Boston, MA, November 7, 2022 - Haemonetics Corporation (NYSE: HAE) reported financial results for its second quarter and first half of fiscal 2023, which ended October 1, 2022:

    

2nd Quarter 2023

YTD 2023

n

Revenue, increase

$297 million, 24%

$559 million, 19%

n

Organic1 revenue increase

27%

22%

n

Earnings per diluted share

$0.64

$1.03

n

Adjusted earnings per diluted share

$0.83

$1.41

n

Cash flow from operating activities

$87 million

$129 million

n

Free cash flow before restructuring & restructuring related costs

$62 million

$66 million

1 Excludes the impact of currency fluctuation and strategic exits of product lines.

Chris Simon, Haemonetics’ CEO, stated: "Strong second-quarter results are evidence that our Long-Range Plan is working. Our technology is helping our plasma customers collect record amounts of plasma to serve patients and replenish depleted inventories. Hospital is accelerating growth and we are making organic and inorganic investments to help clinicians advance the standard of care. Our resilient supply chain is meeting customers’ needs and our balance sheet is strong with ample liquidity to support our capital allocation priorities."

Second quarter fiscal 2023 revenue was $297.5 million, up 24.0% compared with the second quarter of fiscal 2022. Business unit revenue and growth rates compared with the prior year period were as follows:

Gross margin was 53.1% in the second quarter of fiscal 2023 compared with 51.1% in the second quarter of fiscal 2022. Operating expenses were $111.1 million in the second quarter of fiscal 2023 compared with $98.0 million in the second quarter of fiscal 2022. The Company had operating income of $46.7 million and a 15.7% operating margin in the second quarter of fiscal 2023, compared with operating income of $24.5 million and an operating margin of 10.2% in the second quarter of fiscal 2022. The income tax rates were 19% and 25% in the second quarters of fiscal 2023 and fiscal 2022, respectively. Second quarter fiscal 2023 net income and earnings per diluted share were $33.2 million and $0.64, respectively, compared with net income and earnings per diluted share of $14.9 million and $0.29, respectively, in the second quarter of fiscal 2022.

Organic revenue for the second quarter of fiscal 2023 was up 27.4% compared with the same period of fiscal 2022. Business unit organic revenue growth rates compared with the prior year period were as follows:

Second quarter fiscal 2023 adjusted gross margin was 53.7%, up 110 basis points compared with the prior year period. The primary drivers of the increase were volume and mix, price and productivity savings from the Operational Excellence Program, partially offset by inflationary pressures in our global manufacturing and supply chain and increased depreciation expense.

Adjusted operating expenses in the second quarter of fiscal 2023 were $99.0 million, up $16.7 million, or 20.2%, compared with the prior year period. The increase in adjusted operating expenses was primarily driven by an increase in freight volumes and costs, continuous growth investments, higher performance-based compensation and a return to normal spending levels partially offset by productivity savings from the Operational Excellence Program. Adjusted operating income for the second quarter of fiscal 2023 was $60.6 million, up $16.8 million or 38.4%, and adjusted operating margin was 20.4%, up 210 basis points when compared with the same period of fiscal 2022. The adjusted income tax rate was 22% in each of the second quarters of fiscal 2023 and 2022.

Second quarter fiscal 2023 adjusted net income was $42.7 million, up $12.1 million, or 39.3%, and adjusted earnings per diluted share was $0.83, up 38.3%, when compared with the same period of fiscal 2022.

The Company incurred restructuring and restructuring related costs of $3.2 million in the second quarter of fiscal 2023 compared with $4.5 million in the second quarter of fiscal 2022 and deal amortization expenses of $8.2 million in the second quarter of fiscal 2023 compared with $11.4 million in the second quarter of fiscal 2022.

In addition, during the second quarter of fiscal 2023, the Company incurred $2.5 million of costs related to compliance with the European Union Medical Device Regulation and In Vitro Diagnostic Regulation, as compared with $2.3 million of such costs in the second quarter of fiscal 2022.

Cash on hand at October 1, 2022 was $241.2 million, a decrease of $18.3 million since April 2, 2022. During the second fiscal quarter, the Company repurchased $75.0 million of its common stock pursuant to an accelerated share repurchase agreement entered into during the second fiscal quarter and borrowed $50.0 million on its revolving credit facility. Additionally, the Company paid $32.3 million of earnout payments related to acquisitions.

Cash flow from operating activities was $87.0 million and free cash flow before restructuring and restructuring related costs was $61.8 million during the second quarter of fiscal 2023, compared with $42.7 million and $29.3 million, respectively, in the same period of fiscal 2022.

As part of its previously announced $300 million share repurchase program, the Company repurchased 997,406 shares of its common shares for $75.0 million via an accelerated share repurchase agreement with Citibank, N.A. The initial delivery of 786,164 shares occurred at the end of the second quarter with a final delivery of 211,242 shares completed on November 4, 2022.

