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) June 30, 2007
-------------------------------
HAEMONETICS CORPORATION
-------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 1-10730 04-2882273
-------------------------------------------------------------------------------
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
400 Wood Road 02184
-------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 781-848-7100
---------------------------
-------------------------------------------------------------------------------
(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))
1
Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On August 2, 2007 Haemonetics Corporation (the "Company") issued a press release
announcing financial results for the first quarter ended June 30, 2007. 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
(c) Exhibits
99.1: Press Release of Haemonetics Corporation dated August 2, 2007 announcing
financial results for the first quarter ended June 30, 2007.
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: August 2, 2007 /s/ Christopher Lindop
-----------------------
Christopher Lindop, Vice President
and Chief Financial Officer
2
Exhibit 99.1
99.1 Press Release issued by Haemonetics Corporation on August 2, 2007.
3
Haemonetics(R) Reports Strong Results for First Quarter Fiscal 2008
-- Company Generates Double Digit Growth in Sales,
Net Income, and Earnings Per Share --
BRAINTREE, Mass., Aug. 2 /PRNewswire-FirstCall/ -- Haemonetics Corporation
(NYSE: HAE) today reported first quarter fiscal 2008 GAAP net revenues of $122
million, up 10.2%, net income of $13 million, up 13.6%, and net earnings per
share of $0.46, up 16.0%.
First quarter fiscal 2008 adjusted net income, excluding charges, was $14
million, up 13.0%, and adjusted earnings per share were $0.50, up 15.1%.
Haemonetics' FY08 adjusted financial results exclude restructuring costs in
connection with changes to the Company's international operations resulting in
(pre-tax) charges of $1.6 million, or $0.04 per share. Q1FY07 adjusted financial
results to which the Company is comparing also exclude restructuring charges of
$1.6 million (pre-tax), or $0.04 per share. The Company has posted a
reconciliation of GAAP to adjusted results on its website at
http://www.haemonetics.com/investors.
Brad Nutter, Haemonetics' President and CEO, said, "In the quarter,
Haemonetics performed well. We executed to our new vision to be the global
leader in blood management solutions for our customers. On an adjusted basis, we
leveraged 10% growth in revenue into 13% growth in net income and 15% growth in
earnings per share."
FINANCIALS
In addition to revenues and earnings per share, Haemonetics reported first
quarter gross profit of $61 million, up 7.2%, and gross margin of 50.4%, down
140 basis points. Gross margin was impacted by product mix as the Company's
lower gross margin contributors, plasma and equipment, had strong sales growth.
Adjusted operating expenses were $44 million, up 7.7%, with the increase coming
from two areas: 1) planned Enterprise Resource Planning ("ERP") spending; and 2)
the acquisitions of Arryx and IDM, whose expenses were not included in Q1FY07
financial reports. Haemonetics' tax rate was 31.5% in the quarter and reflects
the resolution of a foreign tax contingency.
Haemonetics ended the quarter with a cash balance of $216 million, and $25
million of short and long term debt. The Company generated $4 million in free
cash flow for the quarter. During the quarter Haemonetics initiated a $75
million share repurchase program. Under that program, the Company spent $25
million in the quarter.
EXPANDING THE BUSINESS
In the quarter, Haemonetics continued to make progress expanding the
business. The Company reported the following highlights:
-- Ongoing restructuring of the European business, which reported 14.4%
growth in the quarter
-- The non-dilutive acquisition of Infonale, Inc., giving Haemonetics
access to information technology and services platforms for the hospital market
-- Revenues of $1.2 million from seven new products that the Company has
launched
QUARTERLY PRODUCT LINE GROWTH
Plasma disposables revenue was $36 million for the quarter, up 13.0%.
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 well into fiscal 2009.
Blood bank disposables revenue was $33 million for the quarter, up 5.3%.
Blood bank growth was driven by strong sales in Europe and Asia as the Company
sees early benefits from a new sales structure that mirrors the structure in the
U.S.
Red cell disposables revenue was $11 million for the quarter, up 3.2%. Red
cell disposables revenue softness was offset by strong sales of red cell
equipment as the Company launched the Cymbal blood collection system. Including
equipment sales, total revenues for the Red Cell product line grew 16.1%. The
Company expects that red cell equipment sales will continue to contribute to
product line revenue growth in the year. The Cymbal system is Haemonetics' next
generation red cell technology to collect two units of red cells from one donor,
and strong Cymbal equipment sales are a leading indicator of future disposable
sales.
Software and services revenue grew to $10 million for the quarter, up
55.7%. Software and services showed strength across all product lines.
