8-K

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, 2006

HEMACARE CORPORATION

(Exact name of registrant as specified in its charter)

California	000-15223	95-3280412
(State or other jurisdiction	(Commission File Number)	(I.R.S. Employer Identification No.)
of incorporation or organization)

21101 Oxnard Street, Woodland Hills, CA 91367

(Address of principal executive offices)      (Zip Code)

(Registrant’s telephone number, including area code): 818-226-1968

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On November 14, 2006, HemaCare Corporation issued a press release announcing financial results for the third quarter of 2006.  A copy is attached as Exhibit 99.1 to this report and is incorporated herein by reference.

On November 15, 2006, HemaCare Corporation held an investor conference call discussing the financial results for the third quarter of 2006. A transcript, of the conference 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.  The furnishing of the information in this Current Report is not intended to, and does not, constitute a representation that such furnishing is required by Regulation FD or that the information this Current Report contains is material investor information that is not otherwise publicly available.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit Number	Description
99.1	Press Release dated November 14, 2006
99.2	Transcript of the conference call conducted by HemaCare Corporation on November 15, 2006

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 22, 2006	HEMACARE CORPORATION
		By:	/s/ Robert S. Chilton
			Robert S. Chilton
			Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release dated November 14, 2006
99.2	Transcript of the conference call conducted by HemaCare Corporation on November 15, 2006

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EX-99.1

Exhibit 99.1

N E W S   R E L E A S E

For Immediate Release

Contact:	HemaCare Corporation
	Robert S. Chilton, Executive Vice President and Chief Financial Officer
	877-310-0717
	www.hemacare.com

RELEASE DATE:  November 14, 2006

HEMACARE REPORTS 18% INCREASE IN REVENUE AND 52% INCREASE IN NET INCOME IN THIRD QUARTER 2006

LOS ANGELES - - - HemaCare Corporation (OTC Bulletin Board: HEMA.OB) today announced third quarter 2006 results of operations that resulted in an 18% increase in revenue from the same period of 2005, and a 52% increase in net income to $448,000, or $0.05 per share basic and diluted, marking the Company’s twelfth consecutive profitable quarter.  The Company generated $9.2 million in revenue during the quarter, up from $7.8 million reported for the third quarter of 2005, representing the highest level of quarterly revenue in the Company’s history.

The increase in revenue was driven by a 20% increase in revenue growth in the Company’s blood products business segment to $7.2 million, compared to $6.0 million reported for the same quarter of 2005.   The reported results include 32 days of operations of the Company’s new wholly owned subsidiary, Teragenix Corporation, recently renamed HemaCare BioScience, Inc. (“HemaBio”), from the acquisition date, August 29, 2006, to the end of the quarter.  Revenue from the Company’s blood services business segment increased $224,000, or 13%, during the quarter compared to the third quarter of 2005, driven by a 17% increase in the number of therapeutic apheresis procedures performed, primarily in the Company’s Mid-Atlantic market.

The Company reported gross profit of $1,731,000 in the third quarter of 2006 compared to $1,446,000 for the same period in 2005, a $285,000, or 19.7%, increase.  Gross profit from the Company’s blood services business segment increased $225,000, or 56%, due to efficiencies derived from the increase in procedure volume.

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21101 Oxnard Street, Woodland Hills, CA  91367     ·      Phone 818.226.1968     ·      Fax 818.251.5300

The gross profit percentage for the Company’s blood services segment improved to 31% during the quarter compared to 23% for the same quarter in 2005.  Gross profit from the Company’s blood products business segment increased $60,000, or 6%, mostly as a result of the increase in revenue.  The gross profit percentage for the Company’s blood products segment during the third quarter of 2006 declined to 15.4%, compared to 17.4% for the same quarter of 2005.

General and administrative expenses increased $127,000, or 11%, to $1.3 million in the third quarter of 2006, representing 14% of total revenue, down from 15% for the third quarter of 2005.  The increase in these expenses is attributable to an increase in expenses related to non-cash share-based compensation, other compensation and benefit costs, bad debt, insurance and interest.

For the first nine months of 2006, the Company reported $25.8 million in revenue, a $3.4 million, or 15%, increase from $22.4 million generated during the same period in 2005.  Blood products revenue increased $2.9 million, or 16%, primarily due to sales growth in the Company’s California market, and the addition of HemaBio’s operations during the third quarter.  Blood services revenue increased $554,000, or 11%, during the period, due to a 10% increase in procedure volume.

Net income for the first nine months of 2006 decreased $118,000 to $893,000, or 12%, compared to $1,011,000 generated in the same period of 2005.  The decrease is primarily the result of the recognition of $404,000 in non-cash share-based compensation expense in the first nine months of 2006.  The Company did not recognize a similar expense in the first nine months of 2005, in accordance with the transition method permitted in SFAS 123R.

