Haemonetics Reports Fourth Quarter Earnings, Divestiture of Blood Bank Management Business and Focus on Strong Core Business.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)--May 4, 1998--Haemonetics Corporation (NYSE NYSE See: New York Stock Exchange :HAE) reported revenues of $63.3 million from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the fourth quarter and $285.8 million for its fiscal year (FYE FYE For Your Entertainment FYE First Year Experience FYE Fiscal Year End FYE Funding Your Education FYE For Your Eyes (CSD-TV magazine) FYE For Your Enjoyment FYE Full Year Effect FYE First Year Enrichment FYE For Your Edification 1998) ended March 28, 1998. As discussed below, total earnings per share, after losses from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , were a loss of $.89 per share for the fourth quarter and a loss of $.93 per share for the fiscal year. Haemonetics' Chairman of the Board 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 said, "Following the Board's May 1, 1998 decision to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. Blood Bank Management Services ("BBMS"), we have reshaped the Company to concentrate on our core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
The Company took a fourth quarter charge net of tax of $.67 per share ($27 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern ). The pretax charge includes approximately $14 million to reflect the assets of BBMS at their net realizable value Net realizable value (NRV) is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. based upon estimated sales proceeds. The pretax charge also includes approximately $13 million of one time exit costs, together with a provision for estimated operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. through disposition. The charge is net of $9 million of anticipated income tax benefit. The sales proceeds and tax benefit, less one time cash costs and operating losses, will generate an overall cash benefit which the Company expects to receive commencing in FYE 2000. Year to year sales comparisons for the fourth quarter were negatively impacted by foreign currency, a one time $7.6 million order last year and an inventory reduction of commercial plasma customers. Excluding these effects, the surgical and blood bank business showed single digit A single character in a numbering system. In decimal, digits are 0 through 9. In binary, digits are 0 and 1. digit - An employee of Digital Equipment Corporation. See also VAX, VMS, PDP-10, TOPS-10, DEChead, double DECkers, field circus. growth and commercial plasma decreased 24 percent due to weak market conditions and the loss of business with Centeon. The fourth quarter loss from continuing operations ($.13 per share) resulted from several one time costs and actions intended to position the Company for a resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of momentum and profitability in the coming year, including withdrawal from a non-strategic business initiative, additional provisions not covered not covered Health care adjective Referring to a procedure, test or other health service to which a policy holder or insurance beneficiary is not entitled under the terms of the policy or payment system–eg, Medicare. Cf Covered. by the third quarter restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , expenses of accelerating certain product upgrades and refurbishment re·fur·bish tr.v. re·fur·bished, re·fur·bish·ing, re·fur·bish·es To make clean, bright, or fresh again; renovate. re·fur , and reduced income tax benefit resulting from one time charges. Without these effects, the core business would have earned $.14 per share. Debt net of cash at March 28, 1998 was $49.3 million, down from $65.4 million at December December: see month. 27, 1997 and up from $21.2 million at March 29, 1997. James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. L. Peterson Pe·ter·son , Oscar Emmanuel Born 1925. Canadian jazz pianist. A prolific recording artist noted for his technical skill, he is best known for work produced with his own trio (1953-1965). , Haemonetics' President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. reported, "In the three months since new management took office, we have dramatically changed the direction of the Company and activated activated a state of being more than usually active. In biological systems this is usually brought about by chemical or electrical means. Commonly said of pharmaceutical and chemical products. the following key programs. They are designed to focus on our strategic strengths and solidify so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. the foundation for our future growth. These include: -- reinvigorating R&D by reallocating resources; -- attacking product costs