Haemonetics(US:HAE)2025-02-06 17:19Financial Data and Key Metrics Changes - The company reported third quarter revenue of $349 million, reflecting a 4% growth on a reported basis and flat organic growth [7] - Adjusted earnings per share increased by 14% to $1.19, indicating meaningful earnings growth and margin expansion [8] - Adjusted gross margin for the third quarter was 57.7%, up 240 basis points year-over-year, driven by favorable volume growth and improving portfolio mix [31] - Adjusted operating income for the third quarter was $89.4 million, representing a 25.7% margin, a record for the company [33] Business Line Data and Key Metrics Changes - Hospital revenue grew 24% on a reported basis in the third quarter and 28% year-to-date, with organic growth of 12% and 14% respectively [10] - Blood Management Technologies, the largest hospital franchise, saw revenue growth of 10% in the quarter, driven by sustained market growth and share gains [10] - Hemostasis management experienced 26% revenue growth in the U.S., driven by improved device utilization [11] - Plasma revenue declined 9% in the quarter due to the planned CSL transition, but U.S. disposables revenue grew when excluding CSL [17][22] Market Data and Key Metrics Changes - Revenue growth in Europe for plasma was in double digits, driven by share gains and a robust collections environment [18] - The company signed long-term agreements with BioLife and Grifols, reinforcing its market position and innovation in plasma collections [19][85] - International demand for source plasma is expanding, with the company selected as the exclusive supplier for the Japanese Red Cross [23] Company Strategy and Development Direction - The divestiture of the whole blood business aligns resources to higher margin, higher growth opportunities [9][36] - The company is focused on innovation and technology upgrades to drive market share and improve profitability [20][27] - The updated guidance for hospital revenue is set at 24% to 26% on a reported basis and 12% to 14% on an organic basis [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the foundation being built for transformational growth, despite external market challenges [9][25] - The company anticipates strong earnings performance and has tightened its adjusted EPS guidance range to $4.50 to $4.70 [36] - Management noted that while external disruptions are challenging, the company has adapted and driven progress [26] Other Important Information - Cash on hand at the end of the quarter was $320.8 million, up $142 million since the beginning of the fiscal year [40] - The company expects to finish fiscal '25 with strong free cash flow, updating guidance to a range of $120 million to $140 million [39] Q&A Session Summary Question: Can you walk through the CSL contribution in the quarter? - Management confirmed that CSL's performance is on track with initial guidance, with a 70-30 split in revenue realization [47] Question: What is the outlook for VASCADE? - Management acknowledged competition and internal resource allocation issues but expressed confidence in future performance [60][106] Question: Can you provide details on the BioLife and Grifols contracts? - Management indicated these are long-duration contracts (5 to 7 years) with tiered pricing that benefits both parties [85] Question: What are the expectations for plasma collections growth? - Management anticipates mid to high single-digit growth in fractionation capacity through 2032, indicating a strong market demand [92] Question: How will the divestiture of Whole Blood impact margins? - Management expects a 30 to 40 basis points improvement in operating margin from the divestiture [123]