Information Data Management, Inc. ("IDM"), which Haemonetics acquired in January
2007, contributed $1.9 million in sales. Additional sales growth was driven by
Haemonetics' 5D(TM) Information Management division which grew organically by
23%.
OrthoPAT(R) disposables revenue was $8 million for the quarter, up 8.4%.
OrthoPAT system revenue growth was driven by disposable unit growth. The Company
placed an incremental 89 OrthoPAT devices and contracted with 28 new accounts.
Equipment placements are expected to continue to drive disposables growth in the
second half of the year.
Equipment revenue was $7 million for the quarter, up 24.3% and driven by
strong red cell equipment sales in the U.S. and plasma equipment sales in
Europe.
FY08 GUIDANCE
Haemonetics affirmed its FY08 guidance of revenue growth of 7-9%, and said
that it now expects full year revenues will grow in the high end of that range.
The Company also affirmed adjusted operating income growing approximately 10%,
and adjusted earnings per share in the range of $2.02-$2.12. The Company also
said it will achieve the gross profit range of $248-$253 million that it guided
to at its May investor meeting.
FY08 guidance is adjusted to exclude approximately $4-5 million, or
approximately $0.11 per share, of anticipated costs to restructure Haemonetics'
European business. FY08 guidance includes stock compensation expense.
FY08 GAAP earnings per share guidance is $1.91-$2.01 including the impact
of restructuring costs.
In FY08, the Company expects to generate over $30 million of free cash
flow. The Company continues to make investments in the business, including ERP,
its installed base of plasma collection devices, and plant expansion.
Haemonetics has posted potential income scenarios reflecting guidance
ranges on its website at http://www.haemonetics.com.
CONFERENCE CALL
Haemonetics will hold a conference call on Thursday, August 2nd 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 8987526. The call will be replayed through
August 17, 2007 at (877) 519-4471 (U.S. only) or (973) 341-3080 (International)
using PIN 8987526.
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.
As part of this release, Haemonetics has presented supplemental non-GAAP
financial results restructuring costs. 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 FIRST QUARTER FYE08
% Inc/(Dec)
6/30/07 As 7/01/06 As vs Prior
Reported Reported Year
NET REVENUES $ 121,936 $ 110,674 10.2%
Gross profit 61,494 57,373 7.2
R&D 6,276 5,574 12.6
S,G&A 39,439 36,908 6.9
Operating expenses 45,715 42,482 7.6
--------- ---------
Operating income 15,779 14,891 6.0
Interest expense (207) (425) (51.3)
Interest income 1,903 2,026 (6.1)
Other income, net 957 912 4.9
--------- ---------
Income before taxes 18,432 17,404 5.9
Tax expense 5,755 6,248 (7.9)
--------- ---------
NET INCOME $ 12,677 $ 11,156 13.6
========= =========
Net income per common share
assuming dilution $ 0.46 $ 0.40 16.0%
Weighted average number of shares
Basic 26,534 26,900
Diluted 27,403 27,929
Inc/(Dec) vs
prior year
profit
PROFIT MARGINS: margin %
Gross profit 50.4% 51.8% (1.4%)
R&D 5.1% 5.0% 0.1%
S,G&A 32.3% 33.3% (1.0%)
Operating income 12.9% 13.5% (0.6%)
Income before taxes 15.1% 15.7% (0.6%)
Net income 10.4% 10.1% 0.3%
REVENUE ANALYSIS FOR THE FIRST QUARTER FYE08
6/30/07 As 07/01/06 As % Inc/
Reported Reported (Dec)
Revenues by Geography
United States $ 54,831 $ 46,420 18.1%
International 67,105 64,254 4.4
-------- -------- ----
Net Revenues $121,936 $110,674 10.2
Disposable Revenues by Product Family
Donor:
Plasma $ 35,955 $ 31,819 13.0
Blood Bank 33,032 31,366 5.3
Red Cell 10,944 10,600 3.2
-------- --------
$ 79,931 $ 73,785 8.3
Patient:
Surgical 16,694 17,201 (2.9)
OrthoPAT 8,187 7,556 8.4
-------- --------
$ 24,881 $ 24,757 0.5
Subtotal $104,812 $ 98,542 6.4
Equipment $ 6,968 $ 5,608 24.3
