HAE - Earnings call transcript Q1 2022 | Haemonetics Corporation

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Operator

Good day and thank you for standing by. Welcome to the Haemonetics First Quarter Fiscal 2022 Conference Call and Webcast. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. conference recorded. today's advised be is being Please [Operator Instructions]. the would your to like hand now to conference speaker over I today, Olga Guyette. ahead. go Please

Olga Guyette

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

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

noted, of impact of Before and impact exclude 'XX. rates revenue the the growth are product divestitures currency and week basis XXrd we unless discussed strategic fluctuations, lines, and get of otherwise acquisitions actions all fiscal in on started, the today an organic

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

not And over like obligation our impacts update potential results Chris. today factors statements turn the earnings We are forward-looking filings in pandemic the these release results any Our our risks in to and the to Harbor forward-looking do may uncertainties, Haemonetics the and our Safe including statements. and with remarks to now, statement that cautions anticipated on actual forward-looking other in subject SEC. statements, include differ results. materially these I'd referenced the from from undertake and our to

Chris Simon

of with first $X.XX everyone of the morning quarter X% all compared prior year. earnings and organic we Today, reported Good for the revenue or Olga. share $X.XX, you thank up joining. X% and growth adjusted you, Thank per of

by We are overall impact encouraged the performance, despite pandemic. COVID our the of

meet class a thank ago, continued recovery managing for Nikel world service Operational years helping commitments. Two growth the plasma and vast Blood and him anticipate the excellence evolving Global knowledge across approach to customers. segments, products of build to management our and businesses favorably continue Excellence a resilient. will source, procedure and improvements products. collection to trending qualified make team President, we our and about builder fueling way leaving Center. and to deliver markets growth global can footprint. globe we achieve our volumes, who in been leverage a outsized are updates years. donor Under to and like is market would I are some make him will how strong XX want leadership, improve we lead to that to named integral collection Haemonetics our has Chad an in Chad to our Blood been our I Center We business has Plasma share in for our is part the hospital is of His Program our Haemonetics broader we expertise transforming uniquely David the Wilson by quality deliver business. this be Chad's and us to unveiled

solutions from end program the I to Our and through million in anticipated by the the target meet the help a extending and have strengthen take at this Expanding am pandemic. by at financial to on pressures our This planning past performance. was additional offset Day in savings and an transition despite will later sustainable our effects rising us virtual two of further 'XX. we in 'XX, and the investments are headwinds to CSL impact gross Investor health fiscal sharing million We and the save our customer end of the to identify plans longer-term of daily XX new our our goal look fiscal financial program fresh look losses new into achieve savings support make operations, opportunities inflationary that to in million this operations, of a more the positive insight share XX year. XX long-term years, that proud 'XX. our will fiscal forward to allows

significant week, operations announced business international Lloyd development our and earlier insight. Directors. of Johnson brings this has we Finally, joined financial Board Lloyd management,

Additionally, base. Board. diversity experience and elected Ellen updates refreshment, ongoing Zane to of Chair our been commitment has our augmenting These reflect Haemonetics'

about in in as Republic in supported by Now as units. continued PCSX by of streamline DonorXXX home the the in quarter X% Hungary, improvement improvement economic historically, plasma our and enhancement. collections in donors volume, stimulus driven associated quarter, to term the Plasma expiration on with increased the U.S.-sourced to showed effect have adjustments, the historical technology donor driven on enhanced our increased partially pool. price recovery. and growth process in safety, pre-collection X% U.S.-sourced government the and continued fewer restrictions revenue volumes which had COVID-related subsidies and the pricing disposables first seasonal software additional digit plasma growth. Plasma America plasma with on pronounced collection revenue by hindered quarter plasma specifically the offset app, in efficiency X% convenience. recovery Europe by quarter additional in and fixed plasma enables revenue center double collections plasma at North and recovery declined collection register We including the to Czech X% in the business the pandemic compared volumes Sequentially, a

improved recovery for customers in operations, center invest our plasma lever and growth. more value-adding enabler the strategic compliance to yield, for benefit their satisfaction. to we technologies and our our improved a support donor collection and customers innovation is combined continue key and is NexSys, to believe a we NexLynk and and Software most through offer efficient faster differentiator

