QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
02184-9114 | ||
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Trading Symbol | Name of Exchange on Which Registered | ||
x | Accelerated filer | ☐ | ||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||
Emerging growth company |
PAGE | |
Three Months Ended | Six Months Ended | ||||||||||||||
September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | ||||||||||||
Net revenues | $ | $ | $ | $ | |||||||||||
Cost of goods sold | |||||||||||||||
Gross profit | |||||||||||||||
Operating expenses: | |||||||||||||||
Research and development | |||||||||||||||
Selling, general and administrative | |||||||||||||||
Impairment of assets | |||||||||||||||
Total operating expenses | |||||||||||||||
Operating income | |||||||||||||||
Interest and other expense, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Income before provision (benefit) for income taxes | |||||||||||||||
Provision (benefit) for income taxes | ( | ) | |||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Net income per share - basic | $ | $ | $ | $ | |||||||||||
Net income per share - diluted | $ | $ | $ | $ | |||||||||||
Weighted average shares outstanding | |||||||||||||||
Basic | |||||||||||||||
Diluted | |||||||||||||||
Comprehensive income | $ | $ | $ | $ |
September 28, 2019 | March 30, 2019 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Accounts receivable, less allowance of $4,108 at September 28, 2019 and $3,937 at March 30, 2019 | |||||||
Inventories, net | |||||||
Prepaid expenses and other current assets | |||||||
Total current assets | |||||||
Property, plant and equipment, net | |||||||
Intangible assets, less accumulated amortization of $279,154 at September 28, 2019 and $263,479 at March 30, 2019 | |||||||
Goodwill | |||||||
Deferred tax asset | |||||||
Other long-term assets | |||||||
Total assets | $ | $ | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Notes payable and current maturities of long-term debt | $ | $ | |||||
Accounts payable | |||||||
Accrued payroll and related costs | |||||||
Other liabilities | |||||||
Total current liabilities | |||||||
Long-term debt, net of current maturities | |||||||
Deferred tax liability | |||||||
Other long-term liabilities | |||||||
Total stockholders’ equity | |||||||
Common stock, $0.01 par value; Authorized — 150,000,000 shares; Issued and outstanding — 50,607,751 shares at September 28, 2019 and 51,019,918 shares at March 30, 2019 | |||||||
Additional paid-in capital | |||||||
Retained earnings | |||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Total stockholders’ equity | |||||||
Total liabilities and stockholders’ equity | $ | $ |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||||
Shares | Par Value | |||||||||||||||||||||
Balance, March 30, 2019 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||
Employee stock purchase plan | — | — | ||||||||||||||||||||
Exercise of stock options | — | — | ||||||||||||||||||||
Shares repurchased | ( | ) | ( | ) | ( | ) | ( | ) | — | ( | ) | |||||||||||
Issuance of restricted stock, net of cancellations | ( | ) | — | — | ||||||||||||||||||
Share-based compensation expense | — | — | — | — | ||||||||||||||||||
Net loss | — | — | — | ( | ) | — | ( | ) | ||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ) | ( | ) | ||||||||||||||
Balance, June 29, 2019 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||
Exercise of stock options | — | — | ||||||||||||||||||||
Shares repurchased | ( | ) | ( | ) | ( | ) | — | ( | ) | |||||||||||||
Issuance of restricted stock, net of cancellations | (1 | ) | — | — | ||||||||||||||||||
Share-based compensation expense | — | — | — | — | ||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ) | ( | ) | ||||||||||||||
Balance, September 29, 2019 | $ | $ | $ | $ | ( | ) | $ |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||||
Shares | Par Value | |||||||||||||||||||||
Balance, March 31, 2018 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||
Employee stock purchase plan | — | — | ||||||||||||||||||||
Exercise of stock options | — | — | ||||||||||||||||||||
Shares repurchased | ( | ) | ( | ) | ( | ) | ( | ) | — | ( | ) | |||||||||||
Issuance of restricted stock, net of cancellations | — | — | — | — | ||||||||||||||||||
Share-based compensation expense | — | — | — | — | ||||||||||||||||||
Cumulative effect of change in accounting principles | — | — | — | — | ||||||||||||||||||
Net loss | — | — | — | ( | ) | — | ( | ) | ||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ) | ( | ) | ||||||||||||||
