short-term investments -- --
Accounts receivable, net 84,001 86,901
Inventories, net 58,925 54,571
Other current assets 28,679 26,265
Total current assets 413,805 418,404
Net PP&E 80,757 75,266
Other assets 66,870 51,787
Total assets $ 561,432 $ 545,457
Period ending
-----------------------
09/30/06 4/1/06(1)
---------- ----------
Liabilities & Stockholders' Equity
S/T debt & current maturities $ 21,922 $ 26,176
Other current liabilities 66,193 61,940
Total current liabilities 88,115 88,116
Long-term debt 12,690 12,977
Other long-term liabilities 3,637 3,800
Stockholders' equity 456,990 440,564
Total liabilities & equity $ 561,432 $ 545,457
SECOND QUARTER FYE07
CONSOLIDATED STATEMENTS OF INCOME ADJUSTED FOR THE EFFECT OF STOCK
BASED COMPENSATION EXPENSE, RESTRUCTURING COSTS & ARRYX IPRD AND
OTHER UNUSUAL CHARGES
09/30/06
Effect of
Arryx IPRD Stock-Based
9/30/06 and Other Compensation Restructuring 9/30/06 As
As Reported Unusual(2) Expense(3) Costs(4) Adjusted(5)
------------ ------------ ------------ ------------- ------------
Net Revenue $ 108,487 $ 0 $ 0 $ 0 $ 108,487
Gross profit 55,162 0 (48) 0 55,210
R&D 6,119 0 74 0 6,045
S,G&A 34,741 0 2,145 1,106 31,490
In-Process
R&D 9,073 9,073 0 0 0
Cost to
Equity 73 73 0 0 0
Operating
expenses 50,006 9,146 2,219 1,106 37,535
Operating
income 5,156 (9,146) (2,267) (1,106) 17,675
Interest
expense (421) 0 0 0 (421)
Interest
income 1,951 0 0 0 1,951
Other
income/
(expense),
net 425 0 0 0 425
Income before
taxes 7,111 (9,146) (2,267) (1,106) 19,630
Tax expense 5,845 0 (575) (381) 6,801
NET INCOME $ 1,266 $ (9,146) $ (1,692) $ (725) $ 12,829
Net income per
common share
assuming
dilution $ 0.05 $ (0.33) $ (0.06) $ (0.03) $ 0.46
Weighted average
number of shares
Basic 27,087 27,087 27,087 27,087 27,087
Diluted 27,969 27,969 27,969 27,969 27,969
SECOND QUARTER FYE07
CONSOLIDATED STATEMENTS OF INCOME ADJUSTED FOR THE EFFECT OF STOCK
BASED COMPENSATION EXPENSE, RESTRUCTURING COSTS & ARRYX IPRD AND
OTHER UNUSUAL CHARGES
Adjusted %
9/30/06 10/1/05 Inc/(Dec) vs
As Adjusted(5) As Adjusted(6) Prior Year
-------------- -------------- --------------
NET REVENUES $ 108,487 $ 100,488 8.0%
Gross profit 55,210 51,765 6.7
R&D 6,045 6,283 (3.8)
S,G&A 31,490 30,103 4.6
In-Process R&D 0 0 ---
Cost to Equity 0 0 ---
Operating expenses 37,535 36,386 3.2
Operating income 17,675 15,379 14.9
Interest expense (421) (522) (19.3)
Interest income 1,951 1,083 80.1
Other income/
(expense), net 425 481 (11.6)
Income before taxes 19,630 16,421 19.5
Tax expense 6,801 5,476 24.2
NET INCOME $ 12,829 $ 10,945 17.2
Net income per common share
assuming dilution $ 0.46 $ 0.40 15.0%
Weighted average number
of shares
Basic 27,087 26,395
Diluted 27,969 27,354
Inc/(Dec) vs
prior year
9/30/06 9/30/06 As 10/01/05 As profit margin
As Reported Adjusted(5) Adjusted(6) %
------------ ------------ ------------ --------------
Profit Margins:
Gross profit 50.8% 50.9% 51.5% (0.6)%
R&D 5.6% 5.6% 6.3% (0.7)%
S,G&A 32.0% 29.0% 30.0% (1.0)%
Operating income 4.8% 16.3% 15.3% 1.0%
Income before taxes 6.6% 18.1% 16.3% 1.8%
Net income 1.2% 11.8% 10.9% 0.9%
FYE07 YEAR TO DATE
CONSOLIDATED STATEMENTS OF INCOME ADJUSTED FOR THE EFFECT OF STOCK BASED
COMPENSATION EXPENSE, RESTRUCTURING COSTS & ARRYX IPRD AND OTHER UNUSUAL
