HAE - Earnings call transcript Q4 2020 | Haemonetics Corporation

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Operator

Good day, ladies and gentlemen, and welcome to the Haemonetics Fourth Quarter and Fiscal Year 2020 Conference Call and Webcast. At this time, all participants lines are in a listen-only mode. After the speakers’ presentation, there will be question-and-answer session. [Operator Instructions] Please be advised that today's conference may be recorded. [Operator Instructions]

to conference like speaker to now Ms. today, would hand over the your I Guyette. Olga begin. may you Ma'am,

Olga Guyette

our on morning, information the fiscal analytical Thank you. XXXX with quarter everyone. the year Simon, fourth webcast. Good this morning, joined Relations our XXXX quarter for our CFO. joining fourth I'm Burke, Investor and Haemonetics' CEO; us and fiscal by year including This today results conference Bill and we'll website, to Thank call refer Chris you that call. we posted and to our tables for

Additionally, summary as we flows financial provided reconciliations a of well complete P&L, non-GAAP balance as to results. statement sheet, of GAAP our cash

otherwise, decisions, business and we our from exclude rates revenue solutions impacts growth are strategic plasma product liquid basis Before noted discussed the and assets and started, currency, get of slide all on unless divestitures. today an organic

in XXXX As help for non-GAAP details measures Please income release fiscal items. that to throughout this periods items, we'll morning's reconciliation call note charges Please and our results. these this to Haemonetics performance. earnings to the the year refer comparisons and same past, a to with business certain of including exclude measures understand and financial investors GAAP refer excluded ongoing

and update filings statements. our not the COVID-XX and risks and do today uncertainties, the other include forward-looking differ these remarks release SEC. our results in to the to our subject from safe Haemonetics actual from any statement pandemic referenced with obligation anticipated impacts forward-looking materially undertake earnings on the including harbor Our and in factors in results. We forward-looking our statements are may results potential these cautions statements that the

it And over turn to to now I'd Chris. like

Chris Simon

morning. good and you, Thank

supply our to human chain, those around worldwide, our want We support the technical world customers. of customer this they've tragedy. by and Our know a of teams have foremost, virus, to coronavirus front-lines, service on thanking outbreak, thoughts mind. support by pandemic I manufacturing, the which begin challenge risen battling top is, our first is to X,XXX are affected with the the and who employees especially tirelessly worked the

our response guide to the objectives broad Three crisis.

is priority continuity health first business and and safety. Our employee

centers All majority our and protocols, have are levels teams continue are of drive as products safety commitments. and and with enhanced inventory distribution shipped high operational and committed plants of we open our we exceptions, supply few With on time, to resilience. service vast the our to meet to be our a ample chain

priority Our second is preserving cash.

be and are protracted expense We recovery. a contingencies could what controls pragmatic decisions making for around

balance important Our us allows fund strong sheet to programs.

Our third priority is with a through-cycle driving growth mindset.

We capabilities for are critical new building opportunities. looking and

The welcomed expertise. Chief Coyle has to month, equipped Mike our Officer medtech teams Lingamneni innovation executive to agenda, to the with program challenges operational turnaround we pandemic. and progress the remains essential proven extensive manufacturing overcome Last excellence of Technology as to our global and our we added supply a our Board, and lead Anila to-date

to manage In are are center time continuity. We day-to-day objectives integrated an and targeted we These created make the on focused horizons. immediate across interventions. guide planning three nerve situation,

supply supplier and supply provide with logistics and steps taken production, increased distribution chain We've our care continuity and limiting We optimizing travel and for all employee health and exposure on engagement, service teams. to manufacturing remote services safety emphasis work are customers. for to planning prioritizing inventory restrictions, by field and with ensure

donations. us we company the workers, lockdown. and during responders to health crisis, being in head-on. and response first customers use fight distance used are geography-specific to technology channels our also The launched Our families shrink through is and for training BUs the supporting digital implementation The leveraging philanthropic and segment and is virus have to initiatives the between frontline

parts and segments product but to and Our are markets could America protracted Asia shifting and resurgences disrupted With recovery lockdowns. and Europe reopening, with of in be North recovery.

procedures resilient. our there evolves. indicators the planning as milestones market and may collections will and the products identify for in highly players. But is normal, are product In to fluctuate Demand be new segments We strong situation scenario to opportunity for and our geographies.

Our value enduring are thrive. will enable us drivers to and

change. from exploring market are health risk reforms and We potential restructuring understand society customers, and care how opportunities to and our will

Our results, adapt to position market complete robust drive product our us transformational portfolio and turnaround conditions, accelerate the strong growth. changing financial to and health

growth COVID-XX revenue up year. effect Adjusted per and our quarter organic for reported XX% limited fourth we on to for quarter the share fiscal and X.X% earnings fiscal in in had up the of a XXXX. performance, Today, were the months X.X% XX% Europe. our The of have and taken we including that XXXX elsewhere, fiscal China U.S. the parts the and and Asia positive past improve trajectory. weeks steps the have years evidence in to two strengthened to over is four Haemonetics finish two XX

increased North fiscal XX.X% final expectation was the high our and to in quarter sales COVID-XX the and growth quarter Turning of XXXX, XX% Europe. weeks XX.X% units. guidance. to in line our roughly XXXX favorable in XX.X% disposable America revenue in grew on America XX% single-digit now and volume in two of limited our in plasma to North accounts XX.X% the grew for and the quarter midpoint half. in the impact of business price. in Collection volume XX% second and fiscal with the of revenue Plasma

sales supply revenue business. impacted excluded sources results solution of decision by transitioning exit the and to alternative from liquids customers to organic is were our given Our

was quarter, quarters. linked due flat the previous contract and growth revenue in helped in amendments basis points next our but XXX full conversions year Software rate to by

