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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) November 1, 2004
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 File (IRS Employer
of incorporation) Number) Identification No.)
400 Wood Road Braintree, MA 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:
|_| 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 November 1, 2004 Haemonetics Corporation (the "Company") issued a press
release announcing financial results for the second quarter ended October
2, 2004. 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 November 1, 2004
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.
(Registrant)
Date: October 31, 2004 By: /s/ Ronald J. Ryan
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Ronald J. Ryan, Vice President and Chief
Financial Officer
2
EXHIBIT INDEX
Exhibit No. Subject Matter
99.1 Press Release of Haemonetics Corporation
dated November 1, 2004.
3
Exhibit 99.1
Haemonetics Reports Second Quarter Results
Reaffirms Full Year Guidance
BRAINTREE, Mass., Nov. 1 /PRNewswire-FirstCall/ -- Haemonetics Corporation
reported today second quarter fiscal 2005 net revenue of $91 million, a 3.9%
increase over the second quarter of fiscal 2004. Diluted net earnings per
share for the quarter were $0.34, up 48% over Q2:04.
The Company also reaffirmed its full fiscal 2005 guidance of mid-single
digit revenue growth, gross profit margin in the high 40% range, operating
income growing more than 20%, improved operating margin, and net earnings per
share in the range of $1.38 to $1.43.
Brad Nutter, Haemonetics' President and CEO, added that, "Given our
performance year-to-date, we believe our earnings per share results will be
toward the high end of our range for the year."
FINANCIAL HIGHLIGHTS
Haemonetics reported the following financial results:
-- Second quarter net revenue of $91 million, up 3.9% from $87 million in
Q2:04; year-to-date net revenue of $186 million, up 5.5% from $176
million in fiscal 2004
-- Second quarter gross profit of $46 million, up 9.5% from $42 million in
Q2:04; year-to-date gross profit of $93 million, up 13.8% from $81
million in fiscal 2004
-- Second quarter gross margin of 50.1%, up from 47.6% in Q2:04; year-to-
date gross margin of 49.9%, up from 46.3% in fiscal 2004
-- Second quarter operating expenses of $32 million, down 2.6% from $32.5
million in Q2:04; year-to-date operating expenses of $64 million, level
with fiscal 2004
-- Second quarter operating income of $14 million, up 52.3% from $9
million Q2:04; year-to-date operating income of $29 million, up 64.3%
from $18 million in fiscal 2004
-- Second quarter operating margin of 15.3%, up from 10.4% in Q2:04; year-
to-date operating margin of 15.6%, up from 10.0% in fiscal 2004
-- Second quarter net earnings per share of $0.34, up 47.8% from $0.23 in
Q2:04; year-to-date net earnings per share of $0.73, up 69.8% from
$0.43 in fiscal 2004
Several factors affected the Company's financial results. There was a
significant negative impact to revenue due to consolidation in the plasma
market. Currency, changes in the mix of products being sold, price
improvements, and increased sales volumes all affected results favorably.
Haemonetics will post a non-GAAP financial reconciliation on its website prior
to its conference call.
Haemonetics maintained a strong balance sheet, highlighted by a cash
increase of $13.5 million to an ending cash balance of $144 million. The
Company achieved $18 million of cash flow from operating activities for the
quarter.
Nutter added, "For the fourth consecutive quarter we've leveraged our core
business and improved profitability of the Company. As we remain focused on
management of expenses, product mix, and pricing, I am confident that leverage
is sustainable each fiscal year."
DONOR PRODUCT LINE HIGHLIGHTS
Plasma disposables revenue was $24 million for the quarter, down 21.1%
over Q2:04 and $50 million year-to-date, down 17.6% from 1H:04. Loss of a
large customer when it was purchased by the Company's only plasma competitor
in Q3:04 accounted for more than half of these sales declines.
Blood bank disposables revenue was $33 million, up 24.7% over Q2:04 and
$64 million year-to-date, up 21.7% over 1H:04. Platelet disposables revenue
represents the majority of the blood bank product line. Almost 80% of
platelet disposables revenue comes from Europe and Japan. Thus, blood bank
disposables revenue experienced favorable impact from currency. However,
revenue benefited more significantly from a product mix shift in Japan to
higher-priced filtered platelet collection disposables.