Balance, June 30, 2018 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||
Exercise of stock options | — | — | ||||||||||||||||||||
Shares repurchased | ( | ) | ( | ) | ( | ) | — | |||||||||||||||
Issuance of restricted stock, net of cancellations | — | — | — | |||||||||||||||||||
Share-based compensation expense | — | — | — | — | ||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ) | ( | ) | ||||||||||||||
Balance, September 29, 2018 | $ | $ | $ | $ | ( | ) | $ |
Six Months Ended | |||||||
September 28, 2019 | September 29, 2018 | ||||||
Cash Flows from Operating Activities: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Non-cash items: | |||||||
Depreciation and amortization | |||||||
Impairment of assets | |||||||
Share-based compensation expense | |||||||
Deferred tax benefit | ( | ) | |||||
Provision for losses on accounts receivable and inventory | ( | ) | |||||
Gain on sale of assets | ( | ) | |||||
Other non-cash operating activities | |||||||
Change in operating assets and liabilities: | |||||||
Change in accounts receivable | ( | ) | |||||
Change in inventories | ( | ) | ( | ) | |||
Change in other assets and other liabilities | ( | ) | |||||
Change in accounts payable and accrued expenses | ( | ) | ( | ) | |||
Net cash provided by operating activities | |||||||
Cash Flows from Investing Activities: | |||||||
Capital expenditures | ( | ) | ( | ) | |||
Proceeds from divestiture | |||||||
Proceeds from sale of property, plant and equipment | |||||||
Net cash provided by (used in) investing activities | ( | ) | |||||
Cash Flows from Financing Activities: | |||||||
Net increase in short-term loans | |||||||
Term loan borrowings | |||||||
Repayment of term loan borrowings | ( | ) | ( | ) | |||
Other | |||||||
Proceeds from employee stock purchase plan | |||||||
Proceeds from exercise of stock options | |||||||
Share repurchases | ( | ) | ( | ) | |||
Net cash (used in) provided by financing activities | ( | ) | |||||
Effect of exchange rates on cash and cash equivalents | ( | ) | ( | ) | |||
Net Change in Cash and Cash Equivalents | ( | ) | |||||
Cash and Cash Equivalents at Beginning of Period | |||||||
Cash and Cash Equivalents at End of Period | $ | $ | |||||
Supplemental Disclosures of Cash Flow Information: | |||||||
Interest paid | $ | $ | |||||
Income taxes paid | $ | $ | |||||
Transfers from inventory to fixed assets for placement of Haemonetics equipment | $ | $ |
(In thousands) | 2020 Program | 2018 Program and Prior Programs | ||||||
Balance at March 30, 2019 | $ | $ | ||||||
Costs incurred, net of reversals | ||||||||
Payments | ( | ) | ( | ) | ||||
Balance at September 28, 2019 | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||
Cost of goods sold | $ | $ | $ | $ | |||||||||||
Research and development | |||||||||||||||
Selling, general and administrative expenses | ( | ) | ( | ) | |||||||||||
$ | $ | ( | ) | $ | $ | ( | ) |
Restructuring costs | Three Months Ended | Six Months Ended | |||||||||||||
(In thousands) | September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||
Plasma | $ | $ | ( | ) | $ | $ | ( | ) | |||||||
Blood Center | |||||||||||||||
Hospital | ( | ) | ( | ) | |||||||||||
Corporate | ( | ) | |||||||||||||
Total | $ | $ | ( | ) | $ | $ | ( | ) | |||||||
Turnaround costs | Three Months Ended | Six Months Ended | |||||||||||||
(In thousands) | September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||
Plasma | $ | $ | $ | $ | |||||||||||
Blood Center | |||||||||||||||
Hospital | ( | ) | ( | ) | |||||||||||
Corporate | |||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
Total restructuring and turnaround costs | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands, except per share amounts) | September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||
Basic EPS | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Weighted average shares | |||||||||||||||
Basic income per share | $ | $ | $ | $ | |||||||||||
Diluted EPS | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Basic weighted average shares | |||||||||||||||
Net effect of common stock equivalents | |||||||||||||||
Diluted weighted average shares | |||||||||||||||
Diluted income per share | $ | $ | $ | $ |
(In thousands) | September 28, 2019 | March 30, 2019 | ||||||
Raw materials | $ | $ | ||||||
Work-in-process | ||||||||
Finished goods | ||||||||
Total inventories | $ | $ |
(In thousands) | Plasma | Blood Center | Hospital | Total | |||||||||||
Carrying amount as of March 30, 2019 | $ | $ | $ | $ | |||||||||||
Currency translation | |||||||||||||||
