Exhibit 99.1
HAEMONETICS REPORTS SECOND QUARTER FISCAL YEAR 2006 EARNINGS AND RAISES FULL
YEAR EARNINGS PER SHARE GUIDANCE FOLLOWING ARBITRATION AWARD
BRAINTREE, Mass., Oct. 27 /PRNewswire-FirstCall/ -- Haemonetics Corporation
(NYSE: HAE) reported today second quarter fiscal year 2006 net revenue of $100.5
million, a 10.5% increase over the second quarter of fiscal year 2005 and
year-to-date revenue of $204 million, a 9.8% increase over FY05. Diluted net
earnings per share for the quarter were $0.40, up 17.6% over Q2:05 and for
year-to-date are $0.87, up 19.2% over FY05.
Brad Nutter, Haemonetics' President and CEO, said, "I am pleased with the
performance we posted in the quarter with results coming from strength in sales
in plasma and red cell disposables, equipment, and information management.
Moreover, the quarter was also marked with a substantial investment in new
products."
The Company also reaffirmed its annual guidance of revenue growth of 11-
13%, operating income growth of approximately 20%, and operating margin
exceeding 16%, and announced it was raising its annual earnings per share
guidance. As a result of winning a previously disclosed arbitration proceeding,
Haemonetics received $31 million in October. The Company had previously guided
that diluted net earnings per share for the year would be in the range of $1.73
to $1.83. The receipt of the cash will add approximately $0.61 to Haemonetics'
earnings per share for the year. Therefore, the Company is raising its annual
diluted GAAP net earnings per share estimates to a range of $2.34 to $2.44.
The arbitration award will also result in approximately $28 million in
pre-tax income in Q3:06. The majority of the award will be recorded as other
income, and Haemonetics anticipates a related tax expense of about $11 million.
The award will increase Haemonetics' Q3:06 cash balance by approximately $20
million.
FINANCIAL HIGHLIGHTS
Haemonetics reported the following additional financial results:
* Q2:06 gross profit of $52 million, up 13.6% from $46 million in Q2:05;
year-to-date gross profit of $106 million, up 14.7% from $93 million in
FY05
* Q2:06 gross margin of 51.5%, up 140 basis points from Q2:05; year-to-
date gross margin of 52.2%, up 230 basis points from FY05
* Q2:06 operating expenses of $36 million, up 15.0% from $32 million in
Q2:05; year-to-date operating expenses of $72 million, up 13.5% from $64
million in FY05
* Q2:06 operating income of $15 million, up 10.6% from $14 million in
Q2:05; year-to-date operating income of $34 million, up 17.3% from $29
million in FY05
* Q2:06 operating margin of 15.3%, level with Q2:05; year-to-date
operating margin of 16.6%, up 100 basis points from FY05
In the quarter, net income was negatively affected by a $1.1 million reserve
for equipment and components for an older product no longer expected to be
marketed. However, this was offset by favorable currency exchange, higher
short-term interest rates, and a lower tax rate. The lower tax rate (33.3% in
Q2:06 versus 35.3% in Q2:05) is a result of a favorable determination of a tax
deduction.
Haemonetics achieved an increase in cash and short term investments on the
balance sheet of $11.9 million over Q1:06 for a second quarter end cash balance
of $210 million. The Company also generated $14.3 million in cash flow from
operating activities for the quarter.
Haemonetics will post detailed information on the positive effects of
currency and the Company's annual guidance on the web at
http://www.haemonetics.com/site/content/investor/fin_history.asp.
DONOR PRODUCT LINE HIGHLIGHTS
Plasma disposables revenue was $26 million for the quarter, up 7.0% from
Q2:05 and $53 million year-to-date, up 7.1% from FY05. In the quarter, sales
benefited from disposables unit growth in the U.S. as the plasma collection
market rebounds and as Haemonetics gains new customers.
Blood bank revenue was $32 million for the quarter, down 3.4% over Q2:05 and
$65 million year-to-date, up 1.2% from FY05. In Q2 of last fiscal year, the
Company had a large, opportunistic sale of an intravenous solution that did not
recur in Q2 of this fiscal year.