Red cell disposables revenue was $7 million, up 30.9% over Q2:04, and $13
million year-to-date, up 36.0% over 1H:04. This product is predominantly sold
in the U.S. where blood shortages are more prevalent. Revenue benefited from
unit volume gains as U.S. blood collectors increased use of the technology to
offset blood shortages and from a product mix shift to higher-priced filtered
red cell collection disposables.
PATIENT PRODUCT LINE HIGHLIGHTS
Despite a declining market, Cell Saver(R) brand disposables revenue was
$16 million, up 9% over Q2:04 and $32 million year-to-date, up 6.5% over
1H:04. Revenue benefited somewhat from currency, but unit volume increases in
Europe was the most significant contributor to the revenue increase.
OrthoPAT(R) brand disposables revenue was $4 million, up 70.6% over Q2:04
and $9 million year-to-date, up 70.9% over 1H:04. The OrthoPAT brand has
retained its sales momentum for more than six quarters as orthopedic surgeons
continue to adopt surgical blood salvage as an effective alternative to pre-
donation by patients, or transfusion of donor blood.
SUMMARY OF RECENT ANNOUNCEMENTS
Haemonetics recently made some significant announcements.
In August, the Company announced the acquisition of the assets,
inventories, and intellectual property associated with several surgical
products from Harvest Technologies for $4 million cash. The BloodStream
product line is an integrated product for blood conservation and surgical
blood salvage, but the station consists of several products that can also be
unbundled and marketed as stand-alone products. These products include the
SmartSuction(R), the SmartCell, and an autotransfusion blood bag with integral
transfusion filter. Haemonetics will leverage these technologies to expand its
surgical blood salvage product line and to enter the broader surgical patient
management market.
Also in August, Haemonetics announced the appointment of Susan Bartlett
Foote and Pedro Granadillo to its Board of Directors. Ms. Foote is associate
professor and head of the Division of Health Service Research and Policy at
the School of Public Health at the University of Minnesota. Mr. Granadillo
retired in September from a 24 year career at Eli Lilly and Company, most
recently serving as senior vice president of global manufacturing and human
resources.
Last week, Haemonetics announced that it made an equity investment in
Arryx, Inc. Additionally, the companies announced they will collaborate on
the research, development and potential commercialization of new technology
for applications in a broad range of markets.
CONFERENCE CALL DETAILS
Haemonetics will hold a conference call on Monday, November 1st at 10:00
am eastern to review financial and operational highlights. Interested parties
can participate by calling (800) 921-9431 (US only) or (973) 935-8505. The
call will be replayed through November 15th at (877) 519-4471 (US only) or
(973) 341-3080 using PIN 5294529.
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 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.
Cell Saver, OrthoPAT, and SmartSuction are registered trademarks of
Haemonetics Corporation.