Carrying amount as of September 28, 2019 | $ | $ | $ | $ |
(In thousands) | September 28, 2019 | |||
Assets | ||||
Operating lease right-of-use assets in Other long-term assets | $ | |||
Liabilities | ||||
Operating lease liabilities in Other current liabilities | $ | |||
Operating lease liabilities in Other long-term liabilities | $ |
September 28, 2019 | |||
Weighted average remaining lease term | |||
Weighted average discount rate | % |
(In thousands) | Three Months Ended September 28, 2019 | Six Months Ended September 28, 2019 | ||||||
Cash paid for amounts included in the measurement of operating lease liabilities | ||||||||
Operating cash flows used for operating leases | $ | $ |
Fiscal Year (In thousands) | Operating Leases | |||
2020 (excluding the first half of 2020) | $ | |||
2021 | ||||
2022 | ||||
2023 | ||||
2024 | ||||
Thereafter | ||||
Total future minimum operating lease payments | ||||
Less: imputed interest | ( | ) | ||
Present value of operating lease liabilities | $ |
(In thousands) | Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Loss | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings | Location in Condensed Consolidated Statements of Income and Comprehensive Income | Amount of Gain Excluded from Effectiveness Testing | Location in Condensed Consolidated Statements of Income and Comprehensive Income | |||||||||||
Designated foreign currency hedge contracts, net of tax | $ | $ | Net revenues, COGS and SG&A | $ | Interest and other expense, net | |||||||||||
Non-designated foreign currency hedge contracts | $ | Interest and other expense, net | ||||||||||||||
Designated interest rate swaps, net of tax | $ | ( | ) | $ | ( | ) | Interest and other expense, net | $ |
(In thousands) | Location in Condensed Consolidated Balance Sheets | As of | As of | |||||||
September 28, 2019 | March 30, 2019 | |||||||||
Derivative Assets: | ||||||||||
Designated foreign currency hedge contracts | Other current assets | $ | $ | |||||||
Non-designated foreign currency hedge contracts | Other current assets | |||||||||
$ | $ | |||||||||
Derivative Liabilities: | ||||||||||
Designated foreign currency hedge contracts | Other current liabilities | $ | $ | |||||||
Non-designated foreign currency hedge contracts | Other current liabilities | |||||||||
Designated interest rate swaps | Other current liabilities | |||||||||
$ | $ |
• | Level 1 — Inputs to the valuation methodology are quoted market prices for identical assets or liabilities. |
• | Level 2 — Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities and market-corroborated inputs. |
• | Level 3 — Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk. |
As of September 28, 2019 | ||||||||||||
(In thousands) | Level 1 | Level 2 | Total | |||||||||
Assets | ||||||||||||
Money market funds | $ | $ | $ | |||||||||
Designated foreign currency hedge contracts | ||||||||||||
Non-designated foreign currency hedge contracts | ||||||||||||
$ | $ | $ | ||||||||||
Liabilities | ||||||||||||
Designated foreign currency hedge contracts | $ | $ | $ | |||||||||
Non-designated foreign currency hedge contracts | ||||||||||||
Designated interest rate swaps | ||||||||||||
$ | $ | $ | ||||||||||
As of March 30, 2019 | ||||||||||||
Level 1 | Level 2 | Total | ||||||||||
Assets | ||||||||||||
Money market funds | $ | $ | $ | |||||||||
Designated foreign currency hedge contracts | ||||||||||||
Non-designated foreign currency hedge contracts | ||||||||||||
$ | $ | $ | ||||||||||
Liabilities | ||||||||||||
Designated foreign currency hedge contracts | $ | $ | $ | |||||||||
Designated interest rate swaps | $ | $ | $ | |||||||||
$ | $ | $ |
• | Plasma |
• | Blood Center |
• | Hospital |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||
Net revenues | |||||||||||||||
Plasma | $ | $ | $ | $ | |||||||||||
Blood Center | |||||||||||||||
Hospital | |||||||||||||||
Net revenues by business unit | |||||||||||||||
Service (1) | |||||||||||||||
Effect of exchange rates | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net revenues | $ | $ | $ | $ | |||||||||||
(1) Reflects revenue for service, maintenance and parts |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||
Segment operating income | |||||||||||||||
Plasma | $ | $ | $ | $ | |||||||||||
Blood Center | |||||||||||||||
Hospital | |||||||||||||||
Segment operating income | |||||||||||||||
Corporate expenses (1) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Effect of exchange rates | |||||||||||||||
Impairment of assets and other related charges | ( | ) | ( | ) | ( | ) | |||||||||