The XXX,XXX seek proposition and as YES yield, proven satisfaction leaders efficiency, value yielded increased plasma relevant center is plasma. safety. million donor safety have than and enhanced collections of productivity ever of more and incremental XX Nearly customers

products, to Our are we growth collections confident plasma-derived want to the to for global with pace X% demand long-term customers projected increase XX% in keep and rate.

and concerns, XX% were home our border combined to shutdowns to reduced less collections due college the April, travel year. social and with of closing public XX% capacity availability in donor collection safety lockdown below impeded of and collections. transportation COVID-XX Stay distancing campuses, requirements, at donor prior the During restricted orders

responding. are customers Our

We in will characterized period. including contributed replenish historically Post to impacted now what to ongoing new in we normal will pressures results, greater be have by plasma donor availability. factors a able are forward our expect improvement and being their April that inventories. be customers recovery, The that recessionary protracted different, accelerate will help be to recovery our the the collections recovery look depleted to we

critical fiscal reallocation and XX%. declines Moving to in mostly due growth of to to sales Hospital, revenue sequential felt in throughout restricted is the beginning in X.X% XXXX, our guidance needs range quarter the year, impacted early strong outbreak was fourth in in not and in procedures, as quarter quarter our pronounced. the hospitals. effects funds where performance XX% by teams impact within quarter in China declined revenue to The The the of the was later below X.X% in in therefore, the COVID-XX occurred ICU the for and by markets impact February. After up XX% of access was approximately COVID-XX-related western

COVID-XX sales XX.X% Hemostasis for fiscal in grew driven for of was execution impact viscoelastic below impacts. expectations North XXXX, are from range XX% year. management estimated product we hemostasis and biggest our in Excluding and by the line testing. the to America, due our guidance very overall the the market that growth launches for in management new quarter delivered strong X.X% and revenue up by of strong the hospital XX% launches encouraged the and contribution with our in quarter, COVID-XX, was the demand

to business different this in in hospital invest drive to continue expanded outpatient will settings. and We use

April, any select and acquired we market believe other and technology available has testing. and European It viscoelastic handling our the reduce Asia markets, and markets than proprietary that leadership serve. tip currently our In eliminates to lab-based ClotPro more reagent in potential is site-of-care assays for error. and device strengthen on we ClotPro offering their will a Pacific we to enicor active ClotPro strengthen technology across the in

in Transfusion growth were with demonstrated for and Cell quarter salvage mid-teens and management the and strong both the the in the performance in strong growth impact transfusion on management up products X.X% we the in both X.X% to COVID quarter Relative for China. year SafeTrace these year. from offer record America. don't and down a bookings as currently BloodTrack other lines, Tx, product quarter smaller was our including North

the business, in for compounded competitive ongoing to be continue and to enthusiasm continued China. We for encouraged fiscal COVID elective an to capital and cycle opportunity single-digit challenged be and The procedures in mostly impact leading The for business in by the sales declines to COVID-XX-related capital unfavorable reduced challenges decline XXXX. the due year. quarter, Cell software. by market digits customer our double the salvage was down throughout next-generation

a the in to and across to product make we to to procedure Cell geographies, Regarding believe pattern. lines, as extrapolate partially Saver of recovery range offset disposable TEG the track effect procedures. XX% whereas have it capital a which COVID-XX procedures. three diagnostic the disposables, to both of care was XX% decline. of elective more figures is There one declines critical declines, difficult revenue Saver the of result different utilization difference subject and TEG a April, been any will procedure these hospital by shortfalls between volume in Cell saw We

recovery the for have capital Saver Cell for cycles, subject in in but addition, equipment some we is West, we In demand to seeing and purchasing seen are early Asia. TEG

a for management do presence. Transfusion plans business process and challenges, more long-term to stream, but engine sales the these difficult Haemonetics we hospitals. is and revenue temporary view without to consistent a expand have growth TEG access robust more has as to Despite the our installation the

as is levels. recovery. and to return continue believe address our strong of will to nonelective as market elective impact through COVID-XX coupled We with But hospitals procedures hospital normalize the pre-COVID we procedures, work backlog the for of portfolio end fluid will be inherently the

hospital We the coagulopathy complications. BloodTrack are are in software sites and safely. COVID-XX assisting thrombotic researchers deployed is remote associated ensure its distributed investigation products several blood of to in

used plasma U.S., blood inventory. to inventory SafeTrace manage in to as its an addition convalescent item While is to use in core manage bank the Tx

fiscal down to quarter negative XX% and X% X%. in Blood range above XXXX, our was X% of in center guidance the

highly rapid blood a strong minimal. was presence results inventories have the initial a where in replenish of spike and their areas, We fourth Europe, handful to a we on demand quarter and experienced outbreak our collectors the product from safety coronavirus net blood as After in sought in disruption impacted stocks. Asia impact

competitive X% was and unfavorable to last down in out revenue primarily order the quarter, due timing losses we called Apheresis quarter.

