Haemonetics Announces First Quarter Results; On Track to Deliver Year End Target; Board Authorizes Share Buyback.Business Editors BRAINTREE Braintree, town and district, England Braintree, town (1991 pop. 30,975) and district, Essex, E England, between the Pant (Blackwater) and Brain river valleys. It has textile, plastic, and metal-product industries. , Mass.--(BUSINESS WIRE)--July 25, 2002 Haemonetics Haemonetics® Cell Saver 5, plasma separator Surgery A device that separates plasma from blood, returning Pt RBCs to the body, ↓ need for transfusions. See Blood salvage. Corporation (NYSE NYSE See: New York Stock Exchange :HAE) reported quarterly results on track to achieve year end targets. Revenues were $82 million for the first quarter of fiscal year 2003, an increase of 8% (11% constant currency) and the Company's fifth consecutive quarter of double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" constant currency revenue growth. Earnings per share were $0.26 for the quarter. At constant currency, revenue growth and operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: improvement led to operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. growth of 51%. REVENUE GROWTH CONTINUES ACROSS GEOGRAPHIES AND PRODUCT LINES Sales growth was broadly spread across geographies and products: U.S. sales increased 7%, representing 38% of total revenues; international sales were strong, with 9% growth (14% constant currency). Haemonetics posted particularly strong performances in the plasma and red cell product lines. First quarter disposables revenue increased 4% (7% constant currency) to $73 million. Haemonetics' plasma disposables revenue grew by 7% (9% constant currency) to $28.7 million. Growth in this business resulted from continued strong demand for plasma as well as newer products offered by Haemonetics to its plasma customers. Red cell disposables revenue increased 41% (40% constant currency) for the quarter to $3.4 million. The Company's surgical disposables revenue grew over the quarter by 4% (6% constant currency) to $17.2 million. A significant contributor to growth in this business was the OrthoPAT(R) system for surgical blood salvage salvage, in maritime law, the compensation that the owner must pay for having his vessel or cargo saved from peril, such as shipwreck, fire, or capture by an enemy. Salvage is awarded only when the party making the rescue was under no legal obligation to do so. in orthopedic surgery Orthopedic Surgery Definition Orthopedic (sometimes spelled orthopaedic) surgery is surgery performed by a medical specialist, such as an orthopedist or orthopedic surgeon, trained to deal with problems that develop in the bones, joints, and ligaments . NEW PRODUCTS MEET MARKET DEMAND AND FUEL GROWTH The blood collection and transfusion Transfusion Definition Transfusion is the process of transferring whole blood or blood components from one person (donor) to another (recipient). communities continue to upgrade their processes and capabilities through use of automation. Haemonetics is well positioned to respond to market trends through a full portfolio of new products that enhance customers' ability to collect, process, and freeze blood components. The Company believes that market dynamics will continue to drive growth in each area. In the plasma arena, strong demand for high quality plasma-derived products has accelerated the rollout and penetration of Haemonetics' Superlite(TM) plasma collection system (used in Japan to better facilitate collections in the mobile setting) as well as its Fifth Dimension software that tracks donor The party conferring a power. One who makes a gift. One who creates a trust. donor n. a person or entity making a gift or donation. DONOR. He who makes a gift. (q.v.) and product data. The Company's ACP (Associate Computing Professional) The award for successful completion of an examination in computers offered by the ICCP. It is geared to newcomers in the computing field. For more information, visit www.iccp.org. ACP - Algebra of Communicating Processes (TM) 215 technology to freeze and thaw red cells has enabled military and civilian organizations to establish or increase frozen blood reserves to improve inventory management or for use in times of crisis. Finally, the OrthoPAT system has opened the rapidly growing 1.4 million procedure orthopedic orthopedic /or·tho·pe·dic/ (-pe´dik) pertaining to the correction of deformities of the musculoskeletal system; pertaining to orthopedics. market to surgical blood salvage. BLOOD SHORTAGES DRIVING RED CELL GROWTH Red cell product line growth resulted from expansion of double red cell collection by existing customers as well as adoption of automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. collections by new customers. Supply shortages continued to drive adoption with U.S. blood collectors
Misc This is a list of noted collectors.
