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 4, 2021
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(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): | |||||
| 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)) | |||||
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |||||
Emerging Growth Company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ | |||||
Item 2.02 Results of Operations and Financial Condition.
On November 9, 2021, Haemonetics Corporation (the “Company”) issued a press release announcing financial results for the second quarter ended October 2, 2021 and first half of fiscal 2022. A copy of the press release is furnished with this report as Exhibit 99.1.
The foregoing information, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for the 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.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 9, 2021, the Company announced that William P. Burke, Executive Vice President, Chief Financial Officer (“CFO”) has decided to retire from the Company in June 2022. Mr. Burke will remain in his current role while the Company conducts a search for a new CFO and will assist the Company’s Chief Executive Officer and next CFO in the transition thereafter until Mr. Burke’s retirement from the Company.
In consideration of the important services Mr. Burke will provide during the transition period, the Company and Mr. Burke have entered into an agreement dated November 8, 2021 (the “Agreement”) that sets forth the terms of Mr. Burke’s transition and retention through June 30, 2022 (the “Retention Date”), including his continued compensation, a potential retention payment, transition services to be performed, restrictive covenants in favor of the Company and a customary release of claims against the Company. Under the terms of the Agreement, Mr. Burke’s base salary will continue unchanged through the Retention Date and he will remain eligible for a bonus under the Company’s fiscal 2022 short-term incentive plan based on the Company’s actual performance. Additionally, if Mr. Burke does not resign and is not terminated for Cause (as defined in his Executive Severance Agreement with the Company) prior to the Retention Date, he will receive a retention bonus equal to: (a) 25% of his annual base salary, if a new CFO commences employment prior to April 2, 2022 (the last day of the Company’s fiscal 2022), or (b) 50% of his annual base salary, if a new CFO commences employment after April 2, 2022. Provided that Mr. Burke remains employed by the Company through the Retention Date and satisfies the other criteria to receive his retention bonus, he will also receive a pro rata bonus under the Company’s fiscal 2023 short-term incentive plan equaling (i) his fiscal 2022 annual target bonus opportunity (expressed as a percentage of base salary) multiplied by (ii) a fraction of which the numerator is the number of days in fiscal 2023 that he is employed with the Company and the denominator is 365. Mr. Burke will not be eligible to receive a fiscal 2023 annual long-term incentive award grant from the Company.
The description of the Agreement set forth above is qualified in its entirety by reference to the text of the Agreement, a copy of which will be filed with the Company’s Periodic Report on Form 10-Q for the third quarter of fiscal 2022.
Item 7.01 Regulation FD Disclosure.
On November 9, 2021, the Company issued a press release relating to the matters described above in Item 5.02. A copy of the press release is attached hereto as Exhibit 99.2 and is incorporated into this Item 7.01 by reference.
The foregoing information, including Exhibit 99.2 attached hereto, shall not be deemed “filed” for the purposes of Section 18 of 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.
(d) Exhibits
| Exhibit Number | Description | |||||||
Press Release of Haemonetics Corporation dated November 9, 2021 announcing financial results for the second quarter ended October 2, 2021 and first half of fiscal 2022. | ||||||||
Press Release of Haemonetics Corporation dated November 9, 2021 announcing William P. Burke’s retirement in June 2022. | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HAEMONETICS CORPORATION | ||||||||||||||
Date: November 9, 2021 | By: | /s/ Christopher A. Simon | ||||||||||||
| Name: | Christopher A. Simon | |||||||||||||
| Title: | President and Chief Executive Officer | |||||||||||||
| Exhibit 99.1 | |||||||||||
| Investor Contact | Media Contact | ||||||||||
| Olga Guyette, Director-Investor Relations | Josh Gitelson, Director-Communications | ||||||||||
| (781) 356-9763 | (781) 356-9776 | ||||||||||
| olga.guyette@haemonetics.com | josh.gitelson@haemonetics.com | ||||||||||
Haemonetics Reports Second Quarter and 1st Half Fiscal 2022 Results; Updates Fiscal 2022 Guidance
Boston, MA, November 9, 2021 - Haemonetics Corporation (NYSE: HAE) reported financial results for its second quarter and first half of fiscal 2022, which ended October 2, 2021:
| 2nd Quarter 2022 | YTD 2022 | |||||||||||||
| n | Revenue, increase | $240 million, 15% | $468 million, 16% | |||||||||||
| n | Revenue increase (organic)1 | 5% | 6% | |||||||||||
| n | Earnings per diluted share | $0.29 | $0.20 | |||||||||||
| n | Adjusted earnings per diluted share | $0.60 | $1.09 | |||||||||||
| n | Cash flow from operating activities | $43 million | $42 million | |||||||||||
| n | Free cash flow before restructuring & restructuring related costs | $29 million | $31 million | |||||||||||
1 Excludes the impact of currency fluctuation, strategic exits of product lines, acquisitions and divestitures. | ||||||||||||||
Chris Simon, Haemonetics’ CEO, stated: “All of our businesses are building momentum with revenue increases. While we encountered a delay in the acceleration of plasma collections in the quarter, we did see encouraging signs of recovery and our Hospital and Blood Center businesses delivered strong sales despite the resurgence of COVID-19. We anticipate additional growth across in our Plasma and Hospital businesses in the second half of fiscal 22. Our teams continue to show strong resilience overcoming supply chain challenges and we are ready to support our customers as the pandemic recedes.”
