-----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, VVIZrtluifIfV1b4FaHp9AkGxNPFGN3eo5LuC0vICaeRFiRdVnyoO54xLMwGx8vW EUoUlzZeWDbW3DKz6bd+yw== 0000801748-04-000002.txt : 20040325 0000801748-04-000002.hdr.sgml : 20040325 20040325133703 ACCESSION NUMBER: 0000801748-04-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040325 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040325 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: 04689232 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 rel8kye.txt FORM 8-K FILED MARCH 25, 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): March 25, 2004 HEMACARE CORPORATION (Exact name of registrant as specified in its charter) CALIFORNIA 000-15223 95-3280412 (State or other (Commission File No.) (I.R.S. employer jurisdiction of Identification No.) organization or incorporation) 21101 Oxnard Street Woodland Hills, CA 91367 (Address of principal executive offices) (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 Corporation, dated March 25, 2004 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 March 25, 2004 Item 12 Results of Operations and Financial COndition On March 25, 2004, HemaCare Corporation issued a press release announcing the financial results for the year ended December 31, 2003. A copy is attached as Exhibit 99.1 to this report and is incorporated herein by this reference. Additionally, on March 25, 2004, HemaCare Corporation held an investor conference call discussing the financial results for the year ended December 31, 2003. A transcript of the presentations given by 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 this 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: March 25, 2004 HEMACARE CORPORATION /s/ Robert S. Chilton ------------------------- Robert S. Chilton Chief Financial Officer EXHIBIT INDEX Exhibit Number Description - -------------- ----------------------------------------------- 99.1 Press Release issued by HemaCare, Corporation dated March 25, 2004 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 March 25, 2004 EX-99.1 3 pr8kye.txt PRESS RELEASE DATED MARCH 25, 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: March 25, 2004 HEMACARE REPORTS 2003 FINANCIAL RESULTS ___________________________________________________ LOS ANGELES - - - - HemaCare Corporation (OTC Bulletin Board: HEMA.OB) announced today results of operations for the 4th quarter and the year ended December 31, 2003. For the quarter, the Company reported net income of $264,000 on revenue of $6.6 million. The reported fourth quarter net income represents a $236,000 improvement over the previous year's quarter with revenues declining by 10%. The net income improvement is due to the successful completion of management's plan to close non-performing donor centers and one time positive events of approximately $85,000. The Company reported a net loss for 2003 of $4,679,000 or $0.60 per share basic and diluted, compared to a net loss for 2002 of $591,000, or $0.08 per share basic and diluted. The increased net loss was due to the costs incurred in 2003 associated with closing several donor centers ($598,000), operating losses of the closed centers ($778,000), a decline in the gross profits of the ongoing centers ($793,000), a decline in the gross profits of blood services operations ($358,000) and the write-down of the Company's deferred tax assets ($2,984,000), offset in part by an improvement in general and administrative expenses ($128,000). The decline in gross profits of both the closed centers and the ongoing centers was offset in part by an increase in the gross profit of the California mobile operations driven by higher prices, offset in part by a 6.3% decrease in collection volume. The decline in gross profits of the ongoing centers was due to a decrease of certain testing revenue, the decrease in platelet production, asset write-offs and increases in workers' compensation and professional liability insurance costs. Revenues of the ongoing centers were stable due primarily to a 21% decline in single donor platelet volume, offset largely by a 19.5% increase in sales of whole blood products. - more - The decline in the gross profits of the blood services operations was due to a 13.0% decline in the number of therapeutic apheresis procedures and increases in workers' compensation and professional liability insurance costs. The majority of the expenses associated with closing donor centers was recognized in the third quarter of 2003, and were part of management's plan to improve the profitability of the Company by ceasing operations at several non-performing donor centers. The costs associated with closing these centers included the write-down of assets, severance to terminated employees, the recognition of unexpired lease obligations and other associated costs. The Company recorded a valuation allowance of $2,984,000 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 Company's federal net operating loss carryforwards are not affected and remain available for up to 10 years. Commenting on the 2003 results, Judi Irving, President and Chief Executive Officer, stated, "We are pleased that the fourth quarter was profitable, demonstrating the effectiveness of our plan to close non-performing centers. Although execution of the plan required that we incur a substantial charge during 2003, the elimination of these centers has substantially reduced the drain on the Company's profitability. Although we are pleased to report positive fourth quarter results, we must now focus on improving the profitability of the on-going operations and further developing our long-term strategic plans." HemaCare will be holding an interactive investor conference call on Thursday, March 25, 2004 at 1:00 pm (Eastern Standard Time). Judi Irving, President and CEO, and Robert Chilton, Chief Financial Officer, will review the 2003 financial results. To participate in the call, please call 800-309-8563 and ask to join HemaCare's 2003 annual earnings conference call. A recording will be available two hours following the call through midnight, March 30, 2004 that can be replayed by calling 800-642-1687, ID number 6238571. 