SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 23, 2003
HAEMONETICS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Massachusetts 1-10730 04-2882273
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(State or other jurisdiction of (Commission File (IRS Employer
incorporation or organization) Number) Identification Number)
400 Wood Road Braintree, MA 02184
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(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code (781) 848-7100
Item 9. Regulation FD Disclosure.
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The following information is intended to be included under "Item 12.
Results of Operations and Financial Condition" and is included under this
Item 9 in accordance with SEC Release No. 33-8216.
On October 23, 2003 Haemonetics Corporation (the "Company") issued a
press release regarding its financial results for the second quarter and
year to date ended September 27, 2003. The Company's press release is
attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Current Report on Form 8-K and the Exhibit
attached hereto shall not be deemed "filed" for purposes of Section 18 of
the Securities 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.
Exhibits
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99.1 Press Release dated October 23, 2003 of Haemonetics Corporation.
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
Date: October 23, 2003 By: s/Ronald J. Ryan
--------------------------------
Ronald J. Ryan, Vice President
and Chief Financial Officer
3
EXHIBIT 99.1
FOR RELEASE: CONTACT:
Date: October 23, 2003 Lisa Lopez
Time: 8:00 am eastern Tel. (781) 356-9517
Alternate Tel. (617) 320-2401
fallon@haemonetics.com
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Haemonetics Reports Second Quarter Results On Plan and
Reaffirms Fiscal Year Guidance
BRAINTREE, MA - Haemonetics Corporation today announced second quarter
fiscal 2004 earnings per share of $0.23 and revenues of $87 million. The
Company also said that it was re-affirming its previously announced full
fiscal year 2004 guidance of high single digit revenue growth, gross profit
margins in the mid to high 40% range, and net earnings per share in the
range of last year's earnings of $1.13.
Brad Nutter, Haemonetics President and CEO, said, "In Q2 we focused on
completing the previously announced operational reorganization. As a
result, we strengthened our leadership team, flattened our organization
structure, improved customer focus, enhanced accountability, and
streamlined decision making. All of these factors enabled us to achieve
our internal revenue and earnings target for the quarter and kept us on
track to meet our objectives for the full fiscal year."
FINANCIALHIGHLIGHTS
The Company reported the following financial results for the second quarter
and year-to-date:
* Gross profit of $41 million in Q2:04, up 6% over Q2:03 and $81
million year to date, up 4% over fiscal 03
* Gross margin of 47% in Q2:04, up 260 basis points over Q2:03,
and 46% fiscal year to date, up 20 basis points over fiscal 03
* Operating expenses of $32 million in Q2:04, up 12% over Q2:03
and $64 million year to date, up 10% over fiscal 03
* Operating income of $9 million in Q2:04, down 9% from Q2:03 and
$17 million year to date, down 12% from fiscal 03
* Operating margin of 10% in Q2:04, down from 11% in Q2:03 and
10% year to date, down from 12% in fiscal 03
* Earnings per share were $0.23 in Q2:04, down from $0.27 in
Q2:03 and $0.43 year to date, down from $0.53 in fiscal 03
Second quarter net earnings were negatively affected by the reorganization
charge of $2.6 million ($0.07 per share) and an increase in tax rate from
31% to 36%.
Second quarter revenue was $87 million, level with Q2:03, and fiscal year
to date revenue is $176 million, up 4% over fiscal 03. Revenue for
disposables and services was $84 million for the quarter, 6% over Q2:03 and
$168 million year to date, 7% over fiscal 03. The Company showed balance
sheet strength, highlighted by a $5 million inventory reduction and a cash
reserve of $67 million. The Company achieved $20 million of cash flow from
operations and finished goods inventory turns of 5.7.
QUARTERLY PRODUCT LINE HIGHLIGHTS
Plasma disposables revenue was $31 million, a 2% increase over Q2:03. The
worldwide market for plasma collection disposables reflects volatility that
is due to a current glut of plasma in the market. This mirrors past cycles
in worldwide plasma collection.
"The growth in Haemonetics' plasma business, while modest, is ahead of
market trends and beat our internal expectations. We are pleased that we
continue to gain market share," said Mr. Nutter.