dose was revenue in double The quarter order our apheresis in We maintained technological rates. ongoing discontinued Japan of partially strong expect revenue collections. timing timing sales strength as shift due issues XXXX to in in among growth XXXX. our device, headwind unfavorable platelet experienced weaknesses distributors. fiscal Whole and due includes products customer and declines to result offset to caused X% loss offset of share Japan revenue million was in competitor continuous some with a order down we blood towards this blood by and $XX previously by customer contracts partially plasma another the flat Fiscal business quarter as increased XXXX utilization fiscal transition. in decline XX% on a

fiscal the with XX revenue to customers In primarily more we collect and treat COVID-XX. them Software quarter help countries engaging plasma pandemic, customer convalescent blood was are contracts. discontinued to to than in due response previously down to double the digits center in XX,

recovered and us, to a is donors the plus PCS this pool these opportunity MCS as eligibility, commercial tight apheresis. significant we standard donor for limited will a unlikely continue efforts prioritize for be our and plasma given are devices While of for to window the

by and greater supply year caused in a As experience products. the impact revenue could demand the overall imbalances blood we on for progresses, blood center

Blood for be However, the to blood and we volume. on continue procedure price rates. normalize expect utilization challenged centers to will demand will

of rationalization program and successes our aspiration operational income excellence However, our support our this operating innovation, SKU business. of customer-focused early stable contribution from the

over to turn I'll now Bill. the call

Bill Burke

an discussed prior sheet, has with priorities XXX start Chris, XXXX, are good XXXX compared focus points, discussing I so and our fiscal strength already revenue, of we with was quarter begin balance capital results. this basis actions of the improvement financial fiscal taking. fourth XX.X% XX.X% will in Thanks, respectively, gross the and XXX morning, the Chris adjusted our margin, Then quarter briefly year. allocation I'll and fourth and will on everyone. morning by which and I in the our

were $X drivers product complexity main prior months Consistent the the Adjusted XXXX, expansion reduction productivity savings nine with $XX.X pricing. and were with operating first of of the quarter million fiscal compared decrease of a mix operational in the fourth the and million, initiative or expenses excellence from the year. this program, X%

$XXX.X the compared essentially of percentage flat expenses year when were were XX with decrease revenue basis as Adjusted a million, a of prior XX.X%, and points. XXXX operating for fiscal

had costs TEG. marketing, We clinical lower offset of development by additional continue research XXXX and investments business. some our partially and completed fiscal lower and to realize we productivity These savings for trials as costs our the hospital for in in mainly sales were

year. line XX.X% in and XXX for and same Fourth million an the points, the XX% And of or prior compared quarter compared the million $XXX increase were adjusted XXXX operating income fiscal basis fiscal periods in year. fourth XX% our fiscal increased of of XXXX XX%. the respectively, quarter Adjusted expansion or XXXX, margins XXX and million, in for million for operating with $XX an $X.X $XX.X was guidance with with

the XXXX, XXXX. the period benefit XX% fourth with of and exercises, tax adjusted and share lower half of of and The primarily XX% Our XXXX year. higher in the adjusted quarter was due fiscal fiscal compared XX% was tax the first in in XX% fiscal vestings rate in the fiscal income to in rate same option

share $X.XX or year, per increase the diluted XX%. $X.XX with in an prior Our adjusted compared was fourth quarter of earnings $X.XX

savings the the employees revenue and hospital financial of operating pandemic other fourth our protect limited actions of the timing Lower employees those and facilities and direct offset expenses. and we distribution to cost customer-facing a manufacturing and during our travel experienced partially the Given were COVID-XX progression its in took we impact. in by quarter,

the by XX, in diluted COVID-XX in operating per per $X.XX and that earnings basis fourth diluted point of basis point net on the of our our and share XX%. XXXX and fiscal including Adjusted fiscal per approximately earnings $X.XX on share our a compared impact adjusted within share, $X.XX was with When range or adjusted was estimate earnings XX adjusted impact quarter respectively. $X.XX gross $X.XX. We increased margins, to our was diluted guidance XXX

on, move successfully our out I been point has I that want Reduction to Before Initiative Complexity completed.

important our a margins was exclusively, forward but culture. focused an performance-driven productivity going of will As turnaround program continue expansion Any this meaningfully executing step a to be by cost and goods contributed additional our our sold. program, the created has be reminder, more on which not in to operational on savings agile, of will excellence achieved primarily, and

well XXXX $XXX cash million. related capacity restructuring flow compared was lower before year, expenditures is a the million in by flow fiscal working in range our cash guidance costs fiscal Free and free XXXX within of offset in turnaround XXXX. of plasma in $XXX use higher with $XX the million to in capital of expansion XXXX, fiscal fiscal million capital $XXX a to The prior result partially higher

and which NexSys and fiscal to The in working stock. XXXX million was of an our in capital devices in was a disposable inventory, primarily safety increase outflow $XX continued manufacturing build cash related included

hand fiscal on million. and We cash year-end at our have a sheet $XXX balance strong was

remaining of the split term million are borrowings line the million. majority $XXX between mature Total million, facility an fiscal the of facility end million fiscal of revolving end under the the balance of the and debt quarter $XX under outstanding our have not first credit credit that of towards $XXX term. our principal does The of XXXX. weighted of until was XXXX existing $XXX payments We loan at

revolving which on we have bolstered April, $XXX additional on this hand $XXX In remaining credit drew credit line. our nearly our we additional on drawdown, million. down $XXX an to the million revolving an cash million After line, existing

ratio leverage drawdown. even after EBITDA remains low Our the

clear are remain priorities unchanged. allocation capital and Our

business to with our to expand and opportunistic capabilities innovation and remain bias invest and repurchases. that with organic will a continue towards in We share commercial will growth our M&A will continue

well priority address to the our pandemic. of to arise on shareholders While this are capital of strategy equipped important our course in we will levels fiscal continue commitment may our will that be organization across allocation an of over our focused the to appropriate providing challenges be our ensuring element funding any and XXXX,

remaining we current we this repurchasing to our will a first of up not foresee on be repurchase In $XXX million. and in do total we our now to $XXX on to adequate the authorization cash half million time, of share $XXX million ensure shares repurchased have we shares, XXXX, continue fiscal At of XXXX, hand. fiscal and in disciplined our of approach