Red cell disposables revenue was $9 million for the quarter, up 33.8% over
Q2:05 and $17 million year-to-date, up 32.4% from FY05. The majority of the
quarterly revenue growth came from the U.S. where sales increased 47% over
Q2:05. Unit growth and an increase in sales of Haemonetics' higher-priced
filtered disposable set were key drivers of U.S. red cell disposables revenue.
PATIENT PRODUCT LINE HIGHLIGHTS
Disposables revenue for the Patient family of products was $20 million for
the quarter, level with Q2:05 and $43 million year-to-date, up 4.4% from FY05.
OrthoPAT(R) brand disposables revenue was $4.5 million for the quarter, up 2.6%
over Q2:05 and $10 million year-to-date, up 15.3% from FY05. As expected, U.S.
OrthoPAT sales declined sequentially from Q1:06 as the Company shifted U.S.
sales from a distribution relationship to direct sales on August 29, 2005.
OTHER REVENUES
Particularly strong equipment and miscellaneous/service revenue growth in
the second quarter contributed to the Company's overall revenue growth. Q2:06
equipment sales were $7 million, up 156.7% over Q2:05. Equipment growth came
from the sales of cell processing systems in the U.S., plasma systems in Europe
and the newly introduced CS5+ devices worldwide. Miscellaneous and service
revenue grew to $7 million in Q2:06, up 69.6% over Q2:05. Most of this revenue
growth came from the 5D Information Management division as it made gains in
penetrating the broader blood collection market for its information technology
systems.
OTHER ANNOUNCEMENTS
Haemonetics announced today that it has amended its development agreement
with Arryx, Inc. to expand the field of use for research and product
development. The new agreement gives Haemonetics exclusive rights to
applications, using Arryx's nanotechnology, beyond blood to all of human
healthcare.
The Company also said that it has received FDA 510(k) clearance of its
SmartSuction(R) HARMONY(TM) surgical suction system. The Company has begun
customer acceptance trials of this device as part of its planned product launch.
CONFERENCE CALL
Haemonetics will hold a conference call on Thursday, October 27th at 10:00
am eastern to review the financial and operational performance of the quarter.
Interested parties can participate by calling (800) 322-0079 (US only) or
(973) 935-2100. The call will be replayed through November 11th at (877) 519-
4471 (US only) or (973) 341-3080 using PIN 6507162.
INVESTOR CONFERENCE
Brad Nutter will be presenting at the Piper Jaffray Conference in Chicago on
December 8, 2005.
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.
CONTACT:
Julie Fallon
Tel. (781) 356-9517
Alternate Tel. (617) 320-2401
fallon@haemonetics.com
HAEMONETICS CORPORATION FINANCIAL SUMMARY
(UNAUDITED DATA IN THOUSANDS, EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENTS OF INCOME
SECOND QUARTER FYE06
%
Inc/(Dec)
vs prior
10/01/05 10/02/04 year
---------- ---------- ----------
NET REVENUES $ 100,488 $ 90,923 10.5
Gross profit 51,765 45,549 13.6
R&D 6,283 4,253 47.7
S, G & A 30,103 27,385 9.9
Operating expenses 36,386 31,638 15.0
Operating income 15,379 13,911 10.6
Interest expense (522) (636) (17.9)
Interest income 1,083 502 115.7
Other income/(expense), net 481 (69) (797.1)
Income before taxes 16,421 13,708 19.8