GAAP RESULTS
Second quarter fiscal 2022 revenue was $239.9 million, up 14.5% compared with second quarter fiscal 2021. Business unit revenue and growth rates compared with the prior year were as follows:
| ($ millions) | 2nd Quarter 2022 Reported | |||||||
| Plasma | $81.9 | 4.5% | ||||||
| Hospital | $76.3 | 49.7% | ||||||
| Blood Center | $76.8 | 2.4% | ||||||
| Net business unit revenue | $235.0 | 15.0% | ||||||
| Service | $4.9 | (5.4%) | ||||||
| Total net revenue | $239.9 | 14.5% | ||||||
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Gross margin was 51.1% in the second quarter of fiscal 2022, compared with 50.5% in the second quarter of fiscal 2021. Operating expenses were $98.0 million in the second quarter of fiscal 2022, compared with $47.0 million in the same period in the prior year. The Company had operating income of $24.5 million and a 10.2% operating margin in the second quarter of fiscal 2022, compared with operating income of $58.8 million and an operating margin of 28.1% in second quarter of fiscal 2021. The income tax rates were 25% and 12% in the second quarters of fiscal 2022 and fiscal 2021, respectively. Second quarter fiscal 2022 net income and earnings per diluted share were $14.9 million and $0.29, respectively, compared with net income and earnings per diluted share of $48.1 million and $0.94, respectively, in the second quarter of fiscal 2021.
ADJUSTED RESULTS
Organic revenue for the second quarter of fiscal 2022 was up 5.4% compared with the same period of the prior year. Business unit organic revenue growth rates compared with the same prior year period were as follows:
| 2nd Quarter 2022 Organic | |||||
| Plasma | 6.8% | ||||
| Hospital | 10.4% | ||||
| Blood Center | 1.6% | ||||
| Net business unit revenue | 5.8% | ||||
| Service | (7.3%) | ||||
| Total net revenue | 5.4% | ||||
Within Hospital, organic revenue growth in the Hemostasis Management product line was 21.1% in the second quarter of fiscal 2022 compared with the same period of the prior year.
Second quarter fiscal 2022 adjusted gross margin was 52.6%, up 40 basis points compared with the same prior year period. The primary drivers of this improvement were the acquisition of our Vascular Closure business, productivity savings from the Operational Excellence Program and favorable product mix, partially offset by the impact of price adjustments as well as inflationary pressures in our global manufacturing and supply chain.
Adjusted operating expenses in the second quarter of fiscal 2022 were $82.4 million, up $16.0 million, or 24.1%, compared with the same prior year period. The increase in adjusted operating expenses was primarily driven by the acquisition of our Vascular Closure business and an increase in freight costs. Adjusted operating income for the second quarter of fiscal 2022 was $43.8 million, up $0.8 million or 2.0%, and adjusted operating margin was 18.3%, down 220 basis points compared with the second quarter of fiscal 2021. The adjusted income tax rate was 22% in the second quarter of fiscal 2022 compared with an adjusted income tax rate of 19% in the second quarter of fiscal 2021.
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Second quarter fiscal 2022 adjusted net income was $30.7 million, down $1.0 million or 3.1%, and adjusted earnings per diluted share was $0.60, down 3.2% compared with the second quarter of fiscal 2021.
BALANCE SHEET AND CASH FLOW
Cash on hand at October 2, 2021 was $192.4 million, an increase of $0.1 million since April 3, 2021. Cash flow from operating activities was $42.7 million and free cash flow before restructuring and restructuring related costs was $29.3 million during the second quarter of fiscal 2022, compared with $29.2 million and $27.3 million, respectively, in the second quarter of fiscal 2021.
During the second quarter of fiscal 2022, the Company also had net debt repayments of $4.4 million as compared with net borrowings of $64.4 million in the same prior year period.
RESTRUCTURING AND RESTRUCTURING RELATED COSTS, DEAL AMORTIZATION, EUROPEAN UNION MEDICAL DEVICE REGULATION AND IN VITRO DIAGNOTIC REGULATION, GAIN ON DIVESTITURES AND SALE OF ASSETS
The Company incurred restructuring and restructuring related costs of $4.5 million in the second quarter of fiscal 2022 compared with $4.4 million in the second quarter of fiscal 2021 and deal amortization expenses of $11.4 million in the second quarter of fiscal 2022 compared with $8.1 million in the second quarter of fiscal 2021.
In addition, during the second quarter of fiscal 2022, the Company incurred $2.3 million of costs related to the European Union Medical Device Regulation and In Vitro Diagnostic Regulation, as compared with $0.7 million of such costs in the second quarter of fiscal 2021. The Company also recorded a gain on divestitures and sale of assets of $31.5 million during the second quarter of fiscal 2021.
