Add
HAE to Portfolio
Set Alert
Email to a
Friend
| |||
|
|
Quotes & Info
|
| HAE > SEC Filings for HAE > Form 10-Q on 4-Nov-2009 | All Recent SEC Filings |
4-Nov-2009
Quarterly Report
• Payment of monthly rental fees; and/or
• An asset utilization performance metric, such as performing a minimum level of procedures per month per device.
Our disposables revenue stream (including sales of disposables and fees for the use of our equipment) accounted for approximately 88% and 87% of our total revenues for both second quarter and first six months of fiscal year 2010 and 2009, respectively.
Financial Summary
For the three months ended For the six months ended
September 26, September 27, % Increase/ September 26, September 27, % Increase/
(in thousands, except per share data) 2009 2008 (Decrease) 2009 2008 (Decrease)
Net revenues $ 157,070 $ 145,919 7.6 % $ 311,158 $ 290,035 7.3 %
Gross profit $ 80,967 $ 74,689 8.4 % $ 163,910 $ 147,726 11.0 %
% of net revenues 51.5 % 51.2 % 52.7 % 50.9 %
Operating expenses $ 53,944 $ 51,080 5.6 % $ 110,560 $ 104,783 5.5 %
Operating income $ 27,023 $ 23,609 14.5 % $ 53,350 $ 42,943 24.2 %
% of net revenues 17.2 % 16.2 % 17.1 % 14.8 %
Interest expense $ (255 ) $ (16 ) 1493.8 % $ (463 ) $ (40 ) 1057.5 %
Interest income $ 103 $ 506 (79.6 %) $ 253 $ 1,160 (78.2 %)
Other income, net $ (801 ) $ (1,290 ) (37.9 %) $ (1,135 ) $ (915 ) 24.0 %
Income before taxes $ 26,070 $ 22,809 14.3 % $ 52,005 $ 43,148 20.5 %
Provision for income tax $ 8,020 $ 8,002 0.2 % $ 15,882 $ 14,000 13.4 %
% of pre-tax income 30.8 % 35.1 % 30.5 % 32.4 %
Net income $ 18,050 $ 14,807 21.9 % $ 36,123 $ 29,148 23.9 %
% of net revenues 11.5 % 10.1 % 11.6 % 10.0 %
Earnings per share-diluted $ 0.69 $ 0.57 20.1 % $ 1.37 $ 1.11 23.7 %
|
Net revenues increased 7.6% and 7.3% for the second quarter and first six months
of fiscal year 2010 over the comparable periods of fiscal year 2009. The effects
of foreign exchange accounted for an increase of 2.1% and 1.4% for the second
quarter and six months, respectively. The remaining increase of 5.5% for the
quarter and 5.9% for the six months is mainly due to increases in our plasma
disposables revenue and software solutions revenue.
Gross profit increased 8.4% and 11.0% as compared to the second quarter and
first six months of fiscal year 2009. The favorable effects of foreign exchange
accounted for an increase of 3.4% and 5.8% for the second quarter and first six
months of fiscal year 2010, respectively. The remaining increase of 5.0% for the
quarter and 5.2% for the six months was due primarily to increased sales and
manufacturing efficiencies. This was partly offset by changes in product mix
driven by higher sales of our lower margin plasma products.
Operating expenses increased 5.6% and 5.5% for the second quarter and first six
months of fiscal year 2010 over the comparable periods of fiscal year 2009. The
favorable effects of foreign exchange accounted for a decrease in operating
expenses of 0.5% for the quarter and 1.7% for the six months, respectively.
Without the effects of foreign exchange, operating expenses increased 6.1% in
the second quarter and 7.2% in the first six months of fiscal year 2010. The
higher operating expenses are primarily related to increased investment in
research and development, the expenses from recent acquisitions, expenses
associated with our ERP Phase II go-live, and higher expenses due to the
introduction of blood management solutions. The noted increases in operating
expenses were partly offset by a lack of restructuring costs in the first six
months of fiscal year 2010 when compared to the first six months of fiscal year
2009.
Operating income increased 14.5% and 24.2% for the second quarter and first six
months of fiscal year 2010 over the comparable periods of fiscal year 2009. The
effects of foreign exchange accounted for an increase of 11.8% and 23.7% for the
second quarter and six months, respectively. Without the effects of foreign
exchange operating income increased 2.7% for the quarter and 0.5% for the six
months as a result of noted changes in gross profit and operating expenses.
Net income increased 21.9% and 23.7% for the second quarter and first six months
of fiscal year 2010 over the comparable periods of fiscal year 2009. The main
factors that affected net income were the increase in operating income and the
reduction in tax rate.
