Exhibit 99.1
HAEMONETICS REPORTS FOURTH QUARTER AND FISCAL YEAR END RESULTS AND POSTS
FISCAL YEAR 2006 GUIDANCE
BRAINTREE, Mass., May 5 /PRNewswire-FirstCall/ -- Haemonetics Corporation
(NYSE: HAE) reported today fourth quarter and fiscal year end 2005 financial
results. The Company posted net revenue of $384 million for FY05, a 5.3%
increase over FY04. Diluted net earnings per share for the year were $1.52,
up 27.7% over FY04.
Brad Nutter, Haemonetics' President and CEO, said, "We are pleased with
our fiscal year results. In the year, we were significantly affected by a
revenue challenge due to consolidation in the worldwide plasma market.
However, double digit revenue growth in the Patient Division as well as the
Donor Division's blood bank and red cell product lines more than offset the
15%, or $17 million, revenue decline in the plasma product line.
Additionally, we are comparing against last year which was a fourth quarter
and fiscal year that included an extra billing week."
Product Disposables
% Inc/Dec
Product Line Revenue over FY04
- -------------------------------------------- ------------- ---------
Plasma $ 97 million -15.0%
Blood Bank $ 130 million +16.2%
Red Cells $ 29 million +28.5%
Patient $ 86 million +12.7%
Mr. Nutter continued, "In addition to revenue growth, the factors that
allowed us to meet our guidance included positive currency impact of $0.35 to
earnings as well as discipline in product pricing and mix, supply contracts,
and expense management. We demonstrated the positive drop-through that is our
commitment to shareholders, and specifically leveraged 5% revenue growth into
14% gross profit growth and 27% operating income growth."
FINANCIAL HIGHLIGHTS
Haemonetics reported the following additional financial results:
* Fourth quarter revenue of $100 million, up 2.3% from $98 million in Q4:
04; full year revenue of $384 million, up 5.3% from $364 million in
FY04
* Fourth quarter gross profit of $53 million, up 9.7% from $49 million in
Q4:04; full year gross profit of $198 million, up 14.0% from $174
million in FY04
* Fourth quarter gross margin of 53.5%, an 8 year high and up 370 basis
points over Q4:04; full year gross margin of 51.6%, up 400 basis
points over FY04
* Fourth quarter operating expenses of $38 million, up 13.3% from $33
million in Q4:04; full year operating expenses of $138 million, up
9.3% from $126 million in FY04
* Fourth quarter operating income of $16 million, up 2.1% from $15
million in Q4:04; full year operating income of $60 million, up 26.5%
from $47 million in FY04
* Fourth quarter operating margin of 15.7%, level with Q4:04; full year
operating margin of 15.6%, up 260 basis points over FY04
* Fourth quarter earnings per share of $0.37, level with Q4:04; full year
earnings per share of $1.52, up 27.7% from $1.19 in FY04
* An increase in cash and short term investments on the balance sheet of
$68 million over year end 2004 for a fiscal year end cash balance of
$186 million
* Cash flow from operating activities for the quarter of $23 million and
for the year of $71 million
In addition to the factors noted previously, Haemonetics' financial
results were impacted by the following:
As announced in February 2005, the Company will be the exclusive supplier
of plasma collection products to ZLB Plasma Services' 63 U.S. plasma centers.
As a result, over the third and fourth quarter, Haemonetics spent $1 million
on manufacturing and training to support phase 1 of the process to convert
ZLB's centers from competitive technology to Haemonetics' systems. Phase 1 is
complete and included the refurbishment and placement of more than 700 plasma
collection devices at 22 ZLB centers in the first quarter of FY06.
During FY05, Haemonetics also invested in several new products as well as
404 compliance and legal services, and took a $1.7 million impairment charge
related to technology that the Company no longer expects to deploy. Despite
these expenses, Haemonetics managed its spending increase as planned at half
the rate of gross profit dollar growth.
The Company's tax rate was 33.8% for the year versus 36% in FY04. 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.
DONOR PRODUCT LINE HIGHLIGHTS
Plasma disposables revenue was $97 million for the year, down 15% from
FY04. Revenue was impacted by two significant factors: the loss of a large
customer when it was acquired by a competitor and a temporary reduction in
plasma collections worldwide as plasma collectors and fractionators work down
excess inventory.