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. This press release contains "forward-looking statements" under the safe harbor provisions of 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.) Statements herein that are not historical facts are forward-looking statements pursuant to the safe harbor provisions referenced above. You may also identify forward-looking statements by use of the words "anticipates," "expects," "intends," "plans" and variations and similar expressions. 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 Company's need to successfully complete its operating plan to improve profits; the potential loss of the Company's lines of credit; the potential inability of the Company to meet future capital needs; increasing costs that the Company may not be able to pass on to customers because the market price for blood does not necessarily reflect the costs of collecting and processing it; declining blood donations; the Company's dependence on reimbursement rates of third party providers; its increasing reliance on outside laboratories; limited access to insurance; the competitive advantage enjoyed by not- for-profit companies; potential changes in the healthcare industry; future technology for blood collection and blood replacement; the need to obtain services of qualified medical professionals; the impact of heavy regulation in the Company's industry; potential liability for undetected blood pathogens and other product safety and liability concerns; environmental risks associated with biohazardous substances; the threat of business interruption due to terrorism and the security measures taken in response to terrorism; the provisions of the Company's charter documents that might delay or prevent an acquisition or sale of the Company; lack of liquidity and market risk associated with OTC Bulletin Board stocks; volatility in our stock price; potential dilution that could result from future sales of the Company's common stock; and the other risks and uncertainties discussed from time to time in the documents HemaCare files 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 update any of these forward- looking statements to reflect actual results or events or circumstances after the date hereof. (Financial Table Follows) HemaCare Corporation Condensed Consolidated Data (Unaudited)
Three Months Ended Twelve Months Ended December 31, December 31, 2003 2002 2003 2002 ------------ ----------- ------------ ------------- Statements of Operations: Revenues $6,640,000 $7,375,000 $27,488,000 $27,817,000 Gross profit $1,107,000 $ 826,000 $ 2,251,000 $ 3,745,000 Income (loss) before income taxes $ 264,000 $ 35,000 $(1,695,000) $ (742,000) Provision (benefit) for income taxes $ 0 $ 7,000 $ 2,984,000 $ (151,000) Net income (loss) $ 264,000 $ 28,000 $(4,679,000) $ (591,000) =========== =========== ============ ============ Basic per share amounts $ 0.04 $ 0.00 $ (0.60) $ (0.08) =========== =========== ============ ============ Diluted per share amounts $ 0.03 $ 0.00 $ (0.60) $ (0.08) =========== =========== ============ ============ Weighted average shares outstanding - basic 7,753,000 7,673,000 7,753,000 7,673,000 =========== =========== ============ ============ Weighted average shares outstanding - diluted 8,034,000 7,673,000 7,753,000 7,673,000 =========== =========== ============ ============
December 31, December 31, 2003 2002 ------------ ------------- Balance Sheets Assets - ------ Cash $ 935,000 $ 1,048,000 Current assets 4,030,000 6,424,000 Non-current assets 3,321,000 5,983,000 ----------- ------------ Total assets $8,286,000 $13,455,000 =========== ============ Liabilities and Shareholders' Equity - ----------------------------- Current liabilities $3,786,000 $ 3,998,000 Long-term liabilities 1,089,000 1,370,000 Shareholders' equity 3,411,000 8,087,000 ----------- ------------ Total liabilities and shareholders' equity $8,286,000 $13,455,000 =========== ============
### EX-99.2 4 scye04.txt CONFERENCE CALL SCRIPT DATED MARCH 25, 2003 Exhibit 99.2 2003 Annual Results Conference Call Script 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 Annual Financial Results Conference Call. With us here today is Judi Irving, HemaCare's President and Chief Executive Officer, and Robert Chilton, Executive Vice President and 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 2003 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. Today we announced our financial results for the fourth quarter and the year ended December 31, 2003. The past year has been very challenging for me and for all of the members of the HemaCare management team. When we started out 2003, we were contending with operating losses from several donor centers that were severely hindering the Company's ability to produce sustainable overall profits. We completed an extensive evaluation of all of our operations and decided to close several donor centers located in Illinois, North Carolina, New York and Vermont. Today I can report to you that we have successfully completed the closure of all of these centers. The majority of the costs associated with these closures occurred in the third quarter. The operating losses we incurred prior to closing these centers, along with the costs associated with the closure plan itself, resulted in sizeable losses during 2003. For all of 2003, the Company reported a net loss of $4,679,000, including $1,331,000 in losses associated with operating and eventually closing non-performing donor centers. In addition, we established a 100% valuation reserve against our deferred tax assets, which contributed $2,984,000 to the reported loss for the year. The good news is that the elimination of these operations has freed management to focus more attention on improving the profitability of the remaining operations. In the fourth quarter of 2003, the Company reported net income of $264,000, which represents one of the strongest quarterly results reported by the Company in recent years. Although there were several non-recurring events recorded in the fourth quarter that contributed approximately $85,000 to this positive result, the elimination of the non-performing centers was the major cause for this improvement. I would like to be clear that, although we are pleased with