-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ESIoRKlKhU4V7MbAP3wLvOXL1/qjzlbcjORzxeZNQPwhCK4nG+ZuCNsyVzIDgVjA oRC3w71NXPdn/84IfQbffQ== 0000801748-03-000025.txt : 20031117 0000801748-03-000025.hdr.sgml : 20031117 20031117122748 ACCESSION NUMBER: 0000801748-03-000025 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20031114 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEMACARE CORP /CA/ CENTRAL INDEX KEY: 0000801748 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISC HEALTH & ALLIED SERVICES, NEC [8090] IRS NUMBER: 953280412 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15223 FILM NUMBER: 031007188 BUSINESS ADDRESS: STREET 1: 21101 OXNARD STREET CITY: WOODLAND HILLS STATE: CA ZIP: 91367 BUSINESS PHONE: 818-226-1968 MAIL ADDRESS: STREET 1: 21101 OXNARD STREEET CITY: WOODLAND HILLS STATE: CA ZIP: 91367 8-K 1 rel8k3q.txt FORM 8-K FOR THE PERIOD ENDING NOVEMBER 14, 2003 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): November 14, 2003 HEMACARE CORPORATION (Exact Name of Registrant as Specified in its Charter) CALIFORNIA (State or other jurisdiction of incorporation) 000-15223 95-3280412 (Commission File No.) (IRS Employer Identification No.) 21101 Oxnard Street Woodland Hills, CA 91367 (Address of principal executive offices and Zip Code) Registrant's telephone number, including area code: (818) 226-1968 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits Exhibit Number Description - -------------- ----------------------------------------------- 99.1 Press Release issued by HemaCare, dated November 14, 2003 99.2 Transcript of the presentations given by Judi Irving, CEO, and Robert S. Chilton, CFO,at a conference call conducted by HemaCare Corporation on November 14, 2003 ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On November 14, 2003, HemaCare Corporation issued a press release announcing financial results for the third quarter of 2003. A copy is attached as Exhibit 99.1 to this report and is incorporated herein by reference. On November 14, 2003, HemaCare Corporation held an investor conference call to discuss the financial results for the third quarter of 2003. A transcript of the presentations given by Ms. Judi Irving, CEO, and Robert S. Chilton, CFO, in the call is attached to this report as Exhibit 99.2 and is incorporated herein by reference. The information in this Current Report on Form 8-K, including the exhibits, will not be treated as "filed" for the purposes of Section 18 of the Securities and Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section. This information will not be incorporated by reference into a filing under the Securities Act of 1933, or into another filing under the Exchange Act, unless that filing expressly refers to specific information in this report. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: November 17, 2003 HEMACARE CORPORATION /s/ Robert S. Chilton ------------------------- Robert S. Chilton Chief Financial Officer EXHIBIT INDEX Exhibit Number Description - -------------- ----------------------------------------------- 99.1 Press Release issued by HemaCare, dated November 14, 2003 99.2 Transcript of the presentations given by Judi Irving, CEO, and Robert S. Chilton, CFO, at a conference call conducted by HemaCare Corporation on November 14, 2003 EX-99 3 prq303.txt EXHIBIT 99.1- PRESS RELEASE DATED NOVEMBER 14, 2003 Exhibit 99.1 [LOGO] N E W S R E L E A S E For Immediate Release Contact: HemaCare Corporation JoAnn Mannise, Director of Investor Relations 877-310-0717 www.hemacare.com RELEASE DATE: November 14, 2003 HEMACARE REPORTS THIRD QUARTER FINANCIAL RESULTS _________________________________________________________________ LOS ANGELES - - - - HemaCare Corporation (OTC Bulletin Board: HEMA.OB) today announced third quarter 2003 results of operations that resulted in a loss due primarily to expenses associated with closing several donor centers outside of California and the write-down of the Company's deferred tax assets. As a result of an overall evaluation of operations, management implemented a plan during the third quarter of 2003 to improve the profitability of the Company by ceasing operations at several non-performing donor centers. The costs associated with closing these locations are reflected in the Company's third quarter results, and include the write-down of assets, severance to terminated employees, the recognition of unexpired lease obligations and other associated costs. Additional costs associated with closing these centers will be reported in the fourth quarter. Revenue in the third quarter of 2003 was $6,980,000, or 2.8% less than the $7,181,000 reported in the same period of 2002. The closed donor centers generated revenue of $843,000, or 12% of total revenue for the third quarter, and an operating loss of $890,000. Net loss in the third quarter of 2003 was $4,679,000, or $0.60 per share basic and diluted, compared to a loss of $462,000, or $.06 per share basic and diluted, in the third quarter of 2002. Third quarter results reflect continuing losses in closed donor centers, costs associated with closing these centers and a $3,160,000 write- down in the Company's deferred tax assets. Third quarter revenue from blood products increased 3.8% due primarily to double