Haemonetics Provides Update on Red Cell Business.

Business Editors & Health/Medical Writers

BRAINTREE, Mass.--(BW HealthWire)--Jan. 17, 2002

Haemonetics Corporation (NYSE:HAE) provided an update today on its red cell business. Blood shortages continue to abound across the country, as donors who responded immediately to the 9/11 tragedy by giving blood have, largely, not returned to donate once eligible again (eight weeks following donation). According to recent publications, nationwide roughly two-thirds of blood centers operated by the American Red Cross and half of the nation's independent blood centers are now on urgent appeal for donors(1).

Blood shortages are expected to continue to grow in the spring as additional donor deferral regulations to minimize the risk of blood-borne transmission of New Variant Creutzfeldt-Jakob Disease (mad cow disease) exclude potential donors who have spent significant time in the U.K. or Europe. This additional regulation will eliminate blood currently imported from Europe and will further tighten the U.S. blood supply.

In addition, the American Red Cross has informed the Company of a delay in its program to roll out Haemonetics' double red cell collection technology. The delay resulted from unexpected increased U.S. Food and Drug Administration (FDA) scrutiny of an American Red Cross software and standard operating procedure upgrade. This upgrade includes, among many other things, procedures and procedure coding that allows the double red cell program to expand to regions outside of the current four pilot regions. This action comes in the wake of the escalating court battle between the FDA and the American Red Cross regarding compliance issues associated with the current active consent decree.

Under the terms of the consent decree the FDA is not required to give the ARC a timeline for approval of the software upgrade. Haemonetics anticipates that once the software upgrade is cleared, the ARC will continue to roll out the double red cell technology, although at a slower rate than earlier anticipated, due to concerns about rapidly introducing new technology in the current regulatory environment. However, the first phase of centers have been identified and pre-implementation activities have begun in anticipation of the software release. The slower roll out could reduce Fiscal 2003 revenues for the red cell business by up to 20%; Haemonetics believes that it will double its red cell business in Fiscal 2003.

Although Haemonetics' red cell business clearly continues to be affected by both the events of September 11 as well as increased regulatory activity, the Company remains committed to its $11 million red cell target for Fiscal 2002, which would be a 39% increase over Fiscal 2001. With the events of September 11, the Company also saw higher than expected revenue from the sale of ACP(R) 215 blood freezing machines, which were purchased by the American Red Cross and U.S. military to improve their frozen blood programs; Haemonetics expects $7 million in ACP 215 revenues in Fiscal 2002. The Company is not revising earnings guidance for Fiscal 2002 or 2003.

Haemonetics will release quarterly earnings on January 24, 2002.

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 uncertainties, the effect of economic conditions, the impact of competitive products and pricing, blood product reimbursement 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) The Commercial Appeal; Memphis, Tennessee; January 16, 2002.