Offsetting the $17 million decline in plasma disposable revenue was blood
bank disposables revenue which grew $18 million to $130 million for the year,
up 16.2% over FY04. Several factors contributed to blood bank sales growth
for the year including: currency, a shift to higher priced filtered platelet
collection sets in Japan, and an increase in sales of intravenous solutions.
Red cell disposables revenue was $29 million for the year, up 28.5% over
FY04. Haemonetics was successful in the year at executing to its strategy to
grow this business at the American Red Cross regions. Usage at Red Cross
accounts increased 214% over FY04. More than 150,000 units of red cells
collected last year by the Red Cross utilized double red cell collection
technology. The Company was also successful in its strategy to convert other
customers to filtered red cell collection sets. At fiscal year end, 43% of
all U.S. red cell collections used a filtered set versus 30% in FY04.
PATIENT PRODUCT LINE HIGHLIGHTS
Disposables revenue for the Patient family of products was $86 million for
the year, up 12.7% over FY04. Patient product growth was driven by
OrthoPAT(R) brand disposables revenue which was $20 million for the year, up
51.4% over FY04. The OrthoPAT brand has retained its sales momentum with unit
growth and price improvement in the U.S. and Europe throughout the year. More
than 500 new OrthoPAT devices were placed in the U.S. in the fiscal year so
U.S. revenues benefited from increased rental fees. More importantly, the
high level of device placement positions the product line well for continuing
disposables growth.
FISCAL YEAR 2006 GUIDANCE
In addition to FY05 results, Haemonetics announced today its FY06
financial guidance, including:
* Revenue growth of 11-13%
* Operating income growth of approximately 20%
* Operating margin exceeding 16%
* Diluted net earnings per share range of $1.73 to $1.83
Revenues are expected to be impacted by favorable sales growth in the
plasma disposables product line which will benefit $8-10 million from the ZLB
supply contract and from ongoing strength in sales in the red cell and
OrthoPAT product lines. Additionally, Haemonetics will introduce four new
products in FY06 that will contribute to sales growth later in the fiscal
year.
While adding to revenue, the introduction of the four new products will
affect operating and manufacturing efficiency. Gross margin improvement will
be tempered when compared with fiscal years 2004 and 2005 as the Company
introduces these products.
Haemonetics' guidance includes the favorable impact of currency which is
expected to contribute about $0.12 to diluted net earnings per share.
Haemonetics will post income statement scenarios on its website that
reflect its guidance range.
CONFERENCE CALL
Haemonetics will hold a conference call on Thursday, May 5th at 10:00 am
Eastern to review the financial and operational performance of FY05 and to
discuss financial and operational plans for FY06.
Interested parties can participate by calling (800) 921-9431 (US only) or
(973) 935-8505. The call will be replayed through May 19th at (877) 519-4471
(US only) or (973) 341-3080 using PIN 5919826.
INVESTOR ROUNDTABLE
Haemonetics will also hold an Investor Roundtable on Monday, May 16th in
Boston to review its FY06 operating plan in more detail. Interested parties
can register for the event by contacting Kathryn Odermatt at
kodermatt@haemonetics.com or at (781) 356-9455. The Roundtable will also be
webcast. Details of the webcast will be posted on Haemonetics' website prior
to the meeting.
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.
