Haemonetics(US:HAE)2023-05-11 16:45Financial Data and Key Metrics Changes - The company reported organic revenue growth of 17% in Q4 and 21% for fiscal 2023, with adjusted earnings per diluted share of $0.77 in Q4 and $3.03 for the full year, representing increases of 18% and 17% respectively [18][66] - Adjusted operating income for fiscal 2023 was $218.4 million, an increase of $31.3 million or 17% compared to the prior year, with adjusted operating income margin at 18.7% [35][66] - Adjusted gross margin was 51.8% in Q4 and 53.2% for fiscal 2023, reflecting a decrease of 180 basis points and 70 basis points respectively due to inflationary pressures [61][140] Business Line Data and Key Metrics Changes - Plasma revenue grew 31% in Q4 and 43% for fiscal 2023, driven by volume growth and price benefits, with North America disposables representing 85% of plasma revenue [53][24] - Hospital revenue increased by 19% in Q4 and 18% for fiscal 2023, primarily due to growth in Vascular Closure and Hemostasis Management [25][26] - Transfusion Management revenue grew 8% in Q4 and 19% for fiscal 2023, driven by sales force expansion and software implementations [27] Market Data and Key Metrics Changes - The company anticipates total organic revenue growth of 5% to 8% in fiscal 2024, with plasma revenue growth expected to be between 3% to 6% [58] - Blood Center revenue is projected to decline by 2% to flat for fiscal 2024, with unfavorable order timing impacting the first half of the year [60] - The company retained a majority of CSL U.S. disposables business, which grew at a rate comparable to the overall U.S. disposables business [24] Company Strategy and Development Direction - The company is focusing on strengthening competitiveness in plasma while pivoting to higher growth, higher margin hospital-based opportunities [31] - The operational excellence program is expected to deliver additional growth savings of approximately $20 million, contributing to margin expansion [67] - The company plans to allocate capital to high-impact, high-ROI projects that accelerate growth and value creation [41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for plasma and the ability to meet customer needs despite macroeconomic challenges [79][126] - The company expects operational inefficiencies to persist in the near term but anticipates improvements in the second half of fiscal 2024 [38][45] - Management highlighted the importance of the NexSys platform and its role in driving efficiency and reducing costs for customers [112][143] Other Important Information - The company achieved a milestone by surpassing $1 billion in annual revenue for the first time [22] - Adjusted net income for fiscal 2023 was $155.7 million, up 17% compared to the prior year [66] - Free cash flow before restructuring expenses is expected to be between $80 million to $100 million in fiscal 2024 [68] Q&A Session Summary Question: Can you clarify the CSL contribution and its impact on plasma revenue? - Management confirmed that CSL accounted for approximately 14% of reported revenue in fiscal 2023 and that they expect a minimum purchase commitment from CSL slightly in excess of $100 million for fiscal 2024 [59][92] Question: What are the expectations for gross margins in fiscal 2024? - Management indicated that gross margins would be impacted by inflationary pressures in the first half of fiscal 2024 but expected improvements in the second half as operational efficiencies are realized [45][72] Question: How is the company addressing the competitive landscape for Vascular Closure products? - Management noted that they are focused on penetrating top U.S. electrophysiology hospitals and expanding internationally, with plans to leverage existing infrastructure for commercialization [56][113]