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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) January 31, 2005
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 January 31, 2005 Haemonetics Corporation (the "Company")
issued a press release announcing financial results for the
third quarter ended January 1, 2005. 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
January 31, 2005
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.
(Registrant)
Date: January 31, 2005 By: /s/ Ronald J. Ryan
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Ronald J. Ryan, Vice President and
Chief Financial Officer
3
EXHIBIT INDEX
EXHIBIT NO. SUBJECT MATTER
- ----------- -----------------------------------
99.1 Press Release of Haemonetics
Corporation dated January 31, 2005.
4
Exhibit 99.1
HAEMONETICS REPORTS THIRD QUARTER RESULTS
RAISES ANNUAL EARNINGS PER SHARE GUIDANCE
BRAINTREE, Mass., Jan. 31 /PRNewswire-FirstCall/ -- Haemonetics Corporation
reported today third quarter 2005 net revenue of $98 million, an 8.1% increase
over the third quarter of fiscal 2004. Diluted net earnings per share for the
quarter were $0.42, up 10.5% over Q3:04.
The Company reaffirmed its full FY05 guidance of mid-single digit revenue
growth, operating income growing more than 20%, and improved operating margin.
The Company revised its range for diluted net earnings per share from $1.38-
$1.43 to $1.43-$1.48. There are several factors fueling Haemonetics'
performance: revenue growth year-to-date at the high end of annual guidance;
discipline regarding price, mix, and cost of goods, leading to gross margin in
the 50% range; discipline in expense management; and lower than planned year to
date tax rate.
Brad Nutter, Haemonetics' President and CEO, stated, "We started the year
with a revenue challenge due to consolidation in the plasma market. Our guidance
reflected that business reality. We're very pleased that in the first three
quarters of the year, growth in our non plasma businesses exceeded our plans.
That growth, which we believe is sustainable, plus other factors, positions us
to achieve earnings per share in a higher range than originally planned."
FINANCIAL HIGHLIGHTS
Haemonetics reported the following financial results:
Product Disposable Revenue Changes
Plasma -9%
Blood Bank +15%
Red Cells +30%
Cell Saver +5%
OrthoPAT +61%
* Third quarter net revenue of $98 million, up 8.1% from $91 million in
Q3:04; year-to-date net revenue of $284 million, up 6.4% from $267 million
in fiscal 2004
* Third quarter gross profit of $52 million, up 19.3% from $43 million in
Q3:04; year-to-date gross profit of $144 million, up 15.7% from $125
million in fiscal 2004
* Third quarter gross margin of 52.8%, up from 47.8% in Q3:04; year-to- date
gross margin of 50.9%, up from 46.8% in fiscal 2004
* Third quarter operating expenses of $36 million, up 25.7% from $29 million
in Q3:04; year-to-date operating expenses of $100 million, up 7.9% from
$93 million fiscal 2004
* Third quarter operating income of $15 million, up 6.4% from $14 million
Q3:04; year-to-date operating income of $44 million, up 38.3% from $32
million in fiscal 2004
* Third quarter operating margin of 15.6%, level with 15.8% in Q3:04;
year-to-date operating margin of 15.6%, up from 12.0% in fiscal 2004
* Third quarter net earnings per share of $0.42, up 10.5% from $0.38 in
Q3:04; year-to-date net earnings per share of $1.15, up 42.0% from $0.81
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. This was offset by currency, changes in the mix of products
being sold, price improvements, and increased sales volumes in most product
lines which all affected revenue and gross margin results favorably.
Expenses increased as planned. In the quarter, $2.5 million of increased
expenses supported new products. The Company also reserved for an R&D asset that
it does not expect to employ. This $1.7 million impairment charge negatively
affected earnings per share by 4 cents. Additionally, an incremental $1 million
of expense was attributed to 404 compliance and legal services.
The Company's tax rate was 29.5% in the quarter versus 36% in Q3FY04. The
lower tax rate is a result of additional export tax benefits, higher tax exempt
interest income, and an adjustment to reserves.
Haemonetics will post a non-GAAP financial reconciliation on its website
prior to its conference call.