The Company updated its previous fiscal 2023 GAAP total revenue growth guidance from 8 - 11% to 12 - 15% and its fiscal 2023 organic revenue growth guidance as follows:

Additionally, the Company reaffirmed its adjusted operating margin guidance and updated its adjusted earnings per diluted share guidance and free cash flow before restructuring and restructuring related costs guidance as follows:

The Company will host a conference call with investors and analysts to discuss second quarter fiscal 2023 results on Monday, November 7, 2022 at 8:00 a.m. ET. The call can be accessed via teleconference at https://register.vevent.com/registerBI40288651d4b2472199bac5fd76e59174. Once registration is completed, participants will receive a dial-in number along with a personalized PIN to access the call. While not required, it is recommended that participants join 10 minutes prior to the event start.

Alternatively, a live webcast of the call can be accessed on Haemonetics’ investor relations website at the following direct link: https://edge.media-server.com/mmc/p/jmqoyvd8

The Company is posting this press release to its investor relations website, in addition to supplemental analytical tables that will be referenced on the webcast. These supplemental analytical tables can be accessed at the following direct link: https://haemonetics.gcs-web.com/static-files/f02bd23c-d80b-491e-ab3a-f299118c93f3

Haemonetics (NYSE: HAE) is a global healthcare company dedicated to providing a suite of innovative medical products and solutions for customers, to help them improve patient care and reduce the cost of healthcare. Our technology addresses important medical markets: blood and plasma component collection, the surgical suite and hospital transfusion services. To learn more about Haemonetics, visit www.haemonetics.com.

Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements. Forward-looking statements in this press release may include, without limitation, statements regarding (i) plans and objectives of management for operations of the Company, including plans or objectives related to the development and commercialization of, and regulatory approvals related to, the Company’s products and plans or objectives related to the Operational Excellence Program; (ii) estimates or projections of financial results, financial condition, capital expenditures, capital structure or other financial items, including with respect to the share repurchase program; (iii) the impact of the COVID-19 pandemic and associated inflationary pressures on the Company’s operations, availability and demand for its products, and future financial performance, and (iv) the assumptions underlying or relating to any statement described in points (i), (ii) or (iii) above.

Such forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon the Company’s current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the inaccuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation, the impact of the COVID-19 pandemic, including its scope and duration (including the extent of future surges, variants and the efficacy of vaccinations), government actions and restrictive measures implemented in response and associated economic disruptions, including inflationary pressures and higher freight costs in our global supply chain; availability and demand for the Company’s products; the Company’s ability to implement as planned and realize estimated cost savings from the Operational Excellence Program; the Company’s ability to execute business continuity plans; risks arising from planned or completed acquisitions or divestitures by the Company, including any failure to realize the anticipated strategic benefits and opportunities of the transaction; the impact of share repurchases on the Company’s stock price and volatility as well as the effect of short-term price fluctuations on the share repurchase program’s effectiveness; technological advances in the medical field and standards for transfusion medicine and the Company’s ability to successfully offer products that incorporate such advances and standards; product quality; market acceptance; regulatory uncertainties, including in the receipt or timing of regulatory approvals; the effect of economic and political conditions; the impact of competitive products and pricing; blood product reimbursement policies and practices; and the effect of industry consolidation as seen in the plasma market. These and other factors are identified and described in more detail in the Company’s periodic reports and other filings with the U.S. Securities and Exchange Commission (the “SEC”). The Company does not undertake to update these forward-looking statements.

This press release contains financial measures that are considered “non-GAAP” financial measures under applicable SEC rules and regulations. Management uses non-GAAP measures to monitor the financial performance of the business, make informed business decisions, establish budgets and forecast future results. Performance targets for management are also based on certain non-GAAP financial measures. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, the Company’s reported financial results prepared in accordance with U.S. GAAP. In this release, supplemental non-GAAP measures have been provided to assist investors in evaluating the performance of the Company’s core operations and provide a baseline for analyzing trends in the Company’s underlying businesses. We strongly encourage investors to review the Company’s financial statements and publicly-filed reports in their entirety and not rely on any single financial measure.

When used in this release, organic revenue growth excludes the impact of currency fluctuation and strategic exits of product lines. Adjusted gross profit, adjusted operating expenses, adjusted operating income, adjusted net income and adjusted earnings per diluted share exclude restructuring and restructuring related costs, deal amortization expenses, asset impairments, accelerated device depreciation and related costs, costs related to compliance with the European Union Medical Device Regulation and In Vitro Diagnostic Regulation, integration and transaction costs, gains and losses on dispositions, certain tax settlements and unusual or infrequent and material litigation-related charges.

Adjusted net income and adjusted earnings per diluted share also exclude the tax impact of these items. Free cash flow before restructuring and restructuring related costs is defined as cash provided by operating activities less capital expenditures, net of the proceeds from the sale of property, plant and equipment. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures to similarly titled measures used by other companies.

A reconciliation of non-GAAP historical financial measures to their most comparable GAAP measure are included at the end of the financial sections of this press release as well as on the Company’s website at www.haemonetics.com. The Company does not provide a quantitative reconciliation of its forward-looking organic revenue growth guidance by business unit to the comparable GAAP measure because forecasting the impact of foreign currency fluctuations by business unit is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts. Additionally, the Company does not attempt to provide reconciliations of forward-looking adjusted operating margin guidance, adjusted earnings per diluted share guidance or free cash flow before restructuring and restructuring related costs guidance to the comparable GAAP measures because the combined impact and timing of recognition of certain potential charges or gains, such as restructuring costs and impairment charges, is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts. In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of the Company’s financial performance.