Deal amortization | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
PCS2 accelerated depreciation and related costs | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Gain on sale of assets | |||||||||||||||
Restructuring and turnaround costs | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Other | ( | ) | |||||||||||||
Operating income | $ | $ | $ | $ | |||||||||||
(1) Reflects shared service expenses including quality and regulatory, customer and field service, research and development, manufacturing and supply chain, as well as other corporate support functions. |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||
Plasma products and services | $ | $ | $ | $ | |||||||||||
Blood Center products and services | |||||||||||||||
Hospital products and services | |||||||||||||||
Net revenues | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | September 28, 2019 | September 29, 2018 | September 28, 2019 | September 29, 2018 | |||||||||||
United States | $ | $ | $ | $ | |||||||||||
Japan | |||||||||||||||
Europe | |||||||||||||||
Asia | |||||||||||||||
Other | |||||||||||||||
Net revenues | $ | $ | $ | $ |
(In thousands) | Foreign Currency | Defined Benefit Plans | Net Unrealized Gain/Loss on Derivatives | Total | ||||||||||||
Balance as of March 30, 2019 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Other comprehensive loss before reclassifications(1) | ( | ) | ( | ) | ( | ) | ||||||||||
Amounts reclassified from Accumulated Other Comprehensive Loss(1) | ||||||||||||||||
Net current period other comprehensive loss | ( | ) | ( | ) | ( | ) | ||||||||||
Balance as of September 28, 2019 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Three Months Ended | Six Months Ended | ||||||||||||||||||||
(In thousands, except per share data) | September 28, 2019 | September 29, 2018 | % Increase/ (Decrease) | September 28, 2019 | September 29, 2018 | % Increase/ (Decrease) | |||||||||||||||
Net revenues | $ | 252,566 | $ | 241,581 | 4.5 | % | $ | 491,017 | $ | 470,928 | 4.3 | % | |||||||||
Gross profit | $ | 127,000 | $ | 111,907 | 13.5 | % | $ | 242,906 | $ | 195,151 | 24.5 | % | |||||||||
% of net revenues | 50.3 | % | 46.3 | % | 49.5 | % | 41.4 | % | |||||||||||||
Operating expenses | $ | 77,261 | $ | 85,831 | (10.0 | )% | $ | 206,469 | $ | 163,782 | 26.1 | % | |||||||||
Operating income | $ | 49,739 | $ | 26,076 | 90.7 | % | $ | 36,437 | $ | 31,369 | 16.2 | % | |||||||||
% of net revenues | 19.7 | % | 10.8 | % | 7.4 | % | 6.7 | % | |||||||||||||
Interest and other expense, net | $ | (4,651 | ) | $ | (3,039 | ) | 53.0 | % | $ | (9,074 | ) | $ | (5,017 | ) | 80.9 | % | |||||
Income before provision (benefit) for income taxes | $ | 45,088 | $ | 23,037 | 95.7 | % | $ | 27,363 | $ | 26,352 | 3.8 | % | |||||||||
Provision (benefit) for income taxes | $ | 7,602 | $ | 4,311 | 76.3 | % | $ | (1,644 | ) | $ | 10,445 | (115.7 | )% | ||||||||
% of pre-tax income | 16.9 | % | 18.7 | % | (6.0 | )% | 39.6 | % | |||||||||||||
Net income | $ | 37,486 | $ | 18,726 | 100.2 | % | $ | 29,007 | $ | 15,907 | 82.4 | % | |||||||||
% of net revenues | 14.8 | % | 7.8 | % | 5.9 | % | 3.4 | % | |||||||||||||
Net income per share - basic | $ | 0.74 | $ | 0.36 | 105.6 | % | $ | 0.57 | $ | 0.31 | 83.9 | % | |||||||||
Net income per share - diluted | $ | 0.72 | $ | 0.35 | 105.7 | % | $ | 0.56 | $ | 0.30 | 86.7 | % |
Three Months Ended | |||||||||||||||||
(In thousands) | September 28, 2019 | September 29, 2018 | Reported growth | Currency impact | Constant currency growth (1) | ||||||||||||
United States | $ | 161,880 | $ | 152,926 | 5.9 | % | — | % | 5.9 | % | |||||||
International | 90,686 | 88,655 | 2.3 | % | (1.6 | )% | 3.9 | % | |||||||||
Net revenues | $ | 252,566 | $ | 241,581 | 4.5 | % | (0.6 | )% | 5.1 | % |
Six Months Ended | |||||||||||||||||
(In thousands) | September 28, 2019 | September 29, 2018 | Reported growth | Currency impact | Constant currency growth (1) | ||||||||||||
United States | $ | 318,255 | $ | 295,066 | 7.9 | % | — | % | 7.9 | % | |||||||
International | 172,762 | 175,862 | (1.8 | )% | (2.3 | )% | 0.5 | % | |||||||||
Net revenues | $ | 491,017 | $ | 470,928 | 4.3 | % | (0.8 | )% | 5.1 | % |
Three Months Ended | |||||||||||||||||
(In thousands) | September 28, 2019 | September 29, 2018 | Reported growth | Currency impact | Constant currency growth (1) | ||||||||||||
Plasma | $ | 115,925 | $ | 106,811 | 8.5 | % | (0.4 | )% | 8.9 | % | |||||||
Blood Center | 81,982 | 82,269 | (0.3 | )% | (0.5 | )% | 0.2 | % | |||||||||
Hospital (2) | 49,702 | 47,982 | 3.6 | % | (1.1 | )% | 4.7 | % | |||||||||