CHARGES
09/30/06
Effect of
Arryx IPRD Stock-Based
9/30/06 and Other Compensation Restructuring 9/30/06 As
Reported Unusual(2) Expense(3) Costs(4) Adjusted(5)
------------ ------------ ------------ -------------- ------------
NET REVENUES $ 219,161 $ 0 $ 0 $ 0 $ 219,161
Gross profit 112,535 0 (112) 0 112,647
R&D 11,541 0 174 0 11,367
S,G&A 71,649 0 5,008 2,667 63,974
In-Process
R&D 9,073 9,073 0 0 0
Cost to
Equity 225 225 0 0 0
Operating
expenses 92,488 9,298 5,182 2,667 75,341
Operating
income 20,047 (9,298) (5,294) (2,667) 37,306
Interest
expense (846) 0 0 0 (846)
Interest
income 3,977 0 0 0 3,977
Other
income/
(expense),
net 1,337 0 0 0 1,337
Income before
taxes 24,515 (9,298) (5,294) (2,667) 41,774
Tax expense 12,093 0 (1,531) (927) 14,551
NET INCOME $ 12,422 $ (9,298) $ (3,763) $ (1,740) $ 27,223
Net income per
common share
assuming
dilution $ 0.44 $ (0.33) $ (0.13) $ (0.06) $ 0.97
Weighted average
number of shares
Basic 26,993 26,993 26,993 26,993 26,993
Diluted 27,948 27,948 27,948 27,948 27,948
FYE07 YEAR TO DATE
CONSOLIDATED STATEMENTS OF INCOME ADJUSTED FOR THE EFFECT OF STOCK BASED
COMPENSATION EXPENSE, RESTRUCTURING COSTS & ARRYX IPRD AND OTHER UNUSUAL
CHARGES
Adjusted %
9/30/06 As 10/1/05 As Inc/(Dec) vs.
Adjusted(5) Adjusted(6) Prior Year
------------ ------------ -------------
NET REVENUES $ 219,161 $ 203,661 7.6%
Gross profit 112,647 106,289 6.0
R&D 11,367 11,824 (3.9)
S,G&A 63,974 60,591 5.6
In-Process R&D 0 0 ---
Cost to Equity 0 0 ---
Operating expenses 75,341 72,415 4.0
Operating income 37,306 33,874 10.1
Interest expense (846) (1,063) (20.4)
Interest income 3,977 2,396 66.0
Other income/
(expense), net 1,337 1,345 (0.6)
Income before taxes 41,774 36,552 14.3
Tax expense 14,551 12,723 14.4
NET INCOME $ 27,223 $ 23,829 14.2
Net income per
common share
assuming dilution $ 0.97 $ 0.87 11.5%
Weighted average number
of shares
Basic 26,993 26,338
Diluted 27,948 27,279
Inc/(Dec) vs
prior year
9/30/06 9/30/06 As 10/01/05 As profit margin
As Reported Adjusted(5) Adjusted(6) %
------------ ------------ ------------ -------------
Profit Margins:
Gross profit 51.3% 51.4% 52.2% (0.8)%
R&D 5.3% 5.2% 5.8% (0.6)%
S,G&A 32.7% 29.2% 29.8% (0.6)%
Operating income 9.1 17.0% 16.6% 0.4%
Income before taxes 11.2 19.1% 17.9% 1.2%
Net income 5.7% 12.4% 11.7% 0.7%
(1) Reflects the adjustment to convert our investment in Arryx, Inc. to the
equity method for periods prior to the acquisition.
(2) IPRD and Cost to Equity impact of Arryx acquisition
(3) Stock based compensation expense related to the adoption of FAS 123R.
(4) Restructuring costs primarily include severance and related costs
associated with eliminating or reorganizing certain positions in our
international business operations.
(5) "As Adjusted" for FY07 is comprised of "As Reported" less the "Effect of
Stock Based Compensation", "Restructuring Costs" & "Arryx IPRD and Other
Unusual Charges."
(6) "As Adjusted" for FY 06 excludes the restatement of our financial results
to reflect our investment in Arryx on the equity method.
SOURCE Haemonetics Corporation
-0- 10/31/2006
/CONTACT: Julie Fallon of Haemonetics Corporation, +1-781-356-9517 or
+1-617-320-2401, fallon@haemonetics.com /
/Web site: http://www.haemonetics.com /