“The third quarter of 2006 represented a significant chapter in the history of HemaCare,” said Judi Irving, President & CEO of HemaCare Corporation.  “We are executing our strategic plan to expand our products and services to research related customers.  We completed the acquisition of Teragenix Corporation, renamed HemaCare BioScience, Inc., a provider of human biological samples, quality control products and clinical trial management services.  The integration process is proceeding smoothly, and we are very pleased with the initial contributions our new subsidiary has made to our financial performance during the quarter.  It has now been a full three years since we completed the realignment of HemaCare.  I want to recognize our dedicated, hard working and talented employees who are primarily responsible for the Company’s recent success.” Ms. Irving concluded, “Their efforts resulted in the improvement in profitability over the past three years that provided the resources to acquire Teragenix, and to invest in our infrastructure to support our growth.”

HemaCare will be holding an interactive investor conference call on Wednesday, November 15, 2006 at 1:00 PM (Eastern Time).  Judi Irving, President and CEO, and Robert Chilton, Executive Vice President and CFO, will review the third quarter 2006 financial results. To participate in the call, please call 800-309-8563 and ask to join HemaCare’s third quarter 2006 earnings conference call.  A recording will be available two hours following the call through midnight, November 22, 2006 that can be replayed by calling 800-642-1687, ID

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number 1274099.  A webcast of the conference call will also be available via the Company’s website (www.hemacare.com) after November 22, 2006.

ABOUT HEMACARE CORPORATION

Founded in 1978, HemaCare is a provider of blood products and services to the healthcare industry in the U. S.  HemaCare is licensed by the FDA and accredited by the AABB.  The Company focuses on providing cost effective, high quality solutions to organizations with a need for blood-related products and services.

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 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 ability to continue or maintain the improvement in the revenues and margins of its blood products or blood services segment; its ability to continue to control general and administrative expenses as a percent of sales; the 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; changing demand for blood products could affect profitability; market prices might not rise as costs increase; competition may cause a loss of customers and an increase in costs; operations depend on obtaining the services of qualified medical professionals and competition for their services is strong; declining blood donations; the Company’s dependence on reimbursement rates of third party payors; targeted partner blood drives involve higher collection costs; reliance on relatively few vendors for significant supplies and services could affect the Company’s ability to operate; 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 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; strategy to acquire companies may result in unsuitable acquisitions or failure to successfully integrate acquired companies, which could lead to reduced profitability; volatility in 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 be 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.

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(Financial Table Follows)

HemaCare Corporation

Condensed Consolidated Data

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2006		2005		2006		2005
Statements of Income
Revenues	$	9,177,000	$	7,768,000	$	25,797,000	$	22,372,000
Gross profit	1,731,000		1,446,000		4,869,000		4,677,000
General and administrative expenses(1)	1,276,000		1,149,000		3,943,000		3,659,000
Income before income taxes	455,000		297,000		926,000		1,018,000
Provision for income taxes	7,000		2,000		33,000		7,000
Net income	$	448,000	$	295,000	$	893,000	$	1,011,000
Basic earnings per share	$	0.05	$	0.04	$	0.11	$	0.12
Diluted earnings per share	$	0.05	$	0.03	$	0.10	$	0.11
Weighted average shares outstanding – basic	8,298,000		8,167,000		8,162,000		8,116,000
Weighted average shares outstanding - diluted	9,104,000		8,909,000		8,981,000		8,841,000

(1)Includes impact of Company’s adoption of SFAS 123R in the three month and nine month period ended September 30, 2006 of $39,000 and $381,000, respectively, in non-cash share-based compensation expense.

	September 30, 2006		December 31, 2005
Balance Sheets
Assets
Cash and cash equivalents	$	1,088,000	$	2,612,000
Other current assets	6,968,000		5,097,000
Non-current assets	6,525,000		2,837,000
Total assets	$	14,581,000	$	10,546,000
Liabilities and Shareholders’ Equity
Current liabilities	$	5,217,000	$	3,551,000
Long-term liabilities	525,000		7,000
Shareholders’ equity	8,839,000		6,988,000
Total liabilities and shareholders’ equity	$	14,581,000	$	10,546,000

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EX-99..2

Exhibit 99.2

3rd Quarter 2006 Earnings Conference Call

Bob Chilton:

Thank you, operator.  With me today is Judi Irving, HemaCare’s President and Chief Executive Officer.  We would like to welcome you to HemaCare’s third quarter 2006 earnings conference call.