digit growth in the Company's mobile operations. This increase was offset, however, by a decline in the number of therapeutic apheresis procedures and a decline in the revenue from the Company's Sherman Oaks donor center compared with the same period last year. Sales volume at Sherman Oaks during the most recent quarter were approximately - more - 2 80% of the sales volume in the fourth quarter of 2002. This demonstrates continuing progress in converting the Sherman Oaks operations to a voluntary rather than paid program, which started in January of this year. The third quarter results produced an operating loss of $176,000 compared with a gross profit of $1,022,000 for the same period in 2002. This result was primarily due to on-going operating losses at non-performing donor centers located principally outside of California, and the expenses associated with closing these donor centers. General and administrative expenses in the third quarter increased $156,000 compared with the same period in 2002 due to the expenses associated with closing of donor centers. Commenting on the third quarter results, Judi Irving, President and Chief Executive Officer, stated, "We are certainly not pleased to report a loss for the quarter. However, the implementation of our plan to return the Company to profitability is proceeding very well. The management team is confident that we are taking the right steps and the right time to address the structural problems that led to losses in recent quarters. We are also pleased that the on-going operations continue to show signs of improvement. We remain focused on our objective to build a profitable foundation for the Company from which we can explore new growth opportunities." During the third quarter, the Company recorded a valuation allowance of $3.16 million against its deferred tax assets. This non-cash charge reduced the net value of the deferred tax assets on the balance sheet to zero. The assets were created as a result of income tax benefits that were recorded as a result of operating losses in prior years. Current accounting standards place significant weight on a history of recent cumulative losses in determining whether or not a valuation allowance is necessary. Forecasts of future taxable income are not considered sufficient positive evidence to outweigh a history of losses. The Company's federal net operating loss carryforwards are not impacted and can continue to be utilized. HemaCare will be holding an interactive investor conference call on Friday, November 14, 2003 at 4:30 pm (Eastern Standard Time). Judi Irving, President and CEO, and Robert Chilton, Chief Financial Officer, will review the third quarter 2003 financial results. To participate in the call, please call 800-309-8563 and ask to join HemaCare's third quarter earnings conference call. A recording will be available two hours following the call through midnight, November 21, 2003 that can be replayed by calling 800-642- 1687, ID number 3901827. A webcast of the conference call will also be available via our website (www.hemacare.com) as well as through Street Events (www.streetevents.com) and going to the Individual Investor Center. ABOUT HEMACARE CORPORATION Founded in 1978, HemaCare is a national provider of blood products and services, and is believed to be the only publicly traded company engaged in the blood industry in the United States. HemaCare is licensed by the FDA and accredited by the American Association of Blood Banks. The Company focuses on providing cost effective, high quality solutions to the blood- related needs of U.S. hospitals and others. - more - 3 This press release contains "forward-looking statements" within the meaning of the term in the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). Additional written or oral forward-looking statements may be made by the Company from time to time in filings with the Securities and Exchange Commission or otherwise. Statements contained herein that are not historical facts are forward-looking statements pursuant to the safe harbor provisions referenced above. Forward-looking statements are inherently subject to risks and uncertainties some of which cannot be predicted or quantified. Such risks and uncertainties include, without limitation, the risks and uncertainties set forth from time to time in reports filed by the Company with the Securities and Exchange Commission. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Consequently, future events and actual results could differ materially from those set forth in, contemplated by, or underlined in the forward-looking statements contained herein. The Company undertakes no obligation to publicly release any revision to these forward-looking statements made to reflect events or circumstances after the date hereof. (Financial Table Follows) 4 HEMACARE CORPORATION CONDENSED CONSOLIDATED DATA (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 ------------- ------------ ------------ ------------ STATEMENTS OF OPERATIONS: Revenues $ 6,980,000 $ 7,181,000 $20,848,000 $20,442,000 Gross profit (loss) $ (176,000) $ 1,022,000 $ 1,144,000 $ 2,769,000 Loss before income taxes $(1,519,000) $ (527,000) $(1,959,000) $ (777,000) Provision (benefit) for income taxes $ 3,160,000 $ (65,000) $ 2,984,000 $ (158,000) ------------ ------------ ------------ ------------ Net loss $(4,679,000) $ (462,000) $(4,943,000) $ (619,000) ============ ============ ============ ============ Basic and diluted per share amounts $ (0.60) $ (0.06) $ (0.64) $ (0.08) ============ ============ ============ ============ Weighted average shares outstanding - basic and diluted 7,754,000 7,738,000 7,752,000 7,647,000 ============ ============ ============ ============ September 30, December 31, 2003 2002 ---------------- -------------- BALANCE SHEET Assets - ------ Cash and marketable securities $ 1,057,000 $ 1,048,000 Other current assets 4,563,000 6,424,000 Non-current assets 2,655,000 5,983,000 ------------ ------------ Total assets $ 8,275,000 $13,455,000 ============ ============ Liabilities and Shareholders' Equity - ------------------------------------ Current liabilities $ 4,724,000 $ 3,998,000 Long-term liabilities 404,000 1,370,000 Shareholders' equity 3,147,000 8,087,000 ------------ ------------ Total liabilities and shareholders' equity $ 8,275,000 $13,455,000 ============ ============
### EX-99 4 scpt3q03.txt EXHIBIT 99.2 - INVESTOR CONFERENCE CALL SCRIPT DATED NOVEMBER 14, 2003 Exhibit 99.2 3rd Quarter Investor Conference Call Script Friday, November 14, 2003 1:30 PM (Pacific Time) JoAnn Mannise: - -------------- Good afternoon. My name is JoAnn Mannise, and I am the Director of Investor Relations at HemaCare. I would like to welcome everyone here today to our 2003 Third Quarter Financial Results Conference Call. With us here today is Judi Irving, HemaCare's President and Chief Executive Officer, and Robert Chilton, Chief Financial Officer. During this call there will be forward-looking statements on a number of subjects that are based on the Company's current expectations and are subject to various risks and uncertainties. Actual results could differ materially. Our press releases and 2002 annual report on Form 10-K, as well as our other SEC filings, identify factors that could affect those results. I refer you to those documents. And now I would like to introduce Judi Irving who will start with our prepared comments. Judi Irving: - ------------- Thank you, JoAnn. Welcome to all of you on the call today. As JoAnn mentioned, Robert Chilton, our new CFO who joined us in the beginning of October, is here today. We are delighted that Bob is now part of the management team, and we have already benefited from his knowledge and experience. Bob is a CPA, and has an MBA from UCLA, along with a broad background in the healthcare industry. Bob was Executive Vice President and CFO for Preferred Health Management, Inc., a radiology practice management company, and was CFO during the successful IPO of OrthAlliance, Inc., an orthodontic practice management company. Later in the call, Bob will be providing us with specifics concerning our third quarter results. As we had previously announced, after an extensive evaluation of all of our operations, we decided to close several of our blood management programs. These programs are all outside of California and had been generating significant losses for the Company. The programs we identified for closure are: the free standing operations in Albany, New York; Durham, North Carolina; and Williston, Vermont and our hospital based programs in Chicago, Illinois and in North Carolina. The majority of these closures occurred in September, and costs associated with the closures were recognized in the third quarter as appropriate. Additional costs related to the closures will be reflected in our fourth quarter results. The third quarter results, which reflect a net loss of $4,679,000, include a loss before taxes of $1,519,000 primarily due to the write off of center assets and receivables, severance payments, and the ongoing losses in connection with the closed operations. Our results also reflect the establishment of a 100% reserve of our deferred tax asset of $3,160,000. The elimination of these operations, which were a significant drag on earnings and management resources and attention, will allow us to focus on continuing to improve our California and our East Coast based operations in New England and New York. With respect to our ongoing business units, the Sherman Oaks platelet program continues to produce strong results with 3rd quarter unit sales at approximately 80% of those for the fourth quarter of 2002. We are continuing to focus on improving the operating margins in our California mobile operations and remaining blood management programs and are concentrating our marketing efforts for therapeutic apheresis procedures in both California and New York. We believe that the impact of the center closures will be positive for the Company's results in the future. We continue to focus on establishing a profitable operating profile for the Company. Bob Chilton will now review the operating results. Bob Chilton - ------------ Thank you, Judi, for your warm welcome and introduction. I would like to thank Judi for the opportunity to join the management team at HemaCare. I am looking forward to working with all of the staff and members of management to improve the operations of the Company and build long-term value for HemaCare's shareholders. I will now