FISCAL 2022 GUIDANCE
The Company revised its GAAP total revenue growth guidance from 13 – 18% to 13 – 17% and organic revenue growth guidance issued on November 9, 2021 as follows:
Previous Organic1 Guidance | Current Organic1 Guidance | ||||||||||
| Total revenue | 8 - 12% | 7 - 10% | |||||||||
| Plasma revenue | 15 - 25% | 10 - 20% | |||||||||
| Hospital revenue | 15 - 20% | 15 - 20% | |||||||||
| Blood Center revenue | (6 - 8%) | (3 - 5%) | |||||||||
1Excludes the impact of currency fluctuation, strategic exits of product lines, acquisitions and divestitures and the impact of the 53rd week in fiscal 2021. Reconciliations of reported to organic revenue are provided in the schedules accompanying this release and in the analytical tables referenced below. | |||||||||||
Total company GAAP revenue guidance includes $80 - $90 of million revenue related to Vascular Closure. Hospital organic revenue guidance includes a Hemostasis Management organic revenue growth rate in the mid-twenties.
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Additionally, the Company affirmed its adjusted operating margin, adjusted earnings per diluted share and free cash flow before restructuring and restructuring related costs guidance as follows:
| Previous Guidance | Current Guidance | ||||||||||
Adjusted operating margin | 19 - 20% | 18 - 19% | |||||||||
Adjusted earnings per diluted share | $2.60 - $3.00 | $2.40 - $2.65 | |||||||||
Free cash flow, before restructuring & restructuring related costs | $135M - $155M | $115M - $135M | |||||||||
WEBCAST CONFERENCE CALL AND RESULTS ANALYSIS
The Company will host a conference call with investors and analysts to discuss second quarter fiscal 2022 results on Tuesday, November 9, 2021 at 8:00am EST. Interested parties may participate by telephone by dialing (877) 848-8880 from within the U.S. or Canada or (716) 335-9512 from international locations, using the access code 3529538. Alternatively, a live webcast of the call can be accessed on Haemonetics’ investor relations website at the following direct link: https://edge.media-server.com/mmc/p/apntfy73
The Company is posting this press release to its Investor Relations website, in addition to results analyses that will be referenced on the webcast. These analyses can be accessed at the following direct link: https://haemonetics.gcs-web.com/static-files/1f8f1f7d-24a0-46a4-8c34-20846dcc0a28
ABOUT HAEMONETICS
Haemonetics (NYSE: HAE) is a global healthcare company dedicated to providing a suite of innovative medical products and solutions for customers, to help them improve patient care and reduce the cost of healthcare. Our technology addresses important medical markets: blood and plasma component collection, the surgical suite and hospital transfusion services. To learn more about Haemonetics, visit www.haemonetics.com.
FORWARD-LOOKING STATEMENTS
Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements. Forward-looking statements in this press release may include, without limitation, statements regarding (i) plans and objectives of management for operations of the Company, including plans or objectives related to the development and commercialization of, and regulatory approvals related to, the Company’s products and plans or objectives related to the Operational Excellence Program; (ii) estimates or projections of financial results, financial condition, capital expenditures, capital structure or other financial items, (iii) the impact of the COVID-19 pandemic on the Company’s operations, availability and demand for its products, and future financial performance, and (iv) the assumptions underlying or relating to any statement described in points (i), (ii) or (iii) above. Such forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon the Company's current
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projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the inaccuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation, the impact of the COVID-19 pandemic, including the scope and duration of the outbreak; government actions and restrictive measures implemented in response; availability and demand for the Company’s products; the Company’s ability to implement as planned and realize estimated cost savings from the Operational Excellence Program; the Company’s ability to execute business continuity plans; risks arising from the Company’s acquisition of Cardiva Medical Inc., including any failure to realize the anticipated benefits of the transaction; technological advances in the medical field and standards for transfusion medicine and the Company’s ability to successfully offer products that incorporate such advances and standards; product quality; market acceptance; regulatory uncertainties, including in the receipt or timing of regulatory approvals; the effect of economic and political conditions; the impact of competitive products and pricing; blood product reimbursement policies and practices; and the effect of industry consolidation as seen in the plasma market. These and other factors are identified and described in more detail in the Company's periodic reports and other filings with the U.S. Securities and Exchange Commission (the “SEC”). The Company does not undertake to update these forward-looking statements.
MANAGEMENT’S USE OF NON-GAAP MEASURES
This press release contains financial measures that are considered “non-GAAP” financial measures under applicable SEC rules and regulations. Management uses non-GAAP measures to monitor the financial performance of the business, make informed business decisions, establish budgets and forecast future results. Performance targets for management are also based on certain non-GAAP financial measures. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, the Company’s reported financial results prepared in accordance with U.S. GAAP. In this release, supplemental non-GAAP measures have been provided to assist investors in evaluating the performance of the Company’s core operations and provide a baseline for analyzing trends in the Company’s underlying businesses. We strongly encourage investors to review the Company’s financial statements and publicly-filed reports in their entirety and not rely on any single financial measure.