Software & Services 10,156 6,524 55.7
-------- --------
Net Revenues $121,936 $110,674 10.2%
CONSOLIDATED BALANCE SHEETS
Period ending
--------------------------
Balance Sheet: 06/30/07 3/31/07(1)
-------- ----------
Assets
Cash & cash equivalents $216,056 $229,227
Accounts receivable, net $ 91,917 $ 91,832
Inventories, net $ 68,209 $ 61,797
Other current assets $ 26,884 $ 20,815
-------- --------
Total current assets $403,066 $403,671
Net PP&E $ 95,330 $ 90,775
Other assets $ 79,708 $ 78,289
Total assets $578,104 $572,735
======== ========
Period ending
--------------------------
06/30/07 3/31/07(1)
-------- ----------
Liabilities & Stockholders' Equity
S/T debt & current maturities $ 18,601 $ 22,201
Other current liabilities 67,514 $ 59,816
--------
Total current liabilities 86,115 82,017
Long-term debt 6,522 6,675
Other long-term liabilities 8,912 4,395
Stockholders' equity 476,555 479,648
-------- --------
Total liabilities & equity $578,104 $572,735
======== ========
CONSOLIDATED STATEMENTS OF INCOME ADJUSTED FOR CERTAIN ITEMS
FIRST QUARTER FYE08
Restruct-
6/30/07 As uring 6/30/07 As
Reported Costs(2) Adjusted (3)
--------- --------- ---------
NET REVENUES $ 121,936 $ 0 $ 121,936
Gross profit 61,494 0 61,494
R&D 6,276 0 6,276
S,G&A 39,439 1,629 37,810
Operating expenses 45,715 1,629 44,086
--------- --------- ---------
Operating income 15,779 (1,629) 17,408
Interest expense (207) 0 (207)
Interest income 1,903 0 1,903
Other income/(expense), net 957 0 957
--------- --------- ---------
Income before taxes 18,432 (1,629) 20,061
Tax expense 5,755 (558) 6,313
--------- --------- ---------
NET INCOME $ 12,677 $ (1,071) $ 13,748
========= ========= =========
Net income per common share
assuming dilution $ 0.46 $ (0.04) $ 0.50
Weighted average number of shares
Basic 26,534 26,534 26,534
Diluted 27,403 27,403 27,403
Restru- Adjusted %
7/01/06 As cturing 7/01/06 As Inc/(Dec) vs
Reported Costs(2) Adjusted (4) Prior Year
--------- --------- --------- ----------
NET REVENUES $ 110,674 $ 0 $ 110,674 10.2%
Gross profit 57,373 0 57,373 7.2
R&D 5,574 0 5,574 12.6
S,G&A 36,908 1,561 35,347 7.0
Operating expenses 42,482 1,561 40,921 7.7
--------- --------- ---------
Operating income 14,891 (1,561) 16,452 5.8
Interest expense (425) 0 (425) (51.3)
Interest income 2,026 0 2,026 (6.1)
Other income/
(expense), net 912 0 912 4.9
--------- --------- ---------
Income before taxes 17,404 (1,561) 18,965 5.8
Tax expense 6,248 (546) 6,794 (7.1)
--------- --------- ---------
NET INCOME $ 11,156 (1,015) $ 12,171 13.0
========= ====== =========
Net income per common share
assuming dilution $ 0.40 $ (0.04) $ 0.44 15.1%
Weighted average number
of shares
Basic 26,900 26,900 26,900
Diluted 27,929 27,929 27,929
Inc/(Dec) vs
6/30/07 7/01/06 prior year
As As profit
Adjusted(3) Adjusted(4) margin %
PROFIT MARGINS:
Gross profit 50.4% 51.8% (1.4%)
R&D 5.1% 5.0% 0.1%
S,G&A 31.0% 31.9% (0.9%)
Operating
income 14.3% 14.9% (0.6%)
Income before
taxes 16.5% 17.1% (0.6%)
Net income 11.3% 11.0% 0.3%
FREE CASH FLOW RECONCILIATION
6/30/07 7/01/06
-------- --------
GAAP CASH FLOW FROM OPERATIONS $ 14,181 $ 17,509
Capital expenditures $(11,448) $(10,307)
Proceeds from sale of property, plant
and equipment $ 1,305 $ 1,024
-------- --------
Net investment in property, plant and
equipment $(10,143) $ (9,283)
-------- --------
Free Cash Flow $ 4,038 $ 8,226
(1) Reflects the adjustment to convert our investment in Arryx, Inc. to the
equity method for periods prior to the acquisition
(2) Restructuring costs primarily include severance and related costs
associated with eliminating or reorganizing certain positions in our
international business operations
(3) "As Adjusted" for FY 08 is comprised of "As Reported" less the
"Restructuring Costs"
(4) "As Adjusted" for FY 07 is comprised of "As Reported" less the
"Restructuring Costs"