RESULTS OF OPERATIONS
Net Revenues by Geography
For the three months ended For the six months ended
September 26, September 27, September 26, September 27,
(in thousands) 2009 2008 % Increase 2009 2008 % Increase
United States $ 74,856 $ 66,511 12.5 % $ 149,869 $ 132,300 13.3 %
International 82,214 79,408 3.5 % 161,289 157,735 2.3 %
Net revenues $ 157,070 $ 145,919 7.6 % $ 311,158 $ 290,035 7.3 %
|
International Operations and the Impact of Foreign Exchange
Our principal operations are in the U.S., Europe, Japan and other parts of Asia.
Our products are marketed in more than 80 countries around the world via a
direct sales force as well as independent distributors and agents.
Our revenues generated outside the U.S. approximated 52% for both the second
quarter and the first six months of fiscal year 2010 and 54% for both the second
quarter and the first six months of fiscal year 2009. Revenues in Japan
accounted for approximately 17.0% and 16.6% of total revenues for the second
quarter of fiscal year 2010 and 2009, respectively and 16.4% and 15.9% of total
revenues for the first six months of fiscal year 2010 and 2009, respectively.
Revenues in Europe accounted for approximately 27.3% and 29.6% of total revenues
for the second quarters of fiscal year 2010 and 2009 and 27.6% and 30.5% of
total revenues for the first six months of fiscal year 2010 and 2009,
respectively. International sales are primarily conducted in local currencies,
primarily the Japanese Yen and the Euro. As discussed above, our results of
operations are impacted by changes in the value of the Yen and the Euro relative
to the U.S. dollar.
Please see section entitled "Foreign Exchange" in this discussion for a more
complete explanation of how foreign currency affects our business and our
strategy for managing this exposure.
Net Revenues by Product Type
For the three months ended For the six months ended
September 26, September 27, % Increase/ September 26, September 27, % Increase/
(in thousands) 2009 2008 (Decrease) 2009 2008 (Decrease)
Disposables $ 137,748 $ 127,116 8.4 % $ 273,710 $ 252,644 8.3 %
Software solutions 9,100 7,079 28.5 % 17,554 14,337 22.4 %
Equipment & other 10,222 11,724 (12.8 %) 19,894 23,054 (13.7 %)
Net revenues $ 157,070 $ 145,919 7.6 % $ 311,158 $ 290,035 7.3 %
|
Disposables Revenues by Product Type
For the three months ended For the six months ended
September 26, September 27, % Increase/ September 26, September 27, % Increase/
(in thousands) 2009 2008 (Decrease) 2009 2008 (Decrease)
Plasma disposables $ 59,423 $ 49,924 19.0 % $ 118,293 $ 96,792 22.2 %
Blood bank disposables
Platelet 37,250 36,294 2.6 % 71,557 71,953 (0.6 %)
Red cell 11,484 11,758 (2.3 %) 23,263 23,600 (1.4 %)
48,734 48,052 1.4 % 94,820 95,553 (0.8 %)
Hospital disposables
Surgical 16,631 15,984 4.0 % 34,056 33,253 2.4 %
OrthoPAT 8,678 8,393 3.4 % 17,262 17,189 0.4 %
Diagnostics 4,282 4,763 (10.1 %) 9,279 9,857 (5.9 %)
29,591 29,140 1.5 % 60,597 60,299 0.5 %
Total disposables revenue $ 137,748 $ 127,116 8.4 % $ 273,710 $ 252,644 8.3 %
|
Disposables
Disposables include the Plasma, Blood Bank, and Hospital product lines.
Disposables revenue increased 8.4% and 8.3% for the second quarter and the first
six months of fiscal year 2010 over the comparable periods of fiscal year 2009.
Foreign exchange resulted in a 1.8% and 1.2% increase for the quarter and six
months. The remaining increase of 6.6% and 7.1% for the second quarter and the
first six months of fiscal year 2010 were driven by increases in the Plasma
product line, as discussed below.
Plasma
Plasma disposables revenue increased 19.0% and 22.2% for the second quarter and
the first six months of fiscal year 2010 compared to the same periods in fiscal
year 2009. Foreign exchange resulted in a 2.0% and 1.2% increase for the quarter
and six months, respectively. For both the second quarter and first six months
of fiscal year 2010 as compared to the same periods in fiscal year 2009, higher
collections in both the U.S. and Europe, share gains, and, to a lesser extent,
pricing were the main reasons for the remaining increase.