When used in this release, organic revenue growth excludes the impact of currency fluctuation, strategic exits of product lines, acquisitions and divestitures and the impact of the 53rd week in fiscal 2021. Adjusted gross profit, adjusted operating expenses, adjusted operating income, adjusted net income and adjusted earnings per diluted share exclude restructuring and restructuring related costs, deal amortization expenses, asset impairments, accelerated device depreciation and related costs, costs related to compliance with the European Union Medical Device Regulation and In Vitro Diagnostic Regulation, integration and transaction costs, gains and losses on dispositions, certain tax settlements and unusual or infrequent and material litigation-related charges. Adjusted net income and adjusted earnings per diluted share also exclude the tax impact of these items. Free cash flow before restructuring and restructuring
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related costs is defined as cash provided by operating activities less capital expenditures, net of the proceeds from the sale of property, plant and equipment. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures to similarly titled measures used by other companies.
A reconciliation of non-GAAP historical financial measures to their most comparable GAAP measure are included at the end of the financial sections of this press release as well as on the Company’s website at www.haemonetics.com. The Company does not provide a quantitative reconciliation of its forward-looking organic revenue growth guidance by business unit to the comparable GAAP measure because forecasting the impact of foreign currency fluctuations by business unit is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts. Additionally, the Company does not attempt to provide reconciliations of forward-looking adjusted operating margin guidance, adjusted earnings per diluted share guidance or free cash flow before restructuring and restructuring related costs guidance to the comparable GAAP measures because the combined impact and timing of recognition of certain potential charges or gains, such as restructuring costs and impairment charges, is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts. In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of the Company’s financial performance.
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| Haemonetics Corporation Financial Summary | ||||||||||||||||||||
| Condensed Consolidated Statements of Income for the Second Quarter of FY22 and FY21 | ||||||||||||||||||||
| (Data in thousands, except per share data) | ||||||||||||||||||||
| 10/2/2021 | 9/26/2020 | % Inc/(Dec) | ||||||||||||||||||
| vs Prior Year | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| Net revenues | $ | 239,897 | $ | 209,486 | 14.5% | |||||||||||||||
| Gross profit | 122,541 | 105,744 | 15.9% | |||||||||||||||||
| R&D | 10,853 | 6,763 | 60.5% | |||||||||||||||||
| S,G&A | 75,778 | 63,570 | 19.2% | |||||||||||||||||
| Amortization of intangible assets | 11,400 | 8,127 | 40.3% | |||||||||||||||||
| Gain on divestitures and sale of assets | — | (31,498) | n/m | |||||||||||||||||
| Operating expenses | 98,031 | 46,962 | 108.7% | |||||||||||||||||
| Operating income | 24,510 | 58,782 | (58.3)% | |||||||||||||||||
| Interest and other expense, net | (4,588) | (3,826) | 19.9% | |||||||||||||||||
| Income before taxes | 19,922 | 54,956 | (63.7)% | |||||||||||||||||
| Tax expense | 5,066 | 6,855 | (26.1)% | |||||||||||||||||
| Net income | $ | 14,856 | $ | 48,101 | (69.1)% | |||||||||||||||
| Net income per common share assuming dilution | $ | 0.29 | $ | 0.94 | (69.1)% | |||||||||||||||
| Weighted average number of shares: | ||||||||||||||||||||
| Basic | 51,039 | 50,696 | ||||||||||||||||||
| Diluted | 51,458 | 51,093 | ||||||||||||||||||
| Profit Margins: | Inc/(Dec) vs prior year profit margin % | |||||||||||||||||||
| Gross profit | 51.1 | % | 50.5 | % | 0.6% | |||||||||||||||
| R&D | 4.5 | % | 3.2 | % | 1.3% | |||||||||||||||
| S,G&A | 31.6 | % | 30.3 | % | 1.3% | |||||||||||||||
| Operating income | 10.2 | % | 28.1 | % | (17.9)% | |||||||||||||||
| Income before taxes | 8.3 | % | 26.2 | % | (17.9)% | |||||||||||||||
| Net income | 6.2 | % | 23.0 | % | (16.8)% | |||||||||||||||
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| Haemonetics Corporation Financial Summary | ||||||||||||||||||||
| Condensed Consolidated Statements of Income for the Year-to-Date FY22 and FY21 | ||||||||||||||||||||
| (Data in thousands, except per share data) | ||||||||||||||||||||
| 10/2/2021 | 9/26/2020 | % Inc/(Dec) | ||||||||||||||||||
| vs Prior Year | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| Net revenues | $ | 468,425 | $ | 405,063 | 15.6% | |||||||||||||||
