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): January 22, 2004
HAEMONETICS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Massachusetts 1-10730 04-2882273
- ------------------------------- ---------------- ----------------------
(State or other jurisdiction of (Commission File (IRS Employer
incorporation or organization) Number) Identification Number)
400 Wood Road Braintree, MA
------------- 02184
(Address of principal executive -----
offices) (Zip Code)
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 January 22, 2004 Haemonetics Corporation (the "Company") issued a
press release regarding its financial results for the third quarter and
year to date ended December 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 January 22, 2004 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: January 22, 2004 By: s/Ronald J. Ryan
------------------------------
Ronald J. Ryan, Vice President
and Chief Financial Officer
3
EXHIBIT 99.1
FOR RELEASE: CONTACT:
Date: January 22, 2004 Lisa Lopez
Time: 8:00 am Eastern Tel. (781) 356-9517
Alternate Tel. (617) 320-2401
fallon@haemonetics.com
----------------------
Haemonetics Reports Third Quarter Results; Company Reaffirms Annual Fiscal
Year Guidance
BRAINTREE, MA - Haemonetics Corporation today announced third quarter
fiscal 2004 results in line with expectations with revenues of $91 million,
up 4% from Q3:03, and earnings per share of $0.38, down 10% from Q3:03.
The Company reported year-to-date revenues of $267 million, up 4% from
fiscal 03, and earnings of $0.81, down 15% from fiscal 03.
The Company also re-affirmed its full fiscal 2004 guidance of high single
digit revenue growth, gross profit margins in the mid to high 40% range,
improved operating margin, and net earnings per share in the range of last
year's $1.13.
FINANCIAL HIGHLIGHTS
Haemonetics reported the following financial results for the third quarter
and year-to-date:
* Gross profit of $43 million and gross margin of 48% in Q3:04, up 5%
in dollars and up 50 basis points respectively over Q3:03 and $124
million and 47% year to date, up 5% in dollars and up 30 basis points
respectively over fiscal 03
* Operating expenses of $29 million in Q3:04, down slightly from Q3:03
and $93 million year to date, up 7% over fiscal 03
* Operating income of $14 million in Q3:04, up 19% from Q3:03 and $31
million year to date, down slightly from fiscal 03
* Operating margin of 16% in Q3:04, up from 14% in Q3:03 and 12% year
to date, down slightly from fiscal 03
* Revenue for disposables and services was $87 million in Q3:04, 5%
over Q3:03 and $255 million year to date, 6% over fiscal 03
Haemonetics' Q3:03 tax rate of 13% reflected a one time tax refund of $4
million. By comparison, Q3:04 reflected a return to the Company's
historical tax rate of 36%. Fiscal year to date results also include a
second quarter reorganization charge of $2.6 million, or negative $0.07 per
share.
For the quarter, the Company further strengthened its balance sheet at
December 31, 2003, highlighted by a $3 million inventory reduction and a
cash increase of $30 million to an ending cash balance of $97 million.
Haemonetics debt position continues to improve, declining to $67 million
this quarter. The Company achieved $25 million of cash flow from
operations and finished goods inventory turns of 5.7.
Brad Nutter, Haemonetics' President and CEO, said, "During Q3, our sales
were adversely impacted by the loss of the Alpha Therapeutics' business
after it was purchased by a competitor. We offset this loss by leveraging
our core business to see positive drop through from net sales to gross
profit to operating income. Our emerging red cell collection and
orthopedic surgical blood salvage markets continued to grow in the 40-50%
range and coupled with good growth in our blood bank and surgical products.
As a result, we are reaffirm our financial objectives for the year."
QUARTERLY PRODUCT LINE HIGHLIGHTS
Plasma disposables revenue was $27 million, down 9% over Q3:03.
Haemonetics plasma sales were negatively affected $3 million this quarter
by the loss of the Alpha Therapeutics' business after it was purchased by
Baxter.
