Haemonetics Reports Double Digit Growth in Adjusted EPS of $2.85 for Fiscal 2010; Issues Guidance for Continued, Strong Growth in Fiscal 2011

Haemonetics Corporation Financial Summary

(Unaudited data in thousands, except per share data)

Consolidated Statements of Income for the Fourth Quarter FY10

4/3/2010
As Reported

3/28/2009
As Reported

% Inc/(Dec)
vs Prior Year

NET REVENUES

$169,104

$152,397

11.0%

Gross profit

88,124

82,147

7.3%

R&D

6,662

6,958

(4.3%)

S,G&A

64,024

57,056

12.2%

Contingent consideration income

(2,345)

0

---

Asset writedowns

15,686

0

---

Operating expenses

84,027

64,014

31.3%

Operating income

4,097

18,133

(77.4%)

Interest expense

(20)

(4)

400.0%

Interest income

90

339

(73.5%)

Other (expense)/income, net

(278)

(103)

169.4%

Income before taxes

3,889

18,365

(78.8%)

Tax expense

(78)

4,426

(101.8%)

NET INCOME

$3,967

$13,939

(71.5%)

Net income per common share assuming dilution

$0.15

$0.53

(71.1%)

Weighted average number of shares

Basic

25,192

25,535

Diluted

25,816

26,197

Profit Margins:

Inc/(Dec) vs prior year profit margin %

Gross profit

52.1%

53.9%

(1.8%)

R&D

3.9%

4.6%

(0.6%)

S,G&A

37.9%

37.4%

0.4%

Operating income

2.4%

11.9%

(9.5%)

Income before taxes

2.3%

12.1%

(9.8%)

Net income

2.3%

9.1%

(6.8%)

Consolidated Statements of Income for FY10 and FY09

4/3/2010
As Reported

3/28/2009
As Reported

% Inc/(Dec) vs Prior Year

NET REVENUES

$645,430

$597,879

8.0%

Gross profit

337,481

308,169

9.5%

R&D

26,376

23,859

10.5%

S,G&A

214,483

198,743

7.9%

Contingent consideration income

(2,345)

0

---

Asset writedowns

15,686

0

---

Operating expenses

254,200

222,602

14.2%

Operating income

83,281

85,567

(2.7%)

Interest expense

(742)

(191)

288.5%

Interest income

399

2,094

(80.9%)

Other (expense)/income, net

(1,668)

(2,469)

(32.4%)

Income before taxes

81,270

85,001

(4.4%)

Tax expense

22,895

25,698

(10.9%)

NET INCOME

$58,375

$59,303

(1.6%)

Net income per common share assuming dilution

$2.24

$2.27

(1.1%)

Weighted average number of shares

Basic

25,451

25,389

Diluted

26,063

26,173

Profit Margins:

Inc/(Dec) vs prior year profit margin %

Gross profit

52.3%

51.5%

0.7%

R&D

4.1%

4.0%

0.1%

S,G&A

33.2%

33.2%

(0.0%)

Operating income

12.9%

14.3%

(1.4%)

Income before taxes

12.6%

14.2%

(1.6%)

Net income

9.0%

9.9%

(0.9%)

Revenue Analysis for the Fourth Quarter and Year-To-Date FY10

Fourth Quarter

4/3/2010
As Reported

3/28/2009
As Reported

% Inc/(Dec) vs Prior Year

Revenues by geography

United States

$78,459

$73,297

7.0%

International

$90,645

$79,100

14.6%

Net revenues

$169,104

$152,397

11.0%

Disposable revenues

Plasma disposables

$54,910

$51,787

6.0%

Blood bank disposables

Platelet

$39,677

$35,032

13.3%

Red cell

$12,746

$12,857

(0.9%)