| Gross profit | 230,626 | 195,774 | 17.8% | |||||||||||||||||
| R&D | 23,554 | 14,513 | 62.3% | |||||||||||||||||
| S,G&A | 166,996 | 125,863 | 32.7% | |||||||||||||||||
| Amortization of intangible assets | 23,779 | 16,399 | 45.0% | |||||||||||||||||
| Gain on divestitures and sale of assets | (9,603) | (31,498) | n/m | |||||||||||||||||
| Operating expenses | 204,726 | 125,277 | 63.4% | |||||||||||||||||
| Operating income | 25,900 | 70,497 | (63.3)% | |||||||||||||||||
| Interest and other expense, net | (8,986) | (7,561) | 18.8% | |||||||||||||||||
| Income before taxes | 16,914 | 62,936 | (73.1)% | |||||||||||||||||
| Tax expense | 6,512 | 4,308 | 51.2% | |||||||||||||||||
| Net income | $ | 10,402 | $ | 58,628 | (82.3)% | |||||||||||||||
| Net income per common share assuming dilution | $ | 0.20 | $ | 1.15 | (82.6)% | |||||||||||||||
| Weighted average number of shares: | ||||||||||||||||||||
| Basic | 50,989 | 50,557 | ||||||||||||||||||
| Diluted | 51,358 | 51,170 | ||||||||||||||||||
| Profit Margins: | Inc/(Dec) vs prior year profit margin % | |||||||||||||||||||
| Gross profit | 49.2 | % | 48.3 | % | 0.9% | |||||||||||||||
| R&D | 5.0 | % | 3.6 | % | 1.4% | |||||||||||||||
| S,G&A | 35.7 | % | 31.1 | % | 4.7% | |||||||||||||||
| Operating income | 5.5 | % | 17.4 | % | (11.9)% | |||||||||||||||
| Income before taxes | 3.6 | % | 15.5 | % | (11.9)% | |||||||||||||||
| Net income | 2.2 | % | 14.5 | % | (12.3)% | |||||||||||||||
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| Revenue Analysis for the Second Quarter of FY22 and FY21 | ||||||||||||||||||||||||||||||||||||||||||||
| (Data in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
| 10/2/2021 | 9/26/2020 | Reported growth | Currency impact | Acquisition and Divestitures(1) | Other Strategic Exits(2) | Organic growth | ||||||||||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
| Revenues by business unit | ||||||||||||||||||||||||||||||||||||||||||||
| Plasma | $ | 81,940 | $ | 78,408 | 4.5 | % | 0.3 | % | — | % | (2.6) | % | 6.8 | % | ||||||||||||||||||||||||||||||
| Blood Center | 76,742 | 74,913 | 2.4 | % | 1.7 | % | (0.9) | % | — | % | 1.6 | % | ||||||||||||||||||||||||||||||||
Hospital(3) | 76,307 | 50,978 | 49.7 | % | 0.9 | % | 38.4 | % | — | % | 10.4 | % | ||||||||||||||||||||||||||||||||
| Net business unit revenues | $ | 234,989 | $ | 204,299 | 15.0 | % | 1.0 | % | 8.8 | % | (0.6) | % | 5.8 | % | ||||||||||||||||||||||||||||||
| Service | 4,908 | 5,187 | (5.4) | % | 1.9 | % | — | % | — | % | (7.3) | % | ||||||||||||||||||||||||||||||||
| Total net revenues | $ | 239,897 | $ | 209,486 | 14.5 | % | 1.0 | % | 9.0 | % | (0.9) | % | 5.4 | % | ||||||||||||||||||||||||||||||
(1) Reflects the impact in Blood Center resulting from the divestiture of Inlog Holdings France SAS (“InLog”). Also reflects the impacts in Hospital of 40.5% related to the acquisition of Vascular Closure from Cardiva Medical Inc. and of (2.1%) related to the divestiture of InLog. (2) Reflects adjustments to both fiscal 2022 and 2021 Plasma revenue due to certain strategic exits within the liquid solutions business. (3) Hospital revenue includes Hemostasis Management revenue of $31.5 million and $26.0 million for the three months ended October 2, 2021 and September 26, 2020, respectively. Hemostasis Management revenue increased 21.0% in the second quarter of fiscal 2022 as compared with the same period of fiscal 2021. Hemostasis Management revenue increased 21.1%, on an organic basis, in the second quarter of fiscal 2022 as compared with the same period of fiscal 2021. Hospital revenue also includes Vascular Closure revenue of $20.8 million for the three months ended October 2, 2021. Vascular Closure revenue is excluded on an organic growth basis. | ||||||||||||||||||||||||||||||||||||||||||||
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| Revenue Analysis for the Year-to-Date FY22 and FY21 | ||||||||||||||||||||||||||||||||||||||||||||
| (Data in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
| 10/2/2021 | 9/26/2020 | Reported growth | Currency impact | Acquisition and Divestitures(1) | Other Strategic Exits(2) | Organic growth | ||||||||||||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
| Revenues by business unit | ||||||||||||||||||||||||||||||||||||||||||||
| Plasma | $ | 153,784 | $ | 146,619 | 4.9 | % | 0.6 | % | — | % | (2.2) | % | 6.5 | % | ||||||||||||||||||||||||||||||
| Blood Center | 149,687 | 152,702 | (2.0) | % | 2.6 | % | (2.4) | % | — | % | (2.2) | % | ||||||||||||||||||||||||||||||||
Hospital(3) | 154,801 | 95,817 | 61.6 | % | 2.7 | % | 41.0 | % | — | % | 17.9 | % | ||||||||||||||||||||||||||||||||
| Net business unit revenues | $ | 458,272 | $ | 395,138 | 16.0 | % | 1.9 | % | 8.8 | % | (0.6) | % | 5.9 | % | ||||||||||||||||||||||||||||||
