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

HAEMONETICS CORPORATION

(Exact name of registrant as specified in its charter)

Massachusetts		1-14041		04-2882273
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer 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):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02		RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On August 1, 2011, Haemonetics Corporation (the “Company”) issued a press release announcing financial results for the first quarter ended July 2, 2011. 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 1, 2011 announcing financial results for the first quarter ended July 2, 2011.

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.

EXHIBIT INDEX

99.1		Press Release issued by Haemonetics Corporation on August 1, 2011.

Exhibit 99.1

		News Release

FOR RELEASE:		CONTACT:
Date August 1, 2011		Bryanne Salmon
Time 8:00 am Eastern		Tel. (781) 356-9613
		bsalmon@haemonetics.com

Haemonetics Reports 5% Revenue Growth for First Quarter Fiscal 2012, Earnings per share of $0.65
and Revised Annual Earnings Guidance of $3.35-$3.45, Impacted by the OrthoPAT^® Recall

Braintree, MA, August 1, 2011— Haemonetics Corporation (NYSE: HAE) today reported GAAP net revenues of $170.6 million, up 5%, net income of $16.9 million, down 5%, and earnings per share of $0.65, down 7%. Excluding transformation costs in fiscal 12 and 11, adjusted first quarter net income was $17.1 million, down 10%, and adjusted earnings per share was $0.65, down 12%. Excluding currency, revenue was up 2%.¹

Brian Concannon, Haemonetics’ President and CEO, said “I am very pleased with the return to organic revenue growth, despite the challenges presented by the OrthoPAT voluntary recall. With the exception of Surgical Cell Salvage and Equipment, we saw growth in every product category, which speaks to the building momentum within the broader business.”

STRATEGIC AND SEGMENT GROWTH HIGHLIGHTS

Haemonetics continues to make progress expanding its business. The Company reported the following highlights:

	•		12% growth in plasma disposables as increasing collection volumes drives revenues.
	•		10% organic growth from the integrated software business aimed at delivering the “information highway” focused on the compliance, productivity, availability and safety of blood products from the donor to the patient.
	•		19% growth of our diagnostic disposables products, with rapid uptake by leading US hospitals.
	•		5% growth in red cells after 8 quarters of decline.
	•		IMPACT® accounts increasing to 208 as more customers embrace blood management solutions.
	•		IMPACT Online expanding to 17 accounts, which has more than doubled in the past two quarters.

In addition to revenue growth and earnings, in the quarter Haemonetics reported adjusted gross margin of 52%, down 100 basis points, and adjusted operating margin of 14.2%, down 170 basis points. The Company’s adjusted operating expenses were $64.5 million, up $4.0 million from levels in Q1 of fiscal 11. Gross and operating margins were significantly impacted by the recall of our OrthoPAT devices. The negative impact on operating earnings associated with the OrthoPAT recall and other product quality initiatives was approximately $3 million or $0.08 per share in the quarter. ¹

Mr. Concannon added “From an earnings perspective, we simply could not overcome the headwind that the OrthoPAT recall represented in the quarter despite the relative strength of our other businesses. In addition, we incurred costs associated with the substitution of our plasma HS core product, used to collect plasma for transfusion in certain European markets. While the impact of these challenges will continue to present a headwind for the remainder of the fiscal year, most of this impact will be non-recurring and our actions will serve to strengthen our quality and product portfolio going forward.”

As noted, Haemonetics’ first quarter fiscal 2012 reported revenues were $171 million, up 5%. Reported revenues break down as follows:

Plasma disposables revenue was $63 million for the quarter, up 12%. Haemonetics’ plasma business growth accelerated significantly in the quarter following a cyclical adjustment in the commercial Plasma business last year. Plasma revenues are still being negatively impacted by a change in collection practices in Japan.

Blood bank

Platelet disposables revenue was $37 million for the quarter, up 3%. Platelet revenues continue to benefit from strong sales in emerging markets.

Red cell disposables revenue was $12 million for the quarter, up 5%. Red cell revenues grew due to increasing demand for red cells and market share gains as we leveraged our IMPACT selling approach in the market.

Hospital

Surgical disposables revenue was $16 million for the quarter, down 4%. We are in the early stages of our Elite^® launch which we anticipate accelerating as the year progresses.