Over we shares, the years, total X% million which outstanding. of last three have nearly repurchased is X.X about our shares

our We with financial are fiscal and our health pleased results. XXXX

including our continued and guidance turnaround flow impacts our XXXX income fiscal today. on by XXXX comments not reaffirming free quadrupling not adjusted the caused the and doubling are operating Also, potential XXXX cash and its uncertainty COVID-XX, on duration XXXX previous providing costs. our business, we to our of fiscal fiscal due before we are restructuring aspiration However, fiscal

additional to provide year. updates intend as to continue our guidance we issue will needed, later We and the XXXX fiscal in

number focused and on implemented flow cash are help We allocate have preserving of and capital. on to cash our protect expenses actions a

on operating reviewing and of objectives inventory expenses committed Other agenda. remain have costs. to Some spending include changed are investment We some actions actions our restricting management innovation our projects reducing and focused our thesis items. capital and include nonessential these travel, related compensation-related to the and growth and not delaying associated

to remains of we a environment prudently the different are pandemic. for planning current the scenarios uncertain, While variety related financial

speed business or action and deeply additional of are recovery We the modeling needed. scenario initiated, we that the impacts course implement in based are the engaged measures evaluates those the to on on of different prepared change if

from emerge the as and thoughtful disciplined stronger liquidity that financial us to will balance capital strong our approach confident current allocation with coupled company. and priorities to and a decisions are We enable our sheet, environment

conclude would with summary, some to like closing thoughts. In I

we track XXXX our to fiscal The was turnaround this are and and year. fourth on evidence quarter complete quarter COVID-XX is strategy results are fourth impact of the strong working, minimal. that Our

it timing However, the uncertain first and be recovery. will meaningful, to to the quarter of difficult impact the is but nature quantify

has safety, response a through-cycle been cash sector mindset. pandemic Our continuity, by employee and preservation and business guided a

scenario be later issue guidance we recovery this a are to what will believe planning protracted We and intend for year.

We to to to to results, growth. positioned are and drive well adapt accelerate turnaround to market the complete conditions changing

us enduring normal post-recovery. new well Our momentum are position value a and with drivers for renewed

the And for operator like call turn to Q&A. back now to I'd the

Operator

our And Instructions] Morgan David Stanley. comes [Operator from first from question Lewis

Your line is open.

David Lewis

question. Thanks for Good the taking morning.

for few this a team. Just morning, me

thing next first sort two sound April. of the talking you kind bounced Most some couple is, quarter companies the over the see to quarters, like It are kind So how of medical you just about of off in then of trough. I And year. normalcy, impact around I the commentary something the relative calendar type I had a the does follow-ups. of return could appreciate of react classic really, the around a of to normalcy. recovery? sort We that fourth wondered would device

Chris Simon

liberty this take ample step – The markets is, we us, and back toggling happen. David, is described; predicting, et three little episodic need the of some looks with and two of a scenarios, it's question. factors reality possible Chris. as a a in just get cetera. second, in we macro Thanks very you kind The We've opening the set forth fall which testing, a and first to experts like things closing between the different for your are in lot what actually resurgence for which the question. bit of of as reality

segment at much matters more And matters, and but geographic for the us. macro level the it

XX% the I where like What making the feel is our the And associated blood have plasma we're in against do. the that's Be XX% fully they collection in into need environment business. talk safe more feel we of tied about now. that. to million of to a million first collections. deliver or with all So their $XXX elks to comfortable of that we many We book what that regards, recovery of to business is three point, can nuance things is first But rapidly those the and moving we donors center it's fully donation. our $XXX that revenue

need. of and business medical procedures. and our health hospital our some to Cardiovascular through and transfusion tied worldwide. we, big is care systems XX% get drivers. disproportionately, people nonelective management, TEG, the remaining to to that cell go necessary semblance And tied the return normalcy, they are trauma And salvage The care

Our associated recover markets will that. rapidly with

bit engine it healthy X/X substantially U.S. the The is a third do, of going an the our it's to but we what is, And point, growth to plasma of and XXX% growth. accelerate in but disproportionately we a It's of overlay, important TEG. is forward, returning us U.S. particularly need actually recovery reality

I choose in on can And factors those we're the we then that going betting but the yes, three accordingly. think person, first between work assumption scenario we're So to us. two drive the scenarios you outlined, and adjust that

David Lewis

me, two just and for I'll more ask Okay. them here. And upfront

how going driver just Chris, be is that want COVID touch could do do of serum And plasma customers? donations, really to curious, you frankly, patients to your you So a you think going not material if I one, just COVID-XX impact terms focus just that's seropositive or, to think in material? on, all at

second, is, why environment case strategically thoughts. important the make a good some like NexSys the more curious to COVID kind case customers' And of the large is for desire And amongst NexSys? on environment impact this can con two pro and those does a for just adopt adoption a customers, I how actually of,

Bill, for And thanks CRI. the then update on for the

on COVID Just plan could of the wondering that update impact on how plan are XXXX? over OEP and how you you and the here plan can if us where – that balance

