Exhibit 99.1
HAEMONETICS REPORTS RECORD FOURTH QUARTER AND FISCAL YEAR RESULTS
- --COMPANY PROJECTS DOUBLE DIGIT GROWTH IN REVENUE AND OPERATING INCOME IN FY07--
BRAINTREE, Mass., May 3 /PRNewswire-FirstCall/ -- Haemonetics Corporation
(NYSE: HAE) reported today fourth quarter fiscal year 2006 GAAP net revenue of
$110 million, a 10.4% increase over the fourth quarter of fiscal year 2005 and
full year revenue of $420 million, a 9.4% increase over FY05. Diluted GAAP net
earnings per share were $0.62 for the quarter, up 67.2% over Q4:05 earnings of
$0.37, and $2.51 for the year, up 65.8% over FY05 earnings of $1.52. Full year
GAAP results include the previously reported benefit of an arbitration award
received in the third quarter, which added $26.4 million to operating income and
$0.62 to earnings per share.
Excluding the arbitration award, the Company's fiscal year financial and
operating results met or exceeded the performance targets the Company had
previously provided to investors.
Ronald Ryan, Haemonetics' Vice President and CFO, said, "We are particularly
pleased with this year's results. We posted ten year highs for revenue growth,
at 9.4%, and operating margin, at 17.3%. Also, for the third consecutive year
we've delivered the P&L leverage that demonstrates our success in improving
profitability. On revenue growth of 9.4%, excluding the arbitration award,
operating income grew 21.4% and earnings per share increased to $1.90."
FINANCIAL HIGHLIGHTS
Haemonetics reported the following GAAP results:
* Q4:06 revenue of $110 million, up 10.4% from Q4:05; full year revenue of
$420 million, up 9.4% from FY05
* Q4:06 gross profit of $59 million, up 9.6% from $53 million in Q4:05;
full year gross profit of $221 million, up 11.5% from $198 million in
FY05
* Q4:06 gross margin of 53.1%, down 40 basis points from Q4:05; full year
gross margin of 52.5%, up 90 basis points from FY05
* Q4:06 operating expenses of $35 million, down 8.0% from $38 million in
Q4:05; full year operating expenses of $122 million, down 12.0% from
$138 million in FY05 (the full year comparison reflects $26 million of
income from the arbitration award received Q3:06)
* Q4:06 operating income of $24 million, up 52.1% from $16 million in
Q4:05; full year operating income of $99 million, up 65.5% from $60
million in FY05
* Q4:06 operating margin of 21.6%, up 590 basis points from Q4:05; full
year operating margin of 23.6%, up 800 basis points from FY05
* Q4:06 earnings per share of $0.62, up 67.2% from Q4:05; full year
earnings per share of $2.51, up 65.8% from FY05
For the year, the Company's tax rate increased to 35.4% from 33.8%
reflecting the tax treatment of the arbitration award.
Haemonetics will post detailed information on the effects of the arbitration
award as well as currency on the web at
http://www.haemonetics.com/site/content/investor/Non_GAAP.asp.
BALANCE SHEET
Haemonetics' cash and short term investments increased $21 million in the
quarter, for a year end cash balance of $251 million. The Company also generated
$26 million in cash flow from operating activities for the quarter and $86
million for the year.
PATIENT PRODUCT LINE HIGHLIGHTS
Cell Saver(R) disposables revenue was $16 million for the quarter, down 5.3%
from Q4:05 and $65 million for the year, down 1.4% from FY05. Cell Saver
revenues represented 75% of total patient revenues. The Cell Saver market
continues to shrink because of a shift to less invasive surgeries and the impact
of drug eluting stents.
In Q2:06 Haemonetics shifted from a distribution relationship to direct
sales of its U.S. OrthoPAT(R) surgical blood salvage product. For the quarter,
OrthoPAT brand disposables revenue was $6 million, up 6.9% over Q4:05 and $22
million for the year, up 8.5%. The Company reported excellent progress in its
transition to direct sales. In contrast to the market for the Company's Cell
Saver systems, the orthopedic surgical market addressed by the OrthoPAT system
is relatively unpenetrated. By going direct, Haemonetics expands its U.S. market
opportunity from the one-third of the market serviced by its prior exclusive
distributor to the full $400 million market. As such, the Company expects the
OrthoPAT system to be a growth driver for the Patient Division in FY07 and
beyond.