$52,423

$47,889

9.5%

Hospital disposables

Surgical

$18,022

$16,702

7.9%

OrthoPAT

$9,953

$9,118

9.2%

Diagnostics

$6,770

$4,799

41.1%

$34,745

$30,619

13.5%

Subtotal

$142,078

$130,295

9.0%

Software solutions

$10,109

$9,691

4.3%

Equipment & other

$16,917

$12,411

36.3%

Net revenues

$169,104

$152,397

11.0%

Year Ended

4/3/2010
As Reported

3/28/2009
As Reported

% Inc/(Dec) vs Prior Year

Revenues by geography

United States

$303,682

$279,045

8.8%

International

$341,748

$318,834

7.2%

Net revenues

$645,430

$597,879

8.0%

Disposable revenues

Plasma disposables

$232,378

$202,173

14.9%

Blood bank disposables

Platelet

$151,026

$143,420

5.3%

Red cell

$48,031

$49,508

(3.0%)

$199,057

$192,928

3.2%

Hospital disposables

Surgical

$69,942

$67,697

3.3%

OrthoPAT

$37,079

$35,419

4.7%

Diagnostics

$21,862

$19,881

10.0%

$128,883

$122,997

4.8%

Subtotal

$560,318

$518,098

8.1%

Software solutions

$35,919

$31,604

13.7%

Equipment & other

$49,193

$48,177

2.1%

Net revenues

$645,430

$597,879

8.0%

Consolidated Balance Sheets

Period ending

4/3/10

3/28/09

Assets

Cash & cash equivalents

$141,562

$156,721

Accounts receivable, net

118,684

113,598

Inventories, net

79,953

76,522

Other current assets

33,491

35,552

Total current assets

373,690

382,393

Net PP&E

153,298

137,807

Other assets

227,155

129,493

  Total assets

$754,143

$649,693

Period ending

4/3/10

3/28/09

Liabilities & Stockholders' Equity

S/T debt & current maturities

$17,062

$695

Other current liabilities

114,043

92,168

Total current liabilities

131,105

92,863

Long-term debt

4,589

5,343

Other long-term liabilities

25,325

11,603

Stockholders' equity

593,124

539,884

  Total liabilities & equity

$754,143

$649,693

Free Cash Flow Reconciliation

Three Months Ended

4/3/10

3/28/09

GAAP cash flow from operations

$35,686

$47,181

Capital expenditures

(11,428)

(14,184)

Proceeds from sale of property, plant and equipment

1,175

(139)

Net investment in property, plant and equipment

(10,253)

(14,323)

Free cash flow

$25,433

$32,858

Year Ended

4/3/10

3/28/09

GAAP cash flow from operations

$129,667

$116,364

Capital expenditures

(56,304)

(56,379)

Proceeds from sale of property, plant and equipment

1,785

2,383

Net investment in property, plant and equipment

(54,519)

(53,996)

Free cash flow

$75,148

$62,368

Haemonetics Corporation Financial Summary

Reconciliation of Non-GAAP Measures

Haemonetics has presented supplemental non-GAAP financial measures as part of this earnings release.  A reconciliation is provided below that reconciles each non-GAAP financial measure with the most comparable GAAP measure.  The presentation of non-GAAP financial measures should not be considered in isolation from, or as a substitute for, the most directly comparable GAAP measures.  There are material limitations to the usefulness of non-GAAP measures on a standalone basis, including the lack of comparability to the GAAP financial results of other companies.

These measures are used by management to monitor the financial performance of the business, inform business decision making, and forecast future results.  Performance targets for management are established based upon these non-GAAP measures.  In the reconciliations below, we have removed restructuring costs, contingent consideration income, and asset writedowns from our GAAP expenses.  These restructuring and other items result from a significant transformation of our business during our fiscal years 2010 and 2009.  Our fiscal 2010 restructuring is related to the integration of Global Med Technologies and the reposition of our sales force.  We believe this information is useful for investors because it allows for an evaluation of the Company with a focus on the performance of our core operations.

Non-GAAP Gross Profit

The use of these non-GAAP measures allows management to monitor the level of total gross profits without the costs of our business transformation.  We establish our budgets, forecasts, and performance targets on this basis.

Non-GAAP S,G&A and Non-GAAP Operating Expenses

The use of this non-GAAP measure allows management to monitor the ongoing level of spend that is necessary to support the business in a period when we are not transforming our business or completing an acquisition of in-process research and development.  We establish our budgets, forecasts, and performance targets excluding these costs.

Non-GAAP Operating Income and Non-GAAP Income before Income Taxes

The use of these non-GAAP measures allows management to monitor the level of operating and total pre-tax profits without the costs of our business transformation.  We establish our budgets, forecasts, and performance targets on this basis.