Before we begin our presentation, I would like to remind you that during this call there may be forward-looking statements on a number of topics that are based on the Company’s current expectations.  These forward-looking statements are subject to various risks and uncertainties.  Actual results and outcomes could differ materially.  Our press releases and our third quarter 2006 quarterly report on Form 10-Q, as well as our other SEC filings, identify factors that could affect future results.  We encourage you to review these documents for additional information.

And now, I would like to introduce Judi Irving, who will begin with our opening remarks.

Judi Irving:

Thank you, Bob.

Thank you for joining our call today.

We are happy to report another record breaking and profitable quarter, making this our third year of consistent quarterly profitability.

In the third quarter, we took significant steps forward in executing our strategic plan of expanding our operations in the research support segment while strengthening our company’s infrastructure.

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At the end of August, we completed the acquisition of Teragenix Corporation.  This new subsidiary, renamed HemaCare BioScience, Inc., is a provider of human biological samples, quality control products and clinical trial management services.  Now, eleven weeks after the transaction, we are happy to report that the integration is going smoothly, and we have identified many opportunities for marketing synergies between the companies and we are excited about our plans to fully realize the potential of the combination.

Also in the third quarter, we completed the successful implementation of our new financial system.  We are in the process of transitioning HemaCare BioScience onto the new system, and expect completion in the fourth quarter of this year.

We are very pleased with the results this quarter.  Moving forward, we will continue to focus on expanding our research support activities and continuing to improve our operational efficiencies.

Bob Chilton will now review the operating results in greater detail.

Bob Chilton:

Thank you, Judi.

HemaCare’s third quarter results produced net income of $448,000, or $.05 basic and fully diluted earnings per share, compared with $295,000 for the same quarter of 2005, or $.04 basic and $0.03 fully diluted earnings per share.  This represents a 52% increase in earnings for the quarter.  These results include $43,000 in expense related to the adoption of SFAS 123R in 2006 that was not included in the prior year earnings.  Eliminating the impact of the adoption of SFAS 123R from reported net income results in pro forma net income of $491,000 in the third quarter of 2006, a HemaCare record for any third quarter.

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Revenue for the quarter increased 18%, to $9.2 million, up from $7.8 million reported for the same quarter of 2005.  The improvement in revenue was attributable to an increase in blood products revenue of 20% for the third quarter of 2006 to $7.2 million, compared to $6.0 million for the same period of 2005.  This increase was the result of higher sales volume in California, year-over-year increases in selected product prices and the addition of HemaCare BioScience operations for the 32 day period beginning on the date of acquisition, August 29, 2006, and concluding at the end of the quarter.  We have included this new subsidiary in our blood products business segment as its activities are similar to our existing blood products operations.  Blood services revenue increased $224,000, or 13%, to $2 million from $1.8 reported for the third quarter of 2005.  Most of the increase was the result of a 17% increase in the number of therapeutic apheresis procedures performed in the quarter, primarily in the Mid-Atlantic market.

Gross profit reported during the third quarter of 2006 increased 20% to $1.7 million from $1.4 million reported in the same quarter of 2005.  The increase is attributable to a $225,000, or 56%, increase in gross profit from the Company’s blood services business segment compared to the third quarter of 2005 due to the increase in procedure volumes during the quarter.  Gross profit from the Company’s blood products segment also increased $60,000, or 6%, due to the increase in sales volume and the addition of HemaCare BioScience’s operations for a portion of the quarter.

General and administrative expenses for the third quarter of 2006 increased 11%, to $1.3 million.  This increase was primarily the result of increases in expenses for non-cash share-based compensation, other increases in staff compensation and benefit, bad debt, insurance and interest.  General and administrative expenses represented 14% of revenue for the third quarter of 2006, a decrease from 15% for the third quarter of 2005.

The Company’s cash and cash equivalents were $1.1 million as of September 30, 2006, compared to $2.6 million as of the end of 2005.  Working capital decreased approximately $1.4 million in the third quarter to $2.8 million, from $4.2 million as of the end of 2005.  The decrease is attributable to $1,275,000 in advances against the

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Company’s line of credit with Comerica Bank used to facilitate the close of the Teragenix acquisition.  Late in the third quarter, the Company entered into a new credit agreement with Comerica that added HemaCare BioScience, Inc. as an additional borrower, provided Comerica a security interest in the assets of HemaCare BioScience, extended the term of the agreement one year to June 30, 2008, and expanded the maximum borrowing capacity to $3 million.  As of September 30, 2006, we had $1,725,000 remaining in borrowing capacity on the line of credit with Comerica.

This concludes our opening remarks.  We will now open the line for your questions.  Operator, would you please provide the callers with the necessary instructions.

Operator:

If you wish to ask a question, please press one on your telephone key pad.

Operator:

Again, to ask a question please press one.

Operator:

There are no questions.

Judi Irving:

Thank you for joining our call.

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