Blood bank disposables revenue was $27 million, a 7% increase over Q2:03.
This growth exceeded our internal plans.
Red cell disposables revenue was $5 million, a 47% increase over Q2:03.
Red cell growth was 69% in the U.S. During the quarter, Haemonetics made
excellent progress in three areas:
* Gaining new customers - The Company gained three new customers,
including two additional American Red Cross regions.
* Growing collections at existing customers - Blood Systems
continued its technology growth initiative, now collecting
about 26% of its red cells system wide with Haemonetics
technology.
* Converting collections to filtration (white blood cell
reduction) disposable kits - Currently, 31% of all U.S. double
red cell collections with Haemonetics technology include
filters.
Surgical revenue was $17 million, a 2% increase over Q2:03, affected by
recent declines in U.S. open-heart surgeries, shrinking the market for
surgical blood salvage procedures. Substantial growth in end-user sales of
the OrthoPAT(TM) system is expected to drive revenue growth in the second
half of the year. The Company now expects annual growth in the high single
digits, down modestly from previous forecasts.
Miscellaneous and services revenue was $5 million, an 8% increase over
Q2:03. The Fifth Dimension Information Systems ("5D") business, reported
in the services line, showed success again this quarter. Haemonetics
recently reported that Aventis Bio-Services, Inc. is implementing 5D's
LOGIC(TM) software to manage all of Aventis' plasma transport operations in
the U.S. and Germany. Aventis is the world's largest plasma collection
company.
WORLDWIDE REORGANIZATION COMPLETED
Haemonetics completed its previously announced company-wide reorganization
into two divisions to better service its customers. The reorganization
will have a positive impact of $4 million for fiscal 05.
FISCAL 2004 OUTLOOK
Earlier in the week the Company announced that Baxter Healthcare
Corporation assumed the obligations of exclusive Purchase and Supply
Contracts between the Company and Alpha Therapeutics, as part of Baxter's
acquisition of Alpha's plasma collection operations. Haemonetics and Baxter
are discussing the parties' contractual obligations, and when completed, the
Company will report what, if any, impact the closing by Baxter of a number
of Alpha collection centers will have on Haemonetics' future revenue or
earnings.
"This fiscal year, we moved to annual guidance as we remain focused on the
long term strength of the business. While there may be some change in the
product line revenue mix, we are comfortable at this time that we will meet
the financial targets we made at the outset of the year: revenue growth in
the high single digits; gross margin in the mid to high 40% range; a modest
improvement in operating margin; net income from operations ahead of last
year; and net earnings per share comparable to last year despite the higher
tax rate and a reorganization charge," said Mr. Nutter.
Haemonetics will hold a conference call to review highlights of the quarter
at 10:00 am eastern today. Interested parties can participate by calling
(800) 231-5571 (US only) or (973) 935-8504. The call will be replayed
through November 6th at (877) 519-4471 (US only) or (973) 341-3080 using PIN
4224248.
The Company will post non-GAAP financial reconciliation on its website
prior to the conference call.
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.
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
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 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.