A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators are used to predict changes in the economy, but are not always accurate. and road map for the pace of future growth by newer customers. As announced previously, Haemonetics introduced products to meet customer needs to provide leukoreduced red cells (blood from which white cells have been filtered) to hospitals. Important progress has been made in converting customers to the higher-priced double red cell filtration filtration: see sewerage; water supply. Filtration The separation of solid particles from a fluidsolids suspension of which they are a part by passage of most of the fluid through a septum or membrane that retains most of the solids protocol, although conversion has been slower than expected. The Company believes the combination of continuing strong procedure growth balanced with slower adoption of filtration will result in overall red cell revenue growth above fiscal 2002 of 60% to 70% for the full fiscal year, exiting the year at an 80% growth range. Haemonetics believes that the combination of blood shortages and the drive to universal leukoreduction Leukoreduction is the removal of white blood cells (or leukocytes) from the blood or blood components supplied for blood transfusion. After the removal of the leukocytes, the blood product is said to be leukoreduced. will continue to drive adoption of its technology. STRONG OPERATING PERFORMANCE The underlying performance of the business remained strong with a gross margin of 47% and operating margin of 12%. Gross profit improved 6% year over year (16% constant currency) and operating income increased 2% (51% constant currency). The Company's Customer Oriented o·ri·ent n. 1. Orient The countries of Asia, especially of eastern Asia. 2. a. The luster characteristic of a pearl of high quality. b. A pearl having exceptional luster. 3. Redesign re·de·sign tr.v. re·de·signed, re·de·sign·ing, re·de·signs To make a revision in the appearance or function of. re for Excellence ("CORE") program generated $1.3 million in the quarter. Although the CORE program has been in place for more than four years, it continues to generate operational savings and cash flow that is used to support new product development and introduction. While operating performance continued to be strong, non-operating factors including the strong U.S. dollar, declining interest rates, and changes in accounting rules adversely affected year over year earnings comparisons. SHARE BUYBACK Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may COMPLETED AND RE-AUTHORIZED Haemonetics repurchased 868,200 shares of common stock for approximately $26 million during the quarter, completing the two million share buyback authorization The right or permission to use a system resource; the process of granting access. See access control. announced previously. Haemonetics' Board of Directors recently authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: an additional two million share buyback. FISCAL 2003 OUTLOOK The Company's fiscal 2003 earnings per share target remains $1.45 to $1.50. Revenue growth for the year remains targeted in the double digits Double Digits was a pricing game on the American television game show, The Price Is Right. Played from April 20, 1973 through May 18, 1973's show, it was played for a car and used small prizes. . Currency translation into the U.S. dollar is expected to negatively affect earnings by $0.28 over the year, spread equally between the first and second half. For the second quarter, earnings per share are targeted at $0.29. Second half earnings are targeted at $0.90 to $0.95 with second half constant currency revenue growth mirroring the second half of fiscal 2002 at 13% to 14%. Factoring into the second half revenue build is seasonality and planned equipment sales as well as red cell unit and filtration expansion. Earnings growth will also be supported by higher operating margins resulting from operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. , manufacturing efficiencies, and flat operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Sir Stuart Burgess BURGESS. A magistrate of a borough; generally, the chief officer of the corporation, who performs, within the borough, the same kind of duties which a mayor does in a city. In England, the word is sometimes applied to all the inhabitants of a borough, who are called burgesses sometimes it , Haemonetics' Chairman, stated, "We have made a very solid start to our fiscal year. We are firmly on track to deliver our year end sales and profit targets and expect particularly strong growth in the second half of the year. The Board's decision to authorize To empower another with the legal right to perform an action. The Constitution authorizes Congress to regulate interstate commerce. authorize v. to officially empower someone to act. (See: authority) an additional two million share buyback demonstrates its continuing strong confidence in the Company's underlying value." The Company will hold a conference call to review the quarter at 10:00 am Eastern today. Interested parties may listen to the call live at (973) 321-1040 with no passcode or via replay within the U.S. at (877) 519-4471 and internationally at (973) 341-3080 passcode 3386687 through August 9. Haemonetics 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 collections and plasma collections. To learn more about Haemonetics' products and markets, visit the Company's 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, product demand, market acceptance, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. uncertainties, the effect of economic conditions, the impact of competitive products and pricing, blood product reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. policies and practices, foreign currency exchange rates 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. (1) "Blood Banking and Public Health Leaders Issue a United, Immediate Call for Blood Donations “Give blood” redirects here. For other uses, see Give blood (disambiguation). Blood donation is a process by which a blood donor voluntarily has blood drawn for storage in a blood bank, generally for subsequent use in a blood transfusion. ." June 25, 2002. Appeal issued by American Red Cross American Red Cross: see Red Cross. , America's Blood Centers, American Association American Association refers to one of the following professional baseball leagues:
n.pr a nonprofit national organization of individuals, institutions, and organizations engaged in direct patient care. The association works to promote the improvement of health care services. . http://66.155.15.152/news/detail.asp?ID=111 -O-
Haemonetics Corporation Financial Summary
For the First Quarter Ended FYE 03
(Unaudited data in thousands, except per share data)
INCOME STATEMENT: % Inc/
(Dec) vs
prior
% Inc/(Dec) year at
vs prior constant
6/29/02 6/30/01 year currencies
NET REVENUES $ 81,935 $ 75,801 8.1% 11.1%
Gross profit 38,647 36,311 6.4% 16.1%
R&D 4,939 4,814 2.6% 2.3%
S, G, & A 24,016 21,965 9.3% 9.4%
Operating expenses 28,955 26,779 8.1% 8.1%
Operating income 9,692 9,532 1.7% 51.2%
Interest expense (877) (982) (10.7%)
Interest income 441 1,088 (59.5%)
Other income, net 563 973 (42.1%)
Other income, net 127 1,079 (88.2%)
Income before taxes 9,819 10,611 (7.5%)
Tax expense 3,044 2,971 2.5%
Income before cumulative
effect of change in
accounting principle,
net of tax 6,775 7,640 (11.3%)
Cumulative effect of
change in accounting
principle, net of tax (1) --- 2,304 (100.0%)
NET INCOME $ 6,775 $ 9,944 (31.9%) (14.8%)
Diluted earnings per
common share
Net income per share
before cumulative
effect of change in
accounting principle,
net of tax $ 0.26 $ 0.28 (7.1%)
Cumulative per share
effect of change in
accounting principle,
net of tax --- $ 0.09
NET INCOME PER SHARE $ 0.26 $ 0.37 (29.7%) (12.0%)
EBITDA $ 17,445 $ 19,988
Weighted average number
of shares
Basic 25,318 25,979
Diluted 26,110 26,947
(1) Represents cumulative effect of adoption of Statement of
Financial Accounting Standard (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities," effective April 1,
2001.