DONOR PRODUCT LINE HIGHLIGHTS
Plasma disposables revenue was $28 million for the quarter, up 22.3% from
Q4:05 and $109 million for the year, up 12.2% from FY05. For the year, sales
benefited from disposables unit growth in the U.S. as the plasma collection
market rebounded and as Haemonetics executed its plan to convert a large, new
customer to its plasma collection systems.
Blood bank disposables revenue was $34 million for the quarter, up 5.1% from
Q4:05 and $132 million for the year, up 1.5% from FY05. For the quarter, growth
was largely due to gains in the Asian platelet market. For the year, sales of
platelet collection disposables remained stable in the Company's key markets
(Japan and Europe), and significant I.V. solutions sales reported in FY05 did
not repeat in FY06.
Red cell disposables revenue was $11 million for the quarter, up 32.2% over
Q4:05 and $38 million for the year, up 31.9% from FY05. Quarterly revenue growth
came from the U.S. where sales increased 39.2% over FY05. For the year, unit
growth and a favorable shift in product mix were key drivers of U.S. red cell
disposables revenue.
FY07 GUIDANCE
Haemonetics also provided FY07 guidance. For guidance purposes, pro forma
FY07 results will be measured against pro forma FY06 results that exclude the
arbitration award. FY07 pro forma guidance is:
* revenue growth of 10-14%
* gross margins in the range of 52%
* operating income growing 18-25%
* operating margins improving to approximately 19%
* earnings per share in the range of $2.15-$2.25
This FY07 guidance is based on anticipated pro forma results that exclude
the impact from stock compensation expense, expected to be approximately $0.25
per share and a restructuring charge (pre-tax) of $3-$4 million, with costs
spread throughout the year. Therefore, FY07 GAAP earnings per share are expected
to be in the range of $1.81 to $1.93.
In FY07, the Company expects to generate $35-$40 million of operating cash
flow, Haemonetics' internal cash flow measurement.
Key revenue drivers include: plasma, growing by 17-19%; red cells, growing
by 25-30%; and, the OrthoPAT system, growing by 70-90%. The Company said it
expects gross margins to remain level with FY06 reflecting a product mix shift
as its plasma business ramps up.
Brad Nutter, Haemonetics' President and CEO, said "We operate to two
strategies: leveraging the core business to improve profitability and expanding
the business by leveraging our core competencies. Our discipline in executing to
these strategies over the last three years allowed us to reposition the business
for a transformation into a company that grows double digits in both revenue and
operating income in FY07."
Haemonetics has posted potential income scenarios reflecting the high and
low ranges of guidance on its website at http://www.haemonetics.com.
CONFERENCE CALL AND INVESTOR ROUNDTABLE
Haemonetics will hold a conference call on Thursday, May 4th at 8:00 am
eastern and an Investor Roundtable on May 4th at 10:00 am eastern to review in
more detail the financial and operational performance of the Company. Interested
parties can participate in the conference call by dialing (877) 241-6895 (US
only) or (973) 582-2822 with conference ID 7268456. The call will be replayed
through May 19th at (877) 519-4471 (US only) or (973) 341-3080 using PIN
7268456. Interested parties can participate in the Investor Roundtable in person
at the Sheraton Boston Hotel or via webcast at
http://www.shareholder.com/hae/medialist.cfm.
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.
Haemonetics has presented supplemental non-GAAP financial results excluding
the arbitration award as part of this release. Haemonetics believes that these
non-GAAP results are useful to investors because it allows for an evaluation of
the Company with a focus on the results of our core business.