by reengineering Using information technology to improve performance and cut costs. Its main premise, as popularized by the book "Reengineering the Corporation" by Michael Hammer and James Champy, is to examine the goals of an organization and to redesign work and business processes from the ground up our manufacturing and logistics processes; -- enlarging ENLARGING. Extending or making more comprehensive; as an enlarging statute, which is one extending the common law. the U.S. blood bank market potential by converting the 60 percent of the market that are currently competitors to customer potential; -- becoming closer to our customers by forming worldwide Blood Bank and Surgical divisions and moving towards selling directly to the U.S. open The term U.S. Open is applied to "open" United States national championships in a particular sport, in which anybody, amateur or professional, American or non-American may compete. These include:
-- focusing resources on the emerging red cell apheresis apheresis (əfĕr`əsĭs), or hemapheresis (hē'məfĕr`əsĭs), any procedure in which blood is drawn from a donor or patient and a component (platelets, plasma, or white blood opportunity." Sir Stuart Burgess said, "We now have a solid foundation on which to build the business and plans in place to do just that. I look forward to our profits returning to the $1.20/share we experienced some time ago. It may take us 8-12 quarters to reach that level, but I expect to see the first material improvement in that direction this year." 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. is a global company engaged in the design, manufacture and worldwide marketing 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. blood processing systems. The Company's systems address important medical markets including 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. , blood component collections and plasma collections. Over sixty percent of the Company's business is outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . To learn more about Haemonetics' products and markets, visit the Company's web site at www.haemonetics.com -0-
Haemonetics Corporation Financial Summary
For Fourth Quarter and Four Quarters of FYE 98
(Quarterly Data Unaudited, Yearly Data Audited, in thousands, except
per share data)
------------------- -------------------
Fourth % Twelve %
Quarter Months
ending
------------------- -------------------
3-28-98 3-29-97 3-28-98 3-29-97
-------- --------- -------- ---------
Profit and
Loss:
----------------
Net revenues $63,278 $80,519 (21) $285,76 $303,009 (6)
Gross profit 28,532 39,214 (27) 135,755 159,163 (15)
R & D 4,122 4,524 (9) 17,934 18,586 (4)
S,G & A 23,888 22,394 7 86,909 88,070 (1)
Total operating
expense 28,010 26,918 4 104,843 106,656 (2)
Non-recurring
restructuring exp 0 0 24,500 0
Operating income 522 12,296 (96) 6,412 52,507 (88)
Interest expense (998) (468) 113 (3,373) (1,721) 96
Interest income 408 841 (51) 3,366 2,940 14
Other income
(expense) net (1,886) 696 (371) (1,939) 1,079 (280)
Income(loss) before
taxes (1,954) 13,365 (115) 4,466 54,805 (92)
from continuing
operations
Taxes 1,617 4,677 (65) 3,865 19,171 (80)
Income(loss)
from
continuing
operations (3,571) 8,688 (141) 601 35,634 (98)
Loss from discontinued
operations,
net of tax(1) (20,036) (809) 2377 (25,373) (2,664) 852
Net income
(loss) ($23,607) $7,879 (400) ($24,772) $32,970 (175)
Earnings(loss) per share
Basic income (loss) per share
Continuing
operations ($0.13) $0.32 (141) $0.02 $1.31 (98)
Discontinuing
operations ($0.75) ($0.03) 2400 ($0.96) ($0.10) 860
Net income
(loss) per
share ($0.89) $0.29 (407) ($0.93) $1.21 (177)
Diluted income (loss) per share
Continuing
operations ($0.13) $0.32 (141) $0.02 $1.30 (98)
Discontinuing
operations ($0.75) ($0.03) 2400 ($0.95) ($0.10) 850
Net income
(loss) per
share ($0.89) $0.29 (407) ($0.93) $1.20 (178)
Weighted avg. no. of shares
Basic 26,555 26,916 26,537 27,160
Diluted 26,564 27,063 26,589 27,451
------------------------------------------------------------------
Continuing Operations
Profit Margins:
Gross profit 45.1% 48.7% 47.5% 52.5%
Operating income 0.8% 15.3% 2.2% 17.3%
Income before
taxes (3.1%) 16.6% 1.6% 18.1%
Net income continuing
operations (5.6%) 10.8% 0.2% 11.8%
(1) The fourth quarter BBMS charge for estimated future operating
losses, losses on disposal of assets and one time divestiture costs
are segregated from continuing operations and shown separately as a
component of discontinued operations for FYE 1998 reporting purposes.
BBMS revenues and expenses have been removed from the corresponding
profit and loss classifications for the respective quarter and full
year FYE 1998 and the corresponding periods FYE 1997, and have been
reflected in the caption, Loss from discontinued operations, net of
tax.