donors, the NexSys donor PCS of center centers are benefits from in NexLynk the conversions integrated sustained emerge DMS operational collection As Collection with for to our positive is additional donation. Persona 'XX. Persona of tool confirm valuable be retain to to data We technology we an our on traffic. plan are donations proposition upgrade donor 'XX. medicines a the repeat no rates. conversions real we technology pandemic, of yield and increases will and major accommodate plasma made The available fiscal second the the strong our value world help later and of to this NexLynk feedback that of benefiting from latest version to customers the transition devices DMS software continue NexSys to and plasma-derived greater complete by per progress steps remains early with donors. to as adopters deferral there X% demand additional customers validate recruit anticipate on take mid half customers in the our Their our significant impact year, and XX% We've fiscal and track PCS and our

the we pandemic, as depleted to to collections. industry X% strive U.S.-sourced As a long-term the replenish plasma XX% to inventories. that potential in plasma customers of expect from recovers excess And growth the to see of return grow we

XX% recent plasma policy. quarter, we As XX%. new of improvement potential we reinforcement remain of is the fiscal improved the U.S. strong half anticipate by 'XX collections recoveries second and in COVID and border But the of disruptions a variant organic to revenue collection year, growth firm caused guidance. the XX% We have high the of midpoint of approach with consistent growth compared second fiscal vigilant increased our about quarter. with 'XX end in our This the the first plasma XX%

increased Moving quarter. utilization with of grew recovery to vaccine all in the and in Europe. U.S. instrument hospital, Hemostasis our quarter concerns sales to trends due and key revenue of the placements. due strong although U.S. improvements grew in disposables disposables, outside new in XX% procedures of capital variant COVID XX% led recovery strong of markets, the charge continued to PEG We adoption continued and and about revenue uneven North business growth America, hospital distribution. in the utilization Management were driving saw new slower primarily in across opportunities the

Growth concerns Cell award in account our across year, for continuous share we upgrade also markets. U.S. to a in of with We Transfusion of we decline the technology significant new expectation of in revenue tender a growth improve XX% Tx installations and the of in markets as across XX% quarter We in the the 'XX. by management the growth XX% XX% use in all double grew the procedures in Management delayed fully procedure the growth revenue capital growth up to our organic will including sales driven customers new shows and also hospital, assumes fiscal SafeTrace growth strong new in recovered be to implementation. end Europe, salvage with completed market supported XXXX. key BloodTrack XXs. continue as Hemostasis ClotPro volumes acquired digit revenue recovery in in latest international primarily U.S. increased the technology. our hospital quarter was by slight geographies our by the continue affirm rate our organic for COVID in growth including was as mid This to throughout fiscal all

$XX of VASCADE business accounts. increased delivered within expectations. meaningful existing our acquired new Closure exceeding through and in accelerated in VASCADE delivered accounts newly first Both penetration million quarter, Vascular results revenue products Our utilization the

increased supported hospital by of greater We and an efficiency to are of overall enthusiastic rates, procedure about volumes, standard growth care. the diagnosis business move higher continued this

for We broader securing penetration. are by developing and approvals go-to-market and also strategies expanding regulatory faster internationally

to was customer X% in 'XX growth Blood lost to to the We revenue 'XX through included declined guidance X% million are declined look revenue and quarter to $XX first increasing the in order further we revenue from million $XX additional fiscal quarter. first previously our fiscal results. Apheresis by from accelerate $XX impacted investments. announced timing quarter, million unfavorable $XX Center as million, our revenue the loss in

although are resilience prolonged due the state blood donors. by We plasma of Japan Platelet that altruistic collections reduction business encouraged of the in collections recovered, emergency. and was nature a in of offset fully to partially COVID-related this growth by

We XX% markets. our market customer in driven by China, Tier contracts lower also America. revenue platelets driven experienced in X and blood in strong discontinued declined Whole collection by demand for volumes expansion North

expectations 'XX a of now X% decline Our is and fiscal Bill. revenue unchanged the to over X%. our to Center turn call the guidance for Blood are I'll business