provide some additional detail information regarding the third quarter results that we announced earlier today. HemaCare's third quarter results produced a net loss of $4,679,000, or $.60 per share basic and diluted. This compares with a loss of $462,000, or $.06 per share basic and diluted reported for the third quarter of 2002. Revenues reported in the third quarter declined 2.8%, or $201,000 compared with the same period in 2002. This is mostly attributable to a 17.6%, or $388,000, decline in blood services revenue compared with the prior year, and a $281,000 decline in platelet revenue reported by the Sherman Oaks donor center. The decline in service revenue is due to reduced volume of procedures performed. This decline in reported revenue was partially offset by an increase in blood product sales, primarily from higher blood product collections by our California mobile operations. The decline in revenue from the Sherman Oaks donor center is primarily attributable to a decline in platelet donations as a result of converting to volunteer program as of January 1, 2003. However, the sales volume generated by our Sherman Oaks platelet program continues to improve since the conversion of the program. The third quarter unit sales volume averaged over 80% of the volume reported in the fourth quarter of 2002, just prior to the conversion to a volunteer program, and reflects an improvement over the first two quarters in 2003. As Judi mentioned, management did implement a plan to close several non-performing donor operations in the East Coast. The revenue generated during the third quarter by those operations identified in the plan was $843,000, compared to $553,000 in the same quarter last year. Third quarter operations produced an operating loss of $176,000 compared with $1,022,000 of gross profit for the same quarter in 2002. The decrease in blood service revenue that I mentioned earlier contributed to a decline in gross profit. Gross profit from blood service operations declined $196,000, or 26.4%, to $546,000 from $742,000 for the same period in 2002. The primary reason for the operating loss in the quarter are the expenses associated with closing the donor centers. These expenses include $275,000 in unexpired lease obligation expenses, $285,000 in asset write-downs, severance expenses for terminated employees, and other associated expenses. General and administrative expenses increased $156,000, or 13.1% when compared with the third quarter of 2002. This increase in expenses is mostly attributable to expenses associated with implementing management's plan to close donor operations. These expenses include valuation adjustments on certain assets associated with closed donor centers, severance payments to management personnel and other associated costs. During the third quarter, the Company recorded a valuation allowance of $3.16 million against its deferred tax assets. This non-cash charge reduced the net value of the deferred tax assets on the balance sheet to zero. The assets were created as a result of income tax benefits that were recorded as a result of operating losses in prior years. Current accounting standards place significant weight on a history of recent cumulative losses, rather than on forecasts of future potential taxable income, in determining whether or not a valuation allowance is necessary. Accordingly, the assets were reserved in full. The Company's federal net operating loss carryforwards are not impacted and can continue to be utilized. The balance sheet as of September 30, 2003 shows cash and cash equivalents of $1,057,000 which compares favorably to $1,048,000 as of the end of 2002. Management's emphasis on aggressive cash collection efforts helped to maintain a healthy cash balance as of the end of the quarter. However, net accounts receivable declined as a result to $3,421,000 as of September 30, 2003, from $4,932,000 as of the end of December 31, 2002. As of September 30, 2003, days sales outstanding stood at 45 days compared with 62 days as of the end of 2002, which illustrates the success of management's efforts to improve cash collections. Working capital stood at $896,000 as of the end of the third quarter, compared with $3,474,000 as of the end of last year. The majority of this erosion in working capital is associated with the reduction in net receivables, the write-down in the value of the current portion of the deferred tax asset, accruals to recognize expenses associated with closing donor centers that had been incurred, but not paid, as of September 30, 2003, and finally, the reclassification of notes payable from long-term to current. As of September 30, 2003, the Company had $1,550,000 available from the line of credit with Comerica Bank and the Company reduced outstanding debt balances by $511,000 since the beginning of the year. Therefore, at this time the Company has sufficient resources to satisfy the foreseeable near-term cash requirements. This concludes my prepared remarks regarding the third quarter financial results. Thank you for your time and attention. We are now prepared to open the conference to any questions you may have. Operator, would you please provide the callers with the necessary instructions. -----END PRIVACY-ENHANCED MESSAGE-----