| Service | 10,153 | 9,925 | 2.3 | % | 4.3 | % | — | % | — | % | (2.0) | % | ||||||||||||||||||||||||||||||||
| Total net revenues | $ | 468,425 | $ | 405,063 | 15.6 | % | 1.9 | % | 8.7 | % | (0.7) | % | 5.7 | % | ||||||||||||||||||||||||||||||
(1) Reflects the impacts in Blood Center of (1.5%) and (0.9%) related to the divestitures of the Company’s U.S. blood donor management software solutions assets and of Inlog, respectively. Also reflects the impacts in Hospital of 41.3% related to the acquisition of Vascular Closure from Cardiva Medical Inc. and of (0.3%) related to the divestiture of InLog. (2) Reflects adjustments to both fiscal 2022 and 2021 Plasma revenue due to certain strategic exits within the liquid solutions business. (3) Hospital revenue includes Hemostasis Management revenue of $63.7 million and $50.0 million for the six months ended October 2, 2021 and September 26, 2020, respectively. Hemostasis Management revenue increased 27.4% in the first six months of fiscal 2022 as compared with the same period of fiscal 2021. Hemostasis Management revenue increased 25.9%, on an organic basis, in the first six months of fiscal 2022 as compared with the same period of fiscal 2021. Hospital revenue also includes Vascular Closure revenue of $42.6 million for the six months ended October 2, 2021. Vascular Closure revenue is excluded on an organic growth basis. | ||||||||||||||||||||||||||||||||||||||||||||
10
| Condensed Consolidated Balance Sheets | |||||||||||||||||
| (Data in thousands) | |||||||||||||||||
| As of | |||||||||||||||||
| 10/2/2021 | 4/3/2021 | ||||||||||||||||
| (unaudited) | |||||||||||||||||
| Assets | |||||||||||||||||
| Cash and cash equivalents | $ | 192,420 | $ | 192,305 | |||||||||||||
| Accounts receivable, net | 141,305 | 127,555 | |||||||||||||||
| Inventories, net | 322,661 | 322,614 | |||||||||||||||
| Other current assets | 42,860 | 51,072 | |||||||||||||||
| Total current assets | 699,246 | 693,546 | |||||||||||||||
| Property, plant & equipment, net | 223,747 | 217,559 | |||||||||||||||
| Intangible assets, net | 337,249 | 365,483 | |||||||||||||||
| Goodwill | 468,590 | 466,444 | |||||||||||||||
| Other assets | 72,665 | 76,891 | |||||||||||||||
| Total assets | $ | 1,801,497 | $ | 1,819,923 | |||||||||||||
| Liabilities & Stockholders' Equity | |||||||||||||||||
| Short-term debt & current maturities | $ | 82,733 | $ | 17,016 | |||||||||||||
| Other current liabilities | 205,737 | 236,479 | |||||||||||||||
| Total current liabilities | 288,470 | 253,495 | |||||||||||||||
| Long-term debt | 698,043 | 690,592 | |||||||||||||||
| Other long-term liabilities | 116,435 | 144,166 | |||||||||||||||
| Stockholders' equity | 698,549 | 731,670 | |||||||||||||||
| Total liabilities & stockholders' equity | $ | 1,801,497 | $ | 1,819,923 | |||||||||||||
11
| Condensed Consolidated Statements of Cash Flows | |||||||||||
| (Data in thousands) | |||||||||||
| Six Months Ended | |||||||||||
| 10/2/2021 | 9/26/2020 | ||||||||||
| (unaudited) | |||||||||||
| Cash Flows from Operating Activities: | |||||||||||
| Net income | $ | 10,402 | $ | 58,628 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 48,567 | 41,603 | |||||||||
| Contingent consideration expense | 9,345 | — | |||||||||
| Share-based compensation expense | 12,807 | 12,119 | |||||||||
| Amortization of fair value inventory step-up | 5,295 | — | |||||||||
| Impairment of assets | 5,144 | 1,028 | |||||||||
| Amortization of deferred finance costs | 1,813 | 286 | |||||||||
| Deferred tax benefit | 898 | (3,031) | |||||||||
| Provision for losses on inventory | 114 | 1,057 | |||||||||
| Gains on divestitures and sale of assets | (9,603) | (31,498) | |||||||||
| Change in other non-cash operating activities | 861 | 76 | |||||||||
| Change in accounts receivable, net | (14,574) | 22,391 | |||||||||
| Change in inventories, net | (5,475) | (38,189) | |||||||||
| Change in other working capital | (23,814) | (23,503) | |||||||||
| Net cash provided by operating activities | 41,780 | 40,967 | |||||||||
| Cash Flows from Investing Activities: | |||||||||||
| Capital expenditures | (34,731) | (16,035) | |||||||||
| Acquisition | (2,500) | (16,606) | |||||||||
| Proceeds from divestitures | — | 44,978 | |||||||||
| Proceeds from sale of property, plant and equipment | 860 | 902 | |||||||||
| Net cash (used in) provided by investing activities | (36,371) | 13,239 | |||||||||
| Cash Flows from Financing Activities: | |||||||||||
| Borrowings, net of repayments | (8,750) | 81,250 | |||||||||
| Proceeds from employee stock programs | 3,779 | 3,403 | |||||||||
| Other | 22 | (20) | |||||||||
| Net cash (used in) provided by financing activities | (4,949) | 84,633 | |||||||||