Non-GAAP Net Income and Earnings per Share

The use of these non-GAAP measures allows management to monitor the level of net income and earnings per share excluding both the costs of our business transformation, as well as any related tax effects. We establish our budgets, forecasts, and performance targets on this basis.

Reconciliation of Non-GAAP Measures for the Fourth Quarter of FY10 and FY09

04/03/10

03/28/09

Non-GAAP gross profit

GAAP gross profit

$88,124

$82,147

Restructuring costs

-

-

Non-GAAP gross profit

$88,124

$82,147

Non-GAAP S,G&A

GAAP S,G&A

$64,024

$57,056

Restructuring and deal closing costs

(10,364)

(4,359)

Non-GAAP S,G&A

$53,660

$52,697

Non-GAAP operating expenses

GAAP operating expenses

$84,027

$64,014

Restructuring and deal closing costs

(10,364)

(4,359)

Contingent consideration income

2,345

-

Asset writedowns

(15,686)

-

Non-GAAP operating expenses

$60,322

$59,655

Non-GAAP operating income

GAAP operating income

$4,097

$18,133

Restructuring and deal closing costs

10,364

4,359

Contingent consideration income

(2,345)

-

Asset writedowns

15,686

-

Non-GAAP operating income

$27,802

$22,492

Non-GAAP income before taxes

GAAP income before taxes

$3,889

$18,365

Restructuring and deal closing costs

10,364

4,359

Contingent consideration income

(2,345)

-

Asset writedowns

15,686

-

Non-GAAP income before taxes

$27,594

$22,724

Non-GAAP net income

GAAP net income

$3,967

$13,939

Restructuring and deal closing costs

10,364

4,359

Contingent consideration income

(2,345)

-

Asset writedowns

15,686

-

Tax benefit associated with non-GAAP items

(8,202)

(1,381)

Non-GAAP net income

$19,470

$16,917

Non-GAAP net income per common share assuming dilution

GAAP net income per common share assuming dilution

$0.15

$0.53

Non-GAAP items after tax per common share assuming dilution

0.60

0.11

Non-GAAP net income per common share assuming dilution

$0.75

$0.65

Reconciliation of Non-GAAP Measures for FY10 and FY09

04/03/10

03/28/09

Non-GAAP gross profit

GAAP gross profit

$337,481

$308,169

Restructuring costs

-

72

Non-GAAP gross profit

$337,481

$308,241

Non-GAAP S,G&A

GAAP S,G&A

$214,483

$198,743

Restructuring and deal closing costs

(10,814)

(6,964)

Non-GAAP S,G&A

$203,669

$191,779

Non-GAAP operating expenses

GAAP operating expenses

$254,200

$222,602

Restructuring and deal closing costs

(10,814)

(6,964)

Contingent consideration income

2,345

-

Asset writedowns

(15,686)

-

Non-GAAP operating expenses

$230,045

$215,638

Non-GAAP operating income

GAAP operating income

$83,281

$85,567

Restructuring and deal closing costs

10,814

7,036

Contingent consideration income

(2,345)

-

Asset writedowns

15,686

-

Non-GAAP operating income

$107,436

$92,603

Non-GAAP income before taxes

GAAP income before taxes

$81,270

$85,001

Restructuring and deal closing costs

10,814

7,036

Contingent consideration income

(2,345)

-

Asset writedowns

15,686

-

Non-GAAP income before taxes

$105,425

$92,037

Non-GAAP net income

GAAP net income

$58,375

$59,303

Restructuring and deal closing costs

10,814

7,036

Contingent consideration income

(2,345)

-

Asset writedowns

15,686

-

Tax benefit associated with non-GAAP items

(8,359)

(2,320)

Non-GAAP net income

$74,171

$64,019

Non-GAAP net income per common share assuming dilution

GAAP net income per common share assuming dilution

$2.24

$2.27

Non-GAAP items after tax per common share assuming dilution

$0.61

$0.18

Non-GAAP net income per common share assuming dilution

$2.85

$2.45

CONTACT:

Bryanne Salmon

Tel. (781) 356-9613

[email protected]