OrthoPAT orthopedic perioperative autotransfusion system disposables revenue was $8 million for the quarter, down 13%. OrthoPAT revenues were impacted by the voluntary recall of pre-2002 devices. The Company is making improvements to the reliability of our OrthoPAT system and will continue to advance Quick Connect™ to reinforce the value proposition of this important blood management device.

Diagnostics revenue was $6 million for the quarter, up 19%. Revenues related to the TEG^® Thrombelastograph^® Hemostasis Analyzer business were also driven by the Company’s IMPACT initiative.

Software Solutions revenue was $18 million for the quarter, up 10%. Our enhanced offering of software products for our Blood Bank and Hospital customers is driving organic revenue growth.

Equipment and other revenue was $11 million for the quarter, down 13%. Equipment revenue was influenced by the timing of tenders and capital budgets.

Haemonetics reported revenue growth in North America with sales up 9%, Japan sales up 4%, and Asian sales up 6%. European sales were down 4% reflecting timing of equipment tenders.

Guidance

The company affirmed its full year revenue guidance of 4-6% revenue growth but now expects gross margin improvement of just over 100 basis points, operating income growth of 6-7% and earnings per share in the range of $3.35 to $3.45 for the full year. The current estimate of the annual impact of quality remediation is approximately $10 million or $0.25 per share of which $9 million is expected to be non-recurring.

CONFERENCE CALL

Haemonetics will host a webcast on Monday, August 1^st 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=4152777

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. In the first quarter of fiscal 12, Haemonetics incurred $0.3 million of pre-tax restructuring costs, compared to $1.7 million in pre-tax restructuring and integration costs in FY11. Our FY12 guidance excludes $8 million of planned transformation and integration costs associated with the infrastructure supporting our research and supply chain organization and the integration of our software solutions business.

Haemonetics Corporation Financial Summary

(Unaudited data in thousands, except per share data)

Consolidated Statements of Income for the First Quarter of FY12 and FY11

		7/2/2011				7/3/2010				% Inc/(Dec)
		As Reported				As Reported				vs Prior Year
NET REVENUES		$	170,569			$	163,039				4.6	%
Gross profit			88,748				86,462				2.6	%
R&D			8,609				7,921				8.7	%
S,G&A			56,231				54,354				3.5	%
Contingent consideration income			—				—				—
Asset writedowns			—				—				—
Operating expenses			64,840				62,275				4.1	%
Operating income			23,908				24,187				(1.2	%)
Interest expense			(106	)			(152	)			(30.3	%)
Interest income			106				102				3.9	%
Other (expense)/income, net			(215	)			238				(190.3	%)
Income before taxes			23,693				24,375				(2.8	%)
Tax expense			6,746				6,456				4.5	%
NET INCOME		$	16,947			$	17,919				(5.4	%)
Net income per common share assuming dilution		$	0.65			$	0.70				(7.3	%)
Weighted average number of shares
Basic			25,731				25,140
Diluted			26,216				25,703

										Inc/(Dec) vs
										prior year profit
										margin %
Profit Margins:
Gross profit			52.0	%			53.0	%			(1.0	%)
R&D			5.0	%			4.9	%			0.2	%
S,G&A			33.0	%			33.3	%			(0.4	%)
Operating income			14.0	%			14.8	%			(0.8	%)
Income before taxes			13.9	%			15.0	%			(1.1	%)
Net income			9.9	%			11.0	%			(1.1	%)

Revenue Analysis for the First Quarter of FY12 and FY11

		First Quarter
		7/2/2011				7/3/2010				% Inc/(Dec) vs
		As Reported				As Reported				Prior Year
Revenues by geography
United States		$	86,395			$	79,309				8.9	%
International		$	84,174			$	83,730				0.5	%
Net revenues		$	170,569			$	163,039				4.6	%
Disposable revenues
Plasma disposables		$	62,759			$	55,917				12.2	%
Blood bank disposables
Platelet		$	37,310			$	36,317				2.7	%
Red cell		$	11,868			$	11,314				4.9	%
		$	49,178			$	47,631				3.2	%
Hospital disposables
Surgical		$	15,742			$	16,351				(3.7	%)
OrthoPAT		$	7,754			$	8,957				(13.4	%)
Diagnostics		$	5,615			$	4,708				19.3	%
		$	29,111			$	30,016				(3.0	%)
Subtotal		$	141,048			$	133,564				5.6	%
Software solutions		$	18,160			$	16,460				10.3	%
Equipment & other		$	11,361			$	13,015				(12.7	%)
Net revenues		$	170,569			$	163,039				4.6	%

