Haemonetics(US:HAE)2023-08-08 15:43Financial Data and Key Metrics Changes - The company reported first quarter organic revenue growth of 21% and adjusted earnings per diluted share of $1.05, representing an 81% increase over the prior year [12][21] - Adjusted operating income was $70.2 million, an increase of $25 million or 56%, with an adjusted operating margin of 22.6%, up 540 basis points compared to the same period in fiscal 2023 [37][19] - Adjusted gross margin was 54.2%, 100 basis points lower than the same period last year, benefiting from price, volume, and favorable geographic and product mix [36] Business Line Data and Key Metrics Changes - Plasma revenue grew 35% in the first quarter, with North America disposables growing 41% due to strong U.S. collections and pricing [9] - Hospital revenue increased by 14%, driven by improved procedure volume and staffing levels at U.S. hospitals [13] - Hemostasis Management grew 14%, with North America growing 23% due to increased utilization of TEG and strong capital sales [14] - Transfusion Management saw strong performance driven by market share gains in North America and Europe, although offset by unfavorable order timing outside the U.S. [15] - Vascular Closure revenue grew 27%, with higher utilization rates in U.S. hospitals [32] Market Data and Key Metrics Changes - The company is increasing its full-year Plasma organic revenue growth guidance from 3%-6% to 8%-11% [12] - The company anticipates an organic revenue decline of 2% to 6% in the Blood Center business due to a voluntary product recall and timing of commercial opportunities [35] Company Strategy and Development Direction - The company is focused on operational excellence to improve productivity and risk management, enabling margin expansion and investment in growth opportunities [8] - The launch of Vascular Closure products in Europe and Japan is expected to establish new foundations for growth [16] - The company plans to utilize its capital capacity for M&A, organic growth investments, and opportunistic share buybacks [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to capitalize on positive macroeconomic trends supporting rising collection volumes [12] - The company acknowledged a challenging macro environment and anticipated impacts from changes in geographic and product mix [38] - Management remains cautious in forecasting due to uncertainties such as blood center order timing and the impact of sanctions [61][62] Other Important Information - The company welcomed Diane Bryant to its Board of Directors, bringing over 30 years of leadership experience in technology and healthcare [29] - The NexSys Plasma collection system is expected to enhance efficiency and reduce costs, with FDA clearance for new technology [30][31] Q&A Session Summary Question: What is the upgrade path for Express Plus technology? - The upgrade involves both software and some capital components, with a focus on ensuring no disruption to plasma center operations [57] Question: How is the company addressing inventory replenishment among fractionators? - The company believes it is still in the early stages of recovery, with significant room to reach pre-pandemic inventory levels [46] Question: What factors contributed to the gross margin improvement? - Price and favorable mix helped improve gross margins, although there were lingering inefficiencies from previous volume increases [47] Question: What is the outlook for international growth? - The company expects international growth to continue, albeit potentially at lower gross margins [51] Question: How is the company managing SG&A expenses? - SG&A as a percentage of revenue decreased significantly, attributed to disciplined investments and timing of annual bonuses [71][89] Question: What is the status of the Cardiva launches outside the U.S.? - The company is making progress in Europe and Japan, with positive early feedback from clinicians [75][90]