"Market research shows that Haemonetics' customers are growing plasma
collections by 6% while collections at other plasma centers are declining.
Additionally, we signed contracts with three customers in the quarter which
extended supply agreements, provided for conversion of competitive
collection centers to Haemonetics technology, and increased purchase
minimums of our collection bottles. We remain confident in the future of
our plasma collections business," said Peter Allen, President of
Haemonetics' Donor Division.
Blood bank disposables revenue was $30 million, a 12% increase over Q3:03.
Red cell disposables revenue was $5.5 million, a 41% increase over Q3:03.
During the quarter, Haemonetics gained six new customers, including four
additional American Red Cross regions. This is double the Company's plan.
Additionally, three new customer sites were converted to Haemonetics'
filtered double red cell disposable kits.
Surgical revenue was $20 million, a 16% increase over Q3:03, boosted by
competitive customer gains, OrthoPAT(tm) brand product growth of more than
40%, and increased market penetration in underserved markets.
Miscellaneous and services revenue was $5 million, a 7% decline from Q3:03.
NEW ANNOUNCEMENTS
In follow up to an October 2003 press release, Haemonetics announced today
that it had filed an arbitration demand against Baxter Healthcare Corporation
regarding Baxter's obligations to honor exclusive Purchase and Supply
Contracts as a result of Baxter's purchase of Alpha Therapeutics plasma
collection operations. Haemonetics and Baxter were unable to come to an
agreeable resolution.
Mr. Nutter said, "While I am disappointed that we were unable to come to a
resolution in direct negotiations with Baxter, we will now turn to the
mechanism provide by the contracts. We are confident about the strength of
our case."
Haemonetics anticipates that unless Baxter changes its position and agrees
to honor the contracts and if arbitration is not concluded in FY05, the
loss of plasma sales due to the Alpha contracts will total $9 million next
fiscal year.
Today, the Company also announced renewal of its agreement with Zimmer to
distribute the Company's OrthoPAT system in the U.S. under new terms that
position the Company for continued OrthoPAT revenue growth of 40-50%
annually over the five year term. (See separate press release of January
22, 2004)
Brian Concannon, Haemonetics' Patient Division President commented, "With
Zimmer distributing the OrthoPAT system over the past three years, we have
made significant progress in this emerging market, increasing patient use
at a rate of 45% per year. Zimmer's strength in orthopedics combined with
its outstanding U.S. sales organization provides us with a powerful
distribution channel."
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 February 5th at (877) 519-4471 (US only) or (973) 341-3080 using PIN
4360187.
The Company will post non-GAAP financial reconciliation on its website
prior to the conference call.
Haemonetics is presenting at the U.S. Bancorp Piper Jaffray Healthcare
Conference on Tuesday, January 27th at 1:30 pm.