HAEMONETICS CORPORATION FINANCIAL SUMMARY
(Unaudited data in thousands, except per share data)
Consolidated Statements of Income for Q2FY05
% Inc/(Dec)
vs prior
10/02/04 09/27/03 year
NET REVENUES $90,923 $87,488 3.9%
Gross profit 45,549 41,608 9.5%
R&D 4,253 4,622 (8.0%)
S, G & A 27,385 27,852 (1.7%)
Operating expenses 31,638 32,474 (2.6%)
Operating income 13,911 9,134 52.3%
Interest expense (636) (767) (17.1%)
Interest income 502 186 169.9%
Other (expense) income, net (69) 33 (309.1%)
Income before taxes 13,708 8,586 59.7%
Tax expense 4,834 3,091 56.4%
NET INCOME $8,874 $5,495 61.5%
Net income per common share
assuming dilution $0.34 $0.23 47.8%
Weighted average number of shares
Basic 25,258 24,120
Diluted 25,784 24,327
PROFIT MARGINS
Gross profit 50.1% 47.6%
R&D 4.7% 5.3%
S, G & A 30.1% 31.8%
Operating income 15.3% 10.4% 4.9%
Income before taxes 15.1% 9.8% 5.3%
Net income 9.8% 6.3%
Consolidated Statements of Income Six Months Ended 10/2/04
% Inc/(Dec)
vs prior
10/02/04 09/27/03 year
NET REVENUES $185,525 $175,771 5.5%
Gross profit 92,649 81,443 13.8%
R&D 8,307 9,619 (13.6%)
S, G & A 55,469 54,255 2.2%
Operating expenses 63,776 63,874 (0.2%)
Operating income 28,873 17,569 64.3%
Interest expense (1,297) (1,553) (16.5%)
Interest income 865 469 84.4%
Other expense, net (301) (113) 166.4%
Income before taxes 28,140 16,372 71.9%
Tax expense 9,446 5,894 60.3%
NET INCOME $18,694 $10,478 78.4%
Net income per common share
assuming dilution $0.73 $0.43 69.8%
Weighted average number of shares
Basic 25,207 24,092
Diluted 25,681 24,276
PROFIT MARGINS
Gross profit 49.9% 46.3%
R&D 4.5% 5.5%
S, G & A 29.9% 30.9%
Operating income 15.6% 10.0% 5.6%
Income before taxes 15.2% 9.3% 5.9%
Net income 10.1% 6.0%
Revenue Analysis
Second quarter
10/02/04 09/27/03 % Inc/(Dec)
Revenues by Geography
United States $30,399 $32,317 (5.9%)
International 60,524 55,171 9.7%
Net Revenues $90,923 $87,488 3.9%
Disposable Revenues by Product Family
Donor:
Plasma 24,238 30,720 (21.1%)
Blood Bank 33,338 26,731 24.7%
Red Cell 6,653 5,082 30.9%
64,229 62,533 2.7%
Patient:
Surgical $20,045 $16,939 18.3%
Subtotal $84,274 $79,472 6.0%
Equipment 2,580 3,112 (17.1%)
Misc & Service 4,069 4,904 (17.0%)
Net Revenues $90,923 $87,488 3.9%
Six Months Ended
10/02/04 09/27/03 % Inc/(Dec)
Revenues by Geography
United States $63,310 $63,869 (0.9%)
International 122,215 111,902 9.2%
Net Revenues $185,525 $175,771 5.5%
Disposable Revenues by Product Family
Donor:
Plasma 49,724 60,309 (17.6%)
Blood Bank 64,107 52,680 21.7%
Red Cell 13,114 9,646 36.0%
126,945 122,635 3.5%
Patient:
Surgical $40,818 $35,232 15.9%
Subtotal $167,763 $157,867 6.3%
Equipment 9,253 7,598 21.8%
Misc & Service 8,509 10,306 (17.4%)
Net Revenues $185,525 $175,771 5.5%
CONSOLIDATED BALANCE SHEET
Period ending
10/02/04 04/03/04
ASSETS
Cash & cash equivalents $143,829 $118,117
Accounts receivable, net 83,347 82,640
Inventories, net 50,712 52,235
Other current assets 26,367 28,457
Total current assets 304,255 281,449
Net PP&E 72,224 78,030
Other assets 51,056 47,915
Total assets $427,535 $407,394
Period ending
10/02/04 04/03/04
LIABILITIES & STOCKHOLDERS' EQUITY
S/T debt & current maturities $28,298 $32,818
Other current liabilities 58,331 63,025
Total current liabilities 86,629 95,843
Deferred tax liability, net 1,376 1,682
Long-term debt 25,199 25,442
Other long-term liabilities 4,665 4,678
Stockholders' equity 309,666 279,749
Total liabilities & equity $427,535 $407,394
CONTACT:
Julie Fallon
Tel. (781) 356-9517
Alternate Tel. (617) 320-2401
fallon@haemonetics.com
SOURCE Haemonetics Corporation
-0- 11/01/2004
/CONTACT: Julie Fallon of Haemonetics, +1-781-356-9517, or Alternate Tel.
+1-617-320-2401, fallon@haemonetics.com/
/Web site: http://www.haemonetics.com/
(HAE)
CO: Haemonetics Corporation
ST: Massachusetts
IN: MTC BIO
SU: ERN CCA MAV