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Haemonetics (HAE) Q4 Earnings Lag Estimates, Gross Margin Dips
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Haemonetics Corporation (HAE - Free Report) delivered adjusted earnings per share (EPS) of 46 cents in the fourth quarter of fiscal 2021, reflecting a 33.3% year-over-year decline. The bottom line lagged the Zacks Consensus Estimate by 31.3%.
On a GAAP basis, net loss was 22 cents per share against the year-ago EPS of 34 cents.
Full-year adjusted EPS was $2.35, reflecting a 29% decline from the year-earlier $3.31.
Total Revenues
Revenues declined 5.6% (down 13.7% on an organic basis) to $225 million in the fourth quarter of fiscal 2021. The top line also missed the Zacks Consensus Estimate by 0.06%.
Full-year revenues were $870.5 million, reflecting an 11.9% decline from the year-ago period (down 12.5% organically).
Haemonetics Corporation Price, Consensus and EPS Surprise
The year-over-year plunge in revenues was primarily due to the negative impact of the pandemic.
Quarterly Revenues by Product Categories
At Plasma, revenues of $83.7 million (accounting for 37.2% of total revenues) decreased 25.2% year over year (down 28.3% on an organic basis) in the reported quarter. According to the company, the pandemic continued to have a pronounced effect on the U.S.-sourced plasma donor pool in the quarter.
Revenues at Blood Center (32.8%) fell 3.6% (down 9.8% on an organic basis) to $73.8 million.
Hospital revenues (27.6%) rose 35.8% (up 11.7% on an organic basis) to $62.2 million. Under the Hospital segment, organic revenue growth in the Hemostasis Management product line was 19.1% in the fourth quarter of fiscal 2021 on strong capital sales in North America and EMEA.
Service revenues (2.4%) were up 26.2% (up 19.4% on an organic basis) to $5.4 million.
Margins
Per the company, adjusted gross margin was 50%, down 30 basis points (bps) year over year on higher inventory related charges, the impact of recent divestitures and unfavorable pricing and product mix. However, this was partially offset by recent acquisitions and productivity savings from the Operational Excellence Program and lower depreciation.
Adjusted operating expenses in the fourth quarter of fiscal 2021 were $94.6 million, up 18.9% from $79.5 million in the year-ago quarter. The increase was primarily driven by a rise in variable compensation and the acquisition of Cardiva Medical, Inc., partially offset by productivity savings and cost-containment actions to help offset the negative effects of COVID-19 on business.
Adjusted operating loss was $12.7 million in the quarter under discussion compared with adjusted operating income of $34.1 million in the year-ago quarter.
Financial Position
Haemonetics exited 2021 with cash and cash equivalents of $192.3 million compared with $137.3 million at the end of 2020. Long-term debt at the end of 2021 was $690.6 million, up from $305.5 million at the end of 2020.
Cumulative net cash flow from operating activities at the end of 2021 was $108.8 million compared with $158.2 million a year ago.
Cumulative capital expenses (net of proceeds from sale of property, plant and equipment) incurred by the company were $35.2 million, up from the year-ago $31.9 million. It also reported free cash flow (before restructuring and turnaround costs) of $99.2 million during the same period, down 28.8% from $139.4 million a year ago.
2022 Guidance
Haemonetics has issued its full-year 2022 financial guidance. The company expects GAAP total revenue growth in the range of 13-18% and organic growth in the range of 8-12%. The Zacks Consensus Estimate for 2022 revenues is pegged at $1 billion.
The company expects full-year adjusted earnings per share in the band of $2.60-$3.00. The Zacks Consensus Estimate for the same is pegged at $3.52.
Our Take
Haemonetics exited the fourth quarter of fiscal 2021 with lower-than-expected results. The company’s sluggish Plasma and Blood Center businesses due to the pandemic-led business disruptions is concerning. Contraction of gross margin as well as incurring of operating loss due to lower revenues and higher operational costs associated with the pandemic is worrying as well.
On a positive note, the company’s Hospital business was robust along with uptick in the Hemostasis Management product line. Gross productivity savings from the Operational Excellence Program and cost-containment actions partially offset the contraction of gross margin, raising optimism. Strong customer end-market demand for NexSys PCS system with Persona technology buoys optimism.
Zacks Rank and Key Picks
Haemonetics currently carries a Zacks Rank #4 (Sell).
Boston Scientific reported first-quarter 2021 adjusted EPS of 37 cents, beating the Zacks Consensus Estimate by 23.3%. Net revenues of $2.75 billion outpaced the consensus estimate by 5.3%. It currently carries Zacks Rank #2 (Buy).
Illumina reported first-quarter 2021 adjusted EPS of $1.89, beating the Zacks Consensus Estimate by 38.9%. Revenues of $1.09 billion outpaced the consensus estimate of $1.08 billion. It currently carries Zacks Rank #2.
HCA Healthcare reported first-quarter 2021 adjusted EPS of $4.14, surpassing the Zacks Consensus Estimate by 23.6%. Net revenues of $14 billion exceeded the Zacks Consensus Estimate by 2.2%. It currently carries Zacks Rank #2.
