Haemonetics(HAE) - 2026 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements For the quarter ended June 28, 2025, Haemonetics reported net revenues of $321.4 million, a decrease from $336.2 million year-over-year, while gross profit increased to $192.2 million (59.8% margin) and operating income grew significantly to $53.9 million Condensed Consolidated Statements of Income The company reported net revenues of $321.4 million, gross profit of $192.2 million, operating income of $53.9 million, and net income of $34.0 million for the quarter ended June 28, 2025 Consolidated Statements of Income (Unaudited, in thousands) | Financial Metric | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | | :--- | :--- | :--- | | Net Revenues | $321,394 | $336,172 | | Gross Profit | $192,244 | $174,924 | | Operating Income | $53,872 | $39,756 | | Net Income | $34,031 | $38,373 | | Diluted EPS | $0.70 | $0.74 | Condensed Consolidated Balance Sheets As of June 28, 2025, total assets were $2.46 billion, with cash and equivalents at $292.9 million and total stockholders' equity at $882.3 million Consolidated Balance Sheet Highlights (Unaudited, in thousands) | Balance Sheet Item | June 28, 2025 | March 29, 2025 | | :--- | :--- | :--- | | Cash and cash equivalents | $292,898 | $306,763 | | Total current assets | $913,160 | $934,975 | | Total Assets | $2,462,094 | $2,450,948 | | Total current liabilities | $531,407 | $578,113 | | Long-term debt | $920,833 | $921,230 | | Total Stockholders' Equity | $882,300 | $820,836 | Condensed Consolidated Statements of Cash Flows Operating activities generated $17.4 million in cash, while investing activities used $33.0 million and financing activities used $2.4 million, resulting in a net cash decrease of $13.9 million Consolidated Statements of Cash Flows (Unaudited, in thousands) | Cash Flow Activity | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $17,395 | $(27,421) | | Net cash used in investing activities | $(33,000) | $(139,197) | | Net cash (used in) provided by financing activities | $(2,442) | $333,692 | | Net Change in Cash and Cash Equivalents | $(13,865) | $165,629 | Notes to Financial Statements Key notes detail recent acquisitions of Attune Medical and OpSens, the divestiture of the Whole Blood product line, and ongoing restructuring initiatives, alongside the issuance of $700 million in convertible senior notes and segment revenue performance - Completed the acquisition of Attune Medical on April 1, 2024, for a net purchase price of $176.2 million, expanding the Hospital business unit's presence in electrophysiology[21][22] - Completed the divestiture of the Whole Blood product line to GVS, S.p.A on January 13, 2025, for $43.3 million in upfront cash and up to $22.5 million in contingent consideration[36][37] - In May 2025, a new market and regional alignment initiative was approved to improve operational performance and reduce costs, incurring $2.8 million in related costs during the quarter[49] - In May 2024, the company issued $700.0 million of 2.5% convertible senior notes due 2029, with net proceeds used to repay the revolving credit facility, repurchase a portion of the 2026 Notes, and fund capped call transactions[77] Net Revenues by Reportable Segment (in thousands) | Segment | Q1 FY2026 (ended June 28, 2025) | Q1 FY2025 (ended June 29, 2024) | | :--- | :--- | :--- | | Plasma | $129,897 | $135,910 | | Blood Center | $51,839 | $66,245 | | Hospital | $139,658 | $134,017 | | Total Net Revenues | $321,394 | $336,172 | Management's Discussion and Analysis (MD&A) Management reported a 4.4% decrease in net revenues to $321.4 million, primarily due to lower Plasma sales and the Whole Blood divestiture, offset by Hospital segment growth, while operating income increased 35.5% to $53.9 million due to favorable pricing and product mix Results of Operations Total net revenues decreased 4.4% (4.9% in constant currency), driven by declines in Plasma and Blood Center segments, partially offset by Hospital revenue growth, while gross profit margin significantly improved from 52.0% to 59.8% due to pricing and product mix Net Revenues by Business Unit (YoY Growth) | Business Unit | Q1 FY2026 Revenue | Reported Growth | Constant Currency Growth | | :--- | :--- | :--- | :--- | | Plasma | $129.9M | (4.4)% | (4.7)% | | Blood Center | $51.8M | (21.7)% | (22.8)% | | Hospital | $139.7M | 4.2% | 3.8% | | Total | $321.4M | (4.4)% | (4.9)% | - The decrease in Plasma revenue was driven by lower sales volumes in