Service | 4,957 | 4,519 | 9.7 | % | (1.7 | )% | 11.4 | % | |||||||||
Net revenues | $ | 252,566 | $ | 241,581 | 4.5 | % | (0.6 | )% | 5.1 | % |
Six Months Ended | |||||||||||||||||
(In thousands) | September 28, 2019 | September 29, 2018 | Reported growth | Currency impact | Constant currency growth (1) | ||||||||||||
Plasma | $ | 226,347 | $ | 206,165 | 9.8 | % | (0.4 | )% | 10.2 | % | |||||||
Blood Center | 157,785 | 161,092 | (2.1 | )% | (1.1 | )% | (1.0 | )% | |||||||||
Hospital (2) | 97,399 | 94,962 | 2.6 | % | (1.2 | )% | 3.8 | % | |||||||||
Service | 9,486 | 8,709 | 8.9 | % | (3.0 | )% | 11.9 | % | |||||||||
Net revenues | $ | 491,017 | $ | 470,928 | 4.3 | % | (0.8 | )% | 5.1 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||
(In thousands) | September 28, 2019 | September 29, 2018 | % Increase/ (Decrease) | September 28, 2019 | September 29, 2018 | % Increase/ (Decrease) | |||||||||||||||
Gross profit | $ | 127,000 | $ | 111,907 | 13.5 | % | $ | 242,906 | $ | 195,151 | 24.5 | % | |||||||||
% of net revenues | 50.3 | % | 46.3 | % | 49.5 | % | 41.4 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||
(In thousands) | September 28, 2019 | September 29, 2018 | % Increase/ (Decrease) | September 28, 2019 | September 29, 2018 | % Increase/ (Decrease) | |||||||||||||||
Research and development | $ | 7,422 | $ | 8,583 | (13.5 | )% | $ | 14,909 | $ | 17,989 | (17.1 | )% | |||||||||
% of net revenues | 2.9 | % | 3.6 | % | 3.0 | % | 3.8 | % | |||||||||||||
Selling, general and administrative | $ | 69,839 | $ | 77,248 | (9.6 | )% | $ | 142,839 | $ | 145,793 | (2.0 | )% | |||||||||
% of net revenues | 27.7 | % | 32.0 | % | 29.1 | % | 31.0 | % | |||||||||||||
Impairment of assets | $ | — | $ | — | — | % | $ | 48,721 | $ | — | 100.0 | % | |||||||||
% of net revenues | — | % | — | % | 9.9 | % | — | % | |||||||||||||
Total operating expenses | $ | 77,261 | $ | 85,831 | (10.0 | )% | $ | 206,469 | $ | 163,782 | 26.1 | % | |||||||||
% of net revenues | 30.6 | % | 35.5 | % | 42.0 | % | 34.8 | % |
(Dollars in thousands) | September 28, 2019 | March 30, 2019 | ||||||
Cash & cash equivalents | $ | 112,030 | $ | 169,351 | ||||
Working capital | $ | 327,723 | $ | 340,362 | ||||
Current ratio | 2.4 | 2.4 | ||||||
Net debt(1) | $ | (258,888 | ) | $ | (180,769 | ) | ||
Days sales outstanding (DSO) | 63 | 67 | ||||||
Inventory turnover | 1.9 | 2.5 |
Six Months Ended | ||||||||||||
(In thousands) | September 28, 2019 | September 29, 2018 | Increase/ (Decrease) | |||||||||
Net cash provided by (used in): | ||||||||||||
Operating activities | $ | 32,529 | $ | 80,479 | $ | (47,950 | ) | |||||
Investing activities | 7,825 | (75,346 | ) | 83,171 | ||||||||
Financing activities | (96,427 | ) | 18,584 | (115,011 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents(1) | (1,248 | ) | (4,123 | ) | 2,875 | |||||||
Net change in cash and cash equivalents | $ | (57,321 | ) | $ | 19,594 |
• | Failure to achieve our long-term strategic and financial-improvement goals; |
• | Demand for and market acceptance risks for new and existing products, including material reductions in purchasing from or loss of a significant customer; |
• | Product quality or safety concerns, leading to product recalls, withdrawals, regulatory action by the FDA (or similar non-U.S. regulatory agencies), reputational damage, declining sales or litigation; |
• | Security breaches of our information technology systems or our products, which could impair our ability to conduct business or compromise sensitive information of the Company or its customers, suppliers and other business partners, or of customers' patients and donors; |
• | Pricing pressures resulting from trends toward health care cost containment, including the continued consolidation among health care providers and other market participants; |
• | The continuity, availability and pricing of plastic and other raw materials, finished goods and components used in the manufacturing of our products (including those purchased from sole-source suppliers) and the related continuity of our manufacturing and distribution; |
• | Our ability to develop new products or enhancements on commercially acceptable terms or at all; |
• | The potential that the expected strategic benefits and opportunities from any planned or completed acquisition or divestiture by the Company may not be realized or may take longer to realize than expected; |
• | Our ability to obtain regulatory approvals in a timely manner consistent with cost estimates; |