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 Third Quarter FYE04
Consolidated Statements of Income
(Unaudited data in thousands, except per share data)
% Inc/(Dec)
INCOME STATEMENT 12/27/2003 12/28/2002 vs prior year
---------------- ---------- ---------- -------------
NET REVENUES $90,737 $87,115 4.2%
Gross profit 43,113 40,941 5.3%
R&D 4,072 4,633 (12.1%)
S, G & A 24,945 24,486 1.9%
Operating expenses 29,017 29,119 (0.4%)
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Operating income 14,096 11,822 19.2%
Interest expense (682) (783) (12.9%)
Interest income 805 325 147.7%
Other income, net 335 549 (39.0%)
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Income before taxes 14,554 11,913 22.2%
Tax expense 5,240 1,566 234.6%
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NET INCOME $ 9,314 $10,347 (10.0%)
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Net income per common share
assuming dilution $0.38 $0.42 (9.5%)
Weighted average number of shares
Basic 24,518 24,295
Diluted 24,780 24,573
Inc/(Dec) vs
prior year
profit margin
PROFIT MARGINS: %
--------------- -------------
Gross profit 47.5% 47.0%
R&D 4.5% 5.3%
S, G & A 27.5% 28.1%
Operating income 15.5% 13.6% 1.9%
Income before taxes 16.0% 13.7% 2.3%
Net income 10.3% 11.9%
Haemonetics Corporation Financial Summary for FYE04
Consolidated Statements of Income
(Unaudited data in thousands, except per share data)
% Inc/(Dec) vs
Income Statement: 12/27/2003 12/28/2002 prior year
----------------- ---------- ---------- --------------
NET REVENUES $266,508 $256,075 4.1%
Gross profit 124,079 118,478 4.7%
R&D 13,691 14,682 (6.7%)
S, G & A 79,200 72,456 9.3%
Operating expenses 92,891 87,138 6.6%
Operating income 31,188 31,340 (0.5%)
Interest expense (2,235) (2,530) (11.7%)
Interest income 1,274 1,111 14.7%
Other income, net 699 1,637 (57.3%)
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Income before taxes 30,926 31,558 (2.0%)
Tax expense 11,134 7,656 45.4%
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NET INCOME $ 19,792 $ 23,902 (17.2%)
======== ========
Net income per common share
assuming dilution $ 0.81 $ 0.95 (14.7%)
Weighted average number of shares
Basic 24,234 24,752
Diluted 24,446 25,280
Inc/(Dec) vs
prior year
profit margin
PROFIT MARGINS: %
--------------- -------------
Gross profit 46.6% 46.3%
R&D 5.1% 5.7%
S,G&A 29.7% 28.3%
Operating income 11.7% 12.2% (0.5%)
Income before taxes 11.6% 12.3% (0.7%)
Net income 7.4% 9.3%
Haemonetics Corporation Financial Summary for FYE 04
Revenue Analysis
(Unaudited data in thousands)
Third quarter Nine Months Ended
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REVENUE ANALYSIS 12/27/2003 12/28/2002 % Inc/(Dec) 12/27/2003 12/28/2002 % Inc/(Dec)
---------------- ---------- ---------- ----------- ---------- ---------- -----------
Revenues by Geography
United States $30,372 $32,132 (5.5) $ 94,241 $ 96,694 (2.5)
International 60,365 54,983 9.8 172,267 159,381 8.1
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Net Revenues $90,737 $87,115 4.2 $266,508 $256,075 4.1
- -------------------------------------------------------------------------- ----------------------------------
Disposable Revenues by Product Line
Surgical $19,810 $17,067 16.1 $ 55,042 $ 50,955 8.0
Blood Bank 29,650 26,417 12.2 82,330 75,373 9.2
Red Cell 5,493 3,891 41.2 15,139 10,880 39.1
Plasma 26,830 29,629 (9.4) 87,139 88,377 (1.4)
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Subtotal $81,783 $77,004 6.2 $239,650 $225,585 6.2
Equipment 3,953 4,719 (16.2) 11,551 16,511 (30.0)
Misc & Service 5,001 5,392 (7.3) 15,307 13,979 9.5
------- ------- -------- --------
Net Revenues $90,737 $87,115 4.2 $266,508 $256,075 4.1
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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: 12/27/2003 3/29/2003
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Assets
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Cash & cash equivalents $ 97,182 $ 49,885
Accounts receivable, net 84,399 77,913
Inventories, net 56,081 65,805
Other current assets 28,330 29,652
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Total current assets 265,992 223,255
Net PP&E 79,320 83,987
Other assets 51,252 51,966
Total assets $396,564 $359,208
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Liabilities & Stockholders' Equity
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S/T debt & current maturities $ 41,016 $ 39,005
Other current liabilities 61,338 61,370
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Total current liabilities 102,354 100,375
Long-term debt 25,560 31,612
Other long-term liabilities 4,422 3,984
Stockholders' equity 264,228 223,237
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Total liabilities & equity $396,564 $359,208
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