| Effect of exchange rates on cash and cash equivalents | (345) | 3,019 | |||||||||
| Net Change in Cash and Cash Equivalents | 115 | 141,858 | |||||||||
| Cash and Cash Equivalents at Beginning of the Period | 192,305 | 137,311 | |||||||||
| Cash and Cash Equivalents at End of Period | $ | 192,420 | $ | 279,169 | |||||||
| Free Cash Flow Reconciliation: | |||||||||||
| Cash provided by operating activities | $ | 41,780 | $ | 40,967 | |||||||
| Capital expenditures, net of proceeds from sale of property, plant and equipment | (33,871) | (15,133) | |||||||||
| Free cash flow after restructuring and restructuring related costs | 7,909 | 25,834 | |||||||||
| Restructuring and restructuring related costs | 29,399 | 15,791 | |||||||||
| Tax benefit on restructuring and restructuring related costs | (6,139) | (3,422) | |||||||||
| Free cash flow before restructuring and restructuring related costs | $ | 31,169 | $ | 38,203 | |||||||
12
| Reconciliation of Adjusted Measures for the Second Quarter of FY22 and FY21 | |||||||||||
| (Data in thousands except per share data) | |||||||||||
| Three Months Ended | |||||||||||
| 10/2/2021 | 9/26/2020 | ||||||||||
| (unaudited) | |||||||||||
| GAAP gross profit | $ | 122,541 | $ | 105,744 | |||||||
| Restructuring and restructuring related costs | 3,430 | 3,277 | |||||||||
| Impairment of assets and PCS2 related charges | 185 | 309 | |||||||||
| Adjusted gross profit | $ | 126,156 | $ | 109,330 | |||||||
| GAAP operating expenses | $ | 98,031 | $ | 46,962 | |||||||
| Deal amortization | (11,400) | (8,136) | |||||||||
| Integration and transaction costs | (625) | (1,773) | |||||||||
MDR and IVDR costs(1) | (2,347) | (736) | |||||||||
| Restructuring and restructuring related costs | (1,083) | (1,163) | |||||||||
| Litigation-related charges | (145) | — | |||||||||
| Impairment of assets and PCS2 related charges | (65) | (267) | |||||||||
| Gain on divestitures and sale of assets | — | 31,498 | |||||||||
| Adjusted operating expenses | $ | 82,366 | $ | 66,385 | |||||||
| GAAP operating income | $ | 24,510 | $ | 58,782 | |||||||
| Deal amortization | 11,400 | 8,136 | |||||||||
| Integration and transaction costs | 625 | 1,773 | |||||||||
| Restructuring and restructuring related costs | 4,513 | 4,440 | |||||||||
| Impairment of assets and PCS2 related charges | 250 | 576 | |||||||||
MDR and IVDR costs(1) | 2,347 | 736 | |||||||||
| Litigation-related charges | 145 | — | |||||||||
| Gain on divestitures and sale of assets | — | (31,498) | |||||||||
| Adjusted operating income | $ | 43,790 | $ | 42,945 | |||||||
| GAAP net income | $ | 14,856 | $ | 48,101 | |||||||
| Deal amortization | 11,400 | 8,136 | |||||||||
| Integration and transaction costs | 625 | 1,773 | |||||||||
| Restructuring and restructuring related costs | 4,513 | 4,440 | |||||||||
| Impairment of assets and PCS2 related charges | 250 | 576 | |||||||||
MDR and IVDR costs(1) | 2,347 | 736 | |||||||||
| Litigation-related charges | 145 | — | |||||||||
| Gain on divestitures and sale of assets | — | (31,498) | |||||||||
| Tax impact associated with adjustments | (3,437) | (636) | |||||||||
| Adjusted net income | $ | 30,699 | $ | 31,628 | |||||||
| GAAP net income per common share | $ | 0.29 | $ | 0.94 | |||||||
| Adjusted items after tax per common share assuming dilution | 0.31 | (0.32) | |||||||||
| Adjusted net income per common share assuming dilution | $ | 0.60 | $ | 0.62 | |||||||
(1)Refers to the European Union Medical Device Regulation (“MDR”) and In Vitro Diagnostic Regulation (“IVDR”) costs. | |||||||||||
13
| Reconciliation of Adjusted Measures for Year-to-Date FY22 and FY21 | |||||||||||
| (Data in thousands except per share data) | |||||||||||
| Six Months Ended | |||||||||||
| 10/2/2021 | 9/26/2020 | ||||||||||
| (unaudited) | |||||||||||
| GAAP gross profit | $ | 230,626 | $ | 195,774 | |||||||
| Restructuring and restructuring related costs | 11,512 | 4,484 | |||||||||
| Integration and transaction costs | 5,295 | 90 | |||||||||
| Impairment of assets and PCS2 related charges | 3,715 | 1,232 | |||||||||
| Adjusted gross profit | $ | 251,148 | $ | 201,580 | |||||||
| GAAP operating expenses | $ | 204,726 | $ | 125,277 | |||||||
| Deal amortization | (23,779) | (16,399) | |||||||||
| Integration and transaction costs | (12,063) | (2,973) | |||||||||
MDR and IVDR costs(1) | (4,718) | (1,489) | |||||||||
| Restructuring and restructuring related costs | (3,056) | (3,956) | |||||||||
| Litigation-related charges | (1,083) | — | |||||||||
| Impairment of assets and PCS2 related charges | (178) | (1,850) | |||||||||
| Gain on divestitures and sale of assets | 9,603 | 31,498 | |||||||||
| Adjusted operating expenses | $ | 169,452 | $ | 130,108 | |||||||
