Haemonetics(US:HAE)2022-08-10 17:42Financial Data and Key Metrics Changes - The company reported first quarter organic revenue growth of 17% and adjusted earnings per diluted share of $0.58, an increase of 16% compared to the first quarter of the prior year [8][32] - Adjusted gross margin reached a record 55.2%, reflecting a 50 basis point margin expansion year-on-year, primarily driven by volume and mix [25][26] - Adjusted operating income was $44.9 million, an increase of 18%, with an adjusted operating margin of 17.2%, up 60 basis points compared to the same period in fiscal '22 [29] Business Line Data and Key Metrics Changes - Plasma revenue increased by 44% in the first quarter, with North America experiencing 47% growth, driven by both volume and price [12][13] - Hospital revenue grew by 15%, with Vascular Closure revenue increasing by 36% [17][18] - Hemostasis Management revenue grew by 6%, while Transfusion Management revenue increased by 21% [19][20] - Blood Center revenue declined by 7%, with Apheresis revenue down 13% due to unfavorable order timing and staffing shortages [22][23] Market Data and Key Metrics Changes - North America remains the largest market for Plasma, representing over 90% of total Plasma revenue, with a 40% growth in U.S. plasma collection volume excluding CSL [12][13] - Strong double-digit collections growth was also observed in Europe [14] - The company is experiencing challenges in Europe due to a tough comparison from the previous year, particularly in Hemostasis Management [19] Company Strategy and Development Direction - The company is focused on advancing market leadership and delivering robust revenue and adjusted EPS growth over the next several years [8] - Investments are being made to distinguish technologies and create new opportunities for customers, particularly in the hospital segment [10] - The operational excellence program is on track to deliver significant savings and efficiency improvements [29][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of plasma collections and the performance of the hospital business despite ongoing challenges [38] - The macroeconomic environment continues to exert downward pressure on margins, but the company remains optimistic about growth and margin expansion [30][31] - Future guidance for adjusted earnings per diluted share has been updated to a range of $2.60 to $2.90 [33] Other Important Information - The company announced a new 3-year $300 million share repurchase authorization to offset shareholder dilution [25] - Cash on hand at the end of the first quarter was $214.9 million, down from the beginning of the fiscal year [34] - Free cash flow guidance for fiscal '23 remains unchanged at $100 to $130 million [36] Q&A Session Summary Question: Insights on Plasma growth and mature centers - Management noted that mature centers are showing improvement, contributing to the positive trend in plasma collections, which has exceeded historical averages [44][46] Question: Guidance on sales and EPS - The increase in sales guidance is primarily driven by macroeconomic headwinds, including inflation and foreign exchange impacts [48] Question: Clarification on Plasma guidance - The increase in organic guidance includes contributions from both volume and price, with ongoing upgrades to technology [51] Question: Hospital performance breakdown - Vascular Closure is the fastest-growing segment, while Hemostasis Management faced challenges due to tough comparisons from the previous year [54] Question: Future growth confidence - Management expressed confidence in the ability to grow both top and bottom lines in fiscal 2024, driven by strong trends in plasma and hospital segments [59] Question: Capital allocation and buyback timing - The buyback is seen as a substantial commitment, balancing between organic growth investments and share repurchase [101]