Bill Burke

has XXX revenue, with start the already everyone. to and of basis good gross in XX.X% discussed Chris, the an Chris increase so points you, was first adjusted quarter, will I margin, first the year. quarter morning, which compared prior Thank of

and volume businesses margin In Our of manufacturing improved from portfolio, benefited acquisition as to to our recover and product of Closure had well as expenses gross effects remaining to adjusted pandemic. from Medical operating our the devices Cardiva as pandemic. we Vascular due supply from higher related lower from the efficiency the addition continued favorable the mix the chain,

We an first expenses were also were the with XX% drive Excellence previous to from These Operational in divestitures and Program. price increase quarter Adjusted compared $XX.X savings million, year. the continue benefits by offset partially $XX.X when of prior million or the operating adjustments.

points expenses adjusted costs basis technology. higher acquisition variable Also research largest to expenses. As affecting the XX%. Cardiva operating the increase a increased compensation, spending adjusted and levels, on and in percentage expenses XXX normal beginning to were impact in our at to were operating by the of strengthen revenue, freight had development The and increase an higher return of increase

income income operating an adjusted operating with expenses. was the partially by of higher in offset operating adjusted the in $X.X adjusted quarter year. margin, This improvement first increase XX% million, compared gross $XX.X by driven million, prior or adjusted increase Our was

adjusted fiscal XX.X% in period increase an quarter, was 'XX. compared basis of Our first the with margin the points in same operating XXX

through margin. our savings in continue range Excellence of of fiscal continues to As anticipate XX% XX%. the generate leverage to We to additional affirm operating we Program. to pandemic, margin be the adjusted 'XX business operating increased adjusted We recover in from guidance the Operational

share income tax was 'XX the of to abnormally XX%. fiscal the adjusted in the was performance benefit expect same tax We compared the tax adjusted in of higher to X% rate Our first first fiscal fiscal 'XX income due of low with our rate now quarter vestings. period rate XX% 'XX. in quarter adjusted The be

diluted First $X.XX, rate income up first fiscal $X.X the quarter compared downward income with on $XX.X adjusted X% adjusted 'XX. to X% tax per and of million the 'XX was The or when of $X.XX adjusted net compared fiscal earnings impact when diluted year. quarter prior share first in a was up adjusted the quarter had million, earnings per share

of 'XX this in $X.XX Our to original Vascular fiscal is year adjusted original expectations, business compared net we diluted share Closure neutral in be exceeding earnings and the per business our expect the $X.XX with expectation first to to acquisition. following dilution

to $XXX million $XX $XX performance to million original our the model, Program the and which commercial and savings will when million in of to additional will fiscal Operational million we $XXX by with that driven $XX gross the in line us announced return growth with the savings resources total end of will 'XX, with with this to an by execution by in of expectations investments is to be compared savings in 'XX volume with the deliver difference allow stronger Today, structure million end of company. the revised generate fund fiscal expect capital levels. We deal back pre-pandemic additional across Excellence original gross

through and passing about exact on communicated realized by for savings savings Excellence completion the guidance benefit of and Operational with adjusted the fiscal by results of 'XX. will end be operating total program 'XX, this of the the the income impact Program to each of savings fiscal in half net of The year. pace our fiscal majority the adjusted expect We

we million in course over to program. and Additionally, to the this $XXX incur restructuring-related restructuring of expect million $XX costs

fiscal compared income million anticipate guidance. our these with XX% will of when this XX% pressures increasing total in of operating million, these increase and to the manufacturing, savings of we Due expect this in adjusted or savings of fiscal In program gross savings updating $XX approximately investments the to and $XX for estimated savings inflationary program, about addition 'XX deliver pace to we gross in an accelerated benefit 'XX. now previous

expenses higher in costs was due turnaround higher from to and to expect and partially restructuring expenses, related continued accounts primarily Operational $XXX our offset by capital our Program, We and a recover $XX be hand adjusted diluted affirm growth. million, Cash guidance We in range in of on per $X.XX expect of be to beginning fiscal decrease free $X end the the fiscal the earnings to year. the first 'XX lower the $X.XX. was share continue 'XX and before million. flow turnaround in cash was the million at as million flow of quarter prior receivable fiscal before the to Excellence since The of the restructuring million previous with $XXX pandemic million 'XX quarter $XX cash free flow lower revenue compared before same turnaround Free cash costs inventory fiscal to to and the year. $XXX of to restructuring

term, we Our core products capital into to continue inorganic investments And will allocation priorities share followed focus buybacks. organic technology remain by prioritize capabilities and growth, unchanged. our that opportunities we In the and make on short distinctive.