| GAAP operating income | $ | 25,900 | $ | 70,497 | |||||||
| Deal amortization | 23,779 | 16,399 | |||||||||
| Integration and transaction costs | 17,358 | 3,063 | |||||||||
| Restructuring and restructuring related costs | 14,568 | 8,440 | |||||||||
| Impairment of assets and PCS2 related charges | 3,893 | 3,082 | |||||||||
MDR and IVDR costs(1) | 4,718 | 1,489 | |||||||||
| Litigation-related charges | 1,083 | — | |||||||||
| Gain on divestitures and sale of assets | (9,603) | (31,498) | |||||||||
| Adjusted operating income | $ | 81,696 | $ | 71,472 | |||||||
| GAAP net income | $ | 10,402 | $ | 58,628 | |||||||
| Deal amortization | 23,779 | 16,399 | |||||||||
| Integration and transaction costs | 17,358 | 3,063 | |||||||||
| Restructuring and restructuring related costs | 14,568 | 8,440 | |||||||||
| Impairment of assets and PCS2 related charges | 3,893 | 3,082 | |||||||||
MDR and IVDR costs(1) | 4,718 | 1,489 | |||||||||
| Litigation-related charges | 1,083 | — | |||||||||
| Gain on divestitures and sale of assets | (9,603) | (31,498) | |||||||||
| Tax impact associated with adjustments | (10,066) | (4,241) | |||||||||
| Adjusted net income | $ | 56,132 | $ | 55,362 | |||||||
| GAAP net income per common share | $ | 0.20 | $ | 1.15 | |||||||
| Adjusted items after tax per common share assuming dilution | 0.89 | (0.07) | |||||||||
| Adjusted net income per common share assuming dilution | $ | 1.09 | $ | 1.08 | |||||||
(1)Refers to the European Union Medical Device Regulation (“MDR”) and In Vitro Diagnostic Regulation (“IVDR”) costs. | |||||||||||
14
| Projected Fiscal 2022 GAAP and Organic Revenue Growth Rates | |||||
| FY 2022 | |||||
| GAAP Revenue Growth | 13 - 17% | ||||
| Currency impact | (1%) | ||||
Acquisitions and divestitures(1) | (7-8%) | ||||
Other strategic exits(2) | 1% | ||||
53rd week(3) | 1% | ||||
| Organic Revenue Growth | 7 - 10% | ||||
(1) Reflects adjustment to fiscal 2021 revenue as a result of the divestiture of the Company’s U.S. blood donor management software solutions assets and Inlog Holdings France SAS, as well as an adjustment to fiscal 2022 revenue related to the acquisition of Cardiva Medical, Inc. (2) Reflects adjustments to Plasma revenue due to certain strategic exits within the liquid solutions business. (3) Reflects adjustment to fiscal 2021 revenue for the impact of the 53rd week. | |||||
15
| Exhibit 99.2 | ||||||||
 | ||||||||
Investor Contact Olga Guyette, Director-Investor Relations (781) 356-9763 olga.guyette@haemonetics.com | Media Contact Josh Gitelson, Director-Global Communications (781) 356-9776 josh.gitelson@haemonetics.com | |||||||
Haemonetics Announces CFO William P. Burke’s Retirement for June 2022
BOSTON, MA, November 9, 2021 – Haemonetics Corporation (NYSE: HAE), a global medical technology company focused on delivering innovative medical solutions to drive better patient outcomes, today announced that William P. Burke, Executive Vice President, Chief Financial Officer, has decided to retire from the Company. Mr. Burke will continue to serve as CFO while the Company conducts a search for his successor, and he will work closely with Haemonetics’ next CFO through June 30, 2022 to ensure a seamless transition.
Mr. Burke joined Haemonetics as Chief Financial Officer in August 2016 after spending more than 20 years in finance and business leadership roles at leading healthcare companies, including Medtronic plc, Covidien plc and Tyco Healthcare.
“Bill was my first hire at Haemonetics and has been the co-architect of our turnaround,” said Chris Simon, Haemonetics’ CEO. “He has directed strategic financial initiatives enabling us to best leverage our resources for investments in the people, products and processes that are fueling our long-term growth. I am grateful Bill will lend his experience and expertise to the selection of our next CFO, and a successful transition. I offer my sincere appreciation to Bill for his many contributions to our Company.”
According to Mr. Burke, “I am very proud to have worked with the dedicated management team at Haemonetics and, in particular, the Company’s world-class finance organization that will continue to successfully support the ongoing initiatives of Haemonetics. I have confidence in the strategy and the future success of the Company.”
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ABOUT HAEMONETICS
Haemonetics (NYSE: HAE) is a global healthcare company dedicated to providing a suite of innovative medical products and solutions for customers, to help them improve patient care and reduce the cost of healthcare. Our technology addresses important medical markets: blood and plasma component collection, the surgical suite and hospital transfusion services. To learn more about Haemonetics, visit www.haemonetics.com.