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 for the Fourth Quarter
%
Inc/(Dec)
vs Prior
04/01/06 04/02/05 Year
---------- ---------- ----------
NET REVENUES $ 110,395 $ 99,975 10.4%
Gross profit 58,577 53,446 9.6
R&D 5,229 5,103 2.5
S,G&A 29,510 32,673 (9.7)
Arbitration Award Income 0 0
Operating expenses 34,739 37,776 (8.0)
Operating income 23,838 15,670 52.1
Interest expense (419) (511) (18.0)
Interest income 1,692 770 119.7
Other income/(expense), net 731 165 343.0
Income before taxes 25,842 16,094 60.6
Tax expense 8,684 6,156 41.1
NET INCOME $ 17,158 $ 9,938 72.7
Net income per common share
assuming dilution $ 0.62 $ 0.37 67.2%
Weighted average number of shares
Basic 26,695 26,051
Diluted 27,768 26,888
Inc/(Dec)
vs
prior year
profit
margin %
----------
Profit Margins:
Gross profit 53.1% 53.5% (0.4)
R&D 4.7% 5.1%
S,G&A 26.7% 32.7%
Operating income 21.6% 15.7% 5.9
Income before taxes 23.4% 16.1% 7.3
Net income 15.5% 9.9%
Consolidated Statements of Income for FYE06
%
Inc/(Dec)
vs Prior
04/01/06 04/02/05 Year
---------- ---------- ----------
NET REVENUES $ 419,733 $ 383,598 9.4%
Gross profit 220,535 197,876 11.5
R&D 26,516 19,994 32.6
S,G&A 121,351 118,039 2.8
Arbitration Award Income(1) (26,350) 0
Operating expenses 121,517 138,033 (12.0)
Operating income 99,018 59,843 65.5
Interest expense (1,917) (2,361) (18.8)
Interest income 6,963 2,233 211.8
Other income/(expense), net 2,818 126 2,136.5
Income before taxes 106,882 59,841 78.6
Tax expense 37,806 20,202 87.1
NET INCOME $ 69,076 $ 39,639 74.3
Net income per common share
assuming dilution $ 2.51 $ 1.52 65.8%
Weighted average number of shares
Basic 26,478 25,523
Diluted 27,474 26,145
Inc/(Dec)
vs prior
year
profit
margin %
----------
Profit Margins:
Gross profit 52.5% 51.6% 0.9
R&D 6.3% 5.2%
S,G&A 28.9% 30.8%
Operating income 23.6% 15.6% 8.0
Income before taxes 25.5% 15.6% 9.9
Net income 16.5% 10.3%
Revenue Analysis
-----------------------------------------------------------------------------
Fourth quarter Twelve Months Ended
------------------------------------ ------------------------------------
% Inc/ % Inc/
04/01/06 04/02/05 (Dec) 04/01/06 04/02/05 (Dec)
---------- ---------- ---------- ---------- ---------- ----------
Revenues by Geography
United States $ 45,449 $ 35,258 28.9% $ 161,679 $ 131,632 22.8%
International 64,946 64,717 0.4 258,054 251,966 2.4
Net Revenues $ 110,395 $ 99,975 10.4 $ 419,733 $ 383,598 9.4
Disposable Revenues by Product Family
Donor:
Plasma $ 28,398 $ 23,229 22.3% $ 109,100 $ 97,250 12.2%
Blood Bank 33,936 32,289 5.1 132,407 130,427 1.5
Red Cell 11,168 8,451 32.2 37,830 28,676 31.9
$ 73,502 $ 63,969 14.9 $ 279,337 $ 256,353 9.0
Patient:
Surgical $ 22,406 $ 22,823 (1.8) $ 87,454 $ 86,377 1.2
Subtotal $ 95,908 $ 86,792 10.5 $ 366,791 $ 342,730 7.0
Equipment $ 7,212 $ 6,728 7.2 $ 25,759 $ 20,695 24.5
Misc & Service 7,275 6,455 12.7 27,183 20,173 34.7
Net Revenues $ 110,395 $ 99,975 10.4 $ 419,733 $ 383,598 9.4
Consolidated Balance Sheets
Period ending
-----------------------
04/01/06 04/02/05
---------- ----------
Assets
Cash & cash equivalents $ 250,667 $ 185,815
Short-term investments -- --
Accounts receivable, net 86,901 80,719
Inventories, net 54,571 53,088
Other current assets 26,265 23,989
Total current assets 418,404 343,611
Net PP&E 75,266 69,337
Other assets 52,873 54,809
Total assets $ 546,543 $ 467,757
Period ending
-----------------------
04/01/06 04/02/05
---------- ----------
Liabilities & Stockholders' Equity
S/T debt & current maturities $ 26,176 $ 26,612
Other current liabilities 61,940 61,310
Total current liabilities 88,116 87,922
Long-term debt 12,977 19,231
Other long-term liabilities 3,800 5,469
Stockholders' equity 441,650 355,135
Total liabilities & equity $ 546,543 $ 467,757
Consolidated Statements of Income Adjusted for the Effect of the
Arbitration Award
Fourth Quarter FYE06
04/01/06 04/02/05
------------------------------------- ----------
