BRAINTREE, Mass., Feb. 1, 2016 /PRNewswire/ --
Revenue Growth Highlights
The constant currency revenue increase in the third quarter included strong performance from identified growth drivers:
- 14% growth in Plasma disposables revenue
- 18% growth in Hemostasis Management (TEG®) disposables revenue
- 9% growth in Emerging Markets disposables revenue, ex-Russia
Haemonetics Corporation (NYSE: HAE) reported third quarter fiscal 2016 revenue of $233.4 million, up 1%. Revenue was up 4% over the third quarter of fiscal 2015 in constant currency.
The Company reported a GAAP net loss of $59.4 million or $1.17 loss per share in the third quarter of fiscal 2016. Exclusive of non-cash write-downs of goodwill and other intangible assets, transformation, restructuring and deal amortization expenses detailed below, adjusted net income was $24.6 million, down 10%, and adjusted earnings per share were $0.48, down 9% compared with the third quarter of the prior fiscal year.1
For the first three quarters of fiscal 2016, revenue was $666.5 million, down 3%, and up 1% in constant currency. The Company reported a year to date GAAP net loss of $46.8 million or $0.92 per share. Exclusive of non-cash write-downs of goodwill and other intangible assets, transformation, restructuring and deal amortization expenses detailed below, year to date adjusted net income was $65.2 million, down 9%, and adjusted earnings per share were $1.27, down 8% compared with the first three quarters of the prior fiscal year.1
GROWTH DRIVERS UPDATE
The Company’s growth drivers of Plasma, TEG and Emerging Markets represented approximately 65% of disposables revenue in each of the first three quarters of fiscal 2016. In the third quarter, growth driver revenue was up 12% on a constant currency basis and 14% constant currency ex-Russia.
Plasma disposables revenue grew 15% in North America in the third quarter, as strong demand for collection volumes continued. Global plasma disposables revenue was up 14% in constant currency.
The TEG family of hemostasis management products TEG 5000, TEG 6s and TEG Manager software is well positioned for continued strong revenue growth. Limited market release of the Company’s next generation TEG 6s system continued.
Ronald Gelbman, Haemonetics’ Interim CEO, stated: “We are encouraged with 4% constant currency growth in the third quarter. This was driven by our Plasma and TEG franchises, which continued to deliver strong revenue performance. The encouraging momentum of these two franchises gives us confidence in the long-term prospects for our business.”
THIRD QUARTER 2016 REVENUE ELEMENTS
Plasma
Plasma disposables revenue was $92.5 million in the third quarter, up $9.3 million, or 11% on a reported basis and up 14% in constant currency. North America Plasma disposables revenue was up 15% versus the prior year’s third quarter, including the impact of saline and sodium citrate solutions shipments to CSL. The plasma disposables business outside the U.S. also delivered strong revenue growth.
Plasma collection volumes continued to reflect a robust end user market for plasma-derived biopharmaceuticals.
Blood Center
Platelet disposables revenue was $38.3 million in the third quarter, flat with the prior year quarter on a reported basis and up 4% on a constant currency basis. The impact of currency on reported growth rates reflects the concentration of the Company’s platelet business outside of the United States. Constant currency revenue was strong in Asia Pacific, but down modestly in Japan, where benefits of a single dose market share gain substantially offset a continued market shift toward double dose collection techniques.
Red cell disposables revenue was $9.2 million in the third quarter, down $1.7 million or 15% as reported and 14% on a constant currency basis as compared with the prior year’s third quarter. Lower volume, as well as pricing associated with a previously announced U.S. customer contract, accounted for the decline.
Whole blood disposables revenue was $30.2 million in the third quarter, down $4.0 million or 12% as reported and down 10% on a constant currency basis. This decline reflected continued volatility in the global whole blood collection market.
Hospital
TEG disposables revenue was $12.7 million for the quarter, up $1.8 million or 17% on a reported basis and up 18% in constant currency over the prior year’s third quarter, with continued growth in China and the U.S.
The TEG installed base continued to increase in the third quarter, benefiting from expanded adoption by new and existing accounts. The TEG family of devices, disposables and software remain well positioned for acceleration of revenue growth, consistent with the Company’s multi-year growth outlook.
Surgical disposables revenue was $15.2 million in the third quarter, down 3% as reported and up 2% on a constant currency basis over the prior year’s third quarter. Growth was driven by strong performance in the emerging markets.
Software and Equipment
Software Solutions revenue was $18.2 million in the third quarter, flat with the prior year’s third quarter on a reported basis and up 2% in constant currency.
Equipment and other revenue was $13.9 million, down $1.5 million or 10% as reported and down 7% on a constant currency basis, due primarily to weakness in Russia. Ex-Russia, equipment and other revenue was up 1% on a constant currency basis.
Equipment revenue is influenced by timing of tenders and capital budgets. The installed base of equipment, including devices sold and placed for use with customers, increased 5% in the first three quarters of fiscal 2016.
Geographic
Haemonetics reported third quarter fiscal 2016 revenue growth of 5% in the Americas and 3% in Asia Pacific, with declines of 6% in Europe and 9% in Japan. On a constant currency basis, the Company had revenue growth of 5% in the Americas, 9% in Asia Pacific and 1% in Europe, with a decline of 4% in Japan. Constant currency disposables revenue growth was 9% in both China and Europe ex-Russia in the third quarter.
In the Americas, strength in Plasma and TEG businesses was offset by declines in the Blood Center business. Weakness in Russia contributed to declines in Europe. Japan revenue was impacted by the timing of equipment purchases.
OPERATING RESULTS
Adjusted gross profit was $109.9 million, down $4.2 million or 4% from the prior year third quarter and included $7.2 million of unfavorable currency impact. Adjusted gross margin was 47.1%, down 210 basis points, but down only 30 basis points on a constant currency basis. Adjusted gross margin improvement, driven by productivity programs including Value Creation & Capture (“VCC”) initiatives, was more than offset by unfavorable product mix and reduced pricing, in particular recent pricing concessions in the U.S. red cell disposables business.
Incremental savings from VCC programs and other identified cost reductions were $2 million in the third quarter and are expected to approximate $8 million in fiscal 2016.
Adjusted operating expenses were $75.0 million in the third quarter, down $0.7 million or 1% from the prior year third quarter. R&D expense expanded to 4.6% of revenue, as compared with 4.3% in the third quarter of the prior year, as investments in growth drivers continued. Increased investments in R&D were more than offset by favorable currency translation.
In the third quarter, adjusted operating income was $34.9 million, down $3.5 million, or 9%.
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