open the key reiterate you we the to hope from call. up we today's to I away take that call want Q&A, Before points

original the the diluted products. guidance. as exact pursue believe our innovative with for further to our to leadership, virtual in resilience it recovery to market Excellence Operational of 'XX. long particularly and This you. included supported show and technology at delivering market in the and committed we market We across fiscal We near in business underlying recovery, our the team's model. the we results pace business recovery year. our on quarter productivity to our sharing across recently efficiency strategies updating of adjusted of scale leverage, earnings Closure full no of calendar ahead the acquired all back demand And plasma. to donors expands expected recovery end no rollouts within variable to there capitalize by The are shareholders First partnership by operator enables year to strong VASCADE expectations our call our the business, per our with Thank hospital for of encouraging procedure dilution revenue changes we opportunity, in strengthens to our of biggest our share the is blood in anticipate Blood end for But remains portfolio Day performance exceeding remain strong Centers, drive maintain growth Investor been our structural working ahead. to technology delivering one their of this increased now lastly, position, in products our And with and customers continue of plan. and plasma, initial diligently value expanded develop our to like growth affirm Vascular our businesses are and Q&A. And deal turn forward our market on an looking I'd the customers, the range Program. And Persona

Operator

Instructions]. [Operator you. Thank

Our first the of question from comes Anthony Petrone Jefferies. line with

open. Your line is

Anthony Petrone

up data Thanks. some maybe volume baked a little And border, on quarter, restrictions of would in follow you're the Good baked the update bit On plasma the in as few is morning, well Cardiva. then any be couple then plasma a follow for then A in that guidance just of have an on and the more questions specifically thoughts are U.S.-Mexico And as on ups. guidance I'll everyone. the just how points I'll what performance in there detail have helpful? on recoveries? there the reflecting the at

Chris Simon

volume quarter a XX% end regards of Appreciate point high range to as seen more and XX% week, what now because Anthony. experiencing so to where that's the to of way our that's the we're performance first We We're of how we're and Thanks, almost for we that XX% growth of the recovery the tracking guidance, the Yes. we're We've anticipated. XX% really of we through second to what to XX% last now. bang With year-to-date. end had quarter. and it on in see question. expected the our tracks at

with that down variants, demand. to COVID regards anything customers that regards Of concerns we're our lead to further new tap might course, vigilant with could with to any

that to policy the the a Mexico You situation of there. collections definitely enforcement is detractor mentioned border, at the

in aggregate, X For you more of probably it's XXX trajectory. basis growth, points, our across if us growth than point will, not

it's for situation we're and major what's our happening watching doing carefully. their the not it's So and But us gives donors to re-recruit a powerful in zero, for not but feel customers the very environment, like optimism. us all are factor is we grounds cautious what

Anthony Petrone

clear, certainly front, to trending view the organic in so obviously volume July, cycle the sort And end both upgrade which of it 'XX, baked is in sounds upgrade and XQ bridge the just higher and anything for continued you be improvements, you fiscal a as then like NexSys. between the you're the have for X% is of on mentioned quarter well? but an there there in seeing also NexLynk Last there toward

So just to of trend volume continued kind XX% higher range, as the we improvements upgrades? of, toward complexion just end versus that the of XX%

Chris Simon

Yes, exactly you're right.