Tax expense 5,476 4,834 13.3
NET INCOME $ 10,945 $ 8,874 23.3
Net income per common share
assuming dilution $ 0.40 $ 0.34 17.6
Weighted average number of shares
Basic 26,395 25,258
Diluted 27,354 25,784
Inc/(Dec)
vs prior
year
profit
margin %
----------
PROFIT MARGINS
Gross profit 51.5% 50.1% 1.4
R&D 6.3% 4.7%
S, G & A 30.0% 30.1%
Operating income 15.3% 15.3%
Income before taxes 16.3% 15.1% 1.2
Net income 10.9% 9.8%
CONSOLIDATED STATEMENTS OF INCOME YEAR-TO-DATE FOR FYE06
%
Inc/(Dec)
vs prior
10/01/05 10/02/04 year
---------- ---------- ----------
NET REVENUES $ 203,661 $ 185,525 9.8
Gross profit 106,289 92,649 14.7
R&D 11,824 8,307 42.3
S, G & A 60,591 55,469 9.2
Operating expenses 72,415 63,776 13.5
Operating income 33,874 28,873 17.3
Interest expense (1,063) (1,297) (18.0)
Interest income 2,396 865 177.0
Other income/(expense), net 1,345 (301) (546.8)
Income before taxes 36,552 28,140 29.9
Tax expense 12,723 9,446 34.7
NET INCOME $ 23,829 $ 18,694 27.5
Net income per common share
assuming dilution $ 0.87 $ 0.73 19.2
Weighted average number of shares
Basic 26,338 25,207
Diluted 27,279 25,681
Inc/(Dec)
vs prior
year
profit
margin %
----------
PROFIT MARGINS
Gross profit 52.2% 49.9% 2.3
R&D 5.8% 4.5%
S,G&A 29.8% 29.9%
Operating income 16.6% 15.6% 1.0
Income before taxes 17.9% 15.2% 2.7
Net income 11.7% 10.1%
REVENUE ANALYSIS
SECOND QUARTER
--------------------------------------
%
10/01/05 10/02/04 Inc/(Dec)
---------- ---------- ----------
Revenues by Geography
United States $ 37,930 $ 30,403 24.8
International 62,558 60,520 3.4
Net Revenues $ 100,488 $ 90,923 10.5
Disposable Revenues by Product Family
Donor:
Plasma $ 25,938 $ 24,238 7.0
Blood Bank 32,193 33,338 (3.4)
Red Cell 8,903 6,653 33.8
$ 67,034 $ 64,229 4.4
Patient:
Surgical $ 19,930 $ 20,045 (0.6)
Subtotal $ 86,964 $ 84,274 3.2
Equipment $ 6,623 $ 2,580 156.7
Misc & Service 6,901 4,069 69.6
Net Revenues $ 100,488 $ 90,923 10.5
SIX MONTHS ENDED
--------------------------------------
%
10/01/05 10/02/04 Inc/(Dec)
---------- ---------- ----------
Revenues by Geography
United States $ 76,153 $ 63,310 20.3
International 127,508 122,215 4.3
Net Revenues $ 203,661 $ 185,525 9.8
Disposable Revenues by Product Family
Donor:
Plasma $ 53,241 49,724 7.1
Blood Bank 64,883 64,107 1.2
Red Cell 17,358 13,114 32.4
135,482 126,945 6.7
Patient:
Surgical $ 42,615 $ 40,818 4.4
Subtotal $ 178,097 $ 167,763 6.2
Equipment 12,734 9,253 37.6
Misc & Service 12,830 8,509 50.8
Net Revenues $ 203,661 $ 185,525 9.8
CONSOLIDATED BALANCE SHEETS
Period ending
-----------------------
10/01/05 4/02/05
---------- ----------
ASSETS
Cash & cash equivalents $ 209,981 $ 185,815
Accounts receivable, net 83,409 80,719
Inventories, net 57,581 53,088
Other current assets 28,089 23,989
Total current assets 379,060 343,611
Net PP&E 67,075 69,337
Other assets 53,088 54,809
Total assets $ 499,223 $ 467,757
Period ending
-----------------------
10/01/05 4/02/05
---------- ----------
LIABILITIES & STOCKHOLDERS' EQUITY
S/T debt & current maturities $ 27,643 $ 26,612
Other current liabilities 60,256 61,310
Total current liabilities 87,899 87,922
Long-term debt 18,967 19,231
Other long-term liabilities 5,107 5,469
Stockholders' equity 387,250 355,135
Total liabilities & equity $ 499,223 $ 467,757