• | Our ability to comply with established and developing U.S. and foreign legal and regulatory requirements, including the U.S. Foreign Corrupt Practices Act, or FCPA, and similar laws in other jurisdictions, as well as U.S. and foreign export and import restrictions and tariffs; |
• | Our ability to execute and realize anticipated benefits from our investments in emerging economies; |
• | Our ability to obtain the anticipated benefits of restructuring programs that we have or may undertake, including the 2020 Program and 2018 Program; |
• | Our ability to retain and attract key personnel; |
• | Costs and risks associated with product liability and other litigation claims; |
• | Our ability to meet our existing debt obligations and raise additional capital when desired on terms reasonably acceptable to us; |
• | The potential effect of foreign currency fluctuations and interest rate fluctuations on our net sales, expenses and resulting margins; |
• | The impact of changes in U.S. and international tax laws; |
• | Market conditions and the possibility that the Company’s share repurchase program may be delayed, suspended or discontinued; |
• | The effect of communicable diseases on demand for our products; and |
• | Our ability to protect intellectual property and the outcome of patent litigation. |
Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program(1) | ||||||
June 30, 2019 - July 27, 2019 | |||||||||
July 28, 2019 - August 24, 2019 | 29,018 | (2) | 29,018 | ||||||
August 25, 2019 - September 28, 2019 | 331,318 | (3) | 331,318 | ||||||
Total | 360,336 | $375,000,000 | |||||||
(1) In May 2019, the Company announced that the Board of Directors had authorized the repurchase of up to $500 million of the Company’s common stock from time to time, based on market conditions, over the next two years. Under the Company's share repurchase program, shares may be repurchased in accordance with applicable laws both on the open market, including under trading plans established pursuant to Rule 10b5-1 under the Exchange Act, and in privately negotiated transactions. | |||||||||
(2) In July 2019, the Company completed a $75.0 million repurchase of its common stock pursuant to an accelerated share repurchase agreement ("ASR") entered into with Citibank N.A. ("Citibank") in June 2019. The total number of shares repurchased under the ASR was approximately 0.6 million at an average price per share upon final settlement of $116.33. | |||||||||
(3) In September 2019, the Company entered into an ASR with Morgan Stanley & Co. LLC ("Morgan Stanley") to repurchase $50.0 million of the Company’s common stock. Pursuant to the terms of the ASR, in September 2019, the Company paid Morgan Stanley $50.0 million in cash and received an initial delivery of 0.3 million shares of the Company's common stock based on a closing market price on the New York Stock Exchange on September 10, 2019 of $120.73. This initial delivery of shares represented approximately 80% of the notional amount of the ASR. On October 8, 2019, the ASR was completed and an additional 0.1 million shares were delivered upon settlement. The total number of shares repurchased under the ASR was 0.4 million at an average price per share upon final settlement of $124.37. |
Restated Articles of Organization of the Company, reflecting Articles of Amendment dated August 23, 1993, August 21, 2006, July 26, 2018 and July 25, 2019 (filed as Exhibit 3.1 to the Company’s Form 8-K dated July 29, 2019 and incorporated herein by reference). | ||
By-Laws of the Company, as amended through July 25, 2019 (filed as Exhibit 3.3 to the Company’s Form 8-K dated July 29, 2019 and incorporated herein by reference). | ||
Haemonetics Corporation 2019 Long-Term Incentive Compensation Plan (filed as Exhibit 10.1 to the Company's Form 8-K dated July 29, 2019 and incorporated herein by reference). | ||
Form of Restricted Stock Unit Award Agreement (non-employee directors) under 2019 Long-Term Incentive Compensation Plan (adopted fiscal 2020). | ||
Form of Restricted Stock Unit Award Agreement (employees) under 2019 Long-Term Incentive Compensation Plan (adopted fiscal 2020). | ||
Form of Nonqualified Stock Option Award Agreement under 2019 Long-Term Incentive Compensation Plan (adopted fiscal 2020). | ||
Form of Performance Share Unit Award Agreement under 2019 Long-Term Incentive Compensation Plan (adopted fiscal 2020). | ||
Lease dated August 26, 2019 by and between the Company and HRP Wood Road, LLC. | ||
Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002, of Christopher A. Simon, President and Chief Executive Officer of the Company. | ||