--------------------------------------------------------------------
Sales analysis:
3-28-98 3-29-97 % % 3-28-98 3-29-97 % %
(w/o FX (w/o FX
impact) impact)
Domestic $19,702 $29,367 (32.9)(32.9) $93,104 $110,023 (15.4)(15.4)
International 43,576 51,152 (14.8) (8.0) 192,658 192,986 (0.2) 9.0
Disposables 57,652 68,282 (15.6) (6.0) 253,437 262,958 (3.6) 6.0
Equipment 5,626 12,237 (54.0)(52.0) 32,325 40,051 (19.3)(19.0)
Surgical 16,510 18,990 (13.1) (9.5) 64,641 73,555 (12.1) (9.1)
Blood Bank 30,188 29,852 1.1 9.5 127,345 127,002 0.3 8.8
Plasma 16,580 31,677 (47.7)(46.0) 93,776 102,452 (8.5) (6.0)
Net Revenues 63,278 80,519 (21.4)(17.0) 285,762 303,009 (5.7) (1.0)
-0-
Haemonetics Corporation Financial Summary
FYE 1998 P and L Summary of Results of Discontinued Operations,
Blood Bank Management Services
(Quarterly Data Unaudited, Yearly Data Audited, in
thousands, except per share data)
---------------------------------------------------------------
Quarter 1 Quarter Quarter 3 Quarter 4 FY98
FYE 98 2 FYE 98 FYE 98 FYE 98 Year-to-date
ending ending ending ending ending
Jun. 28, Sept. 27, Dec. 27, Mar. 28 Mar. 29
1997 1997 1997 1998 1998
Profit and
Loss:
--------------
Net revenues 2,843 4,093 5,303 5,807 18,046
Cost of
goods sold 2,869 4,291 5,208 5,867 18,235
Gross profit (26) (198) 95 (60) (189)
R & D 76 88 97 103 364
S,G & A 1,761 2,277 2,906 3,284 10,228
------ ------ ------ ------ ------
Total
operating
exp. 1,837 2,365 3,003 3,387 10,592
Non-recurring
BBMS charge 0 0 700 27,300 28,000
Operating
income (1,863) (2,563) (3,608) (30,747) (38,781)
Interest
expense (39) (60) (78) (77) (254)
Interest
income 0 0 0 0 0
Other income,
net 0 0 0 0 0
-- -- -- -- --
Income
before
taxes (1,902) (2,623) (3,686) (30,824) (39,035)
Taxes (666) (918) (1,290) (10,788) (13,662)
----- ----- ------- -------- --------
Net income
(loss) (1,236) (1,705) (2,396) (20,036) (25,373)
Net income
(loss) per
share
on a diluted
basis ($0.046) ($0.064) ($0.090) ($0.754) ($0.954)
Weighted
avg. no.
of shares 26,645 26,620 26,528 26,564 26,589
--------------
Profit
Margins:
--------------
Gross
profit (0.9%) (4.8%) 1.8% (1.0%) (1.0%)
Operating
income (65.5%) (62.6%) (68.0%) (529.5%) (214.9%)
Income
before
taxes (66.9%) (64.1%) (69.5%) (530.8%) (216.3%)
Net
income (43.5%) (41.7%) (45.2%) (345.0%) (140.6%)
-0-
Haemonetics Corporation Financial Summary
For Fourth Quarter and Four Quarters of FYE 98
(Quarterly Data Unaudited, Yearly Data Audited, in thousands, except
per share data)
BALANCE SHEET: Period ending
3-28-98 3-29-97
Assets
Cash $21,766 $8,272
Accounts receivable, net 58,886 70,913
Inventories, net 61,664 54,928
Other current
assets 48,834 32,078
Net current assets,
discontinued
operations 0 269
Total current assets 191,150 166,460
Net PP&E 83,956 95,227
Other assets 59,516 51,373
Other assets, discontinued operations 7,069 7,414
Total assets $341,691 $320,474
Period ending
3-28-98 3-29-97
Liabilities
S/T debt.& curr. maturities $17,468 $19,511
Other current liabilities 50,297 52,904
Net current liabilities,
discontinued operations 10,593 0
Total current liabilities 78,358 72,415
Def'd income taxes 14,942 12,770
Long-term debt 53,586 10,015
Other long-term
liabilities 150 0
Stockholder's equity 194,655 225,274
Total liabilities & equity $341,691 $320,474
-0- CONTACT: Haemonetics Corporation Lisa Lopez (781) 356-9517 Email: Investor@haemonetics.com |
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