Consolidated Balance Sheets

		Period ending
		7/2/11				4/2/11
Assets
Cash & cash equivalents		$	216,891			$	196,707
Accounts receivable, net			120,759				127,166
Inventories, net			94,960				84,387
Other current assets			35,659				40,571
Total current assets			468,269				448,831
Net PP&E			156,978				155,528
Other assets			228,159				228,905
Total assets		$	853,406			$	833,264
		Period ending
		7/2/11				4/2/11
Liabilities & Stockholders’ Equity
S/T debt & current maturities		$	906			$	913
Other current liabilities			102,112				107,758
Total current liabilities			103,018				108,671
Long-term debt			3,606				3,966
Other long-term liabilities			34,326				34,491
Stockholders’ equity			712,456				686,136
Total liabilities & equity		$	853,406			$	833,264

Free Cash Flow Reconciliation

		Three Months Ended
		7/2/11				7/3/10
GAAP cash flow from operations		$	27,131			$	13,526
Capital expenditures			(11,801	)			(15,224	)
Proceeds from sale of property, plant and equipment			19				111
Net investment in property, plant and equipment			(11,782	)			(15,113	)
Free cash flow after transformation and deal costs		$	15,349				($1,587	)
Transformation and deal costs			1,778				4,058
Global Med employment contracts			—				2,122
			1,778				6,180
Free cash flow before transformation and deal costs		$	17,127			$	4,593

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 from our GAAP expenses. Our restructuring is principally related to the integration of Global Med Technologies and the repositioning 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 First Quarter of FY12 and FY11

		07/02/11				07/03/10
Non-GAAP gross profit
GAAP gross profit		$	88,748			$	86,462
Non-GAAP gross profit		$	88,748			$	86,462
Non-GAAP S,G&A
GAAP S,G&A		$	56,231			$	54,354
Restructuring costs			(337	)			(1,743	)
Non-GAAP S,G&A		$	55,894			$	52,611
Non-GAAP operating expenses
GAAP operating expenses		$	64,840			$	62,275
Restructuring costs			(337	)			(1,743	)
Non-GAAP operating expenses		$	64,503			$	60,532
Non-GAAP operating income
GAAP operating income		$	23,908			$	24,187
Restructuring costs			337				1,743
Non-GAAP operating income		$	24,245			$	25,930
Non-GAAP income before taxes
GAAP income before taxes		$	23,693			$	24,375
Restructuring costs			337				1,743
Non-GAAP income before taxes		$	24,030			$	26,118
Non-GAAP net income
GAAP net income		$	16,947			$	17,919
Restructuring costs			337				1,743
Tax benefit associated with non-GAAP items			(187	)			(600	)
Non-GAAP net income		$	17,097			$	19,062
Non-GAAP net income per common share assuming dilution
GAAP net income per common share assuming dilution		$	0.65			$	0.70
Non-GAAP items after tax per common share assuming dilution		$	0.01			$	0.04
Non-GAAP net income per common share assuming dilution		$	0.65			$	0.74

Presented below are additional Constant Currency performance measures. We measure different components of our business at constant currency. We believe this information is useful for investors because it allows for an evaluation of the Company without the effect of changes in foreign exchange rates. These results convert our local foreign currency operating results to the US Dollar at constant exchanage rates of $1.20 per Euro, and 110 Yen to the $1.00. They also exclude the results of our foreign currency hedging program described in Note 7 to our consolidated financial statements in our Form 10-K.

Non-GAAP revenues
GAAP revenue		$	170,569			$	163,039
Foreign currency effects			(11,063	)			(6,683	)
Non-GAAP revenue — constant currency		$	159,506			$	156,356
Non-GAAP net income
Non-GAAP net income, adjusted for restructuring costs		$	17,097			$	19,062
Foreign currency effects, net of tax			(2,278	)			(2,369	)
Non-GAAP net income — constant currency			14,819				16,693
Non-GAAP net income per common share assuming dilution
Non-GAAP net income per common share assuming dilution, adjusted for restructuring costs		$	0.65			$	0.74
Foreign currency effects after tax per common share assuming dilution			($0.08	)			($0.09	)
Non-GAAP net income per common share assuming dilution — constant currency		$	0.57			$	0.65