The Company maintained a strong balance sheet, highlighted by a cash
increase of $16 million to an ending cash balance of $160 million. The Company
achieved $21 million of cash flow from operating activities for the quarter and
$48.5 million year-to-date.
DONOR PRODUCT LINE HIGHLIGHTS
Plasma disposables revenue was $24 million for the quarter, down 9.4% over
Q3:04 and $74 million year-to-date, down 15.1% from FY04. Industry reports
indicate that plasma collections may have declined by 15-20% due to industry
consolidation and efforts to reduce plasma inventory levels. Haemonetics
continues to be affected by these market pressures.
Blood bank disposables revenue was $34 million, up 14.8% over Q3:04 and $98
million year-to-date, up 19.2% over FY04. There are several factors contributing
to blood bank sales success year-to-date: unit volume increases, share gains and
a shift to higher priced filtered platelet collection sets in Japan, and an
increase in sales of intravenous solutions.
Red cell disposables revenue was $7 million, up 29.5% over Q3:04, and $20
million year-to-date, up 33.6% over FY04. This product is predominantly sold in
the U.S. where blood shortages are more prevalent. Revenue benefited from unit
volume increases as U.S. blood collectors integrate automated collections into
their routine fixed site and mobile blood collection operations. Revenue also
benefited from a product mix shift to higher-priced filtered red cell collection
disposables.
PATIENT PRODUCT LINE HIGHLIGHTS
OrthoPAT(R) brand disposables revenue was $6 million, up 61.0% over Q3:04
and $14 million year-to-date, up 66.9% over FY04. The OrthoPAT brand has
retained its sales momentum for more than seven quarters as orthopedic surgeons
continue to adopt surgical blood salvage as an effective alternative to
pre-donation by patients, or transfusion of donor blood. OrthoPAT revenue
benefited from volume and price increases for the quarter.
Haemonetics also reported that customer acceptance trials in Europe and the
U.S. for the cardioPAT(TM) surgical blood salvage system are going well.
Haemonetics expects full market release for the cardioPAT system by the end of
the calendar year and will initially target the device in beating heart
surgeries. Haemonetics believes the cardioPAT system represents a $100 to $120
million market opportunity.
Brad Nutter added, "We are moving forward on a number of initiatives to
expand our business in FY06. These initiatives include new product launches in
both the Donor and Patient product lines that will bring us into adjacent
markets."
CONFERENCE CALL
Haemonetics will hold a conference call on Monday, January 31st at 10:00 am
eastern to review financial and operational performance of Q3FY05 and to discuss
the planned sales roll out of the cardioPAT system and the Blood Stream(R)
surgical family of products in FY06.
Interested parties can participate by calling (800) 921-9431 (US only) or
(973) 935-8505. The call will be replayed through February 14th at (877) 519-
4471 (US only) or (973) 341-3080 using PIN 5561461.
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.
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 THIRD QUARTER FYE05
%
Inc/(Dec)
vs prior
01/01/05 12/27/03 year
---------- ---------- ----------
NET REVENUES $ 98,098 $ 90,737 8.1%
Gross profit 51,781 43,390 19.3
R&D 6,584 4,072 61.7
S, G & A 29,897 24,945 19.9
Operating expenses 36,481 29,017 25.7
Operating income 15,300 14,373 6.4
Interest expense (553) (682) (18.9)
Interest income 598 805 (25.7)
Other income, net 262 58 351.7
Income before taxes 15,607 14,554 7.2