Chris Simon

to help plays trial and potential some response to just immune the Really, the a COVID-XX. tamp to that plasma you the and roles spike work severe a interest response IVIG, three as over particularly down just of see. in ongoing some to straight David. in Thanks, a application is – There cases treatment of of role

piece. one that's So

I is has press, lot a a think which piece, which of second there's plasma. the use gotten convalescent of

help of blood We've as philanthropic select prepared made that number initially typically intent very initiative. our to center We we done more and as that's hospitals. clear us, with a whenever in our our remarks, noted wherever view For can. and we a been

an As we in world, active talked one plasma. of it, convalescent around XX engagement forms the about we're different countries

I third the they a which take think notion the globulin is grounded is hyperimmune the scientifically probably convalescent most plasma. piece, of whereby

through the a dosing most scientific backing essentially part early administer behind that will ways that create be then what to there has work it. We're that fall happy that's to given targeted press impacts, in mid-summer, could we head-on. they participate we're with that. in donor the fight all human more used more And restrictions be a the be – see is and that a probably likely. it. the material is and that's early three. virus the one as being probably And the the technology drug antibodies but our We don't releases of around around think, That as It's delighted plasma of the different to one qualifies

We're in In our We're meaningful talking the liter. cycle nothing terms of of reduction at meaningful to your now question about the in satisfaction per NexSys in million of collections, outstanding. environment about and their centers. is improvement donor increase the and time, throughput where short talking desperately an improvement about NexSys, compliance collectors yields, XX proposition need cost in value

stronger converted proposition relative that We base is than think customer ever. in the and see We value their the performance.

is conversions this even about it. Obviously, in environment more we're making excited challenging. So

However, and to a do we're our manner. so ability good safe we about effective it, doing feel and in

intend just continue value stronger. we with to think no, push NexSys. but got to proposition I And our So ahead –

Bill Burke

Bill. it's David,

savings on programs. other your two question Just

complexity was First, reduction. Yes, on that program completed.

much actions the in talked this haven't fiscal We already. because it most year undertaken undertaken were about of

savings to. through came and just delivered committed planned, we as savings our the million-ish So that we of $XX

related forward And still are with as to planned. In savings terms we're the OEP these to we, still, all program, committed program. meeting the planned of that initiatives driving

If prepared you actions remember, expenses. against I that that we're overall. some is in remarks taking a did my four-year program say

sure savings not expenses we're going taking on actions drive that making forward. are We these that would

Okay.

of through savings savings or was million will give – in on exactly issue We of P&L – of come the dropping had plan some bottom we are to for the when that. line. point, $XX debt guidance, the majority And both with P&L through coming our program gross In terms the savings an the to said communicating the or are planned on at update net we and an the FYXXXX. what through it

David Lewis

much. Great. Thanks so

Chris Simon

Thanks, David.

Operator

you. Thank

Our comes Raymond Keusch Larry from question next from James.

Your open. line is

Larry Keusch

everyone. morning, Good you. Thank

Just two me. for

First, sounds business, to their Haemonetics there. as think to there do to Chris, you you volumes? I But ready in an by levels organization as in actual that Because their noted. response have be plasma extremely know and those increase the be the done what to of are and what supportive collection clearly try obviously, plans collections collectors is be the needs important putting to will it like inventory are dropping. collections

which respond, translates So guys? how they think back you volumes do into ultimately going up you for

Chris Simon

Yes. Thanks, Larry, for the question.

projection meet volume the of need, need and very feel our collection XX% as good X% to I demand. think underway. ongoing to then their response is about They we well already a

don't up three guys dealing here to period, are going that and forward. be as So you that are we anything they they collect made with. it, described this needs there trough in Really, factors

reduced less that the macro the orders, and being the the themselves across creates positive travel public not stay-at-home see is how – collection those centers, capacity. and the The availability border, school, of We in all real centers underlying for on college flow. that's a perceived movement manage of and they the which and transportation. then just is their campuses, environment, students restricted those, in There because

or the appear of it the All drives reopening there impediment, effect. not? we this down cleaning now point in in process big at at a capacity least. psychological shut so. are Some in centers Do the any protocols. lose The U.S., April. but It's It not doesn't just

appropriately driven of in real. comply beds we distancing donation propensity. that donor erecting recessionary And as those donor have remarks, deep out we have Historically, social too what facing with case here centers Social to things partitions, cetera. combination with the of right? expect et and a economic are All or actual that's that are the We drives reconfigure with safety said requirements, The our beds. We're is distancing. period. coupled be quite motivation, well. which we taken will sense as itself, psychology And the associated prepared a

Larry Keusch

Okay.

punchline variety start So see were. there starting relative hit direction all is And that right sounds we the to like, I where of we're you the to move in of that the guess made again, trough. hopefully, sort probably those comments to

Chris Simon

Yes. And our to of them stand we so. as bias, that have and customers do help same all ready

Larry Keusch

providing and referenced providing certainly guidance Recognizing you And guys happen guidance? for Bill. in for to What that one to needs great. that for to just Okay, for here. be a that out get are feel not you fiscal to clearly stated curious later You you to actually the the able happen variety has play expect provide to of this you may in then at year. that to confidence point, guidance? But scenarios just what you XXXX comfortable

Bill Burke

Well, think each what we talked I in of it's those that about, business Larry, just Chris units have.

that We some comfortable time. with right? revenue certain or to already, seeing we things milestones of those key that associated but get eye starts we're need an to that to need see change, have each we're trend guideposts that over and on, the keeping we And or we're seeing milestones

world, United economy the again would that that has opens spoken Chris also, macroeconomic particular. guidance sets happens the too. and up COVID-XX, whole impact the some some factors, greater the in the States, back If and right? of about outbreak Then Now back with