Certification pursuant to Section 302 of Sarbanes-Oxley of 2002, of William Burke, Executive Vice President, Chief Financial Officer of the Company. | ||
Certification Pursuant to 18 United States Code Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Christopher A. Simon, President and Chief Executive Officer of the Company. | ||
Certification Pursuant to 18 United States Code Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of William Burke, Executive Vice President, Chief Financial Officer of the Company. | ||
101** | The following materials from Haemonetics Corporation on Form 10-Q for the quarter ended September 28, 2019, formatted in inline Extensible Business Reporting Language (XBRL) includes: (i) Condensed Consolidated Statements of Income and Comprehensive Income, (ii) Condensed Consolidated Balance Sheets, (iii) Condensed Consolidated Statements of Cash Flows, and (iv) Notes to Condensed Consolidated Financial Statements. |
† | Agreement, plan, or arrangement related to the compensation of officers or directors. | |
* | Appendices to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished as a supplement to the Securities and Exchange Commission upon request. | |
** | In accordance with Rule 406T of Regulation S-T, the XBRL-related information in Exhibit 101 to this Form 10-Q is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act, is deemed not filed for the purposes of section 18 of the Exchange Act, and otherwise is not subject to liability under these sections. |
HAEMONETICS CORPORATION | |||
November 1, 2019 | By: | /s/ Christopher A. Simon | |
Christopher A. Simon, President and Chief Executive Officer | |||
(Principal Executive Officer) | |||
November 1, 2019 | By: | /s/ William Burke | |
William Burke, Executive Vice President, Chief Financial Officer | |||
(Principal Financial Officer) |
Effective Date: | August 26, 2019. |
Lot: Premises: | The parcel of land known as 400 Wood Road, Braintree, Massachusetts, more particularly described on Exhibit A attached hereto. The building situated on the Lot (the “Building”). |
Landlord: | HRP Wood Road, LLC, a Delaware limited liability company |
Address of Landlord: | c/o Hilco Redevelopment Partners 99 Summer Street, Suite 1110 Boston, MA 02110 |
Tenant: | Haemonetics Corporation, a Massachusetts corporation |
Address of Tenant: | 400 Wood Road Braintree, MA 02184 |
Term Commencement Date: | The Effective Date of this Lease. |
Term Expiration Date: | October 31, 2019 |
Extension Terms: | See Section 2.3 |
Monthly Fixed Rental Rate: During Original Term: During Extension Terms: Additional Rent: | None See Section 2.3 All sums, charges, and other amounts which Tenant is obligated to pay to Landlord under this Lease other than Monthly Fixed Rental Rate. |
Rent: | Monthly Fixed Rental Rate and Additional Rent. |
Permitted Uses: | All existing uses conducted at the Premises as of the Effective Date, including, without limitation, any general office, research and development, laboratory (including medical laboratory), and/or storage uses, including, but not limited to, administrative offices, and other lawful uses reasonably related to or incidental to such specified uses. |
Security Deposit: | None. |
Broker: Business Days | None. All days except Saturdays, Sundays, and all legal holidays in which government offices in the Town of Braintree, Massachusetts, are closed. |
Extension Term I: | By notice given at least thirty (30) days prior to the commencement of each extension included in Extension Term I, Tenant may extend the Term in one or two month increments (as Tenant shall elect) through December 31, 2019. The Monthly Fixed Rental Rate during Extension Term I shall be $0.00. | |
Extension Term II: | Tenant may extend the Term for the one (1) month period beginning January 1, 2020, and ending January 31, 2020, by notice given from Tenant to Landlord prior to December 1, 2019. The Monthly Fixed Rental Rate during Extension Term II shall be $100,000.00. Pursuant to Article 4, the Monthly Fixed Rental Rate for Extension Term II shall be payable on or before January 1, 2020. | |
Extension Term III: | Tenant may extend the Lease for the one (1) month period beginning February 1, 2020, and ending February 29, 2020, by notice given from Tenant to Landlord prior to January 1, 2019. The Monthly Fixed Rental Rate during Extension Term III shall be $200,000.00. Pursuant to Article 4, the Monthly Fixed Rental Rate for Extension Term III shall be payable on or before February 1, 2020. | |