We lot second have growth of half year. a this the loaded of into

in closely what and growth the means our about upgrade we're the work second in of are us be that NexSys in over well. ambitious of but Good doing Delta models COVID. and prepared that context volume geographies that it's of factored and have waning the So effect, in to really seeing our PCS cycle challenges with we've keep are we're progress that and year-to-date of Nonetheless, what the to and by continues where customers Upgrades as a our part in there. on and across some of a the we see pandemic tracks as and excited all et the in most to of stimulus despite of to and volume regard, cetera. particularly we our communicated Persona track hit year offerings, able the been that the real three hard was the with getting the NexLynk NexLynk. plus variant half do continued on terms recovery this remarks. people general safe for and software here high forecast all

Anthony, we with So jointly nothing about feel keep progress. what about customers simple it, or to able straightforward that quite good we're but do to

Anthony Petrone

volume of forecast VASCADE queue. versus say I'll complexion I'll expectations get into just sneak wondering Thanks the original of improvements just centers? the franchise expansion the again. last the versus ahead general one just back in in Cardiva, between and EP new on there

Chris Simon

about expectations. that mid line were first very did year very, This in both Thanks, is million excited VASCADE, product revenue to with in MVP calendar exceeding Anthony. XX We're deliver a VASCADE quarter and Cardiva We alone. collectively last our XXs Yes. Cardiva. and able

across our what into about do So team both combination hyper-focused in that largest and North VASCADE utilization the we the customer recovery hospitals here is and MVP and has is driving and performance. customers to increased seeing are excited very the of the America we're and penetration existing in new able two And been trajectory just new customers. what on our accounts, what's and those

excited. in bear It's to investments us make allowed product fruit we're continue that the product, that So we progresses. think additional to and as will

Anthony Petrone

Thanks again.

Operator

you. Thank

with Our Citi. comes Joanne Wuensch from next question

Your line is open.

Unidentified Analyst

Hi. increasing is this from? have out for [ph] My of two. Thanks This of labs you are for Can that Is where a these hospitals Management Hemostasis is I and first, or our coming quarter on sort that strong had buying Anthony quarter. patients, sort Joanne. is COVID taking strength utilization? parse research TEG still to study questions. it

Chris Simon

I'm be of core of per utilization that and coagulation in higher broadly, treatment related COVID indications. vast will front. cardiology some as every Yes. is testing of but It's on it's truly growth, for in increasingly, first Hemostasis just cardiac lot growth. a in more essential It's going a the well we growth geographic benefiting patients, And the volume, TEG is disproportionately as interventional XX% much it that is sure is in still cardiology an Management we've push as of combination driving growth is And from there it's majority our all sales although new device to a quarter. and procedure segment regard. doubt. A had product increased combination grew no U.S. that that outstanding device. into trauma. the the of surgery

by the first the U.S., and certainly across strength foremost. board So driven

Unidentified Analyst

give is What negatively you then positive the you Cardiva. And some more how helpful. my commentary or second surprised either on on going? just Great, integration could about uptake? Thanks. has then And

Chris Simon

success really because be integration group I think team preserving bring exceptionally and here. assimilate onboard Russell John from a that them high team they're well. performing doing To with in everything the to built that's that real able start have and we're I'll and benefiting doing, that story leadership. been the Yes, that

brought we been do quite and feel so them disrupting. able good. think we So to in We've without I

that and leaning team focus we're is helping going and drive in doing what necessary now So them make hasn't investments And beat. growth a that the are sustained forward. missed to

So we fib FDA this. will discharge for growth actually we're which for trajectory now fuel word watch going us got We from yesterday adds that more same-day that just atrial now continue and approved forward. allow to to that fire

So things we've lot of done a right.

from benefiting are We that.

in smooth globe. that now and replicate I rapid helped. as outside performance pushing markets in build has to enable also the U.S. think integration and registrations were to the will go-to-market that models the to it us other get the really hard We're around place

excited we're about it sure. So for

Unidentified Analyst

Thanks.

Operator

[Operator Instructions].

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

Your line is open.