North America, primarily related to the previously announced customer transition of CSL Plasma[150] - The decrease in Blood Center revenue was primarily driven by the divestiture of the Whole Blood product line in January 2025[151] - Gross profit increased by 9.9% (8.7% constant currency), with the margin expanding to 59.8% from 52.0% YoY, driven by pricing benefits, product mix, and decreased restructuring and inventory step-up costs[153] Liquidity and Capital Resources The company maintains a strong liquidity position with $292.9 million in cash and $750 million available under its revolving credit facility, with a new $500 million share repurchase program authorized and operating cash flow significantly improving to $17.4 million Key Liquidity Indicators (in thousands) | Metric | June 28, 2025 | March 29, 2025 | | :--- | :--- | :--- | | Cash and cash equivalents | $292,898 | $306,763 | | Availability under revolving credit facility | $750,000 | $750,000 | | Working capital | $381,753 | $356,862 | | Net debt position | $(931,884) | $(918,025) | - A new three-year share repurchase program was approved in April 2025, authorizing the repurchase of up to $500.0 million of common stock through April 2028[140][171] - Net cash provided by operating activities increased by $44.8 million year-over-year, driven by higher net income before non-cash gains and improved working capital management[175] Quantitative and Qualitative Disclosures about Market Risk The company is exposed to market risks from foreign exchange rates, interest rates, credit concentration, and investments, which are managed through hedging programs and careful monitoring of customer and investment portfolios - Primary foreign currency exposures relate to sales in Japanese Yen, Euro, and Chinese Yuan, managed through forward contracts to hedge anticipated cash flows over a rolling 18-month horizon[185][187] - Interest rate risk is associated with the $243.8 million outstanding on the senior unsecured term loan, mitigated by two active interest rate swap agreements with a notional value of $203.2 million[190] - Credit risk is concentrated with several large customers in the Plasma business unit and with government-owned healthcare systems in certain international markets[191] - As of June 28, 2025, the company holds $80.9 million in strategic investments in privately held entities, classified as other long-term assets and subject to investment risk[193] Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 28, 2025, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of June 28, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[194] - No changes occurred in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[195] PART II. OTHER INFORMATION Legal Proceedings The company is involved in patent infringement litigation, including a complaint filed by Knoninklijke Philips N.V. against OpSens and Haemonetics' own complaints against Terumo BCT and Fresenius Kabi USA LLC - A complaint was filed by Knoninklijke Philips N.V. against the company's subsidiary OpSens, alleging patent infringement related to interventional cardiology systems[115] - The company filed complaints against Terumo BCT and Fresenius Kabi USA LLC, alleging infringement of its intellectual property rights related to donor-centric blood plasma collection patents[116] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended March 29, 2025 - No material changes from the Risk Factors disclosed in the Annual Report on Form 10-K for the fiscal year ended March 29, 2025[197] Unregistered Sales of Equity Securities and Use of Proceeds During the first quarter of fiscal 2026, the company repurchased 363,886 shares, completing the $150.0 million accelerated share repurchase (ASR) agreement and fully funding the $300.0 million authorization under the 2022 share repurchase program Issuer Purchases of Equity Securities (Q1 FY2026) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | March 30 – April 26, 2025 | 363,886 | Not specified in table | | Total | 363,886 | N/A | - In April 2025, the company completed a $150.0 million accelerated share repurchase (ASR) agreement, fully funding the $300.0 million authorization under its 2022 share repurchase program[198] Exhibits This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, compensation plans, and required certifications by the CEO and CFO under the Sarbanes-Oxley Act - Exhibits filed include CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, and XBRL data files[203]