So want more overall, about When looking predictable for revenue doing this is right? up at predictability thing most you're to important. a blow don't again. forecast trend, We guide have and me, it's

be point. that to provide pretty the some comfortable numbers So we at we want with

Larry Keusch

Okay. very much. you Very good. Thank

Operator

you. Thank

Petrone Anthony Our from next Jefferies. comes from question

open. is line Your

Anthony Petrone

I product, And hope mentioned does and what plasma for does be it would product if hyperimmune a kit that to first Chris, coronavirus. a that is one. A indeed plasma – couple be wondering, think seasonal just healthy just seasonal? So for questions Thanks. me. overall you potentially on safe. the globulin. do One everyone's on would And potential for what be that the become I'm as to you demand? relates few stay a it

a just was then in blood in And on hit are donation quick How side just implications, have exiting one blood follow-up. And second the volumes? the more little COVID then we one the center bit And of substantial I'll where on things. March just April?

Chris Simon

Yes. fractionators area It's as as bring really the we've about. like early there's different what the Anthony. the supports hope most this perhaps feel and more But leading said, horizons is I this regards time an are saying, hyperimmune, is viewed certainly vaccine. to fall. plasma releases eventual science enthusiastic and well. as And early I I market, some the you're They this as that nicely. then bridge that the Thanks, an others to size actual July, With to opportunity. seen in a think will area

published been Now about lot's this.

not vaccine have other or coronaviruses have that society do longer science where We been in difficult, we least. have a decade vaccines, say the for the is

tap read So our I it just is think for playing really input. and try conversations we scientific our and we what us our back I've how heard and to committee everything advisory with customers to date,

hospitalized What as vaccine. globulin bridge would struggling. we're to a for that's It hyperimmune largely severe effective patient hearing be onset, probably moderate a is to

think We it. months XX how from seasonal kind an of perspective nine what not? is nature of just But go you to have and the any about don't that. the extra it next back believe So what we're hearing And guess, experts. to and over And or takes I could we you it bridge, on I by do epidemiology? the the customers exciting virus the be thinking we're about external

of done the and five-zero. Most business of hit they in blood we a hard of particularly, XX%, you said, of sizable China, is as Asia, terms a north drop Japan, volumes and on, particularly that early business, In were China, in through Korea collection have in center business, pretty distributors.

So of to buy in Chinese for effect. Chinese New the had the the onset New they Year A looking close distributors before bunch of an Year.

the experience Japanese actual when dip that but – And a we're up Patients to each stocks. you the responded Red free Japan that call sorry, and particularly donors the their out watch, put see COVID cells intimidating masked the recovery. think, somewhat shock it's We've nicely. what rapid at impact. actually a a want a saw then for direct gone Cross – red population that's platelets and tendency which So and were outstanding it's a and surprise, we their point and seeing relatively blood They has is every I which altruistic contribute, the to to it, and is, is further, collectors we system, market. safety step in motivated to worldwide not see globally.

customers much actually we regulate than running give. completely our the supply next want will working how through manufacturers that there, the us do hotter significantly it center of quarters but increase We trying to to are could demand and have stocks a supply intend we blood six-month But their don't safety to we they additional get be this the are. two supply. But we take balance. so. other them now So disrupt We'll to to all real-time, notified blood

Anthony Petrone

be there, that program can it out to be just helpful. accelerated on or an That's how just update cost programs, just impacts? are, on And are update program? of any And uncertainties where for me just we given delayed? last the on and one COVID the an just you program on maybe And given the would specifically that Bill, where out the the plays second restructuring maybe

Bill Burke

excellence of like on $XX plus all Yes, are We the and million our planning on David savings Anthony. the to get started we to in Thanks, still back said delivering I August operational to there. Lewis, program on program, savings. journey the

a the of is delivering Our fast all this. significant amount to go savings. intent do all as The to mobilized possible projects organization that as with independent encompass is still

programs that these expecting. and to continue on intent think I no of the pulling all drive improvements, key These we're savings. gross have to operating margin are improvements We margin back

we'll speed will overall what Like guidance the But we at can And some some we yes, update again are that we'll that. or see we we point. about change we very point, full We're when give like it we'll still the said, about up after and the do down, issue if specifics and program, movement guidance on optimistic feel be ahead I at year-by-year go with it. FYXXXX, in we program. would this savings

Anthony Petrone

Thanks again.

Chris Simon

Thanks, Anthony.

Operator

Thank you.

from next JMP. comes Turkaly from Dave Our question

is open. line Your

Dave Turkaly

us I TEG maybe color the you Great. will on give wondering that success? Chris, with a and Thanks, how little was ClotPro and could mentioned you if TEG maybe acquisition. interact

Chris Simon

deep With Thanks, this viscoelastic It really, really We the Appreciate nice that regards in a Yes. to the is technology, well. ClotPro and Xs complement Hopeful have setting. developed an to active enicor testing. essentially as Steve. it existing TEG lab-based that. and roots business. tip It's our a individual team by time, over particularly TEG imagine XXXX, an was just displacing product.