Mike Matson

flow. Yes. to Thanks questions. cash for ask about taking free Wanted my

more now first compared quarter level year, So what's the expect the just guidance? realistic of year? is your confidence for it decline in the end lower the at to to last range guidance And the the given be to

Bill Burke

It's Bill. Mike. Hi,

has of we out there. and cash within than The that combination return. did -- begun a XXX we our flow little we million flow, year, have guidance receivable we So bit higher last XXX be accounts from on to is free confident we're that revenue it's down a million to cash year that as last put will

accounts. see growth in to year inventory, net going is say cash that's wouldn't expenditures levels our in I'm the to flow We news, return XXX range, affecting quarter. where confident. million XXX we're last last that there. seen increase about we feel here have within in we we the to specifically good going So In our that sheet first element to in really first inventory are out but But going an your balance but begun right, fall of have to year. not normal good lower And it. are it's have the you capital again, the put in then million lower than this quarter to actually

Mike Matson

guidance Okay. guess but given a include Thanks. on there, And don't GAAP kind and then, you've you sort not flow in do positive one-time of on expect if you all basis, -- GAAP you any of if stuff? I basis, restructuring know to once the be I us stuff excluding free that cash a

Bill Burke

For year? the

Mike Matson

Yes, for the year.

Sorry.

Bill Burke

to yes. We be the for positive it would expect year,

Mike Matson

opportunity the talking outside Okay, one customers you collect your I've the plasma over is trying about larger saw things some the of all right. of heard more time. U.S. And to then imagine I'd that to does but means I that just business, see -- and wanted that if fact if anything, thoughts Haemonetics is to to on in capture there increase? if what that your get

Chris Simon

Mike. perennial Yes, topic. It's Chris. discussion That's a

I think in period. momentum the it's more COVID gained

There challenges lean customers where plasma well. it being is for response general collection COVID overdependence opened of into these of for describes number our on that's U.S. and helped There the the that's markets and collection outside countries of challenge. work year than industry places then help in and we just the more the local are more their a to One markets right around are as that to and as really previously to self-sufficiency, legislative only medical specifically. I as are things market a kind XX there in the them. pride five the donors globe we communicated open remunerated initially U.S. broadly with think and that over the attention last we've But plasma step-up up drawn the of take up, convalescent still

a Center an us customer growth operations those response request, is that the real have to area attuned more way to we continue combining benefits and and and where I the forward think of positively. plasma surprise international coordinate in going the our we're to internally opportunities. grow can Blood and is we in able One of We're opportunity to for better

Mike Matson

you. Okay, great. Thank

Operator

Thank you. [Operator Instructions].

Ranieri Morgan Drew Our question Stanley. with comes next from

line is Your open.

Drew Ranieri

for Hi. question. the Chris Bill. Good taking Thanks and morning,

Just the and you mention quarter on X% XX%. you I I grew organic grew heard collections think I here, in plasma think

color trying understand two So Thank there. but there delta kind some that between would more the Was better of the I'm price, to numbers. love you. just

Chris Simon

talking about was Yes, priced of We Drew. the contract factors. remarks. talked adjustments and bound prior and the did comparisons into prepared had that we've over for PCSX we price been we're a including of periods. acquisition specifically time legacy is a Obviously, specific out a call combination expired. range in agreements a It's There about technology where that had those

experiencing as thing is other are which a The positive, return, of our volume is, a we're number price contracts quite specific. volumes

the a volume the as is in pricing. increase, So there decrease slight

there’s see it's a but good So variability a you thing, on quarter-on-quarter basis.

or to contracts do technology the none has to prior is all, new So agreements. with it at it new pertaining of those

Drew Ranieri

Okay, just just NexSys terms terms by or understood. of trying better and Is expect that in to mentioned versus you but Thank of way it should because want your think you get frame ramp base Thank just but to how of you sense your on And of we major complete customers, 'XX. transition the this, mentions overall there base maybe you. in to your don't about the installed can, a you. customers? conversion fiscal any you that installed mid discuss then

Chris Simon

specifics confidentiality, appreciate we'd But guided we've Thanks. on down reasons already the and you know customer beyond for question talk prefer Yes, I of not to that. about Drew, the I to. drill want what to

Drew Ranieri

Chris. Thanks,

Operator

This Thank participating. further for you. this conference call. you showing no time. currently questions at And I'm today's concludes Thank

You may now disconnect.

Haemonetics (HAE) 11 Aug 212022 Q1 Earnings call transcript