% Inc/
Effect Adjusted (Dec)
of for the vs
As Award Effect of As Prior
Reported (1,2) Award Reported Year
---------- ---------- ---------- ---------- ----------
NET REVENUES $ 110,395 $ 0 $ 110,395 $ 99,975 10.4%
Gross profit 58,577 0 58,577 53,446 9.6
R&D 5,229 0 5,229 5,103 2.5
S,G&A 29,510 0 29,510 32,673 (9.7)
Arbitration Award Income 0 0 0 0
Operating expenses 34,739 0 34,739 37,776 (8.0)
Operating income 23,838 0 23,838 15,670 52.1
Interest expense (419) 0 (419) (511) (18.0)
Interest income 1,692 0 1,692 770 119.7
Other income/(expense), net 731 0 731 165 343.0
Income before taxes 25,842 0 25,842 16,094 60.6
Tax expense 8,684 (178) 8,862 6,156 44.0
NET INCOME $ 17,158 $ 178 $ 16,980 $ 9,938 70.9
Net income per common share
assuming dilution $ 0.62 $ 0.01 $ 0.61 $ 0.37 64.9%
Weighted average number of
shares
Basic 26,695 26,695 26,695 26,051
Diluted 27,768 27,768 27,768 26,888
Inc/(Dec)
vs
prior
year
profit
margin
%
----------
Profit Margins:
Gross profit 53.1% 53.1% 53.5% (0.4)
R&D 4.7% 4.7% 5.1%
S,G&A 26.7% 26.7% 32.7%
Operating income 21.6% 21.6% 15.7% 5.9
Income before taxes 23.4% 23.4% 16.1% 7.3
Net income 15.5% 15.4% 9.9%
Consolidated Statements of Income Adjusted for the Effect of the
Arbitration Award
FYE06
04/01/06 04/02/05
------------------------------------- ----------
%
Inc/
Effect Adjusted (Dec)
of for the vs
As Award Effect of As Prior
Reported (1,3) Award Reported Year
---------- ---------- ---------- ---------- ----------
NET REVENUES $ 419,733 $ 0 $ 419,733 $ 383,598 9.4%
Gross profit 220,535 0 220,535 197,876 11.5
R&D 26,516 0 26,516 19,994 32.6
S,G&A 121,351 0 121,351 118,039 2.8
Arbitration Award Income (26,350) (26,350) 0 0
Operating expenses 121,517 (26,350) 147,867 138,033 7.1
Operating income 99,018 26,350 72,668 59,843 21.4
Interest expense (1,917) 0 (1,917) (2,361) (18.8)
Interest income 6,963 1,333 5,630 2,233 152.1
Other income/(expense),
net 2,818 0 2,818 126 2,136.5
Income before taxes 106,882 27,683 79,199 59,841 32.3
Tax expense 37,806 10,717 27,089 20,202 34.1
NET INCOME $ 69,076 $ 16,966 $ 52,110 $ 39,639 31.5
Net income per common
share assuming dilution $ 2.51 $ 0.62 $ 1.90 $ 1.52 25.0%
Weighted average number
of shares
Basic 26,478 26,478 26,478 25,523
Diluted 27,474 27,474 27,474 26,145
Inc/(Dec)
vs
prior
year
profit
margin
%
----------
Profit Margins:
Gross profit 52.5% 52.5% 51.6% 0.9
R&D 6.3% 6.3% 5.2%
S,G&A 28.9% 28.9% 30.8%
Operating income 23.6% 17.3% 15.6% 1.7
Income before taxes 25.5% 18.9% 15.6% 3.3
Net income 16.5% 12.4% 10.3%
(1) Haemonetics issued its Q3FY06 earnings press release on January 31, 2006.
At that time, $26.4 million in income from an arbitration award was
classified as Other Income in the financial summary attached to the
earnings release. In our quarterly report on Form 10-Q filed with the
Securities and Exchange Commission on February 9, 2006, the arbitration
award income was classified within Operating Income. The financial
information above represents Haemonetics' Q3FY06 results with the award
income reclassified to Operating Income.
(2) Represents a reduction in the estimated income taxes relating to the
arbitration award received on October 13, 2005 from Baxter including
damages, reimbursement of attorneys' fees and costs, and statutory interest
since the time of the arbitration panel's initial award on May 20, 2005
which was recorded in our third quarter ending December 31, 2005.
(3) Represents the effect of the arbitration award received on October 13, 2005
from Baxter including damages, reimbursement of attorneys' fees and costs,
and statutory interest since the time of the arbitration panel's initial
award on May 20, 2005.
SOURCE Haemonetics Corporation
-0- 05/03/2006
/CONTACT: Julie Fallon of Haemonetics Corporation, +1-781-356-9517,
fallon@haemonetics.com/
/First Call Analyst: /
/FCMN Contact: /
/Web site: http://www.haemonetics.com/
(HAE)