the fourth quarter results, management remains focused on improving the Company's long-term profitability. The Sherman Oaks platelet program continues to produce strong results, although the recent introduction of bacterial testing could impact supply and increase the chance of product expiration. We are continuing to focus on improving the operating margins in our California mobile operations and in our blood donor centers in New England. We are also expanding our marketing efforts for the Company's therapeutic apheresis services. Bob Chilton will now review the operating results. Bob Chilton Thank you, Judi. I will now provide some additional detail information regarding the financial results that we announced today. As Judi mentioned, HemaCare's fourth quarter results produced net income of $264,000, or $.04 per share basic and diluted. This compares with net income of $28,000 for the fourth quarter of 2002, or an increase of 843%. Especially significant is that the Company produced this positive result while revenues declined 10% from the fourth quarter of 2002. As Judi mentioned, this is mostly attributable to the closure of several non-performing donor centers in the third quarter of 2003. In addition, there was a $226,000 decline in blood service revenue and a $210,000 decline in revenue generated by the Sherman Oaks donor center in the fourth quarter of 2003 compared with the same quarter in 2002. The decline in service revenue is due to reduced volume of therapeutic apheresis procedures performed, principally from the East Coast 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 a 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. Finally, the Company did recognize two non- recurring events in the fourth quarter. First, the Company recorded approximately $50,000 in supplemental testing revenue in the fourth quarter that pertained to services performed in prior periods. Second, as part of the completion of the plan to close donor centers, management negotiated favorable termination agreements for facility lease obligations that resulted in recognizing a net benefit in the fourth quarter of $35,000. For all of 2003, the Company recognized a net loss of $4,679,000 compared with a net loss of $591,000 for 2002. Revenues declined 1.2% to $27.5 million from $27.8 million in 2002. As Judi mentioned, most of the 2003 loss was due to operating and closure costs attributable to several non- performing donor operations in the East Coast, an increase in insurance costs, and the recognition of a 100% valuation reserve against the Company's deferred tax assets. The decline in net revenue is attributable to a $915,000, or 10.9%, decline in blood services revenue as a result of a general decline in therapeutic apheresis procedures in both the California and New England markets. Despite the closure of blood centers in 2003, blood product revenue actually increased $586,000, or 3%, in 2003, mostly due to a $758,000 increase in revenue from the Company's California Mobile operations. This was mostly due to increases in prices for whole blood products produced by California Mobile collections. The increase in prices more than offset the 6.3% decrease in blood product sales from this unit. Offsetting this increased revenue, was a $1,043,000 decline in revenue from the Sherman Oaks donor center. General and administrative expenses decreased in 2003 by $128,000, or 3.1% when compared with 2002. This is primarily the result of an absence of expenditures to pursue the ARC litigation and severance expenses for the Company's former CEO, that were incurred in 2002. The Company recorded an increase in audit and tax preparation expenses in 2003, and significant increases in professional liability and other insurance costs. In 2003, the Company increased its valuation allowance against its deferred tax assets by almost $3 million. This non-cash charge reduced the net value of the deferred tax assets on the balance sheet to zero. The assets are income tax benefits resulting from net 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 for up to ten years The balance sheet as of December 31, 2003 shows cash and cash equivalents of $935,000 which is comparable to $1,048,000 as of the end of 2002. Net accounts receivable declined to $3,128,000 as of December 31, 2003, from $4,932,000 as of the end of December 31, 2002. Management aggressively pursued outstanding receivables in 2003, which resulted in a decline in receivables. A further indication of the success of management's collection efforts is that as of December 31, 2003, days sales outstanding stood at 42 days compared with 62 days as of the end of 2002. Working capital stood at $1,179,000 as of the end of 2003, 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 as I discussed previously, and the reclassification of the Company's line of credit with Comerica Bank to current since the facility is scheduled to terminate June 30, 2004. As of December 31, 2003, the Company had $450,000 outstanding on this line, and $1,363,000 available based on the net receivables balance which is used to determine availability under the facility agreement. The Company reduced total outstanding debt by $686,000 since the beginning of the year. The Company has requested and recently received written approval from Comerica Bank to extend the termination of the existing credit facility. As a result, the Company is expected to have sufficient resources to satisfy working capital requirements and finance operations into 2005. This concludes my prepared remarks regarding the 2003 financial results. I would like to now turn the call back over to Judi for some concluding remarks. Thank you Bob. In closing, 2003 proved to be a challenging year for the Company, during most of which we focused our attention on dealing with those operations that were not contributing to the success of the organization. We are pleased with the fourth quarter results, which demonstrated the effectiveness of our plan to close non-performing centers. We must now focus on improving the profitability of the on-going operations, and further developing our long-term strategic plan. 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-----