Tax expense 4,600 5,240 (12.2)
NET INCOME $ 11,007 $ 9,314 18.2
Net income per common share
assuming dilution $ 0.42 $ 0.38 10.5
Weighted average number of shares
Basic 25,628 24,518
Diluted 26,314 24,780
PROFIT MARGINS
Inc/(Dec)
vs prior
year
----------
Gross profit 52.8% 47.8%
R&D 6.7% 4.5%
S, G & A 30.5% 27.5%
Operating income 15.6% 15.8% (0.2)
Income before taxes 15.9% 16.0% (0.1)
Net income 11.2% 10.3%
CONSOLIDATED STATEMENTS OF INCOME FOR NINE MONTHS ENDED 1/1/05
%
Inc/(Dec)
vs prior
01/01/05 12/27/03 year
---------- ---------- ----------
NET REVENUES $ 283,623 $ 266,508 6.4%
Gross profit 144,430 124,833 15.7%
R&D 14,891 13,691 8.8%
S, G & A 85,366 79,200 7.8%
Operating expenses 100,257 92,891 7.9%
Operating income 44,173 31,942 38.3%
Interest expense (1,850) (2,235) (17.2%)
Interest income 1,463 1,274 14.8%
Other expense, net (39) (55) (29.1%)
Income before taxes 43,747 30,926 41.5%
Tax expense 14,046 11,134 26.2%
NET INCOME $ 29,701 $ 19,792 50.1%
Net income per common share
assuming dilution $ 1.15 $ 0.81 42.0%
Weighted average number of shares
Basic 25,347 24,234
Diluted 25,886 24,446
PROFIT MARGINS:
Inc/(Dec)
vs prior
year
----------
Gross profit 50.9% 46.8%
R&D 5.3% 5.1%
S,G&A 30.1% 29.7%
Operating income 15.6% 12.0% 3.6%
Income before taxes 15.4% 11.6% 3.8%
Net income 10.5% 7.4%
REVENUE ANALYSIS
THIRD QUARTER
-------------------------------------
01/01/05 12/27/03 % Inc/(Dec)
---------- ---------- -----------
Revenues by Geography
United States $ 33,068 $ 30,372 8.9
International 65,030 60,365 7.7
Net Revenues $ 98,098 $ 90,737 8.1
Disposable Revenues by
Product Family
Donor:
Plasma 24,297 26,830 (9.4)
Blood Bank 34,031 29,650 14.8
Red Cell 7,111 5,493 29.5
$ 65,439 $ 61,973 5.6
Patient:
Surgical 22,736 19,810 14.8
Subtotal $ 88,175 $ 81,783 7.8
Equipment 4,714 3,953 19.3
Misc & Service 5,209 5,001 4.2
Net Revenues $ 98,098 $ 90,737 8.1
NINE MONTHS ENDED
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01/01/05 12/27/03 % Inc/(Dec)
---------- ---------- -----------
Revenues by Geography
United States $ 96,374 $ 94,241 2.3
International 187,249 172,267 8.7
Net Revenues $ 283,623 $ 266,508 6.4
Disposable Revenues
by Product Family
Donor:
Plasma 74,021 87,139 (15.1)
Blood Bank 98,138 82,330 19.2
Red Cell 20,225 15,139 33.6
$ 192,384 $ 184,608 4.2
Patient:
Surgical 63,554 55,042 15.5
Subtotal $ 255,938 $ 239,650 6.8
Equipment 13,967 11,551 20.9
Misc & Service 13,718 15,307 (10.4)
Net Revenues $ 283,623 $ 266,508 6.4
CONSOLIDATED BALANCE SHEETS
Period ending
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01/01/05 04/03/04
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Assets
Cash & cash equivalents $ 160,276 $ 118,117
Accounts receivable, net 87,578 82,640
Inventories, net 52,485 52,235
Other current assets 28,117 28,457
Total current assets 328,456 281,449
Net PP&E 72,684 78,030
Other assets 55,634 47,915
Total assets $ 456,774 $ 407,394
Period ending
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01/01/05 04/03/04
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Liabilities & Stockholders' Equity
S/T debt & current maturities $ 29,862 $ 32,818
Other current liabilities 65,083 63,025
Total current liabilities 94,945 95,843
Deferred tax liability, net 1,388 1,682
Long-term debt 19,359 25,442
Other long-term liabilities 5,143 4,678
Stockholders' equity 335,939 279,749
Total liabilities & equity $ 456,774 $ 407,394
SOURCE Haemonetics Corporation
-0- 01/31/2005
/CONTACT: Julie Fallon, +1-781-356-9517, or +1-617-320-2401 (Alternate
Tel.), fallon@haemonetics.com/
/Web site: http://www.haemonetics.com/
(HAE)