HAEMONETICS CORPORATION FINANCIAL SUMMARY
(UNAUDITED DATA IN THOUSANDS, EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENTS OF INCOME
FOURTH QUARTER FYE05
% Inc/(Dec)
vs prior
04/02/05 04/03/04 year
------------ ------------ ------------
NET REVENUES $ 99,975 $ 97,721 2.3
Gross profit 53,446 48,703 9.7
R&D 5,103 4,013 27.2
S, G & A 32,673 29,339 11.4
Operating expenses 37,776 33,352 13.3
Operating income 15,670 15,351 2.1
Interest expense (511) (668) (23.5)
Interest income 770 574 34.1
Other income/(expense), net 165 (371) (144.5)
Income before taxes 16,094 14,886 8.1
Tax expense 6,156 5,358 14.9
NET INCOME $ 9,938 $ 9,528 4.3
Net income per common share
assuming dilution $ 0.37 $ 0.37 0.0
Weighted average number of shares
Basic 26,051 24,997
Diluted 26,888 25,439
MARGINS
Inc/(Dec)
vs prior
year profit
margin %
------------
Gross profit 53.5% 49.8%
R&D 5.1% 4.1%
S, G & A 32.7% 30.0%
Operating income 15.7% 15.7% 0.0
Income before taxes 16.1% 15.2% 0.9
Net income 9.9% 9.8%
CONSOLIDATED STATEMENTS OF INCOME
FISCAL YEAR ENDED 05
% Inc/(Dec)
vs prior
04/02/05 04/03/04 year
------------ ------------ ------------
NET REVENUES $ 383,598 $ 364,229 5.3
Gross profit 197,876 173,536 14.0
R&D 19,994 17,398 14.9
S, G & A 118,039 108,845 8.4
Operating expenses 138,033 126,243 9.3
Operating income 59,843 47,293 26.5
Interest expense (2,361) (2,903) (18.7)
Interest income 2,233 1,848 20.8
Other income/(expense), net 126 (426) (129.6)
Income before taxes 59,841 45,812 30.6
Tax expense 20,202 16,492 22.5
NET INCOME $ 39,639 $ 29,320 35.2
Net income per common share
assuming dilution $ 1.52 $ 1.19 27.7
Weighted average number of shares
Basic 25,523 24,435
Diluted 26,145 24,695
MARGINS
Inc/(Dec)
vs prior
year profit
margin %
------------
Gross profit 51.6% 47.6%
R&D 5.2% 4.8%
S, G & A 30.8% 29.9%
Operating income 15.6% 13.0% 2.6
Income before taxes 15.6% 12.6% 3.0
Net income 10.3% 8.0%
REVENUE ANALYSIS
Fourth quarter Twelve Months Ended
------------------------------------------ ------------------------------------------
%Inc/ %Inc/
04/02/05 04/03/04 (Dec) 04/02/05 04/03/04 (Dec)
------------ ------------ ------------ ------------ ------------ ------------
REVENUES BY GEOGRAPHY
United States $ 35,258 $ 32,631 8.1 $ 131,632 $ 126,872 3.8
International 64,717 65,090 (0.6) 251,966 237,357 6.2
Net Revenues $ 99,975 $ 97,721 2.3 $ 383,598 $ 364,229 5.3
DISPOSABLES REVENUE BY PRODUCT FAMILY
DONOR:
Plasma 23,229 27,207 (14.6) 97,250 114,346 (15.0)
Blood Bank 32,289 29,879 8.1 130,427 112,209 16.2
Red Cell 8,451 7,182 17.7 28,676 22,321 28.5
63,969 64,268 (0.5) 256,353 248,876 3.0
PATIENT:
Surgical $ 22,823 $ 21,622 5.6 $ 86,377 $ 76,664 12.7
Subtotal $ 86,792 $ 85,890 1.1 $ 342,730 $ 325,540 5.3
EQUIPMENT 6,728 5,136 31.0 20,695 16,687 24.0
MISC & SERVICE 6,455 6,695 (3.6) 20,173 22,002 (8.3)
NET REVENUES $ 99,975 $ 97,721 2.3 $ 383,598 $ 364,229 5.3
CONSOLIDATED BALANCE SHEETS
Period ending
---------------------------
04/02/05 04/03/04
------------ ------------
ASSETS
Cash & cash equivalents $ 185,815 $ 79,467
Short-term investments 0 $ 38,650
Accounts receivable, net 80,719 82,640
Inventories, net 53,088 52,235
Other current assets 23,989 28,457
Total current assets 343,611 281,449
Net PP&E 69,337 78,030
Other assets 54,809 47,915
Total assets $ 467,757 $ 407,394
Period ending
---------------------------
04/02/05 04/03/04
------------ ------------
LIABILITIES & STOCKHOLDERS' EQUITY
S/T debt & current maturities $ 26,612 $ 32,818
Other current liabilities 61,310 63,025
Total current liabilities 87,922 95,843
Deferred tax liability, net 0 1,682
Long-term debt 19,231 25,442
Other long-term liabilities 5,469 4,678
Stockholders' equity 355,135 279,749
Total liabilities & equity $ 467,757 $ 407,394
CONTACT:
Julie Fallon
Tel. (781) 356-9517
Alternate Tel. (617) 320-2401
fallon@haemonetics.com
SOURCE Haemonetics Corporation
-0- 05/05/2005
/CONTACT: Julie Fallon for Haemonetics, +1-781-356-9517, or
+1-617-320-2401, fallon@haemonetics.com /
/Web site: http://www.haemonetics.com/