Extension Term IV: | If, because of Force Majeure, the space to which Tenant intends to relocate at 125 Summer Street, Boston, Massachusetts, will not be ready for its occupancy by March 1, 2020, Tenant may extend the Term for the one (1) year period commencing March 1, 2020, and ending February 28, 2021, by notice given from Tenant to Landlord prior to February 1, 2020. The Monthly Fixed Rental Rate during Extension Term IV shall be $167,167.00. Pursuant to Article 4, the Monthly Fixed Rental Rate for Extension Term IV shall be payable on or before the first calendar day of each month. |
1. | Tenant’s lease of the 355 Wood Road Premises shall be coterminous with the Original Term, and Tenant shall have no right to extend the term of its lease of the 355 Wood Road Premises beyond the expiration of the Original Term. Seller agrees to terminate the Management Agreement and to deliver the 355 Wood Road Premises, free of the Bright Horizon’s possession thereof and free of any and all personal property of Bright Horizons and Seller and otherwise in the condition required under Section 10.9 of this Lease, on or before the expiration of the Original Term. |
2. | Tenant shall have the right to terminate this Lease with respect to the 355 Wood Road Premises at any time during the Term of this Lease by giving at least thirty (30) days’ prior notice to Landlord. |
3. | The Monthly Fixed Rental Rate for the 355 Wood Road Premises shall be $0.00, and Tenant shall pay, in accordance with Article 8 hereof, all amounts to be paid by Tenant pursuant to Articles 5, 6, and 7 hereof that are applicable to the 355 Wood Road Building (as if it were the “Premises”) and the 355 Wood Road Lot (as if it were the “Lot”) to the extent attributable to the period of time prior to when the 355 Wood Road Premises is surrendered to Landlord in accordance with subsection 1 of this Article 15. Notwithstanding the foregoing, if any utilities or services to the 355 Wood Road Premises are separately metered, then Tenant shall only be responsible for the cost of providing such utilities or services to the 355 Wood Road Premises. |
4. | The 355 Wood Road Premises may be used and occupied by Bright Horizons for the use set forth in the Management Agreement, and such use and occupation shall be deemed a part of the Permitted Uses with respect to the 355 Wood Road Premises. Tenant shall ensure that Bright Horizons maintains all licenses and permits necessary for Bright Horizon’s business operations at the 355 Wood Road Premises. |
5. | If Tenant holds over in the 355 Wood Road Premises beyond the expiration or termination of the Original Term, and such holdover continues for more than thirty (30) days following such expiration or termination, then Tenant shall be responsible for all of Landlord’s indirect or consequential damages arising from such holdover. |
By: | /s/ William P. Burke |
Name: | William P. Burke |
Its: | Executive Vice President, Chief Financial Officer |
By: | /s/ Eric Kaup |
Name: | Eric Kaup |
Its: | Authorized Signatory |
SOUTHERLY: | by the side line of Wood Road as shown on said Plan by a curved line having a radius of 50.00 feet, 44.05 feet; |
SOUTHERLY: | again by the side line of Wood Road as shown on said Plan by a curved line having a radius of 60.00 feet, 6.94 feet; |
1. | I have reviewed this quarterly report on Form 10-Q of Haemonetics Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Christopher A. Simon | ||||
Christopher A. Simon, President and Chief Executive Officer | ||||
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Haemonetics Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ William Burke | ||||
William Burke, Executive Vice President, Chief Financial Officer | ||||
(Principal Financial Officer) |
/s/ Christopher A. Simon | ||||
Christopher A. Simon, | ||||
President and Chief Executive Officer |
/s/ William Burke | ||||
William Burke, | ||||
Executive Vice President, Chief Financial Officer |
ACCUMULATED OTHER COMPREHENSIVE LOSS |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 28, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCUMULATED OTHER COMPREHENSIVE LOSS | 16. ACCUMULATED OTHER COMPREHENSIVE LOSS The components of Accumulated Other Comprehensive Loss are as follows:
(1) Presented net of income taxes, the amounts of which are insignificant.
|
GOODWILL AND INTANGIBLE ASSETS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 29, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following represents our goodwill balance by new global reportable segment. The prior period information has been restated to conform to the current presentation:
|
?FP ;BEFG_CU4O1A@+_E&)['-#PA=,HIVV