###
Haemonetics Corporation Financial Summary for the Second Quarter FYE04
Consolidated Statements of Income
(Unaudited data in thousands, except per share data)
% Inc/(Dec)
INCOME STATEMENT 9/27/2003 9/28/2002 vs prior year
---------------- --------- --------- -------------
NET REVENUES $87,488 $87,025 0.5%
Gross profit 41,380 38,890 6.4%
R&D 4,622 5,110 (9.5%)
S, G & A 27,852 23,954 16.3%
Operating expenses 32,474 29,064 11.7%
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Operating income 8,906 9,826 (9.4%)
Interest expense (767) (870) (11.8%)
Interest income 186 345 (46.1%)
Other income, net 261 525 (50.3%)
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Income before taxes 8,586 9,826 (12.6%)
Tax expense 3,091 3,046 1.5%
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NET INCOME $ 5,495 $ 6,780 (19.0%)
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Net income per common share
assuming dilution $0.23 $0.27 (14.8%)
Weighted average number of shares
Basic 24,120 24,642
Diluted 24,327 25,163
Inc/(Dec) vs
prior year
profit margin
PROFIT MARGINS: %
--------------- -------------
Gross profit 47.3% 44.7%
R&D 5.3% 5.9%
S, G & A 31.8% 27.5%
Operating income 10.2% 11.3% (1.1%)
Income before taxes 9.8% 11.3% (1.5%)
Net income 6.3% 7.8%
Haemonetics Corporation Financial Summary for FYE04
Consolidated Statements of Income
(Unaudited data in thousands, except per share data)
% Inc/(Dec) vs
Income Statement: 9/27/2003 9/28/2002 prior year
----------------- --------- --------- --------------
NET REVENUES $175,771 $168,960 4.0%
Gross profit 80,966 77,537 4.4%
R&D 9,619 10,049 (4.3%)
S, G & A 54,255 47,970 13.1%
Operating expenses 63,874 58,019 10.1%
Operating income 17,092 19,518 (12.4%)
Interest expense (1,553) (1,747) (11.1%)
Interest income 469 786 (40.3%)
Other income, net 364 1,088 (66.5%)
Income before taxes 16,372 19,645 (16.7%)
Tax expense 5,894 6,090 (3.2%)
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NET INCOME $ 10,478 $ 13,555 (22.7%)
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Net income per common share
assuming dilution $ 0.43 $ 0.53 (18.9%)
Weighted average number of shares
Basic 24,092 24,980
Diluted 24,276 25,642
Inc/(Dec) vs
prior year profit
PROFIT MARGINS: margin %
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Gross profit 46.1% 45.9%
R&D 5.5% 5.9%
S,G&A 30.9% 28.4%
Operating income 9.7% 11.6% (1.9%)
Income before taxes 9.3% 11.6% (2.3%)
Net income 6.0% 8.0%
Haemonetics Corporation Financial Summary for FYE 04
Revenue Analysis
(Unaudited data in thousands)
Second quarter Six Months Ended
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REVENUE ANALYSIS 9/27/2003 9/28/2002 % Inc/(Dec) 9/27/2003 9/28/2002 % Inc/(Dec)
---------------- --------- --------- ----------- --------- --------- -----------
Revenues by Geography
United States $32,317 $33,632 (3.9) $ 63,869 $ 64,562 (1.1)
International 55,171 53,393 3.3 111,902 104,398 7.2
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Net Revenues $87,488 $87,025 0.5 $175,771 $168,960 4.0
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Disposable Revenues by Product Line
Surgical $16,939 $16,625 1.9 $ 35,232 $ 33,888 4.0
Blood Bank 26,731 24,917 7.3 52,680 48,956 7.6
Red Cell 5,082 3,461 46.8 9,646 6,989 38.0
Plasma 30,720 30,090 2.1 60,309 58,748 2.7
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Subtotal $79,472 $75,093 5.8 $157,867 $148,581 6.2
Equipment 3,112 7,373 (57.8) 7,598 11,792 (35.6)
Misc & Service 4,904 4,559 7.6 10,306 8,587 20.0
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Net Revenues $87,488 $87,025 0.5 $175,771 $168,960 4.0
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Haemonetics Corporation Financial Summary for FYE04
Consolidated Balance Sheets
(Unaudited data in thousands)
Period ending
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BALANCE SHEET: 9/27/2003 3/29/2003
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Assets
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Cash & cash equivalents $ 66,771 $ 49,885
Accounts receivable, net 84,162 77,913
Inventories, net 58,726 65,805
Other current assets 31,910 29,652
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Total current assets 241,569 223,255
Net PP&E 81,345 83,987
Other assets 51,473 51,966
Total assets $374,387 $359,208
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Liabilities & Stockholders' Equity
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S/T debt & current maturities $ 38,388 $ 39,005
Other current liabilities 60,552 61,370
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Total current liabilities 98,940 100,375
Long-term debt 31,389 31,612
Other long-term liabilities 4,210 3,984
Stockholders' equity 239,848 223,237
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Total liabilities & equity $374,387 $359,208
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