As supply-demand balance has been achieved between source plasma collected and
used in pharmaceutical production, we are seeing a moderation in collections.
The fractionation companies will continue to balance collections to support the
underlying growth in demand for plasma drugs which we believe to be in the 7%
range. With contractual price increases, new products, and market share gains,
we anticipate that plasma disposable revenue growth will moderate, but continue
to outpace collection market growth in the near term.
Blood Bank
Blood bank consists of platelet and red cell disposables.
Platelet disposables revenue increased 2.6% for the second quarter and decreased
0.6% for the first six months of fiscal year 2010 compared to the same periods
in fiscal year 2009. Comparing the second quarter and the first six months of
fiscal year 2010 to that of 2009, foreign exchange accounted for an increase of
2.3% and 2.1%, respectively. For the quarter, the remaining increase of 0.3% was
the result of growth in China and Taiwan offset by share loss in Japan. Without
the effect of currency, revenues decreased 2.7% in the first six months. The
decrease was driven by the first quarter challenges in South Korea associated
with the significant devaluation of South Korea's currency, the Won, and by the
reasons noted for the second quarter growth.
Red cell disposables decreased 2.3% and 1.4% for the second quarter and the
first six months of fiscal year 2010 compared to the same periods in fiscal year
2009. Comparing the second quarter and the first six months of fiscal year 2010
to that of 2009, foreign exchange accounted for a decrease of 1.1% and 0.7%,
respectively. The remaining decrease of 1.2% for the quarter and 0.7% for the
six months was driven by lower demand for red cells, as a result of (i) fewer
surgeries, thus a
reduced demand for blood and (ii) 5% more donors due to the entry of 16 year
olds to the blood donor population, which combined resulted in a reliance on a
higher percentage of whole blood collections.
Hospital
Hospital consists of surgical, OrthoPAT, and diagnostics products.
Revenues from our surgical disposables increased 4.0% and 2.4% for the second
quarter and the first six months of fiscal year 2010 compared to the same
periods in fiscal year 2009. Surgical disposables revenue consists principally
of the Cell Saver and cardioPAT products. Foreign exchange resulted in an
increase in surgical disposables revenue of 1.9% for the quarter and 2.1% for
the six months. Without the effect of currency, surgical disposables increased
2.1% and 0.3% for the second quarter and the first six months, respectively. The
increase was primarily the result of increases in sales of cardioPAT products,
as more hospitals adopt the cardioPAT products.
Revenues from our OrthoPAT disposables increased 3.4% and 0.4% for the second
quarter and the first six months of fiscal year 2010 compared to the same
periods in fiscal year 2009. Foreign exchange had a minimal impact, a 0.5%
increase, on OrthoPAT disposables revenue for the quarter and no impact on
revenue for the first six months. The increase was primarily the result of
market share gains.
Revenues from our diagnostics products decreased 10.1% and 5.9% for the second
quarter and the first six months of fiscal year 2010 compared to the same
periods in fiscal year 2009. Diagnostics product revenue consists principally of
the TEG products. Comparing the second quarter and the first six months of
fiscal year 2010 to that of 2009, foreign exchange accounted for an increase of
3.9% and 0.4%, respectively. Without the effect of currency, diagnostic product
revenues decreased of 15.0% for the quarter and 6.3% for the six months.
Diagnostics product revenue is unique, compared to revenue from other products,
in that it includes TEG disposable and equipment sales. The revenue decline in
the quarter and year-to-date are due to a decline in TEG equipment sales. The
noted decrease was partly offset by an 11.1% and 10.0% increase in TEG
disposables for the second quarter and the first six months of fiscal year 2010.
Software Solutions
Our software solutions revenues include revenue from software sales. Software
solutions revenues increased 28.5% and 22.4% for the second quarter and the
first six months of fiscal year 2010 over the comparable period of fiscal year
2009. Foreign exchange resulted in a 1.4% and 1.1% increase for the quarter and
six months. The remaining increase of 27.1% and 21.3% for the second quarter and
the first six months of fiscal year 2010 was driven by increased sales to
commercial plasma customers and revenues associated with two recent
acquisitions.
Equipment & Other
Our equipment & other revenues include revenue from equipment sales, repairs
performed under preventive maintenance contracts or emergency service visits,
spare part sales, and various service and training programs. Equipment & other
revenues decreased 12.8% and 13.7% for the second quarter and the first six
months of fiscal year 2010 over the comparable period of fiscal year 2009.