We It's for markets. have number Europe. CE approval in a Asia-Pacific marked of important

the a hemostasis acquisition to originators the approval get with FDA team off And opportunity from talked opportunity We've us. at for and U.S. We increasingly of that in in the we're million and there just real we a market is $XXX that with base. past, the believe will nonhospital-based total. expand management TEG. work on looking the our That rights Coramed, it's of landscape expands

the low-cost inside the us it's up outside space us a of hospital kind even aperture itself the support. product, is lab care, this for opens manufacture of with and squarely the So into a two combination, to enicor has necessary brings which more state-of-the-art one,

$XXX what as us, integrated opportunity an is So million-plus how drive a be portfolio against we hospital. it we for we're hopeful this in manage will and

Dave Turkaly

quick follow-up. you across globe? where big like if you is running believe But comment XXX% I you and the just have maybe at you facilities capacity ones close quickly don't have on It that I the China. any this any and do don't issues, or Just point? sounds have one at Are was could you supply wondering in chain

Chris Simon

Yes.

the to global So our four our who They as there. we've admirably These and crisis global can't we over years colleagues, tremendous as last equipped – our frontline progress for has They're service respond colleagues. have think the supply made this are in we out turnaround responding business manufacturing I place. the have, corporate shelter us to in workers chain respect are call. to

All our six production six for have facilities how and we detailed have We've had We experience protocols with COVID, address we worldwide. it. operational. are

in folks they similar those interesting operational, XX% on employment between actual challenges XXX% And depending folks are around to restrictions Malaysia, have if – base specific we're capacity how the women, in So many female. we're there sites, is allowed of for I our obviously, allowed Tijuana. would pregnant is and concerns. say are An at where we which work to have, factor have two varies

and a So bunch testing. we're doing of monitoring

sites. We have temperature readings our at all of

we in plasma sites, of where coming bulk that. manufacturing U.S. great North three about production our at feel shape, full our and from. is the American capacity, We're sites, For we're good that's and

our continue We we do. the to tech able support, are customer including that and also work service field-based

our equipped been worker trained. with Our are able They're up they've go to network operational and status in, of people equipment to to and They're given worldwide. be essential PPE. able keep

outstanding. this. I've challenge. dailing a by Thanks, short is the that impressed, prepared response we really and remarks that have It's mentioned really, center meets the to nothing been been organization's it of reviews nerve So I this. in humbled But daily Dave. integrated this

Operator

Thank you.

Our next question comes Securities. from Larry Solow from CJS

Your line is open.

Larry Solow

questions wishes of echo been your Most well and my morning families and Good well. the to everybody as have I Great. answered.

– and of granularity any stage. bit maybe it's of there said, recovery. couple a little entering Hopefully, plasma a the sort Is on maybe hopeful Just a of as regionally? you that

little donate confidence confidence get we of then to where Just – other on. start that go to us want rapidly potential some But going have the have and areas clearly, better, of not you just a donor may crazy to in in or where may things sort New In donate improves, recovery? more been gives been things Brooklyn, that to as give other York confidence words, there's so in get ratchet things of say, I will hasn't outbreaks bad, lacked, to as not considerably been up. it country coronavirus wherever able

Chris Simon

largely segmentation for thanks. differences comfort customers. too and But South different to concentrated provide cetera. to close we're responses. in Yes. look Larry, our Look, little gets collections customer, et effects by at collection a segment and because of absolutely taken There the type for hotspots, that are at a the And in U.S. by absolutely East forward are we this. it the The look not they've is It's going reality going we country. center. we differences it pertains as

example, there at et see absolute to-date, a at collection – are it's counties, been the the of not not don't in cities, lot there true least, cetera. have That's not are perfectly fortunately, entirely the we in And main, but hotspots. They're But done it is for very donor are base? we've of nature What this Northeast, exempt. the looked psychologically having considered What what's effect on we is at orders, have for order? account essential. right? the Donors stay-at-home carefully to the

And have plasma can safe as for – customers. passes they them letters our we give can

donate a ability, are order does The So in not are session, cases, College students The propensity campuses their Students But those centers meaningfully here. right? the to stay-at-home be the home. but campus. have have utilization. college campuses, effect. they're college it psychological open but still on campuses, the collection capacity lower less at is in home are on they all still are would than

Larry Solow

around. Nobody

Chris Simon

along, for but all, our and border. the meaningful not Yes. customers Individuals The some of to border sites, Mexico across are sites donate. allowed right, border have example, the travel

were they challenges certain sites et donors, mixed to folks cetera. required some U.S. where the immigrant accepting that interpretation quarantine. thought weren't self were was of There and However, early

basis, these The vast it then sit has discussions. do with corrected determining to essential. this in for, effective on in to we have a do down on of that been of these And is company it's terms the a to how had Board geographic challenge. all has and we're And a deal municipality this, in this rights to but safe I as here's things, majority manner. local and the Each of and going Advamed,

we've that. through worked So

right. new is centers, factor other The

see centers New those. community. an in established local impact their yet We that themselves on haven't

mean lockdown centers collection centers. this. talks There on it Bill the planning, scenario we're stay we individual at think also it collection cetera. for are about But micro level, particularly home, when do about at very the et the XXX What macro U.S. will in So about

categorized as recovery It's underway. the We what is that already confidence them have such. gives us

six and customers it we be will be be There side, months But it. it wise. other – will to will help ready normal. be the we get did And ago, episodic, it and different. be stand it candidly, and look our step there That right? manage will when won't will a However, setbacks, new through like to

said, reinforces our that. work industry. think see, proposition the that we'll and we'll through way our But As value I I to

Bill Burke

centers you're have different mean, the are to evolving – But themselves, then adaptive they and maybe And not running it's center, for and them of themselves. staying have some But measures. speak to in in. time, to given I less any at these guess don't you employees se of facility more more the – in maybe indirectly benefit. they imagine lure cash I payment donors offer concern have all would realize the assume donors I I I less per that and be really but can inevitably they even levers