PROFIT MARGINS:
Gross profit 47.1% 47.9%
R&D 6.0% 6.4%
S, G & A 29.3% 29.0%
Operating income 11.8% 12.6%
Income before taxes
including the
cumulative effect
of a change in
accounting principle 12.0% 18.2%
Net income 8.3% 13.1%
REVENUE ANALYSIS:
% Inc/(Dec)
% Inc/ at constant
6/29/02 6/30/01 (Dec) currencies
REVENUE BY GEOGRAPHY
United States $ 30,935 $ 28,888 7.1% 7.1%
International 51,000 46,913 8.7% 13.7%
Net revenues $ 81,935 $ 75,801 8.1% 11.1%
DISPOSABLES REVENUE
BY PRODUCT LINE
Surgical disposables $ 17,200 $ 16,505 4.2% 5.5%
Blood bank disposables 24,185 24,731 (2.2%) 3.1%
Red cell disposables 3,381 2,403 40.7% 39.6%
Plasma disposables 28,667 26,886 6.6% 8.9%
Subtotal disposables $ 73,433 $ 70,525 4.1% 7.2%
Equipment $ 4,759 $ 2,434 95.5% 93.4%
Misc. & Service 3,743 2,842 31.7% 32.5%
Net Revenues $ 81,935 $ 75,801 8.1% 11.1%
Foreign exchange impact (2) $ 919 $ 2,851
Net revenues at
constant currencies $ 81,016 $ 72,950 11.1%
(2) Difference between actual exchange rates and exchange rates
selected to translate sales in both periods for constant
currencies comparisons.
CONDENSED OPERATING CASH FLOW INFORMATION (3)
6/29/02 6/30/01
Net income $ 6,775 $ 9,944
Depreciation and amortization 7,064 6,666
Capital expenditures (6,726) (5,654)
Sales-type leases 423 1,599
Net investment in PP&E
and Haemonetics equipment 761 2,611
Changes in balance sheet items:
Accounts receivable (907) (2,816)
Inventories (4,261) (3,084)
Accounts payable and
accrued liabilities (2,546) (1,901)
Operating working
capital (7,714) (7,801)
Adjustments, primarily non-cash 842 110
OPERATING CASH FLOW FROM
CONTINUING OPERATIONS $ 664 $ 4,864
Net debt, beginning
of period $ 4,594 ($ 4,764)
Operating cash flow-
continuing operations 664 4,864
Asset and stock purchases
and other deals --- (2,433)
Purchase of treasury
stock, net of ESPP
shares issued (25,776) 251
Exercise of stock options 2,021 5,805
Other, including the effect
of exchange rate changes (5,108) (2,544)
(Increase)/decrease in
net debt (28,199) 5,943
NET DEBT, END OF PERIOD $ 32,793 ($10,707)
(3) Operating cash flow is defined as net income adjusted for
depreciation, amortization and other non-cash items; capital
expenditures for property, plant and equipment together with the
investment in Haemonetics equipment at customer sites including
sales-type leases; and, the change in operating working capital,
including change in accounts receivable, inventory, accounts
payable and accrued expenses excluding tax accounts and the effect
of currency translation.
BALANCE SHEET Period ending
6/29/02 3/30/02
ASSETS
Cash & available for sale investments $42,006 $67,549
Accounts receivable, net 69,417 63,743
Inventories, net 74,444 67,244
Other current assets 36,088 34,299
Total current assets 221,955 232,835
Net PP&E 85,846 84,877
Other assets 47,271 47,209
TOTAL ASSETS $355,072 $364,921
LIABILITIES AND Period ending
STOCKHOLDERS' EQUITY 6/29/02 3/30/02
S/T debt & current maturities $36,369 $31,356
Other current liabilities 57,833 52,742
Total current liabilities 94,202 84,098
Long-term debt 38,430 40,787
Other long-term liabilities 3,674 3,212
Stockholders' equity 218,766 236,824
TOTAL LIABILITIES & EQUITY $355,072 $364,921
NET DEBT $32,793 $4,594
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