Foreign exchange resulted in a 7.8% and 4.7% increase for the quarter and six
months. Without the effect of currency, the decrease of 20.6% and 18.4% for the
second quarter and the first six months of fiscal year 2010 is primarily the
result of fewer equipment sales, particularly to distributor customers due to
macro economic trends impacting health care funding.
Gross Profit
For the three months ended For the six months ended
September 26, September 27, September 26, September 27,
(in thousands) 2009 2008 % Increase 2009 2008 % Increase
Gross profit $ 80,967 $ 74,689 8.4 % $ 163,910 $ 147,726 11.0 %
% of net revenues 51.5 % 51.2 % 52.7 % 50.9 %
|
Gross profit increased 8.4% and 11.0% for the second quarter and the first six months of fiscal year 2010 as compared to the same periods of fiscal year 2009. Our gross profit margin improved 30 basis points for the second quarter and 180 basis points for the first six months of fiscal year 2010. The improvement was attributable to foreign exchange and improved
manufacturing efficiencies, particularly for our plasma business. Product mix
partly offset these improvements due to increased sales of our lower margin
plasma products.
Operating Expenses
For the three months ended For the six months ended
September 26, September 27, September 26, September 27,
(in thousands) 2009 2008 % Increase 2009 2008 % Increase
Research, development and
engineering $ 6,475 $ 5,217 24.1 % $ 13,252 $ 11,061 19.8 %
% of net revenues 4.1 % 3.6 % 4.3 % 3.8 %
Selling, general and
administrative $ 47,469 $ 45,863 3.5 % $ 97,308 $ 93,722 3.8 %
% of net revenues 30.2 % 31.4 % 31.3 % 32.3 %
Total operating expenses $ 53,944 $ 51,080 $ 110,560 $ 104,783
% of net revenues 34.3 % 35.0 % 35.5 % 36.1 %
|
Research, Development and Engineering
Research, development and engineering expenses increased 24.1% and 19.8% for the
second quarter and the first six months of fiscal year 2010 as compared to the
same periods of fiscal year 2009. The increase is a result of increased spending
in the whole blood and Arryx blood diagnostics technologies.
Selling, General and Administrative
During the second quarter and first six months of fiscal year 2010, selling,
general and administrative expenses increased 3.5% and 3.8%, respectively.
Foreign exchange resulted in a 0.3% and 1.7% decrease in selling, general and
administrative during the quarter. Excluding the impact of foreign exchange,
selling, general and administrative expense increased 3.8% and 5.5% for the
second quarter and six months. The increase was due primarily to (i) expenses
brought on from recent acquisitions that had not been reflected in the second
quarter of fiscal year 2009, (ii) expenses associated with our ERP Phase II
go-live, and (iii) general selling, marketing and handling costs necessary to
support the increase in sales and the introduction of blood management
solutions. The noted increases were partly offset by a lack of restructuring
costs in the first six months of fiscal year 2010 when compared to the first six
months of fiscal year 2009.
Operating Income
For the three months ended For the six months ended
September 26, September 27, September 26, September 27,
(in thousands) 2009 2008 % Increase 2009 2008 % Increase
Operating income $ 27,023 $ 23,609 14.5 % $ 53,350 $ 42,943 24.2 %
% of net revenues 17.2 % 16.2 % 17.1 % 14.8 %
|
Operating income increased 14.5% and 24.2% for the second quarter and first six months of fiscal year 2010 as compared to the same periods of fiscal year 2009. Foreign exchange resulted in increases of 11.8% and 23.7% in operating income during the quarter and first six months, respectively. Without the effects of foreign currency, operating income increased 2.7% for the quarter and 0.5% for the first six months due to the net of sales and gross profit growth offset by increases in operating expenses.
Other (expense)/income,
net
For the three months ended For the six months ended
September 26, September 27, % September 26, September 27, %
(in thousands) 2009 2008 Increase 2009 2008 Decrease
Interest expense $ (255 ) $ (16 ) $ (463 ) $ (40 )
Interest income 103 506 253 1,160
Other expense, net (801 ) (1,290 ) (1,135 ) (915 )
Total other (expense)/income, net $ (953 ) $ (800 ) 19.1 % $ (1,345 ) $ 205 n.m.
|
Total other expense, net increased 19.1% for the second quarter and total other
income, net decreased more than 100% for first six months of fiscal year 2010 as
compared to the same periods of fiscal year 2009. The main reasons for the
decrease is the net of (i) the increase in interest expense due to the
accounting relating to the contingent consideration on a recent acquisition and
(ii) the decrease in interest income due to significantly reduced investment
yield.
Income Taxes . . . |
|
|