Chris Simon

and most we to the with materially. And safe feel ourselves their They regard that quite concern that quite can donor help partners thing for We a they psychology. compensated the industry. donation? And in think bit, important right? Do is properly I the as us

For a applications by that with lobby. to distancing of in ways one we social their having donors help not example, don't they is – of software – practice underway large the queue safe

previously who example, appointment So moving systems, a system. are for didn't number use customers, to appointment our of an

digital called if help physical applications contact. not know forward can example, have even they and to get in to close technology Donors We who with interactive, it's make car asked if to they are for experience or have remain, that. that outside in show their the up they option. How using

bunch the et how a my ways which them a spread they out, normal. to of make social within happen new is cetera, to centers, distancing as reference that practicing as help there's So well

that help some long may right customers and we regulatory think adapt appropriate we're proactively. and response that out structural that COVID-XX, an will now. through we're And after outbreak, about actual scientific of world's to the how persist changes that thinking our and I beyond the working figured changes stay do

Larry Solow

I that. Great Thanks. appreciate

Chris Simon

Thanks.

Bill Burke

Thanks.

Operator

you. Thank

from Our & next from comes Needham Mike question Company. Matson

is line open. Your

Mike Matson

wanted start taking the statement. my I for to guess on just I income Hi. Thanks questions.

addition, terms is thinking gross of how of variable? OpEx, is sizable on if us revenue at I of you then you declines help just that much How in wondering out your margin. So potentially in look could was And about impact much the fixed? when

Bill Burke

Mike. Okay,

So it's Bill.

things. revenue EPS. On we did the the piece were first, that. revenue impact was What has quantified two the We impact I of largest portion on through the hospital, gone quantify think Chris in

So to every keep about expenses of basically well EPS, from coming $X.XX was we who work revenue across would and are globe as that us the up the said day that drop-through gross overall, as our and running. we to a some combination employees safe impact keeping it margin be a incurred the

QX points what the on basis We on operating the about when But basis revenue dollars point we everything just on and XX margin are. said said gross point had on the is impact haven't revenue what margins impact basis I impact exactly a say XXX or we you gross in the put together. that margin did

Okay.

what or So I'm not exactly costs amount going specifically to split what the were out the dollar was.

looking margin today. provide and EPS I percentage the at basis think was a impact just it we to on all from then want

Mike Matson

much could particularly of it but... hard how and We maybe, helpful. quarter gross know like at what here I to into – your first helpful, revenue, was think variable? modeling? decline versus margin getting on guess are should guess of OpEx even about can impact get fixed not on OpEx, define But how think I in I with if I in Now, larger say tell see know and you is that's us terms would you you're through giving anything potentially just but kind the a guidance, when be those of we the is we

Bill Burke

in saw start declines. running out with on to point. we're do is low different trend get April now in volume Yes. I hopefully, decline to We was impact hate what range Well, these the a hospital and of and We we provide collection said believe the we the we would the and April in what of – is. gradually business. And prepared quarter future, provided the remarks issue We the guideposts. scenarios that milestones exactly that the April guidance we've we plasma, did those in into different all

all went different just through plasma, impact that for the factors revenue. those example, Chris would in And

going those provide we're independently. looking And we're on then for cash base those view our expense overall for preservation at all to fiscal year. quarter or for at action the not the company. the this So we're taking our guidance particular of to of But appropriate offset with point, impacts

Mike Matson

then the and Chris' comments infection final this ties there kind And around new my prevention things of are Understand. just Okay. here plasma normal. to opportunities be, new product in maybe the But would of in that centers collection blood question business? any like or the

Chris Simon

in arms it the which the I I board. When the come across hyperimmune, I I probably benefit I actually medical biggest I'd – different across plasma, we of Thanks, the are of because a for through single et use positive Yes. of the the care that convalescent at plasma, folks think three walked looking plasma, cetera. about dealing Mike. portfolio, we're it couple think, our that. think essential with have appreciate ways applies at

it's life this the very remunerated positives of large fighting saving, of real is know I a can't on global think as one didn't of of linings right? you the as of the something I And is life discussion a news this the much think hope reframing feed one all of seen it without And its disease. use, therapy. plasma, that enhancing which I turn understand that on collection forefront portion silver of a population of hearing a now is or around of about plasma allows

that bodes there we think psychology donor that I can well And momentum that there's for build upon going forward.

or here. different of in We number blood in so, experienced thoratic with the in researchers factors, a pulmonary going that fatalities that associated our whether it's positives on one of COVID we've hypercoagulopathy large using clotting to are understand is response. or see something this TEG I and a embolism the think business, there's we TEG lung now of stroke equally the in know cascade coagulation cardiovascular with real

yet that see mean use TEG is it's be it's what – for as might again, demand it's near of going early But to the we in understand that forward. instrument most fight. used a and that by in determined way be to to part technology use know us on term, surge for that, of to it our can very encouraging the the sophisticated

that the of markets the back towards we'll come benefit So nature we recovery, to what move remain optimistic accordingly. we as the and fore essential will do

Mike Matson

Thank you.

Operator

Ladies for question-and-answer today's and Thank you. day. may all does And Everyone, conclude our conclude does session This wonderful program, conference. have for thank that you gentlemen, the today's conference. you in disconnect. a participating and

Haemonetics (HAE) 8 May 202020 Q4 Earnings call transcript