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Haemonetics (HAE) Q4 Earnings Lag Estimates, Gross Margin Dips
Haemonetics Corporation (HAE - Free Report) delivered adjusted earnings per share (EPS) of 46 cents in the fourth quarter of fiscal 2021, reflecting a 33.3% year-over-year decline. The bottom line lagged the Zacks Consensus Estimate by 31.3%.
On a GAAP basis, net loss was 22 cents per share against the year-ago EPS of 34 cents.
Full-year adjusted EPS was $2.35, reflecting a 29% decline from the year-earlier $3.31.
Total Revenues
Revenues declined 5.6% (down 13.7% on an organic basis) to $225 million in the fourth quarter of fiscal 2021. The top line also missed the Zacks Consensus Estimate by 0.06%.
Full-year revenues were $870.5 million, reflecting an 11.9% decline from the year-ago period (down 12.5% organically).
Haemonetics Corporation Price, Consensus and EPS Surprise
Haemonetics Corporation price-consensus-eps-surprise-chart | Haemonetics Corporation Quote
The year-over-year plunge in revenues was primarily due to the negative impact of the pandemic.
Quarterly Revenues by Product Categories
At Plasma, revenues of $83.7 million (accounting for 37.2% of total revenues) decreased 25.2% year over year (down 28.3% on an organic basis) in the reported quarter. According to the company, the pandemic continued to have a pronounced effect on the U.S.-sourced plasma donor pool in the quarter.
Revenues at Blood Center (32.8%) fell 3.6% (down 9.8% on an organic basis) to $73.8 million.
Hospital revenues (27.6%) rose 35.8% (up 11.7% on an organic basis) to $62.2 million. Under the Hospital segment, organic revenue growth in the Hemostasis Management product line was 19.1% in the fourth quarter of fiscal 2021 on strong capital sales in North America and EMEA.
Service revenues (2.4%) were up 26.2% (up 19.4% on an organic basis) to $5.4 million.
Margins
Per the company, adjusted gross margin was 50%, down 30 basis points (bps) year over year on higher inventory related charges, the impact of recent divestitures and unfavorable pricing and product mix. However, this was partially offset by recent acquisitions and productivity savings from the Operational Excellence Program and lower depreciation.
Adjusted operating expenses in the fourth quarter of fiscal 2021 were $94.6 million, up 18.9% from $79.5 million in the year-ago quarter. The increase was primarily driven by a rise in variable compensation and the acquisition of Cardiva Medical, Inc., partially offset by productivity savings and cost-containment actions to help offset the negative effects of COVID-19 on business.
Adjusted operating loss was $12.7 million in the quarter under discussion compared with adjusted operating income of $34.1 million in the year-ago quarter.
Financial Position
Haemonetics exited 2021 with cash and cash equivalents of $192.3 million compared with $137.3 million at the end of 2020. Long-term debt at the end of 2021 was $690.6 million, up from $305.5 million at the end of 2020.
Cumulative net cash flow from operating activities at the end of 2021 was $108.8 million compared with $158.2 million a year ago.
Cumulative capital expenses (net of proceeds from sale of property, plant and equipment) incurred by the company were $35.2 million, up from the year-ago $31.9 million. It also reported free cash flow (before restructuring and turnaround costs) of $99.2 million during the same period, down 28.8% from $139.4 million a year ago.
2022 Guidance
Haemonetics has issued its full-year 2022 financial guidance. The company expects GAAP total revenue growth in the range of 13-18% and organic growth in the range of 8-12%. The Zacks Consensus Estimate for 2022 revenues is pegged at $1 billion.
The company expects full-year adjusted earnings per share in the band of $2.60-$3.00. The Zacks Consensus Estimate for the same is pegged at $3.52.
Our Take
Haemonetics exited the fourth quarter of fiscal 2021 with lower-than-expected results. The company’s sluggish Plasma and Blood Center businesses due to the pandemic-led business disruptions is concerning. Contraction of gross margin as well as incurring of operating loss due to lower revenues and higher operational costs associated with the pandemic is worrying as well.
On a positive note, the company’s Hospital business was robust along with uptick in the Hemostasis Management product line. Gross productivity savings from the Operational Excellence Program and cost-containment actions partially offset the contraction of gross margin, raising optimism. Strong customer end-market demand for NexSys PCS system with Persona technology buoys optimism.
Zacks Rank and Key Picks
Haemonetics currently carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the broader medical space are Boston Scientific Corporation (BSX - Free Report) , Illumina, Inc. (ILMN - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boston Scientific reported first-quarter 2021 adjusted EPS of 37 cents, beating the Zacks Consensus Estimate by 23.3%. Net revenues of $2.75 billion outpaced the consensus estimate by 5.3%. It currently carries Zacks Rank #2 (Buy).
Illumina reported first-quarter 2021 adjusted EPS of $1.89, beating the Zacks Consensus Estimate by 38.9%. Revenues of $1.09 billion outpaced the consensus estimate of $1.08 billion. It currently carries Zacks Rank #2.
HCA Healthcare reported first-quarter 2021 adjusted EPS of $4.14, surpassing the Zacks Consensus Estimate by 23.6%. Net revenues of $14 billion exceeded the Zacks Consensus Estimate by 2.2%. It currently carries Zacks Rank #2.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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